REG - HeiQ PLC - HUGO BOSS and LYCRA back new climate positive yarn

HeiqAnnouncement

14/02/2022 07:00

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RNS Number : 5090B  HeiQ PLC  14 February 2022

14 February 2022

 

HeiQ Plc

("HeiQ" or "the Company")

 

HUGO BOSS invests in HeiQ's new sustainable yarn

HUGO BOSS invests in HeiQ AeoniQ and The LYCRA Company acquires exclusive
distribution rights

HeiQ Plc (LSE: HEIQ), a Swiss IP innovator and established global brand in
materials and textile innovation which operates in high-growth markets, has
signed a development partnership agreement with HUGO BOSS (MDAX: BOSS) to
support the commercialization of HeiQ's latest innovation, HeiQ AeoniQ, a high
performance, climate positive, cellulose yarn aimed at decarbonizing the
fashion industry. HUGO BOSS, one of the leading companies in the global
premium apparel market, has invested US$5 million in HeiQ's 100% owned
subsidiary at an implied valuation of US$200 million. HeiQ AeoniQ LLC will use
the proceeds towards funding the pilot commercialization plant, scheduled for
Q2 2022.

As well as the initial investment, HUGO BOSS has agreed to make additional
deferred payments of up to US$4 million, subject to the completion of specific
project milestones. The agreement also contains a call option, enabling HUGO
BOSS to acquire an additional holding in HeiQ AeoniQ LLC at the same implied
valuation as the initial equity investment. Today's transaction is the first
sustainability-linked equity investment made by HUGO BOSS as part of its
'CLAIM 5' growth strategy, which includes a firm commitment to further
strengthen its sustainability efforts to deliver both measurable impact, as
well as emotional engagement with the consumer.

In addition, HeiQ has signed an agreement with The LYCRA Company, whereby it
will become the exclusive distributor for HeiQ AeoniQ yarns. The LYCRA Company
will pay an undisclosed but substantial technology fee and deploy industry
expertise and sales resources to accelerate commericalization, subject to the
completion of specific project milestones. As a global leader in stretch and
performance fibers and being renowned for its innovation prowess and consumer
ingredient branding, The LYCRA Company has committed to develop the technology
for broad application in textiles.  The HeiQ Directors believe that The LYCRA
Company is the ideal partner to bring the new HeiQ AeoniQ yarn to market.

 

HeiQ AeoniQ Overview

·    HeiQ anticipates delivering the first HeiQ AeoniQ yarns in H2 2022.
Discussions for category-exclusivities with additional leading brand partners
are ongoing and progressing well.

·    HeiQ AeoniQ is designed as a substitute for existing synthetic
filament yarns, such as environmentally persistent Polyester and Nylon, which
constitute over 60% of global annual textile output of 111 million metric tons
(Statista).

·    The global Polyester and Nylon fiber market is worth an estimated
US$135 billion with an expected CAGR of >3.5% over the next decade
(Statista).

·    The fashion industry represents a third of the global US$1.7 trillion
(Statista), textile market and is responsible for more than 10% of global
CO(2) emissions, over 20% of waste water worldwide(i) and more than 20% of the
microplastics pollution of the oceans(ii). Polyester and Nylon take up to
1,000 years to degrade(iii) and today more than 70% of textiles are disposed
in landfill with only 1% close-loop recycled(iv).

·    The fibers of HeiQ AeoniQ are made from cellulosic biopolymers that
bind CO(2) from the atmosphere. For every ton of Polyester & Nylon
substituted by HeiQ AeoniQ, the Directors believe that potentially up to five
tons of CO(2) can be reduced. HeiQ is currently exploring the opportunity to
issue carbon credit certificates with HeiQ AeoniQ.

·    The manufacturing process for HeiQ AeoniQ is expected to consume 99%
less water than cotton yarns and HeiQ AeoniQ is designed to offer comparable
performance properties to Polyester, Nylon and conventional regenerated
cellulose yarns.

·   When compared to conventional Polyester, Nylon, cotton and
conventional regenerated cellulosic products, the production of HeiQ AeoniQ
yarns will aim to have the best-in-class environmental credentials, as it is
designed to be recyclable in a circular textiles economy, will use 100%
renewable energy for manufacturing, will feature closed- loop recycling for
 more than 99.5% of materials used, will use no restricted substances and
will not draw on arable land, pesticides or fertilisers for its feedstock.

·   Mr. Martin Gebert-Germ, a viscose filament yarn expert with 30 years
of experience in the textile industry, is leading the commercialization of
HeiQ AeoniQ LLC as CEO.

HeiQ Group co-founder and CEO, Carlo Centonze said:

"The financial commitments by such prestigious companies as HUGO BOSS and The
LYCRA Company are strong endorsements of the enormous potential we see in HeiQ
AeoniQ, which is one of seven HeiQ technology platforms. These agreements also
demonstrate our ability to commercialize our HeiQ AeoniQ IP, which, whilst
still at an early stage, has secured third party investment at an implied
US$200 million valuation. We believe that, because of its physical strength,
HeiQ AeoniQ yarn is a versatile alternative to Polyester and Nylon and its
climate positive qualities create a very exciting future market opportunity
for HeiQ, as fashion brands and retailers come under increasing pressure to do
their part in commercializing their products and reduce their environmental
footprints."

