Desert Control As · OSL:DSRT
Desert Control As — Q3 2022 Earnings Presentation
80 slides from Desert Control As's earnings presentation, 2022
Slide 1: Company Update
Company Update Desert Control AS
Slide 2: Our vision
Our vision to foster the prosperity of life 1M km2 2030 Cultivate and green Contribute to sustainable social Establish a Sub Sahara 1oo Million Hectares impact, immense water savings social impact initiative of degraded land and and balance the climate with by 2025 to reduce desert by 2030 increased
Slide 3: Desert Control
Desert Control Combat Strengthen Food Reduce Water Focus Desertification Security Scarcity Climate-smart agriculture technology to combat desertification by regenerating soil ecosystems to solve water- and natural resources scarcity 12 million hectares of fertile land Less than 60 years left for glo
Slide 4: Our Purpose
Our Purpose (Why we do what we do) 4
Slide 5: Population growth drives increased demand for food and water
Population growth drives increased demand for food and water INCREASING POPULATION… …NEEDS MORE FOOD AND WATER… …WATER SHORTAGE EXPECTED TO BE SUBSTANTIAL Food production required to increase by (billion m2 of -40% (billion people) 10.9 6,900 water) 7.7 60-70% 4,500 by 2050 and water demand 4,200 5.
Slide 6: Food production depends on water
Food production depends on water > 70% of the freshwater in the world is used for agriculture SHARE OF FRESHWATER WITHDRAWLS BY SECTOR (%) 6% 5% 7% 11% • The shortfall between demand and 9% 16% 15% supply of water is estimated to be 34% Domestic 17% 40% by 2030 12% • Approx. 1/3 of the population wi
Slide 7: The United Nations declares desertification the greatest environmental threat of our time
The United Nations declares desertification the greatest environmental threat of our time 110 1.3Bn 12m Countries exposed to People trapped on Hectares of productive desertification and land degrading agricultural land turns barren every degradation land year $490Bn annual cost world-wide 20% 52% <6
Slide 8: Desertification and soil degradation is not limited to desert regions
Desertification and soil degradation is not limited to desert regions US >40% of the continental US is at 2022 risk of desertification Spain 74% of territory at risk of desertification Portugal +50% of mainland at risk of desertification Cyprus 2008 2017 99% of territory vulnerable to desertificatio
Slide 9: The need for LNC has never been higher
The need for LNC has never been higher (2022 has seen accelerated food shortages & focus on supply chains and sourcing) Massive increase in acute food insecurity… …with soaring prices… …leading to government action USD/mt US inflation reduction act 2014 Q4-22 $19.5bn $4bn $5bn 2.1x 752 mitigating th
Slide 10: Our Solution
Our Solution (Innovation and Technology) 10
Slide 11: Desert Control's LNC is part of the solution
Desert Control’s LNC is part of the solution Enhances soil ecosystems and increases water-holding capacity of sandy and arid soil – reduces water and fertilizer usage and improves soil health One 1. UNIQUE FORMULATION PROCESS application lasts up to Clay and natural minerals are formulated into a li
Slide 12: The problem LNC targets to solve
The problem LNC targets to solve < 15% of irrigation water is retained in the topsoil for plants to utilize 1 Most of the water is lost to deep drainage that CO2 causes wash-out of fertilizers (leaching), loss of other inputs, organic matter and biodiversity 2 Increased use of water requires more en
Slide 13: How LNC works
How LNC works Sandy soil LNC treated sandy soil behaves more like a clay-rich fertile soil CANOPY SIZE Large particle sizes, small Small particle sizes, large surface area, large pore space surface area, small pore space High gravitational pull Capillary action Sandy soil LNC treated soil High gravi
Slide 14: Increased lateral flow
Increased lateral flow (LNC validation study at the University of Arizona) Control plot wetting width: LNC plot wetting width: <---- 140 cm ----> LNC <------ 210 cm ------> 50% Sandy soil treated soil improvement High gravitational pull and very Increased capillary limited lateral flow action and la
Slide 15: A unique non-intrusive nature-based solution
A unique non-intrusive nature-based solution Conventional methods for soil enhancement Impact measurement and transparency are intrusive, time consuming and costly enabled by digital services platform INTRUSIVE NON-INTRUSIVE (mechanical/manual intervention) (self-percolating into the soil) vs. Solid
Slide 16: With proven, measurable benefits
With proven, measurable benefits UAE desert example Other benefits Before Immense water Possible to Spray Uniform savings: Up to 50% or Inject Application After Natural Product Can be applied using Can be applied on existing systems existing greenery 62% Crop yield Up to 5 increase 28% x2-3 YEARS 17
Slide 17: Benefits of soil ecosystem enhancement
Benefits of soil ecosystem enhancement LNC changes the ecosystem of sandy soils to behave like clay-rich fertile soil 1 2 3 4 5 Reduces pressure on Improves plant Reduces Lowers pressure on Restores biodiversity natural resources health and yield operational costs infrastructure and captures carbon
Slide 18: Nature-based solutions; vital for a stable climate
Nature-based solutions; vital for a stable climate Global GHG emissions (Gt) ADDRESSING MULTIPLE KEY UN 49 8 SUSTAINABLE DEVELOPMENT GOALS 6 9 25 Collectively ~57% of required reduction to reach 2DS target 2016 GHG emission Stopping Restoring soils Remaining gap GHG emissions in levels deforestation
Slide 19: Too good to be true?
