Pyrum Innovations AG (PYRUM.OL) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. A warm welcome to today's earnings call of the Pyrum Innovations AG due to the publication of the half-year figures 2025. I am delighted to welcome CEO, Pascal Klein; and CFO, Kai Winkelmann, who will start their presentation shortly. [Operator Instructions] So with this, I hand over to Mr. Klein.

Good morning, everybody, and thank you all for joining this call. As we have done already several times now, maybe today, there will be a little change on that, we will spend less time on Pyrum history and what is Pyrum. We will still have a small excursion on that sector because there are always new participants in this call who are not really familiar with Pyrum, so they want to learn what is Pyrum doing and maybe become new investors. So we will do a little part now on what is Pyrum doing, but then we will also have a second part in it on really what has been brand new in the last months. So these are the 2 presenters. So myself and Kai Winkelmann, our CFO. Kai Winkelmann will share with you the numbers afterwards. And I will start now with the presentation itself, so company and market. So about the market, I can tell that it is slowly happening what we are predicting since some years. So in fact, since already 2020, we are saying that the export will increase, that the granulate will go down and that the burning will go down in volumes. And that's what we see now happening in 2020 (sic) [ 2025 ] for the first time very drastically. Why? Because most cement plants, tire burners, et cetera, have CO2 certificate issued. So they spend a lot of money on CO2 certificate. So they decided to burn less tires, because burning tires creates a lot of CO2. And that's exactly what the law wants. So we saw in 2024, a decrease from 50% to 35% in burning of tires, and a decrease from 30% to 25% in tires being transformed and rubber granulate used for children playground, soccer fields flooring and all that stuff. And that will still go down in volumes due to new laws, but that comes on the next slide. The only thing that has really risen drastically in the last months or weeks or even in the last year, I would say, is the export, which went up from 10% to 30%. And available tires are still about 10%. So what we see here is really an explosion of export. Why? Because there's not enough recycling volume in Europe. So the tires have to go somewhere instead of laying in our backyards. They have to go -- that's always a solution of the European Union. If we don't know what to do with it in Europe, we send it above. So it's not our problem anymore, but that will also change in some years if the information we have are right. So the volume of the tires are still there. They are even increasing every year due to electric mobility, which is consuming more tires than before. So from the regulations, they are tightening also more and more, and that is clearly in our advantage. Landfill, for example, has been banned since long time. So that is an information we gave already many times. Ban of incineration in some quantities has come, but it's not really necessary anymore, because most cement plants have announced that they'll stop burning tires in the next years until 2030. So the ban of incineration is not really legally pushed, it is financially pushed and also technology pushed, because the new cement kilns are much smaller and they don't treat tires anymore. They are much more efficient, and they don't have the size anymore to burn tires. So even technically-wise, there is evolution in our favor. And rubber granulate, that was in summer 2023, has been banned for most applications by the European Union because it causes cancer, skin cancer mainly; it can go into the lungs. And it is not -- how can I say that, it is not good to let your children play on old tires. You can imagine tires have been designed to last for 10,000 kilometers on the road and not to support the children's butt playing on it. But here is a grace period of 8 years before the ban will be definitive or final. News is that more and more OEM audits, so more and more tire industry off-takers, due to new regulations, are requiring, in their audits, circular contents. So I have seen letters from car manufacturers saying, if your production is not containing at least 10%, 20%, 30% of circular materials until 2030, you will be delisted, so you cannot be my supplier anymore. So there's really a pressure from the car manufacturers towards their suppliers to have circular content. And that comes a lot with also the newly discussed end-of-life vehicle regulation, so the ELVR, that has been negotiated already now in September and will continue in October. So that will oblige the automotive industry to have circular content in new cars. So instead of just burn old cars, we have to take materials from old cars and have a certain percentage of old cars in new cars. That is already happening today for the steel and metal parts. but they are excluded from the ELVR. The ELVR is really just for plastic components, so polymers that are in cars, because steel is already partly -- or mainly recycled. So here are many discussions even if tires are included or not. So I can tell you that we are, at Pyrum, very actively discussing with members of the European Parliament and politicians here in Germany to get that right, so that rubber is included, that tires are included in ELVR, and also that the products we are producing, which will then be used in the future in, for example, door handles of Mercedes-Benz or dashboards, et cetera, that, that will count into the ELVR obligations that are coming more and more now. And the increased tire export in 2024 has pushed some EU leaders even to visit us in Dillingen and to speak about our possibilities to take in tires and to increase our recycling volumes, because there is really EU discussion to ban the export of tires. So that really this resource, which is more and more recognized by European Union as being a valuable resource. It contains oil to create new polymers, medicine, cosmetics, it creates carbon to make new tires. So that is a valuable resource, which is a shame or a waste to send that outside of the European Union. And therefore, it's actively discussed at EU level to ban the export of tires. But I can't tell more about that yet because these are discussions and there is no final results yet. And look, hopefully, for all of us that will be discussed and decided in the next 2 to 3 years. So for those who are for the first time here, I quickly explain again what Pyrum is doing and maybe some smaller new things on the process. So again, we are taking in tires. So one line of Pyrum is treating about 1 tonne of tires per hour. 1 tonne of tires per hour is then shredded, steel is extracted, textile fiber is extracted. The source of the tires is multiple from Schwalbe, Michelin, Conti, Remondis, local garages, let's say this. Yes, even from workshops here or recycling centers here in our region, everybody is bringing us tires. So that is more and more well working system. The steel represents about 15% to 25% of the tire. That really depends on the input. So you have 15% approximately in a car tire and 25% in a truck tire, and bike tires have very little steel, almost none. And then you have between 0% and 10% of textile fibers, and the textile fibers also depend from the input. So bike tires are up to 10%, truck tires almost none. So on average, we have around 700 kilogram of rubber granulate out of 1 tonne of used tires, and that goes then -- everything after that, bucket elevator here is what we have developed mainly, so our reactor. So the rubber falls into the reactor, is processed in the reactor through an airtight and continuous process, which separates it mainly in 2 first steps. So the one part is carbon, crude carbon. And the other thing is vaporized oil, which is mixed with gas. And that is then condensed, so cooled down, like in a refinery, and that creates oil. That oil is then slightly cleaned. So we take out of the oil, floating particles and water residues, and then the oil goes to the tankers already into BASF. That is about 250 kilogram per hour. So about 25% of the tires that came in at the beginning becomes oil, and that goes today mainly to BASF and BASF makes products for VAUDE, for Mercedes-Benz, for many, many customers. You will find it in ibuprofen for pills when you have a headache. So in fact, more or less, BASF can produce a lot of things that are made of crude oil. And there are also new test runs on making chemicals also for the tire and rubber industry. So the oil is really a resource that is not burned and used for the production of new products. At the end of the condensation system, we have a gas, and that gas can be treated by 2 ways. So we have both systems up and running here at Pyrum at industrial scale on a daily basis. So one is a combined heat and power plant, which is nothing more than an engine, a big MAN engine that is burning the gas and creates energy and heat out of it. That is quite maintenance intensive, because the gas has some fluctuations and the hydrogen content in the oil, which is not so good for the long life of an engine, but we managed to make it run quite well. The advantage of the combined heat and power plant is that you get more electricity out, but less heat. And you need to prefilter the gas beforehand because you need to take out the sulfur before. Then we have another system with microturbines, which creates much more heat, a little bit less electricity, but both systems create enough electricity to power the Pyrum reactors. So that part is completely self-sustaining. We just need external energy for the shredding unit and a little for the mill. The heat is also used in the mill and pelletizer. And that is the last thing I explained now, what comes out of the bottom of the reactor is about 310 kilograms. That is about 31% of the tires that came in at the beginning. That is milled to thin powder, smaller than 10 microns. That goes then into a pin mixer, to a dryer. For that, we need the heat from the combined heat and power plant in the turbines, and that creates small 1- to 2-millimeter pallets, the so-called recovered carbon black. And that is used in new tires from Continental and Schwalbe today that is sold and we have offtake agreements with them. And a new thing since the