Symphony Environmental Technologies (LSE:SYM) — Interim Results

0:01 Good morning, ladies and gentlemen, and welcome to the SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC Investor Presentation. Situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we would just like to submit the

0:31 following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from SYMPHONY ENVIRONMENTAL, Michael, Ian. Good morning. Good morning. And good morning to you. Thank you. Good morning to everybody.

0:57 The traditional executive summary I'm pleased to present. The first half results demonstrate, of course, a material turnaround in financial performance, followed improvements of d two w, our core market. Q two and six it was successfully an implement let's try again. Q two successfully implemented a cost reduction program, which has started to increase our operating margins. Our interim results for six months to the 06/30/2024, our operating losses reduced 50% to $400,000 We had a significant fold in operating losses in Q2 to just $50,000 And these results demonstrate strengthening results of mainly all our D2W markets.

1:58 The successful equity raise of $1,300,000 should also be noted in March 2024 and the convertible loan, the extension to 12/31/2025. Currently, we're operating on at least the same level as Q2 twenty twenty four. We have very important positive legislation and regulations changing in key markets, is helping to increase D2W, our biodegradable demand. Our D2P bread technology becomes commercial in one more country, making three countries where we have our D2P technology. D2P Bred technology undergoing two semi commercial pre evaluation trials in The USA, which is where we have the FDA approval.

2:57 So for those that don't know, we're SYMPHONY ENVIRONMENTAL TECHNOLOGIES. And our main core business is in the development of additives and masterbatch technologies that you put into ordinary plastics which will do something to their properties. Now, the important part is to really understand where we are globally. And essentially the global issues we list very, very briefly in this slide. We're dealing with the plastic pollution issue globally.

3:30 Food preservation as a result of plastic usage. Crop growing, which is a result of plastic usage water pipe protection, protecting the water as a requirement is to use plastic pipes and human safety. These are core areas where our business is focused to try and generate improvements. So our technology is scalable and is also immediate. It's scalable because it's non disruptive. It's an upgrade to an existing product. So you don't have any material changes in cost, no changes to equipment or product quality. And of course, for those that are focused on recycling, it's recyclable and it can be made and recycled.

4:20 And it limits the amount of CO2 emissions and also limited life cycle impact. In fact, in both those areas, there are no material increases to CO2 emissions or life cycle impact. We are still one of the lowest in terms of LCA of any product in existence that we know of.

4:46 So that's the overview. Essentially, at a glance, we spent since twenty fifteen sixty seven million pounds in the development of this business. And we have been awarded, as many of you will know, one of the first, in fact, to get the LSE green mark. This is a high margin business, 46% -ish in terms of gross profit. And the important part is it's capital light, meaning really that we're operationally geared. And we have a global network of distributors. So in other words, these people aren't on our payroll. It's similar to a franchising type model.

5:33 We've invested something in the order of 8% of our overall revenues into research and development since 2015, just under $5,000,000 $4,900,000 to be precise.

5:48 And, of course, one of our very, very important strengths is our blue chip global partners. That includes Group Bimba, one of the very first to use our DGW biodegradable technology. For now, something like sixteen years, which has been quite a long period of time. And Indorama Corporation, very, very strong collaboration with that group, and Rivalis. So 75 distributors that we have, about 76 distributors that we have, covering nearly 100 countries. So from there, what do we really have in terms of business opportunity? And that is a very, very strong pipeline. It's been developing over many, many years.

6:37 We engage with public and private sectors internationally. So the result of that in terms of commercial activity, we have a lot of multiple customer trials ongoing at this moment. And I know we continually keep saying this, but those trials, some of them have become commercial, some of them semi commercial. So that pipeline is developing well. Ian, over to you. Yeah. Hi, Michael. Thanks, Michael. Just just clarification on previous page. Revenues are 65,000,000 since 2015, and r and d is close to 5,000,000 for about five or six years. So just on the the first half results we just announced this morning.

