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www.sttenvirocorp.comTHE NUTS AND BOLTS OF GREEN
Corporate Presentation
March 2014
sttenvirocorp.com
TSX.V:STT
Corporate PresentationApril 2014
THE NUTS AND BOLTS OF GREEN
www.sttenvirocorp.comTHE NUTS AND BOLTS OF GREEN
Forward looking Statement
This presentation may contain forward-looking statements thatreflect current views, including the company’sobjectives, projections, outlook, estimates, expectations orpredictions, and contain forward-looking information with respect tofuture events.
STT Enviro Corp. cautions that such information involves risk anduncertainty and that actual results could differ materially from thosecontained in them. In addition, certain material factors andassumptions were applied in drawing the conclusions or making theforecasts or projections contained in them which are subject tochange.
Additional information about the material factors that could causethe results to differ materially, and the material factors orassumptions that were applied, are contained in STT Enviro Corp’spress releases, current financial statements and MD&A for the year-ended 2013 and 2012, all of which are available on SEDAR.
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The Company’s three primary areas of business are:
Systems: providing engineering support, project management and installation of bulk
material/chemical handling systems for neutralization of pollutants;
Tanks: Supplying bolted steel tanks and glass fused to steel tanks for liquid storage
projects; and
Solutions: The sale of parts and aftermarket services to our customers to assist them
in maintaining their systems and increasing overall efficiency.
Helping our clients clean up their world
The company assists its clients in subscribing to the highest environmental
standards by offering quality products, reliability and cost effective solutions.
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Company Milestones
There was a Problem (2009) High debt, economic downturn
Company was too highly leveraged due to heavy acquisition
program when financial markets corrected
Began sale of non-core businesses to pay down debt after onset of
financial crisis
The Solution (2011)Corporate restructuring, new
management
New management
Refinancing through debt to equity conversion and $2.5 convertible
debenture
Doubling of 2010 revenue to $26.4M
Ramped up staff by 70%
The Result (2012-2013)Strong financial position, higher
margins, new growth opportunities
Created the Solutions Group, a high margin new business
Substantially improved profitability; EBITDA over $2 M
Closed financing with BDC & set up banking arrangement with RBC
Changed corporate name to STT Enviro Corp
Expanded tanks business in oil sands
Closed additional financing with BDC to refinance convertible debenture
obligation maturing Q1 2014
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The Result: Strong revenue growth and
increased margins due to product mix
change Capital StructureTicker Symbol TSX-V: STT Shares outstanding * 36,190,533 Market Capitalization ~$5.4M 52 Week Hi/Lo 0.15/0.04
Revenue Gross Margins
CN
D$
00
0s
EBITDA Net Income (excluding special recovery or write offs)
CN
D$
00
0s
CN
D$
00
0s
-$2.3 M
19%22%
24%26%
0%
5%
10%
15%
20%
25%
30%
FY 2010 FY 2011 FY 2012 FY 2013
-$1.5M
$2.1M
$2.5M $2.7M
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
FY 2010 FY 2011 FY 2012 FY 2013
$13.2M
$26.5M$29.2 $28.4M
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
FY 2010 FY 2011 FY 2012 FY 2013
$853
$953$1.0M
0
200
400
600
800
1000
1200
FY 2010 FY 2011 FY 2012 FY 2013
*Total shares outstanding following the maturity of the final tranche of the convertible debenture on April 25th
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Learning to do well in tough markets…
2010 2011 2012 2013 2014F
STT
Semco
2010 2011 2012 2013 2014F
2010 2011 2012 2013 2014F
Systems
TanksSolutions
The Company built new revenue streams to reduce the impact of the slowdown in
resource development. When commodities recover it is positioned for significant growth.
