Rayonier Advanced Materials Inc. Price & Performance (RYAM)

Reconciliations comparable GAAP measures can be found in our presentation on Slides 21 to 27. Call over to Jalyle. All right. Thank you, Mickey, and good morning. I'll begin with a recap of our financial and strategic achievements in '20 to walk through the details of our business segments capital structure and liquidity. After his remarks, I'll return to discuss our ongoing initiatives and outlook for 2025. [indiscernible] 2024 was a year of execution, resilience and strategic progress. Made significant strides in improving profitability strengthening our balance sheet and positioning the company for long term value creation. We achieved meaningful EBITDA growth, improved our free cash flow and advanced key strategic initiatives aimed at reducing earnings volatility and increasing shareholder return. Let's review our key financial results for 2024. [indiscernible] Revenue for 2024 came in at $1,630,000,000 a slight $13,000,000 decline compared to 2023. Operating income significantly improved to $39,000,000 an increase of $104,000,000 over the prior year. Adjusted EBITDA reached $222,000,000 marketing an $83,000,000 or 60% year over year increase, driven by strong cellular specialty pricing and volume as well as cost reductions resulting from our temiskamine high purity cellulose indefinite [indiscernible] EBITDA margins expanded to 13.6% from 8.5%. 2024 adjusted free cash flow stood at $128,000,000 and a 42% from 2023.

Our net secured debt decreased by $73,000,000 and our net secured leverage ratio improved to 2.7 times covenant EBITDA We are firmly on track to meet our long term 2.5x target. High purity cellulose was a primary driver of the EBITDA growth. Delivering a $93,000,000 65% increase year over year. Higher cellulose specialty pricing and volumes and improved sales mix towards cellulose specialties cost benefits from strategic capital investments, lower cost due to the Temiscaming indefinite suspension, and Canadian emergency wage subsidy or SEWS benefits supported this growth.

However, [indiscernible] We faced some offsetting impacts from the adjusted fire repair costs in the absence of a prior year payroll tax benefit. Paperboard EBITDA declined by 4,000,000 Finally due to lower sales prices, higher labor costs and the impact of custodial site costs from Temiscaming. However, higher volumes improved productivity and the SUEZ benefits partially offset these headwinds. [indiscernible] A little more detail on the noted custodial side cost at site continues to encourage site costs to support ongoing energy needs for the paperboard and high yield pulp businesses. Beginning in the fourth quarter, these custodial side costs are now being netted with the benefit of electricity sales and will largely be allocated to the paperboard and high yield pulp results during the period of the temiskymene high purity cellulose indefinite suspension. Higher pulp EBITDA also declined by $4,000,000 due to lower sales prices, higher labor costs, and a larger allocation of the Timiskaming custodial side cost. That said, lower logistics and input cost improved productivity and the SEWS benefits helped mitigate these challenges. Corporate expenses increased by $2,000,000 driven by higher variable compensation discounting and financing fees and ERP transfer [indiscernible] This was partially offset by favorable foreign exchange rate.

In short, our strong operating execution and disciplined cost management helped drive significant EBITDA and free cash flow growth despite revenue pressure in certain segments. Looking ahead to 2025, we are currently projecting EBITDA in the range of 2 to $235,000,000 This guidance includes our estimate of the impact of the 25% tariffs on U. S. Sales of paperboard. However, this guidance is subject to any additional tariffs. While these tariffs do supply in paperboard in the absence of certain one time net benefits of approx We will build on last year's achievements by prioritizing value over volume in our core cellular specialty business, executing our biomaterial strategy, and realizing operational efficiencies derived from the strategic capital investments made in 2024. If we exclude the impact of these one time benefits that were realized in 2024 we are on track to achieve our target of 10% annual EBITDA growth even with the headwinds of the paperboard tariffs and new supply. I will provide more color on these drivers later. With that, I'll turn it over to Marcus to go through our financials. Thank you, Delil. Annual 2024 sales for the HPC segment declined by 11,000,000 to 1,300,000,000.0 as summarized on Slide five.