7:25 As a business, just to remind you, we are high margin operationally geared business. Our sales are international from a diverse range of regions, and there there'll be a map later on that Michael will go through, and you'll see d two w being sold in in 50 plus countries around the world. And our manufacturing is global as well. So we manufacture six six countries. So the capacity is large and immediate, and it means also a CapEx line business. So this is purely growth funding, working capital in growth going forward with a high margin business. So I think one of the questions we're gonna come to is how sustainable is the company's position. We don't need much cash to grow this business going forward with those those things in play. So just for the revenue for the first six months, d two w, same as the first half of last year.

8:18 But underlying with that, as Marcus mentioned, we've got growing we can see now growing markets in D two w strengthening in in in a number of regions. The d two p, strong performance first half of the year, 402,000, which is pretty close to the 500,000 for the whole of last year. So strengthening d two p. They're primarily in the anti insecticide for the time being, which is a liquid of sales selling primarily into Middle East and parts of Europe. So total revenue is 3,500,000, slightly lower than last year. It's because of reduction in our noncore market revenues. So the big number here is the gross profit strengthening 37% for the whole of last year. It's gone to 46% for the first half of this year, proved due to the raw material manufacturing cost reductions and also managed efficiencies.

9:12 And these initiatives are continuing into half two two thousand twenty four. So we've got more to come on that basis. And then the distribution costs remaining low, three to 4% from the dizzying heights of COVID. That should remain consistent around those levels. So contribution after distribution costs of 42% for the business. If we go into the the wider profit and loss account, admin expenses, a reduction in those expenses, primarily due to using less and less professional consultancy costs for the last few years. We've used a lot of consultants, professional advisory firms for various parts of the world to help us through things like FDA, clearances, market analysis in various parts of the world, legislative analysis and stuff. All that work's done now, and it's work that we can carry on doing ourselves. Significant reduction now. And then the operating loss well, looking at last year, 2,000,000 for the whole of last year operating loss to just under just over 400,000 loss. And in q q two, the loss of that was just 50,000. So significant turnaround financially for the business.

10:27 The other significant factor there is just the share of joint venture results. So we've got the Indian joint venture, which Michael will spend a bit more time on later on, and a loss of about 28,000, which should probably continue for the second half of year second half of the year as well, resulting in a loss before tax of just over 500,000. And the earnings per share, a loss of 0.27p. Just looking at the balance sheet. Look at my squeeze a bit bigger. Inventories reduced, again, as part of the efficiencies with the business and also efficiencies in terms of cash flow. You can see our inventories reducing to to below £500,000. They were close to 1,000,000 June last year, and they were just £600,000 end of the year. So a significant reduction there, which is, I think, well, a good place for us to be in.

11:20 And and within share capital share premium, you can see the result of the £1,300,000 subscription we undertook in March, which we've got 67% premium, strengthening the balance sheet. And then the convertible loans, you got the 1,500,000 in greater than one year. So they were in current borrowings last June and and at the end of the orbit, and that would extend to the end of December. So that's made our net current asset position much stronger.

11:48 So Michael, back to you. Okay. Thank you. So as you can imagine, the global market that we're focusing in is pretty large. We've come up with a figure here of $712,000,000,000 That's the sort of market that we're active in. And that market is still set to increase by something like 4%, certainly all the way up to 2033. So 400,000,000 tons is the sort of number that we're looking to focus our technology into or technologies with an S. So out of this 400,000,000 tonnes, you have China, which is one of the largest markets producing 32%.

12:35 Packaging accounting for 36%, of which 85% ends up in landfill or litter. That's a pretty big number. And, of course, it's said that it could take somewhere between twenty to five hundred years for that to degrade. So 10% of all plastic pollution resides in the world is in the oceans. By 2050, plastic in our oceans would exceed the weight of all living marine organisms.

