Investor Presentation For personal use only · SCIDEV Investor Presentation - March 2020 2 SciDev...

Investor Presentation

Virtual Q3 Roadshow Presentation

April 2020

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Next-generation technology for solids-liquid separation in mining, water and wastewater

SCIDEV Investor Presentation - March 2020 2

SciDev brings together world-class technology, chemistry, management and manufacturing capabilities to solve pressing operational and environmental issues for the minerals

processing, tailings, water treatment and Oil & Gas markets.

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SciDevsnapshot

SciDev engages with its customers to deliver bespoke solutions to their solid-liquid separation requirements.

Corporate overview

ASX code SDV

Market cap (at $0.50 per share) $71m

Shares on issue 141m

Cash at bank $3.9m*

Working capital facilities $8.8m

Major shareholders % held

Nuoer Group 7%

Board and Management 9%

Institutional 16%

Retail 68%

Leading Chinese chemical company. SciDev has exclusive marketing rights in Oceania and support globally for key target end users and industries

3Q FY20Net cash from

OperationsA$0.72m

Metrics3Q FY20 RevenueA$7.3m

3Q FY20 Cash receiptsA$5.75m

Inventoryat end 3Q FY20

A$3m

Offerings

ProfessionalServices

ProcessControl

BespokeChemistry

Industries

Mining Oil & Gas Construction Water treatment

*31 March 2020

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Financial highlights

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Financialhighlights

SciDev has a robust balance sheet, growing revenues, an ongoing focus business development & cost control.

• First cashflow positive quarter in March 2020 delivering A$0.7m

• Record quarterly sales to customers of A$7.8m

• A$4.8m of sales for the month of March

• First quarter of contribution from ProSol Australia and Ilukacontracts

• Cash at bank of A$3.9m

3Q FY20Revenue

A$7.3m

Cash at bankat end 3Q FY20

A$3.9m

3Q FY20 Net cash from Operations

A$0.72m

3Q FY20 Cash receipts

A$5.7m

Inventoryat end 3Q FY20

A$3m

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Sales perquarter ($m)

SciDev has a track record of growing revenues and has a well-structured pipeline of business development opportunities globally.

• SciDev has a track record of growing its sales as it executes on opportunities in its pipeline

• Management are focused on signing new contracts and pursuing business opportunities globally

$m Sep Q2018

Dec Q2018

Mar Q2019

Jun Q2019

Sep Q2019

Dec Q2019

Mar Q2020

Revenue 0.5 0.8 0.5 1.7 1.1 4.4 7.3

Cash Receipts 0.6 0.7 0.8 0.8 1.5 2.2 5.7

Net cash from operating activities

(0.5) (0.2) (0.6) (0.3) (0.7) (1.8) 0.7

Net Cash 0.5 0.3 1.4 1.7 4.8 3.1 3.1

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SciDev’s business

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SciDev: technology SciDev provides world-class coordinated technology and chemical solutions for solids-liquid separation.

• SciDev’s bespoke solutions and professional services deliver sustainable coagulant and flocculant dosage optimisation, reducing the associated costs and the elimination of poor performance

• SciDev generates revenue from professional services, its operating systems, and chemical sales

• Our technology can be utilised in a range of industries including mineral processing, tailings, water treatment, construction, dairy, and the oil & gas sectors

WaterMining ConstructionOil & Gas

OptiFlox® onlineanalyser

Hydration & Injection

Equipment

Flocculant Plant Equipment

Process Control OptiFlox® is a patent pending technology that continuously analyses & measures key parameters in industrial process streams. The technology supports our key chemistry MaxiFlox®

Flocculants Friction Reduction

Antiscalents Proppant Fluids

Defoamers Drilling Fluids

Rheology Modifiers

Dust Suppressants

CoagulantsEnhanced Oil

Recovery

Chemistry

Our range of proprietary chemicals & polymers deliver highly effective solutions to a range of industries

ProfessionalServices

Our workforce of highly skilled engineers and chemists engage with our customers to build bespoke solutions to their solid-liquid processing requirements

Process StudiesEquipment AuditingOperating Training

Flow Loop TestingPiloting Programs

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Professional services

SciDev engages with its customers to deliver bespoke solutions to their solid-liquid separation requirements.

SCIDEV Investor Presentation - March 2020

SciDev develops bespoke chemistry to meet the requirements of our customers. We do not sell off-the shelf-product.

Businessdevelopment targeting

Professional services development & tender

Trialpurchase order

Product &services review

Commercialcontract

SciDev identifies the root causes of our client's

problems.

SciDev develops bespoke chemistry to meet the requirements of our

customers

SciDev’s team of highly skilled engineers engage with our

customer to understand their requirements & specific

chemical challenges

Our clients review the operating parameters of the

trial and determine the future utilisation of our offering

Execution and optimisation of our solutions & chemistries for steady state operations.