last presentation we have made, we have now also green light from several coating manufacturers that will get now the first deliveries also to make coating out of it. So another big application that is even very, yes, turnover positive, because carbon black for coatings have a very high value. So history, I will make it quick. There has happened so many things in the last 17 years. So we concentrate on the most important things. So created in 2018 (sic) [ 2008 ], building permission for the first industrial line was 2013, which started for the first time in 2015, but it took until 2019 until it was running properly. So 4 years of ramping up and solving issues. Then we had the first oil offtake agreement with BASF in 2019, and an investment of BASF in 2020. First cooperation with Continental and Pirelli also in 2020. '21 was our IPO in Oslo; '22, the second listing in Frankfurt. End of 2023, we had a new cooperation agreement with BASF in which we increased the oil purchasing volumes by 3x, so to 300,000 tonnes of oil per year. So there are a lot of plans to build and the oil offtake is there. And we received a loan agreement from BASF of EUR 50 million in order to bring us in our plant building projects a big step forward. Since 2023, we are VDA 6.3 certified. I also like to say that there has been a Pyrum before and after VDA 6.3, because that has really changed the structure of our company completely, because that is the automotive auditing, which was necessary to be allowed to deliver recovered carbon black into the automotive industry, because the recovered carbon black is a security relevant component of a car. And for that, we had to put in place quality control, quality labs, [ for hire ] systems, backup systems, et cetera. Then we had Schwalbe with the first 100% rCB made bike tire called The Green Marathon in the same year. In '24, we successfully started the 2 new lines in Dillingen, so the 2 new reactors 2 and 3, 3 at the end of the year. That also gave us the possibility at the end of '24 to get, for the first time, a technical due diligence report confirming that we have reached TRL 9. So for those who don't know what that means, TRL 9 means that the technology is industrially proven. So it is a proven technology that has won for more than 1 year in an industrial scale. So very, very important, mainly to get project financings and other finances. In '25, we had done the first FID from our project in Czech Republic. We got a new big customer with VTTI with the first project in Antwerp and many others to come. And now the actual thing we are working on since April, May, really hard. And I would say, since July, even harder is the commissioning now of the biggest rCB plant on the globe, which is our -- we call it MAD 2. So just for the ecological side, just a quick summary that we have done as a first in the industry, a life cycle assessment already in 2023, proving that the Pyrum technology saves 965 kilogram of CO2 per tonne of used tires, which is 72% better than the recycling mix in Europe today. And that was really an important milestone to show to the industry that we are not just circular, but also saving a lot of CO2. So that is for the history. Now we look at the actual new stuff. So we have declared 2 new patents. So they have already been a patent, a global patent and our reactor that we have now since some years. That is not limited to tires, but for multiple applications. So that is our reactor transforming plastics or polymers into new raw materials. And we have a European patent on the pyrolysis process itself. And now we have a new patent declared in 2024, end of 2024 for carbon fiber reinforced plastics. So there our first prototype is running and has proven that it is able to take out again the carbon fibers from windmills, old planes, cars, et cetera, and to use them to make new carbon fiber products. And another thing we are very proud of, because we have done over 100 test runs since 2022, together with Continental in a common call JDA, joint development agreement, to create a Golden recovered carbon black. So meaning a recovered carbon black that can be used in high quantities in tires. And we have developed 2 new grades with them. And for that, we have also declared a European patent end of 2024 for that so-called yes, Golden rCB. So that is now -- the next picture shows now the actual status of the plant in Dillingen, which is not 100% new. It's from April 2025. The only thing that has changed on that sky view here is that here the new asphalted area here next to the power plant is now full with tires. So that is our newest additional tire stock, and that is really full completely. So we are getting tires and not little of them. So about the next steps. So here, that is the shredder. So what has been colored here in orange. In green, these are the 2 new reactors. In yellow is the power plant and the exhaust gas cleaning as well as the gas buffering tank. This is the new mill and pelletizer, and the 4 big green silos you see, the 2 first silos are for the crude carbon coming out from the reactors and the second 2 are for the finished mill and pelletized recovered carbon black. Underground in here, you have the oil tanks. In red, you have the control rooms, the new tire storage. And here in the back here, that giant hole here is now for spare parts, maintenance, et cetera. So you need quite a lot of space for that, which we have a little bit underestimated at the beginning. Sharping the knives of the shredding unit takes a lot of space. You need a lot of spare parts. So yes, you need a warehouse to store spare parts, and that is something that we have learned now. So that we have also -- and that has also drastically reduced downtimes on plants, because when you have spare parts there, then you want again in an hour or 2, you first have to find the spare parts. It sometimes takes days or weeks. So yes, also throughput has a lot of influence on how well is the maintenance prepared. And if something is brand new, like our technology, you don't know what happens or you don't know what breaks off, then you don't know what spare parts you need. But here, we are getting really a good knowledge on that part now. So now news and facts on the plant in Dillingen. So where are we? We have here the system with the red lights or green lights or yellow lights, meaning how good is something working. So the 2 new lines called TAD 2 and 3, so thermolysis unit Dillingen 2 and 3. So both are running stable at about 600 kilogram per hour serial production on daily basis. So every time you are here in Dillingen, you see white smoke coming up here from our power plant. You see that both plants are nicely running. So there is, I would say, no big issues here anymore. We have been able, in the last months, to increase the maintenance intervals, which is extremely good. Before we had always a maintenance stop every 4 weeks. Now we were able to increase that maintenance interval to almost 8 weeks, which just cuts one maintenance of 3 to 4 days per month. So that gives more production days. And we are working to increase that even further. Just one thing that you all know it, we also passed the annual maintenance successfully in August, and it worked quite well. It was planned for 3 weeks. And we even had some spare days at the end because it was so well prepared and all parts were there that we could even do some maintenance work that were not 100% necessary, but nice that we had some time to do them. There was also one thing in the last month that was not so nice. We had some emergency stops on line #2, in which the plant shut down automatically through safety systems from minute to the other. The good thing is it was immediately solved by the plant itself. So I have to say I'm really proud here with our team that our security systems work so well. So nothing happened, no machinery parts, no person was in harm at any moment, and we could very quickly find the mistake. It was just a firmware error. So there has been an update on the control system of the plant, and that was not compatible with the firmware on one controller. So some stupid thing that can happen on every computer at home can also happen in the plant and that has been fixed. So if you have heard that there has been a shutdown here at Pyrum, it was nothing drastically. It has been solved, and it was just a firmware issue. Shredding unit. So we have added here additional night shift. So we had in the past little issues with throughput. So we didn't have enough rubber granulate sometimes to feed the well-working Pyrum units. So we had to help ourselves sometimes with reducing the throughput on the Pyrum lines a little bit because there was not enough rubber granulate, or by acquiring rubber granulate from somewhere else. So in order to solve that, we have now an additional night shift. So for those who don't know it, we are only allowed to shredder over day. And now we change the knives overnight, so that we have more shifts working. And that has pushed us now to average of 300 tonnes per week of tires that we can process. And we need 350 to work all lines with 600 kilogram per hour on 24/7 basis. But that is, for the moment, 300 tonnes with 5 days. By adding now the 6th day, Saturday, with 2 new shifts gives us about 70 tonnes more per week. So then we are now at full throughput in the shredding unit also. So next is the power plant. The power plant has also caused some issues until March, April this year, but they have all been solved. At the beginning, we had some software issues and some overheating in the burning chambers. But that is solved, I would say, since around mid of April and the power plants are running stable 24/7, which we're also proud of. So at this moment, I have to say we are really a nicely running plant here in Dillingen. We are so proud, from the shredding to the reactors to the power plant, everything is working smoothly. And we have found the sweet spot of operations for all of these units. So the clear footprint or the blueprint -- sorry, blueprint is the right word, to multiply that is now finalized. So the last step we have now to accomplish is the new mill and pelletizer, which is the world's largest one. As you all know, we have already one mill and pelletizer, which is very, very small compared to the new one. So the news on that is constructions are completely accomplished since June approximately. Mill