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March2018
GlobalLeadershipinDecentralizedWaterSolutions
2
Summary
• Growing global water scarcity, contamination – Cape Town, Flint Michigan, Middle East, China, India
• Decentralized solutions deploy faster, cheaper – US$22B market by 2021• Fluence is leading global player focused on this market with complete suite of
solutions• Targeting US$15B China rural opportunity, global desalination, wastewater to
energy markets• Proven management team and Board – systems installed in 70 countries• Guiding $105-115M in 2018 revenues, 80-100% up on 2017• $95M in backlog entering 2018 - $75M of this due in 2018 revenue• Guiding $22-25M gross margin in 2018, EBITDA positive during 2019• $33M in cash at end of 2017, under $2M in debt
MarketOpportunity
4
GrowingGlobalWaterCrisisNow
Watershortagesaffect2.7Bnow
2.4Blackproperwastewatertreatmentnow
Anadditionalpopulationof2.1Bneedupgradedtreatment
Populationgrowthfrom7.4Bin2016to9.1Bin2050
60%increaseinglobalfoodproductionby2050
Manufacturingwaterdemandwillgrow400%by2050
Globalwaterconsumptiontodoubleby2050
Resultsin40%waterdeficitby2030
By 2025,two-thirdsoftheworldwillfacewatershortages
Sources:WWF,WaterScarcity,2014;USGeologicalSurvey,2015;UNWorldWaterDevelopmentReport,2017;WaterforFood,UNCTAD, 2011.
UrgentNeedForAffordable,
Fast-to-DeploySolutions
5
Today’sLargeCentralizedSolutionsDoNotAddresstheGrowingDemand
• Largecentralizedplants:CapEx andOpExinefficient,demandsmassivein-groundinfrastructure– toocostly
• Developedworld:Rustingpipesandgrowingcommunitiesdrivepipereplacement:$1M– $10M+/km,pluspumpingandstorage
• Verycostlytoupgrade:Fixingandupgradingwaterinfrastructureestimatedtocost$1trillion+- notviable
Source:GlobalWaterIntelligence,GlobalWaterMarket2017Volume1
6
DecentralizedPackagedTreatmentPlants:TheSolutionForGlobalWaterNeeds
• SmartPackagedPlantsprovideacosteffective‘plugandplay’solution,avoidinginefficientinfrastructureprojectsspanningyearsandcostinghundredsofmillions
• SmartPackagedPlantsenableremotemonitoringandoperation,substantiallyreducingOpEx
• PointofUseDecentralizedPlantsrequireshortandlimitedin-groundinfrastructure, saving25%CapEx &40%OpEx fornewinstall&upgrades
• Localizedwatertreatmentandreuseavoidsneedforlargeinstalledbasetotransportsourcewaterandreturningtreatedwater,reduceswaterandenergydemand
• Multipledecentralizedplantshelpmitigateman-madeornaturaldisasters
7
TargetMarketsGrowingRapidly
5.5 5.1
2.7
9.18.4
4.4
MunicipalWastewater
IndustrialWastewater
Drinkingwater
2016 2021
Sources:MarketsandMarketsAnalysis,GlobalWaterIntelligence,companyestimates
$83BinPlannedCapExDesalinationandReuseplants
(2017to2022)
SmartPackagedPlants:Globalmarketgrowingfrom
$13.3Bto$21.8B (2016to2021)
China&Taiwan$29.9B(36%)
MiddleEast&Africa
$28.6B(34%)
USA$15.6B(19%)
EU/CAsia$9.1B(11%)
$Billion
s
Positioning
9
AGlobalLeaderinFast-To-DeployDecentralized TreatmentSolutions
SalesreachinUS,China,LatinAmerica,
Africa,Europe
Diversifiesrevenuesourceswhileincreasing
opportunities
Globaloperations,incl.manufacturinginIsrael,Argentina,USA,ItalyandChina
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AnEstablishedGlobalPlayerwithDifferentiatedProductsServingGrowingMarkets
$700Bglobalwatermarket– tighterrules,
urgentneeds
Onlyglobal,pureplaywater&wastewatertreatmentcompany
Targetingfastestgrowingsegments
Provensolutionsofferbest-in-classperformance
MABRrampstartinginChina FirstSUBREcontractwon Globalteamof330+
expertsStrongbalancesheetto
executeplan
Result:SustainedRevenueandMarginGrowth,IncreasingRecurringRevenue
11
WellPositionedforHugeChinaOpportunity
China’s13th 5yearplanprovidesUS$15Billion
