Half Yearly Report and Accounts

Key Metrics

Annual Recurring Revenue = $49.0m (+15.3% PCP)

Client sites = 391 (+16.0% PCP)

Statutory revenue = $26.8m (+13.8% PCP)

Gross profit = 48.4% (+16.6% PCP)

Adjusted EBITDA (loss) = $(2.0m) - Improved 44.9% PCP

Key Highlights

• Total revenue of $26,817k of which 80.5% is recurring, increased $3,252k (13.8%) over 1H FY21 (PCP) predominantly due to strong growth in project revenue in the America’s and strong Annual Recurring Revenue (ARR) sales over the prior 12 months converting into booked recurring revenue during the current reporting period.
• Gross profit (statutory) continues to improve with gross profit of 47.5%, showing steady growth from 44.0% in prior period and 40.6% in PCP.
• Operating expenses increased 7.0% over PCP as a result of investment in EVS Water, Product Development and transformation project costs including the transition from private data centres to AWS and a new ticketing system.
• Adjusted EBITDA loss of $1,964k represents a significant improvement over $3,562k loss in the PCP due to revenue growth. Adjusted EBITDA is lower than the prior period due to the additional operating expenses incurred in investing in EVS Water, Product Development and transformation project costs.

Strong ARR sales wins over the past 12 months in the America’s and EMEA have driven the increase in recurring revenue of $1,509k (7.5%) compared with PCP. Recurring revenues for the current reporting period were impacted by global supply issues causing delays in project implementations.

Revenue growth of $3,248k (13.8%) compared with the PCP included strong growth in non-recurring revenue (up 50.0% against PCP) mainly in the Americas within Omnis and Aviation. Revenues in Asia Pacific were lower in the current reporting period than in PCP, predominantly due to PCP including significant low margin non-recurring revenues in China that were not repeated in this current reporting period.

New Aviation sites won in the prior period drove an increase in Aviation recurring revenues of $1,085k against the PCP. Non-recurring Aviation revenue has also seen growth when compared to the PCP as the effects of COVID on the Aviation industry started to reduce and client project spend has started to increase

New Omnis sites won over the past 12 months have driven Omnis recurring revenues up $380k (6.6%) compared to the PCP, however the impact of these new sales wins was reduced due to supply chain issues impacting the delivery of instrumentation and associated revenue recognition. Non-recurring revenue in Omnis was significantly up on PCP (24.4%) due to material deals in the mining industry in South America.

While revenues from Water are minimal in the current reporting period, there have been significant new ARR sales wins during the current reporting period, with revenue expected to materially increase over the next 12 months.

EBITDA is a non-IRFS measure and is calculated by adding back depreciation, amortisation and interest from net loss before tax. Adjusted EBITDA also adds back share-based compensation expense, foreign currency gains and losses, and transaction and integration costs (which are seen as non-recurring) and excludes the impacts of adopting AASB 16, as the application of the standard results in operating expenses being excluded from EBITDA.

For the half-year ended 31 December 2021, the Group reported an Adjusted EBITDA loss of $1,964k, an improved result over the $3,562k loss incurred in the PCP due to strong revenue growth. Adjusted EBITDA was down on the prior period ended 30 June 2021 due to costs associated with investment in EVS Water, Product Development and transformation project costs.

Cash and Cash Equivalents increased by $6,074k during the current reporting period, predominantly due to a capital raise in December 2021 for $10,469k ($9,946k net of transaction costs) of additional equity to fund further expansion of EVS Water. The remaining decrease in cash related to:

• $1,562k from operating activities
• $1,087k cash used in the acquisition of intangible assets which relate to capitalised product development costs
• $800k in payments for Property, Plant and Equipment
• $423k other cashflows

Total cash used in operating activities when adding capitalised development costs and repayment of lease liabilities (“Adjusted Operating Cashflow”) was an outflow of $3,559k, this is down from $3,882k in the prior period and $5,064k in the PCP, showing consistent improvement in the cash management of the business.

The Group has a healthy balance sheet following the cash raised during the current financial period, the lack of debt on the balance sheet (other than lease liabilities) and the strong management of Adjusted EBITDA and operating cashflows during the period.

The Directors continue to monitor the impacts of the COVID-19 pandemic on group operations and respond appropriately to risks identified.

New Board appointments

EVS has appointed two new independent non-executive directors in Mr. Stuart Bland and Mr. Tim Ebbeck, effective from 1st March 2022.

Stuart Bland B.Ec., MAppFin, FCA, GAICD

Stuart has over 30 years broad commercial executive experience, primarily in global SaaS businesses undergoing high rates of growth. His industry experience includes technology (fintech, knowledge management), defence, sport, telecommunications, biotechnology and wine.

Stuart’s executive experience includes 14 years as Chief Financial Officer at Iress Ltd (ASX:IRE) and Chief Financial Offer roles at Melbourne IT Ltd and Panviva Pty Ltd.

Stuart is currently a member of the Advisory Board to Cablex Pty Ltd, as well as consulting to a number of other Boards.

Tim Ebbeck B.Ec., FCPA FILM, GAICD

Tim has over 30 years of board, executive, and advisory experience across a range of industries including technology, public sector, media, sport, professional services, energy and finance.

