Slide 1: How Proven Successes Drive Future Growth
+ = How Proven Successes Drive Future Growth July 2017
Slide 2: Disclaimer (1/2)
DISCLAIMER (1/2) This presentation has been prepared by Emefcy Group Limited (ASX: EMC) (“EMC” or the “Company”) in order to provide a high level overview of the potential business combination of the Company and RWL Water LLC ("RWL Water"). This presentation should not be considered as an offer or i
Slide 3: Disclaimer (2/2)
DISCLAIMER (2/2) This presentation may contain forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of pas
Slide 4: Summary
SUMMARY Technology & compelling economics drive fast growth in decentralized water and wastewater treatment markets globally Fluence anticipates this trend by delivering smart packaged plants: extensive customer benefits, faster time to order, earlier revenue recognition, Key factors maximizes margi
Slide 5: Brief Business Update: On or Ahead of Target
BRIEF BUSINESS UPDATE: ON OR AHEAD OF TARGET Emefcy • Wuxi demo plant – Testing completed, await data finalization then we submit report to them • Jinzi demo plant – Commissioned & operational • CGGC demo plant – Commissioned & operational • Sinorichen demo plant – Installation started on Jul 4, com
Slide 6: Decentralized Solutions Are the Future
DECENTRALIZED SOLUTIONS ARE THE FUTURE “Desire for greater cost control, system flexibility and higher speed of deployment are driving a shift away from infrastructure- heavy centralised systems towards decentralised and pre- engineered treatment solutions… in rural areas,… in new urban residential
Slide 7: Fluence's Target Markets Are Growing Rapidly
FLUENCE’S TARGET MARKETS ARE GROWING RAPIDLY Smart Packaged Plants: Global market New capex on Cumulative new capex on size grows from US$13.3B in 2016 to desalination and reuse desalination and reuse US$21.8B in 2021 (US$ Billions) equipment (US$ Billions) plants, 2017-22 (US$ Billions) 9.1 29.9 8.
Slide 8: Primary Goals: Profitability, Visibility, Dominance
PRIMARY GOALS PROFITABILITY VISIBILITY DOMINANCE Become the dominant Achieve sustained global player in EBITDA profitability on decentralized water and quarterly basis during Improve revenue visibility wastewater treatment calendar year 2019 by via increased recurring solutions through our maintaini
Slide 9: Fluence's Strategy to Achieve Its Goals
FLUENCE’S STRATEGY TO ACHIEVE ITS GOALS • Focus on China – potentially fastest path to sales growth via product (modules) & packaged systems sales Focus on key regions • Build momentum in other key geographies including North America, Latin America & Rest of the world • Seek customers requiring imme
Slide 10: Full-Custom versus Smart Packaged Plants
FULL-CUSTOM VERSUS SMART PACKAGED PLANTS Custom Plant: • 18-27 months from start to finish • Long-term = High capex, fixed location • High per-plant engineering Complex, lengthy planning & Intensive civil works: Lengthy installation & costs proposal stage: >30% of project cost, commissioning: • Ca
Slide 11: Smart Packaged Plants Are a Win-Win for Fluence & Customers
SMART PACKAGED PLANTS ARE A WIN-WIN FOR FLUENCE & CUSTOMERS Option Impact on Customer Impact on Fluence ✓ Maximum flexibility Very slow path from pipeline to Longest path from order to operation booking, and booking to revenue Fully custom- Maximum civil works Often compete with bigger playe
Slide 12: Why Fluence's Smart Packaged Plants Win: Case Study
WHY FLUENCE’S SMART PACKAGED PLANTS WIN: CASE STUDY Smart Packaged Plant deploys in 1/3 of the time, at 37% lower cost, and captures more of total plant value for Fluence Typical Custom Desalination Plant • 18+ months to complete • Total Capex = US$1,600+/m3/day of water produced of which US$500/m3/
Slide 13: How Smart Packaged Plants Accelerate China Success
HOW SMART PACKAGED PLANTS ACCELERATE CHINA SUCCESS Nirobox: Packaged desalination plant designed & built by Fluence, deploying globally since 2015 Containerized MABR plant: Packaged plant expertise helps speed rollout Packaged of MABR in China: wastewater • Locally made MABR modules reach sites fast
Slide 14: How Smart Packaged Plants Accelerate RaaS
HOW SMART PACKAGED PLANTS ACCELERATE RAAS RaaS (Reuse-as-a-Service) incorporating MABR technology can save resorts ~30% in water-related opex (10% of revenues) Low-energy RaaS helps office campuses meet sustainability goals Resorts and office campuses want to minimize disruption from civil works Nei
Slide 15: Innovation Combined with Smart Packaged Plants Improves Margin Uplift