13:10 So pretty hard facts. So where are we? Key opportunities. This global map shows that we've got Rivalis, one of the largest producers of irrigation pipes using our D2P technology, mainly an Israeli company but with a global reach. We have key opportunities in USA and Canada, maybe in relation to our D2P bread technology. But there's a lot of other activity going on in The US without other products. But our US and Canadian operations are mainly focused in the bread packaging technology, where we had announced an exclusive contract with group Bimbo in the development of their bread packaging to use D2P technology.

14:03 In The Middle East, one of our strongest markets, the new manufacturing unit that we have there has settled quite well. And we have in those markets a very, very positive regulatory enforcement and new laws coming in play. You can imagine that The Middle East aren't looking to ban oil related products. So it's become a very interesting market for us to develop. But of course, The Middle East, enormous amount of construction, enormous amount of plastic, and that plastic is very susceptible to fire hazards. And one seen in the press, quite a lot of issues with the Burj Khalifa in flames and other buildings.

14:49 So yes, we are active certainly on one or two great formulations in The Middle East on flame retardants and also antimicrobials. Our Latin American businesses, our distributors down there, they're active with a lot of legislation that's currently ongoing. We've had new governments come into play in the last few weeks and months. So the legislation drive has picked up quite substantially from Mexico to Colombia to quite a lot of those countries. And, of course, plastic pollution is on that list. Too difficult to ban plastic. So it's become

15:34 more an easier task to get people's attention to say don't ban it, just upgrade it using DTW. So there are a lot of interesting developments going on on the political side, as well as we continue to make progress on our bread technology. Our JV in India with the Indorama Corporation is also a developing situation that we've ported to the market for some time now. And the driver behind that is of course the regulations. And the regulations in India essentially are making plastic a key policy. And what they've done there is demanded that all plastics increase their thicknesses.

16:24 And what you were seeing perhaps in food packaging, an increase of up to three times in terms of thickness. Three times increasing thickness means massive increase in cost. The exemptions are if your product happens to be biodegradable or compostable. Compostable is rather difficult because they don't have any composting systems. But biodegradability is such that it will biodegrade safely in the open environment is the initiative, and our team is working very, very hard to get certification in India. So, of course, just a quick recap. Our solution to the plastic pollution issue is a technology that came to the world in the 1970s. And this technology is an additive or a master batch, which essentially is a formulation, which will help substantially reduce the issue of persistent microplastics.

17:22 Anyone using our technology does not create microplastics. That's scientifically proven. And what it does is it turns ordinary plastic at the end of its service line, because the reuse part is very important, into non plastic biodegradable

17:39 compounds. It then becomes bioassimilated safely in the environment. So what you're seeing, if you look at these little schematics to the right, the long entangled chains which through a process of oxidation are then becoming much, much shorter chains. And those chains then become susceptible to microbial activity. Now, it may be difficult for some of you to see it, but the picture you're looking at is a piece of plastic film that was being processed at Queen Mary University. I think in terms of size, it's around about one micron. It's less than a human hair. And if you look at the top right hand of that picture, you're seeing the bacteria that's been scraped away from the grooves.

18:32 What it's demonstrating is that these guys were consuming the compounds. We've actually started opening up that plastic into food. So it's a real life shot of biodegradation. So the work done by Queen Mary was very, very interesting and globally extremely helpful in demonstrating to regulators that using this technology you can get biodegradation up to 90 times faster than ordinary plastics. So, if we see where we are on the regulatory side, we have Saudi Arabia, one of the largest consumers of plastic, adopting in I think, 2017 a law that makes all plastic biodegradable using this type of technology.

19:28 To be able to supply in Saudi Arabia, you need to have an approval and you need to have a quality mark. We have that. It took some years to get that. And in The United Arab Emirates, similar. Bahrain, similar, and very recently, Yemen. But interestingly, in all these countries, we're finding that they're moving forward slowly but surely in the adoption of pushing more and more companies into using biodegradable plastics, which are, in their eyes, ordinary plastics that have this sort of technology inside.

