Translation: Original published in Finnish on 10/15/2025 at 9:19 am EET.

An update to Solar Foods' Factory 02 operating model brings more concrete details to the evaluation communicated in connection with the company's H1 report regarding the possibilities to reduce the production plant's investment needs by relying more heavily on partner suppliers.
We believe that the use of partner suppliers is justified from Solar Foods' perspective, as it reduces the capital requirement of the future production facility, which is currently the main pain point of the investment story. At this stage, the release does not necessitate changes to our forecasts, but in our view, it concretizes the company's decision to utilize partner suppliers.  

The decision replaces investment needs with operating expenses

Solar Foods announced on Tuesday evening that it is updating the operating model of its Factory 02 and specifying its financing needs. The company confirmed its intention to implement the plant with strategic partners. In our view, the release confirmed the message given in connection with the H1 report that, instead of its own investments, the company intends to rely more heavily on services provided by various partners in the operation of its Factory 02. From a business model perspective, this replaces investment needs with operational expenses, which reduces the company's own financing needs for the Factory 02 investment and thus the dilution risk for shareholders.

The partner model significantly reduces the need for own financing

According to the release, Solar Foods is proceeding with the Factory 02 design using a model where strategic partners are responsible for, for example, the property, hydrogen production, and energy infrastructure. This allows Solar Foods to focus on its core technology and the commercialization of Solein. According to the company's estimate, a stronger reliance on the partner network reduces the equity requirement for phases 1 and 2 of Factory 02 from 70-80 MEUR to approximately 25-35 MEUR. This reduces the financing risk associated with the company's massive investment program and the dilution risk for shareholders. However, the estimated financing need is conditional on the granting of the remaining 66 MEUR of IPCEI notification and the availability of sufficient debt financing. The company also announced that it is exploring equity financing and has appointed DNB Carnegie Investment Bank as its advisor, which suggests that the necessary capitalization arrangement is being prepared. In our view, in an ideal scenario, capital would be raised through a directed share issue to food industry customers, as this would commit them to the ramp-up of Factory 02 and the commercialization of Solein.

Solar Foods' estimate of financing needs and sources

Source: Solar Foods

The strategic direction was in line with our expectations

The main message of the release was not a surprise to us. We have already discussed the utilization of the partner model in our H1 report published in August, where we stated that it is a logical solution given the company's limited resources. We had already taken into account the impact of the model in our long-term forecasts by reducing the need for investment and increasing the share of operating costs. Tuesday's release confirms our view and provides more precise figures to support the model.

Illustrative targets add color to the long-term story

New and interesting information in the release included the company's illustrative financial estimates of the impact of Factory 02 (phases 1 and 2) by 2030. The company estimates it will achieve revenue of 97-119 MEUR and an operating profit of 31-37 MEUR. The company's revenue estimate is slightly below our 2030 forecast, but the estimated EBIT level is more optimistic than our 28 MEUR forecast.