Slide 1: H1 2021 Report
Making Earth Green Again – to foster the prosperity of life H1 2021 Report Financial Results for the First Half (Fiscal half year ended 30 June 2021) Desert Control AS 1
Slide 2: to foster the prosperity of life
to foster the prosperity of life 1M km2 2030 Cultivate and green Contribute to sustainable social Establish a social impact 1oo Million Hectares impact, immense water savings initiative throughout Sub of degraded land and and balanced climate with Sahara by 2025 to reduce desert by 2030 carbon seque
Slide 3: About Desert Control
ABOUT DESERT CONTROL HIGH-LEVEL COMPANY OVERVIEW | FOCUS AND SOLUTION AREAS FOCUS § Desert Control specializes in climate-smart agriculture technology to combat desertification, soil degradation, and water scarcity 12 million hectares of fertile land perish to Less than 60 years left for global agri
Slide 4: Agenda | H1 2021
AGENDA | H1 2021 H1 2021 REPORT AND FINANCIAL RESULTS | COMPANY PRESENTATION HIGHLIGHTS FINANCIAL QUESTIONS AND OUTLOOK RESULTS AND ANSWERS Q&A Ole Kristian Sivertsen Erling Rasmussen Moderator Chief Executive Officer Chief Financial Officer Webcast Session 4
Slide 5: Highlights | H1 2021
HIGHLIGHTS | H1 2021 FOCUSED EXECUTION TO PREPARE FOR OPERATIONAL SCALE-UP CORPORATE TECHNOLOGY COMMERCIAL DEVELOPMENT AND OPERATION AND MARKET § Raised NOK 200M in Private Placement § Launched first industrial mobile LNC § Was awarded first commercial contract § IPO: Successfully listed on Euronext
Slide 6: Mawarid Pilot
MAWARID PILOT COMMERCIAL CONTRACT WITH AGRICULTURE AND NATURE CONSERVATION GIANT MAWARID HOLDING PILOT OVERVIEW | PART 1 § Initiatives for strengthening food-security (local agriculture production) in desert climate conditions Cucumber, Beetroot, and Basil Date Palms Alfalfa and Panicum (to be grown
Slide 7: Mawarid Pilot
MAWARID PILOT COMMERCIAL CONTRACT WITH AGRICULTURE AND NATURE CONSERVATION GIANT MAWARID HOLDING PILOT OVERVIEW | PART 2 § Initiatives for reducing water and resource requirements for maintaining and planting trees and forests in desert climate conditions Ghaf, Salvadora, Ziziphus Fruit Trees Tree P
Slide 8: Mawarid Pilot
MAWARID PILOT HIGH-LEVEL PLAN FOR EXPECTED LNC APPLICATION First LNC KPI Data All crops/species Project Applied Collection represented in KPI Report 30.08.2021 Start monitoring Weeks: W1 W2 W3 W4 W5 W6 Vegetables Date Palms Alfalfa Panicum Forest 1 Fruit Trees Forest 2 Tree Planting 8
Slide 9: Other Pilots
OTHER PILOTS EXCEEDED WATER-SAVING KPI’S FOR PRE-COMMERCIAL PILOTS RESULTS § Pilot for ≈1,000 m2 of a 200-hectare VIP property in Abu Dhabi delivered 35% water savings versus 25% KPI target § Pilot for agriculture (sweet corn) delivered 35% water savings § Pilot for landscaping areas with Tecom Grou
Slide 10: COVID-19 | 2021
COVID-19 | 2021 STILL NEGATIVE IMPACT ON BUSINESS OPERATION IN H1 | SOME IMPACT EXPECTED TO CONTINUE IN H2 § Negative impact related to travel restrictions – Especially for travel between Norway and United Arab Emirates § Impact on hiring activities – United Arab Emirates closed boarders for several
Slide 11: Outlook | Focus and Ambitions for H2 2021
