Bergen Carbon Solutions AS (BCS) Q4 FY2025 Earnings Call Transcript & Summary

Good morning and very welcome to our presentation of Q4 2025. My name is Odd Strømsnes, and I'm the CEO of Bergen Carbon Solutions. As one of very few true CCU companies, BCS continues to offer an attractive value proposition based on local development of sustainable carbon. This carbon is a key component into all batteries, which today, as we know, is produced with a massive greenhouse gas footprint, and most of it is made in China. Our core CO2 consuming technology leverages electrolysis to convert captured CO2 emissions into conductive carbon powders for advanced battery applications. I would say we have achieved substantial progress in all our 3 key areas: technology, finance and organizations. As reported during last quarter, we are now able to produce what we say is a consistent and well-defined carbon powder. Following the last 2 years of intense process development to achieve consistency, we now have an operational recipe of the process to produce CNT at a certain quality on a predictable basis. We have, during Q4, consolidated the process platform as a defined baseline. This process platform enables predictable production of larger volumes, which is a prerequisite and the basis for our testing with selected international partners starting now. Our strong cost control remains with a substantial reduction in burn rate for the full year compared with 2024. Headcount is reduced and our CapEx requirements going forward is very limited. We are all well equipped with hardware, in particular with specialized powder characterization equipment. And the grant from Innovation Norway will obviously further strengthen and de-risk our operations and subsequently enable a faster development speed. I'm very pleased with the current lean and very competent organization we now have built up. Remember, we are doing frontier development work as a global leader in molten salt carbon capture electrolysis. In this pretty immature CCU space, which puts a lot of requirements to our staff, this is highly specialized and this is a new territory. And we have further strengthened the organization with more experienced battery lab competence. In addition, we have reinforced the team with an advisory board of senior members with experience from the industry. Producing CNT, it's all about size. It's all about form, a small particle as possible with as much surface as possible. 1000 times thinner than a hair, 10 to 100 nanometers in diameter with a surface area of 100 to 200 square meter per gram. These carbons are used as additives to increase the conductivity of the active material in the battery for different applications. And this is now a typical spec game, I would say, towards existing CNT industry. It's all about making small few-wall tubes with a high surface area. However, from a new process, making a product that is produced with a technology, that is fundamentally different from the conventional CVD products available as a commodity product in the market. And this is a sketch of the core of our pure-play CCU equity story, an attractive value proposition in terms of local, circular and sustainable value chain. Local BCS carbon production from a nearby large CO2 point emitter by using the direct or indirect flue gas as a feeding stock for our CO2-consuming technology. Subsequently, the harvested BCS carbon powder put into the batteries as conductive agents, making the batteries better and greener. And the geopolitical aspects of what we do is increasingly relevant. New regulations are implemented on traceability, on sourcing towards strategic battery materials. Stricter control over critical raw materials are being implemented. Export bans, new trade tariffs and increased geopolitical uncertainty with raising trade barriers are all factors pointing towards increased competitiveness for local suppliers. EU is pushing hard for a stronger autonomy in the battery production with larger financial stimulation packages. Our CCU equity story is, in many ways, a perfect match to this. We have already proven our ability to produce valuable carbon directly from large CO2 point emitter during our Enova funded project a couple of years back. This is indeed a true, true scale CCU project and shows there are alternative to costly CCS initiatives. For several large CO2 point emitters, this could be an interesting surplus technology to other CCUS solutions. Then over to the financials from Q4. Our financial numbers confirms that we continue to have a robust plan for execution of our strategy. We have seen a significant 48% reduction year-end cash burn compared to 2024. And this gives a burn rate last quarter of NOK 4.1 million, and we will maintain a low cash burn going forward. We have a very limited CapEx need going forward and a still healthy cash position now of NOK 137 million. And we received the first installment of around NOK 10 million from Innovation Norway in January. This is a good and condensed illustration of our technological journey. The relationship between a number of process conditions, such as temperature, time and current density, among many others, and the quality of the carbon powder. And for quality, we basically mean the amount and the size of the CNT described for all practical purposes by purity, diameter and surface. We have gone from a more random distribution of powder quality to a more consistent and well-defined powder quality. This is, in fact, what we said we should