Tim’s executive experience includes roles as Chief Executive Officer at SAP (ANZ), Chief Executive of Oracle (ANZ), Chief Commercial Officer of SAP (APJ), Chief Commercial Officer of NBN Co, as well as Chief Financial Officer of Unisys South Pacific and TMP Worldwide.

Tim is presently Non-Executive Director of ReadyTech Ltd (RDY.ASX), XPON Technologies Ltd (XPN.ASX), and The Yield Technology Solutions. He is also a Board Member of the NSW Health Central Coast Local Health District.

Envirosuite, Chairman David Johnstone said,

“Stuart and Tim bring significant additional expertise and experience to the board with their respective and complementary backgrounds and I am very pleased to welcome them to the excellent group of people that we have across the Company.

The building out of the board complements the recently announced key executive appointments, as the directors and management continue to work closely together to capitalise on our many growth opportunities.” 

Follow up on my straw from yesterday, with EVS announcing this morning that they have raised $10.5m to accelerate the growth of EVS water. The capital will be used to invest into further growing the direct sales team, with a specific focus on the Optimiser and SeweX products. Additional product and technical roles will be utilised to support future developments. EVS are going to create further strategic partnerships to support implementation and success for this portfolio.

Envirosuite Chief Executive Officer, Jason Cooper, said: “This capital raising is about growth. The EVS Water business is on the cusp of a tremendous market opportunity as the benefits from our Environmental Intelligence technology platform are recognised more and more by Governments and corporates seeking to improve the well-being of their citizens and customers, and by key global industry service providers like GHD who recognise the benefits of our products. We are tooling up to meet that opportunity. That we have been able to raise capital in a highly sought-after Placement at a materially superior price than the previous tranche of growth funding is indicative of the trajectory of the business and investors’ appreciation of the opportunity that lies before us”.

Envirosuite raises A$10.5 million to accelerate EVS Water

• Placement attracted strong demand from both existing and new institutional investors
• Funding will be used to accelerate Envirosuite’s investment into growing sales in the high-margin EVS Water business to support accelerated incremental growth in the next 12 months
• The Placement raised ~ A$10.5 million at an Offer Price of A$0.20 per New Share

According to AFR, Envirosuite is raising $10.5 million from institutional investors to help expand its water treatment technology platform.

The offer is priced at 20 cents per share.

Details from EVS announcement:

Request for Trading Halt Envirosuite Limited (ASX:EVS)

(Envirosuite) requests a trading halt in respect of its ordinary shares pursuant to Listing Rule 17.1 with immediate effect.

For the purposes of Listing Rule 17.1, Envirosuite provides the following information:

1. The trading halt is requested as Envirosuite expects to make an announcement to the ASX in connection with a proposed capital raising by way of an institutional placement (Placement).
2. Envirosuite requests that the trading halt continues until the earlier of Envirosuite releasing an announcement in relation to the completion of the Placement, or the commencement of trading on 3 December 2021.
3. Envirosuite expects that the trading halt will be ended by Envirosuite making an announcement to the ASX in relation to completion of the Placement.
4. Envirosuite is not aware of any reason why the trading halt should not be granted, or of any other information available at this stage that is relevant to the trading halt. Should you require any further information, please do not hesitate to contact me.

On behalf of the Board of Envirosuite Limited

Leading environmental technology company Envirosuite Limited (ASX:EVS) (“Envirosuite” or “the Company”) is pleased to provide the investor presentation which the Company’s CEO, Jason Cooper, will use during the Bell Potter EnviroTalks, client-exclusive environmental technology conference, commencing at 10:30am AEDT.

Date: 17 November 2021

Time: 10:30am – 1:00pm AEDT

Investors wishing to join can register for the session at the following link: https://extraconnect.co/bell-potter-envirotalks/

For further information, please contact: investors@envirosuite.com or visit www.envirosuite.com

Authorised by: Rachel Ormiston General Counsel and Company Secretary

EVS and WA’s Water Corporation enter into SeweX proof of concept

@jwrostagno27 has covered most of this annoucement. I'd just like to add that is great to see EVS working with an Australian state government. As Jason Cooper said: "We believe that every major town in the world is a potential customer for SeweX and this is a step towards that vision." If EVS can show that SeweX works, then there is big upside with further agreements with other state governments down the track. 

A strong FY2021 full year results announced this morning. Total revenue increased 104% compared to last year, gross profit up 179% and the number of sites has grown from 329 to 373 (13.4% increase). All very positive numbers when dealing with the challenging times we find ourselves in.

I'd like to highligh this quote from CEO Jason Cooper:

"Globally, the growing importance of ESG, the advancement of the UN’s Sustainable Development Goals, and the recent US$1 trillion Biden infrastructure bill, all create strong tailwinds for Envirosuite in FY22 and beyond. The value and importance of environmental intelligence for the world is accelerating and the time for Envirosuite is now."

Highlights:

• Total revenue of $48.6m for FY21 of which 83% was recurring, more than doubling the revenue reported in the prior year
• Gross margin continued to improve with gross margin of 42.4% compared with 31.0% in prior year
• Operating expenses represented 66% of revenue compared with 107% in prior year
• Adjusted EBITDA loss of $4.5m with the Group generating a positive Adjusted EBITDA in the 4th quarter
• Total number of sites increased from 329 in FY20 to 373 in FY21, representing an increase of 13.4%
• Strong growth for EVS Omnis achieving 24% growth in ARR, while EVS Aviation remained resilient with a 2% growth in a challenging environment