SCIDEV LTD — Investor Presentation 2020

Oct 14, 2020

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Investor Presentation

Q1 FY2021 Financial Results

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Making a difference to water

SciDev brings together world-class technology, chemistry, management and manufacturing capabilities to solve pressing operational and environmental issues for the Mining, Construction, Water treatment and Oil & Gas markets.

SCIDEV Investor Presentation – October 2020

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SciDev snapshot

	Corporate overview
	ASX code	SDV
	Market cap (at $0.72 per share)	$109m
	Shares on issue	152m
	Cash at bank	$5.6m1
	Working capital facility	$8.6m2
	Major shareholders2	% held
	Nuoer Group	6%
	Board and Management	8%
	Institutional	21%
	Retail	65%

Second largest global producer of key raw materials for SciDev’s chemistry range. SciDev has exclusive marketing rights in Oceania and support globally for key target end users and industries

• 1) 30 September 2020 2) Drawn $1.1m at 30 September 2021

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

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Offerings

Professional Engineering Bespoke Services Chemistry Industries Mining Oil & Gas Construction Water treatment

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Q1 FY2021 Revenue Gross Profit [3] Q1 FY2021
Metrics
Sales Growth 25% cash receipts
A$9.4m 127% Vs customers
vs PCP 17% in FY20 A$5.7m
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3) Unaudited

SCIDEV Investor Presentation - October 2020

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Financial highlights

SCIDEV Investor Presentation - October 2020 4

Q1 FY2021 Financial highlights

• Record quarterly sales of A$9.4m

• A$4.6m of sales recorded in the month of September

• Strong performance from Oil & Gas vertical delivering A$3m of revenue for the quarter

• 25% Gross Profit[3] for the quarter. Strong improvement from 17% in FY20

• Realising accounts payable ( A$3.7m v A$7.8m ) and accounts receivables ( A$5.9m v A$2.1m ) SDV was cashflow positive for the quarter

• A$0.5m unaudited Net Profit

3) Unaudited

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

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FY20 Q1 FY21
Revenue Revenue
$18m A$9.4m
17% Gross Profit 25% Gross Profit [3]
+755%
$9.4
Cash Receipts (A$m)
Revenue (A$m) $8.1
$7.3
$5.7 $5.5 $5.6
$4.4
+120% $2.2
$1.7
$1.5
$1.1
$0.6 $0.5 $0.7 $0.8 $0.8 $0.5 $0.8
1Q FY19 2Q FY19 3Q FY19 4Q FY19 1Q FY20 2Q FY20 3Q FY20 4Q FY20 1Q FY21
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Business Update

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SciDev: technology

• SciDev’s bespoke solutions and professional services deliver sustainable solutions reducing the associated costs and the elimination of poor performance

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

• Our solutions are utilised in a range of industries including mining , water treatment, construction and the oil & gas sectors

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

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Mining Oil & Gas Water Construction
Professional
Our workforce of highly
Services
skilled engineers and chemists Process Studies
engage with our customers to Equipment Auditing
build bespoke solutions to Operating Training
their solid-liquid processing
Piloting Programs Flow Loop Testing Piloting Programs
requirements
OptiFlox® online
Engineering
We combine inhouse analyser
engineering knowhow with our Flocculant Plant Injection Flocculant Plant
IP equipment and process Equipment Equipment Equipment
control solutions to support
TrueMud® Mixer
the applications of our
chemistries
CrossFlow Filtration
Flocculants Friction Reduction Flocculants
Chemistry
Enhanced Oil
Coagulants Coagulants
Our range of proprietary Recovery
MaxiFlox ®, xPAM, DrySLIK® Antiscalents Completion Fluids Antiscalents
and WetSLIK polymers deliver
Defoamers Drilling Fluids Defoamers
highly effective solutions to a
range of industries Rheology Modifiers
Dust Suppressants
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SCIDEV Investor Presentation - October 2020 7

SDV’s strategic opportunity

• The global opportunity for SciDev’s products is significant

• The chemical industry has experienced a period of consolidation , with suppliers removed from customers

• This has created large industry competitors that are not customer focussed , rather focussed on product manufacturing with reduced customer service levels

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

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

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Global markets Industry drivers
Oil & Gas market in USA $2bn Clean water requirements
Global Mineral processing $2bn Metal demand
Global Municipal water treatment $5bn Environmental regulations
Global Industrial water treatment $1bn Sustainability
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Competitor insights

