Ekopak : 2nd Half and Full year 2022

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SECOND HALF 2022 & FULL YEAR 2022 RESULTS

Ambitious 2022 targets accomplished - Looking to the future with great confidence

Pipeline growth is well ahead of plan for reaching the medium term objectives

Tielt (Belgium), 27 March 2023 - 07:00 a.m. CEST - Today, Ekopak (EKOP:xbru) published the results for the six- and twelve-months period ended 31 December 2022.

Highlights of 2022

• • All 2022 revenue targets have been met

  • o Water-as-a-Service (WaaS) segment: triple digit growth (+109% vs 2021)

  • o Non-WaaS segment: double digit revenue growth (+51% vs 2021)

  • o Total group revenue (EUR 17,7 million): double digit growth (+57% vs 2021)

• • Revenue in France increased eightfold, partly related to the acquisition of H2O Production (included in the consolidation scope as of 1 September 2022)

• • EBITDA margins remain stable thanks to pricing power. The pressure from general price increases and inflation is neutralised: Waas 67% (67% in 1H2022), non-Waas 5% (2% in 1H2022)

• • Strong cash position of EUR 32.5 million

• • The organisation has been strengthened to accommodate future growth

• • Preparations for the Waterkracht joint venture and NextGen plant in the Antwerp Port are on track to become operational as of 2025. As from then, the drinking water system will become more robust due to the production of 20 billion liters of circular water annually

• • Circeaulair project is undergoing a rapid development and forecasts an annual offtake of 25 billion litres of circular water from 2024 onwards

Business Outlook

• • Projected 2023 Total Revenue of EUR 25-28 million with continuously growing positive EBITDA

• • Ekopak is on track to make major leaps forward in 2024, 2025 and beyond

• • Ekopak is confident of making a significant contribution to achieve 100% water circularity within the industry and to ensure the continuity in available drinking water across the globe

Management Report - Executive Summary
In EUR thousands In 000 € 1H2022/ In 000 € 2H2022/ In 000 € 1H2022 1H2021 1H2021 2H2022 2H2021 2H2021 Full Year 2022 Full Year 2021 2022/ 2021 Ebitda marge FY 2022
Revenue
WaaS segment	1.225	281	336%	1.292	924	40%	2.517	1.205	109%
non-WaaS segment	6.248	4.207	49%	8.945	5.839	53%	15.193	10.046	51%
Total	7.473	4.488	67%	10.237	6.763	51%	17.710	11.251	57%
EBITDA
WaaS segment	822	199	313%	860	640	34%	1.682	839	100%	67%
non-WaaS segment	111	1.097	-90%	589	404	46%	700	906	-23%	5%
Corporate segment	-1.402	-1.220	15%	-1.439	-183	686%	-2.841	-1.403	102%
Total	-469	76	-717%	10	861	-99%	-459	342	-234%
The CEO's perspective Pieter Loose, CEO Ekopak, comments: "2022 has been an intense but rewarding year for Ekopak. We have been extremely active on several domains at a time. Within our WaaS-division, we have dedicated a lot of efforts to the Waterkracht project and the NextGen plant in the Port of Antwerp. Both projects will be fully operational by 2025. We even outperformed ourselves with the Circeaular project, which only emerged in mid-2022 but is now on track to contribute to Ekopak's operations starting in 2024. The formal creation of joint ventures for both the Waterkracht and Circeaulair projects is imminent. Notwithstanding the focus of our resources on these projects for the future, the WaaS team also managed to achieve 109% revenue growth in 2022. In parallel, Ekopak has also built an unparalleled pipeline for its non-WaaS operations, which are still only partially recognized in the 2022 figures, in line with the completion rate of the installations involved. On top of that, Ekopak has worked hard on its internationalisation strategy. Following the establishment of Ekopak France, we have further strengthened our position in the French market, including the acquisition of H2O Production. In spite of the general scarcity on the labour market, Ekopak confirmed to be an attractive employer, hence we have been able to almost double our workforce. In parallel, we have installed systems and procedures in order to manage our future growth. I their contribution over the past period. I look forward to the future with confidence and ambition." am extremely grateful to all Ekopak employees, as well as to all other stakeholders, for

WaaS segment: revenue more than doubled, solid 67% EBITDA-margin

Ekopak's WaaS business witnessed another impressive performance in 2022. Segment revenue more than doubled (+109%) in comparison with 2021 and now reaches EUR 2.5 million. WaaS revenue now represents 14% of total revenue, compared to 11% in 2021.

The WaaS division started 2022 extremely strong with a 336% YoY revenue growth in the 1st Half of 2022. YoY growth for the 2nd Half of 2022 was 40% as the revenue from WaaS contracts is only recognised as of the moment that the installation becomes operational and hence a substantial part is not yet included in the FY2022 figures.