FLUENCE’S INNOVATION COMBINED WITH SMART PACKAGED PLANTS IMPROVES MARGIN UPLIFT • MABR saves up to 90% of aeration energy in wastewater treatment – potentially halving plant opex: capex also lower at target plant sizes • Innovative process modeling increases throughput • SUBRE – Enables retrofit of
Slide 16: Strong Experience Mitigating Country & Customer Risk
STRONG EXPERIENCE MITIGATING COUNTRY & CUSTOMER RISK Country Examples Of Situation Risk Mitigation Strategy Risk Successes Low • Investment Grade • $/Euro denominated contracts US, Europe, • Hard Currency ($/Euro’s) • Index-linked protection Israel • Low Inflation • Stay cash flow positive as delive
Slide 17: How a Typical BOT Contract Works
HOW A TYPICAL BOT* CONTRACT WORKS Example: US$40M project Fluence receives: 1. Full equipment gross margin on project construction 2. +15% Risk Adjusted IRR on invested equity over the life of the Offtake Agreement 3. Ongoing share of profits on any O&M Agreement fees Water Utility 20 - 30 year Offt
Slide 18: Fluence Metrics to Indicate Success
FLUENCE METRICS TO INDICATE SUCCESS Pipeline • Breakout by type of opportunity once meaningful • Breakout by type and region Bookings • Pipeline conversion rates versus industry norms Backlog • Breakout by type & region, & when due as revenue • RWL Water CY 2017 target is US$90M, noting revenues as
Slide 19: Fluence KPIs
FLUENCE KPI’S US$ millions 20151 20161 2017 YTD1,2 Total Bookings 57.1 71.2 55.6 Revenue 54.9 61.7 20.1 Year End Backlog 70.1 63.7 82.9 Gross Margin % 7.1% 16.9% TBD 2017 YTD revenue & backlog falling in 2017 = US$74.7M 83% of US$90M CY2017 guidance Footnotes: 1. RWL Water revenue shown for each per
Slide 20: Key Metrics: Smart Packaged Plant Revenue Growth
KEY METRICS: SMART PACKAGED PLANT REVENUE GROWTH All US$ $90M • Smart Packaged Plants $28M go from pipeline to $62M bookings to revenue $1M $55M $6M much faster than custom $62M $56M projects $54M • Smart Packaged Plants require less engineering & opex to deliver 2015 2016 2017E Custom projects & ot
Slide 21: Planned Migration to Profitability
PLANNED MIGRATION TO PROFITABILITY • Strengthen strategic relationships in China 2H CY 2017: • Invest in product development of MABR Gen 3, SUBRE Sustain Revenue Growth • Focus on achieving US$90M in CY 2017 revenues Invest in products, channels, and capacity • Invest in production capability in Arg
Slide 22: Summary
SUMMARY Technology & compelling economics drive fast growth in decentralized water and wastewater treatment markets globally Fluence anticipates this trend by delivering smart packaged plants: extensive customer benefits, faster time to order, earlier revenue recognition, Key factors maximizes margi
Slide 23: Key Contacts
KEY CONTACTS Richard Irving Henry Charrabé Emefcy Group Limited RWL Water Executive Chairman President & CEO, Global Operations +1 408 382 9790 +1 212 572 3766 richard@emefcygroup.com hcharrabe@rwlwater.com For further detail please see “Emefcy RWL Binding Agreement Investor Presentation” released o
Slide 24: Appendices - Financials
Appendices - Financials 24
Slide 25: RWL Water Financials
RWL WATER FINANCIALS RWL Water is expected to generate US$90m in revenue in CY17 and is anticipated to improve gross margins as it continues to sell higher margin products US#039;000 CY15 (Audited) CY16 (Audited) CY17 Forecast Revenue 54,879 60,932 90,0001 Cost of sales (50,986) (49,307) Gross profit 3
Slide 26: Fluence Pro Forma Balance Sheet
FLUENCE PRO FORMA BALANCE SHEET Emefcy Group Limited RWL Water LLC (US (IFRS) GAAP) Pro-forma Consolidated US$ Adjustments 31 December 2016 - 31 December 2016 - balance sheet (IFRS) Audited Audited Assets Cash and cash equivalents 22,870,848 10,867,809 - 33,738,657 Short term investments / deposits
Slide 27: Fluence Pro Forma Balance Sheet (continued)
FLUENCE PRO FORMA BALANCE SHEET (continued) Notes: The December 31, 2016 consolidated balance sheet pro-forma is based on the combined balance sheets of Emefcy, audited and accounted in accordance with IFRS (Column A) and RWL, audited and accounted in accordance with US GAAP (Column B), as if the me
Slide 28: Fluence Pro Forma Balance Sheet (continued)
FLUENCE PRO FORMA BALANCE SHEET (continued) Notes on RWL Water LLC's Balance Sheet: Short term investments / deposits During 2015, RWL Water Argentina received the Argentine peso (ARS) equivalent of US$95.5 million as an upfront payment on a contract with a customer in Venezuela. Certain transaction