Slide 1: Investor Presentation
De.mem Limited (ASX:DEM) ACN 614 756 642 Registered Office Level 4, 96-100 Albert Road South Melbourne, Victoria 3205 (e) investor@demem.com.sg ASX RELEASE | De.mem Limited (ASX:DEM) INVESTOR PRESENTATION 3 June 2024: Australian headquartered, international water technology company De.mem Limited (A
Slide 2: Acquisition of Auswater Systems Pty Ltd
De.mem Limited (ASX:DEM) Acquisition of Auswater Systems Pty Ltd 3 June 2024
Slide 3: Contents
2 CONTENTS 3 Trading Update 4 Strong Acquisition Value-add Track Record 5 Acquisition Rationale 6 Well-executed Acquisition Track Record 7 Geographic Diversification 8 Acquisition Overview 9 Financial Overview 10 Recurring Revenues Underpin Strong Growth Outlook 11 Large Addressable Market 12 Blue C
Slide 4: Trading Update
TRADING UPDATE 3 Record growth momentum and outlook Record growth momentum • 20 consecutive quarters of growth vs prior period • 19% organic revenue growth from CY22-CY23, above industry average (see ASX release 29 Feb 2024) Record March Quarter 2024 • Cash receipts of $6.6m, up 14% vs March Quarter
Slide 5: Strong Acquisition Value-add Track Record
STRONG ACQUISITION VALUE-ADD TRACK RECORD 4 Since 2019, Demem has successfully grown 4 bolt-on acquisitions by average ~63% Acquired business revenue growth $6.0 $3.6 Demem $3.3 $3.3 $2.5 $3.1 achieved 63% $2.3 $1.8 revenue growth of acquired businesses De.mem-Capic De.mem-Pumptech De.mem-Geutec De.
Slide 6: Acquisition Rationale
ACQUISITION RATIONALE 5 Demem’s strict acquisition selection criteria and discipline has historically generated strong returns ACQUISITION CRITERIA BENEFIT Enables rapid cross selling 1 Long-standing customers • Limits integration risk 2 Recurring revenues • Enhances earnings quality 3 High margins
Slide 7: Well Executed Acquisition Track Record
WELL EXECUTED ACQUISITION TRACK RECORD 6 Well priced - average acquisition revenue multiple of 0.7x and EBITDA (normalised) multiple of 5.2x Growth – average revenue growth of 63% across acquired businesses Historical acquisition growth • $8.2m has been invested in 4 acquisitions (excluding recent B
Slide 8: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 7 Auswater acquisition enhances Demem’s position in the strategically significant mining sector in Western Australia Border Pumpworks Offices
Slide 9: Acquisition Overview
ACQUISITION OVERVIEW 8 Auswater Acquistiion continues proven bolt-on acquisition value-add strategy Auswater Systems Pty Ltd (“Auswater”) acquisition • Perth, Western Australia • 50+ long term mining customers, service business with chemicals & consumables sales • 29-year operating history Auswater
Slide 10: Financial Overview
FINANCIAL OVERVIEW 9 Accelerates Demem path to sustainable full-year operating cashflow positive Auswater acquisition accelerates path DEM DEM PROFORMA PROFORMA EBTIDA EBTIDA (A$M) (A$M) to operating cashflow positive 0.0 • Proforma combined CY23 EBITDA -0.5 -0.3 (Demem and Auswater) = ~$0.3m -0.8 -
Slide 11: Recurring Revenue Segments Underpin Strong Growth Outlook
RECURRING REVENUE SEGMENTS UNDERPIN STRONG GROWTH OUTLOOK 10 De.mem has successfully achieved it stated strategy of growing recurring revenues – resulting in a stable, high-margin business model Recurring cash receipts 91% total CY23 cash receipts, up from 38% in CY18 Recurring revenue growth DEM Re
Slide 12: Large Addressable Market: Strong Regulatory Tailwinds
LARGE ADDRESSABLE MARKET: STRONG REGULATORY TAILWINDS 11 Decentralized water and waste water treatment is large and fragmented many small companies operating in certain niche segments Significant Addressable Market • Treated wastewater being embraced as a sustainable alternative to fresh water A$2.3
Slide 13: Blue Chip Customer Base - Focus on the Industrial Segment
BLUE CHIP CUSTOMER BASE - FOCUS ON THE INDUSTRIAL SEGMENT 12 Global, blue-chip customers with multiple sites provide significant cross-sell opportunities De.mem’s sales strategy is based on a “land and expand” strategy with multi-site customers Mining Infrastructure Food & Beverage Other Industrial
Slide 14: "One Stop Shop" of Water Treatment Solutions
“ONE STOP SHOP” OF WATER TREATMENT SOLUTIONS 13 Allows substantial cross-selling and recurring revenue growth to >90% total Services Pumps, Services & Membrane Systems Speciality Chemicals (BOO & O&M) Equipment • Provide containerized • Operations & maintenance • Specialty chemicals for • Supply pum
Slide 15: Auswater Acquisition Terms
AUSWATER ACQUISITION TERMS 14 DEM has signed a Share Purchase Agreement to acquire Auswater Pty Ltd Unconditional payments • Tranche 1 (payable immediately): $1,380,000 in cash plus $120,000 in DEM shares (based on 20 day weighted average share price) • Tranche 2 (payable after 12 months from comple
Slide 16: Contacts
15 CONTACTS Andreas Kroell Chief Executive Officer Demem Limited andreas@demem.com.sg George Gabriel, CFA Managing Director BLETCHLEY Park Capital gg@blethcleyparkcapital.com.au