TSXV:HEO
Corporate & Investors PresentationH2O Innovation
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August 2019Presented by :
Frédéric Dugré, CEO & President
TSXV:HEO
Our Business Pillars and Business Lines
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1. Water & Wastewater
Projects, and Services2. Specialty Products
3. Operation &
Maintenance
W, WW, WR
Systems
Digital
Solutions
Couplings &
Filter Housings
Specialty
Chemicals
Operation &
Maintenance
Maple farming
equipement
Aftermarket
Services
Business Highlights
• Water Treatment Solutions Provider :
• Focus on small to mid-size municipal market in North America
• Strong expertise in membrane filtration, notably for Water Reuse
• Multiple proprietary filtration-related products
• Strong O&M business based
• Multiple references in the energy sector
• Growing experience in DB and DBO projects
• Business model promotes customer’s retention
• Multiple synergies among 3 complementary business pillars
• Export Specialty Products in > 40 countries through distributors and EPCs
• > 675 employees
• Consolidated sales backlog (Projects + O&M) : ≈ 140.0 M
• > 75% of the revenues are recurrent by nature
• Completed 12 acquisitions
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H2O’s OFFICESHead Office: Québec, QC, CAN
Manufacturing Plants: Ham-Nord, QC, CAN
Champlin, MN, USA
Vista, CA USA
Engineering & Sales Offices: Burlington, ON, CAN
Calgary, AB, CAN
Bilbao, SP, EUR
Other (franchises, stores): Swanton, VT, USA
Saint-Louis-du-Ha!-Ha!, QC, CAN
H2O Mexico, Cancùn, MEX
Operations & Maintenance: Gulfport, MS, USA
Claremont, NH, USA
Las Vegas, NV, USA
Forsyth, GA, USA
Kananaskis, AB, CAN
Spring, TX, USA
Totalling
675
employees
in North
America &
Spain
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Revenues, Business Mix and Adjusted EBITDA
In CAD million $
5
0.0 $
1.0 $
2.0 $
3.0 $
4.0 $
5.0 $
6.0 $
7.0 $
8.0 $
9.0 $
10.0 $
0.0 $
20.0 $
40.0 $
60.0 $
80.0 $
100.0 $
120.0 $
140.0 $
Projects SP&S O&M Adj EBITDA
Reven
ues
EB
ITD
A
Unique Growth Platform (+750 systems
installed)
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Unique Value-Proposition
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Water & Wastewater
Projects, and Services
Specialty Products
Operation & Maintenance
Our Strategy Water
Utilities
Maximize customers’ retention by
serving Water Utilities through an
integrated approach and in-depth water
and membrane expertise.
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1st Business PillarWater & Wastewater Treatment Projects, and Services
• > 750 systems installed
• Strong membrane expertise
• Feed the aftermarket sales with
recurring consumables
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1st Business Pillar – ProjectsWater & Wastewater Treatment Projects, and Services
Montevina, (CA)
Drinking Water
(30.0 MGD)
Data Center, (OR)
Process & Water Reuse
(1.7 MGD)
Decatur, (AR)
Wastewater
(4.6 MGD)
Sherman, (TX)
Drinking Water
(5.0 MGD)
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36%
64%
Q3 - FY2019
Industrial
Municipal
27%
73%
Q3 - FY2018
38%
62%
Q3 - FY2019
Wastewater
Water
23%
77%
Q3 - FY2018
1st Business Pillar - Backlog DiversificationWater & Wastewater Projects, and Aftermarket
Decatur, AK• 4.6 MGD
• Municipal
Wastewater
WaterHub, VA• 1.2 MGD
• Industrial
Wastewater,
Water Reuse
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North American BWRO & SWRO Desalination Forecast
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2nd Business PillarSpecialty Products
25 Piedmont Distributors
25 PWT Distributors
50 Maple Distributors
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2nd Business PillarSpecialty Products (all manufactured in USA)
Products
Membrane Pretreatment
• Coagulants & Flocculants
• Scale Inhibitors
• Antifoulant
Membrane Cleaners
• Lavasol
• OptiClean
• Biocides
Membrane Preservation
• Preservol
Services
• On-site & off-site membrane cleaning
• Water Analysis
• Membrane Autopsy
• Etc.
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2nd Business PillarSpecialty Products
Product Lines
Couplings
FRP Filter Housings
Self-Cleaning Screen Filters
Self-Cleaning Disc Filters
Complementary Products
2013 2015 2016 2017 2018
Evolution of Piedmont’s Product Offering
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2014 2019
Piedmont’s
acquisition by H2O
Innovation
Launch of new FRP
cartridge filter
housingsLaunch of new disc
and self-cleaning
filters
Since it’s Acquisition by H2O Innovation
Creating value by:
• Growing product offering
• Leveraging sales network
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Global Desal Market Forecast CapEx & OpEx
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CapEx >24 million m3/d
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3rd Business Pillar - ContractsOperation & Maintenance (O&M)
Services
Water & Wastewater Operation & Maintenance
Billing & Collection Services
Additional Services
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3rd Business PillarOperation & Maintenance (O&M)
As of today:
• 82 Contracts
• 11 States | 2 Provinces
• 135 Water Systems
• 44 Wastewater Facilities
• 435 Employees
Q3-FY2019Activity per Business Pillar
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$9.8 M
$40.2 M
$55.0 M
Q3-FY2019
3-month Revenues LTM Revenues
Backlog
$7.8 M
$23.3 M
Q3-FY2019
3-month Revenues LTM Revenues
$9.1 M
$35.7 M
$68.1 M
Q3-FY2019
3-month Revenues LTM Revenues
Backlog
Our Business Model Promotes Synergies and Customer Retention
Example: Partnership with Sustainable Water
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Synergies in this project:
• $3.2 M Capital Equipment
Project➢ flexMBRTM Technology;
➢ RO system;
➢ IntelogxTM smart
software.
• $50 k / year (for 5 years) of
specialty products and
consumables;
• $3.3 M for 5 years of O&M.
• 5 other similar projects in the backlog;
• More than 40 opportunities.
Corporate InformationTSX Venture : HEO / OTCQX : HEOFF
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Board of Directors :
Lisa Henthorne, ChairmanCTO Water Standard, Former IDA Chairman
Frédéric Dugré, President & CEOMechanical Engineer, Founder
Richard Hoel, DirectorLawyer, Founding partner of Winthrop & Weinstine
Stephen A Davis, DirectorManaging Partner, Ventry Industries LLC
René Vachon, DirectorFormer CFO of Miranda Technologies
Pierre Côté, DirectorFormer CTO of Zenon / GE
Robert Comeau, DirectorFormer CFO of Lumen Pulse
Shares outstanding : 55,889,000
2.5 million of options
Officers & Directors: 10% (on a fully diluted basis)
Institutional: 60% (IQ: 18% /BDC: 13% / CDPQ: 11%)
Officers :
Frédéric Dugré, President & CEO
Marc Blanchet, CFO
Guillaume Clairet, COO
Management :
Greg Madden, V.P. – Aftermarket & Digital Solutions
Denis Guibert, V.P. – Engineering & Projects
Rock Gaulin, V.P. – Manufacturing & Operations
Bill Douglass, V.P. – Operation & Maintenance
Advisors to the Board :
Elisa M. SperanzaFormer Senior VP and Corporate Director, CH2M Hill OMI
Leonard GrazianoFormer President and CEO, Severn Trent Services, Inc.
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H2O InnovationUnique smart water player
Headquarters
330 rue St-Vallier Est, suite 340
Quebec City, QC
G1K 9C5 Canada
1-418-688-0170
www.h2oinnovation.com