Rubicon Water Limited · ASX:RWL
Rubicon Water — Investor Presentation (August 2024)
53 slides from Rubicon Water's investor presentation, Aug 7, 2024
Slide 1: Rubicon Water Capital Raising Presentation
Victoria, Australia RUBICON WATER Capital Raising Presentation August 2024 Presenters: Bruce Rodgerson CEO / Andrew Bendall CFO ASX:RWL 1
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation (the “Presentation”) is dated 7 August 2024 and has been prepared by Rubicon Water Investments Commission (“ASIC”)), nor does it form part of, and should not be construed as, any present Limited ACN 651 852 470 (ASX: RWL) (the “Company”) and its subs
Slide 3: Important Notice and Disclaimer (cont.)
IMPORTANT NOTICE AND DISCLAIMER (CONT.) Not financial product advice or offer (continued) statements regarding the Company’s intentions, objectives, plans, expectations, assumptions and beliefs Any investor that intends to deal in any existing or prospective securities of the Company is required to
Slide 4: Important Notice and Disclaimer (cont.)
IMPORTANT NOTICE AND DISCLAIMER (CONT.) Future performance and forward-looking statements (Continued) To the maximum extent permitted by law, responsibility for the accuracy or completeness of any forward- NOT FOR RELEASE TO U.S. WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES looking statements
Slide 5: Important Notice and Disclaimer (cont.)
IMPORTANT NOTICE AND DISCLAIMER (CONT.) Disclaimer To the maximum extent permitted by law, the Company, each member of the Group, the Lead Managers, and their respective affiliates, subsidiaries, shareholders, directors, officers, partners, employees, agents, advisors, representatives or any other p
Slide 6: Table of Contents
USA Table of Contents 01 HY22 summary 02 03 Executive Summary Our Journey Overview of Rubicon 04 05 06 Growth Opportunity Capital Raising Overview Key Risks and International Offer Restrictions 6
Slide 7: Rubicon Water
RUBICON WATER Dedicated to addressing water scarcity by providing innovative solutions to governments, water management utilities, and growers. $1.08bn ~70% Our mission is to increase water availability and agricultural productivity through Infra & services Revenue improved water-use efficiency. Wit
Slide 8: 1. Executive Summary
NSW, Australia 1. Executive Summary 8
Slide 9: Executive Summary
Executive Summary ▪ In FY24, Rubicon secured a record $33 million of orders in the US market (up 200%+ pcp)1, including a notable 5-year contract in late June 2024 for its FarmConnect Solution. ▪ Significant investment is continuing within target markets to grow pipelines and contract works with Rub
Slide 10: 2. Our Journey
VIC, Australia 2. Our Journey 10
Slide 11: Development Journey
1996-97 1998 DEVELOPMENT Awarded major software contracts Commenced research relationship with University of Melbourne JOURNEY 1995 2002-03 2000-01 Over 29 years of developing and delivering First pilot projects and commercial rollout of FlumeGate Designed and our autonomous Channel Control Solution
Slide 12: The Rubicon Opportunity
THE RUBICON OPPORTUNITY Projections towards the Currently… year 2050 state that…. Agriculture consumes Agriculture will need 70% of the world’s to produce 56% freshwater resources. more food and fibre to feed the Surface water is the world’s population. primary source of water, supplying approximate
Slide 13: International Business Transition
INTERNATIONAL BUSINESS TRANSITION Snapshot of globalisation progress over the last 5 years. 1 2 Embedded global 200%+ increase in operations. REVENUE bookings out of the DIVERSIFICATION OVER USA for FY24. Assembly operations est. in USA & Chile, manufacturing est. in TIME1 Funding and prioritisation
Slide 14: 3. Overview of Rubicon
USA 3. Overview of Rubicon 14
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS Key outlook and trading update FY24 unaudited cash flow position ▪ Full year FY24 underlying EBITDA loss range $5.3m to A$m $5.8m. Opening cash balance (1 July 2023) 8.5 ▪ Near term pipeline of opportunities across both established and emerging markets. Unaudited operating cash
