Corporate Presentation - April 2021 - Woodbois
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Corporate Presentation – April 2021
COMPANY PRESENTATION 2021 |
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COMPANY PRESENTATION 2021 | 2
High growth proposition in an increasingly
important sector
Company Overview Principal Activities
A ctivities Commentary / Capacity
− Woodbois Limited, is a forestry − Significant asset investment Sawmill - 3,500m3 per month(1)
SAWMILL & KILN
Kilns - 2,000m3 per month
GABON
and timber company involved in s ince 2017 including a veneer
the production, processing, factory completed and
manufacture and supply of modern European processing VENEER FACTORY 670m 3 per month
sustainable African hardwood and equipment installed at
hardwood products sawmill
DENMARK
− Since 2017, under the leadership − The Company has grown TIMBER TRADING & Trading function with
of Paul Dolan, Woodbois has revenues from US$0.6m in OPERATIONS extensive pan-Africa network
transformed into a purely timber 2016 to US$19.5m in 2019
and carbon business. Non-core and US$15.3m in 2020
bus inesses were sold off / Carbon offset solutions for
CARBON TRADING &
− As of 28 April 2021, the
UK
liquidated and proprietary in-house REFORESTATION
corporates and reforestation
s ystems implemented market cap of Woodbois is at scale in Africa
GBP121.1m (6.90GBp/share),
− c.400,000ha of forestry the directors of the business
MOZ.
concessions in Gabon and hold 5.5% of the total SAWMILL 1,000m 3 per month
Mozambique and U S $157m of net Com pany
as sets on balance sheet
− Woodbois has FSC chain of
custody certification in Denmark
and is in the process of attaining
FSC certification for its forestry
operations in Gabon
(1) Includes the new Primultini line COMPANY PRESENTATION 2021 | 3
Strong, experienced and motivated
leadership team
Paul Dolan – Chairman and CEO Hadi Ghossein – Deputy Chairman
Paul held senior management positions at Barclays, DE A former diplomat and a Gabonese citizen, Hadi manages
Shaw and Nomura prior to joining Woodbois. Paul has the operations in Gabon. He has 25 years experience of
consistently built award winning, world-class teams managing forestry assets. Hadi has a trusted network of
employing technology to manage substantial pools of managers across each division in Gabon.
human and financial capital across a diversified group of
asset classes ranging from fixed income and equity
derivatives to forestry.
Carnel Geddes – CFO Graeme Thomson – Non-Executive Director
Carnel is a dually qualified chartered accountant in the UK Graeme is a Fellow of the Institute of Chartered
and South Africa. She is also a certified fraud examiner. Accountants in England and Wales and has been a public
During a 15-year career at BDO, the global audit, tax and company director for many decades, as a CEO,
advisory group, Carnel served as director, forensic services, CFO/Company Secretary and as a Non-Executive. He has
of BDO London and partner of BDO Cape Town. She has varied commercial UK and international experience
been a director and board member of the largest South
African pomegranate farm company, Pomona, since 2008.
Henry Turcan – Non-Executive Director Jacob Hansen – Head of Timber Sales
Henry is a representative of the funds managed by Jacob has been in the timber business for more than 30
Lombard Odier. Henry has worked in financial services years. He worked in DLH Group before joining in 2005
since 1996, with a focus on equity capital markets. He has where he held various international sales and procurement
spent the majority of his career advising growth companies roles based in France, the Middle East and Africa (Gabon,
within investment banking. Cameroon), including roles relating to the procurement of
lumber produced in West Africa.