and pelletizer is producing and each for themselves. So the mill and the pelletizer are producing in spec material at higher throughput, and that was even quicker than we thought. So just to give you an idea on the old mill and pelletizer, it took us almost a year to get the mill to produce milled material that was in spec and could be sold. It was just producing out of spec material. The new mill was producing almost from day 1 on in spec material and at high throughput. So what has cost an immense amount of time on the first mill and pelletizer is not happening here. The same thing is for the pelletizer. It took, I think it was 3 days, until the pelletizer was producing in spec material at high throughputs that can be sold. So honestly speaking, that worked better than expected, and that is something that made us very happy and confident that in the future, milling and pelletizer is not really an issue anymore. What is right now sadly a little issue is that the bottleneck actually in the mill and pelletizer is the transport between the mill and pelletizer. We have already said in December to our supplier that we see a problem there, but we have been told that they are aware of issues with transporting mill powder and that they know exactly what they do. Sadly, I have to say today that we were right. The good thing is that we know how to solve that. Already in December, we gave our supplier a hint on how to solve that in case it would really create a problem. Now it is the case that this bottleneck, the transportation of the mill material to the pelletizer is now exactly the problem that we have announced in December, it is exactly happening in the same way as we announced it. So the good thing here is that we know the solution. So our initial ramp-up plan was from September to December 2025, slowly from 0 to 80% throughput in the new mill and pelletizer to have the full year '26 at 80% and from 2027, 100%. The new plan to the newest results is that we will now be operating from September to December approximately at around 50% capacity of the new mill and pelletizer. Why? Because the transportation system between the mill and the pelletizer is just not doing more and the new system has to be put in place. So the planning has now been -- we keep the planning with 80% for the first half of '26. But as of now, and I can't say too much about that, but if the new conveying system is put in place, usually, we should be immediately at full capacity. So it is more or less sure that in the second half of '26, we will already be at 100%, maybe even a little bit earlier. So that is the actual situation for the milling and pelletizer. As we speak now, it is running. We are producing now since some days in shift operation, and we are trying to increase that a little bit. But yes, if you have a conveying system that's just not transporting more, then it's just not transporting more. So I just gave a nice example just before, it's like having a race car and you have forklift tires on it, you cannot drive faster with forklift tires. So you need to wait until the new tires are mounted. So that is here, for the conveying system, the case. So here, we have some new pictures. So on the left, you see when it was brand new and newly installed, the new mill pelletizer had a round tour on the plant with Felix Magath, and that's how it looked brand new, shine and bright. That is the pin mixer, that's the machine, in fact, that is creating the pellets. And here on the right, you see a picture from the pelletizer, in fact, that is the right side of the hall. On the left side of the hall, you have the mill which has almost the same size again. So it's really a huge plant over 3 floors in 1,000 square meter hall. So it's really giant. I also didn't think that would become so big, but it's really impressive to see it. And here, you see a picture from this morning, where it runs. And here you see directly that it runs because there's a little smoke in the hall, and that is from the hot vaporized water and so on. This machine is warm. What you see here on the top, the silver parts here on the top, that is the dryer that is drying the pellets at the end of the process. So let's continue. So now the new plant in Perl-Besch. So here are the details about the plan. So there's not much that has changed since the last presentation, the size, the throughput. We have now a full investment volume of EUR 62 million, which comes for several reasons. We have included 12.5% contingency, because that's what the project financing bank was asking for. It includes the financing cost during building phase, because now we have the interest rates from the term sheets, and we have now the OpEx cost for the ramp-up period. So this includes really everything, not just the building. And the new [ CRR ] site is prepared, completely accomplished, site is cleaned. The zoning plan, in German Bebauungsplan, has been adapted and also exclusively to the building of a project of Pyrum. So nothing else can be built there than a Pyrum plant. We have received, in summer, the building permit according to Paragraph 8a. So usually, I could say now that we are allowed to build, but there was one thing, the Land Servicing in Germany, you call it Geländeerschliessung, that was must have in the zoning plan and in the building permit that the site in Perl-Besch has been land serviced. That means it has to be linked to the street system of Germany. If the site is not linked to the street system, you are not allowed to start working. And finally, we had a notarial act on 11th of September with a lot of participants. I think there were 7 participants in that notarial act among mainly the catholic church and the municipality of Perl. And this procedure took almost a year and was strongly supported by the Stahl-Holding-Saar and the city -- or the village of Perl. There had been many interests to be joined together. So with this new land serving solved now, we can really start now. Now we can build the road to the site, and we have immediately ordered the architect now the planning of the road and the foundation and the servicing of it. Here you see it, I have added a plan of the site as it is. So here you see the green part of the site, that is our new plant in Perl-Besch, in fact, the building site. And here, you see the street. Here's a round point and the street that stopped here before. And what you see here, the blue part, the blue building side or the blue side, that was owned by the catholic church. And in order to access our site, we needed that small orange square, which is 10x 7 meters. So it's really not big. It's 70 square meters, but that was necessary. That part is not owned by Pyrum. It has to be owned by the city, because the city is the one who needs to prolong that street to the building site and then the site is serviced and only then all the permits are valid. And that has finally been signed on a notary on the 11th of September. And I'm really thankful to everybody that was involved here, because it was long discussions. And here, you see now the first 3D picture of the new plant in Perl-Besch, and that is what the site looks like today. You see it is prepared. So it's flattened and the trees and all the other stuff that was there is taken away. So nobody needs to drive there to have a look. But if you want, you can. So partner projects and customers. So we have far more than 20 projects in pipeline. Just with VTTI, we have added a lot of new projects potentially. But we are not speaking about that yet. As said, we have 5 -- 10 running projects right now in 6 countries. Four are actually in the permitting progress and 3 have reserved the permits now. So it's our plant in Perl-Besch that has the permit, the Vresová tire plant with SUAS in Czech Republic and the project in Greece, Thermo Lysi, they have now all the permits. And as said, SUAS is the first now to have FID. And if everything works according to plan, we will hopefully have FID in Greece before end of the year. So recycling volume of this project is 220,000 tonnes, 6.4% of the European market, over EUR 600 million invested. Oil is completely sold and the rCB for a big chunk of it already. This graph here shows where each project is standing. You see there are some very new ticks in the last 2 months where, for example, the full VTTI project, Swedish project became forward. We have FID now in Czech Republic. We have new granted permits. So you see all these projects are really taking speed now. And soon, I hope we can also announce that Unitank has also signed the contract. So here we are very close to an agreement. So here are the highlights from the customer projects. So VTTI, which is the largest LNG terminal operator in the world, has signed the engineering contract with us for a minimum 45,000 tonne plant in Antwerp, and which is just the opening door for a lot of other projects worldwide. I said, Czech project has received FID, building permit and investment agreement. It will be signed soon. So I cannot tell you a lot about that, but we are very close to that. Impactus, our Greek customer, has just signed a EUR 2.50 million engineering contract with us, with this planned to be finished before end of this year. So yes, if everything works well, we have their FID before end of the year, we can also start there. So then we have Perl, Czech Republic and Greece in the building phase next year. And here with Siemens, we have implemented our first plant on earth, the SIEMENS PCS NEO software, which is groundbreaking, and there are now commercials coming out between Siemens and Pyrum showing the partnership. And that is already, even though it has just started some weeks ago, bringing customers from all around the globe that suddenly realized that Pyrum exists and wants to work with us. So partnerships with VAUDE and Mercedes, they are known. So as a matter of time, I will skip that. Continental, also nothing extremely new. We are still working together. Offtake agreements are running. We are delivered with tires with Continental. So that is still running quite well. Schwalbe, there are some changes because Schwalbe has now started by investing also in Pyrum. So Schwalbe has participated in our last 2 capital increases and becomes now a much bigger shareholder, which makes me happy because working together with Schwalbe is super, very friendly, yes, together. And now I skip to Kai.