The triple digit revenue growth 2022/2021 did not affect the robust EBITDA-margin, which was maintained at 67% - the level envisaged in the medium-term plan. This is yet another confirmation of the structural attractiveness of this business model, as well as an illustration of Ekopak's resilience to cope with difficult market conditions, including general inflation.

Non-WaaS segment: 51% YoY revenue growth, unprecedented new business pipeline

As already demonstrated in previous reporting periods, Ekopak's strategic transition from non-WaaS to WaaS can involve business growth in both segments at the same time. This is rigorously reconfirmed in 2022, with a solid 51% YoY revenue growth.

Mainly in the second half of 2022, Ekopak was able to conclude a significant number of large non-WaaS contracts, which, according to the completion rate of the associated installations, are only partly recognised in the 2022 figures.

The underlying figures for the non-WaaS segment support its structural potential to grow both revenue and profits. While in the 1st Half of 2022, short-term profitability was temporarily impacted by upfront development costs, the EBITDA margin was already restored from 2% (1H2022) to 7% in 2H2022.

International expansion continues. Revenue in France increased eightfold

Ekopak's internationalisation strategy is an important factor in its corporate purpose to make a significant contribution to achieving 100% water circularity within the industry and ensuring the continuity of available drinking water across the globe.

Revenue generated beyond the Belgian home market now represents 26% of the group's total revenue (20% in 2021).

At this stage of the internationalisation strategy, the focus is on France, which is a strategically important water market. Since the establishment of Ekopak France in 2021, the French organisation is moving forward at a rapid pace as illustrated by the assignment for a major non-WaaS-project for SNCF at the Charles de Gaulle airport.

Ekopak France's contribution to the group's revenue grew from EUR 0.4 million in 2021 to EUR 3.2 million in 2022: an eightfold increase! The acquisition of H2O Production (included in the consolidation scope as of 1 September 2022) brings great synergy and helps to further strengthen Ekopak's business in the major French water treatment market. H2O Production provides production and warehousing capacity and benefits from a well-developed commercial network.

Building a strong organisation to accommodate future growth

Ekopak continues to build a strong organisation that is capable of seizing great business opportunities in the fast evolving water market. As the effects of the climate change became more tangible during the dry summer of 2022, the water treatment market is evolving at a fast pace. Ekopak believes there is no time to lose for strengthening its market position, which requires a strong organisation that is well equipped to manage the company's mid- and long-term growth, both in revenue and profitability.

In February 2022, Ekopak announced its plans to construct a new corporate building on an industrial park in Deinze (Belgium), easily accessible along the E17 motorway. Financing for this project is secured through a bank loan, construction is scheduled to start in 2Q2023 and commissioning is expected in the 2nd half of 2024. The Deinze site will house both corporate services, warehouses and engineering workshops space. The current Ekopak head office in Tielt, the office in Ghent and the warehouse in Roeselare will be combined at this single location, which is suitable for sustaining future growth.

Ekopak is pleased to note that the company is capable of attracting and retaining talented people. The total average number of full-time equivalents (FTE) grew from 54.4 for 2021 to of 94,2 FTE for 2022.

With the R&D On Tour project, Ekopak has further strengthened its marketing capabilities. With this project, Ekopak places trial installations at the premises of potential customers, enabling them a 'live experience' of the potential impact. Initially, the R&D On Tour included one mobile installation, but due to sustained demand there are now 3 mobile water purification units involved, while the waiting list of interested potential customers remains considerable.

Ekopak was able to adjust sales prices for services and consumables in line with the price increases for several important raw and auxiliary materials.

In addition to strengthening its internal capabilities, Ekopak strengthened its organisation through the acquisition of well-targeted companies. Following Ekopak's first acquisition (of iSERV) in February 2021, the company concluded the acquisition of the French company H2O Production on September 16, 2022. The expertise of H2O Production in regenerating resins also represents a significant additional asset for the group's technological know-how. H2O Production is located in Pithiviers, in the French department Loiret, and brings 20 years of expertise in several technologies applied for the production of demineralised water and also has the know-how to address PFOS/PFAS contamination.

Ekopak also continued to develop its ESG objectives in 2022, enabling Ekopak to start measuring its progress in this area as of 2023. Since Ekopak joined the UN Global Compact initiative, enormous progress has been made in this area.

The above-mentioned efforts for building a strong organisation are reflected in the EBITDA of the Corporate segment, as well as in the total for the group. The corporate cost amounted to EUR 1.4 million in the 1st Half of 2022 and EUR 1.4 million in the 2nd Half of 2022.

This leads to an operating result for 2022 of EUR -2.3 million while the net result amounts to EUR -2.0 million.