Xeros Technology Group Plc · LSE:XSG
Xeros Technology — H1 2018 Earnings Presentation
21 slides from Xeros Technology's earnings presentation, Sep 13, 2018
Slide 1: Xeros Technology Group plc Interim Results Presentation
XEROS TECHNOLOGY GROUP plc Without limits. For a world with them. INTERIM RESULTS PRESENTATION FOR THE SIX MONTHS ENDING 30TH JUNE 2018 13TH SEPTEMBER 2018
Slide 2: Macro Environment - Global Water Stress and Pricing Now Increasing
2 MACRO ENVIRONMENT - GLOBAL WATER STRESS AND PRICING NOW INCREASING Combined Commercial Water and Sewerage costs Selected cities 10 8 6 $ per m3 4 2 0 UK S Africa San Tianjin Dubai Average Francisco Up to 600 litres saved per cycle in Xeros 25 kg washing Central Californian Valley machine equating
Slide 3: Commercial Progress
3 COMMERCIAL PROGRESS 2018 objective to accelerate commercialisation of applications under IP-rich, capital-light models: Earned Income1 For the six months ended 30th June Cleaning Technologies Marken (High Performance Workwear) – 3 sites added and validated £1.9m cleaning efficacy and demonstrated
Slide 4: Recap - Scope and Strategy for Commercialising Platform Technology
4 RECAP - SCOPE AND STRATEGY FOR COMMERCIALISING PLATFORM TECHNOLOGY XEROS STRATEGY XEROS SCOPE Develop and commercialise our XOrb TM Fabric & Manufacture Cleaning technologies to radically improve the sustainability, Garment performance and economics of water intensive processes. Nylon XOrb TM Poly
Slide 5: Cleaning Technologies - High Performance Workwear
5 CLEANING TECHNOLOGIES - HIGH PERFORMANCE WORKWEAR Commercial Progress Major US and European Four sites operational with addressable market of c. 1,400 fire stations Garment/Linen Fleet Providers housing 30,000 professional firefighters. Turnover Independent verification of cleaning efficacy and ga
Slide 6: Cleaning Technologies - High Performance Workwear
6 CLEANING TECHNOLOGIES - HIGH PERFORMANCE WORKWEAR Garment Life Extension1 Significant improvement in tear resistance and shrinking resistance of the outer-shell fabrics. Noticeable improvement observed in water absorption resistance and breaking force of the outer-shell fabrics. Xeros Cleaning Tec
Slide 7: Cleaning Technologies – Commercial
7 CLEANING TECHNOLOGIES – COMMERCIAL Commercial Progress XDrum technology scaled up for use in large machines. First OEM licensing contract signed with SeaLion for exclusive rights in mainland China. Leading Mechanical, Electrical and Infrastructure projects As previously announced, testing and vali
Slide 8: Cleaning Technologies – Commercial: China Market and SeaLion Agreement
8 CLEANING TECHNOLOGIES – COMMERCIAL China Market and SeaLion Agreement Initial target market - 4* and 5* hotels. Number of properties ~ 1,650. Market valued at ~ $110m per annum. 10% CAGR in China commercial laundry market last 5 years. SeaLion c. 10-12% share. 10 year exclusive contract. Minimum m
Slide 9: Cleaning Technologies – Domestic
9 CLEANING TECHNOLOGIES – DOMESTIC Commercial Progress Timeline Launched low cost solution for simply incorporating Xeros Technologies into Domestic Machines in January at CES in Las Vegas. Major time extension to core IP coverage with XDrum. XDrum Patent Data Room Concept Filings Opened Formal comm
Slide 10: Tanning Technologies
10 TANNING TECHNOLOGIES Commercial Progress Detailed engineering solutions configured 2 Heads of Terms with major, modern tanneries. Previous financial assumptions affirmed. Potential upside in upstream tanning process – water, chemistry and cycle time reductions. Established that Xeros technology r
Slide 11: Tanning Technologies