Michael Floyd – Carbon Solutions Ashkan Rahmati – Corporate Dev & Strategy
Michael directs Woodbois’ Carbon solutions division. Ashkan has 10 years of investment banking and private
Michael is a CFA charterholder and has a Master’s Degree equity experience in Africa and the Middle East. Prior to
in Mathematics. Prior to joining Woodbois, Michael spent Woodbois, Ashkan was a member of the private equity
several years working for large financial institutions in team at CDC actively involved in monitoring and investing
London and Hong Kong, where he managed complex in the agri-forestry space across Africa and South Asia
derivative portfolios. including investments in Miro Forestry and Feronia
COMPANY PRESENTATION 2021 | 4
Gabon Overview
Population of c2.1million in country that is roughly same
size as UK (of which 59% live in Libreville and Port Gentil)
Forest cover – Gabon 85% vs UK 13% vs Ireland 11%
Significant export based economy with large
multinational presence
Per Income Capita 4x Sub-Saharan Africa average
Strong government commitment to environment and
natural capital1
Note 1 - http://www.gaboronedeclaration.com/gabon COMPANY PRESENTATION 2021 | 5
Gabon – Sawmill Operations
Overview
﹣ Woodbois has been active in the Gabonese
forestry sector for the last 20 years
﹣ With over 95,000ha of forestry under management
Woodbois Gabon is a significant player in the
Country
﹣ Invested $5m in a sawmill in Mouila with the latest
European machinery that is suitable for African
hardwoods
﹣ The Company has 96 employees at the sawmill
﹣ Increased output capacity from 1,100m3 per
month to 3,500m3(1) per month since 2018
﹣ Hired industry-leading professionals to advance
the sawmilling business as well as move further
down the timber value chain into products such as
blockboard
﹣ Implementation of training and development
program to broaden the skillset of the local
workforce
(1) Includes the new Primultini line COMPANY PRESENTATION 2021 | 6
35% Gross profit margin production business
Target
Sawn Timber US$/m3 Breakdown
Price per m3 - US$450/m3(1)
Harvesting US$70.4
Costs
Sawmill US$68.0
Costs
Kiln &
Domestic US$45.0
Transportation
Costs
Export & US$115.0
Shipping
Cost
Gross Profit
US$151.6
Example selling price per m3 of Okoume including freight costs COMPANY PRESENTATION 2021 | 7
Gabon – Veneer Operations
Overview
﹣ Core to Woodbois’ strategy is the capture of
the entire timber value chain
﹣ To date the Company has invested $3m on
its veneer factory
﹣ The veneer factory and sawmill are both
located in Mouila, c50km away from our
forestry concessions. This helps reduce
transportation costs versus regional
competitors who are transporting logs to
factories that are 500 to 1,000km away
﹣ The veneer factory has 74 employees with
over one third being women
﹣ The production is exported mainly to the
Mediterranean region with key buyers in
Italy, Morocco and Turkey
﹣ In April2021, the Company announced a key
purchase agreement with CEMA for the
acquisition of two additional veneer lines
COMPANY PRESENTATION 2021 | 8
Case Study - A renewable commodity
when managed sustainably…
Management Plan – 3,500ha
In a typical hectare, c5-6 trees can be cut.
