5N Plus

Highlights:

• 5N Plus, through its subsidiary AZUR SPACE Solar Power GmbH, supplied triple junction solar cells that are integral to the world’s largest and most efficient next-generation long-duration solar energy storage project. These cells play a crucial role in converting sunlight into cost-effective and environmentally friendly electricity.
• The project marks a historic milestone in collaboration with long-time partner RayGen, a pioneer in solar power technology and renewable energy storage. The Carwarp power plant in Victoria, Australia, was officially inaugurated on August 31, 2023, boasting impressive capabilities of 4 MW solar generation and 2.8 MW / 50 MWh energy storage capacity.

Highlights:

• Arrowhead is updating its coverage on 5N Plus with a fair value bracket of CAD 4.2 to CAD 5.1 (share price on September 05, 2023: CAD 3.6) based on the Discounted Cash Flow (DCF) method.
• In Q2 2023, the company’s revenue amounted to USD 59.1 mn, showing a decline compared with the USD 72.4 mn recorded in Q2 2022. This reduction can largely be attributed to the company’s decision to discontinue manufacturing low-margin extractive and catalytic products, a strategic move implemented in the latter half of 2022, and the related divestiture of its Tilly, Belgium, operations in Q4 2022. Adjusted Gross margin stood at 32.9%, the strongest performance in a decade. The increase was mainly attributed to the favorable product mix, strategic initiatives undertaken last year in the form of a commercial excellence program and strategic exit from the low-margin business. The EBITDA for the quarter stood at USD 17.5 mn, compared with USD 6.7 mn in Q2 2022, primarily attributed to the litigation and restructuring income of USD 9.0 mn. The Consolidated EBITDA margin stood at 29.7%, compared with 9.3% in Q2 2022. Also, the adjusted EBITDA reported during the quarter stood at USD 10.8 mn, compared with USD 8.6 mn in Q2 2022, an increase of 26.3% year-on-year (YoY), with a Consolidated Adjusted EBITDA margin of 18.4% as compared with 11.9% in Q2 2022. The Controlled cost structures helped the company post a strong bottom line, where the Selling, General, and Administrative (SG&A) expenses stood at USD 7.6 mn, compared with USD 7.4 mn in Q2 2022. This resulted in a net profit of USD 10.1 mn, compared to a net loss of USD 2.1 mn in Q2 2022. The strong financial performance helped the Company to pay down debt, with Net debt getting reduced by USD 4.9 mn since the beginning of the year and USD 6.2 mn compared with Q1 2023, resulting in a net debt of USD 73.4 mn, compared with a net debt of USD 78.3 mn reported in Q2 2022.
• The revenue from the Specialty Semiconductors division stood at USD 36.3 mn, compared with USD 30.6 mn in Q2 2022, an increase of 18.5% YoY, while the adjusted gross margin for the quarter stood at 31.9%, compared with 27.7% in Q2 2022. The Performance Materials division experienced a decline in revenue due to the company’s strategic decision to exit the low-margin extractive and catalytic products in the latter half of 2022 and the sale of its Tilly, Belgium, business in Q4 2022. The revenue during Q2 2023 stood at USD 22.8 mn, compared with USD 41.7 mn in Q2 2022. However, the adjusted gross margin for the quarter stood at 36.6%, compared with 18.9% in Q2 2022.
• The company stated that its ongoing capacity expansion programs have been progressing as planned and include an increase in output capacity at AZUR by 30% by 2024 and an increase in production capacity for renewable energy applications by 35% in 2023 and 100% in 2024, combined with key customer capacity expansion plans. The Company is also in the advanced stages of securing additional complex feeds and secondary streams to recover critical minerals for its recycling and refining capacity at its Montreal plant.
• 5N Plus has a strong outlook underpinned by unprecedented demand in target end markets (including terrestrial renewable energy and space solar power under Specialty Semiconductors and in the health and pharmaceutical sector under the Performance Material division), an improved product mix and the effectiveness of its commercial excellence program. As a leading supplier of ultra‐high-purity specialty semiconductor materials outside of China and a leader in critical metal recovery, the Company remains uniquely positioned to continue benefiting from strong demand in critical and high‐growth industry sectors, such as space solar power and terrestrial renewable energy. It has maintained its previously disclosed adjusted EBITDA guidance range of USD 35 – 40 mn for FY 2023 and a projected adjusted EBITDA range of USD 45 – 50 mn for FY 2024.
• Chandrayaan-3, powered by the solar cell technology developed by 5N Plus’s subsidiary, AZUR SPACE Solar Power GmbH (“AZUR”), was employed in the latest lunar exploration mission by the Indian Space Research Organization (ISRO), where AZUR supplied the 3G30 solar cells for the propulsion module (758W), the lander (738W) and the rover (50W).

Highlights:

• AZUR Tech Powers Chandrayaan-3: AZUR SPACE Solar Power’s advanced 3G30 solar cells drive India’s Chandrayaan-3 lunar mission, energizing travel, landing, and surface exploration.
• Breakthrough Efficiency in Space: AZUR’s 3G30 solar cells enable Chandrayaan-3’s success, delivering unprecedented end-of-life efficiencies for the propulsion module, lander, and rover.

