Ecoslops

Update on strategy

 

Paris, March 11^th, 2024

• Positive structural impact in terms of financial solidity post disposal of Ecoslops Provence
• Strong growth prospects for the Group, refocused on its Portuguese subsidiary and Scarabox
• Governance in line with the Group's challenges 

Following the effective sale of its subsidiary Ecoslops Provence to the TotalEnergies Group, Ecoslops SA would like to review the reasons for and consequences of this decision, as well as the Group's new strategy for the coming years.

Background

It is important to recall that Ecoslops was created in 2009 and designed, built and launched its first recycling unit in Portugal between 2012 and 2015. This worldwide innovation, enabling 99% of marine hydrocarbon waste to be recycled into new petroleum products, was a success after just 18 months of operations, thanks to the prompt deployment of supply and sales networks for finished products. Since then, the Sines unit has recycled and produced 180,000 tonnes, generating an annual EBITDA of around €2.2 million (excluding 2020, the COVID year).

Ecoslops Provence

It was not possible to duplicate this success on the second unit (Ecoslops Provence), inaugurated in 2021, due to unfavorable changes in local market conditions, with in particular stiffer competition for hydrocarbon waste supplies in the catchment area (higher prices, smaller quantities) and difficulties with technical adaptations made necessary by the need to extend sourcing to waste from land-based industries. Indeed, the volumes of residues collected at the Port of Marseille's oil terminal fell sharply between the date of the investment decision in 2017 and the unit's commissioning in 2021.
The structural rather than cyclical nature of these difficulties (at least as far as supplies are concerned) led us to seek a solution in order to (i) preserve the Group's financial resources and (ii) give this unit a future in a different scope.
As a result, the two Ecoslops Provence partners agreed that TotalEnergies would buy Ecoslops' 75% stake in Ecoslops Provence and operate the unit on its own at 100% (with a non-competition clause).

Impact of the sale of Ecoslops Provence

This decision was rapidly implemented, and the transaction was closed and paid for on February 29. No vendor warranties have been granted by Ecoslops SA. The cash payment of €8 million for the shares and the shareholder loan is combined with by the take-over of Ecoslops Provence's bank debt which, at 31/12/2023, amounted to €5 million (previously consolidated in Ecoslops SA's accounts). Part of the €8 million payment gave rise to a repayment by Ecoslops SA on the same day of the sums due to the European Investment Bank ("EIB") in respect of 2023, i.e. €1.9 million (€0.5 million in amortized capital and €1.4 million in interest and royalty fees).