Each tree is individually identified and its location
recorded by GPS within the concession area
1ha
After 20 years you can re-enter the forest and the
exact same exercise is carried out This method of forest management is called Continuous
Cover Forestry – when taking out an individual tree in an
area, you open the canopy to allow smaller trees to grow
COMPANY PRESENTATION 2021 | 9
Overview of trading business
Experienced team comprised of timber specialists supplying sustainable timber to a global customer base
Overview
● Trading operations headquartered in Denmark with team of ex-DLH staffers, which was the leading global
timber trading company
● Woodbois responsibly sources and trades products mainly from the Congo basin region by working with
trusted, long term suppliers that are aligned to our business model
Key Highlights & Woodbois Competitive Advantage
The global hardwood timber market is worth US$40bln annually but is not traded on any exchange
Trades are arranged via voice with margins ranging from 4 to 20%
Reliable empirical pricing data is very hard to access
Trade finance capital for the African export market is expensive and difficult to access for the majority of players
Extensive barriers to entry as most supplier – buyer relationships are built face-to-face over time
Sold to 91 different customers since January 2020, with over 50 different suppliers in the same period
W oodbois proprietary in-house-developed technology captures, stores and presents data, providing a matching engine
to build scale as well as developing a database of empirical data to optimise trading opportunities
W oodbois has long standing, personal relationships with suppliers, progressively built over a 30 year period
COMPANY PRESENTATION 2021 | 10Woodbois – a long term partner for Gabon
1 Woodbois has a 20 year operating history in Gabon
Ranked 3rd in Global ZSL SPOTT index for transparency, 100% aligned with long-term goals of Ministere de
2
l’environnement & des forest
Extensive research and discussions into reforestation schemes with stakeholders and corporates – this is a key area
3
of growth for the Company and Gabon
Sustainable cash-generative timber manufacturing alongside carbon-credit programs are long-term revenue ‘plays’ for
4
Woodbois
With existing facilities and plans for blockboard and other end-products, Woodbois aims to move further along the
5
value chain
6
Woodbois aims to be the pioneer and leader for end-use, sustainable timber products, forestry management and
reforestation in Gabon
COMPANY PRESENTATION 2021 | 11Transparent, sustainable timber
operations
● Zoological Society of London SPOTT 2019/2020 –
100 Timber Companies Transparency Ranking ● The Zoological Society of ● Woodbois’ Annual Sustainability
London ranks timber companies Report enhances transparency
by the level of transparency of by providing data relating to the
their operations – Woodbois economic, environmental and
ranked 3rd out of 100 companies social impacts of our operations
● Woodbois’ strong sustainability ethos will position the Company to
become the partner of choice for Governments, local communities,
suppliers, purchasers and investors within the Forestry sector
COMPANY PRESENTATION 2021 | 122021 Q1 Snapshot
2020 vs YTD 2021 Sawmilling Production (m3)
Positive ROI and impact from new in-country management
Sawmill Monthly Volume (m3)
team 1,424
1,280
954 1,009
Record levels of production during Q1 2021 928 944 879
859 837
563
494
382
On track to be cashflow positive in 2021
239
51 -
On course to deliver positive EBITDA in 2021 as the world
recovers from covid
Key Initiatives for 2021
Install additional veneer line
Purchase of additional hectarage of forest in Gabon
Purchase and install blockboard line
Initiation of reforestation strategy and carbon sequestering division
COMPANY PRESENTATION 2021 | 13Reforestation & Carbon Market Overview
COMPANY PRESENTATION 2021 | 14Woodbois – a call option on timber & carbon asset classes
1 There is a climate emergency, GHG emission commitments are NOT on track to meet Paris agreement goals
Climate scientists have made it clear that a deep transformation is needed to achieve climate goals. It is widely
2
recognised that carbon credit markets are a significant part of the solution
Tropical forests play a critical role in sequestering and storing carbon, forest preservation and reforestation are
