Annual General Meeting 2014 - Home - Clearford · • Tim Hortons • NSF/ANSI certified • Target...
Transcript of Annual General Meeting 2014 - Home - Clearford · • Tim Hortons • NSF/ANSI certified • Target...
Annual General Meeting 2014
June 18, 2015
TSX-V:CLI
Certain statements in this presentation are forward‐looking statements, which reflect the current expectations of management regarding theCompany’s future operations. Forward‐looking statements consist of statements that are not purely historical, including any statementsstatements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertaintiesthat may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance canbe given that any of the events anticipated by the forward‐looking statements will occur or, if they do occur, what benefits the Companywill obtain from them. These forward‐looking statements reflect management’s current views and are based on certainexpectations,estimates and assumptions which may prove to be incorrect.
A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by theforward‐looking statements, including: (1) a downturn in general economic conditions, particularly in Ontario and our internationalmarkets (2) the inherent uncertainties associated with our customers procurement processes and time required to get the necessarygovernmental approvals required to install our system, (3) the risk that the Company does not execute its business plan, (4) an inability tofinance operations and growth (5) an inability to retain key management and employees, (6) an increase in the number of competitorswith larger resources, and (7) other factors beyond the Company’s control. Additional information about these and other assumptions,risks and uncertainties are set out in the “Risks and Uncertainties” section in the Company’s MD&A filed with Canadian securityregulators.
Clearford Water Systems Inc.515 Legget Drive, Suite 100
OTTAWA, Ontario K2K 3G4www.clearford.com
SAFE HARBOR
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Clearford Water Systems 2014: A Transformative Year
• Colombian Distribution Agreement with UV Pure – April 10• Clearford One™ Product Launched – April 29• Fetherston Mobile Home Park Contract Signed – April 30• Cayunda, Colombia Phase I Materially Complete – November 30• $100M Project Funding for Ontario Municipalities Agreed in
Principle – December 14• UV Pure Acquired – December 22
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1. Gentle mixing of solids & bacteria increases digestion & reduces sludge accumulation
2. Flow attenuator reduces peaks
3. Sealed pipe with no infiltration or exfiltration
Liquid flow requires 1/2 the slope of conventional sewer pipes
4. Membrane filter and bio reactor to complete digestion & removal of suspended solids & nutrients
Modular system sized by selecting size and number of modules
Clearford One™ announced April 2014 –40% Less Capital cost, 20% Less Operating cost
4
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Fetherston Mobile Home Park
• Clearford has entered into a 30 year agreement with Fetherston Mobile Park Association
• Build, own, operate water distribution & treatment, and wastewater collection & treatment
• Clearford wholly owned subsidiary Clearford Water Utility (Fetherston) will fund, install, and contract operations
• Located near Kemptvillein North Grenville, ON
• 41 residential units
• Existing infrastructure constructed in 1970
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• Koester will be the third party provider of a state of the art ClearRecover™ MBR treatment plant
• ClearRecover™ and potable treatment plan will include UV Pure Hallet Ultraviolet disinfection system
• Team Aquatic, a division of Koester, will be the site operator
Fetherston Mobile Home Park (cont.)
• Water and sanitation service to 41 lots initially
• Capable of expanding to a further 100 lots
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• Rural residential development of 115 houses• Project approval was based on:
• Retaining a large portion of the forest; • Achieving zero-discharge of wastewater from the site.
• Deliverables:• Clearford One™• Potable water plant & distribution network• Recycled water distribution network• Storm water and Fire suppression
Clearford One™ Cayunda Installation
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Secure $100M Project Funding for Ontario Municipalities
• Agreement principles set with Signina:• Full funding for Clearford One™ in Ontario
Municipalities• Up to $100M available to “A” rated municipalities• 20-30 year amortization period• Includes operation contract during amortization
period• System delivered to municipality in full working
order at end of amortization period at no charge
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• 90% of UV Pure with Crossfire Technologies acquired December 2014
• Profitable and growing > 5yrs positive cashflows• Will remain an independent subsidiary• Quality management team remain shareholders
• President & CEO – Rick VanSant• VP & Head of Operations – Karen Frick
UV Pure
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Crossfire Technology Disruptively Better
• Reflectors eliminate shadowing, 2.4 times more efficient by re-using energy
• Automatic mechanical self-cleaning (patented)
• Dual Smart Sensors (patented) monitor UV dose level, lamp intensity, net UV transmittance – guides troubleshooting
• Lamps mounted in air – no overheating, easy to change
•Effective in low UVT water and hard water – no pre-treatment necessary
• Single pass of water past one lamp length = significant shadowing and energy inefficient
• Quartz cleaning requires shutdown, manual scrubbing using acid
•Single sensor measures drop in UV intensity, but provides no diagnostic guidance
• Lamps in quartz tube inside water flow – overheat in low flow situations, difficult to change
• Requires expensive pre-treatment; requires high-UVT water
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UV Pure – A Proven Product
• Over 15,000 systems installed• Strong reference base
• Boeing (787 Dreamliner)• GE• Tim Hortons
• NSF/ANSI certified• Target market <1m gallons/day
• Municipal• Institutional• Commercial• Transportation• Residential Multiplexed systems for flows up to 1 million GPD
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Strong Financial Performance
• Revenue• 12 months to December 31, 2014 $2.8 million• Projected 2015 $3.3 million (18% growth)