Hello, everybody. We are coming to the financial figures that we announced this morning for the first half of 2025. The revenues in the first 6 months amounted to EUR 1.3 million, almost up around 79% compared to the previous period in 2024. The total output increased by 48% to EUR 6.7 million after EUR 4.5 million due to increase in higher capitalizable own work and in higher revenues from TAD 2 and 3, especially the oil. The other operating income almost tripled compared to the previous year. This was due to an investment subsidy amounting to EUR 2 million for the creation of jobs in Dillingen. The personnel expenses were up by 12% to EUR 3.5 million due to new staff and inflation. And the other operating expenses went up to EUR 2.2 million after EUR 1.6 million. This is due to the new costs that occur from the operation of TAD 2 and 3, so spare parts, maintenance and running the plant. EBITDA amounted to EUR 2.3 million -- minus EUR 2.3 million after minus EUR 3.1 million, while the EBIT was at minus EUR 3.9 million after minus EUR 4.2 million. Depreciation went up to EUR 1.5 million. This is based on the completion of plant parts that now has been taken into readiness and starting of depreciation and amortization. And interest and similar expenses went up by drawing additional loans from BASF during the last 12 months. The cash was at EUR 2.8 million on the 30th of June. After that, we made a capital increase by EUR 5.6 million, so summing up more than EUR 8 million available. The forecast for 2025. We stick to the revenue forecast between EUR 4.5 million to EUR 6 million. Even we expect now a bit lower revenues from the selling of rCB than expected before. On the other hand, we expect more revenues from consulting agreements with partners. The total output we have to take down from EUR 20 million to EUR 25 million to EUR 10 million to EUR 15 million. Total output includes always parts that we order for new plants, as example, for Perl-Besch or for other plants. And as we had some delays, let's say, with the SUAS project and in Perl-Besch with the financing, it is not possible anymore to have EUR 20 million to EUR 25 million of total output, but this doesn't influence the revenues and doesn't influence the EBIT for 2025. The EBIT forecast still is at minus EUR 8.5 million to minus EUR 10.5 million. So no changes on that one. Coming to the next page, we did 2 capital increases during the last 12 months. We expected to get EUR 15 million roughly in October. It was possible to create EUR 10 million. And we intended in July this year to get EUR 8.5 million and made EUR 5.6 million. The math is, let's say, that the capital markets for small caps is, yes, not very easy. To give you an example, from the EUR 15.6 million that was acquired, more than EUR 15 million came from, let's say, acquisition from the management and not from the banks. So it is our work, particularly mine, to attract investors also for the future. The current shareholder structure shows that Pascal Klein still owns 8.3%; Amel Holding, the company of the Klein still holds 8.3%. Benifin also participated in one of the business angles from the beginning, participated in the last 2 capital increases as well as Jürgen Opitz. BASF was diluted to 6.7%. Schwalbe is the new strategic shareholder, took part in both capital transactions and now holds 5.2%. And Continental from the IPO in 2021 keeps around 0.9%. Then we come to the outlook, and I hand back to Pascal.