3
currently the most effective ways to take carbon out of the atmosphere
4 Amongst construction materials, timber has the most significant potential for the storage of carbon
5 Timber as a commodity is likely to become an increasingly valuable and inflation -proofed asset class
Woodbois sustainably manages 1 million acres of forest and is entering the carbon-credit market through large scale
6
reforestation while growing its valuable underlying asset-base
7
Through its new reforestation and carbon division, using limited cash, Woodbois can add a valuable long-term call
option on carbon pricing to its sustainable, cash-flow generative, inflation-proofed business
COMPANY PRESENTATION 2021 | 15Carbon market driven by corporate demand
Th e value of Carbon markets is growing at pace C arbon offset demand expected to multiply by 2 Carbon price models forecast significant uplift
2030 20 times 91/t 2030 industry
price forecast
272
bln ≈12x
2050 130 times $7.69 avg price
paid for voluntary
reforestation
+20% global carbon market
growth 2020 1
credits in 20193
Co mpanies allocating significant capital to nature-
C o rporates racing to achieve net-zero status Example project economics
b ased projects
20,000ha project
1660 companies Over $5bln sequestering 25t/CO2/ha
Representing US$ 11.4tln
budgeted for generates 500,000 credits
in revenue have nature based per year
announced 2050 net-zero
target4 solutions by just
10 companies $10 million annual revenue
assuming $20/credit
(1) Refinitiv. Carbon market year in review. 2020 (4) UNCC. Who’s in Race to Zero? 2021
(2) McKinsey & Co. A blueprint for scaling voluntary carbon markets. 2021 Sources: Company web pages of P&G, Total, Ikea, Nestle, Shell, Eni, BCG, Amazon, FedEx, Delta
COMPANY PRESENTATION 2021 | 16
(3) Ecosystem Marketplace. State of the VCM. 2020Voluntary Carbon Market nature-based solution
commitments
▪ Net-zero upstream business by 2030 ▪ 2030 carbon neutral goal ▪ 2030 net-zero goal
▪ $1.2 billion budget for circular economy ▪ 12 million carbon credits purchased and ▪ Committed budget of $400 million (2020-
initiatives (2020-2025) retired on voluntary basis since 2012 2030) to drive climate and environment
projects
▪ Reforestation to be an important part of ▪ Committed budget of $1 billion to offset
their budget emissions (2020-2030)
Co mmitted Budget - $1.2 billion C o mmitted Budget - $1 billion C o mmitted Budget - $400 million
▪ Planned reforestation partnerships in the ▪ Net-zero carbon flights
▪ 2030 carbon neutral goal
Netherlands and Spain
▪ Funding tree planting projects in Africa and
▪ Committed budget of $100 million for
▪ $100 million/year budget set aside for tree South America
nature-based offset projects (2020-2030)
planting over the next three years
▪ $32 million/year budget for offsetting flight
emissions
C o mmitted Budget - $100 million Co mmitted Budget - $300 million Co mmitted Budget - $32 million/year
COMPANY PRESENTATION 2021 | 17
Source: Company web pages of ENI Spa, Delta Airlines, BCG, P&G, Shell, EasyJetRecent acquisition activity
▪ Arise joint venture have acquired a 35% stake in African focused
carbon credit originator and trade group Aera
▪ The deal valued Aera at €28.5million
Ol am and AFC joint venture acquire 35% stake in Aera
▪ BP have acquired majority stake in Finite Carbon, a North American
developer and supplier of forest carbon offsets
▪ Initial $5 million investment in Finite in 2019
▪ Recently acquired majority stake for an undisclosed sum
BP acquire majority stake in FiniteCarbon
▪ Shell are in the process of acquiring SelectCarbon, a carbon focused
environmental services company
▪ SelectCarbon have developed a portfolio of 70 carbon sequestration
projects across Australia
▪ Undisclosed sum
Sh ell acquire 100% of SelectCarbon
COMPANY PRESENTATION 2021 | 18
Source: Company web pages of Aera, BP, ShellReforestation Project Process
﹣ Project sites previously exploited for illegal logging / extractive industries
﹣ Lack of investment and expertise has previously prevented reforestation
﹣ Project developer coordinates with the Government to secure long term concession
﹣ Native species used to restore efficient ecological system
Degraded land Reforestation / carbon Sustainable
sequestration harvesting High value
timber products
Co-benefits
Positive environmental impact –