Despite a 5% net increase in overall HPC pricing, driven by a higher mix of cellulose specialties, products Total sales volumes fell by 5%. This was due to a 10% rise in CS sales offset by a 19% decline in commodity sales. The increase in CS volumes was supported by several factors. Including a competitor plant closure in late twenty twenty three accelerated sales volumes from the Timiskaming HPC indefinite suspension a gradual recovery in ethers demand and the absence of a prior year one time benefit from a change in customer contract terms. EBITDA rose by $93,000,000 to $237,000,000 Reflective of the improved CS sales mix, cost improvements due to the indefinite suspension of the existing HPC plant and the benefits of strategic capital investment. EBITDA margins improved from 11% to 18.2%. Turning to Slide six. Paperboard sales grew by 9,000,000 reaching $228,000,000 driven by higher volumes as customer destocking eased.

EBITDA declined by 4,000,000 to $48,000,000 dollars mainly due to lower pricing influenced by higher European import and cost increases related to higher labor, and Temiscaming custodial site costs. These impacts were partially offset by improved productivity.

EBITDA margins for the segment declined to 21.1% as compared to 2023.

High yield pulp sales as set out on Slide seven declined by $9,000,000 to $127,000,000 primarily due to a 9% drop in external sales prices. Reflecting oversupply in China and lower demand. Cost improvements as a result of higher productivity and lower cost inputs partially offset by increased labor and Temiscaming custodial site costs.

Segment EBITDA declined by $4,000,000 to a $5,000,000 loss compared to a $1,000,000 loss in the prior year. Transitioning to Slide eight.

Consolidated operating income improved significantly to $39,000,000 reversing the prior year's $65,000,000 loss. Higher CS pricing was partially offset by lower prices in HPC commodities, high yield pulp and paperboard, In addition, the favorable sales mix from increased CS volumes more than offset the impact of lower HPC commodity volumes. Cost improvements were mainly driven by the Temiscaming HPC indefinite suspension activities and previous strategic capital investments. SG and A and other costs increased due to higher variable compensation but were more than offset by the impact of favorable foreign exchange rates [indiscernible] Highlights on the company's capital structure are set out on Slide nine. Net debt fell to $653,000,000 a $68,000,000 reduction from 2023.

Net secured debt as reflected in our financial covenant ratio associated with the term loan, was $625,000,000 reducing net secured leverage to 2.7 times covenant EBITDA. Liquidity remains strong at $276,000,000 reflecting $125,000,000 in cash, dollars 141,000,000 under the undrawn ABL facility and 10,000,000 Turning to capital allocation. Total twenty twenty four capital expenditures reached $108,000,000 with $33,000,000 allocated to high return strategic projects [indiscernible] focused on enhancing plant efficiency. The France bioethanol plant and completing ERP upgrades to support enhanced segment reporting in 2025. Net of financing, strategic capital amounted to $15,000,000 Overall, the completed refinancing four strengthens the company's capital structure and enhances Ryan's financial flexibility to execute the company's long term business strategy With that, I'd like to turn the call back over to Dislav. All right. Thank you, Marcus.

Let's now turn our attention to Slide 10, where I'll provide an overview of our key initiatives for 2025. We will be implementing new segment reporting beginning in Q1 of twenty twenty five, which will better reflect our evolving business and strategic direction. The new segments will include Soluble Specialties, cellulose commodities, Biomaterials paperboard, We believe that these reporting segments will provide investors with clearer picture of the resilient earnings power Our Cellular Specialty business the progress in the execution of our biomaterial strategy, and the steps we are taking to reduce exposure to non fluff commodity markets. [indiscernible] We will continue to prioritize debt reduction to strengthen our financial flexibility However, our debt reduction in 2025 will likely be limited to the schedule to amortization of $20,000,000 per remitted under our credit agreements as discussed with potential buyers of our paperboard and high yield pulp businesses have stalled due to the market uncertainties introduced by The U. S. Tariffs.