I will make very quick now with the outlook, because this way we can answer some questions. So from the outlook, the main points are complete the bank due diligence. We are very well working with a big European bank on that. We are speaking with some investors, but I can't say very lot of that. Increase the rCB volumes, which is one of the key points. So ongoing modifications on line #1, but the priority 1 was the whole last month to bring line #2, so the new mill and pelletizer to start in August, because it has 8x the capacity of the old one. Now we have it running with a delay of approximately 3 to 4 weeks. How can I say it? We are now at about 50%. The plan was to ramp up from 0 to 80% from September to December. I would say we are not so far away from that. The only thing is that we don't think that before December, we will crack the 50% because of that bottleneck. But I've seen already there's a question in the Q&A. So...

Yes. Yes. Let me just intervene, Mr. Klein, for a short second, because we have some questions that the attendees cannot hear you. So you might check your microphone as well for another time. I can hear you clearly.

I turned it on and off.

I can hear you.

I hope everybody else can hear me.

Okay. So we got some participants and they can clearly understand and hear you.

Okay. So I said, but I will come to the questions in a minute. Yes. So we always spend a lot of time in Perl-Besch. So even though we haven't done the inauguration ceremony in Perl-Besch, that doesn't mean that we didn't start there. So construction has more or less started already in the background with all the planning works and all that stuff. So when we really start to build on site, it will be extremely quick on site, but we will do that before end of the year now, this official starting ceremony in Perl-Besch. And what did cost a lot of time in the last month was also, yes, some lobby work in the European Union for the end-of-life vehicle regulations, for the banning of export of used tires, and increased political awareness, and therefore, our brand ambassador, Felix Magath, was also quite helpful, because it did open some political doors that we couldn't open on our own. So I never thought that we would need to work so much in Brussels to get to here. But when you see in a new end-of-life vehicle regulation that rubber or tires are excluded because there's no technology to recycle it, then you have to lift your hand and say, sorry, guys, we are here. Sorry if you didn't hear about us in Brussels. But the technology is there, the market is there. Then you need to educate politicians, and that's what we have done with more than 60 people from the parliament now, and it's starting to take fruits. So here's the summary. So I said this presentation will also be accessible afterwards. So that is a quick summary of the main points. Now at last, picture of Felix, who has a very important sentence that we share with everybody now. He's now one of our shareholders, too. And he loves our technology, the pioneer spirit and entrepreneurial consistency and social relevance of what we do. He cannot understand why we are not more supported by politics, and that's why he wants to push now because, yes, it's answering so many problems we have right now. So thanks for your attention. And how do we go forward now with the questions?

