www.fmuencecorp.com Targetjng Global Leadership in Decentralised Water & Wastewater Treatment Solutjons Annual General Meetjng 22 May 2019
Agenda 1. Chairman’s Address – Richard Irving 2. Managing Director’s Presentatjon – Henry J. Charrabé 3. Formal Business
Chairman’s Address Richard Irving Chairman
Managing Director’s Presentation Henry J. Charrabé Managing Director and CEO
2018 in Summary • Delivering on our mission to become the worldwide leader in decentralized water and wastewater treatment solutjons • Completed the fjrst full year as a combined entjty • ~74% YoY organic revenue growth, signifjcantly outpacing industry peers – Achieved fjnancial guidance provided at the beginning of the year • Reduced SG&A by 30% in fjrst full year as a combined entjty, further validatjng the ratjonale for the 2017 merger of Emefcy and RWL Water • Entered 2019 with a strong pipeline of opportunitjes, an enhanced product ofgering and commitued debt fjnancing to meet the needs of a broader customer universe 5
Sustained Year Over Year Growth of Key Metrics Revenue US$M ($ millions) 2017 (1) 2018 (2) $50 Revenue 58.0 101.1 $40 $30 Gross Profjt Margin 13.0 34.5 $20 Gross Profjt Margin 22% 34% $10 $0 EBITDA -35.7 -8.1 Q1 Q2 Q3 Q4 2017 2018 2019 • Revenue growth 74%, all organic • >200% increase in Gross Profjt Backlog US$M $300 • Reduced G&A by 30% $250 $200 • Virtually zero debt on the balance sheet $150 $100 • Cash Balance as of Q1 2019: $24.3M $50 $0 Q1 Q2 Q3 Q4 2017 2018 2019 (1) 2017 pro-forma (consolidatjon of 12 months of RWL water) 6 (2) Q4 and Full Year Audited Gross Profjt include a $6.5M benefjt of reversal of an onerous contract provision from prior years
Growth Momentum Contjnues FY 2019E • Targetjng 100% YoY FY 2018 revenue growth of Smart • Achieved organic Products revenue growth of • Increasing backlog of 74% projects with Recurring • >200% increase in Q3 2018 Revenue • First MABR sale to Hubei Gross Profjt • Goal to achieve sustainably • Reduced G&A by ITEST positjve EBITDA • First NIROBOX™ BOT 30% signed in Philippines • First commercial Q1 2018 Aspiral™ sales in US and • Received award for Philippines Decentralized Water & Wastewater Company of the Year Q1 2019 • First NIROBOX™ Q3 2017 Record quarterly bookings of orders in Argentjna Emefcy and RWL $223M and Philippines Water merged to Awarded €165M landmark Ivory form Fluence Q4 2018 Coast contract • Commencement of Corporatjon Largest individual order of 40 (ASX:FLC) San Quintjn Project Aspiral™ units in China • Largest NIROBOX™ Offjcial launch of SUBRE and fjrst order ever from Egypt Q2 2018 commercial orders secured • San Quintjn project (12 units) Revenue of $12.3M, up 20% YoY • Announcement of reaches Financial Q4 2017 Total backlog of $267M, up 181% $50M Generate Close Opening of fjrst • Aspiral™ product Capital debt facility YoY MABR manufacturing 2019 guidance reaffjrmed suite launch plant in Changzhou, 7 China
Complete Suite of Water & Wastewater Treatment Solutjons Water Wastewater Wastewater-to- Food & Beverage Desalinatjon Reuse Treatment Treatment Energy Processing Custom Engineered Solutjons 8
Establishing a Global Presence • First draw down of US$50m non-recourse debt facility of US$2m for project in Bimini, Bahamas • Recurring revenue base of US$14.7m from Bahamas, Peru and San Quintjn • First commercial Aspiral™ sale (Philippines) • Signed second large contract in Egypt • Currently present in 23 provinces in China, a key market • Bulk order of 40 Aspiral™ in Q1 2019 in China • Backlog now sittjng at US$267m • Desalinatjon plant win in Brazil with repeat industrial customer 9