fundingforruralwastewatertreatment
FluenceMABRuniquelyqualifiedforthismarket
Fluencehasestablishedmultiplechannel
partnershipsinChina
ShipmentofCommercialPackagedPlantshas
commenced
Local supplyofflagshipMABRproductfromourplantinChangzhou
StrongPipelineofC-MABRWastewaterTreatmentFirstcommercialcontractsthroughstrategicchannelpartnersinHenan&Guizhou Provincesannouncedin
November2017
12
AnticipatedChinaRevenueRamp
• 2016– Securedinitialpartnerships:4
• 2017– Deployedandproved6demoplants,closedcontractsforinitial2commercialplants– 36MABRunits
• 2018– Bookandshipincreasingcommercialcontractsvia15partners
• 2019– Anticipatedsubstantialstepupfrom2018revenues
• Totalmarketestimatestill$15B,actualramppointhardtoproject
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PositioningforGrowingOpportunitiesinUSA
DemoPlantatCodiga ResourceRecoveryCenter (CR2C)atStanfordUniversity• CommissionedinJanuary2018toallowforobservationandtestingofcompliancewithCalifornia’s
strictTitle22reusestandards• Servesasreferencesiteforpotentialclients,whocanseeaC-MABRunitinoperation
• Keyapplications:wastewatertreatment,nitrification/denitrification,phosphorousremoval,reuse
NorthAmericaPWWTMarketalready$2.8Bin2016,expectedtoreach$4.1Bby2021*
*Source:MarketsandMarkets Analysis
14
HistoricalandExistingCustomersandPartners
LargeDiversifiedClientBase
Fluencefocusesondecentralized,packagedwaterandwastewatertreatmentsolutionsforcustomersacrosstheindustrial,commercialandmunicipalsectors
15
CriticalSuccessFactor:GrowingGrossMargin
IncreasingGrossMargin
LargeProject
SmartPackagedPlant
ProprietarySmartPackaged
Plant
ProprietaryProduct
$100MAfricaProject(MoUsigned)
NIROBOX™ SmartPackagedMABR
SUBREExample:
16
WhySmartPackagedPlantsWin:CaseStudy
“SouthAfrica’sfirstmobiledesalinationplant”GlobalWaterIntelligence
Deployin1/3ofthetime,at37%lowercost,capturesmorevalue
TypicalCustomDesalinationPlant
û Longtimetocomplete(18+mos)û Highcapexû Fixedsite,hardtoupgrade
FluenceDesalinationPlant
ü One-thirdofconstructiontimeü Capex=37%lessü Easytoupgradeasrequiredü Easytorelocate– mobileü Lowerenergyuse
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SmartPackagedNIROBOX™ PlantsDeliverWaterFast
• NIROBOX™ isafieldprovensolutionthataddressesthemidmarket
• Shortertime-to-water theidealsolutionfordroughtstrickenareas
• Lower InitialCapEx
• Modular andScalable approachthatcansuitanysiterequirements,enablingfastdelivery,integration,commissioningandoperation.
Thegrowingdemandforpotablewaterduetoclimatechangerequirefastdeploymentofrobust,reliable
waterdesalinationsolutions
Large,tailormadedesalinationplantsrequirelongdevelopment
time- environmental,site,interconnectionandfinancing
AdvancedTechnology:o Highavailabilityo LowerOpEx costso Onlinemonitoringforimprovedefficiency
NIROBOX™ Familyofpre-engineeredwatertreatmentsolutions,fullyassembledinastandard40ftcontainer,readyforrapiddeploymentandoperation
NIROBOXSW NIROBOXBW NIROBOXFW
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SmartPackagedPlantsdriveRapidSalesGrowth
*projected
Projected2xyear-on-year
growth
NiroboxSmartPackagedPlant
• Containerizedmobiledesalinationplantforeasydeploymentglobally
• Winscontractsbysavingenergy,cost,timetodeployment
• Highergrossmargins• Introducedin2015withimmediatemarketadoption
2
10
25
40
2015 2016 2017 2018
Nirobox™SalesRamp
UnitsSold
*
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SmartPackagedMABRPlantsEnableFastestPathToRevenue
MABRSmartPackagedPlant
• Containerized,mobile,lowenergydistributedwastewaterplant• ThekeytocapturealargeportionofthevastChinesemarket• Captures2xrevenue,40%highergrossmarginversussellingonlyMABR• Locallymadeplants=fastertimetorevenue• Introducedin2017targetingChinaandglobalmarkets