Optimizing assets and operational efficiency is a huge opportunity for I'm We have successfully reduced our exposure to non fluff HPC commodities to just 6% in 2024. And we believe that this commodity exposure will continue to decline as ether's demand recovers to historical levels and we successfully requalify the Temiscaming cellulose specialty production at our other HBC facilities. Such qualifications remain on track. In 2024, we invested $10,000,000 of CTH capital into cost efficiency projects. That when added to an additional $5,000,000 investment to be made in 2025, is projected to generate $10,000,000 in EBITDA 2025. Significant opportunities remain and we will continue to invest in such high return strategic capital projects to reduce unit production cost via increased labor productivity, improved reliability and input efficiencies. Finally, growing our biomaterials business remains a key initiative. We continue to believe that demand for sustainable solutions is accelerating. We that we are well positioned to capture highly profitable growth in this space. [indiscernible] The biomaterial projects we plan to advance in 2025 include BILTOMaha Green Energy or AGE project which was awarded a purchase power agreement by Georgia Power in 2024. We're currently working on permitting, negotiating the EPC contract arranging the project's financing, We expect the final investment decision to be made on this project in late twenty twenty five.

The various BioNova initiatives such as bioethanol, crutal oil and prebiotics. We have secured funding for these near term projects. These investments leverage co product economics driving strong investment returns and investment decisions are also expected to be made on these projects in 2025. I want to emphasize that we remain committed to advancing the bio ethanol project at our Fernandina Beach site. We believe that the city of Fernandina Beach errored in rejecting our site plan application for project and we are pursuing all available remedies. In anticipation of a favorable outcome, we are continuing to advance engineering plans and explore potential commercial agreements. Turning to Slide 11, we are committed to realizing high investment returns on our discretionary strategic capital [indiscernible] 2025, we are evaluating $39,000,000 of strategic capital investments toward biomaterials, and CS cost efficiency projects that will meet our mandatory investment criteria of a ROE greater than 30% and a payback period of less than two years. As noted, in biomaterials, we are advancing the Bio Nova initiatives as well as the AGE project. With substantial external financing, Ryan's net twenty twenty five strategic capital investment for biomaterials project is just $1,000,000 Total investment for these projects is expected to be around $140,000,000 of which 50% will be funded by Orion equity.

These investments in biomaterials are expected to generate $55,000,000 in EBITDA once full production is achieved.

In Cellular Specialties, we're evaluating of $19,000,000 and $14,000,000 in 2025 and 2026, respectively. In automation, efficiencies and other cost reduction projects. We believe these initiatives will generate $31,000,000 in annualized EBITDA, which will build on the success of the $15,000,000 recently invested similar projects that is expected to deliver $10,000,000 in cost reduction this year We're also completing the final phase of our ERP system upgrade with a $4,000,000 investment to enhance segment group oversight. Supporting our new segment reporting structure launch, in Q1 twenty twenty five. Turning to Slide 12, we outline our 2025 EBITDA and free cash flow guidance.

We expect EBITDA to be in the range of $215,000,000 to $35,000,000 driven by the continued strength of our core cellular specialty business. [indiscernible] Sequentially and year over year, we expect EBITDA to decline moderately in the first half twenty twenty five with a stronger back half of the year reflecting the impact of extended planned maintenance outage outages at all three HPC facilities in the first half of twenty twenty five. While this guidance includes an estimated impact of the recent 25% U. S. Tariffs on paperboard, this guidance remains subject to the impact of any additional tariffs. Cash interest expense for 2025 is projected at $93,000,000 which reflects the timing of our debt refinancing thus includes a $12,000,000 interest payment for the last quarter of twenty twenty four.

On a normalized basis, Annual cash interest expense will be just over $82,000,000 Maintenance capital is projected at 85,000,000 reflecting the noted planned maintenance outages across all three HPC facilities compared to only one in 2024, well as incremental capital repairs related to the Jessup fire.

Breaking capital expected to provide a modest $5,000,000 benefit as we continue optimizing our cash conversion cycle. We realized a total of nearly $100,000,000 of working capital reduction over the two year period of 2023 and 2024.