20:05 So, our opportunities, as I said, The Middle East. And now in this slide we focus a little bit more on Saudi Arabia. Why is it sort of massive in terms of size at the moment? That's because it's in phase one. It's a three phase operation or three steps. Phase one should have moved to phase two and phase three three or four years ago, but they paused because of pressure from other parts of the world saying that they should be doing their own studies, which they did. They've completed those studies only this year, and those studies revealed that the technology did exactly what they expected. It met all their standards. And their standards are based on international standards. Standards that will prove that a plastic in the urban environment will biodegrade.

20:52 So we're waiting for news now that we've done their own evaluations, adds to the enforcement of phase two and phase three. This, in our view, will be significant because globally, it will have an impact, and certainly as far as our Middle East sales, another impact. The UAE, Bahrain, and Yemen all active in terms of encouraging and forcing people to use biodegradable technologies. Similar sort of enforcement story.

21:23 The factory in UAE is ESG and cost efficient in terms of its production, in terms of its overall efficiency, and is a preferred option from a lot of local users. They prefer to buy products locally. And having that local production put in place in the last year or so has made our presence much, much more dynamic. Let me move across to one of our other active markets, and we have many and we've only listed some of the main ones here. We have Group Bimbo in Latin America. They are the largest bread manufacturing company in the world, which I understand which sells in excess of 17,000,000,000 and still growing.

22:12 They are a strong supporter of ESG, good compliance, believe very strongly in recycling, and they believe very, very strongly in biodegradable technologies. They have big operations now in India and are waiting for SYMPHONY to get its approval, which we hope won't be that much longer, so that they can start using technology in India as soon as possible. But in other areas, we have interesting movements in Mexico, Costa Rica, Colombia where legislation has moved into a more aggressive phase. Peru, again, it's becoming more aggressive in terms of demand for biodegradable type plastics.

22:58 Brazil and Argentina, a lot of work's been going on with our teams in those parts of the world to keep people focused on this is a credible option. It's a better option than banning. It's a better option than using alternative technologies that may not have the same ESG credentials. So in other markets, we have quite a lot of blue chip companies within our pipeline. We show here North America, but also in the Far East we have strong partnerships in China, Vietnam, which is a very interesting market. Pakistan, where we're seeing new legislation that's being passed through in favor of our sort of technology.

23:43 Huge amount of activity, ongoing career in many different sectors, and of course in Indonesia. As I said in an earlier slide, India, our main focus is with our joint venture there with Indorama Corporation. We hope to be providing updates very, very soon in relation to that. It's too difficult to define whether there'll be news this year or next year, but you can be sure our team or our mutual teams are working very hard to get our certification completed, which will then allow the business to move forward very quickly on biodegradables. But on our antimicrobials and on insecticides, they're progressing well and we're optimistic on the outcome on that.

24:31 So products included,

24:34 we just put on this slide just for those that aren't too focused on the products that we cover. They're of course refuse sacks, bin liners. They are drinking straws. There are apparels, a huge amount of activity in agriculture films, food packaging, supplement bottles, different types of bottles in fact, not just supplement bottles, stirrers,

25:00 and our technology do go into unique brands. So on our D2P technology, D2P, well, it means designed to protect and to protect against lots of different damage, for example, on food spoilage. We have the FDA approval for antibacterial, antifungal technologies for bread packaging. We have other technologies that can control the rate of ethylene that you might get in terms of fruits. Fruits, as you know, from bananas to strawberries and onwards can decay quite quickly. So our technology will allow the packaging to control the ethylene

25:44 transmission of those fruits so we can retard it, means we can produce less wastage as a result of fungi or rotting of the fruit. Our technologies will be found and we're focused in hygiene areas, virus transmissions. In particular, we have projects in water tanks and water pipes on a global basis, a very interesting area with no competition that we've identified. And in terms of flame retardant products, I touched on it earlier, we do have a lot of activities going on. Our main activity where we've been really, really focused for the past few years is on flame retardants, developing particular formulations

26:35 for unique markets. That's moving along quite well and we hope to update the market further in very short order. We have corrosion, we call them VCIs technology. We can stop oxidation of metal parts. So making your plastic stop the corrosion of metal parts is one of our other technologies. Some activity going on in that. One would expect some news coming out probably more like 2025 on breakthroughs on that sort of technology. And then of course our insecticide technologies.