Too good to be true? LNC is patented, validated and field-proven… Initial commercial deliveries (July 2022) …with a science-led and Academic validation by the University of Arizona (2022) data-driven approach Academic validation by ICBA (2019 – 2020) 4 years of validation & pilots in the UAE (2018 –
Slide 20: Results and impact of LNC
Results and impact of LNC +8% Yield -46% Water SAMPLE OF REFERENCE RESULTS FROM THE UAE Increase Reduction +21% Grade-A Quality Increase WATER CROPS/VEGETATION SEGMENT LOCATION SAVINGS Pearl Millet, Zucchini and Watermelon 40% Agriculture ICBA* in Dubai (Independent validation) Liquid Natural Clay f
Slide 21: Agenda / Q3 2022
Agenda / Q3 2022 Q3 2022 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q3 Q3 Highlights Financials Outlook Questions and answers 21
Slide 22: Q3 and Year-to-Date Highlights
Q3 and Year-to-Date Highlights G AIN ACCELERATED COMMERCIALIZATION IN THE UNITED STATES R EACH LARGE-SCALE ADOPTION OF LNC IN THE MIDDLE EAST O BTAIN A STRATEGIC POSITION TO GROW INTO SOUTHERN EUROPE W ATERPROOF THE FOUNDATION FOR GLOBAL SCALE-UP • Progressing ahead of initial • Operationalizing the
Slide 23: Progressing ahead of expectations in the United States
Progressing ahead of expectations in the United States Initial plan Academic validation Pilots Initial commercialization Full-scale commercialization Q2 2022 Q2 2023 Q4 2023 Q4 2024 Revised expectation Academic validation Commercialization with paid Pilots Commercialization with full-scale projects
Slide 24: Gain accelerated commercialization in the United States
G ain accelerated commercialization in the United States COMMERCIALIZE FOUNDATION VALIDATION Strategic contract with Limoneira Strengthening the team to Expanding the validation Company for commercial pre-projects accelerate commercialization program with additional crops $ales 24
Slide 25: Limoneira Company
Limoneira Company Yuma Cadiz, San Bernadino, California Cadiz Yuma, Arizona …with an opportunity to include additional … a large-scale 120,000 trees One of the premier Over 6,200 hectare of Leading producer of roll-out is integrated agribusinesses rich agricultural lands, lemons, avocados, anticipat
Slide 26: Business case – citrus scenario
Business case – citrus scenario (Based on findings from pilots) $ 250 Potential cost savings $ per ton ≈1 (y) COMMERCIALIZE $ 200 Payback period $2,3k Crop value $ 150 per ton $ 96 96% Return on $ 100 $198 investment $186 $ 40 Estimate value of 8% yield increase per ton $ 50 Fuel Fertilizer $ 62 Wat
Slide 27: Ambition 2023: Develop pipeline of projects
Ambition 2023 DEVELOP PIPELINE OF PROJECTS Continue growth in number of pre-projects Growth in number of pre-projects Limoneira Pre-project 2000 + 2000 trees Signing of new paid pre-projects Conversion to full-scale projects Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 27
Slide 28: U.S. Ambition 2023 – 2025: Develop revenue scale-up
U.S. Ambition 2023 – 2025 Trigger points = success achieved (backward-looking destination statements) Trigger Point 5 DEVELOP REVENUE SCALE-UP Trigger Point 4 Trigger Point 3 Trigger Point 2 Trigger Point 1 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 28
Slide 29: Reach large-scale adoption of LNC in the Middle East
R each large-scale adoption of LNC in the Middle East STREAMLINE COMMERCIALIZE COMMUNICATE Operationalizing Mawarid Desert Starting to gain traction with MDC Exceptional impact for LNC on Control and restructuring Desert strategic commercial pre-projects date palms Control Middle East 29
Slide 30: Business case – date cultivation scenario
Business case – date cultivation scenario (Based on findings from pilots) +8% Yield -46% Water Increase Reduction Business case for date trees customer +21% Grade-A (UAE example scenario) Quality Increase $108 COMMERCIALIZE Potential value of 8% yield increase Number of trees 16.7 1.4 (y) per ton Li
Slide 31: Business case – landscape scenario
Business case – landscape scenario (Based on findings from pilots) COST SAVINGS Business case for UAE landscaping customer (example scenario) 1.7 (y) COMMERCIALIZE Landscape size 50 Hectares Payback period Watering costs (p.a.) $1.25m >$2/m2 59% (before LNC treatment) LNC impact on water savings $60
Slide 32: Streamlined organization