Thus, the opportunities to monetize working capital are getting more challenging. Deferred energy payments in France from 2023. As a result, we expect adjusted free cash flow for 2025 to be in the range of $25,000,000 to $45,000,000 subject to the same caveats mentioned earlier regarding tariffs, As in prior years, we will continue allocating these funds toward debt reduction and high return strategic capital investments that we can maximize long term equity value creation. On Slide 13, I will provide a deeper deeper look into our 2025 market outlook across each of our business segments. In Cellular Specialties, we expect mid digit mid single digit percentage price increases. Driven by our value over volume strategy, Sales volumes are projected to decline slightly reflecting the 2024 bridge volume up Asset heat demand continues to be afflicted by supply chain destocking while ethers demand is expected to improve and the demand for the other specialty grades remain strong. We anticipate moderate inflation in raw materials and logistics costs. For the year, we project EBITDA between $255,000,000 and $265,000,000 subject to any future tariffs. In cellulose commodities, we also anticipate mid single digit percentage price increases. Fluff demand remains strong while our non fluff exposure continues to to decline.

Moderate inflation in raw materials and logistics cost is expected. EBITDA is projected to range from $3,000,000 to $8,000,000 subject to potential tariffs. In biomaterials, we are advancing the key initiatives as noted. We expect biomaterials EBITDA of $8,000,000 to $10,000,000 in 2020 In Paperboard, a 25% U. S. Tariff will be applied on our U. S. Sales of Paperboard effective March 4. [indiscernible] As I will discuss on the next page, we are confident that we can mitigate much of the impact of these tariffs to the enterprise EBITDA.

Heavyboard prices are expected to decline in 2025 due to the startup of new capacity While sales volumes are expected to increase, Higher purchase pulp costs and the increased burden of Temiscaming custodial side costs will also put pressure [indiscernible] For 2025, we expect paperboard EBITDA of $15,000,000 subject to any additional tariffs.

In high yield pulp, we anticipate lower prices though sales volumes are expected to rise as we return to normal operating levels following the Q4 twenty twenty four market related production downtime. EBITDA is projected at negative $15,000,000 reflecting ongoing pricing pressure a $10,000,000 impact of Tameiskemin custodial side costs. And corporate costs are expected to decline driven by the completion of our ERP project. We anticipate corporate EBITDA of negative $50,000,000 subject to currency changes.

I outline the potential impacts of tariffs in our mitigation strategies on Slide 14.

Given the evolving trade environment, we are actively assessing the potential financial and operational effects across our business Business segments we will adjust our mitigation strategies as needed. And Cellular Specialty is the primary the primary tariff risk relates to potential retaliatory measures from China on our acetate products. While no specific retaliatory tariffs against our products have been announced, [indiscernible] exposure of up to 5% on approximately $160,000,000 in revenue. However, given the industry is largely sold out, our approach to mitigating this risk includes customers absorbing the tariff and protecting U. S. Domestic market.

In cellulose commodities, the exposure is primarily related to fluff with the potential for Chinese retaliatory tariffs of up to 5% on approximately $110,000,000 of revenue. Though no specific retaliatory tariff has been announced. Mitigation efforts will focus on passing through the tariffs to customers where possible protecting U. S. Market share and pursuing market share in geographies outside of the impacted regions. As already mentioned, our 25% U. S. Tariff will be applied on our U. S. Paperboard sales of approximately $175,000,000 in annualized sales. Worst case scenario is an annualized EBITDA impact of $42,000,000 per year and $35,000,000 in 02/1935. We will of course attempt to pass on as much of this impact to customer Our key mitigation action though will be to replace our 105,000 metric tons of paperboard USX of Canadian domestic sales We believe that this can be done since it trade balance between The U. S. And Canada for paperboard is significant and balanced. 400,000 metric tons is imported by either concentrate from the other. We believe that most of the 400,000 metric tons of U. S. Paperboard imports into Canada will be available For domestic suppliers, given the strong [indiscernible] Canadian segment, [indiscernible] and the upcoming retaliatory tariffs a 25% retaliatory tariff on U. S. Sourced SBS and FBB paperboard effective March 25, 2025, We are also in frequent discussions with Canadian Federal and Quebec Provincial policymakers regarding short term government support including the funding of the up to one year qualification process to convert these Canadian SBS customers to our paperboard product.

