Desert Control As · OSL:DSRT
Desert Control As — Q2 2023 Earnings Presentation
47 slides from Desert Control As's earnings presentation, 2023
Slide 1: Company Update
Company Update Desert Control AS
Slide 2: Making Earth Green Again
MAKING EARTH GREEN AGAIN
Slide 3: Water and Fertile Land: A Global Crisis
WATER AND FERTILE LAND: A GLOBAL CRISIS Increasing droughts, degradation of fertile land and growing water scarcity is an accelerating vicious cycle. 12M 4Bn Hectares of fertile land turn to sand annually Experience severe water scarcity >1 month/year (2K football pitches per hour) (almost 2/3 of th
Slide 4: The Problem: Soil Degradation
THE PROBLEM: SOIL DEGRADATION When soil turns to sand, even more water and natural resources are needed to maintain plant life and grow food. The Chief Problem Resulting in Sandy Soil Less than 15% Sand particles are large and Of water is retained in the have no ‘surface charge’ – water has nothing
Slide 5: Our Solution: Liquid Natural Clay (LNC)
OUR SOLUTION: LIQUID NATURAL CLAY (LNC) How the LNC treatment of sandy soil works: LNC is made up of tiny clay and mineral ‘platelets’ with electrical charge LNC-treated When poured into sandy soil, LNC’s Sandy Soil platelets bind to (“coat”) the sand grains – giving them a negative surface charge (
Slide 6: Treatment Overview
TREATMENT OVERVIEW Our product is combined with advanced data analytics, end-to-end services, and customized formulations to produce outstanding & scalable results. One treatment lasts for up to 5 years. Analyze & Prescribe Tailored Formulation 01 02 03 Easy Non-Intrusive Application Design Performa
Slide 7: Results
RESULTS Before After Savings Silicon Oasis, Dubai, UAE 47% water savings Water Energy Fertilizers Increased Returns The University of Arizona, Yuma, U.S. 21-53% yield increase Yield Quality Profit ICBA, Dubai, UAE Up to 62% yield increase 7
Slide 8: Proven, Patented, and Validated
PROVEN, PATENTED, AND VALIDATED 12+ years of R&D, 5+ years of field LNC Achieved Documented Results in 20+ Field Implementations & Data-Driven Pilots in UAE & USA: validation and pilots Independent validation by ICBA & University of Arizona Patents achieved in 48 countries Before After Partnerships
Slide 9: Market
MARKET Initial target markets: U.S. Southwest & UAE/Middle East – sandy soil areas affected by drought, desertification, and water scarcity. $490B $125B Annual cost of soil and land USD spent globally to address The water and fertile land crisis is global, and LNC has potential to degradation world-
Slide 10: Business Model
BUSINESS MODEL Turnkey Soil Ecosystem Regeneration for Sandy Soil Scalability: Multiple Revenue Streams Turnkey Projects Digital Subscriptions Fast Lead Times $/acre or $/tree – project pricing Monthly (MRR), dashboard with • 2-3 months build time for additional LNC dependent on area & contract size
Slide 11: Agenda / Q2 2023
Agenda / Q2 2023 Q2 2023 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q2 Q2 & YTD Financials Outlook Questions Highlights and answers 11
Slide 12: Company Update
Company Update CORPORATE UNITED STATES MIDDLE EAST • Strategic Review & Outcome • On Target Execution • Mawarid Licensing Agreement • Improved Unit Economics • Crop Diversification • Regulatory Approvals • Global Recognition • Efficiency Improvements • H-EART Agreement for KSA 12
Slide 13: Corporate Highlights
Corporate Highlights >2X PRODUCTION CAPACITY STRATEGIC REVIEW & IMPROVED UNIT GLOBAL OUTCOME ECONOMICS RECOGNITION • Process from April 27 – July 3 • >2X Increase in LNC Production • Entrepreneurship World Cup Capacity for all Units • Middle East Licensing Model • Norwegian Impact Awards • Extending
Slide 14: Corporate Highlights: Strategic Review and Outcome
Corporate Highlights BACKGROUND Previous model functioned to a Joint Venture structure in the UAE • Mawarid Desert Control LLC (MDC) • Desert Control Middle East LLC • Desert Control Liquid Natural Clay Manufacturing LLC THE CHALLENGE The Middle East operations had structural inefficiencies: STRATEG
Slide 15: Corporate Highlights
Corporate Highlights >2X PRODUCTION CAPACITY STRATEGIC REVIEW & IMPROVED UNIT OUTCOME ECONOMICS • Process from April 27 – July 3 • >2X Increase in LNC Production Capacity for all Units • Middle East Licensing Model • Extending Reach of Deployed • Streamlined value chain CAPEX • Reducing Opex >NOK 15