Slide 16: Solutions from Source to Crop
SOLUTIONS FROM SOURCE TO CROP Integrated solutions to maximise the efficiency, productivity and sustainability of agricultural water. • Growers receive water when their crops need it – an • Water is equitably distributed throughout the on-demand supply network • Water is precisely measured and contr
Slide 17: Illustration Across the Irrigated Landscape
ILLUSTRATION ACROSS THE IRRIGATED LANDSCAPE 9 5 3 1 4 Sensor Data 7 8 Water Tailwater measurement Authority Soil moisture probe 1 Sensor data indicates 10 the optimal time to The farmer’s crops irrigate. IoT Gateway + integrated receive water at the weather station optimal time, improving 2 yield an
Slide 18: Solutions Delivering Long-Term Value
SOLUTIONS DELIVERING LONG-TERM VALUE Creating relationships beyond solution sales, embedding ourselves to address evolving water management challenges SOLUTION SALES1 RECURRENT SOFTWARE1 Revenue composition by financial year REVENUE – O&M1 9% 7% 9% Integrated hardware O&M NeuroFlo Software 11% 11% 7
Slide 19: Global Installation Footprint and Growing Customer Base
GLOBAL INSTALLATION FOOTPRINT AND GROWING CUSTOMER BASE 40,000 • Rubicon is a market leader in providing innovative water management solutions 35,000 to customers around the globe. 30,000 • We have a growing customer base with long-term relationships and regular 25,000 repeat project opportunities.
Slide 20: Well Positioned to Deliver Material Operating Leverage
WELL POSITIONED TO DELIVER MATERIAL OPERATING LEVERAGE AS PIPELINE IS DELIVERED $100m • Rubicon’s operating model is set up to 50% $90m deliver strong operating leverage at scale given a relatively consistent $80m historical gross margin range of ~40- $70m 40% 50% and stable operating cost base. $60
Slide 21: 4. Growth Opportunity
Italy 4. Growth Opportunity 21
Slide 22: Rubicon's Market Evolution
RUBICON’S MARKET EVOLUTION Historical sales - Australia vs USA market (A$m) 80 Australia: early years characterised by technology development and small- Australia per year US per year Annual water price indicator scale implementations until the 70 Millennium Drought peaked, seeing the value of water
Slide 23: Key Regional Serviceable Addressable Market
KEY REGIONAL SERVICEABLE ADDRESSABLE MARKET Anticipated market over the next 5-10 years. MANAGEMENT ESTIMATE BASED ON FAO DATA ($AUD) KAZ ITALY $0.84bn $0.74bn RWL SAM RWL SAM $1.86bn total investment* $2.1bn total investment* MOROCCO $0.26bn USA RWL SAM $3.23bn 27 RWL SAM $0.65bn total investment*
Slide 24: Process of a Typical Rubicon Market-Led Proposal
PROCESS OF A TYPICAL RUBICON MARKET-LED PROPOSAL 1. ESTABLISH OPPORTUNITY 2. BUSINESS CASE DEVELOPMENT 3. PROJECT PROCUREMENT Identify Opportunity Tender published and bidding process begins. Assist with the development of Detailed Typically quote to multiple Lead Contractors. Project Report and wor
Slide 25: Project Pipeline
PROJECT PIPELINE RWL - Pipeline Progress NEAR-TERM PROJECTS – BY SEGMENT 1,200 + 4% 1,000 - 7% 800 Aug-23 $'M 600 Jun-24 400 + 4% 200 - ANZ Asia Rest of World Early Engagement Funding/Solution Development Pricing/Tender/Contract DIVERSIFICATION OF NEAR-TERM PROJECT OPPORTUNITIES, ALIGNING WITH GLOBA
Slide 26: Near-Term Summary & Characteristics
NEAR-TERM SUMMARY & CHARACTERISTICS Contracted works, recurring revenue and smaller projects across all geographies budgeted in FY25 Global near-term Opportunities in the Countries with active Average opportunity pipeline near-term stage near-term amount opportunities $225M+ 310+ 20+ $640K Healthy n
Slide 27: Near-Term Global Projects
NEAR-TERM GLOBAL PROJECTS New project pipeline opportunities over the next ~12-18months. ($AUD) C. ASIA $48.7M Avg. 8.1M 6 OPPORTUNITIES EMEA USA $35.2M $29.5M Avg. 370K Avg. 250K 94 PROJECTS 117 PROJECTS INDIA $96.9M Avg. 12.1M 8 PROJECTS LATAM AUS $13.3M APAC Avg. 280K $5.6M 27 Avg. 140K 47 PROJEC
Slide 28: Summary and Highlights
