24 slides from Phoslock Environmental Technologies's investor presentation, Mar 5, 2020
Slide 1: Phoslock Institutional Road Show
Phoslock Institutional Road Show March 2020
Slide 2: Disclaimer and Important Information
Disclaimer and Important Information This presentation does not constitute investment advice. Neither this presentation not the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in Phoslock Environmental Technol
Slide 3: FY2019 Financial Summary
FY2019 Financial Summary 2019 Revenue: $25.1m (up 40% YoY) 2019 NPAT: $3.0m (significantly up on loss of $1.0m: 2018) Strong Operating Margins: 54% Gross Profit Margin 2020 Forecast Revenue: $50m-70m (up 100% YoY) Strong Balance Sheet: o A$15m in cash o Receivables/Inventory of $20m; o Debt Free; o
Slide 4: PET Operating Performance
PET Operating Performance Millions PET Operating Performance 30 25 20 15 10 (5) 2015 2016 2017 2018 2019 —B=Sales B= Gross Profit l= Net Profit before Tax & Option Expense
Slide 5: Phoslock Board & Senior Management
Phoslock Board & Senior Management
Slide 6: Introducing – Lachlan McKinnon, CEO (MD from AGM)
Introducing – Lachlan McKinnon, CEO (MD from AGM) o Rural Victoria - home o Agricultural / Environment Background o Agscience , Marketing , MOE Melb University , Harvard Business School o Long Career with Nufarm, Ltd. Australia’s largest Agricultural Chemical Manufacturer and Marketer o Regional GM
Slide 7: Short Term Focus
Short Term Focus o Focus on Key International Markets o Initially – North America , Western Europe, South America and ANZ o Increase Resourcing to grow sales o Continuity of China growth strategy o Appropriate structure and resources for Head Office transition o Manufacturing base that is capable of
Slide 8: PET Four Business Units
PET Four Business Units International Materials Changxing Factory China ChinaMaterials Materials China Engineering
Slide 9: How will PET reach $50-$70m Sales in FY2020
How will PET reach $50-$70m Sales in FY2020 China Projects: $40m-$55m o Xingyun Lakes & Catchment – circa $10m o Shilongba Reservoir – circa $15-20m o Dianchi Catchment Area o Beijing Canals – Maintenance o Beijing Wetland – Maintenance o 20 Other Projects in China: Range of 3,000 to 6,000 tons - $9
Slide 10: Total Addressable Market – THE WORLD
Total Addressable Market – THE WORLD Phoslock Offices/ Licensees
Slide 11: China Operations & Major Projects
China Operations & Major Projects Factory Hubei Yunnan Lakes
Slide 12: Chinese Operation Structure
Chinese Operation Structure All Chinese Subsidiaries are 100% owned by PET Phoslock Beijing – Sales & Marketing Company – run by Tingshan Liu (joined PET in June 2017) Phoslock Changxing – Factory – run by Jason Hai (joined PET in June 2017) Mr Zhang (Deputy Chairman) & Mr Ma (Non Executive Director
Slide 13: CHINA – Enormous market with large Government Funding
CHINA – Enormous market with large Government Funding Team of 60 PET employees working in China o Beijing – China HQ; sales; engineering team; project management o Changxing (150km inland from Shanghai) – factory; R&D; sales o Kunming – sales; project management Strategic Agreement with BHZQ has sig
Slide 14: Changxing Factory and R&D Centre
Changxing Factory and R&D Centre Changxing – 150km west of Shanghai manufacturing Phoslock® o Current factory Production Capacity increased to 20,000tpa o Now running at 40 – 50t per day o PET plans to run this factory until late 2021 o ISO Accreditation o WQA Accreditation Annually Second Factory s
Slide 15: PET International Business
PET International Business o Operating since 2005 o > 300 successful projects in 20 countries o Main focus is absorption of phosphorus in lakes, drinking water reservoirs, rivers, canals & wetlands using “Phoslock” o “Phoslock” product is proven technology (over 70 peer-reviewed technical papers); p
Slide 16: Recent International Projects
Recent International Projects FLORIDA FLORIDAWETLANDS, POLAND WETLANDS,USA US DRINKING CANADA WATER RESERVOIR, BELGIUM DRINKING POLAND WATER RESERVOIR, BRAZIL PAMPULHA, BRAZIL 16
Slide 17: New Products/ R&D Projects
New Products/ R&D Projects Bacterial Products Reusable Filter Material Phoslock Brick Bacteria Brick High Speed Aerators Constructed Wetlands
Slide 18: Why Invest in PET?
Why Invest in PET? Compelling Investment Case o PET has sales growth accelerating on robust margins o Diversified business mix of International and Chinese Water Treatment businesses and China Engineering & Contracting Business o 75% new Business; 25% Recurring maintenance business Accelerated Growt
Slide 19: Capital Structure
Capital Structure Capital Structure (4th March, 2020) Company Name: Phoslock Environmental Technologies Limited ASX Code: PET Current Price: $0.57 Trading Range: (last 12 months) $0.36 – $1.60 Total Issued Shares: 565.0m Total Issued Options: 28.0m* Market Capitalisation: A$322 m Options: 25m @ $1.0
Slide 20: Major PET Shareholders
Major PET Shareholders ‘Top 20 Security Holders Shareholder (including Related Parties) Number % Total of Shares Shares Link Traders (Aust) Pty Ltd Director 1 69,183,914 12.25% 2ZL Pty Ltd Director 2 25,000,000 4.42% Citicorp Nominees Pty Limited 3 19,474,022 3.45% Evan Clucas 4 14,474,022 2.56% JP
Slide 21: ASX Code – PET
ASX Code – PET PET is included in the ASX 300 Index Robert Schuitema – Managing Director Suite 403, email: rs@phoslock.com.au 25 Lime Street Sydney NSW 2000 Lachlan McKinnon – CEO AUSTRALIA email: l.mckinnon@phoslock.com.au Tel: +61 2 8014 7611 Michael Kotowicz – Investor Relations Web: www.phoslock
Slide 22: The Problem
The Problem Water Quality is a major GLOBAL PROBLEM Causes – excess Phosphorus entering canals, rivers, lakes Where does the Phosphorus come from: o Run-off water from agriculture (fertilisers used to enhance production) o Run-off water from livestock farms and processing o Run off water from urban
Slide 23: The Solution - PHOSLOCK®
The Solution - PHOSLOCK® Beijing Canal – March 2018 Same Beijing Canal – Sept 2018 23
Slide 24: PHOSLOCK® - The Product
PHOSLOCK® - The Product Environmentally Friendly product that locks up Phosphorus safely and permanently o Invented by CSIRO (Australian Govt Science Organisation) in 1990’s o Modified Bentonite Lanthanum product o Environmentally Friendly; safe for humans and fish & aquatic plants o Internationally