Streamlined organization New organizational structure with optimized operational costs 49% JV Mawarid DC Norway DC Middle East DC Americas Desert Control DC 100% owned Newly established JV Executive and organization based in with Mawarid for sales Sales, production and Total DC organization corporat
Slide 33: Obtain a strategic position to grow into Southern Europe
O btain a strategic position to grow into Southern Europe 2023 2024 2025 2026 2027 Desert Control will support Amarenco in its initiatives to offset its energy production facilities by investing in biodiversity protection and soil regeneration 33
Slide 34: Waterproof the foundation for global scale-up
W aterproof the foundation for global scale-up EFFICIENCY LEADERSHIP SCALE ON DEMAND Increased efficiency with lower Strengthened management team Allows for linking investments to operational costs prepares us for future growth signed customer agreements 34
Slide 35: Agenda / Q3 2022
Agenda / Q3 2022 Q3 2022 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q3 Q3 Highlights Financials Outlook Questions and answers 35
Slide 36: Financial key figures
Financial key figures THIRD QUARTER 2022 FIRST NINE MONTHS 2022 [third quarter 2021 in brackets] [first nine months 2021 in brackets] • Revenue NOK 0.1M [NOK 2.3M] • Revenue NOK 1.2M [NOK 2.3M] 94.2% • EBITDA NOK -21.6M [NOK -7.8M] • EBITDA NOK -64.7M [NOK -20.5M] Equity ratio • Profit or loss for t
Slide 37: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income 37
Slide 38: Consolidated statement of financial position
Consolidated statement of financial position 38
Slide 39: Consolidated statement of financial position (continue)
Consolidated statement of financial position (continue) 39
Slide 40: Consolidated statement of cash flows
Consolidated statement of cash flows 40
Slide 41: Consolidated statement of cash flows (continue)
Consolidated statement of cash flows (continue) 41
Slide 42: The DSRT share
The DSRT share ORIGIN OF SHAREHOLDERS Norway Luxembourg UK Sweden Others 42
Slide 43: Agenda / Q3 2022
Agenda / Q3 2022 Q3 2022 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q3 Q3 Highlights Financials Outlook Questions and answers 43
Slide 44: Outlook
Outlook G AIN ACCELERATED COMMERCIALIZATION IN THE UNITED STATES R EACH LARGE-SCALE ADOPTION OF LNC IN THE MIDDLE EAST O BTAIN A STRATEGIC POSITION TO GROW INTO SOUTHERN EUROPE W ATERPROOF THE FOUNDATION FOR GLOBAL SCALE-UP • Hire Managing Director for • Fully implement go-to- • Prepare the next sta
Slide 45: Targeting a global market with numerous opportunities
Targeting a global market with numerous opportunities 3 Australia 2 Africa Asia/India 1 USA Rest of the world Southern Europe MENA Global expansion to all regions experiencing desertification, Continued scaling in areas prone draught and water shortage to desertification, including the Initial opera
Slide 46: Ambition 2023 – 2025: Develop revenue scale-up
Ambition 2023 – 2025 DEVELOP REVENUE SCALE-UP Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Revenue pre-projects Revenue full projects 46
Slide 47: Milestones and targets on the journey towards meeting global demand
Milestones and targets on the journey towards meeting global demand 2023: 2025: • Middle East: Launch first large-scale projects • Middle East: Secure contracts for large-scale reforestation projects 50-100 mill. Hectare equivalents of treated soil (1) • USA: Execute multiple strategic pre-projects
Slide 48: Go to Market – entering early scale-up phase
Go to Market – entering early scale-up phase Current stage Next growth stage Growth stage #2 Growth stage #1 B2B2E B2B2B 3 2027-> B2B 2 2025-2027 Business to Business to 1 2022-2025 Everyone Business to Business to Business Expansion to include in- Business to Business In-direct to business customer
Slide 49: Cautionary note
Cautionary note DISCLAIMER RELATED TO FORWARD-LOOKING STATEMENTS This presentation contains to change without notice. Q3 2022 Report forward-looking information and Forward-looking statements are The information enclosed is statements relating to the not guaranteeing any future subject to the disclo
Slide 50: Agenda / Q3 2022
Agenda / Q3 2022 Q3 2022 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q3 Q3 Highlights Financials Outlook Questions and answers 50
Slide 51: Thank you for your attention!