SUMMARY AND HIGHLIGHTS ESTABLISHED BUSINESS DEMONSTRATED TRACK SIGNIFICANT GROWTH PRIMED FOR RECORD OF DELIVERY: POST-INVESTMENT: INTERNATIONAL GROWTH: $730 million of historic revenue has been First 13 years of Australian investment Rubicon has been in operation for 29 generated in Australasia, rep
Slide 29: 5. Capital Raising Overview
5. Capital Raising Overview 29
Slide 30: Overview of Capital Raising
OVERVIEW OF CAPITAL RAISING ▪ Fully underwritten two-tranche Placement to raise approximately $16.0 million via the issue of approximately 64.0 million new fully paid ordinary shares in Rubicon (“New Shares”) (representing ~37.1% of shares currently on issue) to professional and sophisticated Offer
Slide 31: Overview of Capital Raising
OVERVIEW OF CAPITAL RAISING ▪ All Rubicon Directors and some key management personnel have provided firm commitments to participate in the Placement for an Director aggregate of $9.2 million. Director participation of $8.8 million is subject to shareholder approval at an EGM to be held in or around
Slide 32: Sources and Uses of Funds
SOURCES AND USES OF FUNDS Overview of Funding Sources & uses of funds ▪ Proceeds from the Capital Raising will be used to strengthen Sources of funds1 $m Rubicon’s balance sheet position, providing further financial Tranche 1 Placement 6.5 flexibility and headroom to support the working capital requ
Slide 33: Pro Forma Debt Funding Position
PRO FORMA DEBT FUNDING POSITION Net debt ($'000) June 2024 Completion June 2024 • Unaudited net debt position of $31.2 Unaudited of Offer1 Pro Forma million as at 30 June 2024. Cash at bank 1,690 3,576 5,266 • The Placement will reduce net debt on a Bank overdrafts (1,424) 1,424 - pro-forma unaudite
Slide 34: Timetable
TIMETABLE Summary of Key Dates Time / Date (2024) Trading Halt Monday, 5 August Placement bookbuild conducted Tuesday, 6 August Trading halt lifted, announce completion of Placement Wednesday, 7 August Settlement of New Shares under Tranche 1 of the Placement Monday, 12 August Allotment and Quotatio
Slide 35: 6. Key Risks and International Offer Restrictions
Uzbekistan 6. Key Risks and International Offer Restrictions 35
Slide 36: Summary of Key Risks
SUMMARY OF KEY RISKS Timing of uptake As a result of the significant capital outlay required for large-scale irrigation modernisation projects, the customer decision-making process is typically protracted. Rubicon faces of products and challenges with timing of tenders, tender awards and subsequent
Slide 37: Summary of Key Risks
SUMMARY OF KEY RISKS Occupational Rubicon is subject to health and safety regimes in Australia and other jurisdictions where it has employees and is required to comply with their respective legislation concerning the health and safety protection of the health and welfare of employees, contractors an
Slide 38: Summary of Key Risks
SUMMARY OF KEY RISKS Key personnel Rubicon Management has been largely responsible for the development and growth of the business. While Rubicon undertakes succession planning, the departure of any one of the Management team could negatively impact Rubicon’s financial performance or growth prospects
Slide 39: Summary of Key Risks
SUMMARY OF KEY RISKS Inability to execute Rubicon’s growth strategy includes expanding the geographic area of its operations and the introduction of new products and solutions. There is a risk that these strategies may not be growth strategy successful and may negatively impact Rubicon’s financial p
Slide 40: Summary of Key Risks
SUMMARY OF KEY RISKS Supply and Rubicon is heavily reliant on freight logistics including air, sea and land for the inbound delivery of materials and outbound distribution of goods to customers. There is a risk of disruption logistics to logistics including due to the impacts of pandemics, fire, nat
Slide 41: Summary of Key Risks
SUMMARY OF KEY RISKS Cyber-security and Rubicon’s operations rely on a number of information technology systems, applications and business processes utilised in the delivery of its business functions. Rubicon’s operating data privacy businesses depend on computer systems and network infrastructure.