Through a myriad of mitigation actions, including the noted short term government support favorable change in foreign exchange, a hold on discretionary spending in a quick Canadian conversions of at least 30,000 metric tons in 2025, we believe we can mitigate much of the EBITDA impact of these tariffs. We will continue to monitor U. S. We will continue to monitor trade developments closely and we'll take necessary actions to address risk as more details become available. Turning to Slide 15, we anticipate margins in the 13% to 14% range in 2025, supported by our continued shift toward higher value specialty products facilities from strategic investments. Net secured leverage is projected to be 2.7x covenant EBITDA at year end. We remain confident in our ability to reach 2.5 times [indiscernible] Well ahead of 2027.

With that operator, please open the call to questions.

Our first question comes from the line of Daniel Harriman Please proceed with your question.

Hey, guys. Good morning. Thank you so much for taking my Congrats on a really wonderful year of execution. Just a couple of quick ones from me today. The first, when we look at capital allocation, both on a strategic and a maintenance level, for 2025, can we expect that to kind of follow the same cadence as 2024 in terms of quarterly spend And then I hate to bring this up, but just wanted to ask about the sale of the paperboard and high yield pulp assets at Temiscaming. And wondering if maybe you're seeing a better market more conducive market thus far into 2025. If investors are hung up on the oversupply of high yield pulp from China, and the upcoming paperboard capacity adds in that market. You so much. Hey, good morning, Daniel. This is Delil.

So on your capital allocation, Question which is specifically around, I think, calendarization of the spend throughout the year. I would say that with respect to the maintenance CapEx, will be a little heavier in the first half than it will be the second half because again, our outages at the three facilities will happen in March and April of this year. So you'll see heavier weighting in the first half of the year. With respect to the strategic capital, probably a little bit the opposite, because we're still going through the evaluation of various projects and so forth. The spend on that tends to happen in the second half or the later part of the year, after just have been validated and projects have been approved. And then obviously, the execution of implementation actually doesn't happen until after all that happens. So At the end of the day, given the size of the maintenance CapEx relative to the strategic CapEx, you probably see on a combined consolidated level a little heavier in the first half and a little lighter in the second half.

And then with respect to the potential sale or the the paperboard in high yield pulp again. Obviously, we're very interested in sometime in the near future. And I think you hit on a couple of points about why this has been dragging out the excess capacity [indiscernible] for high yield pulp, not just in China, but around the world. The issues with respect to the new capacity on paperboard coming online later this year and the impact it will have on prices. It certainly has weighed on interest. But I would say that the uncertainty that surround that's surrounding this [indiscernible] The tariff news that will be going out, I think the uncertainty with respect to the flip flops we're seeing is not helping. And until all that settles out, until things become much more certain and we can put together a long term coherent strategy to deal with that, I think we're going to be in a situation where we're most potential suitors will be will sit on the sidelines until all that settles out.

Okay. Thanks, Duil. I appreciate it.

Thank you. Next question comes from the line of Matthew McKellar with RBC Capital Markets. Please proceed with your question. Good morning. Thanks for taking my questions. First, I'd like to ask about the outlook for CS volumes this year.

Is there any more color you can provide particularly around the destocking trend in asset states you noted maybe around what kind of destocking you're seeing now and how you expect the impacts of destocking to affect demand through the year, And then Just around what's driving continued improvement in ethers both in terms of the end uses and then the impacts of restocking versus improvement underlying demand you might be expecting?

Okay.

Good morning, Matthew.

Talk about the destocking of acetate. In China. And actually, I would say it's probably global. This is really, I think, you've taken our own direct cost We look at the supply chain from our product all the way up into the actual cigarette sticks, there's seems to be an overstocking throughout the throughout the supply chain.

