NYSE American: LIQT Q2 2018

Transcription

1 NYSE American: LIQT Q2 2018

2 FORWARD LOOKING STATEMENTS This presentation contains "forward-looking statements". Although the forward-looking statements in this presentation reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward looking statements in order to reflect any event or circumstance that may arise after the date of this presentation. 2

3 COMPANY OVERVIEW LiqTech International, Inc. (NYSE MKT: LIQT) manufactures and sells ceramic silicon carbide membranes and systems for liquid and particulate filtration. The Company operates in: Marine Scrubber Market High growth market driven by the International Maritime Organization s (IMO) recent decision to implement a new lower cap on sulfur emissions from international shipping Analysts expect approximately 14,000 vessels (20%) to have scrubbers added by 2025 Legacy Filtration Markets Filtration of produced water, heavy metal removal, drinking water, and pool and spa water, as well as diesel particulate filters (DPFs) for the control of soot exhaust particles from diesel engines in trucks and buses. Balance Sheet and Pathway to Profitability to Support Growth Raised $6 million in April 2018 Expected to achieve operating profitability in revenue projected to be $16-$18 million, a 41% 59% YoY increase 3

4 SILICON CARBIDE OVERVIEW Silicon Carbide (SiC) is the second hardest material on earth (behind diamond) and provides very high durability. The material offers longer lifetime than any other material used for DPF and membranes. Given the robustness of the material, it also offers greater versatility. SiC benefits add value to customers in terms of: Reduced operating costs less energy is required, increased lifetime, reduced downtime for cleaning Installation costs reduced number of components, cost of footprint/weight and construction costs Unmatched robustness for demanding applications with reduced downtime Product portfolio: Microfiltration Ultrafiltration DPF High Durability The Benefits of SiC Longer Lifetime Greater Versatility Adds value to the customer in terms of Less energy required Reduced number of components Reduced operating costs Increased lifetime Reduced installation costs Reduced cost of footprint/weight Reduced downtime Reduced construction costs 4

5 THE SILICON CARBIDE DIFFERENCE SiC membranes are more energy efficient, temperature resistant, harder, more porous, and longer lasting MEMBRANE MATERIAL Type SiC Other Ceramic Polymer Cost of ownership Lifetime Flux Chemical Resistance Energy Savings Recovery Rate Fouling Tendency Relaxation Time None None Yes Temperature Resistance Hardness Porosity

6 LIQTECH ADDRESSABLE MARKETS NEW HIGH GROWTH SEGMENT LEGACY LONG TERM DEVELOPMENT SEGMENTS POOL WATER INDUSTRIAL MARITIME EMMISSIONS BUS TRUCK 6 6

7 MARITIME OPERATIONS 7

8 MARITIME OPPORTUNITY In 2016, the International Maritime Organization (IMO) decided to implement a new lower cap on sulfur emissions from international shipping, effective January 1 st, Available options for shipowners to comply with new IMO standards Scrubber New/Retrofit LNG New Build/Retrofit 0.1/0.5%S Fuel Oil Ship owner can continue to operate on Marine Heavy Fuel <2 years ROI Business case likely to improve due to limited capacity for low sulfur fuel Limited availability of LNG in harbors Business case only attractive for certain types of vessels Only a few suppliers can offer reliable supply Price gap between low sulfur and heavy fuel expected to increase after

9 SCRUBBER PROCESS 9 9

10 COMPETITIVE ADVANTAGE TO SCRUBBERS The current price gap between the higher sulfur fuel and lower sulfur fuel needed to satisfy the regulation is approximately 47%. Price gap is expected to widen as more demand shifts away from higher sulfur fuel to lower sulfur fuel. In total 3 million barrels per day (mbd) of High Sulphur Fuel Oil (HSFO) Bunkers will need to switch to 0.5%S fuel through blending with gasoil, plus improved logistics segregation. Higher production costs and increased use of gasoil in the 0.5%S blend may effectively drive up the fuel cost. At the same time, a lack of demand for HSFO will drive down its price. Source: Shell Oil 10 10

11 2-YEAR SCRUBBER BREAKEVEN TO DRIVE ADOPTION Scrubbers uptake expected to pick up starting in 2020 as the payback period on forward curve reaches a compelling 2 years threshold with widening diesel versus HSFO spreads. 1 Analysts predict a 20% uptake (14,000 vessels) in scrubbers by Scrubber Breakeven Period