Q2 2023 Highlights:

• Revenue in Q2 2023 reached $59.1 million, compared to $72.4 million for the same period last year. The decrease is primarily attributable to the Company’s strategic exit from the manufacturing of low‐margin extractive and catalytic products in the second half of 2022.
• In Q2 2023, EBITDA was $17.5 million, compared to $6.7 million in Q2 2022. The $10.8 million increase is mainly explained by litigation and restructuring income of $9.0 million received from the previous shareholder of AZUR SOLAR Space GmbH (“AZUR”) as per stipulations of the share purchase agreement.
• Adjusted EBITDA in Q2 2023 reached $10.8 million, compared to $8.6 million for the same period last year, an increase of 26%, with Specialty Semiconductors increasing by 27% to $8.1 million, due to higher demand and Performance Materials increasing by 12% to $6.2 million due to a more favourable product mix.
• Adjusted gross margin in Q2 2023 was 32.9%, compared to 22.4% in Q2 2022.
• On June 30, 2023, the backlog represented 289 days of annualized revenue, 17 dayslower than the previous quarter due to the quarterly realization of yearly contracts under Performance Materials and 149 days higher than the same period last year primarily due to the demand for terrestrial renewable energy and space solar power.
• Net debt stood at $73.4 million as at June 30, 2023, compared to $78.3 million as at December 31, 2022, representing a decrease of $4.9 million.

Highlights:

• Arrowhead is updating its coverage on 5N Plus with a fair value bracket of CAD 4.0 to CAD 4.4 bracket (share price on June 08, 2023: CAD 3.15) based on the discounted cash flow (DCF) method.
• 5N reported a revenue of USD 55.3 mn in Q1 2023, a decline of c. 14% compared to Q1 2022, owing to the company’s strategic decision to focus on high-margin and value-adding segments. The company took an exit from the extractive and catalytic market in Q4 2022, which led to a drop in the revenue base in FY 2022 as well as Q1 2023.
• The Speciality Semiconductors segment’s revenue increased to USD 32.7 mn, up c. 20% YoY driven by strong demand from the terrestrial renewable energy and solar space power markets. This growth was more than offset by the decline in the Performance Materials segment’s revenue to USD 22.5 mn, down 39.3% YoY, due to the exit from the extractive and catalytic sector.
• VNP generated an adjusted EBITDA of USD 8.8 mn in Q1 2023, a growth of c. 56% YoY. The EBITDA margin increased from 8.7% in Q1 2022 to 15.9% in Q1 2023. The adjusted gross margin was 29.8% in Q1 2023 as compared to 21.9% in Q1 2022, driven by improvement in product mix (due to exit from low-margin extractive and catalytic sectors), and the successful implementation of the ‘Commercial Excellence’ program. The cash and cash equivalents stood at USD 41.4 mn in Q1 2023, compared to USD 42.7 mn in FY 2022, while the cash outflow from operations was at USD 3.8 mn in Q1 2023.
• The company is planning to increase the production capacity of AZUR Space (wholly owned subsidiary) by 30% over the course of 2023 and 2024 through productivity improvements, installation of new equipment, and commissioning of co‐investment equipment to meet the growing demand of existing customers.
• AZUR Space (wholly owned subsidiary) with high-end solar cell technology played a crucial role in the European Space Agency’s ‘Mission to Jupiter’. NASA is also planning to employ AZUR’s 3G28 solar cells for its mission to Jupiter in the future, it solidifies the company’s vital role as a key supplier in the world’s leading space agencies.
• The company’s management is committed to its strategy of focusing on products that offer high growth potential and superior margins while meeting the customer’s demand in value-added markets. The company anticipates a strong demand in its target market i.e. in the healthcare and the pharmaceuticals market.

Highlights:

• 5N Plus Inc. held its Annual General Meeting of Shareholders and elected its proposed nominees as directors of the Company.
• Mr. Luc Bertrand was re-appointed as Chairman of the Board of Directors of 5N Plus subsequent to the Meeting.

Highlights:

• Revenue in Q1 2023 reached $55.3 million, compared to $64.4 million for the same period last year. The decrease is primarily attributable to the Company’s exit from the manufacturing of low margin extractive and catalytic products in the second half of 2022.
• Adjusted EBITDA in Q1 2023 reached $8.8 million, compared to $5.6 million for the same period last year, an increase of 56%, with Specialty Semiconductors increasing by 27% to $7.2 million, supported by higher demand, and Performance Materials increasing by 70% to $4.5 million, impacted by a more favourable product mix.
• Adjusted gross margin in Q1 2023 was 29.8%, compared to 21.9% in Q1 2022.
• On March 31, 2023, the backlog represented 306 days of annualized revenue, 53 days higher than the previous quarter and 110 days higher than the same period last year. The increase is attributable to favourable negotiations of long-term contracts.
• Net debt stood at $79.6 million on March 31, 2023, slightly higher than the $78.3 million at the end of fiscal 2022.
• On April 14, 2023, 5N Plus confirmed its role in the European Space Agency’s mission to Jupiter and NASA’s intention to employ AZUR’s solar cells in its future mission to Jupiter.
• On April 26, 2023, the Company announced its plans to increase AZUR’s production capacity by 30% over the course of 2023 and 2024, through productivity improvements, the installation of new equipment and the commissioning of co-investment equipment.

Highlights:

• 5N Plus played a key role in enabling the European Space Agency’s Juice mission to Jupiter with high-end solar cell technology from AZUR SPACE Solar Power GmbH.
• AZUR’s specific 3G28 state-of-the-art proprietary solar cell technology was selected by ESA’s engineers to cover Juice’s 85 sq. m. of solar arrays, the largest ever built for interplanetary spacecraft.
• The specific 3G28 solar cells were considered the best solar cells for their unique capacity to make solar power work in Jupiter’s dark and gloomy space, and will also be employed by NASA’s future Europa Clipper mission to Jupiter moon Europa.