Directa Plus Plc

Good afternoon to you. Thank you, and good afternoon to everybody.

My name is Giulio Cesareo. I'm the Founder and the CEO of the company.

I have 40 years of experience in graphite and graphene arena, starting with 20 years in Union Carbide and 20 with Directa Plus. In front of me, that is our CFO, Giorgio please introduce yourself.

Good afternoon, everybody. My name is Giorgio Bonfanti, I am the Group CFO of Directa Plus and I have been in this company more than 40 years, to go up to start many experience.

[indiscernible] we will try to give you a concise view of what are the opportunities for the next class in the future. And I would like to start by telling that if you go on the website, you will see a similar content on an explosive expected growth of the graphene sector.

All the different are talking of compound analytical rate between 20% and 40% for the next 10 years. With a significant focus following pre-vertical battery expense and environment.

We consider Directa to be a leading company in this area. We have a process that has been during this year, redesign in engineered with the objective to generate new products, not just graphene but also graphite, and I will go deep on analysis of the process and of the product in the next few slides.

Time to market is still very aggressive in the range of months. And we are signing significant partnership.

One of these come forth and we will not have chart this close to mark that is very, very important for the future of the company and in the defense area. If we move to the process, I think that this is the slide covering the old cases but I will give you much more detail in a slide that has been prepared show the difference between the old and the new all-in-one comment.

For your information, we have 116 granted patent set and 39 pending and one of those [indiscernible] of these patent as my name is inventor or co-investor.

GiPave graphene. So our material is an enabling material.

So it's a transfer a number of different properties across [indiscernible] and vertical [indiscernible] applications. So for example, from [indiscernible] to [indiscernible] properties, higher extra [indiscernible], improvement of chemical properties, I have absorb shrink capacity, plan [indiscernible] and the corrosion.

So we had a number of different products across [indiscernible] group. Covered by stronger portfolio.

We have a portfolio of 22 billion families, four of which are covering the production process and [indiscernible] covering process and applications. Let's jump [indiscernible] of the presentation, which will give you a few highlights on the maintenance of the first half of 2025.

Having [indiscernible] operational performance. It is key for us and is a game changer.

So we'll go more and deeper in the next month, but we are significant improvement on our production system that will allow us to have a reduction in operational costs and will be assets to new tariff process. So we will cover more in detail in that current part of the presentation.

On the two main verticals, Environmental and Textile, just a couple of good comments that Environmental we keep working on the fracturing of Setcar after we acquired it for full ownership 1 year ago, and we have translated into solid results in the first half, and we signed also new important contracts using broad cover and the main material for acquiring the content media information on this front. And on this side, we keep working on more presence and a very important news as Giulio said is the fact that we secured for social contract [indiscernible] Environmental [indiscernible] departments.

In terms of financials, in the first half of the year, we had revenue increase by 15%. This will have to the new focus, but more importantly we were able to reduce our EBITDA by 38%.

This was the result of the continuous progress in terms of keep reviewing the production cost but also areas core control and optimization. Cash as of June 2025 was, of course, EUR 3 million, in line with mode station.

And we keep working on carefully managing balancing investment growth with business opportunity. In the next slide, I will go more in detail on the main strategic actions we put in place.

Put in place five strategic actions really to generate and capture the right momentum and the opportunity we see in the market. Let's start with the three levers underpinning the strategy.

The first and most important nowadays is production we did a massive action on the production line reengineering and redesigning it. We have now full automation.

We will have the chance to use new precursors we reach from 1 to 9 in the super expansion to reduce cost, but I will go with more detail in the next slide covering production it's important to stress the attention that we will give this system to reduce practically production costs and assess new market. With regard to sales that we are accelerating the market adoption in the existing vehicle the main for environment and excise, but especially with the new material in our end, we will be able to satisfy not the policy but the quality demand from certain applications was already performing totally by the price expectation of capital and also the too additional in the next slide.