27:24 Our main business there is with Rivalis, but there are others similar in that industry that want to be able to make their plastic products, be it pipes, be it plastic shooting, with anti insectic

27:38 barriers inside. So, moving along, our progress and our opportunities. We have strong partners, regulations in place, and working to extend product types and geographics. The anti insects technologies, as I've said in the earlier slide, is mainly with Rivalis. But we do have others. So we have, I'm pleased to say, good consistency of business and a lot of opportunities and business coming to maturity in that area. Our FDA approved technology, we're unique. There is, as far as we know and as far as the FDA website is concerned, the only technology in the world that's got this approval.

28:27 It's a great technology and Group Bimbo are the group that signed into exclusivity in certain markets. But we do have other trials going on with other bread companies in other parts of the world. And this brief update gave you some indication that it is moving, albeit slowly. We believe the pace will pick up. And then the two main technologies I touched on in the earlier slide, so in this summary, are the flame retardants and the ethylene controlled absorbers. India, I've touched on earlier in this slide. The main issue here, a good slide to look at, what's it all about? There is this Indian standard called IS seventeen thousand eight ninety nine.

29:15 Our product through independent laboratories approved by the government has been certified to that standard. When completed, we can then apply for certification from the government like we did in Saudi Arabia. We had to have our product certified before it can go into market. We're well advanced into that phase of the business. That's why we have issues currently being tested for compliance. Yes, it's a massive market. One would expect India to be a massive market. It changes the dial hugely in terms of top line profitability for both the JV and the core business. 500 plus prospective customers fueled by something in the order of 20 odd distributors.

30:05 Each one of those distributors have products, master batches, going into the Indian market. So supply distribution is, of course, an issue, and that issue is resolved through the distribution setup that they have. And of course, India, moist, they consume a lot of bread. One would expect trials to be ongoing. We do have trials ongoing in India. We've also got semi commercial use after quite a long time of processing. The good thing is that the results consistently demonstrate that the technology inside plastic works. It does stop the inhibition of mold, delays it, which means you can either use less preservatives in the grid or you have less waste.

30:57 So, Ian, would you like to go through the overview? Yes, sure. Just so for the overview then, coming back to the results themselves, seeing significant financial improvement, operating loss reduced by half to under 500,000, which actually is a is a greater factor when you compare half one against the whole of last year. And and more significantly, the quarter two operating loss was was just 50,000. And we are maintaining at least that financial perspective from quarter two going into half two of this year. We're seeing legislative and regulation changes in some of our key markets, which is fueling DGW demand. And with the bread, the FDA bread technology, we've one more country that's starting to use it now. And we've got some two two trials going on in in in, obviously, The USA, which is which is a very, very large market. So really just summarizing opportunity, operationally geared, high margin, reducing cost base, the significant reductions there in our marginal costs, our product costs, and product efficiencies, which is obviously fantastic.

32:09 The opportunities globally are significant. We're addressing major global concerns with a major global product, plastics. As you saw earlier on, it's a £700,000,000,000 market in plastics. Nearly every organization is using plastics involved with plastics, and that's where we fit in. Our product is, as Michael said before, nondisruptive. It's scalable and immediate. We continue with product innovation, and the markets are large. So you saw from the map, literally, through the whole of The Americas we're working on. We're showing India. We're showing The Middle East. And, of course, within that map, there's there's 50 countries that we're we're working currently with d two w. Any any of those other countries, be it in Africa, be it in the Far East, as well as they they they can offer some very good growth potential for our business.

33:01 And we've got some strong strategic global partners. We've got a Spimbo, Indorama amongst amongst others as well. So that's the overview. And that's the end of our slide presentation. Thank you very much. Perfect. Ian, Michael, if I may just jump back in there. Thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can all be accessed via your investor dashboard. Michael, Ian, as you can see there, we have received a number of questions from investors. And thank you to all of those on the call for taking the time to submit their questions.