12 LIQTECH EARLY MOVER ADVANTAGE In 2017, LiqTech systems were installed in approximately 45% of scrubber installations which included a filtration system. LiqTech systems have several advantages in terms of reduced foot-print, low maintenance, lower OpEx, better quality of discharged water and guarantee to meet discharge limits mandated by the IMO Scrubber Filtration Installations 1 Estimated 45% market share in ) LiqTech Company estimates LiqTech Centrifuge Technology 12 12

13 MULTI-BILLION MARITIME MARKET POTENTIAL Approximately 70,000 total vessels Analyst Project 20% to Install Scrubbers 14,000 vessels to have scrubbers installed $450,000 average cost of filtration system per vessel $6 to $7 Billion Revenue Opportunity for LiqTech 13 13

14 FRAMEWORK AGREEMENTS SIGNED LiqTech has signed framework agreements that will help drive adoption in the next 6-18 months. March 2018 Signed a framework agreement with one of the world's largest manufactures of marine scrubbers for more than 95 systems. April 2018: Signed a framework agreement with a large marine scrubber manufacturer for a minimum of 35 systems. April 2018/July 2018: Signed and later extended a Letter of Intent with one of the world's largest marine scrubber manufacturers

15 MARITIME GROWTH OPPORTUNITY SUMMARY 2018 is setting up to be a transformational year for LiqTech IMO regulations driving rapid adoption of marine scrubbers, to which LiqTech has early mover advantage with highly competitive product. $6 to $7 billion revenue opportunity over next 7 years based on analyst estimates with sustainable new build market into the future. Framework agreements in place with marine scrubber manufacturers to deliver 130 units over coming years. Sufficient balance sheet to meet growth demands due to efficient working capital structure with customers and suppliers. Newly released state-of-the-art Mark 6 system can be manufactured more efficiently than any the Company has developed in the past, allowing for further margin expansion in years to come

16 LEGACY OPERATIONS 16

17 LEGACY OPERATIONS INDUSTRIES POOL WATER INDUSTRIAL BUSES TRUCK CUSTOMERS CUSTOMERS This Photo by Unknown Author is licensed under CC BY-SA 17

18 LEGACY OPERATION OPPORTUNITIES LiqTech has been one of the key suppliers of SiC Diesel Particulate Filters to the automotive market Traditionally focused on retrofits of trucks and buses. In the past this market has been driven by mandates throughout the world and had growth opportunities due to subsidies and other trends. Other legacy filtration markets Stand-alone membrane filtration systems or complete turn-key of entire pool water treatment systems Drinking water treatment Ground water, surface water, desalination, reuse Oil & Gas, Wet Scrubber Condensate reuse, Wet Scrubber Marine Sox Reduction, and Heavy Metal Removal Mining. New market opportunities where the company is seeing growth Luxury yachts, off-road vehicles, and power generators. Expect revenues within our legacy operations to stabilize in

19 FINANCIALS 19

20 $ Millions REVENUE $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $15.8 $13.9 $11.4 $16 - $18 Estimated operating breakeven of $16 to $18 million Contribution margins for the Company s marine products are above 65% which will have a significant impact on the Company s gross profits and net profits as volumes increase. $ E 2018 Revenue Expectations as discussed on Q Conference Call 20 20

21 $ Millions INCOME (LOSS) FROM OPERATIONS Company is estimating operating breakeven to profitable in 2018 based on revenue of $16 to $18 million. $4.0 $2.0 $0.0 Breakeven to Profit ($2.0) ($4.0) ($3.4) ($6.0) ($5.8) ($4.6) ($8.0) E 1) 2016 excludes impairment write down 2) 2018 Revenue Expectations as discussed on Q Conference Call 21 21

22 BALANCE SHEET ($ in Millions) 6/30/18 Cash and cash equivalents $4.5 Total assets $14.1 Long-term debt $0.0 Total liabilities $3.5 Total shareholder's equity $10.6 Shares outstanding

23 MANAGEMENT Sune Mathiesen Group CEO Most recently CEO and majority owner of Provital Solutions A/S Broad experience in management and held several senior executive positions in listed companies Broad experience in sales and business development in global markets Claus Toftegaard Group CFO Most recently CFO of Gabriel Holding A/S, a publicly listed fabric company Previously served as CFO of RTX A/S, a publicly listed wireless company Financial Manager of Glenco A/S Mark Vernon Chairman Most recently CEO of Spirax-Sarco Engineering plc Broad experience in global markets, operational management and business development Currently serves as Chairman of LiqTech and as Senior Independent Director of Senior plc 23

24 MANUFACTURING SITES Ballerup, Denmark Headquarters Membrane manufacturing Diesel Particulate Filter (DPF) Production Hobro, Denmark Systems manufacturing Minneapolis, USA DPF manufacturing 24 24