Yes, indeed, we can do so. But anyhow, there are some attendees still have problems hearing you. I can hear you very clearly and some others just put in the Q&A that they also can hear you well. So anyhow, we can now check if -- there are some notifications that people can hear you as well. So we just move on with that and come to the Q&A session. And to all the others, there will be a recording of that later on. So we move on to the Q&A and you are able as a participant to put these questions into our chat box. And we start with Thomas [indiscernible].

Thomas did put some questions and very good ones, as always. So I hope he can hear me. Otherwise, he knows how to contact me. So color on the rCB prices for paints versus tires. I just took the occasion, while Kai was speaking, to call our rCB salesperson, which is newly working for us since now 2 months. He is one of the biggest specialists in the rCB market, and he has also opened the doors in the paint industry. So you get in the painting industry approximately 40% more per tonne for the same rCB. So the prices in the coating industry are much higher than in the rubber industry, but the volumes in the coating industry are much smaller than in the tire industry. So there are smaller volumes of paint you can sell to the painting industry for approximately 40% more per tonne, because that's the prices they pay. And I hope that gives you an idea on that. So should I read the next one, or...

Yes, you can read the next one. That would be lovely.

Okay. Can you explain what the issue is with the transport? Is it not enough capacity at the conveyor belt? If you know the issue, why is it left for the IPC to hold back the issue? Okay. So I will try to be quite transparent here. In the old mill and pelletizer, at the beginning, the mill was not working. And at the old mill and pelletizer, at the beginning, the pelletizer was not working. They were not producing the right output material. And on the first mill and pelletizer, we had exactly the same problem in the transport between these 2 points, which was the fact that when carbon is freshly milled, it is fluffy. It is so mixed with fresh air that you cannot transport it like a solid, like sand or any other solid. It behaves like water. So the traditional conveying system that transports sand, for example, or set down carbon is not working with freshly milled material. So in the ramp-up phase also here for Line 2 and 3, we did the milling. The milling worked perfectly. We put that in tanks or in bags. And some days later, we started with the pelletizer and we put the carbon from the tanks, the milled material from the tanks from the big packs and the pelletizer and that worked perfectly. The problem is that you need 20 to 30 minutes after the milling to let the milled material set down, settle, and that the air goes out. And once that the air has gone out, it can be transported via a dosing screw. And what we have here is a dosing screw. So that dosing screw can only dose the freshly milled recovered carbon black after 20 to 30 minutes it has set. So the solution in the old mill and pelletizers, that's why we know the solution, is that we put a double screw inside, and that is a screw that is air tightening and water tightening itself. So meaning that you can transport with this screw even water or any liquid. And as the freshly milled carbon black is behaving like a liquid, you need to transport it like a liquid. And that's what we told already in December to the supplier, but the supplier said to us clearly, he knows the issue, that he has been in front of that issue many times in the past, that they have a solution for that, and that we have ordered an EPC, so turnkey system. So if we want to mess up now with their planning, that would mean that we can take responsibility for the well-functioning of the new mill and pelletizer, and that is something that we disagreed to sign. In fact, we buy a full system. It's their problem to make that one. So we are not taking any responsibility on that. And sadly, we were right at exactly the problem that we announced them. The freshly milled material is behaving like a liquid. So you will not be able to dose that with the screw. It will work with a double screw, or if you have 2 containers between the mill and pelletizer, meaning one is filled and one is used for the pelletizing. And after half an hour, you switch. So the one that has half hour settled material is then pelletized and then you send the new material, the new milled material in the other tanks. So you switch between the 2 tanks every half an hour. What we are doing right now is easily explained. We produce half an hour, then the material has to wait for half an hour to set down, and then it can be processed with the existing transporting system with the existing screw. So we produce half an hour, we stop half an hour. We produce half an hour, we stop half an hour. And that's why we know quite exactly what the maximum throughput will be, because with the second buffering tank, we can switch between the 2 buffering tanks, and then we will double the quantity, and we will be at 100% quite quickly. So that is one of the solutions that they are checking for. So at just 2 buffer tanks, and we switch between the 2 of them every 30 minutes or like we have done it in the old mill and pelletizer with that famous double screw that can also transport the liquid and 1 buffering tank in between the mill and pelletizer is enough. Yes. So we know the 2 solutions to solve it. Sadly, these things are not -- you cannot buy them in the next workshop. It's not things that you can buy from the shelf, so they need to be built. And yes, our supplier will do it, of course. And I hope that answers the question. The next question, I haven't understood it 100%. Are you seeing any challenges -- gas engines? Not really because we are using today mainly the turbines, and our turbine supplier has not yet said anything that we couldn't do that. And I see a skip once question. Can you confirm that specifications are to spec for tire manufacture -- and as a result, revenues expected for first half '26. I think you mean that. Yes. So we meet the expectations of almost the first samples that came from the mill and the first samples that came from the pelletizer were immediately in spec. And that was the big difference from the old mill and pelletizer. It took 2 years to get the first in spec output from the old mill and pelletizer, and that was not stable. The new one is really producing extremely stable output and everything is in spec. It's really just that, that issue was the transport of the milled material into the pelletizer, but that is -- I'm very confident because I know how to solve that, and I know also approximately how long it takes to switch that unit.