biodiversity, soil and water quality,
CO2 sequestration
Mo netise carbon Poverty alleviation, skilling and
Validation & credit – can be
verification by stable employment for local
used to finance
trusted standard communities
additional
reforestation
Capability building and educating in
sustainable practices
Reduced social mobility in project
geographies
Issuance of Retired carbon
carbon credit credit
Voluntary carbon markets
COMPANY PRESENTATION 2021 | 19Project Life Cycle
2052
issuances
completed
Tree CO2 sequestration
reaches plateau at end of
project life cycle
Project enters
revenue generation
The trees remain efficient
Credits are phase – credits are
biological carbon sinks
is sued on s old to corporates
regular basis and retired to
Project after offset emissions
validated verification of
and verified s equestration
2022 Project by private levels
project developer s tandard
start s ecures plot
and plants Trees
with native continue
s pecies growing and
s equestering
CO 2
COMPANY PRESENTATION 2021 | 20
Note – TSVCM. Taskforce on scaling voluntary carbon markets. 2020Projected growth of Voluntary Carbon Market (“VCM”)
The 2015 Paris Agreement, si gned by 196 states, set out a commitment to limit Voluntary carbon credit demand projections in 2030 and 2050
temperature rise to 2°C above pre-industrial levels1
13 billion tonnes
130 x
The 2°C limit is a critical threshold beyond which scientists p redict the earth
wo uld suffer irreversible damage
Co rporates have a central role to play in meeting global emissions targets
20 x 2 billion tonnes 2
1 ,660 companies, representing over US$ 11.4 trillion in revenue have already
committed to reaching net-zero by 2050 2
0.1 0.2
McKinsey predict g l obal demand for carbon offsets could reach 1.5-2.0 GtCO2 by Commitment Commitment Forecast Commitment Forecast
2 030 and as much as 7 .0-13.0 GtCO2 by 2050 3 Demand Demand
2020 2030 2050
Large scale sequestration projects will be required to supply carbon credits to meet *Gigatonne - 1 billion tonnes
rapidly growing demand in the Voluntary Carbon Markets (VCM) *Commitment – purchased credits
Woodb ois’ initial target is to sequester 2 million tonnes/ year
Projections indicate the an nual value of VCM to exceed $50 billion by 20503
Equivalent to 0.1% of 2030 offset demand
Forecast VCM emissions-offset demand in 2030 = 2 billion tonnes of CO 2 = $5-30bn
(1) United Nations. The Paris Agreement. 2015
(2) Data-Driven EnviroLab & New Climate Institute. Accelerating Net Zero. 2020 COMPANY PRESENTATION 2021 | 21
(3) McKinsey & Company. A blueprint for scaling voluntary carbon markets to meet the climate challenge. 2021Woodbois – a perfect example for Carney’s TSVCM
1 ETS Carbon Markets In ternational Carbon markets Vo luntary Carbon Markets
▪ Independent markets open to all
▪ Project based mechanisms
▪ Cap and trade system for allocated participants
Description ▪ Joint Implementation and Clean
allowances ▪ Industry created standards (e.g.
Development Mechanism credits
Verra, Gold standard)
C u rrent size ≈ $ 260 billion/year ≈ $ 12 billion/year Less than $1 billion/year
C u rrent pricing $5 - $55/tCO2e $0.2-$0.4/tCO2e $0.1-$70/tCO2e
Participants Large industry emitters National level Corporates and individuals
The Taskforce for Scaling Voluntary Carbon Markets, launched by Mark Carney, is currently
developing a plan to grow and further standardise the Voluntary Carbon Markets
New protocols are designed to provide improved liquidity, transparent pricing, enhanced carbon
accounting procedures, increased credit supply, and greater regulation
The VCM is at a turning point, industry experts state that the new Voluntary Market needs to be
between $50 - $100 billion in value by 2050 2 to meet net zero
(1) CFA Institute. Climate change analysis in the investment process. 2020 & IHS Global Market Index
(2) TSVCM. Taskforce on scaling voluntary carbon markets. 2020 COMPANY PRESENTATION 2021 | 22Reforestation – the most cost effective solution
CO2
CO2 CO2 CO2 CO2 CO2 CO2 CO2
CO2 Biochar CO2
Emission R eforestation Bi omass energy Bi ochar Direct air C capture So il C capture En hanced Ocean fertilisation
capture wi th C capture weathering &
method o cean alkalinity
2050 0.5-3.6Gt CO2/p.a. 0.5-5Gt CO2/p.a. 0.3-2Gt CO2/p.a. - 2.3-5.3Gt CO2/p.a. 1-16Gt CO2/p.a. 0-44Gt CO2/p.a.
potential 0.1-10Gt CO2/p.a.