Slide 16: Corporate Highlights: Current LNC Production Capacity
Corporate Highlights CURRENT LNC PRODUCTION CAPACITY >2X UNITED STATES LNC Production Units Deployed: • 4 X Oasis Units (capacity 30k liter per hour per unit) • 1 X Mirage Unit (capacity 8k liter per hour) PRODUCTION CAPACITY • Total capacity ≈128.000 liter/hour UAE >15 000 / H IMPROVED UNIT LNC Pro
Slide 17: Corporate Highlights
Corporate Highlights >2X PRODUCTION CAPACITY STRATEGIC REVIEW & IMPROVED UNIT GLOBAL OUTCOME ECONOMICS RECOGNITION • Process from April 27 – July 3 • >2X Increase in LNC Production • Entrepreneurship World Cup Capacity for all Units • Middle East Licensing Model • Norwegian Impact Awards • Extending
Slide 18: United States
United States 30X ON TARGET EXECUTION OPERATIONAL MILESTONES REGULATORY CERTIFICATION • 5 Pilots Signed in Q1 • 30X Application Improvement • OMRI certification in compliance with the USDA • 5 Pilots Signed in Q2 • >2X LNC Production Capacity National Organic Program • On Track for H2 • Increased Di
Slide 19: United States: Signed Pilots
United States Q1 SIGNED PILOTS • Five Rivers (Alfalfa) • Lemonica (Citrus) • Fortuna de Oro (Golf) • Coyote Wash (Golf) • Griffin Farms (Dates) + Implementation of Stage 2 Pre-Project with Limoneira Yuma Q2 SIGNED PILOTS ON TARGET EXECUTION • Yuma Organics (Herbs) • 5 Pilots Signed in Q1 • Confident
Slide 20: Customer Conversion Model
Customer Conversion Model STAGE 1 STAGE 2 STAGE 3 Technical Pilots Extended Pilots (Commercial Pre-Projects) Large-Scale Deployments Engagement with potential clients Successful Stage 1 pilots evolve into larger Upon successfully completing Stage 2, initiates through smaller-scale commercial pre-pro
Slide 21: H1-2023 U.S. Projects – Status
H1-2023 U.S. Projects – Status STAGE 1 Griffin Farms (Dates) Fortuna de Oro (Golf) Coyote Wash (Golf) Technical Pilots Lemonica (Citrus) Daily Farms (Sudan Grass) Engagement with potential clients Yuma Organics (Herbs) initiates through smaller-scale pilot Confidential Vineyard programs to validate
Slide 22: United States
United States 30X ON TARGET EXECUTION OPERATIONAL MILESTONES • 5 Pilots Signed in Q1 • 30X Application Improvement • 5 Pilots Signed in Q2 • >2X LNC Production Capacity • On Track for H2 • Increased Diversity 22
Slide 23: United States: Diversity in Applications & Crops
United States Diversity in Applications & Crops: Deployments continue to demonstrate that LNC application is not limited by crop 30X type. LNC is expanding its reach as a viable solution for diverse vegetation growing in sandy soils. H1 Deployments: H2 Planned Deployments: • Sudan Grass (Forage crop
Slide 24: United States
United States 30X ON TARGET EXECUTION OPERATIONAL MILESTONES REGULATORY CERTIFICATION • 5 Pilots Signed in Q1 • 30X Application Improvement • OMRI certification in compliance with the USDA • 5 Pilots Signed in Q2 • >2X LNC Production Capacity National Organic Program • On Track for H2 • Increased Di
Slide 25: Middle East
Middle East LICENSED OPERATOR MODEL UNITED ARAB EMIRATES KINGDOM OF SAUDI ARABIA 25
Slide 26: Middle East: Licensed Operator Model
Middle East FOR MORE DETAILS: https://go.desertcontrol.com/FAQ-LicenseModel LICENSED OPERATOR MODEL • Empowers Local Operators • Removes Need for Local Subsidiaries • Lowers Operational Cost • Unlocks Cash • Reduces CAPEX Requirements 26
Slide 27: Middle East: United Arab Emirates
Middle East LICENSED OPERATOR MODEL UNITED ARAB EMIRATES • Empowers Local Operators • Strategic Agreement with Mawarid Holding Investment • Removes Need for Local Subsidiaries • Organic Certification by MoIAT • Lowers Operational Cost • Regulatory Approval by MOCCAE authorizing LNC for Sale and Use
Slide 28: Middle East: Mawarid Holding Investment
Middle East MAWARID HOLDING INVESTMENT (MHI) Moving together for a better tomorrow UNITED ARAB EMIRATES • Strategic Agreement with Mawarid Holding Investment • Organic Certification by MoIAT • Regulatory Approval by MOCCAE authorizing LNC for Sale and Use Across All Sectors in the UAE 28
Slide 29: Middle East: UAE and Saudi Arabia