With respect to ourselves, The order book for $25,000,000 was reduced. By the large consumers of the assay product that we make And as a consequence, although we were able to maintain share Our volumes did come down [indiscernible] we were able to raise price. Again, In terms of percentages, in terms of decline in demand, I would say it's in the single digits, roughly [indiscernible] Let's say, mid single digit impact relative to last year. The expectation of how long this is going to last, I mean, it's lasted longer than we thought it would. We thought this would be well over well behind us going into '25. But right now, we really don't have any clear sight of when this is going to end. So we'll just keep keep our year to the rails, so to speak, and we'll inform investors as we get new information.

So there's 50 ethers ethers demand, we're seeing improvement in 2024. Some of that improvement due to restocking, but also an increase in demand from a few end uses. Principally food and pharma. Construction continues to be a little weak But again, we expect that those demand the demand will continue to increase in ethers in those two segments that we saw improvements in 2024. And there may be some upside on construction activity, particularly around if the wars in Gaza and Ukraine end, construction activity may pick up and that obviously will then drive construction related ethers demand.

That's great. Thanks very much for that color. Just on other CS grades, appreciate that demand there remains fairly robust. Just looking underneath the surface level, any I guess, specific end uses that you call out as being stronger or weaker here maybe either around kind of what's happening with defense spending with respect to Nitrocellulose or autos with respect to tire cord and filtration applications? [indiscernible] Would say that filtration has been a strong growth market for us for the business [indiscernible] obviously, the sad commentary about the various geopolitical activities going on in the world is actually driving munitions and that's been supportive for us. Autos, I would say is if you think look at auto the build rate for autos, it's weak. But Given the the mix change to electric vehicles, and the impact of the heavier cars, ours have on tires we're actually seeing an uplift in the premium tires that go into EV.

Casings is relatively flat We're not seeing growth there. MCC which again is primarily tied to food and pharma, we're seeing improvements in So at the end of the day, three markets are up, MCC, Nitro Filtration, Casing's entire quarter are relatively flat right now.

That's great. Thanks very much for that color. And then last question for me just around tariffs in your paperboard business. Assuming this 25% tariff level is sustained, how quickly would you expect to capture more business within Canada versus business you might expect to lose out on in The U. S. You've called out I mean one year qualification period is a a consideration here. Is that pretty universal across the business you'd expect the targets? Or how would you just think about that kind of relative relationship between That's a great question. And getting down to specifics would probably be probably a little premature on our part right now. But If I look at Paperboard, there are really two big segments that we'd be looking at converting in Canada would be commercial riding commercial print, and then packaging. We think packaging is going to have the much longer qualification period. And so that'll be one where we'll need to take a little bit of government support and so forth to make those conversions. But where we think we can get quick wins is on the commercial print side. And, the qualifications are much shorter in that space. So with the retaliatory tariffs expected to go into go in effect at the March, Given the strong Canadian sentiment to buy Canada products, We believe that we'll be able to convert fairly quickly upwards of 30,000 tons of production away from U. S. Exports to Canadian domestic business in 2025.

Obviously, we will continue during that period going through the qualification on the packaging grades and we'll start we would start expect to start seeing those conversions in 2026. So that's that's our strategy. That's our our action plan right now with respect to that.

Great. Thanks very much. Turn it back.

Thank you. Ladies and gentlemen, as a reminder, Our next question comes from the line of Dmitry Silversky with Water Tower Research.

Good morning, gentlemen, and congratulations on a strong end to the year. And a very good 2024.

A couple of questions, if I may. One, you talked about onetime helped with the profitability I believe with your high purity cellulose business in 2024.

Can you just go through and remind us what those one time benefits were, so we know how to adjust our 2025 Yes, Dmitry.

By the way, good morning. With respect to 2024, let's say there was probably roughly $15,000,000 of one time benefits in 2024 that we would not see continuing in 2025, one of the Suez, those Canadian employment wage subsidy benefits that we were able to recognize in 2024. That totaled about $10,000,000 There was benefits that came from the indefinite suspension that pull forward of demand by our customers to have inventory on the floor while they went through a qualification process. That would probably another $17,000,000 of benefit last year. So those two together is 27%. And then offsetting that would be the fire. At Jessup. And so when you take that out, which was roughly a $9,000,000 hit, that gets you down to roughly that $15,000,000 impact last year.