OUTLOOK | FOCUS AND AMBITIONS FOR H2 2021 ACCELERATE OPERATIONAL SCALE-UP | EXECUTE ON PROJECTS AND MARKET ACTIVITIES CORPORATE TECHNOLOGY COMMERCIAL DEVELOPMENT AND OPERATION AND MARKET – in partnership to make the desert green again § Establish US subsidiary to prepare for § Increase LNC productio
Slide 12: Mawarid Partnership
MAWARID PARTNERSHIP STRATEGIC PARTNERSHIP TO SERVE THE ENTIRE UAE MARKET AND WIDER MIDDLE-EAST, NORTH AFRICA REGION ABOUT MAWARID § Manage agriculture, forests, green landscapes and natural resources on large scale – 11,000 employees – 3,000 vehicles, specialty equipment, and machinery for their for
Slide 13: Strategic Update
STRATEGIC UPDATE POTENTIAL CHANGE OF BUSINESS MODEL FOR MIDDLE EAST PENDING SUCCESSFUL MAWARID PILOT CURRENT BUSINESS MODEL § Service based business model (direct to customers) – Desert Control deliver turnkey projects for LNC treatment – All aspects of Production and Application of LNC carried out
Slide 14: Expo 2020
EXPO 2020 DUBAI, UNITED ARAB EMIRATES, 1 OCTOBER 2021 – 31 MARCH 2022 DESERT CONTROL AT EXPO 2020 § Desert Control is featured at the “Good Place Pavilion” in the Opportunity District § The “Plantar Project” is a specific landscaping plot in the “Good Place Pavilion” allocated to Desert Control for
Slide 15: United States
UNITED STATES ESTABLISH US SUBSIDIARY TO PREPARE FOR PLANNED ACTIVITIES IN 2H ACTIVITIES § Establish US subsidiary in Q4 2021 to prepare for planned activities focused on California, Arizona, and Nevada – The subsidiary is likely to be incorporated in the state of Delaware – Branch office for states
Slide 16: Technology and Operation
TECHNOLOGY AND OPERATION SIGNIFICANT INCREASE OF LNC PRODUCTION CAPACITY DEFINITIONS § LNC production unit: mobile factory for in-situ LNC production § Cluster: 4 units § Capacities: – 15,000 l/h per unit – 60,000 l/h per cluster PRODUCTION CAPACITY DEVELOPMENT PRODUCTION CAPACITY FORECAST (EOY) 200
Slide 17: Organizational Development | 2021
ORGANIZATIONAL DEVELOPMENT | 2021 BUILD OPERATIONAL CAPABILITY TO DELIVER PROJECTS AND UTILIZE THE GROWING LNC PRODUCTION CAPACITY FTE DEVELOPMENT 60 50 40 Estimate EoY UAE - Operations UAE - Technology 30 UAE - Administration Norway - Technology 20 Norway - Administration 10 0 3 4 1 2 3 4 1 2 3 4 1
Slide 18: Agenda | H1 2021
AGENDA | H1 2021 H1 2021 REPORT AND FINANCIAL RESULTS | COMPANY PRESENTATION HIGHLIGHTS FINANCIAL QUESTIONS AND OUTLOOK RESULTS AND ANSWERS Q&A Ole Kristian Sivertsen Erling Rasmussen Moderator Chief Executive Officer Chief Financial Officer Webcast Session 18
Slide 19: Key Figures | H1 2021
KEY FIGURES | H1 2021 DESERT CONTROL MAINTAINS A SOLID NET CASH POSITION OF NOK 204M AS OF 30 JUNE 2021 FINANCIAL HIGHLIGHTS (30 June 2020 in brackets) § Net proceeds from capital injection: NOK 190M § Total cash balance: NOK 204M § Equity: NOK 221M (equity ratio 96% as of 30 June 2021) § EBITDA*: N
Slide 20: Statement of Operations | H1 2021
STATEMENT OF OPERATIONS | H1 2021 INTERIM CONSOLIDATED PROFIT AND LOSS (P&L) STATEMENT Unaudited NOK (in thousands) For the six months ended 30 June 2021 30 June 2020 Total Revenue 821 Cost of Goods Sold (COGS) 194 4 Gross Margin (194) 817 Payroll 4 047 2 809 Other Expenses 3 997 635 Operating Expen
Slide 21: Statement of Financial Position | H1 2021