11 TANNING TECHNOLOGIES Tanning target contract terms for Retanning and Dyeing Process Term – 10 year target Four out of five system unit operations supplied by customer. Fifth element, XOrb Cleaning Station supplied under peppercorn Gain share arrangements – 50:50 for water and chemistry lease arra
Slide 12: Textile Technologies
12 TEXTILE TECHNOLOGIES Commercial Progress XDrum technology applied to textiles applications. Successful scale up of denim and garment finishing in Xeros Technology Centre. World leading manufacturers with their garments now under test by Xeros. Next milestones/deliverables Commercialisation and de
Slide 13: China – All Applications
13 CHINA – ALL APPLICATIONS Commercial Progress China office established and Executive Chairman appointed. China Market Dimensions Hydrofinity (“Symphony Project”) license agreement signed with China’s largest OEM in July. 390,000 Professional Firefighters 3 major brands in Domestic licensing proces
Slide 14: China – All Applications: Water Pricing Reform
14 CHINA – ALL APPLICATIONS China water pricing reform 1 Beijing 2017 - NDRC (National Development and Reform 2017 GDP: ~ US$440bn 2017 population: ~21.7m Commission) and MOHURD (Ministry of Housing and Highest tier water price: 5.7 US$/m³ Urban-Rural Development) dictates nationwide implementation
Slide 15: XFiltra
15 XFiltra Commercial Progress Alpha prototype completed Parallel but separate licensing process to domestic washing machine OEMs. Next milestones/deliverables Complete negotiation of Commercialisation and Development agreement by end of 2018. Targeting up front payments for exclusivity and subseque
Slide 16: Financials – Cash Position
16 FINANCIALS – CASH POSITION At end December 2017 - £25.1m At end June 2018 - £10.4m At end August 2018 - £6.1m Guidance from earlier in the year was cash burn expected to be average of £2.2m per month through 2018. Average to date is £2.37m per month Exceptional items in H1 2018 related to Gloves
Slide 17: Financials – Profit and Loss Account
17 FINANCIALS – PROFIT AND LOSS ACCOUNT Six months ended Six months ended 30 June 2018 30 June 2017 £000 £000 Earned income 1,908 1,076 Less: lease interest income (43) (43) Earned income growth of 77.3%: REVENUE 1,865 1,033 39.0% organic growth (Hydrofinity) Cost of sales (1,960) (937) 38.3% growth
Slide 18: Financials – Cashflow
18 FINANCIALS – CASHFLOW 6 months ended 6 months ended 30 June 30 June 2018 2017 £000 £000 Operating activities Loss before tax (12,972) (15,140) Adjustment for non-cash items: Amortisation of intangible assets 89 - Depreciation of property, plant and equipment 352 273 Share based payment 1,028 997
Slide 19: Financials – Pro-forma Contract Values for Medium Sized Tannery
19 FINANCIALS – PRO-FORMA CONTRACT VALUES FOR MEDIUM SIZED TANNERY Volume inputs for contract terms: Average daily hides processed: 2,500 hides Average weight per hide: 7 kg Operational days p.a.: 288 days Kg processed p.a.: 5,040,000kg/5,040 tonnes Value inputs for contract terms: Average value cre
Slide 20: Financials – Targets
20 FINANCIALS – TARGETS Commercialisation achieved and predicted milestones now give line of sight to breakeven dates: Hydrofinity – EMEA EBITDA positive in 2019. Overall business EBITDA positive in 2020. Marken – As previously guided, EBITDA positive in 2019. Domestic – EBITDA positive upon any up-
Slide 21: Summary
21 SUMMARY Environmental and regulatory pressures increasing demand for our technologies Strong revenue growth from our established businesses Clear line of sight to break even points for each business, with the majority in the next 12 – 18 months. Numerous commercial inflection points reached Clear
Xeros Technology Group — H1 2018 Earnings Presentation on 6ix