Fluence Growth Areas Reportjng Segment Products Smart Products Solutions Aspiral, SUBRE, NIROBOX BOOT Recurring Revenue and Complete range of O&M and Aftermarket Services Aftermarket offerings Custom-Engineered Waste-to-Energy, Large projects, Solutions EPC Water and wastewater treatment solutions for customers across Water and wastewater treatment solutions for customers across the industrial, commercial and municipal sectors the industrial, commercial and municipal sectors 10
Smart Products Solutjons Packaged MABR wastewater treatment Packaged potable water MABR wastewater treatment solutjons solutjons treatment solutjons for existjng or new plants 0.15-25 MGD raw municipal sewage 5,000-200,000 GPD raw municipal 130,000-400,000 GPD Seawater, Fresh sewage water, Brackish water Stricter regulatjons Water shortages Stricter regulatjons Market Decentralizatjon, Energy effjciency Decentralizatjon, Energy-effjciency Process intensifjcatjon Drivers: Increased urbanizatjon, New-build Increased urbanizatjon, New-build Outdated infrastructure infrastructure infrastructure Energy effjciency Plants USVI, Stanford (Title 22 Plants globally including Egypt, South Ma’ayan Zvi, Israel Market validated), Oregon, Texas, Argentjna, Africa, Philippines, Caribbean, Signifjcant and growing pipeline Adoptjon: Ecuador, China, Philippines, Israel Mexico, South America Commercial launch Q1 2019 and fjrst commercial orders in Jamaica 11
Recurring Revenue: Build Own Operate and Transfer (BOOT) Complete Water and Wastewater Solutions Recurring High Margin Revenue • Fluence’s Aspiral ™ and NIROBOX ™ products are ideal for BOOT projects Footprint, energy efficiency, reliability, low maintenance and quality output Using in-house proprietary technologies enhances margin • Uses Fluence’s equity to inject its own equipment • Ability to offer complete water/wastewater reuse solutions • BOOT agreements offer lucrative, recurring revenue for many years with higher valuations Multi-year Recurring Revenue Water Treatment Wastewater Treatment Capex 12
Custom-Engineered Solutjons: Landmark Project Win in Ivory Coast • €165M commercial agreement with Federal Government of Ivory Coast, signed in February 2019 • Turnkey supply of custom-engineered solutjon for 150,000 m 3 /day surface-water Water from Lagune Aghien will be treated to supply potable water for Abidjan treatment plant • The plant will treat freshwater and provide potable water to the city of Abidjan (4.7M populatjon) • Fluence’s scope: water intake and treatment, bulk water piping, water towers and infrastructure • Project fjnance guaranteed through Export Credit Agency (ASHRA, Israel) and fjnanced through Israel Discount Bank CAD depictjon of plant locatjon and layout • Financial Close and project commencement expected by Q3 2019 13
Fluence Growth Areas: Targeted Revenue Growth Smart Products Solutjons Aspiral, NIROBOX, SUBRE 2018: $22M 2019 target: $44M $101M Recurring Revenue … BOOT projects, Afuermarket $58M Custom-Engineered Solutjons Large projects Wastewater-to-energy Water purifjcatjon 2017 2018 Future Target Revenue Mix Shifu towards higher margin proprietary solutjons and recurring revenues Shifu towards higher margin proprietary solutjons and recurring revenues 14
Fluence Difgerentjatjon Strategy: Target Growing Gross Margin Increasing Gross Margin Large Smart Proprietary Proprietary Project Packaged Smart Packaged Product Plant Plant Aspiral™ Example: NIROBOX™ SUBRE >EUR165M (Ivory Coast project) 15
Outlook for Contjnued Growth in 2019 • 100% Year over year growth of Smart Products from $22M to $44M • Increase backlog of projects with Recurring Revenue • Achieve sustainable positjve EBITDA by SUBRE installatjon, Ma’ayan Zvi, Israel Q4 2019 Fluence MABR manufacturing plant, Changzhou, China 16
Formal Business
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