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SUBRE(SubmergedMABR)OpensLargeNewMarket
SUBRE
• SubmergedMABRupgradescentralizedplantcapacity,efficiencyandcompliancewithoutchemicals
• AverageFluence revenues$4.5M/plant,thousandsofplantsneedupgrading
• Highmargins• Firstfull-scaleSUBREcontractsecured
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Proven IndustrialWaste-to-EnergySolutions
Onsiteproductionofenergyreduceselectricityandgasconsumption
High-quality,treatedeffluentsmeetthemoststringentrequirements
Reductionofsludgevolumebyupto90%,significantlyreduceslandfillwaste
Outputcanbeusedasafertilizer
Reducesgreenhouse-gasemissions
Dominantinlocalmarketsectors,100%reliable,lowoperationandmaintenancerequirements
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CompellingGLOBALPosition=DiversifiedRevenue
Product Market CompetitiveAdvantage ProofPoints
Smart PackagedMABR
Decentralizedwastewater:$9.1Bin2021+$15BinChina
Upto90%lessenergy, halvesOpEx,fasttimetomarket
PlantsinUSVI(USEPAcertified), 5inChina,1inEthiopia,2inIsrael
SUBRE Thousands of plants,$2B+/year
Avoidstoxicchemicals,bigenergy saving,improvesnitrogenremoval
Full-scalefieldtestingandfirstcontractnow- low-risk,asbasedonprovenMABRtechnology
SmartPackagedPlant– Purification(Nirobox,Ecobox)
Decentralizedwaterplants:$4.4Bin2021Solves emergencies
Deployin6months,versus18-24monthsLowerCapEx,OpEx,footprintMobile
PlantsgloballyincludingAfrica,LatinAmerica,Cyprus
Waste-to-Energy Industrialmarket$8.4Bin2021
Provenexpertise anddominantinlocalmarket
DominantinItalian sectorsDealwithtopinternationalprocessors
Large EPCProjects Multi-billion market Globalplayer,activein70countries
Africanproject($100M+),MexicanBOT,Cyprus,Colombia
BOT/RecurringRevenue
Waterandwastewatertreatment
Ownsourceoffinancing; expertatmanagingrisk
SanQuintin,$44MCapEx +30year O&M
Sources:MarketsandMarketsAnalysis,GlobalWaterIntelligence,companyestimates
23
CompanyProductsSatisfyGlobalGeographies
Geography FluenceTrackRecord NextSteps
China
Newentrant: 9ruralwastewatertreatmentpartners
5workingplants(Wuxicompleted)Firstcommercialordersshipping
RampMABR winsSellSUBREforeasyplantupgradeWaterpurificationanddesalination
Waste-to-energyRiverremediation
NorthAmerica Pioneerinpackagedwastewatertreatment(TiptonPWWTP,asRWLWater) Migrate toMABRandSUBREsales
LatinAmerica
Dominantproviderofwaterpurification toCocaCola
RecycleOil&GasproducedwaterDesalinationandwaste-to-energyinstallations
AddMABRandSUBREsalesContinuetorampwaste-to-energy
Africa&MiddleEast Desalinationandwaterpurification plants Keep rampingNiroboxsales
AddMABR,SUBRE
Europe Leading waste-to-energyplayer AddMABR,SUBREinEU;globalizewaste-to-energysuccess
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Guidance:MetricstoTrackSuccess
• $95Mentering2018ofwhich$75Manticipatedin2018BacklogAtJan1,2018
• $105- 115M(~2x2017)Revenuefor2018
• $22- 25MGrossmarginfor2018
• IncreasingBOTprojectsviaoff-balancesheetfinanceRecurringrevenue
• SUBREfirstcontractsuccess,generalintrobyQ22018Newproducts
• Stilltargetingatleastoneprofitablequarterin2019Profitability
25
KEY CONTACTS
RichardIrvingExecutiveChairman
+14083829790rirving@fluencecorp.com
HenryCharrabéManagingDirector&CEO
+12125723766hcharrabe@fluencecorp.com
KeyContacts
GaryDvorchakTheBlueshirt Group
+13232405796+8613810791480
gary@blueshirtgroup.com
RonnBechlerMarketEye
+61400009774Ronn.Bechler@marketeye.com.au
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Disclaimer
This presentation has been prepared by Fluence Corporation Limited (ASX: FLC). All currencies quoted as “$” are US$ unless otherwise specified.
