SCC Small Cap Conference

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1 SCC Small Cap Conference August 31 th September 1 st 2015 Lutz Bungeroth ItN Water Filtration is a brand of

2 Disclaimer Future-oriented Statements This information contains statements about the future that are based on current suppositions and estimates by the management of ItN Nanovation AG. Future-oriented statements are indicated by the use of words such as expect, intend, plan, foresee, assume, believe, estimate and similar expressions. These statements are not to be understood as guarantees that these expectations will prove to be correct. The future development and results actually achieved by ItN Nanovation and its affiliated companies depend on a number of risks and uncertain factors, and may therefore deviate considerably from the future-oriented statements. Many of these factors lie outside ItN Nanovation s sphere of influence and cannot be predicted accurately, e.g. the future economic climate and the behavior of competitors and other market participants. No plans are in place to update these future-oriented statements; neither does ItN assume any particular obligation to do so. 2

3 The company ItN 3

4 Investment highlights ItN Nanovation AG ( ItN ) has a clear focus on water filtration ItN is the technology leader in ceramic flat membranes for water filtration with about 50 patents in this technology ItN s Ceramic Flat Membranes are offering the newest technology with little competition ItN Water Filtration is already focused on groundwater and sewage water treatment With ItN has a powerful application for Radium and Arsenic removal in ground water ItN has got several big orders for groundwater from Saudi-Arabia Sales is expected to rise strongly within the next years ItN is building up a new segment seawater filtration within the next years 4

5 Company key facts ItN Nanovation AG ( ItN ), headquartered in Saarbrucken, Germany, is the technology leader in ceramic membranes for water filtration The membranes are used for drinking water and wastewater treatment with most deployment so far being in the filtration of ground and surface water for dinking water treatment Core know-how are the nano-coating and process application for water treatment ItN s membrane for deep groundwater filtration was picked as the technology of choice by the Saudi Arabian Ministry of Water & Electricity due to significantly longer lifetime and impressive results regarding the removal of challenging substances In addition, to its strong track record in Saudi Arabia, ItN has demonstrated the superiority of its filtration systems in projects in the USA and Germany ItN demonstrated in numerous projects that its membranes clearly outperform other solutions (e.g. sand and polymer filters) in terms of filtration performance, flux rate, robustness, lifetime and cost CeraNovis GmbH, ItN s German subsidiary, is specialized in nanobased technical coatings for various industrial applications 5

6 Economic and ecological timeline Company milestones Awarded five further projects in Saudi Arabia worth USD 15 million in 2013 and 2014 ItN receives largest order in history of 6.6 Mio.-USD Prequalified for projects worth USD 150 million (thereof USD 25 million qualified) to be delivered over the next 30 months Product/ technology milestones Enhancing existing ground-water treatment plant in Buraydah (SA) increasing capacity by 100% and recovery rate to 99.6% at very low operating cost Sewage treatment plant in Germany using the most advanced ceramic flat membrane technology resulting in an extremely pure effluent ItN invents new adsorption technology for Ra + As- Removal Development process technology seawater filtration First excellent laboratory test results for the new seawater desalination technology 6

7 The management board Lutz Bungeroth Chief Executive Officer Lutz Bungeroth, born in 1960, has been a member of ItN's board since He holds a degree in mechanical engineering and is familiar with the industrial sector. In the past decades he has led and restructured several SME companies, securing their market success. He is used to acting on an international level and to addressing diverse markets. 7

8 Concern structure Name ItN Nanovation AG CeraNovis GmbH Founded Place of business Saarbruecken, Germany Saarbruecken, Germany Number of employees 30 (10 scientists / engineers) 16 (6 scientists / engineers) IPO 2006 (ISIN: DE000A0JL461) General Standard 2009 Patents 18 families/ 69 applications/ 47 granted 13 families/ 46 applications/ 19 granted 8

9 Technology and Products 9

10 Our technology 35 Membranes Permeate Permeate Membrane surface Filter active layer Membrane body 10 µm permeate channel feed 10

11 Advantages of ItN s Ceramic Flat Membranes Latest technology, very few competitors Ideal combination of robustness of sand filters and filtration-quality of polymeric membranes, high resistance against chemical substances, pressure changes and temperature changes High flux rates Almost no chemical additives needed for pretreatment leads to low OPEX Low energy consumption; very small pressure difference Easy to clean with high pressure water backwash with/without citric acid Very high Log Removal Value of 4.7 (out of Bacteria only 1 is passing the membrane) Very little water consumption (Mass-Balance close to 100%) Very high availability and high capacity utilization through smart cleaning and backwash procedures 11

