Nexam Chemical Plans to Significantly Boost Growth of Recycling Additives Business

Since 2023, Nexam Chemical has initiated a strategic transformation centered on enhancing profitability, business quality, and scalability. By adjusting cost structures, optimizing product and application area layouts, and improving organizational and work method efficiency, the company has stabilized its gross profit margin at a high level, reduced the break-even point, and strengthened financial resilience.

In the fourth quarter, the company's revenue was affected by multiple factors. In the high-temperature materials segment, a major customer made a temporary inventory adjustment, leading to a slight decline in total revenue compared to the same period last year. This impact is assessed as an extraordinary event and is expected not to affect the company’s long-term market position in this business area. The aesthetic materials (color masterbatches) and lightweight materials (lightweight high-strength structural foams) segments exhibited a certain level of market caution, reflecting the impact of the complex macroeconomic environment on some parts of the value chain.

Despite facing these temporary challenges, the company's cash flow this quarter remains on par with the same period last year, and its earnings before interest, taxes, depreciation, and amortization (EBITDA) is close to breakeven. The company maintains a strong market position in various business areas and continues to actively adjust product supply, customer communication, and resource allocation, always focusing on profitability, business quality, and long-term value creation.

Reactive Recovery Technology - Accelerating Commercialization Deployment

Currently, the company believes that the field of improving the performance of recycled plastics combines clear structural demand, commercial traction, and scalability. The global shift towards a more circular material flow model is driving the continuous growth in market demand for high-quality, high-performance, and more widely applicable recycled plastic solutions. Although mechanical recycling technology has achieved technical maturity and scalability, it still faces challenges such as polymer degradation, material quality fluctuations, and mechanical performance degradation after multiple recycling processes.

Nexam Chemical offers unique, additive-based, and customized application solutions through its patented Reactive Recycling™ technology, effectively improving the material properties, processing stability, and functional performance of recycled plastics, addressing the pain points in the industry.

In 2025, the company's recycling business achieved strong development, with increased delivery volumes, continued expansion of commercial customer relationships, and a rapid growth in the proportion of recurring business. In the fourth quarter of 2025, the sales revenue of the recycling business exceeded the total sales revenue of this segment for the entire year of 2024, fully demonstrating the accelerated commercialization of the business.

The sales revenue of the recycling business in this quarter has increased by more than 250% year-on-year, indicating that the company's solutions have achieved significant commercial maturity and are gradually being applied at an industrial scale.

The business logic of the recycling operation is consistent with other business segments of the company, meaning that most of the revenue comes from recurring customer partnerships rather than one-time projects or deliveries.

Future Growth Targets

In this context, the company believes it is now equipped to accelerate the commercial expansion of its recycling business in a more systematic and proactive manner. Considering the current market environment and resource reserves, the company aims to double the sales of its recycling business annually over the next two years.

The target is formulated based on the current market demand and potential business volume observed by the company, and does not constitute an official forecast or financial guidance. The company's existing cost structure, technology platform, and organizational framework also support this target, providing a foundation for gradually expanding the business scale.

Use of funds

The company has announced plans for a rights issue of approximately 51.8 million Swedish kronor ("the Rights Issue"). The funds raised from the rights issue will primarily be used to support the ongoing development and growth of the company's business, with a focus on the recycling sector. Specific uses include:

- Strengthen the commercialization capabilities of key customer groups and regional markets.

- Further develop additive technology and customized application solutions, including technical customer support;

- Implement market promotion and commercial communication initiatives.

Match the working capital needs with business scale growth and general corporate purposes.

CEO Comments

"In recent years, we have developed a more focused and scalable business model while enhancing our profitability. By 2025, our recycling business has reached a new level of commercial maturity, with market demand continually transforming into recurring business and growing sales. This rights issue aims to provide the financial impetus to accelerate this development and propel Nexam Chemical into a new phase of long-term growth. At the same time, we will continue to actively develop and manage our other business segments, focusing on profitability, customer value creation, and flexibly adapting to changes in the market environment."