SciDev provide ongoing support to our clients to continually improve the efficiency of the process

technology

SciDev’s solutions and chemistry are trialled onsite

with the support of our highly trained staff

3months

12-18months

6-12months

3-6months

9

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Flocculation

Brings together small often coagulated particles, 1/5th the size of a human hair using polymers which bridge between particles and bind them together

Flocculation is critical in wastewater, sewage, mineral processing, oil & gas, papermaking, water treatment, and several other industries

Flocculation allows for better environmental outcomes through increased water recovery and is also used in mineral processing, papermaking and oil & gas for production

Coagulation

Promotes the aggregation of particles 1/50th the size of a human hair by enhancing the attractive forces between them

Coagulation is used in mineral processing, oil & gas, papermaking, water treatment, and several industries

Coagulation is critical for the control of fine particles or pollutants. In wastewater and drinking water, coagulation allows the fine solids to be removed to make the water fit for consumption or discharge


Solids-liquids separation

SciDev focuses on solids-liquid separation which is an important component of chemical engineering & manufacturing.

• Many chemical processes require the separation of solids out of their liquid state

• Solid liquid separation can occur via many methods such as;

• Filtration

• Precipitation

• Centrifuging

• Chemical additives such as flocculants and coagulants

• SciDev technology focusses on the addition of flocculants and coagulants into liquids to drive the solid separation

What

Where

Why

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Business overview

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SDV’s strategic opportunity

SciDev technologies can be applied as a solution to a range of solid-liquid problems across multiple industries on a global basis.

• The global opportunity for SciDev’s products is significant

• The chemical industry has experienced a period of consolidation which has created large industry competitors that are focussed on centralised manufacturing with reduced service levels

• Our world-class technical staff and our bespoke solutions will allow SciDev to increase its penetration into this market

Competitor insights

Large industry competitors have consolidated and are now focused on centralised manufacturing with reduced service levels.

Oil & Gas market in USA $2bn

Global Mineral processing $2bn

Global Municipal water treatment $5bn

Global Industrial water treatment $1bn

Global markets Industry drivers

Clean water requirements

Metal demand

Environmental regulations

Sustainability

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Business development activities

SciDev has delivered several significant new business opportunities across a range of industries.

Aug 19

Awarded a 3 year contract with Iluka Resources for delivery of

MaxiFlox® chemistry to the Jacinth–Ambrosia mine. AUD$8-12m

contract over term

Strategic alliance with Nuoer Group of China – the world’s 2nd

largest producer of water-based polymer products

Feb 19

Oct 19

Acquired ProSol Australia Pty Ltd for AUD$1.9m, strengthening SDV’s position in the Hunter

Valley Coal fields

Strategic acquisition of Highland Fluid Technology for US$6m,

providing access to onshore USA oil and gas market

Jan 20

US$1.4m product order from Phoenix Process Equipment Company for use in tailings dewatering, slurry & sludge

separation

Feb 20

Mar 20

AUD $1m trial product order from Syncrude, one of Canada’s

largest oil sands companies. Product trial expected to last 2

weeks

SCIDEV Investor Presentation - March 2020

Jan 20

Trial Order for Maxiflox® chemistry from Las Bambas

copper mine in Peru. First order in large South American copper

industry

Mining and Minerals

Oil and gas

Construction

Strategic alliance

13

A$4.6m capital raising to provide working capital for

growing inventory requirements

Sep 19

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Highland acquisition SciDev’s strategic acquisition of Highland Fluid Technologies provides access to the sizeable USA onshore Oil & Gas market.

• Initial US$5m acquisition

• c.US$7.8m of revenue delivered in CY19

• Acquisition funded via the issue of 11.35m shares to the vendors at a price of $0.60/sh

• 50% of shares have nil escrow, 25% with 6-month escrow and 25% 12-month escrow

• US$1m additional cash payment if US$20m of revenue achieved in CY2020 at a specified margin

Immediate access The US onshore oil and gas market represents a potential US$2bn market in production & speciality chemicals

Margin upliftMargins are expected to improve through SciDev’s ability to introduce a low cost chemical supply chain via their own facilities and strategic relationship with Nuoer Group who are a substantial SciDev shareholder

USA baseThe Highland facilities in Houston will provide a base for SciDev in the USA to target opportunities in other sectors throughout the Americas

Accelerated growthSurety of quality supply from Nuoer and SciDev facilities will allow Highland to target larger value customers accelerating growth

Skilled staffHighland staff will remain with SciDev providing valuable knowledge especially in the water recycling component of the oil and gas sector

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Highland opportunity SciDev’s strategic acquisition of Highland Fluid Technologies provides access to the sizeable USA onshore Oil & Gas market.