Thank you for your attention!
Slide 52: Our core values
Our core values Leadership Integrity Inspirational pro-active execution Keep promises | grow strong relationships Growth-mindset Curious and solution-oriented Contribution Desire to make everything better Innovation Challenge status-quo | create value Diversity Inclusive | open-minded | respectful 5
Slide 53: Appendix
Appendix DESERT CONTROL COMPANY PRESENTATION
Slide 54: About Desert Control
About Desert Control Desert Control is a company specialized in climate-smart agri-tech solutions to combat desertification by regenerating soil ecosystems to solve water- and natural resources scarcity. Its patented Liquid Natural Clay (LNC) restores and protects soil, enhances the soil ecosystem,
Slide 55: Soil ecosystem enhancement – service delivery model
Soil ecosystem enhancement – service delivery model Soil(s) Plants Clay(s) FORMULATION How to Other grow inputs How to apply FORMULATE IMPLEMENT OBJECTIVES CURRENT STATE GAP ANALYSIS SOLUTION AND MONITOR • Define objectives • Collect info (health check) • Analyze data and inputs • Create specific fo
Slide 56: Service delivery with on-site LNC production
Service delivery with on-site LNC production Allows tailoring LNC formulation to meet the specific requirements of each location – minimizes environmental footprint (avoid transportation of liquid) ANALYZE Soil(s) Plants Clay(s) FORMULATION How to Other grow inputs How to apply FORMULATE PRODUCE LNC
Slide 57: Vision and mission
Vision and mission Making earth green again to foster the We combat desertification, land degradation, Desert Control is a company specialized in prosperity of life and water scarcity by; climate-smart agri-tech solutions to combat desertification by regenerating soil • We aim to reclaim 100 million
Slide 58: Our strategic principles
Our strategic principles Think Big: Design to scale Everything we do must connect to a bigger picture and exponentially: ultimately to our vision of making earth green again. Everything we do must be scalable. The positive impact of our innovation must grow at an increasingly rapid Start Small: rate
Slide 59: 2025 Ambition (GROW)
2025 Ambition (GROW) G AIN LARGE-SCALE ADOPTION OF LNC IN THE UNITED STATES R EACH LARGE-SCALE ADOPTION OF LNC IN THE MIDDLE EAST O BTAIN A STRATEGIC POSITION IN SOUTHERN EUROPE W ATERPROOVEN FOUNDATION FOR GLOBAL SCALE-UP • LNC is recognized as the • LNC is listed among the • Successful partnership
Slide 60: ESG and impact
ESG and impact IMPACT ON EXTERNAL ENVIRONMENT AND SUSTAINABILITY Liquid Natural Clay (LNC) can reduce further minimize the risk of chemical safeguarding the carbon storage of soil sum of positive impact from stopping water consumption for agriculture, run-off reaching through to natural ecosystems a
Slide 61: LNC identified as a potential impact solution by the United Nations
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 – WORLD BANK AMONG DONORS RESTORE 100 MILLION HECTARES OF DEGRADED LAND SEQUESTER 250 MILLION TONNES OF CARBON CREA
Slide 62: Impact of innovation
Impact of innovation With more than 20 field pilots, feasibility studies and independent academic validations by universities and research institution, a few visual references are shared in the following slides…
Slide 63: UAE adaptive agriculture reference validation
UAE adaptive agriculture reference validation VALIDATIONS – PILOTS – RESULTS ü Less than 1kg of minerals per m2 ü Water and fertilizer savings (20-50%) ü Increased crop yields (17-62%) ü Preserved organic matter, reduced salinity, Before and improved overall soil health CROP YIELD INCREASE 62% 28% 1
Slide 64: From date palms to citrus and other permanent crops
From date palms to citrus and other permanent crops VALIDATIONS – PILOTS – RESULTS DATE PALMS • 46% water savings • 8% yield increase • 21% increase of Grade A CITRUS • In progress Arizona • Next up: California 64
Slide 65: Citrus trees, desert fruit tree cultivation
Citrus trees, desert fruit tree cultivation VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Mixed varieties of citrus trees RESULTS • 50% water preserved • Healthy trees • On-going monitoring Before of tree growth 65