Daniel Grieder, CEO of HUGO BOSS commented:

"Our exciting partnership with HeiQ on HeiQ AeoniQ represents yet another
important milestone in our journey towards becoming the leading premium
tech-driven fashion platform worldwide. Consistent with our bold mission
statement 'We Love Fashion, We Change Fashion', this game-changing
collaboration with HeiQ enables us to further push innovation and
sustainability across our brands' offerings, thereby driving measurable impact
for the environment and society alike."

Julien Born, CEO of The LYCRA Company commented:

"Sustainability continues to be a core tenet of The LYCRA Company's strategy
as we are focused on providing value-added technologies to help our customers
create and develop exceptional fabric and garment offerings while reducing the
environmental footprint, without sacrificing comfort or performance. Through
our close collaboration with HeiQ, we are working together to fast-track the
commercialization of HeiQ's AeoniQ yarn and are excited by the impact this
ground-breaking innovation will have on the apparel industry."

Annual results

The Company expects to announce its annual results for full year 2021 by the
end of April 2022. The Directors expect the results to be well in line with
market expectations.

 

Footnotes

i)          European Parliament, the impact of textile production and
waste on the environment,
https://www.europarl.europa.eu/news/en/headlines/society/20201208STO93327/the-impact-of-textile-production-and-waste-on-the-environment-infographic
(https://www.europarl.europa.eu/news/en/headlines/society/20201208STO93327/the-impact-of-textile-production-and-waste-on-the-environment-infographic)
, retrieved on 10 February, 2022

ii)         Science of The Total Environment, vol 652, 2019, 483-494

iii)        ACS Sustainable Chem. Eng. 2020, 8, 9, 3494-3511

iv)        Ellen MacArthur Foundation, A new textiles economy:
Redesigning fashion's future, (2017,
http://www.ellenmacarthurfoundation.org/publications)

 

This announcement contains inside information.

 

For further information, please contact:

 

 HeiQ Plc                                        +41 56 250 68 50

 Carlo Centonze (CEO)
 Cenkos Securities plc (Joint Broker)            +44 (0) 207 397 8900

 Stephen Keys / Callum Davidson
 SEC Newgate (Media Enquiries)                   +44 (0) 20 3757 6882

 Elisabeth Cowell / Robin Tozer / Megan Kovach   HeiQ@s (mailto:HeiQ@secnewgate.co.uk) ecnewgate (mailto:HeiQ@secnewgate.co.uk)
                                                 .co.uk (mailto:HeiQ@secnewgate.co.uk)

 

About HeiQ

HeiQ is focused on improving the lives of billions of people world-wide by
innovating the materials people use every day. HeiQ has strong IP which is at
the forefront of global technology in the $10 billion antimicrobial fabrics
market, $24 billion textile chemicals market, the $50 billion probiotics
market and the $150 billion man-made fibers market. It has also moved into the
medical device, healthcare and hygiene coatings markets, to help make
hospitals and healthcare environments more hygienic. HeiQ aims to deliver
growth for its shareholders through a combination of increased sales of its
core products and by entering additional lucrative markets through disruptive
innovations and M&A.

HeiQ has created some of the most effective, durable and high-performance
technologies in the market today, which cool, warm, dry, repel, purify, and
destroy viruses. Since 2005, HeiQ has developed over 200 technologies in
partnership with 300 major brands and it has a significant R&D pipeline
containing over 50 projects. The Company has won multiple awards and gained a
strong reputation for the ESG & sustainable downstream effect of its
innovations. HeiQ is the only company to have won the Swiss Technology award
twice. It has also won the Swiss Environmental award with an innovation that
saves energy and water consumption during the textile manufacturing process.

Led by an experienced leadership team, HeiQ researches new solutions for
partners, delivers scaled up manufacturing from its sites across the world and
helps partners market the product to end consumers - aiming for lab to
consumer in months.

About HUGO BOSS

HUGO BOSS is one of the leading companies positioned in the premium segment of
the global apparel market. With its two brands, BOSS and HUGO, the group
offers collections in 127 countries at around 7,350 points of sale and online
in 59 countries via hugoboss.com. With approximately 13,800 employees
worldwide, the company, based in Metzingen (Germany), posted preliminary sales
of EUR 2.8 billion in the fiscal year 2021. group.hugoboss.com
(https://group.hugoboss.com/en)

About The LYCRA Company

The LYCRA Company innovates and produces fiber and technology solutions for
the apparel and personal care industries. Headquartered in Wilmington,
Delaware, The LYCRA Company is recognized worldwide for its innovative
products, technical expertise, sustainable solutions, and unmatched marketing
support. The LYCRA Company owns leading consumer and trade brands:  LYCRA®,
LYCRA HyFit®, LYCRA® T400®, COOLMAX®, THERMOLITE®, ELASPAN®, SUPPLEX®,
and TACTEL®. The LYCRA Company's legacy stretches back to 1958 with the
invention of the original spandex yarn, LYCRA® fiber. Today, The LYCRA
Company focuses on adding value to its customers' products by developing
unique innovations designed to meet the consumer's need for comfort and
lasting performance. For more information, visit www.thelycracompany.com
(http://www.thelycracompany.com)

 

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