Okay. There was just one add regarding the revenues. While we expect that in the second half we are going up to 100% instead of 80%, we can confirm that we expect the revenues for 2026 are unchanged, that there is not a drop in what we have said in the last call, let's say. So yes, we can confirm.

So do you have enough staff to oversee the construction of the 3 upcoming plants and plan for -- yes, that was one of the main thing that BASF was already asking us in 2020 when they invested in us. You have to increase your team in size and in experienced people. Otherwise, once the rollout starts, you will be drawn quickly. And that's why we went from 25 employees 3 years ago to now over 100. So that's also one of the main reasons for our losses because we have these teams in place, and they are working on the existing projects. So if we wouldn't have that team ready, we would have better numbers, honestly speaking. But we need to invest in our staff in order to make the projects come to life now. Can you give us some -- that question, I don't understand exactly. Kai, do you get that?

Yes, impressions. Yes, we participated on the hitch with Montega. It was a very well-organized conference. We met a lot of new potential investors, but there were also many that haven't seen Pyrum before. And we got good feedback, but it's not that you just go there and you are meeting someone who says, okay, I give you EUR 100 million for the next plant. So that's the impression. So we had around 13 investor meetings doubly booked. So more than 18 investors, then a group meeting, and another interview with the [indiscernible]. So in our opinion, quite successful.

So test facility for grinding and pellet manufacturing had produced required quantities. So why couldn't this be transferred directly? Have these problems delayed the conclusion with the bank financing deal? So that is somebody who knows what we are doing. In fact, it is correct that we have sent already, a year ago, truckloads of material to the Netherlands to the same facility that the one that has been built here to test the throughput, and that is working. The mill is producing here on site the throughput that it should produce. And the pelletizer is also producing the quality and the throughput it should produce. But you have to know that in the test once last year, the mill was in the Netherlands, the pelletizer was in Germany. So they milled the material, put it in big bags, drove it with the truck to Germany and then pelletized it in Germany, and that worked perfectly fine. And the point is we have no truck driving here between the mill and the pelletizer. And we have not a delay of a day or 2 in between the milling and pelletizing. The only problem where the throughput is not there is that the freshly milled recovered carbon black needs 20 minutes to 30 minutes to set down. It's like a good red wine that needs to settle, the recovered carbon black needs to settle for 20 to 30 minutes. If that is not done, you cannot transport it. Or if you try to transport it with a screw, it's just not working because it's floating through the screw like water. And that is exactly the point. So the 2 possibilities are, we have 2 buffer tanks, one that is resting and waiting for [indiscernible], the other one is producing; or the other possibility, you have just one buffer tank and the system under it that can also transport liquids. So that are the 2 solutions. And as we are not the builder of the plant, we are just a buyer of a turnkey process, we have declared that to the supplier and the supplier is now to build 1 of these 2 solutions. And we are waiting. Normally, next week we will be told what of the 2 things will be done or if they even have a third solution that might be quicker. And I don't see that, that has delayed anything, because the technical due diligence specialists that have visited the plant, they also see that, and I see that it is nothing crucial here. Crucial would be if the mill would not produce in spec material or the pelletizer would not produce in spec material or not enough, but this is just a simple resting issue. And so nothing that an engineer who's watching on it has any fear about it, but it just takes now some weeks to change it. In respect to ramp up to 100%, what impact will it have on revenues? So yes, I said the rest of the plant is running fully. It's the shredder, the reactors, the power plant. We are, just now I said, at around 50% for the milling and pelletizing. And we expect really to be at 100% the quickest possible. And impact on revenues, that is more something for Kai.

Yes. So as we said before, we expect, in the second half -- beginning of the second half of 2026 to be at 100% at TAD 2 and 3. For listeners from the past, they should know that TAD 1 is now running for 10 years already. So it's time to replace the reactor within the next 2 years. That's what we expect. So there needs to be something done. On TAD 2, 100% would mean around EUR 8 million to EUR 9 million revenues just coming from TAD 2 and 3. And so we expect up to EUR 13 million in revenues for the next year. The concrete planning has not been performed yet because we are still waiting for the results from the milling and pelletizing, and then we can get more concrete on that part.

What are your plans for the share price development? The price has not changed almost for 2 years. Pyrum is extremely underrepresented in the media. That's right. Honestly speaking, that's right. That's exactly also the reason why we spoke with Felix Magath to help us. We also have a new investor since only now some months. It's Frank Thelen. He also starts now to represent us more in the media. And yes, I have an offer on my desk for a bigger media campaign, but I need the green light from my CFO to buy that. On your income then, please clarify what is operating output?

Operating output is revenues from selling of products and, let's say, additionally, increase of finished and unfinished goods. As many of you might know, in the time where we could produce on TAD 2 and 3, there is coming out some carbon black that has not been milled and pelletized and that's shipped mainly to Perl, where we need it in 2 years. So the increase of finished and unfinished goods includes, let's say, what we produce and have not yet sold, but it also includes work ongoing, let's say, consulting services that had partially been finished but not yet taken into the revenues. That's the main difference. Own work capitalized is always what your stuff is doing, let's say, plus material costs. So if you buy a Pyrum plant, you have the work from your workforce that you put in, that could be added to the CapEx, to the plant costs, that the depreciation later on is higher because the value of the plant includes the own work. In our balance sheet, you have the mechanism that you can activate costs from CapEx as soon as they are ordered, delivered and totally paid. And then you see it in the own work capitalized. On the other side, you see the material costs below in the material costs. I hope that answers the question.

Can we answer the next one, Kai?

No, we don't name the bank. What we can say is that 30% of equity is needed. And...