33:49 But Ian, Michael, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so. And then I'll pick up from you at the end. Thank you. Very good. Thank you. Questions are good questions. Dealing with the first one from Gary B. How did the positive legislation changes in key markets that Saudi Arabia, Yemen impact growth forecasts for DTW products? What new markets have been targeted over the next twelve months? So, look, in in two parts, Saudi Arabia and Yemen are massive markets. And if they do exactly what we would like them to do, and I can't comment on whether that will happen at all or not because we obviously update the market should anything dynamic happen. But these are markets that should they legislate as the legislation is showing, then our sales, our profitability moves up by some serious numbers.

34:51 So I think those markets, the news flow that we hope to be able to give as these things move forward will be very, very positive, very good for the company. So we are driven by legislation. It's not a matter of going out there and trying to sell this technology to individual corporates. The biggest driver of this is legislation changes. And remember, 2017 is the date that I gave you in relation to Saudi Arabia. This has been going on for some time. But interestingly, with all the political troubles in Yemen, it's only this year that they've decided to start enforcing legislation that was passed some years ago. Enforcement means everything in terms of really increasing ourselves, and that's why we put so much time into legislation driving.

35:45 The second part of that question was what new markets have been targeted over the next twelve months? There are already a huge amount of markets that we're in, and we're just staying focused on those markets. We're not looking to expand those markets. If we deliver on any one of those markets, and we hope to deliver on several, it will make a substantial difference to the business itself. Moving on to another question here by Paul M. Why has the bread business taken so long to convert into proper revenue? Didn't they already do the trials? And when do you think material revenues will begin from this? And that's a very good question. And just to explain what's been going on, trials on bread have been done over ten years and the results have been very consistent.

36:35 But the issue there is that each bread unit, each bread facility have different contamination issues. They have different recipes. And what they need to do, each one, is to be able to do their own tests in their own environment, in their own conditions. But as you may know, the conditions are never the same from one year to the other. So beginning of the year, you might have a cold condition. Middle of the year, you might have humid conditions and hot. So what we've been seeing is tests over different times of the year for different companies and different units and different locations. And when you add that together with the diversity of different recipes, you end up with quite a lot of different results. I've got to say that every result that I've seen have been consistently good. There are the few odd ones which have not been good. And the reasoning behind that is the product wasn't manufactured as it should have been manufactured.

37:44 So you go and do a retest. The retest then goes and shows an exceptional result and the customer then believes, Oh, it's too good. Let's go and do it again. So that's why we lose a lot, a lot of time. It's been painfully slow. But as you will see from our update, we are progressing on the DDP technology. And the DDP technology in relation to bread is a valuable technology. It's valuable to the bread manufacturer. It's hugely valuable to SYMPHONY. It's a technology that sells at a very, very high margin and in certain terms of value much greater than D2W. I hope that answers your question, Paul M. Just looking at some other questions. Well, do want me can there's a there's a question on the r and d tax credit.

38:40 Just the reason let's not go into the first half purely because we account for r and d tax credit on cash received. We haven't received the r and d cash yet purely just in case there's any issues with revenue and customs on that. I think the other part of that question was balancing the investment. Most of our investment in r and d is is is is is what we're working with with our customers, with our distributors around the world. So a lot of a lot of the r and d is actually developed ourselves. We are using less third party facilities in r and d at the moment. I think the main reason for that is because I think we we feel we've developed pretty much developed the core ranges now, and it's really defined tuning so that there's not much risk in terms of overspending on r and d going forward. That's not really where we are at this moment in time.

39:34 When you eventually receive significant orders, are you able to produce product to ensure a volume? Well, the answer is yes. We've got six six factors six core factors that we use, and we pretty much can sort of turn them on, turn them off as we require. If one factory in particular may have a problem, we can just go to another factory around the world. Raw materials for our core products, we keep a large stock of the raw materials, our key materials. So we've got no risk in not having the material even though we've got the manufacturing space. I think what b to talk about the pipeline. Well, the pipeline really is is is the map that Michael showed. It's, you know, within USA in terms of the bread amongst our territories.