STATEMENT OF FINANCIAL POSITION | H1 2021 INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited NOK (in thousands) For the six months ended 30 June 2021 30 June 2020 Fixed assets Research & development 7 566 3 441 Goodwill 6 413 6 562 Total intangible assets 13 979 10 003 Machinery and equi
Slide 22: Statement of Cash Flows | H1 2021
STATEMENT OF CASH FLOWS | H1 2021 INTERIM CONSOLIDATED CONDENSED CASH FLOWS Unaudited NOK (in thousands) For the six months ended 30 June 2021 Cash flow from operating activities Profit before taxes (8 009) Taxed paid - Depreciation and amortization 126 Changes in working capital (1 869) Cash used i
Slide 23: Shareholders
SHAREHOLDERS Top 20 shareholders Share development No of shares % Account name Type Citizenship 5 900 000 14,52% OLESEN CONSULT HVAC AS NOR 2 154 715 5,30% JAKOB HATTELAND HOLDING AS NOR 2 154 715 5,30% MONSUNEN FORVALTNING AS NOR 1 881 950 4,63% J.P. Morgan Bank Luxembourg S.A. NOM SWE 1 750 000 4,
Slide 24: Cautionary Note
CAUTIONARY NOTE DISCLAIMER RELATED TO FORWARD-LOOKING STATEMENTS By reading this company presentation (the “Presentation”) or attending any meeting or oral presentation held in relation thereto, you (the “Recipient”) agree to be bound by the following terms, conditions and limitations. The Presentat
Slide 25: Agenda | H1 2021
AGENDA | H1 2021 H1 2021 REPORT AND FINANCIAL RESULTS | COMPANY PRESENTATION HIGHLIGHTS FINANCIAL QUESTIONS AND OUTLOOK RESULTS AND ANSWERS Q&A Ole Kristian Sivertsen Erling Rasmussen Moderator Chief Executive Officer Chief Financial Officer Webcast Session 25
Slide 26: Appendix: Desert Control Company Presentation
APPENDIX H1 2021 REPORT AND FINANCIAL RESULTS DESERT CONTROL COMPANY PRESENTATION 26
Slide 27: Vision, Mission & Values
VISION, MISSION & VALUES OUR PURPOSE | THE REASON WHY WE EXIST AND OUR VALUES OUR MISSION OUR VISION § Our mission is to combat § Our vision is making earth green again desertification, land degradation, and – Desertification, loss of fertile soil, water scarcity and growing water scarcity are – Res
Slide 28: Population growth driving increased demand for food and water
POPULATION GROWTH DRIVING INCREASED DEMAND FOR FOOD AND WATER WATER DEMAND EXPECTED TO EXCEED RELIABLE WATER SUPPLY BY 40% IN 2030 INCREASING POPULATION… …NEEDS MORE FOOD AND WATER… …WATER SHORTAGE EXPECTED TO BE SUBSTANTIAL (billion people) Food production (billion m2 of water) -40% required to inc
Slide 29: UN has declared desertification the greatest environmental challenge
UNITED NATIONS HAS DECLARED DESERTIFICATION AND LAND DEGRADATION THE GREATEST ENVIRONMENTAL CHALLENGE OF OUR TIME 110 1.3Bn 12m Countries exposed to People trapped on hectares productive desertification and degrading land becomes land degradation agricultural land barren every year $490Bn annual cos
Slide 30: Problem – Impact way beyond the traditional deserts
PROBLEM – IMPACT WAY BEYOND THE “TRADITIONAL DESERTS” 59% of territory with a higher or medium sensitivity to desertification 2008 74% of territory at risk of desertification +50% of mainland at risk of desertification 2017 99% of territory vulnerable to desertification Source: Pravalieet al., Quant
Slide 31: 70% of freshwater in the world is used for agriculture