do last year. This work is resting on deep process understanding through a systematic parameter control and is a good documentation on the transition the company has taken. And we have, over the last years, built a deep insight into the fundamentals of this technology in order to really understand the key drivers. This work has now resulted in what we define as a process platform, a stable, predictable foundation for further development work. It marks a clear breakthrough for BCS and a turning point towards further industry development of our technology to achieve a controlled progress. Documentation of a stable process is absolutely a prerequisite to enter into technology agreements with larger global industrial companies. And our battery lab is our showroom for innovation, enabling faster routes to certain markets. Remember, we are not a battery production company. We are a material development company. So the sole purpose for us is to verify the impacts of our carbon nanotubes into the different chemistries. As this battery lab now proves to be very important for us, it means also that it's very busy, and we can now report that the lab has produced more than 1,200 coin cells, primarily for LFP but also for sulfur chemistries. And focus now is on building up baselines on BCS powder performance versus commercially available references, then compare against precast electrodes from commercial suppliers as well as cathode electrodes using our competitor material. And the results so far is as expected, we would say, for LFP chemistries with our Multi-Walled Carbon Nano Tubes. As seen on this graph, we are performing between ordinary carbon black and single-wall carbon nanotubes after 350 cycles. We believe this is a positive and a true representation of the performance and most importantly, a clear evidence that our testing procedures are working well. Showing that our CNT function well in today's mainstream chemistries is important, but we have also seen highly promising early results in the next-generation lithium sulfur batteries. And this chemistry is not yet widespread, but our initial test indicates that our CNTs may offer a particularly interesting advantage. As you can see in the graphs, the capacity retention with our powders is significantly higher than the CVD-based reference we also -- we have used for this case, which is shown in blue. And we can also report on promising C-rate results at both 4C and 6C. This is very technical, but it explains basically the charging and discharging speed within the batteries, important. And as you can see from the graph that C-rate with our powder as host material is performing very well and significantly better than the reference material. These earlier findings suggest that our materials could play a meaningful role not only in today's battery systems but also potentially in tomorrow's. Based upon gained knowledge and understanding of our novel technology, it's time for me to be more articulated towards where we believe we are positioned in the marketplace. The global battery demand is increasing dramatically, and new battery technologies will be a prerequisite for the energy transition needed. And the need for sufficient energy storage capacity is a requirement for larger global regions in order to be self-sufficient for clean energy during a 24-hour cycle. California is such an example. This means there will be different battery chemistries for different applications. And all these markets will be massive. Competing head on in Chinese fossil CNT on price is probably not a good strategy. That's why we are to an increasingly extent, focusing on our uniqueness towards what we say is niche markets. Niche markets in this context can be novel battery chemistries or markets with price dynamics supporting local and sustainable carbon. And in this context, it's crucial for us to document the effect from actual testing rather than strict commodity specification comparison. The transition from exploration to a stable technology platform in 2025 provides a solid start into 2026. Development activities are progressing according to plan with steady progress on key processes. In 2026, the focus will be on larger test volumes, external validation and feedback and subsequently, further process optimization. The next phase of development will involve increased interaction with selected global industrial partners, all positioned in different parts of the complex battery value chain. BCS is targeting industrial partners with strong competence in battery chemistries and conductive additives. The partner should be able to add value to our technology development and support external validation for our materials. External testing in real battery systems is key for us to document performance and application relevance. We are, as such, in ongoing dialogues with several relevant and global companies and research environments. So in order for me to summarize, we have seen a stable and repeatable development of process platform. This is now established, providing a new level of control and understanding. Our cost levels remain low and predictable, supported by strong financial discipline and Innovation Norway grant. The process platform enables larger test volumes an external validation with global industrial companies. So the next phase is all about execution, establishment of partnerships and progress towards a further commercialization. That brings me to the end of my presentation, and we are now opening up for Q&A.

