corporate presentation - stt enviro corp€¢this presentation may contain forward-looking...
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TSX.V:STTsttenvirocorp.com
CORPORATE PRESENTATION
January 2015
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TSX.V: STT
FORWARD LOOKING STATEMENT
• This presentation may contain forward-looking statements that reflect current views, including the company’s objectives, projections, outlook, estimates, expectations or predictions, and contain forward-looking information with respect to future events.
• STT Enviro Corp. cautions that such information involves risk and uncertainty and that actual results could differ materially from those contained in them. In addition, certain material factors and assumptions were applied in drawing the conclusions or making the forecasts or projections contained in them which are subject to change.
• Additional information about the material factors that could cause the results to differ materially, and the material factors or assumptions that were applied, are contained in STT Enviro Corp’s press releases, current financial statements and MD&A for interim 2014 and the year-ended 2013, all of which are available on SEDAR.
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OUR FORMULA FOR SUCCESS
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Environmental Options (at) Less Cost = Profits
E@( )=$2$
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STT ENVIRO CORPTwo Areas of Business
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Environmental systems to neutralize pollutants (usually acid water) created in the ore recovery or oil recovery process.
Aftermarket services including optimization of chemical use for our clients to reduce costs and their carbon footprint.
Down part of market cycle – commodity cycle dependent
New business growing rapidly
STT SYSTEMS & SOLUTIONS STT TANKS & INDUSTRIAL
Bolted tanks with environmental advantages, especially for the oil sands.
Large opportunity identified and massive growth
Transload facilities for frac sand and other material handling.
New business launched in 2014
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THE HISTORY – A TURNAROUND STORYWith income growth and increased margins
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-$2,000
-$1,500
-$1,000
-$500
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
FY 2010 FY 2011 FY 2012 FY 2013
-$1.5M
$2.1M
$2.5M $2.7M
0%
5%
10%
15%
20%
25%
30%
FY 2010 FY 2011 FY 2012 FY 2013
19%
22%24%
26%
$0
$200
$400
$600
$800
$1,000
$1,200
FY 2010 FY 2011 FY 2012 FY 2013
$853$953
$1.0M
EBITDANET INCOMEGROSS MARGINS
-$2.3 M
SHARE STRUCTURE
Shares outstanding Fully Diluted Market Capitalization 52 Week Hi/Low36,190,523 40,290,523 ~$6.0 M 0.32/0.10
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$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14
Current portion of debt
Long-term portion of debt
SIGNIFICANT DEBT REDUCTIONDebt reduced to $2.8 M + cash reserves of $3.8 M = net positive cash position
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SALES & REVENUE BY DIVISION Revenue and sales correlation year-to-year
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$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
1 2 3 4 5 6 7 8 9 10
Tanks
Solutions
Systems
2010 Sales
2011 Revenue
2011 Sales
2012 Revenue
2012Sales
2013Revenue
2013Sales
2014FRevenue
2014FSales
2015FRevenue
2016FRevenue
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STT SYSTEMS & SOLUTIONS Chemical Makedown Systems
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Environmental systems to neutralize pollutants (usually acid water) created in the ore recovery (in mining) and oil recovery.
• Cost effective modular designs
• Installed over 1,000 systems
• Own proprietary ZMI Portec Slaker technology (oil & gas)
• Exclusive agreement with Metso for Vertimill Slaker (mining leader)
Our scope of work usually includes the entire process:• Truck Unloading • Chemical Storage• Flow Promotion/Feeding• Makedown (wetting/mixing)• Distribution • Instrumentation & Controls.
OUR COMPETITIVE ADVANTAGE
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Lifecycle support for systems customers. Supply system retrofits, components, optimization and service to improve the efficiency of systems.
STT SYSTEMS & SOLUTIONSThe “data-in” for the Systems Group
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• System Optimization: reducing the amount of chemical usage by up to 40%
• Reduce customer cost
• Reduce customer carbon footprint
• Recurring revenue through our Applied Care program
• Patent pending Vertimill design
• Lime slaking reactivity mapping Cost competitive system with chemical optimization = lower cost and reduced carbon
footprint.
OUR COMPETITIVE ADVANTAGE
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STT TANKS & INDUSTRIAL BOLTED STORAGE TANKS
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E@($ )=$2
Environmental improvement @ reduced cost = customer value
• Bolted is 25-30% cheaper
• Construction time is 25 to 50% less
• Coatings last 2-4x longer
• No site - hot work, scaffolding, cranes, paint
• Reduced environmental footprint
• Safer work and fewer workers
OUR COMPETITIVE ADVANTAGE
Tanks group sells bolted storage tanks for municipal, industrial and oil and gas applications. Major new oil sands opportunity in upgraders and SAGD facilities.
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INNOVATION IN THE OIL SANDS - CAPP COMMERCIAL STT was recognized by Canadian Association of Petroleum Producers
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https://www.youtube.com/watch?v=joq97oQANzM
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OPPORTUNITY FOR TRANSFORMATIONAL BUSINESS CHANGE Income diversification with many of the same clients
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The right strategic timing for acquisition offers:
• Corporate scale• Accretive growth• Increased organic growth potential• Business synergies; and • Diversification of revenue stream
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• Organic Growth - Low oil prices are making our bolted tanks a “must consider” technology in the oil business since they are 25% cheaper than field welded tanks. Major sales growth was achieved in 2014.
• Growth by Acquisition - We have a net positive cash position which allows us to contemplate highly accretive acquisitions at a time when there is likely to be some distressed selling.
• Margin Growth - Our highest margin business (Solutions), has grown by over 125% in four years and we continue to focus on expanding opportunities in this area.
• R&D Differentiation - In December we announced an LOI to acquire a proprietary composite pipe product which is part of our continued effort to deliver quality products with an environmental benefit at a lower cost. Internal R&D work is complete in another area with patent pending.
POISED FOR SIGNIFICANT GROWTHOur growth drivers
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STT ENVIRO CORP Investment Highlights
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•Proven success of management
• Projected 2015 revenue up over 250% since 2010
• Increased gross margins to 26%, up 37% in four years
• Reduced debt by over 60%
•Backlog has been rebuilt on growth in new sectors and business is set to continue growth
•Both continued organic growth and targeted acquisitions will provide accretive growth and shareholder upside as well as revenue diversification
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Contact Us
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Investor Relations
David Deacon, CEO
Tel: +1 905-693-9301
Email: [email protected]
Holly Hendershot, Director of Corporate Affairs
Tel: +1 905-875-5584
Email: [email protected]
Corporate Offices
Milton, OntarioTel: +1 905-693-9301
Richmond, British ColumbiaTel: +1 604-271-6441