40:23 You got Latin America, which has got some strong regulatory moves in relation to biodegradable plastics. Middle East, Michael, just went through in terms of the volumes there alone that could be significant. And in a way, transformational. We haven't actually used the word transformational in these statements, but I think, you know, where we are with a number of these products, be it India, be it The USA, it Saudi, you know, as and where. And we can't dictate where time is gonna be on those, but the they're all those particular areas are all significant if they do move in the right direction and start to sort of move with a sort of the gradient that we hoped would be significant and transformational for SYMPHONY. I see a question for Jason M, and and it's a good question. And I'm sure a lot of shareholders or people looking at the company continually ask this question.

41:16 He says, I've been following the company for many years, and the story is very similar. Every quarter, what has stopped you increasing revenues many more times than you have? And this has been a really, really hard business and incredibly frustrating, particularly for me and my team. We're dealing with governments, legislators, because essentially people do not make a move without seeing whether it's compatible with the laws. If there are no laws, as in this case, it makes it even more difficult. Though for those that follow the company since the early days, we've made a great start. We've got our product into Tesco's, we've got products into Co op, we've got products into Safeway.

42:02 Many of the large units use us pretty fast. And then the government put a statement out that basically said, we don't have a policy that deals with plastic litter other than don't litter it or let's go for composting. Against a composting scenario, you end up with a European norm that was focused on products that will fall apart in a compost. You can't have ordinary plastics that fall apart in a compost because you need it to have barrier properties. You need it to protect moist foods. So our challenge was always to say compostable is one issue, biodegradability in the open environment is another.

42:49 And we've spent a huge amount of time and shareholder money in trying to demonstrate by evidence that there are two technologies, and composting doesn't biodegrade in the open environment, and biodegradable such as ours, based on international standards, will biodegrade in the open environment. Though it's all been about hesitation, but we are at a point now where hesitation's now moved into actions, and we're seeing governments saying and organizations saying, I can't ban my plastic. I can't move to a compostable product. It's three times more expensive than an old me one, and we don't have composting facilities. What am I gonna do? And what we're seeing as a result is increase in global demand. But we're also seeing more rules, more regulations pushing towards biodegradable plastics like we did in India.

43:47 And India is a very, very big ticket item. Once that's clarified, I think the dynamics change. Though difficult when one communicates quarter, well we don't really communicate quarterly, we communicate maybe twice a year on what's going on and we try to give the update on what's going on at that period of time. And at this period of time, and we're pretty advanced into this particular space, we are seeing governments making moves that are supporting our type of technology. And so our focus, as you've seen from the results, is to make the company more efficient, drive the costs down, which we've done, driving product costs down, driving overhead costs down, ensuring that we're financially sustainable, and also at a point when top line looks set to grow and grow quite well.

44:44 I hope that answers that question. Somebody else asked a question, How much longer does Group Bimbo have exclusivity for? Well, the exclusivity was only for The Americas, I. E. North America and South America, and you may say that's a big market. Yes, it is. We have come to the end of that period. We do have some flexibility which is why we have other trials, commercial trials, semi commercial trials ongoing in The United States. So it is opening up a bit on that front. More questions. Are we using our successful penetration in Vietnam expanding to neighboring Laos and Cambodia?

45:36 The Far East is not one of our biggest markets. A huge amount of activity going on in Korea. We've got activity going on in Vietnam. Activity going on in China. We didn't cover all the different countries in our update. We just quoted some of the main ones. But we still think our fastest growing markets at the moment are Middle East and Latin America. But at the rate of change, the amount the rate of pressure on plastic pollution, you you might well see changes from Africa, which is pretty poor and can't afford expensive alternatives to plastic, to the Caribbeans, if you like. So we're in the right space at the right time, and we've got a non disruptive technology that's operationally geared.

