Slide 1: De.mem Limited (ASX:DEM) Investor Presentation
De.mem Limited (ASX:DEM) Investor Presentation Strategic Shift to Recurring Revenues Underpins Strong FY20 Outlook 2 March 2020
Slide 2: Contents
CONTENTS RESULTS OVERVIEW 3 BUSINESS OVERVIEW 4 CORPORATE SNAPSHOT 5 FY19 KEY MILESTONES 6 FY19 MILESTONE PROJECTS 7 FY19 FINANCIAL SUMMARY 8 GROWING RECURRING REVENUES 11 FY20 OUTLOOK KEY INVESTMENT CONSIDERATIONS 12 KEY INVESTMENT CONSIDERATIONS 13 RELATIVE VAULATION DISCOUNT 14 BLUE CHIP CUSTOMER
Slide 3: Business Overview
BUSINESS OVERVIEW 3 De.mem is a “one-stop shop” provider of industrial water treatment solutions. DEM combines its unique water treatment technology product portfolio with repeat sales of water treatment consumables (pumps, filters, membranes, chemicals) and its specialist water engineering & design
Slide 4: Corporate Snapshot
CORPORATE SNAPSHOT 4 ASX code DEM NA Singapore Early-Stage Venture Fund 24.0% Ordinary shares 175.4m MAJOR SHAREHOLDERS Market capitalisation $30m Perennial Value Microcap Opportunities Fund 14.2% Cash on hand (31.12.19) $8.2m MARKET DATA Listed on ASX 7 April 2017 New Asia Investments Pte Ltd 6.8%
Slide 5: FY19 Key Milestones
FY19 KEY MILESTONES 5 In FY19, DEM accelerated its transition to a recurring revenue business which provides a “complete one stop shop” for industrial water treatment solutions. DEM commences FY20F with visible revenues exceeding FY19 revenues. “One-stop shop” supplier of decentralised industrial wa
Slide 6: FY19 Milestone Projects
FY19 MILESTONE PROJECTS 6 Breakthrough Project Awards in FY19 – providing a strong foundation for follow-on work • Client is Mulpha, an international infrastructure investor with a number of assets in Australia • Total value of project is approx. A$3m • Desalination plant based on a Sea Water Revers
Slide 7: FY19 Financial Summary
FY19 FINANCIAL SUMMARY 7 DEM increased cash receipts by 15% to $11.7m in CY2019 DEM is growing its recurring revenue base and has a visible path to sustainable operating cash positive At the current market capitalisation, it is trading at 1.3 x market cap / paid-in equity A$M (Dec yr end) 2016 2017
Slide 8: Growing Recurring Revenues
GROWING RECURRING REVENUES 8 Recurring revenues include BOO, O&M and Consumables Sales. Recurring revenues are increasing from 38% of total revenue in FY18 to 56% in FY19, with FY20 outlook for continued growth in recurring revenues. Equipment Build-Own-Operate Operations Consumables Sales or Build-
Slide 9: Growing Recurring Revenues
GROWING RECURRING REVENUES 9 Recurring revenues are growing, from 38% of total revenue in FY18 to 56% in FY19. The outlook is for continued growth in recurring revenues, supporting FY20F total cash receipts/revenue guidance of $16-20m. • Recurring revenue increased from 38% of FY18 revenues to 56% o
Slide 10: Total Revenue (A$m)
GROWING RECURRING REVENUES 10 FY20F has a minimum visible revenue base of $11.4m, with equipment sales to further add to FY20F total revenue. FY20F recurring revenue base is approx. $10m with an additional $1.4m contracted revenue carried over from FY19. For context, equipment sales have historicall
Slide 11: FY20 Outlook
FY20 OUTLOOK 11 Ongoing top line growth • FY20F cash receipts/revenue guidance of $16-$20m, driven by $10m of recurring revenues and $1.4m FY19 contract rollover • Visible path to sustainable operating cash positive with diminishing operating cash outflow Contracts Strong customer pipeline with ongo
Slide 12: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS 12 Uniquely positioned to become the leading player in decentralized water treatment across APAC, providing a range of proven, world-class, highly scalable and potentially disruptive technologies to a large addressable market Proprietary technology – De.mem has access t
Slide 13: Relative Valuation Discount
RELATIVE VALUATION DISCOUNT 13 DEM trades at 2.6x Market Capitalisation/Revenue (x) multiple, which is ~75% discount to its ASX-listed peer average Company Last 12 Months Market Market Technology Market Focus Customer Cash Capitalisation Capitalisation / Receipts (28 February 2020) Revenue Phoslock
Slide 14: Blue Chip Customer Base
BLUE CHIP CUSTOMER BASE 14 DEM has large, blue-chip clients that often provide repeat orders across their global operations Customers include global mining companies, large EPC contractors, municipalities, water utilities and multinational corporations Mining Municipal / Infrastructure Food & Bevera
Slide 15: Unique Technology Portfolio
UNIQUE TECHNOLOGY PORTFOLIO 15 De.mem proprietary product portfolio includes breakthrough membrane innovations COMPLETED (2018 and 2019) PLANNED (2020 FF) • Nanofiltration membrane • Membrane Bioreactor (MBR) – Superior filtration performance due to minimum – Treatment of high organic load waste wat
Slide 16: Strong Customer Value Proposition
STRONG CUSTOMER VALUE PROPOSITION 16 De.mem as a Total Water Management Solutions Provider: A “One-stop-shop” for the customer • De.mem supplies all major types of water and waste water treatment equipment • Proven service (Operations & Maintenance) and after-sales capability and ability to supply a
Slide 17: Legal Disclaimer
LEGAL DISCLAIMER 17 This presentation has been prepared by De.mem Limited and its related entities (the “Company”). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Company. You should not treat the contents
Slide 18: De.mem Limited (ASX:DEM)
DE.MEM LIMITED (ASX:DEM) Andreas Kroell Chief Executive Officer De.mem Limited investor@demem.com.sg INVESTOR ENQUIRIES George Gabriel, CFA Managing Director BLETCHLEY Park Capital investors@bletchleyparkcapital.com.au (03) 8686 9144