R&D is working very well in a very slow collaboration with production in sales and we were focused on real opportunities, real market and customary way. So we are not checking all the graphene opportunities without a real connection with the market.

Now if we move to the slide covering production, as I told you, this is the most important move we made. And let me try to explain on the upper side of the slide, there is the old system on the bottom of the [indiscernible] one.

What are the reasons to change from our system to the other? The reason are a very simple, inability to produce nano graphite.

And the take on a more importance, we start to realize that some of our key competitors were capturing our market offering at nano graphite material. So we decided to move on all design that has six parameters so that was utilizing a kind of algorithm maximizing the input of energy to an significant amount of [indiscernible] placement.

So I input local activity and a fixed number of morphology, moving to a new design where we prioritize what we can define the adaptive control logic. So we are able us to adapt the process during the production phase and to adapt the process also to defense [indiscernible].

This is key to get important -- very important reduction to get further increase. We have the full automation before the word -- minor automation in [indiscernible] department.

We have a fast -- very fast setup change so we can move from one [indiscernible] to the other. And we have also a new training process that is able with very high pressure water to clean the entire production line and also to keep the material that normally was eliminated as a raw material for immense production.

And we -- as I mentioned, we can work on the [indiscernible]. The last comment I want to make is that if you look at the third box in the bottom part of the slide, we are moving from the OpEx portion to what we call additional exfoliation and interlocking.

What does it mean? We are able now to put together different materials.

So we are able to cover a specific material with our graphene, adding binder and another product and satisfy mainly most is [indiscernible] in the battery arena. So the plant has been reconfigured as an integration platform fully automated.

And doing this activity, we decided to certify [indiscernible] which is a very important step because nowadays, we can license the technology anywhere in the world and opportunities to license the technology right now.

So as in said, we upgrade our production plans are a change for us because we'll have maybe two [indiscernible]. The first one is the fact that we review our direct production costs, as we said, did with our [indiscernible] revising [indiscernible] our price business to get either access to move to the market depending on the merits coming at location.

And the second point is the fact that we will be able to produce new kind of products. So we'll have two different categories.

The GiPave traditional products, we looking [indiscernible] for higher performance and higher price [indiscernible] somatic application in high potential. But at the same time, we will also ask as scenario [indiscernible] and branded materials margins.

with higher volumes for industrial application. So we'll have a double offering.

And in this slide, we try to summarize very briefly the main difference between the two categories.

Yes. Let me tell you that the bond rate between graphene and nano graphite is many cases is very thin.

And if you look at the upper part of this slide, below the layer, we have a nano [indiscernible]. So for us, different [indiscernible] is number of staff within [indiscernible] you can't pass a system that is designed to produce productivity at a proper level, we are able to really to practically reduce the number of debt and that creates a material that is top quality, but at low cost.

The key markets are always between energy, advanced composite, textile, graphene [indiscernible]. But for example, in battery capitals, we are posed to produce a very interesting specific material our USA partner.

And now we will move into the battery anode arena with the nano graphite. Position in the one side is tailor-made on the other is volume based and the compound annual growth for nano placement in graphene, between 35% and 40% and [indiscernible] between 10 and 15 all nano graphite.

Okay. The next slide, we try to recap the most important opportunity in terms of sales and cost in our pipeline on this so many vertical.

The first one is that on the [indiscernible] remediation. We had a couple of important opportunities.

The first one is we find [indiscernible], which is the long-standing contract. We've been using [indiscernible] for a number of contract with them.

Now there are people who [indiscernible], well they own in ground. It's a 20-year exposure.

We actually commissioned 30,000 wells, and we are -- we have an open discussion with [indiscernible] value for sector, but this will be very [indiscernible] for us. The second one is with scenarios remain for a total with management contract.

We submit an offer of EUR 2 million per year. So we are waiting for the outcome of the [indiscernible] will start from January 2026.