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

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SCIDEV Investor Presentation - October 2020 8

Key Contract Wins

SciDev is developing a portfolio of blue-chip customers

Iluka : 3-year contract at Jacinth Ambrosia minerals sands

• SciDev’s solution based customer focussed approach with an excellent global team is the key growth driver

• SciDev is developing a portfolio of blue-chip customers in the mining, infrastructure and oil & gas sector

• The company is continuing to experience strong inbound enquiries from large multinational companies

• SciDev have several field qualifications underway in several sectors with key customers

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BHP : Trial works at Olympic Dam copper mine

OZ Minerals : Provision of chemistry for Prominent Hill copper mine

MMG : Trial at Las Bambas copper mine progressing

YanCoal : Ongoing activity withing Hunter Valley coal fields

Melbourne Metro : Provision of chemistry and professional services on Melbourne Metro Tunnel

Syncrude : Trial underway 2HCY20 at one of Canada’s larges oil sands producers

Shell : Secondment of HFT staff to Shell to provide product development support

Major Global E&P Company : Ongoing chemistry development initiatives

FloTek : Partnership to deliver friction reducing chemistries to major US E&P producer

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Highland Fluids Opportunity

• The onshore US oil sector is recovering from the June quarter

• Sales in September quarter A$3m following June quarter A$1m

• Activity levels are now normalizing , an expanded team Highland Fluid Technology ( HFT ) is capitalizing on its first mover advantage

• Shell R&D work with key HFT technical services team for Gas to Liquid ( GTL ) application development

• South Texas major E&P company for completion fluids and water treatment

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

USA onshore oil & gas market

Industry drivers

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

Clean water requirements

Environmental regulations

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

Sustainability

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

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

Customer target market

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

• Ongoing work with Flotek Industries to supply into several key projects

SCIDEV Investor Presentation - October 2020 10

Syncrude opportunity

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

• Order is for A$1m , representing approximately 2 weeks of chemistry supply for field qualification

• SciDev chemistry on plant in September with initial technical results promising

• Further commercial reviews post initial field qualification will take place in the remainder of FY21

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

Oil sands market

Regulatory drivers

1.3 trillion litres of tailing volumes in Canada

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

Volumes up +70% in past 10 years

Estimated cost of rehabilitation C$260bn

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

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Syncrude

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

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Nuoer Strategic partnership

• Nuoer Group is the world’s second largest producer of watersoluble 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

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

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

SciDev strengthened the relationship with Nuoer Group by entering a new joint venture (the new JV) to accelerate global growth initiatives (signed April 2020)

The new JV strengthens the relationship between the two parties and expands upon the original binding Heads of Agreement (Feb 2019)

The new JV provides a platform to accelerate global growth initiatives with specific focus on targeting Chinese State Owned Enterprises (SOE’s) operating around the globe. These entities would normally be off-limits to western companies

Under the terms of the new JV, the parties will bring core products and skill sets at agreed costs and attractive terms;

• Nuoer: the supply of chemistry backed by their existing production facilities and logistics network

• SciDev: Expert technical advice, marketing & sales, specialist staff and technology & relationship base

Stand-alone joint venture, which will not impact SDV’s own business development opportunities

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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.

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Ensure the health and safety of all SciDev staff in all regions

Continued focus on revenue growth and Cash conversion across all sectors and regions Progress commercial discussions post field validation of SciDev chemistry across several opportunities Capitalise on our position in the North American oil & gas sector with our best in class team Accelerate our efforts with technology partners in North America and Europe Building on the momentum in the construction sector locally & globally and progress outstanding projects

Continue to assess strategic growth opportunities globally in all sectors

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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.

SCIDEV Board

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Trevor Jones

Chairman

Lewis Utting

CEO & MD

Simone Watt

Non-executive Director

Jon Gourlay

Non-executive Director

Heath Roberts Company Secretary

Executive Management Team

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John Fehon

CFO

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Kevin Smith President HFT

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Jamiel Muhor Business Development

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Ben Gill

Jeffrey Zhiang Ben Gill Marketing & Strategy Technical Director Director

SCIDEV Investor Presentation - October 2020

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Disclaimer

Important Information

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.

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Contact

CEO & MD Lewis Utting

Company Secretary Heath Roberts

Investor Relations Craig Sainsbury craig.sainsbury@marketeye.com.au 0428 550 499

www.scidev.com.au