Hydrodec Group plc a unique renewable oil proposition Ian Smale, Chief Executive Chris Ellis, Chief Financial Officer
Precautionary Statement By attending the meeting where this presentation is made, or by reading the howsoever arising from any use of this document or its contents or otherwise arising in presentation slides, you agree to be bound by the following instructions. connection with this document. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may This information in this document has been prepared by Hydrodec Group plc change materially. Neither the Company nor any other person is under an obligation to (“Hydrodec” or the “Company”) solely for use at presentations to held in connection keep current the information contained in this document. with the proposed placing of ordinary shares in Hydrodec (the “Placing”) and is personal to the recipient. This document has not been approved by the UK Financial Services Authority or any other regulator. 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The securities this presentation should not engage in any behaviour in relation to qualifying of the Company have not been and will not be registered under the Securities Act or investments or related investments (as defined in the Financial Services and Markets with any securities regulatory authority of any state or other jurisdiction of the United Act 2000 (“FSMA”) and the Code of Market Conduct made pursuant to FSMA) which States, and may not be offered, sold, pledged or otherwise transferred directly or would or might amount to market abuse for the purposes of FSMA. indirectly in or into the United States, or to or for the account or benefit of any US person within the meaning of Regulation S (“Regulation S”) under the Securities Act, Peel Hunt LLP is acting for Hydrodec in connection with the proposed Placing and for no-one else and will not be responsible to anyone other than Hydrodec for providing except that the shares may be offered and sold: (a) in the United States to certain “qualified institutional buyers” as defined in, and in reliance on, Rule 144A under the the protections afforded to its clients nor for providing advice in relation to the proposed Securities Act who are “qualified purchasers” as defined in Section 2(a)(51) of the Placing or any other matter referred to herein. Peel Hunt LLP has not authorised the contents of any part of this document. United States Investment Company Act of 1940, as amended; and (b) outside the United States only in “offshore transactions” to persons that are not US persons as No representation or warranty, express or implied, is made as to, and no reliance defined in, and in reliance on, Regulation S. should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither the Company, nor any of the Company's advisers or representatives, including Peel Hunt LLP, shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss Hydrodec Group plc Slide 2
The basic proposition based in proven transformer oil re-refining with real potential for technology-led growth We produce new, renewable transformer & base oils as good or better quality than original oil Unique industry-leading clean-technology is proprietary, proven and efficient Two commercial operations in USA and Australia generate positive cash flow Eight consecutive years of revenue growth, now poised for expansion & positive EBITDA Planned build-out in US underpinned by feedstock from Strategic Partnership Technology development underway offering access to a step change in opportunity Newly acquired UK business creates platform for technology-led growth Hydrodec Group plc Slide 3
Transformer oil – global market opportunity a unique competitive technology to treat used and contaminated T-oil Global market 2012: 1.35bn litres, growing at estimated 5% cagr to 2017* Valued at US$1.6bn, growing at estimated 9% cagr to ENVIRONMENT 2017* Demand driven by ASPAC* Technology approved in US, Australia & Japan for treating PCB contaminated oil Rules of thumb: OECD: “75 % rule” – new oil displacing old oil** Sales price: ca. US$1.00/litre* SOURCES OF Direct from utilities: ca. 25% USED OIL ca. US$0.40-0.50/l Feedstock: Indirect channels in highly fragmented market Alternatives: incineration, fuel additives, regeneration, recycling 25% + Gross margin: 6.75m litres per Existing train – 4 in US**, capacity: Re-used as new transformer oil “ Virtual closed- loop” with utilities 1 in Australia USES OEMs: ca. 40% demand Base oil markets in inks, agriculture, mining & explosives *ICIS pricing **planned expansion to 10 trains in US > 99% as new oil, no waste COMPETITIVE Tests as better than new oil ADVANTAGE Single-step re-refining process Negligible emissions, ‘carbon neutral oil’ * Source: Markets and Markets: Transformer oil market, Global Industry Trends & Forecast to 2017 ** Source: Hydrodec estimates Hydrodec Group plc Slide 4
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