On textile, we said, we keep working in the warframe applications because those are applications where we believe that our growth and technology can be appreciated the most. One key here is the fact that, as we said, that we won our first sole source contract with a leading governmental defense agencies.

And not sure if you want to add.

Yes, we are very proud because it's a very large agency. It's not an Italian agency.

There is the previous -- we are not allowed to disclose any information because we committed ourselves personally to avoid any flow not of the informational side, but the leverage is on significant properties of our materials [indiscernible] by this agency to deploy [indiscernible] without intermediary products at Directa and start to work with us.

The next one is on Setcar.

Yes. Setcar [indiscernible] in progress [indiscernible] as objectives.

The first one is the short term is almost completed. We have a new Board, a new governance.

We report to a new general manager. We need financial sales, and we are looking for a couple of new executives to reinforce the organization.

We continuously optimizing the workforce we projected to introduce new talent. Since June '24, we moved from 164, 465 people, down to June '25 to 144, and the objective by the end of this year is to be in the range of 130 or below.

We are working on contract portfolio, removing the low-margin contract with a lot of focus on strategic agilities that are not anymore in the area of the Directa [indiscernible]. But the medium-term objective is to explore these opportunities keeping in the portfolio, customers and materials that either maximize Directa technological expertise or generating significant profit.

Let me make an example, Setcar technology to decontaminated that transformer with PCB oil that is working very well in generating the profit we can move to a graphene technology, but this process is working well. The equipment is almost unique.

So we don't want to lose this business opportunity. With regard to looking ahead, as I mentioned, refactoring still in progress.

Timing, unfortunately, open exports to external factor. One example, we got a MIDIA order of EUR 1.5 million is -- has been structured on the part has the ability to decontaminate the drilling platform from hydrocarbons during all the activity, but the drilling platform was supposed to move from the Middle East to the Dead Sea and [indiscernible] of passing via Suez Channel.

Nobody wants to insure them so they will have to make a longer freight, and this could generate a delay. The only other pending significant content for this year is the full contract that is in all the customer of Setcar.

With regard to R&D, as I mentioned, we are focusing on real opportunities, existing market. We have six projects ongoing.

One is covering the lens with global companies. We work to reinforce polymite composite in order to be using [indiscernible] transmission and we discovered that the lens adapt the [indiscernible] graphene is significantly improving the impact of the distance.

So now we are targeting polycarbonate lenses that are a very significant market for the expense and safety. The other important area where we are moving quite fast is [indiscernible].

You probably know that [indiscernible] is [indiscernible] for every [indiscernible] very dangerous, and they are being utilized in different industries to leverage their properties to exist with water in oil. We are developing, and we finally design a filter to remove [indiscernible] from water.

And we are already working in defense area. We are working in pharma area, facing and shaping the remove of contaminant in the pharma water, agriculture and semiconductors.

And we have also develop with the support of the external farmer, a pilot the contamination units that can be offer to different industries and different customers. We are moving also back to the entire arena and starting with [indiscernible] tariff, but we are also testing and working with very large Taiwan factory and the test are still moving on.

We have a big electronic conglomerate working with our glass polycarbonate enhanced for gaming devices. We have integration our new materials into batteries, working with our NAND [indiscernible] battery company and partner in [indiscernible] to U.S.A.

next week to bring down some very close business opportunity with them. And last, we developed an HVAC system that will capture again of a normal conditioning system, not just the articles, but will have a make [indiscernible].

Just a couple of times mark on the market and outlook starting from the market, we would like to represent the chart on the left of this slide, which really shows that it was the market expect explore in terms of [indiscernible] graphene on the market. One key here to highlight is the patents, we believe that we are well positioned to manage from the market growth because we have on the market.

They have a stronger portfolio and we have a strong know-how thanks to our work with me over the last few short. We are expert in producing the team.

We need to rely on our departments in order to leverage on their team knowledge in the technical of a basis and the commercial network to accelerate the cooling [indiscernible] on the market.