46:23 I think we are at that point where we are seeing all the right movements. So there's a question now on The UK. We don't really pursue The UK market for anything. We've got a small number of UK customers. Again, as you see from our presentation, we have a lot of exciting opportunities elsewhere at the moment. The other question, Rob b, losses with the joint venture in India. When do we expect to get into breakeven profitability? I think, obviously, once we get the we should work in towards getting the the government approval under the standard. Obviously, that will address that significantly. In the meantime, between us and IndoArmor, we are working at eliminating costs. I can't give a timeline or give any promises to that, but that is something we're working on. The cost is technically quite low for the opportunity in India.

47:17 It is quite a small investment being made by us in IndoArmor there. But nevertheless, obviously, we'd like to turn that investment into profit generating item and hopefully watch this space on that one. Paul M's question, isn't it? It's a good question. Why has the Indian approval taken so long? What's the delay and what confidence do you have before we resolve soon? Well, answer to confidence, we're incredibly confident. It's not a matter of an if, it's more a matter of when in our opinion. And secondly, why does it take that so long? Because essentially we're following a two year process. The standard says you've got to put this piece of plastic inside a test tube, if you like, and you've got to watch the CO2 which is created by the microbes consuming the plastic give out 90% of its CO2.

48:11 And you've got, I think, two years, this year's leap year which is interesting to be able to finish that. We're towards the end of the process, and at the end of that process, we've got one or two much easier steps to go through. But are we confident? Absolutely very, very confident that we will be able to achieve everything that we need to achieve in terms of compliance. Once we've done it, once we put the submissions in, I'm not confident at the speed that the government of India will actually issue the certificate. We'll probably have to drive them crazy to issue it, but we'll update the market when we've actually got some facts. But yes, nearing the end of that testing phase. There's one from earlier on. I of half answered how sustainable is the company's financial position.

49:00 Well, I think know, we've answered that with our significant loss reduction and also the fact that we're operationally geared, high margin business. The the catalyst, again, within the presentation, I think the geographic map identifies, which we believe is are the main areas that can significantly boost revenues. Robert and hire, how does competition well, actually, very little. We we don't we aren't seeing too much from EPI and Wells in relation to our biodegradable business. So it's not affecting us at all, actually. And I think as Michael said, the main areas we're dealing with is on a much bigger scale dealing with governments, making sure they adopt the right technology. Be you know, obviously, ideally, a biodegradable plastic technologies that's digital w as opposed to the compostable technologies, which are expensive. So people who are similar to us aren't really affecting our sales at all.

49:59 Fine. I think I think we're finished now on the questions. Jake? Right. Raymond Sorry, Michael. Go ahead, sir. Raymond w raises a question. Edit developments on the EU's stubbornness in getting approval, and is The UK doing anything to have the product approved? Okay, two parts. We're not doing very much in the EU at this point in time. We had our shot at the EU. They're very, very stubborn in where they are. It is a developing situation in terms of the SUP directive. So our focus is mainly in countries that have the right legislation and the right attitude towards this sort of technology. As far as The UK is concerned, we are active with DEFRA, giving them data all the time and trying to guide them to make the right decisions in relation to policy.

50:49 But time will tell. Perfect. Ian, Michael, if I may just jump back in there. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in for investors this morning. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But, Michael, Ian, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great. Okay. From my side, I'm delighted to make this presentation. I think particularly today because as one will see, the company has completely turned around financially.

51:40 We are virtually looking at the breakeven to profitability part. We feel very, very optimistic on half two. I think it's going to be a real pleasure making the presentation at the end of half two to show the results. As we said in presentation, the world is demanding change today. We have the right technology. It's non disruptive. We're an operationally geared company. We've got the right distribution system in place. I think that is everything to go for. We're pretty optimistic. Thank you. Perfect. Michael, Ian, that's great. Thank you once again for updating investors this morning. Could I please ask investors not to close this session? It shall now be automatically redirected for the opportunity to provide your feedback in order that management team can really better understand your views and expectations.

52:32 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you.