Spinnova Plc’s transition to IFRS reporting

COMPANY RELEASE, SPINNOVA PLC, 17 AUGUST 2023 AT 1:00 P.M. EEST

Spinnova Plc’s transition to IFRS reporting

 

Spinnova Plc. will transition from Finnish Accounting Standards (FAS) to International Financial Reporting Standards (IFRS).

 

Spinnova expects that the transition to IFRS reporting will increase the comparability and transparency of its financial figures internationally and support the company’s strategy execution. 

 

The company will report its January-June 2023 result, published 31 August 2023, according to IFRS.

 

The IFRS transition date was 1 January 2021.

 

In addition to the official financial statements prepared in accordance with FAS, Spinnova has prepared audited IFRS financial statements for the financial period ending 31 December 2022, as well as for the comparison period ending 31 December 2021 and IFRS transition date’s opening balance sheet 1 January 2021.

 

Spinnova has also prepared unaudited IFRS financials for January–June 2022 and July-December 2022.

 

The key differences resulting from the transition to IFRS reporting compared to FAS and the effects of the IFRS transition are described in the report attached to this release.

 

Operating results were EUR -13.1 million for January-June 2022 when prepared in accordance with IFRS compared to EUR -12.3 million when prepared in accordance with FAS.

 

The most significant effects caused by the transition to IFRS reporting are:

IFRS 2 Share-based payments
The Group has option-based incentive and commitment plans, which aim to encourage the management and key persons and employees to work to increase shareholder value in the long term. In the FAS financial statements, option programs are not recorded in the income statement. According to IFRS, the fair value of stock options must be amortised as an expense in the income statement during the stock options’ vesting period. This has a negative impact on reported EBIT.

IAS 38 adjustment of capitalised development expenses
In the FAS financial statements, following the principle of prudence, Spinnova has not capitalised employee expenses as part of development expenses. Following the transition to IFRS, as part of the development expenses, Spinnova has reliably definable employee expenses, which shall be capitalised in accordance with IAS 38. This has a positive impact on EBIT.

IFRS 16 Leases
In accordance with IFRS, a right-of-use asset and a lease liability will be recorded on the balance sheet. These increase the balance sheet's long-term assets and financial liabilities. The increase in financial liabilities affect both the net debt and the equity ratio. According to FAS, rental payments are recorded in other business expenses for the rental period, and rental payments are at the end of the financial year presented as off-balance sheet liabilities. In the IFRS financial statements, rental expenses are adjusted from other business expenses to amortisation of lease debt and interest expense. Depreciation of right-of-use assets recorded in the balance sheet is recorded in the income statement. These do not have an impact on EBIT.

IAS 32 Transactions costs of financial arrangements
Spinnova's financial transaction costs incurred in 2021 related to the company’s IPO (Initial Public Offering) were all expensed as incurred in the financial year of 2021 in accordance with FAS. Under IFRS the transaction costs have been adjusted from financial expenses, and majority of the costs have been recorded as a decrease of the reserve for invested unrestricted equity, in the closing balance of 31 December 2021, improving the result for the financial period in 2021.

IAS 28
Under FAS Spinnova did not record the value of Respin’s shares in the financial statement since Spinnova had not invested any funds in Respin, following the joint venture agreement. Under IFRS Spinnova records the value of Respin’s shares in the balance sheet. This has a positive impact on reported EBIT during the transition period. When Respin enters the commercial phase and Spinnova invests in Respin according to the joint venture agreement, this will result in a negative impact on EBIT for that period.

KEY FIGURES JANUARY-DECEMBER 2022

(EUR mill)	IFRS Jan-Dec 2022	FAS Jan-Dec 2022
Revenue	24.3	24.3
Operating result	-13.1	-12.3
Earnings per share (EUR, diluted and undiluted)1	-0.29	-0.28
Net Cash	74.5	76.3
Equity ratio, %	86%	87%
Number of permanent employees at the end of the period	75	75
Number of permanent employees, average	67	67

1) The weighted average used in the calculation of earning per share is 51 331 672.

 

KEY FIGURES JANUARY-JUNE 2022

(EUR mill)	IFRS Jan-Jun 2022	FAS Jan-Jun 2022
Revenue	7.6	7.6
Operating result	-5.8	-5.8
Earnings per share (EUR, diluted and undiluted)1	-0.15	-0.15
Net Cash	94.1	95.1
Equity ratio, %	87%	87%
Number of permanent employees at the end of the period	69	69
Number of permanent employees, average	65	65

  1) The weighted average used in the calculation of earnings per share is 51 296 247.

 

KEY FIGURES JULY-DECEMBER 2022

(EUR mill)	IFRS Jul-Dec 2022	FAS Jul-Dec 2022
Revenue	16.6	16.6
Operating result	-7.4	-6.5
Earnings per share (EUR, diluted and undiluted)1	-0.15	-0.13
Net Cash	74.5	76.3
Equity ratio, %	86%	87%
Number of permanent employees at the end of the period	75	75
Number of permanent employees, average	70	70

1) The weighted average used in the calculation of earnings per share is 51 355 297.

 

The company’s potential dilutive instruments consist of stock options. As the results have been negative, stock options would have had an anti-dilutive effect and therefore they are not taken into accounting measuring the dilutive loss per share. Thus, there is no difference between the undiluted and diluted loss per share.

 

The comprehensive income statement and consolidated balance sheet for the financial period ending 31 December 2022, as well as for the periods January – June 2022 and July- December 2022, are presented in the attachment of this release.

 

For more information about historical financial information, prepared in accordance with FAS, please visit Spinnova’s website www.spinnovagroup.com

Spinnova Plc

For further information, please contact:
Ben Selby, CEO (interim), CFO
tel. +358 20 703 2430
or
Sophie Jolly, Interim Head of Investor Relations
Tel. +358 40 828 7317
[email protected]

Certified advisor:
Aktia Alexander Corporate Finance Oy
+358 50 520 4098

Distribution:
Nasdaq Helsinki
Key media

SPINNOVA – Sustainable textile materials, naturally

Spinnova transforms the way textiles are manufactured globally. Based in Finland, Spinnova has developed breakthrough technology for making textile fibre out of wood or waste, such as leather, textile, or agricultural waste, without harmful chemicals. 

The patented SPINNOVA® fibre creates zero waste and side streams or microplastics, and its CO2 emissions and water use are minimal. SPINNOVA® materials are quickly biodegradable and circular. Spinnova is committed to using only sustainable raw materials such as FSC certified wood and waste. SPINNOVA® fibre is produced without harmful or complex chemical processes and has the touch and feel of natural fibres such as cotton and linen. 

Spinnova has received awards from e.g., the Fast Company, ISPO, Scandinavian Outdoor, ANDAM, Monocle and Marie Claire UK.

Spinnova’s shares (SPINN) are listed on the Nasdaq Helsinki First North Growth Market.

SPINNOVA® home: http://www.spinnova.com
Corporate & IR site: http://www.spinnovagroup.com