Okay. That's helpful. Thank you. That's what I thought I just wanted to make sure I wasn't missing anything.

And then in the crosshairs immediately here. Starting in April.

So your guidance, I'm presuming, is based on three quarters of tariff impact because the first quarter looks like it You sort of dashed the board in the first quarter impact. So is this basically a nine month kind of worst case scenario guidance that you're giving us of $35,000,000 here on EBITDA. [indiscernible] No, we're actually assuming a ten month hit. As it was effective as of March 4. So and you look at an unmitigated exposure, it roughly a $35,000,000 potential impact. Now as I said, we expect to pass on as much of that tariffs as we can to our U. S. Customers. But that being said, we will retain our share in The U. S. While we work through qualification processing in Canada with our our customers, potential customers in Canada. [indiscernible] there's a lot of puts and takes here. One of the immediate benefits that we got was foreign exchange. Foreign exchange, works in our favor. And that alone provide us benefits of $5,000,000 $5,500,000 all by itself. So, and then you look at the conversions in some of things we're doing on putting holds on some discretionary spend at the enterprise level we believe that we'll largely mitigate that $35,000,000 potential exposure due to these tariffs in 2025.

Okay. That's encouraging.

Then I just want to make sure I understand this correctly. In your biomaterials guidance, you talked about [indiscernible] reaching a $55,000,000 EBITDA run rate when these projects come in.

I think last time were mentioning something in the neighborhood of $40,000,000 in EBITDA when these projects come up.

Are you adding more projects in your line of sight to get to the $55,000,000 or do you expect what you've told us before to be more profitable [indiscernible] On a run rate basis, when you get the production fully up, [indiscernible] that's a great question, because it is a little confusing. The $55,000,000 is related to projects that we're going to spend strategic capital starting in 2025 through 2028. One thing is it doesn't include and it doesn't include the the bioethanol plant that we've already invested in, in France. So just for easy math, let's just assume that you got another $10,000,000 EBITDA to the $55,000,000 to get to the potential that we get to at the end of twenty twenty eight. So you've got this increase of roughly $18,000,000 plus versus what we've what we've mentioned in the past. And really that the difference is is the AGE project. So the AGE project is advancing pretty quickly. Since we received the purchase power agreement from Georgia Power Law.

Last year.

We'll be making a final investment decision on that later this year. But the potential EBITDA impact of that is $25,000,000 to $30,000,000 per year.

And so by the time that we get that plant up and running, it 2028, which is it would come on in the later half of twenty twenty eight because it takes about three years to build. So you get some of the benefit in 2028, and then you get a full year impact in 2029. So when you get to 2029, you're possibly looking at a $70,000,000 EBITDA number for biomaterials.

Okay. So if I'm to think about this over the next couple of years kind of going back to your original 2027 guidance, that $40,000,000 EBITDA expectation is still [indiscernible] Well, there's been delays. Principally around the bioethanol plant in Fernandina Beach. As we go through the public participation process on the permitting, So achieving $42,000,000 at the end of twenty twenty or for the year of 2027 is probably not likely. We'll probably see that in 2028. I mean, yes, 2020 because of that delay. Okay. Got it. Thank you very much. That's all the questions I had.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Blumquist for any final comments.

Okay. Well, once again, thank you for taking the time today. To listen to our earnings call and for your continued interest in Ryan. Twenty twenty four year was a great year for us and [indiscernible] Incredibly proud of all the hard work and efforts and progress we made in '20 As we move forward, we will continue our focus on advancing our high return investments and continuing to maintain our financial discipline. To drive the long term value of the business. So we appreciate your support. And we will continue to strengthen our business and position ourselves for sustained growth going forward.

So we're committed to transparency and open communication but please don't hesitate to reach out to us if you have any further questions. Thank you again and look forward to talking to you in the future.

Thank you for your participation.