Solar Foods Oyj, inside information 10 December 2024 at 8:00 EET

Inside Information: Solar Foods Oyj Publishes Reviewed Strategy and Long-Term Financial Targets

Solar Foods Oyj's ("Solar Foods" or the "Company") Board of Directors has approved Solar Foods' reviewed strategy and long-term financial targets for the strategy period 2025-2030, focusing on targeted initiatives in the Health & Performance Nutrition segment especially in the US, transition to a concept sales model, higher product price points and increased capacity at Factory 01. Solar Foods is also preparing a phased investment plan for the Factory 02 facility to achieve positive EBITDA during the strategy period. Solar Foods has also refined its Management Team and its responsibilities to ensure the execution of the reviewed strategy.

New Focused Product Segments

Solar Foods will focus on the Health & Performance Nutrition segment, especially in the United States, one of the primary global markets for high-protein products. This core segment consumes approximately 500 kilotons of protein powder annually and has shown consistent growth driven by health, nutrition and fitness trends.

Solein® is well-positioned to succeed in this segment due to its good nutritional and sustainability credentials. The Company plans to focus on ready-to-mix powders, ready-to-drink beverages, and protein bars tailored to meet market demands.

Product Prototyping for Customers

Solar Foods is transitioning from offering powder prototypes to a concept sales model that demonstrates end-products containing Solein that meet customer needs and accelerate sales cycles. Solar Foods aims to strengthen its value proposition in the competitive protein market by emphasizing taste, texture, validated health benefits and sustainability.

Higher Expected Price Point

During this strategy period, the Company anticipates higher price points for Solein compared to previous levels. Whey proteins are currently the most used source of protein in the selected Health & Performance Nutrition segment. The strategic shift is from achieving price parity with soy protein to targeting price parity with whey protein isolate, reflecting Solein's quality and nutritional benefits. The Company estimates that in 2025-2026, Solein's market price for this segment will be USD 16-25/kg, and in 2027-2030 USD 13-20/kg.

Increased Capacity for Factory 01 Facility

Solar Foods plans to expand the capacity of its operational Factory 01 facility. The Company will implement recent productivity improvements demonstrated at its pilot facility, increasing Factory 01's annual design capacity from 160 tons to 230 tons in 2026.

Phased Construction of Factory 02 Facility

The Company has outlined an investment plan for its industrial-scale Factory 02 facility, focusing on a phased expansion and incremental capital deployment. All the phases are estimated to achieve positive cash flow. The key operational and financial estimates of Factory 02 are shown in the table below:

	CapEx, EUR million	Production capacity, kT/year	Revenue, EUR million	EBITDA, %	Operational deployment, year
Phase 1	134	3,2	48-55	57-62	2028
Phase 2	48	3,2	48-55	69-72	2029
Phase 3	135	6,4	96-109	68-72	2030
Total	317	12,8	192-219	65-69

These estimates are based on the current productivity and energy efficiency levels (Cell productivity of 1.5 g/l/h and an O2/CO2-ratio of 3), in-house hydrogen production, sales of excess heat to district heating grid, electricity price of 40 EUR / MWh and a greenfield location.

The Company aims to explore potential cost savings by considering the location of the Factory 02 facility in a brownfield site, the use of hydrogen supplied by external parties, and the possibility of securing grants under the IPCEI notification, subject to a separate financing decision by the relevant authority. If these materialize, the CapEx required to be arranged by the Company in phase 1 could reduce to approximately EUR 69 million, compared to the estimated EUR 134 million. This revised CapEx may be covered with an indicative 50/50 split between equity and debt financing.

The final investment decision for the Factory 02 facility is expected to be made in 2026.

New Financial Targets

Solar Foods expects to achieve positive EBITDA in 2030 as a result of higher product pricing, new geographical markets, continuously improved productivity, and a new phased CapEx approach, which could lead to even more capital-lean construction of the Factory 02 facility.

The financial guidance for 2025 will be published in conjunction with the financial statements release on 27 February 2025.

The operational and financial targets remain unchanged (including additional factories, licensing business and Space business) for the period after 2030.

Changes in Management team

As disclosed earlier today, the Company has refined the composition of its Management Team and its responsibilities to ensure the execution of the reviewed strategy.

Capital Markets Day

Solar Foods will host its Capital Markets Day today, 10 December 2024, at 4:00 p.m. EET. Investors, analysts, and media representatives can follow the event live via webcast:

https://solarfoods.videosync.fi/cmd-2024

The recording and presentation material of the event will be made available on the Company's Investor Relations website at investors.solarfoods.com.

Further Information

CEO Pasi Vainikka

Email: pasi@solarfoods.com

Tel: +358 10 579 3286

Certified Advisor

Carnegie Investment Bank AB (publ)

About Solar Foods

Solar Foods produces Solein®, a protein created using carbon dioxide and electricity. This innovative production method is independent of weather and climate conditions, eliminating the need for traditional agriculture. Founded in Finland in 2017, Solar Foods is listed on the Nasdaq First North Growth Market Finland. Learn more at investors.solarfoods.com.

Disclaimer

This company announcement contains certain forward-looking statements that are estimates based on the management’s current views and best assumptions at the time they were made. For this reason, they involve a certain amount of inherent risk and uncertainty. The estimates are subject to change in the event of significant changes in general economic conditions or otherwise.