• Strategic acquisition of Highland Fluid Technology provides access to the fluid recycling and water reuse markets in the US$2.5bn onshore USA oil & gas industry

• SciDev’s chemistries and services have been tested by Highland and its customers since mid year and have passed commercial trials – significantly de-risking the project

• Acquisition will provide a USA base for further North American business development opportunities

• Highland Fluid Technology management have a global network providing a segue into other large oil & gas markets

Customer target market

SciDev, via Highland will target, drillers, producers and service companies to provide chemistry, equipment and professional services to help in the re-use and recycling of water and reduce waste. Key customer targets include; Halliburton, Innospec & US Well Services

USA onshore oil & gas market Industry drivers

4 barrels of wastewater are generated by every 1 barrel of oil produced

Water scarcity and increasing regulations on waste-water quality driving a need to produce less waste and reuse more water

Specialty & production chemical market in US oil and Gas industry is estimated at US$2bn

Clean water requirements

Environmental regulations

Sustainability

The amount of water used in the US shale industry has risen 770% since 2011

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Syncrudeopportunity

SciDev’s trial order from Syncrude represents a significant new business development opportunity.

One of the largest operators in the Canadian oil sands industry

2.8 billion barrels of cumulative oil production

Over 85% of water used in bitumen extraction process is recycled from tailings settling basins

1.3 trillion litres of tailing volumes in Canada

Volumes up +70% in past 10 years

Estimated cost of rehabilitation C$260bn

Alberta Energy Regulator tightening regulation on the amount of fluids allowed to pass into tailings dams

Directive 85 sets out increased regulation for managing tailings in oil sand projects

Fluid tailings must be ready to reclaim within 10 years of closing an oil sands mine

Oil sands market Regulatory drivers

Syncrude

• The trial order received from Syncrude (ref ASX 3 March 2020) is a significant new business development opportunity

• Purchase order is for A$1m, representing approximately 2 weeks of chemistry requirements

• First step into an attractive & sizeable market

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Outlook

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The outlook


SciDev has a strong growth pipeline and is well positioned to deliver sustainable growth in solid-liquid separation.

Build upon the Company’s momentum in the Australian coal industry, transitioning across application, mineral types and key industry players with our OptiFlox® technology

Drive our revenue line through the execution of a well-structured business development pipeline in the mineral processing, oil & gas, construction and wastewater sectors

Extend our technology into the precious metal and base metal sectors throughout Australia and Asia, while looking for other opportunities in currently unrealised sections of the mineral processing value chain

Renew our effort in the Australian water and wastewater sector with strategic partnerships and licensing opportunities with global operators and key end users

Further develop the opportunities presented by Highland in the US oil & gas sector

Continue to strengthen and leverage our relationship with Nuoer through joint marketing and R&D efforts in key market areas

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Appendix

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SciDev: people


SciDev’s products are backed up with expert support from our technical personnel, with a combined experience of several decades in the field. We can determine the best chemistry for a particular application and assist customers in optimising dosing and performance on site.

BusinessDevelopment

Jamiel Muhor

Marketing & Strategy Director

Jeffrey Zhiang

COO

Dale Barron

Technical Director

Ben Gill

Executive Management Team

CEO & MD

Lewis Utting

Chairman Non-executive Director

Simone Watt Jon Gourlay

Non-executive Director

Heath Roberts

Company Secretary

Trevor Jones

President HFT

Kevin Smith

CFO

John Fehon

SCIDEV Board

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Nuoer Strategic partnership

Strategic partnership with Nuoer group delivers supply chain security & leverage.

In February 2019, SDV signed a binding Heads of Agreement (HOA) to acquire the exclusive distribution and marketing rights in Australia and Oceanic countries for polymer products produced by the China-based Nuoer Group

Through the HOA, Nuoer received 5 million shares in SDV which currently represents 7% of the company

Nuoer Group is the world’s second largest producer of water-soluble polymers with a manufacturing capacity exceeding 300kt per annum

Nuoer has a world class facility in Donying, China which operates under ISO 9001 and ISO 14001 quality and environmental systems

SDV has the ability to utilise Nuoer’s manufacturing capacity and supply chain to deliver products into SDV contracts outside Oceania

Our Nuoer relationship provides the ability to offer a competitive chemistry supply chain to complement our professional services solutions

As at March 2020, Nuoer factories are at operational capacity and SDV’s supply chain is not impacted by current market conditions relating to COVID-19

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This presentation has been prepared by SciDev Ltd (SciDev) based on information available to it as at the date of this presentation. The information is provided in summary form and does not contain all information necessary to make an investment decision. Hence, no representation is made as to the accuracy, completeness or reliability of the information.

In addition, neither SciDev nor any of its subsidiaries, directors, employees, shareholders nor any other person shall have liability whatsoever to any person for any loss, including without limitation from any fault or negligence arising from this presentation or any information supplied in connection with it. This presentation may contain forward-looking statements and projections. These reflect SciDev’s current expectations, based on what it believes to be reasonable assumptions.

SciDev gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or ASX listing rules, SciDev is not obliged to update this presentation after its release, even if matters change materially.

This presentation does not constitute financial advice. Further, this presentation is not and should not be construed as an offer to sell or a solicitation of an offer to buy SciDev securities and may not be relied upon in connection with any purchase of SciDev securities.


Important Information

DisclaimerF

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Contact

www.scidev.com.au

CEO & MDLewis Utting

Investor RelationsCraig Sainsbury

[email protected]

0428 550 499

Company SecretaryHeath Roberts

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