Slide 42: Summary of Key Risks
SUMMARY OF KEY RISKS Counterparty risk Rubicon has a number of commercial agreements and arrangements with third parties, including customers and suppliers, and will continue to enter into a number of further agreements and arrangements with others in order to meet its growth strategy. Third parties
Slide 43: Summary of Key Risks
SUMMARY OF KEY RISKS General investment risks Exposure to As a listed company on the ASX, Rubicon is subject to the general market risk that is inherent in all securities traded on a stock exchange. This may result in fluctuations in the Share general economic price that are not explained by Rubicon
Slide 44: Summary of Key Risks
SUMMARY OF KEY RISKS General investment risks Exposure to Tax laws in Australia are complex and are subject to change periodically, as is their interpretation by the courts and the tax revenue authorities. Significant reforms and current proposals changes in tax for further reforms to Australia’s ta
Slide 45: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any
Slide 46: Summary of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT The Company has appointed Wilsons Corporate Finance Limited (ACN 057 547 323) and Morgans Corporate Limited (ACN 010 539 607) (together, the Joint Lead Managers) to act as the joint lead managers, underwriters and bookrunners in relation to the Placement, subject to
Slide 47: Summary of Underwriting Agreement
SUMMARY OF UNDERWRITING AGREEMENT o) (*)hostilities not presently existing at the date of the Underwriting Agreement commence (whether war has been declared or not), a major escalation in existing hostilities occurs (whether war has been declared or not), a national emergency is declared, or a terro
Slide 48: Appendix
Canada Appendix 48
Slide 49: USA – National Value Proposition to Modernise
USA – NATIONAL VALUE PROPOSITION TO MODERNISE USA Country Data USA value proposition based on RWL Serviceable Addressable Market (SAM) ~28Mha Annual Annual value Total cost to Distribution System Present Value Total area equipped for distribution of saving modernise Payback of saving irrigation wate
Slide 50: India – Market Opportunity
INDIA – MARKET OPPORTUNITY India Country Data RWL Serviceable Addressable Market (SAM) Serviceable Total cost to surface area modernise ~61.90Mha Total area equipped for ($AUD) irrigation ~22.50Mha 14.5Mha $18.14bn Total area serviced by surface water 54% Overall water requirement ratio (efficiency)
Slide 51: Egypt – Market Opportunity
EGYPT – MARKET OPPORTUNITY Egypt Country Data RWL Serviceable Addressable Market (SAM) Serviceable Total cost to surface area modernise ~3.40Mha Total area equipped for ($AUD) irrigation ~3.10Mha Total area serviced by 2.00Mha $2.50bn surface water 76% Overall water requirement ratio (efficiency). T
Slide 52: Rubicon Directors
RUBICON DIRECTORS ANTHONY BRUCE RODGERSON GORDON DICKINSON DAVID AUGHTON LYNDA O’GRADY IVEN MAREELS MORGANTI CHIEF EXECUTIVE OFFICER CHAIRMAN EXECUTIVE DIRECTOR INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR • Founding Director and • 20+ years in the • 30+ years in water • 30+ years
Slide 53: Contact
www.rubiconwater.com CONTACT Bruce Rodgerson Andrew Bendall CEO CFO Bruce.Rodgerson@rubiconwater.com Andrew.Bendall@rubiconwater.com © 2024 Rubicon Water. RUBICON logo and BayDrive, BladeMeter, BladeValve, CableDrive, FarmConnect, FerIT, FlumeGate, FlumeMeter, FormiPanel, MicronLevel, NeuroFlo, Piko