This presentation may contain forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of past and present economic and operatingconditions, and on a number of assumptions regarding future events and actions that, as at the date of this presentation, are expected to take place. Suchforward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other importantfactors many of which are beyond the control of the Company, its Directors and management. Although the Company believes that the expectations reflected inand the assumptions underlying the forward looking statements included in this presentation are reasonable, readers are cautioned not to place undue relianceon them, as the Company cannot give any assurance that the results, performance or achievements covered by the forward-looking statements will actuallyoccur.
This presentation should not be considered as an offer or invitation to subscribe for or purchase any shares in FLC or as an inducement to make an offer orinvitation to subscribe for or purchase any shares in FLC. No agreement to subscribe for securities in the FLC will be entered into on the basis of this presentationor any information, opinions or conclusions expressed in the course of this presentation. This presentation is not a prospectus, product disclosure document orother offering document under Australian law or under the law of any other jurisdiction. It has been prepared for information purposes only and does notconstitute an offer or invitation to apply for any securities, including in any jurisdiction where, or to any person to whom, such an offer or invitation would beunlawful.
To the maximum extent permitted by law, the Company and its professional advisors and their related bodies corporate, affiliates and each of their respectivedirectors, officers, management, employees, advisers and agents and any other person involved in the preparation of this presentation disclaim all liability andresponsibility (including without limitation and liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be sufferedthrough use of or reliance on anything contained in, or omitted from, this presentation. Neither the Company nor its advisors have any responsibility orobligation to update this presentation or inform the reader of any matter arising or coming to their notice after the date of this presentation document whichmay affect any matter referred to in the presentation. Readers should make their own independent assessment of the information and take their ownindependent professional advice in relation to the information and any proposed action to be taken on the basis of the information.
Appendix
28
CorporateOverview
CapitalStructureasat31January2018ASX:FLC
OrdinarySharesonIssue 415M
Optionsonissue 46M
SharePrice A$0.50
UndilutedMarketCapitalization A$208M
CurrentCash(31/12/2017) US$33M
Externaldebt(except non-recourseprojectdebt) <US$2M
Liquidity(avg.sharestradedperdayforlast12months)
570,559
BoardofDirectorsRichardIrving– ExecutiveChairmanHenryCharrabé– ManagingDirector&CEOPeterMarks– Non-ExecutiveDirectorRobertWale– Non-ExecutiveDirectorArnonGoldfarb– Non-ExecutiveDirectorRossHaghighat– Non-ExecutiveDirectorDr.RengarajanRamesh– Non-ExecutiveDirectorRossKennedy– BoardAdvisor&CompanySecretary
ExecutiveManagementTeamHenryCharrabé– ManagingDirector&CEOPhilippeLaval– ChiefOperatingOfficerRobertWowk– ChiefFinancialOfficerSpencerSmith – ChiefLegalOfficerRonenShechter– ChiefTechnologyOfficerIlanWilf– GlobalVPSalesYaronBar-Tal– GlobalVPProductDevelopment
TopHoldersASX:FLC Shares(M) %ofFLC
RSLInvestments 110.9 26.7
PondVentures 36.3 8.7
ESOPManagementTrust 24.8 6.0
PlanBVentures 20.0 4.8
CapitalGroup 14.8 3.6
Othertop20 99.4 23.9
Top20total 306.2 73.7
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LeadershipTeam
World-ClassBoard&Leadership
• FormerCEORWLWater
• FormerCOORWLWater
• 27yearsenvironmentaloperatingexperience
• 35yearstech/VCexperience
• US$3Bvaluecreated
HenryJ.CharrabéManagingDirector&CEO
PhilippeLavalCOO
BobWowkCFO
RonenSchechterCTO
• Co-FounderEmefcy
• 25yearsfinanceexperience
BoardofDirectors
RichardIrvingExecutiveChairman
• FormerCTOGEWater
RengarajanRameshNon-executiveDirector
• 30yearstech/VCexperience
• US$4Bvaluecreated
RossHaghighatNon-executiveDirector
HenryJ.CharrabéManagingDirector&CEO
• 30+yearscapitalmarketsexperience
PeterMarksNon-executiveDirector
• 30+yearswaterindustryexperience
RobertWaleNon-executiveDirector
• 30+yearsindustrialexperience
ArnonGoldfarbNon-executiveDirector
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HowMABRWorks
3.Blood(withoxygen)flowsout
1.Airbreathedin
2.Oxygendissolvednaturallyintobloodthroughlungmaterial
MABR- InspiredbyNature
1.Airpassesthrough
2.Oxygendissolvesnaturallyintowastewaterthroughmembrane
3.Wastewaterpicksupoxygentodigestwaste
O2
Semi-permeablemembrane
Biofilm
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