Cost USD 5.50/tCO2 USD 200/tCO2 USD 30-120/tCO2 USD 100-300/tCO2 USD 45-100/tCO2 USD 15-40/tCO2 USD 2-457/tCO2
USD 14-400/tCO2
• Illustration provides comparison in effectiveness and cost of different carbon capture methods
• Photosynthetic carbon capture is the most reliable and cost-effective method available today for restricting the rise of
atmospheric CO2 concentrations
• Research suggests new forest projects could sequester 25% of the CO 2 required to maintain the 2°C temperature goal 1
Source: Intergovernmental Panel on Climate Change. Global warming of 1.5 degrees Celsius – special report. 2018 COMPANY PRESENTATION 2021 | 23
(1) Bastin et al. The global tree restoration potential. 2019Reforestation – primary amongst natural solutions
Expected Climate Mitigation Potential in 2030 – Gigatonnes of CO2 per year1
• Studies of satellite images have identified ≈1bln
hectares of degraded land suitable for reforestation2
0.0 2.0 4.0 6.0 8.0 10.0
FO RESTS • After Latin America, Africa has the largest available
Reforestation 10.12
land area suitable for low-cost CO2 abatement3
Avo ided Fo rest Conversio n 3.60
• Reforestation projects can provide numerous
Natural Forest Management 1.47 additional environmental and social benefits
Im proved Plantation s 0.44
• The application of carbon offsetting capital can be
Fire Management 0.37
trans formational for the reforestation space which is
AGRICULTURE largely characterised by NGO driven, small scale
Biochar 1.10
projects
Trees in Crop lands 1.04
• Woodbois is well positioned to locate and deploy capital
Nutrient Manag em ent 0.71 to appropriate projects.
Gr azing - Feed 0.68
• By acquiring and developing new forestry sites
Conservation Agr icu lture 0.41
Woodbois will increase its inflation-proofed asset base
Im proved Rice 0.27 and continue to grow its valuable hardwood portfolio
Gr azing - Animal 0.20
Avo ided Grassland 0.12
WETLANDS
Coastal Restoratio n 0.84 low cost portion ofCarbon pricing expectations
Price Forecast & Expectations by Source for Carbon Credits – US$/tonne
2030 industry average Woodbois 2030 Woodbois 2040 140
112
107
100
95 94
91
78
67
58 60
50
Department of
Energy and
Climate Change
and the Carbon
Trust
The above graph demonstrates a range of carbon price forecasts for 2030 with average 91 USD/tonne
Woodbois’ model prices carbon at a significant discount to market estimates for 2030
Source: Company web pages of Shell, BP, S&P Global Platts
COMPANY PRESENTATION 2021 | 25Gabon - ideally located and structured for African
reforestation
Gabon is one of the world’s most densely forested countries with a unique bioclimate suited to rapid tree
Ideal Natural Environment
growth and optimal CO 2 sequestration
The G a bonese Government has demonstrated a keen appreciation for the environment , addressing
deforestation, investing in green industries, and engaging with international sustainability programmes
Aligned Government
Adviser to the President, Mr Tanguy Gahouma, serves as Chairman of the African Group of Negotiators on
Climate Change, a regional body focused on establishing priorities for COP26 1
Harness t he support and knowledge of existing local community networks, providing employment for
Aligned Communities
gathering indigenous specie seeds, managing nurseries, planting trees and maintenance of reforested areas
The “G reen Gabon” initiative is focused on accelerating the t ransition away from an extractive-based economy
Green Gabon Initiative
(oil, mining) towards a sustainable future 2
Proven commitment to Proven commitment to international forestry related investment, recently signing a USD150 million 10 year
international investment deal with Norway to protect natural forests from deforestation and degradation3
(1) African Group of Negotiators on Climate Change. 2020
(2) African Development Bank. Technical support to the Green Gabon initiative. 2017
(3) Central African Forest Initiative. Gabon: First in Africa to receive payments for preserved rainforests. 2020