Middle East LICENSED OPERATOR MODEL UNITED ARAB EMIRATES KINGDOM OF SAUDI ARABIA • Empowers Local Operators • Strategic Agreement with • Strategic Agreement with Mawarid Holding Investment Holistic Earth Advanced • Removes Need for Local Regeneration Technologies Subsidiaries • Organic Certification
Slide 30: Middle East: About H-EART
Middle East ABOUT H-EART Holistic Earth Advanced Regeneration Technologies (H-EART) • A start-up company focused on climate-smart technology for the regeneration of soil and natural ecosystems. • Strong alignment with the Saudi Vision 2030. • LNC will be a fundamental core for the company's offering
Slide 31: Summary
Summary CORPORATE UNITED STATES MIDDLE EAST • Strategic Review & Outcome • On Target Execution • Mawarid Licensing Agreement • Improved Unit Economics • Crop Diversification • Regulatory Approvals • Global Recognition • Efficiency Improvements • H-EART Agreement for KSA 31
Slide 32: Agenda / Q2 2023
Agenda / Q2 2023 Q2 2023 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q2 Q2 & YTD Financials Outlook Questions Highlights and answers 32
Slide 33: Financial Key Figures
Financial key figures SECOND QUARTER 2023 [second quarter 2022 in brackets] • Revenue NOK 0.5M [NOK 0.5M] 91.2% • EBITDA NOK –19.5M [NOK –20.3M] Equity ratio Secured • Profit or loss for the year NOK –18.2M [NOK –16.8M] ≈NOK 40M • Gross R&D expenses TNOK 300 [TNOK 900] NOK 42M from strategic review
Slide 34: Consolidated Statement of Comprehensive Income
Consolidated statement of comprehensive income 34
Slide 35: Consolidated Statement of Financial Position
Consolidated statement of financial position 35
Slide 36: Consolidated Statement of Financial Position (continue)
Consolidated statement of financial position (continue) 36
Slide 37: Consolidated Statement of Cash Flows
Consolidated statement of cash flows 37
Slide 38: Consolidated Statement of Cash Flows (continue)
Consolidated statement of cash flows (continue) 38
Slide 39: The DSRT Share
The DSRT share 40 30 20 10 0 ISSUE PRICE AS OF SHARE PRICE AS OF 14 APRIL 2021: NOK 11.69 30 JUNE 2023: NOK 7,7 ORIGIN OF SHAREHOLDERS Norway Luxembourg UK France Sweden Others 39
Slide 40: Agenda / Q2 2023
Agenda / Q2 2023 Q2 2023 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q2 Q2 & YTD Financials Outlook Questions Highlights and answers 40
Slide 41: Recap
RECAP WHAT WE HAVE DONE WHERE WE ARE NOW WHAT WE WILL DO NEXT • Executed Strategic Review • Stronger Financial Position • Execute Transition to Licensed Operator Model • Delivered on Target in the U.S. • Streamlined Organization • Focus on the United States • Improved Unit Economics and • Increased
Slide 42: Focus on the Execution of Our Sales Strategy
FOCUS ON THE EXECUTION OF OUR SALES STRATEGY STAGE 1 STAGE 2 STAGE 3 Technical Pilots Extended Pilots (Commercial Pre-Projects) Large-Scale Deployments Engagement with potential clients Successful Stage 1 pilots evolve into larger Upon successfully completing Stage 2, initiates through smaller-scale
Slide 43: Growth Objectives
GROWTH OBJECTIVES Target 2023: Secure >5 pilots per quarter targeting >50% conversion to larger deployments Target 2024: Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Reach cashflow-positive revenue contribution from projects Pilots & Pre-Projects Large-Scale Deployments Ta
Slide 44: Phase 1: Building the Foundation
PHASE 1: BUILDING THE FOUNDATION PHASE PHASE PHASE 01 02 03 MENA & USA Southern Europe Australia, Africa, Asia/India, RoW Transition to a licensed operator model Continue scale-up and expansion to Global expansion to all regions in the Middle East and accelerate U.S. areas prone to desertification,
Slide 45: Agenda / Q2 2023
Agenda / Q2 2023 Q2 2023 REPORT AND FINANCIAL RESULTS / COMPANY PRESENTATION Q2 Q2 & YTD Financials Outlook Questions Highlights and answers 45
Slide 46: Cautionary Note
Cautionary note DISCLAIMER RELATED TO FORWARD-LOOKING STATEMENTS This presentation contains to change without notice. Q2 2023 Report and Year-to-Date forward-looking information and Forward-looking statements are Company Update statements relating to the not guaranteeing any future The information e
Slide 47: Thank you for your attention!
Thank you for your attention!