We got some closing in comments. The first one back to the upgraded production line.

This is by far the most important move we made with the object to really consolidate the acquisition on basis. grow and there remains a core sector that we denied on batteries where as a mission we are having with some very interesting products and [indiscernible] opportunity.

We consider the momentum very good. As I mentioned at the beginning, the index -- all the different index are showing an incredible attention to graphite and graphene, and some countries are also starting projects to be open graphite mine and to design a new graphene industry.

And of course, we are open to offer our technology in license. And the Board really is convinced, I'm confident that we will deliver the year-on-year EBITDA improvement that the market is waiting for us.

So let me say that without any doubt the future, it's no longer a different horizon, but it is unfolding now, and we are ready to chase it. I think that at this point, we can stop and wait for question.

Okay. So I will read some questions.

On the top of your H1 revenue is high, what capability do you have for 2025 and beyond? All we can say is that approximately EUR 6 million of our revenues on the related private current supply regarding the long-time variance that you've been working for more than 3 years now.

So we believe that we have solid base of recurring customers. Of course, we should be not so comfortable for the next year in terms of revenue growth, as we said, we expect to keep growing with at least a double-digit growth as we eager to wait 2025 competition [indiscernible] for also next year.

I feel there are a couple of questions about EBITDA. So the one that would say what are the robust to achieving breakeven [indiscernible] still make a full and another [indiscernible] similar questions.

So I will have to suggest -- we [indiscernible] organization that we are inventory, maybe two different levels, different level response, that is [indiscernible] keep growth in the business, in the markets with the contract. I mean we believe that we have a good pipeline for the coming out year.

In parallel to that, we are keep increasing our gross margin and reducing our production cost stocks and the intervention and upgrades to the line are fundamental, and we are achieving good results on that, but also come optimization with positive results. So we believe that we are eager to reach the EBITDA breakeven in the short term.

And let me add that some of this new opportunity, especially the defense one, could really explode the turnover, if we will continue with this growing phase that is not just testing, but we are moving very close to significant number. Of course, we don't know exactly what is going to happen and when.

But in any case, we see differently from the past that between starting an opportunity because we have the products because we have the material because when the patient we will have, in most of the cases, the price, the time is much, much closer -- on our side of [indiscernible] probably is doing the right thing on the other because the star global companies as dejected the concept and the largest behind the nano materials in graphene.

Another question is our carbon is a sole technology across different countries, and we disclose key times to the market, we have acquired Setcar create a use case for the [indiscernible] of graphene on the market. So what couple and provide [indiscernible] services to the market, [indiscernible] and after that [indiscernible].

So the two ways, but it's probably more probable in July [indiscernible]. So we are putting place -- thanks to our [indiscernible] portfolio, we have put in place that we're working on potential market in the future of the results.

Another question is how strong is your IP portfolio and how you would continue to [indiscernible] business?

Yes, there are people [indiscernible] stronger. We are finding some ideas, but now, especially now with this [indiscernible] opportunities, we are investing a lot in rocks.

So instead of filing that at the present point, we'll disclose some key information. We are keeping everything confidential.

We are created the first business unit with a limited number of people. I mean we are very, very protected area covering the important information.

Other places like [indiscernible] like some of the new materials, we will continue to file as we did in the past.

The question is, what is your expected timeline for the rate revenues from the nano type product plan?

We react to move almost or not immediately because I presented in one of the slide, the border between the two material is so thin that it's just a question to go back to some of the cash already tested our graphene material, offering them in nano graphite at an interesting new price, and we expect they will place the order. So we have a very clear on this.

Okay. I think we answer all the questions.

Yes. Let me mention a statement quite the way up and the way down are one and the same.

What we're [indiscernible] at are now the very steps of our [indiscernible]. This was mentioned by [indiscernible] 500 years before Christ.

And I think it's really valid for ejecting company like Directa. And I would like to add a very short and various people comment on my side, come and ride with us.