Translation: Original published in Finnish on 8/13/2026 at 9:15 am EEST.

Betolar's half-year report was operationally subdued, especially as new orders fell short of our estimates. We have incorporated the strategic, financial, and structural revisions announced by the company in recent months into our estimates. Overall, our estimates decreased after we lowered our expectations for the pace of commercialization. The strengthened liquidity position resulting from the financing arrangements provides the new management room to maneuver in advancing commercialization. However, the relatively high cost of capital requires commercialization to proceed at a vigorous pace to ensure there is something left to distribute to current shareholders in the long term. Following the estimate revisions, we lower the target price to EUR 0.9 (from EUR 1) and reiterate our Sell recommendation.

One project accounted for early-year figures

Betolar’s H1 revenue of 0.9 MEUR and EBITDA of -2.1 MEUR missed our estimates. Revenue more than doubled from the comparison period, and according to our estimate, the growth was practically entirely due to the revenue recognition of the October 2025 infrastructure order. Order intake came in at 0.3 MEUR, well below our forecast of 0.5 MEUR, and in Q2, the total was a very modest 0.1 MEUR.

Winds of change have been blowing in recent months

Over the past few months, Betolar has changed direction significantly. The original idea of a geopolymer-based cement replacement will no longer play a practical role in the future strategy. Instead, the company is undergoing business model and structural reforms, positioning itself as a technology provider and seeking partners to finance the commercialization of metal extraction technology and critical infrastructure protection solutions. We expect the announced letter of intent regarding metal extraction technology to move forward and be implemented within the year, and our new forecasts are based on this assumption. We anticipate that the targeted, high-margin licensing income related to metal extraction technology will begin accruing only within 3–5 years, whereas our greatest expectations for commercialization progress in the coming years lie in what we estimate to be the lower-margin blast furnace slag supply business and other projects, including solutions designed to protect critical infrastructure. In our interpretation, the CEO change, the strategic and structural changes, and the planned Capital Markets Day for fall are a necessary reaction to the slower-than-expected progress of commercialization. In light of the slower-than-expected commercial progress, we have revised our forecasts for the coming years downward while incorporating the planned changes to structure, financing, and strategy into our projections. Consequently, our earnings forecasts have been lowered, and we do not anticipate cash flow turning positive until the next decade. Due to these financing arrangements, we estimate that the company’s financing needs will be covered for approximately two years, depending on commercialization progress and investments in the coming years.

Current risk/reward is unattractive

The stock is expensive based on revenue multiples, with an EV/S ratio of 15.0x for the current year and 10.3x for next year. The value of our DCF model, which relies on a long-term commercial breakthrough, is EUR 0.9. From a shareholder's perspective, the progress of commercialization in the coming years is also important because the mezzanine financing instruments rank ahead of shareholders and will accumulate interest at a rate of nearly 10% in the next few years. Betolar’s expected return remains binary: a successful commercial breakthrough could lead to multiplied returns given the large market, while the potential loss of invested capital for current shareholders due to possible refinancing weighs heavily on the other side of the scale. Currently, the lack of visibility into a commercial breakthrough makes the risk/reward ratio weak in our view.