COMPANY PRESENTATION 2021 | 26Woodbois’ unique industry position
1 Woodbois has been active in the Gabonese forestry sector for 20 years
2 Woodbois has a proven ability to build high quality teams and execute complex operations on the ground
3 Woodbois will engage corporate partners by offering the forward-sale of high quality carbon credits
4 Woodbois will explore innovative technologies such as LIDAR and AI in the design and monitoring of projects in order
to create transparent progress reports for stakeholders
5 Woodbois will work with the leading carbon standards agencies to ensure confidence in the quality of reporting
criteria
6 Woodbois’ African operational expertise and knowledge of global financial markets puts it in a unique position to link
reforestation solutions to carbon credit creation and global distribution
COMPANY PRESENTATION 2021 | 27Employing technology to deliver robust project
reporting
+
▪ LiDAR used to model three-dimensional forest ▪ AI used in conjunction with high-spatial and temporal
canopy height and structure1 resolution satellite imagery to track changes in forest
Carbon density 3
▪ Airborne LiDAR enhances large scale CO 2 monitoring
by eliminating operational confines of traditional field ▪ Carbon density data translated into accurate CO 2
sampling2 sequestration records
Woodbois exploring cutting-edge technologies to enhance project transparency and ensure accuracy of CO 2 reporting
(1) Csillik et al. Monitoring tropical forest carbon stocks and emissions using Planet satellite data. 2019
(2) Asner et al. Mapping tropical forest carbon: Calibrating plot estimates to a simple LiDAR metric. 2014
(3) Planet. Monitoring Forest Carbon from Space. 2021
COMPANY PRESENTATION 2021 | 28Reforestation - A natural add-on to existing operations
1 Reputable climate change solution provider to global corporates
2 Trusted partner for African governments to provide long term environmental and social benefits
Best-in-class ESG investment, making a significant and measurable contribution to combatting climate change
3
through large scale reforestation projects
4 Increase existing long term sustainable income stream
5 Diversify geographic and political risk with replicable model across multiple African countries
6 Forward sell carbon credits to corporate partners, alleviating working capital requirements
7 Provide shareholders with a unique long-term call option on carbon pricing
COMPANY PRESENTATION 2021 | 29Proposed Transaction
Placing to raise c£5 million (cUS$7.5 million)
• Placing to raise c£5 million (cUS$7.5 million) within existing authorities
Transaction Overview
• In addition to the Placing, the Company is considering a Retail Offering via Primary Bid
• Begin reforestation efforts in Gabon focusing on degraded and savannah land while progressing parallel
discussions for large reforestation projects with large corporations;
• Expand concession land through the acquisition 56,000 ha of concession area close to existing forests in
Use of Proceeds Mimongo, Gabon;
• Enhance production capacity through construction and installation of the required infrastructure for the
installation of the veneer lines; and
• Purchase a blockboard line to expand revenue potential for the Company
• Proposed fundraise expected to be announced on 10 May 2021 via ABB
Timetable
• Results of fundraise expected to be announced on 11 May 2021
• Company anticipates commencing dividend payments in 2022
Other
• Company will upsize placing in response to investor demand
COMPANY PRESENTATION 2021 | 30Appendix
COMPANY PRESENTATION 2021 | 31Project Verification Process
Confirm basic Project Implementation of Register verified
project design development plan carbon offset credits with chosen
Estimate climate validated by project standard
impact and consult independent
stakeholders auditor
1 2 3 4 5 6 7 8
Realised carbon Carbon credits
Lay out plans for Register validated
sequestered issued by the
achieving emission project with chosen