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The Result: big progress in debt reduction
$5.9M
$6.0M $6.3M
$4.4M
$3.4M
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Mar-10 Mar-11 Mar-12 Mar-13 Mar - 14F
Long-term portion of term debt
Current portion of term debt
CN
D$
00
0s
By April
2014 the
company’
s total
debt has
been
reduced
to $2.8 M
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BUT: A 3 year lid on the share price due
to Convertible Debt Conversion Price
The refinancing deal which was closed in April 2011 put a lid
on the stock price despite improved corporate performance
and better balance sheet.
Resolution of share float of
36 M shares outstanding
5x EBITDA Share Price Multiple
-0.35
-0.25
-0.15
-0.05
0.05
0.15
0.25
0.35
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Share Price
54 M Shares Outstanding
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Potential Share Price Valuation
As of April 1st, 2014, STT share float of 36,000,000 is now known and a
proper share price valuation can take place: the market can decide.
36 million shares 36 million shares
Before April 2014
The dillution possible if
everyone had exercised
their option STT Enviro Corp STT Enviro Corp
Multiple 2.5 4 5 6
2013 2013 2013 2013
Revenue $28,500,000 $28,500,000 $28,500,000 $28,500,000
EBITDA $2,650,000 $2,650,000 $2,650,000 $2,650,000
Ent Value $6,625,000 $10,600,000 $13,250,000 $15,900,000
Debt $2,800,000 $2,800,000 $2,800,000 $2,800,000
Net Value $3,825,000 $7,800,000 $10,450,000 $13,100,000
Shares 26,000,000 52,000,000 36,000,000 36,000,000
$/Share $0.15 $0.15 $0.29 $0.36
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Valuation Comps
Environmental Service Companies with higher than 15% EBITDA margin
EBITDA Margin EDITDA Multiple
Waste Management 24.40% 8.8
Waste Connection 33.40% 11.2
Covanta 25.40% 10.7
Environmental Service Companies with lower than 15% EBITDA margin
Veolia 9.50% 6.1
Renewable Energy Group 12.60% 2
URS Corp 7.40% 6.2
As of Jan 24, 2014
Valuation parameters we found on major public companies were as follows:
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ISO 9001:2008 Certified:
Quality Products, Quality Clients
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Systems: Specialized in Water Treatment in
Resource Recovery & Air Emissions Clean-
up
Oil Sands Tailing Ponds
Flue Gas Desulfurization
Systems to clean up water in existing tailings
ponds
SO2 elimination from stack emissions in coal fired
flue gas
SAGD Oil Recovery
Mining Tailings
Fundamental to any development project
Lime systems for pH control
Acid mine drainage control
Steam Assisted Gravity Drainage (SAGD) is an
oil recovery technology requiring a steady source
of clean water. STT provides technology for
closed loop water system
System Markets:
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Systems
Our Competitive Advantage
ZMI Portec Slaker: Acquired ZMI
Technology, which is largely considered the
industry leader in lime slaking - small
footprint means it can sit inside the silo
Metso Vertimill: Partnership agreement with
Metso – record of reliability in mining
Over 1,000 systems installed
High Quality: Products are built with quality
materials and components – ISO 9001
certified
Optimization expertise
Broad capability: from “Engineer Procure
Contract” status to just what’s required for the
job
Cost effective solutions: modular systems
from historical knowledge and data
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Tanks: Economically competitive &
environmentally responsible
Up to 30% savings with our bolted steel tanks compared to field-welded tanks
BOLTED TANKS offer factory-manufactured sheets - no harsh fumes or chemicals are
released into the environment during the coating and construction process
Over 1,000 tanks and silos installed to date
No heavy machinery or equipment is required during construction
Through a distribution agreement for western Canada with CST
Industries, our Tanks group sells CST’s bolted tanks and provides related
engineering support, drawings, capacity charts, specifications, life-cycle
analysis and construction services for liquid storage projects.
We have identified an application which would allow us to enter a new market
which holds the potential to triple or quadruple tanks sales over the next three
years
Currently reviewing the technical obstacles surrounding this application and
feasibility of it coming to fruition
Our Competitive Advantage
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Solutions – the input data of the company
The Solutions group focuses on aftermarket and lifecycle support for our
customers
56% of maintenance outages in plants are unplanned, our services addresses this
costly challenge for operators in an economical way
Strong growth in this division has also resulted in R & D opportunities
Applied Care Program
The Applied Care program helps to prolong
system life and increase its overall efficiency. The
program offers one year and two year contracts.