70% OF FRESHWATER IN THE WORLD IS USED FOR AGRICULTURE CURRENT APPROACHES IN AGRICULTURE YIELD LOW WATER EFFICIENCY GAINS SHARE OF FRESHWATER WITHDRAWLS BY SECTOR (%) 2% 6% 5% 7% 11% 16% 9% 15% • The shortfall between demand 17% 34% Domestic and supply of water is estimated 12% to be 40% by 2030 • A
Slide 32: Desert Control's LNC treatment is part of the solution
DESERT CONTROL’S LNC TREATMENT IS PART OF THE SOLUTION ENRICHES THE FERTILITY CAPABILITY IN DESERT SAND – LOWER WATER USAGE AND IMPROVED SOIL HEALTH 1. UNIQUE FORMULATION PROCESS Clay is processed into a liquid compound 2. SPRAY ON Applied directly to sand or arid soil 3. EFFECT Forms a soil structu
Slide 33: Patented process based on 12 years research
PATENTED PROCESS BASED ON 12 YEARS RESEARCH LIQUID NATURAL CLAY («LNC») PREMISE DESERT CONTROL’S PATENTED LNC PROCESS KNOWLEDGE BASED STRATEGY Clay-rich soil retains water Natural clay is turned into a liquid nearly as thin as water • Each clay type has unique properties effectively and has high res
Slide 34: Unique product offering with no direct competitor
UNIQUE PRODUCT OFFERING WITH NO DIRECT COMPETITOR SUBSTITUTES AND OTHER METHODS FOR SOIL ENHANCEMENT ARE INTRUSIVE, TIME CONSUMING AND COSTLY DESERT CONTROLS LNC PROCESS IS THE ONLY NON-INTRUSIVE SOIL LNC’S ADVANTAGES ENHANCEMENT OPTION INTRUSIVE NON-INTRUSIVE (mechanical/manual intervention) (self-
Slide 35: Proven, validated and patented
PROVEN, VALIDATED AND PATENTED MULTI-YEAR FIELD TRIALS EGYPT - BEFORE AND AFTER APPLICATION OF LNC SCIENTIFIC ACCREDITATION BY ICBA UAE, AL AIN AFTER APPLICATION OF LNC Source: International Center for Biosaline Agriculture; https://www.biosaline.org 35
Slide 36: The Results – UAE Desert Example
THE RESULTS – UAE DESERT EXAMPLE ü Less than 1kg of clay per m2 ü Water and fertilizer savings (20-50%) Before ü Increased crop yields (17-62%) ü Improved soil, biodiversity, and carbon uptake CROP YIELD INCREASE 62% After 28% 17% Pictures: Transformation of UAE desert land Mar - Sep 2020 Zucchini P
Slide 37: LNC identified as a potential impact solution by the UN
LNC IDENTIFIED AS A POTENTIAL IMPACT SOLUTION BY THE UNITED NATIONS THE GREATEST CHALLENGE OF OUR TIME: THE GREAT GREEN WALL RECEIVED OVER $14 BILLION IN DONATIONS TO REGREEN THE SAHEL RESTORE 100 MILLION – WORLD BANK AMONG DONORS HECTARES OF DEGRADED LAND SEQUESTER 250 MILLION TONNES OF CARBON CREA
Slide 38: Liquid Natural Clay | ESG and Impact Potential
LIQUID NATURAL CLAY | ESG AND IMPACT POTENTIAL EXPECTED TO PLAY A VITAL ROLE IN SUSTAINABLE DEVELOPMENT FROM A FINANCIAL AND AN ESG PERSPECTIVE ADDRESSING KEY UN SUSTAINABLE In a conservative estimate of $20 /t this translates to $280Bn of annual cost DEVELOPMENT GOALS ~49 Global GHG emissions (Gt)
Slide 39: ESG and Impact
ESG AND IMPACT IMPACT ON EXTERNAL ENVIRONMENT AND SUSTAINABILITY Liquid Natural Clay (LNC) can reduce water consumption for agriculture, forests, and green landscapes by up to 50%. The amount of water required to produce LNC is recovered within 2-3 weeks (offset by irrigation water savings). Increas
Slide 40: About Desert Control
ABOUT DESERT CONTROL COMPANY OVERVIEW Desert Control is a company specialized in climate-smart agri-tech solutions to combat desertification, soil degradation, and water scarcity. Its patented Liquid Natural Clay restores and protects soil, reducing water usage for agriculture, forests, and green la