• EBITDA• 7 months to December 31, 2014 $296k• Projected EBITDA 2015 $500k range
• 2 major co-branding deals to close mid 2015 that represent multiples of existing revenue are not included in this forecast
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UV Market Share Source: Global Water Intelligence April 2013: Global Water Market 2014, page 34, fig.1.56
Market Size, $ millions and Predicted Growth Rates
2011actual
% share
2013actual
% share CAGR2013-18
2018projected
% share
Chlorination $1,264.2 52% $1,342.1 52% 4.5% $1,693.8 49%
UV disinfection $847.0 35% $928.3 36% 7.5% $1,335.7 38%
Ozonation $222.0 9% $240.7 9% 6.5% $332.0 10%
Other $80.0 3% $87.1 3% 6.7% $121.8 3%
Total $2,413.2 $2,598.2 6.0% $3,483.4
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Clearford Water Systems 2015: Year to Date & Outlook
• $100M Project Funding for Ontario Municipalities announced – January 14• Pay for Performance (P4P™) delivery model launched – February 1• MOU signed with IIT Mumbai to provide CAMUS structured wetland as
ClearRecover option in India – Feb 10 • India “Toilets for Schools” product launch - April 15• Aquion co-branded H2Optimo with Crossfire® Technology to deliver UV
water purification to the Food & Hospitality Industry – May 25• First India contract signed with IL&FS – June 17
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Clearford One™ Pay-for-Performance
Enabled by Clearford’s$100m Fund
• No capital costs to the municipality
• Total private sector assumption of construction and operating risk
• Meets all MoE regulation and approval requirements
• Expected useful life of all in-ground components exceeds 90 years
For a Monthly Service Fee• Construction of a Clearford
One™ system tailored to your requirements
• Operations and maintenance over life of the long-term Services Agreement
• Guaranteed performance• No cost transfer of ownership
to municipality at end of term• Monthly Service Fee is a fixed
payment, per connection, subject only to inflation and flow adjustment
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• Clearford sells Clearford One™ to Special Purpose Corporation (SPC)
• SPC contracts with municipality• Clearford revenue $12,000-$13,000 per
connection• Contract with SPC for O&M 20-30 years• Annual operating revenue ≈ 2% of total system
capital cost
P4P™ Business Model
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• Agree on P4P™ services to one municipality• Present to other Ontario Municipalities• 1st Ontario P4P™ capex ~ $20 million
Marketing Plan - Ontario Municipalities
Feb-Apr
• Discussion
Apr 27
• Council Approval
June 12
• Issued RFEI
July 3
• Respond to RFEI
• Competitive bid or negotiate contract
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• Many municipalities in Ontario require wastewater collection & treatment infrastructure to grow
• 9.3M Ontarians live in 51 communities which have aging sanitation systems
• 2.5M Ontarians live in 393 small communities which either do not have communal sewage systems or have systems which require replacement
• 1.5M Ontarians live in rural areas
Potential for Clearford One™ in Ontario
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India Institute of Technology Mumbai CAMUS-(SBT)™
CAMUS-SBT™ Features• Low Maintenance
• Apart from small pumps there are no moving parts in plant
• High Aesthetics• The SBT unit is generally adorned with plants
to give it a garden like appearance
• Low Operating Cost• No machines apart from the process pump.• Operating power is minimum and operators
require minimal training to operate plant
• No Odor• CAMUS-SBT™ is completely odorless and
does not need to be sited far from living and working spaces
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• Toilets for schools identified as centre piece of Prime Minister Modi’s Swachh Bharat initiative
• A modified ClearfordOne™ system complete end-to-end solution
• ClearRecover™ Structured Wetland will be developed by IIT Mumbai
Clearford One™ Sanitation for Schools
• Modular design that allows for easy installation, scalability, and low maintenance
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• Over 620M Indians lack access to a toilet. Exposure to fecal matter kills 600,000 Indians each year
• Lack of toilets often puts women at risk of attack
India Sanitation Market
• Indian Prime Minister Narendra Modi has pledged:• Every school will have separate toilets for boys & girls by Oct. 2015 • By 2019 all Indians will have access to a toilet (12.5M new toilets)
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• First Clearford One™ project in India• IL&FS sponsored Corporate Social Responsibility (CSR) project • Intended as a prototype project with IL&FS to be replicated in
larger towns and urban slums
India - Jabudiyapura Village
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• Develop relationship with Infrastructure Leasing & Financial Services (IL&FS)• One of India's leading infrastructure
development and finance companies
• Corporate Social Responsibility (CSR)• Government of India mandates that
companies give 2% of their net profits to charitable causes
India
Founded 1986
Industry Infrastructure & Finance
Total Income
Rs. 15,330.72M (CAD $294.19M)
Net Profit Rs. 6,082.76M (CAD $116.73M)
Net Worth Rs. 38,668.64M(CAD $742.03M)
Total Assets Rs. 123,819.53M(CAD $2376.04M)
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• Deliver UV water purification to the Food & Hospitality industry
• Co-branded H2Optimo with Crossfire® technology for Aquion Inc. (Illinois)
• Marketed globally by Erie Water Treatment (division of Aquion)
• Made by UV Pure
UV Pure –
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• April 15, 2015 - MOU signed with LADWP to test and certify the Hallet 30 as NSF350 compliant
• NSF350 Standard establish design, construction & performance requirements for onsite residential and commercial water reuse treatment systems.
• The NSF 350 Standard has already been incorporated into the plumbing and public health codes of California
• Currently no greywater reuse system is NSF350 compliant for commercial use
UV Pure - California
Los Angeles Department of Water and Power
• Largest Municipal Water & Power Utility in US (666,000 water customers)
• State mandatory 20% water reduction
• Set goal of additional 20% water reduction
Annual General Meeting 2014
June 18, 2015