Mechanical Audit & System Review
A Study to review mechanical issues for process
inefficiency. We have found significant savings for
clients through this review.
Parts & Service
STT Enviro Corp Solutions is a leader in parts and
service supply for dry bulk storage, lime slaker
products and pneumatic transfer systems and has
seen a dramatic increase in Parts Sales since the
launch of our Solutions business.
System Retrofits & Upgrades
Improving client relations by developing a retrofit
instead of scrapping the system in order to
increase capacity or deal with fatigued equipment.
STT Solutions Product Offerings:
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Research and Development: Staying
ahead of the competition
The research and development work we do is important for maintaining and strengthening
our role as an industry leader.
We are continually challenging ourselves to make product improvements and find new
ways to positively impact our clients by further reducing their environmental impact.
Our R&D programs are focused on finding cost savings for our clients while reducing the
carbon footprint
Project: Mapping of lime slaking
reactivity both in field and in the lab.
Potential: Product design
differentiation which could lead to
significant reduction in chemical use
for clients.
Project: Development of new Vertimill
feed and classification designs for
optimizing lime use.
Potential: Major retrofit opportunity
as well as new product differentiation.
Some of our R&D Projects:
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The Four Pillars of our Success
Proven success of new management
2013 revenue of $28.5 M, an increase of 115% since 2010
Increased gross margins to 27%, up 42% in four years
Expected to reduce debt by over 60% by mid-2014
R&D programs to develop our proprietary technology
On-going review of potential acquisitions and strategic partnerships that offer accretive growth
An ethical investment: helping our clients reduce their environmental footprint and improve their health and safety standards
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Contact Us
Investor Relations
David Deacon, CEO
Tel: +1 905-693-9301
Email: ddeacon@sttenvirocorp.com
Holly Hendershot, Director of Corporate Affairs
Tel: +1 905-875-5584
Email: hhendershot@sttenvirocorp.com
Corporate Offices
Milton, Ontario
Tel: +1 905-693-9301
Richmond, British Columbia
Tel: +1 604-271-6441
www.STTEnviroCorp.com
www.sttenvirocorp.comTHE NUTS AND BOLTS OF GREEN
Management
DAVID DEACONChief Executive Officer
Mr. Deacon became President and Chief Executive Officer of STT Enviro Corp in March 2011. He has broad experience in entrepreneurial management, marketing, sales and finance. From 2007 to February 2011, he was founder, Chairman and CEO of Group DKG Corp., a private company involved in the production of industrial fibreglass. Prior to that, David had a career which included running Porsche Canada, taking the Canadian market from the 13th largest in the world to sixth largest and along the way creating the Rothmans Porsche racing series. His first nine years in business were spent in the brokerage industry: four as an institutional analyst and five as vice-president of retail sales.
JOHN WILBY, CA Chief Financial Officer
John Wilby joined the Company in July 2007. He has over 20 years’ of senior financial experience, including ten years as CFO of SorocTechnology Inc. and five years with Moneysworth & Best Shoe Repair Inc. in financial and operational roles. He obtained his designation as a Chartered Accountant in 1988 and holds a Bachelor of Commerce degree from Queen’s University.
CALIN SARBAN, M. Eng P.Eng VP of Operations
H. FRASER BRINGELAND, B.CommVP of Business Development
ALI ABBAS, M. Eng P.Eng Director of Aftermarket Sales and Service
Calin Sarban joined the Company in January 2013 as Director of Operations. He is responsible for the Company’s project execution team, and oversees the project management, engineering and design, application, quality assurance , procurement and construction functions in the Company. A Mechanical Engineer and Project Manager with a Masters’ degree in Mechanical Engineering, Calin has 22 years’ experience in strategy development, project management, manufacturing, technical sales, planning and purchasing.
