Why invest in Tekna?
Tekna is a world-leading producer of micro and nano-sized advanced materials. Based on a proprietary plasma torch technology the company is producing materials, which will be used in next-gen technologies such as 3D printing, printed electronics and batteries.
Key investment highlights:
1. Megatrends are accelerating demand for high-quality materials that Tekna produces:
- 3D printing is enabling equipment manufacturers to produce parts with better properties while reducing material waste
- Digitalization and IoT are driving demand for more and smaller electronic components
- Electrification of every-day devices and vehicles and the inherent variation in power generation from renewable energy sources are requiring an increasing amount of batteries with longer duration and with a lower weight.
2. Tekna has developed an IP-protected plasma technology that can transform materials such as titanium, aluminium, nickel and silicon into extremely fine materials (powders), which are used to enable such megatrends. Tekna is currently one of few companies, if not the only company, which can do this at the required size and quality.
3. The technology has already been commercialized and is validated by a large portfolio of global customers.
4. The business model is scalable, recurring and sticky due to the long qualification time of the unique high-quality materials Tekna produces. Customers will therefore be inclined to stay with Tekna once they have incorporated the materials into their production. Due to the low CAPEX requirements, Tekna can easily continue to scale up its capacity, as it has been doing for the past years.
Tekna is well positioned for growth and has a proven track-record of scalability, with 80% recurring sales. Revenues are driven by accelerating adoption of technologies driven by megatrends and increasing market share due to the uniqueness of the materials produced. Tekna can protect its margins due to its scalable business model and high contribution margins, protected by long-term raw material sourcing.
The company has an ambition to grow 2020 materials revenues of CAD ~13 million to a run-rate of CAD ~22 million in 2021.
Tekna targets mid- to long-term total revenue CAGR of 40-50%, with an EBITDA margin of around 25%, enabling the company to deliver high returns.
The company’s growth targets for 2030 rest on two pillars that will ensure solid value creation:
1. Organic growth:
- Additive Manufacturing sales will drive Tekna revenues up to CAD 0.5 billion by 2030
- The Printed Electronics (PE) segment will generate CAD 0.3B billion by 2030
- The Energy Storage (ES) segment will generate CAD 1.0 billion by 2030
2. Strategic alliances:
- Establishing strategic alliances, such as Tekna’s JV with Aperam (Arcelor Mittal) established in 2019, will ensure swift and deep penetration of these market segments.