Slide 66: Watermelon production, research station – Yuma, Arizona
Watermelon production, research station – Yuma, Arizona VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Watermelon RESULTS • Active project in progress • Show potential for reduced irrigation frequency, increased lateral movement Before of water in the soil profile, promising potential for ferti
Slide 67: Vegetable production in controlled environment, research farm
Vegetable production in controlled environment, research farm VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Cucumber • Basil • Beetroot RESULTS • 50% water preserved Before • Yield fully maintained compared to control plots 67
Slide 68: Vegetable production in open field, private farm
Vegetable production in open field, private farm VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Cauliflower • Carrots • Ladyfinger • Peppers RESULTS Before • 38.5% water preserved 68
Slide 69: Wheat production in desert soil with LNC
Wheat production in desert soil with LNC VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Wheat RESULTS • 50% water savings • > 1,4x yield increase • Larger grain size Before • 158% reduced plant stress • 24% higher carbohydrate Increased cation exchange capacity in the soil by 54% and increased
Slide 70: Wheat production, private farm
Wheat production, private farm VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Wheat RESULTS • > 50% water savings • Increased yield Before 70
Slide 71: Alfalfa production, animal feed farm
Alfalfa production, animal feed farm VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Alfalfa production RESULTS • On-going trial Before 71
Slide 72: Punica granatum trees, desert fruit tree cultivation
Punica granatum trees, desert fruit tree cultivation VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Pomegranate trees RESULTS • 50% water preserved • Healthy trees • On-going monitoring Before of tree growth 72
Slide 73: Moringa trees, private farm
Moringa trees, private farm VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Moringa trees RESULTS • Up to 50 % water savings • Higher germination rate • Higher tree survival rate Before 73
Slide 74: Mangifera indica trees, fruit farm
Mangifera indica trees, fruit farm VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Mango trees RESULTS • 50% water preserved • Healthy trees • On-going monitoring Before of tree growth 74
Slide 75: Ziziphus spina Christi trees, afforestation project
Ziziphus spina Christi trees, afforestation project VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Christ’s thorn jujube trees RESULTS • 54% water preserved • Healthy trees • Preserved organic matter, Before reduced salinity, and improved overall soil health 75
Slide 76: Prosopis cineraria, afforestation project
Prosopis cineraria, afforestation project VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Ghaf tree RESULTS • 51% water preserved • Healthy trees • Preserved organic matter, Before reduced salinity, and improved overall soil health 76
Slide 77: Climate resilient landscaping reference validation (Bermuda grass)
Climate resilient landscaping reference validation (Bermuda grass) VALIDATIONS – PILOTS – RESULTS ü Less than 1kg of minerals per m2 Before ü Water savings (47%) ü Increased grass growth (52%) ü Preserved organic matter, reduced salinity, and improved overall soil health ü Increase in available P an
Slide 78: Lawn areas landscaping
Lawn areas landscaping VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Paspalum grass RESULTS • 45% water preserved Before 78
Slide 79: Ficus benghalensis tree, landscaping
Ficus benghalensis tree, landscaping VALIDATIONS – PILOTS – RESULTS PLANTS/CROPS After • Banyan trees RESULTS • 50% water preserved • Healthy trees Before 79
Slide 80: Feed our planet responsibly
FEED OUR PLANET RESPONSIBLY to foster the prosperity of life ACCELERATE COMBAT CLIMATE WATER ACTION SCARCITY 1M km2 2030 GOVERNMENTS LANDOWNERS AND NGOS AGRICULTURE 80