validated by standard and can
sequestration in standard
independent be sold as offsets
project design
document auditor
Woodbois will engage with standards agencies to ensure that generated carbon credits are audited, validated and verified
The rigorous process outlined above provides additionality, ensuring that strict environmental and social requirements are met
The resulting carbon credits will be of high quality and fully transparent
COMPANY PRESENTATION 2021 | 32
Source: Control Union. Carbon offset project validation/verification. 2020Targeting 20x revenue growth from
developed and frontier markets
African Export Market Size (US$m)(1) 5% of the African export market implies cUS$200m revenue,
● Size of Woodbois’ relevant categories; non-coniferous roundwood, sawnwood, veneer sheets and plywood 10% of the market implies cUS$400m revenue(2)
CAGR
3.8% 4,844 5,029
4,494 4,665
4,129 4,169 4,328
3,924 4,021 4,016
3,631
3,329
2013A 2014A 2015A 2016A 2017A 2018A 2019P 2020P 2021P 2020P 2023P 2024P
Global Timber Market(US$bln)(1)
● Size of Woodbois’ relevant categories; non-coniferous roundwood, sawnwood, veneer sheets and plywood
CAGR
2.7% 47.08 48.37
43.41 44.60 45.83
42.70 41.13 42.26
35.93 37.09 35.94 37.93
2013A 2014A 2015A 2016A 2017A 2018A 2019P 2020P 2021P 2020P 2023P 2024P
Source: (1) 2013-2018 FAOSTAT (as of Feb 2020). Projections based on management’s assumption of growth at ‘13-18 CAGR
(2) Figures calculated based off 2018 actual African market export size COMPANY PRESENTATION 2021 | 33Sustainable harvesting is at the core of
the Woodbois business model
Sustainable harvesting with low impact in the forest Key Takeaways
Forest management plans are developed in partnership with c1 tree harvested per hectare in 2019(1)
local communities and approved by multiple government
agencies
16,000ha of conservation area
Harvesting plans are based on a 23 year rotation cycle. Via the
forest management plan – Woodbois harvests a section of its Only trees between 70 cm and 110 cm in
concession area over 3 years – after this period the same area diameter can be harvested
cannot be entered for 20 years
One of the largest formal employers in
Mouila, Gabon
These plans ensure the selective cutting of commercial
species, by quantifying and locating appropriate trees allowing Providing manufacturing jobs in
for low-impact logging plans predominantly raw-material exporting
country
(1) Assumes 500-1,000 trees per hectare within our concessions
COMPANY PRESENTATION 2021 | 34Margin analysis by product
Woodbois Gabon – Own Production
Gross Profit Average
Product Comments Current Capacity
Margin(1) Cash Cycle(1)
• Woodbois’ main harvested specie, Okoume veneer is in high 3-4
Veneer demand from plywood producers in Europe and Asia
45% 670m 3
months
• Global demand, sold across 40+ countries 5-6
Sawn timber • Can require kiln-drying process 25% - 35% 3,500m 3 Gabon
• Significant sawmill re-tooling in 2019 and kilns installed months
• Woodbois’ excess harvest can only be sold domestically
• Numerous domestic veneer / plywood manufacturers need Local demand & permitted cut 1
Logs logs 50% dependent month
• High margin, quick cash turnaround
Woodbois International - Trading
Gross Profit Monthly Average
Product Comments
Margin Capacity Cash Cycle
Spanish Cedar / • Sourced from Woodbois’ suppliers across Ivory Coast 5-6
n/a
• Kiln dried in leased facilities 15-20%
Dabema • Sold globally with particular demand from North America Limited by trade finance months
• Woodbois pre-pay trusted, consistent suppliers for their
Prepaid Timber timber n/a 2-3
8-12%
Trades • Higher margin than back to back trades, but longer cash Limited by trade finance months
cycle
‘Back to Back’ • Fast turn-around trades but low margin
n/a
• Only pay supplier when timber is on the ship 4-8% 30-60 days
Trades • Not constrained by production capacity Limited by trade finance
Note (1): Estimated gross profit and cash cycle at production capacity COMPANY PRESENTATION 2021 | 35You can also read