Yes, 30% equity, and we are, I would say, in final negotiations with the region of Saarland to grant us part of the equity, which would reduce loan part. Can you reach your revenue targets of pelletizer running at 50%? What about stops? Just that you get it, I want to explain something here. The idea what Kai had in his planning is that we went up from 0% to 80% from September to December this year. The idea was to make the plant running and to reduce the off-spec, because that was the experience from the old line that we produced a lot of off-spec material that could not be sold, so that only a little part of what came out from the mill and pelletizer could be sold, and to reduce over the months more and more the off-spec and increase the in spec. So now what we are facing here now is that we have 50% throughput, which is fully in spec, so which is very good. So we see that we have no off-spec production. So that is extremely good and that the only thing that is blocking us here is that bottleneck, of course, and that will happen once the decision is made. Whether we get a second buffer tank or the double screw to dose it, we will have a stop of, I would say, 2 to 3 weeks to do that modification. So we will have half a month to a month where we are not producing at all in the mill and pelletizer once the solution is delivered. But then I'm very confident that we jump from 50% to 100% almost instantly. What is needed to finalize the bank loan? Is that still realistic?

It is totally realistic. And yes, we are in talks with them since more than a year now.

Weekly calls with them.

Yes, we have weekly calls, and we don't see any part that doesn't fit. It's a very complex part that we have there because, let's say, this involved the capital that we get as a loan from BASF, as you might know. There's the Saarland where we want to have them participate to exchange part of the equity. And during the discussions on the business plan, there used to be, let's say, other assumptions than we had initially. We always said we need EUR 50 million. And the bank said, no, you have to add 12.5% on contingency. You have to add all the OpEx costs upfront. You have to add some reserves or bank fees and so on. That's why we summed up at EUR 62 million instead of EUR 50 million, and then you have a gap on the equity. And we introduced to the bank another one from Saarland if they might manage to do it together, but that doesn't help, because we need to close the gap from the equity part. And that's why we are in discussion with Saarland, but this is really going too deep in detail. Let's say, it's all about securitization, discussions between BASF, the bank, Saarland. So this took and takes longer than we expect to, but we are still more than positive that it is realistic to finalize it.

Maybe to add that sentence, I was not so into bank discussions in the past of my life, but I have to say, I'm really impressed about this bank because they are really sitting with us on one table and they're really searching together with Pyrum for the solution. So it's not really we want Pyrum to deliver A, B and C. No, okay, we help you to find a solution, and they are really extremely helpful. They even help in discussions with our region. I can just say, I'm really happy with their help. And I have not a single feeling that they have anything against us. They have against others that are delaying things, not against us.

Okay. For the next question, with, let's say, 10 concrete projects, we are coming to around 6% of the European market. Of course, we're working on more for the future. And we don't plan to have 100% of the market. But yes, we want to be a very, very good solution for that problem.

Excess energy, next question. I don't see it. And if there is excess energy, we use that in our shredding unit, which is the most valuable way to use it, because you don't get the same price for electricity on the market than we pay to buy it from the market. Coating market, do you take fines from the pelletizer? I don't understand the question.

I think the question is if it's powder or if it needs to be pelletized maybe and then you just...

Yes, coating...

Packaging in between.

No, the coating industry also want pelletized material and small amount fines. But for that, you need a special packaging machine, yes.

Are there any plans to apply AI, artificial intelligence, into monitoring and managing the E2E production process? So we decided to use SIEMENS NEO, and we are the first one in the world that has decided that. So we were very close to Siemens and Siemens is really working on industrial, yes, how you call it, 4.0, including artificial intelligence. But there will always be human additionally monitoring the process. I don't know if you want to add something, Pascal?

No. Well, an important rCB factory had a major fire accident recently. There has been a major damage on the plant and disrupted supply chain. Seriously, how does Pyrum prevent accidents like that? I think I know what you are speaking about. We know that company. My knowledge is that it was not the recovered carbon black part, so the milling and pelletizing that burned, but it was the pyrolysis technology that took fire. And Pyrum is doing completely something else here. Our reactors are unique in the world. That's why we have them patented. We don't have moving parts in our reactors. We don't have air leakage issues, and has been the same problem also with Black Bear in the past. And I can tell you our inventor, Mr. Schulz, who had his first trial runs in recycling polymers and rubbers in the '80s, he did also burn 2 plants to the ground. And before you realize that, with rotary kilns, with batch ovens, with all these systems, you have such a big risk of fire that he thought about a completely new reactor design with no moving parts that's constantly air tied over years and securitized, under-pressurized, and that was what our reactor is made for. So in fact, our reactor is the answer to why there is no fire.

What is the expected [indiscernible]? So we have no, let's say, forecasts further than that we announced in the past that we used to be to be positive on EBITDA basis in 2026 and net positive in 2027. We don't have additional forecasts actually that we publish.

Are there any risks that produced goods from plants in Greece and Czech Republic will lower price and therefore, cannibalize the German plants? I don't think so because we participate in these plants. So we are not just selling those plants, we are active co-shareholder, and we are even in the Board of these companies. And the intention of being in both companies is to get the best price for both of them. So I don't see any cannibalization here, and we are even consulting our partners in what are the best price that can be achieved.

Okay. Thank you very much, gentlemen. We have no further questions in the chat box, and we are slightly over time, but we took the time to answer all the questions. Thank you very much to all the attendees for staying with us. And thank you, Mr. Klein and Mr. Winkelmann for taking your time to answer the questions. If there are any further questions to our attendees, please get in contact with the Investor Relations of Pyrum Innovations. And for now, we close this earnings call. And for a last word, I hand back to Mr. Klein, and say goodbye and have a lovely weekend.

Thank you, everybody, for joining the call. Also for the very good questions. I didn't see one question that was not good. And I hope we answered them quite to the best we could. And like always, we try to be as transparent as we can. And yes, so I wish you all a nice day and a beautiful weekend and hopefully, weather gets a little bit better.

Thank you for participating, and thanks for organizing this call.