Fraser Bringeland joined the Company in July, 2007 as Sales Representative. Fraser has over 25 years’ experience in sales and marketing roles, including 11 years spent with Metso Minerals, a large mining industry supplier. He left Metso in 2007 to join STT and lead its efforts in selling complex systems to mining industry customers. Fraser holds a Bachelor of Commerce degree from the University of British Columbia.
Ali Abbas joined the Company in November, 2008 as Project Engineer, and led the enhancement of the Company’s then-recently acquired line of ZMI Portec lime slaking products. A seasoned water/wastewater engineer, Ali now leads the Company’s Solutions divisions, which provides process expertise and after-market parts and services to industrial customers across North America. Prior to joining the Company, Ali spent 13 years working in technical and sales roles with leading suppliers of water treatment technology in Canada and the United States.
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Board of Directors
DAVID DEACONChief Executive Officer Mr. Deacon became President and Chief Executive Officer of STT Enviro Corp in March 2011. He has broad experience in entrepreneurial management, marketing, sales and finance. From 2007 to February 2011, he was founder, Chairman and CEO of Group DKG Corp., a private company involved in the production of industrial fibreglass. Prior to that, David had a career which included running Porsche Canada, taking the Canadian market from the 13th largest in the world to sixth largest and along the way creating the Rothmans Porsche racing series. His first nine years in business were spent in the brokerage industry: four as an institutional analyst and five as vice-president of retail sales.
PHILIP JAMIESONDirector
DAVID W. SNOWDEN Independent Director
PETER F. CLARKIndependent Director
Originally from the United Kingdom, Mr. Jamieson qualified as an Accountant in November 1982 and is a member of the U.K. Association of International Accountants. He had a successful career in financial management in the U.K. until 1989. His experience included Group Accountant in the manufacturing industry, Financial Director in the retail motor trade and International Accountant for Granada Group. In 1989, Philip moved to Canada to become Chief Financial Officer for Granada Canada Ltd. Following a strategic decision by the U.K. parent of Granada Group to sell Granada Canada Ltd., Philip headed up the team that successfully raised $77 million to acquire it. Philip was appointed President, CEO and CFO of Granada Canada and successfully ran it from 1991 to 1997. In 2006, he joined STT and served as Chairman and CEO until March 2011.
Mr. Snowden joined the Company’s board of directors on January 15, 2010. He is a Chartered Accountant and has managed his own practice since 1978, providing financial and tax planning services to individuals and corporations. For over twenty years, he lectured at the University of Toronto in the Commerce and Finance program. He has also served as a director of an international packaging company for over 25 years, and continues to assist that company with general business and international tax planning advice. Mr. Snowden holds a Bachelor of Commerce degree from the University of Toronto.
Mr. Clark joined the Company’s board of directors on August 15, 2012. He was President and CEO of Clark Shoes from 1969 to 1988 and President and CEO of CPI Plastics Group from 1989 to 2009. Peter has served on numerous public and private boards, including Just Energy, and also served for 15 years as Chairman of the Metropolitan Toronto Licensing Commission.
ROBERT J. TWEEDYChairman and Independent Director
Mr. Tweedy is Chairman of STT Enviro Corp and a director of Aurcana Corporation (TSX-V) and Dundee Real Estate Investment Trust (TSX). Robert is also an advisor to MaRS, an organization which supports the creation and growth of Canadian companies with innovative technology. Robert started his career as a consultant with McKinsey & Co. Inc. in Toronto, Cleveland and Paris, France and, while in Europe, he worked as an Executive of Holderbank Financier Ltd., Zurich, Switzerland. He returned to Canada to become President of Dufferin Concrete Products Group, Toronto. From 1977 to 1980, he was President and Regional Coordinator, Bata Shoe Company From 1980 to 1989, he was President and CEO of PCL Industries Ltd., Toronto and then, was Chairman and CEO of Sklar Peppler Furniture Corporation.