Okay. Thank you, Odd. This Q&A session is hosted by Fredrik Oksnes, CCO of Bergen Carbon. Can you tell us more about how far BCS is from entering into new agreements on strategic partnership and collaborations with industrial investors and/or leading chemical companies?

Yes. We have seen a number of questions related to this. I have obviously tried to explain the rationale in this presentation. But I mean in order to take our business case further, we need to have a stable process. I would say that's a prerequisite to enter into an agreement. We need to be able to document that we are making consistent product over and over again. So we have said now that we're going to produce larger volumes. It's not large volume but larger volumes in order to accumulate enough powders to test externally at industrial companies, both here in Europe but also in Asia as well as renowned academic institutions. I think it's important to say that, I mean, we are a world leader in our technology. And this is novel stuff, and this is technology development. It's always very difficult and dangerous to predict forecasting for doing technology development. But what we do now is the right thing to do. I'm 100% confident for that. We are also improving the quality of our process at the same time as we are testing it. And all these are packed into a mega trend, which is very attractive, and I'm very confident that 2026 will bring us forward in a great way.

Thank you. I think you have probably answered the next question but let us take it anyway. Can we expect BCS to have its commercial breakthrough during 2026?

Yes. I think I have nothing more to add than what I answered to the first question. We are taking small steps in the right direction.

Okay. Two more questions with regards to the International Advisory Board. On the 13th of October last year, BCS announced the formation of the International Advisory Board. Can you please tell us about their work so far and what they have achieved of course?

Yes. I mean we are operating in a very complex value chain, I would say, as a raw material supplier into the battery industry. We needed support from a strategic level. We have been able to attract 2 very industrial leaders, both from the carbon industry as well as from the material development industry, great background, very relevant background for us. And obviously, they are supporting BCS with strategy, commercial thinking, the dynamics, the commercial dynamics of the industry, the commercial terms and they have a great network. So they are contributing on a number of very important areas for us in order to succeed going forward.

I think actually you have already answered the last question from here. With us today, we have Petter Slyngstadli from Norne Securities. Petter, could you take some questions?

Yes. Thank you. So would you say that the testing that you've been refining and the technology breakthrough that you had last year has made you able to produce constantly CNTs of a substantial good quality or sufficient good quality already ready for the -- or do you need further sort of improvement in the quality to be able to address the global battery chain?

I mean the biggest room in the world is the room for improvement. We are producing a constant quality powder of a certain quality with our unique features from the process and the way we are making it. We are seeing from our own tests in the battery lab that this has a positive impact for certain chemistries. So in addition to focusing on the specification comparison, as I talked about, you also need to address the performance of our CNT in the battery chemistry itself. So we are -- the fact that we're now able to produce certain quality on a repetitive basis makes us qualified, I would say, to enter into negotiations and discussions with key industrial partners. It's a prerequisite to start these discussions -- to have this establishment before we enter into potentially commercial discussions.

The lithium-sulfur looks promising. Just to be clear on that chart you showed. So the capacity retention that you are showing of 70%, that is compared to the traditional industry of 36%.

That's commercially available CNT made fossil. So that's the comparison.

So you nearly have twice the...

But I mean, I would emphasize these are early test results but it looks promising.

So are you -- are the European industry on the field? Or is it completely dominated by Asians and Americans?

I will say that it's dominated heavily by Asian companies. And that is also linked to the establishment of battery industry in Europe. Many of these players are also as -- has also an Asian origin. But I mean the interest and the motivation for qualifying European industry within this field is very high. So that's why we are we're having interesting conversations with global players in Europe and in Asia. So I would say that's too early to conclude. I think the ambitions in Europe, they are high. But of course, as we all know, last year was a pretty depressive development of European battery industry. But I think that we are -- I mean we are in a position we are in a material supplier position. We are not a battery company. So that's important to remember here. We can supply green and local material. If they are Asian or European, we are independent of that.

And I noticed that you travel a lot in Europe and present the company. Are you pitching for European grants? Is that a possible source of financing? Are you qualified? And how are you seeing interest from regulation -- regulatory bodies?

No. I mean we are invited to a lot of events, and there's a great interest in our business case and our equity story and the company. So we are trying to use the opportunity to broadcast what we are doing. I mean the fact that we succeeded by Innovation Norway last year was very good news. We have an ambition of entering into a process of EU grants. I mean they are pretty heavy and time consuming and requires a lot of work and probably not as the main applicant but maybe as part of the group applying for EU grants. I would definitely not rule that one out for this year.

Okay. That concludes the Q&A. Thanks, Odd.

Thank you.