12 Advantages of ItN s Ceramic Flat Membranes in comparison to the traditional sand filter and polymer filter solution 3 5x Prolonged lifetime compared to other ultrafiltration solutions up to 2x more than 50% Higher flux rate Less chemical ingredients for cleaning 98% Capacity utilisation (based on 24/7) more than 50 % more than 50% + Lower labor cost for maintenance and operational process Lower energy consumption Higher heat, pressure and chemical tolerance on process fluctuations 12

13 Comparison with conventional solutions Performance: Quality of permeate 3 Ceramic Flat Membranes 1 Sand filters Traditional method for thousands of years Robust solution Holds back only solids to a certain extent and some organics making massive and expensive pretreatment with chemicals necessary (e.g. for bacteria elimination) Sand has to be regularly renewed and disposed as toxic waste 2 Polymer filters Around for about years High competition due to many players offering filters without distinction Good filtration performance, but low flux rate and robustness Frequent cleaning and use of chemicals reduces lifetime (only 3-4 years) Repairs barely feasible Cannot be used for higher temperatures (e.g. deep groundwater must be cooled down) Latest technology with little competition Strong filtration performance due to high resistance against chemical substances Low operation cost as a result of little use of chemical additives, low energy consumption and maintenance Superior resistance against pressure and temperature changes High flux rates and little water consumption Excellent availability and capacity utilization through smart cleaning and back-wash procedures as well as long lifetime Evolution The Ceramic Flat Membrane combines all advantages of sand filters and polymer filters respectively, i.e. the robustness of sand filters and filtration performance of polymer filters 13

14 Different realms of application Latest technology Sea water desalination Surface water Low operating cost Superior filtration ItN s Long lifetime Ground- water target markets Industrial wastewater Little use of chemicals Excellent robustness Drinking water Water reuse Municipal sewage High flux rates 14

15 Comprehensive product program Drinking Water Module T-Series HP-D Sewage Module T-Series HP-S Connected Filtration Towers Slim Fit Tank R Filtration Rack Connected Filtration Towers Project Size Small Medium CRO Filtration Container Slim Fit Tank C Single Filtration Towers MBCR Filtration Container Single Filtration Towers 15

16 Deep Groundwater 16

17 Application in deep ground water with sandfilters H 2 SRn aeration tower chlorination HMO (Hydrogenous Manganese Oxide) Cl 2 (perm) rapid mixer M MnO 2 (perm.) O 2 (perm) air blower Fe(OH) 3 adsorption tank Ra ads(hmo) inlet pump from well detention tank O 2 (clean) air blower sand filter to RO 17

18 Application in deep ground water - Ra-removal with H 2 SRn aeration tower chlorination (nano Hydrogenous Manganese Oxide) Cl 2 (perm) MnO 2 (clean) filtration pump to RO O 2 (perm) air blower Fe(OH) 3 CFM UF detention tank inlet pump from well air blower filtration tank sludge O 2 (clean) 18

19 Ground water projects in Saudi Arabia 1. Al Maghma 2. Al Quaiyah 3. Buraydah North 4. Buraydah Main 5. Al Hameima Retrofit 6. Al Hameima Newbuild 7. Al Tabouk 19

20 Bidding process in Saudi Arabia Preparation Bidding Ordering Execution 6-12 month 3-9 month 6-12 month month MoWE (local directorate) Consultant (to directorate) 1. epccontractor (local civil works) 2. epccontractor (local civil works) 3. epccontractor (local civil works) 4. epccontractor (local civil works) n th epccontractor (local civil works) electromechanics (global company) electromechanics (global company) electromechanics (global company) component sensors (global company) component controls (global company) component filters (global company) component pumps (global company) component pipes (global company) 20

21 Ground water projects in Saudi Arabia (appr. 330,- /m²) m m m m m 2 * according to project list dated March 27th,

22 Some of ItN s projects in Saudi Arabia Al Quaiyah Application: Deep ground water plant newbuild Location: Al Quaiyah in Riyadh region Installation: December 2015 Completion: November 2016 Client: Veolia Water Systems Riyadh Capacity: 30,000 m 3 /d Background: Local directorate modified specification from sandfilter to ceramic flat sheet membranes after excellent results of ItN field test at Buraydah. Veolia changed design to ItN ceramic flat sheet membranes in spite of own membrane company in house. Results: The residual TSS after the ceramic flat sheet membranes will be so low, that the reverse osmosis behind the ultrafiltration membranes works at much higher efficiency Incorporating ItN s new adsorption technology reduces Radium contamination significantly. Al Tabouk Application: Deep ground water plant newbuild Location: City of Tabouk in Al Tabouk-region Installation: November 2016 Completion: December 2018 Client: Wetico Water Technologies Riyadh Capacity: 150,000 m 3 /d Background: High iron concentration in water caused high cost for existing groundwater treatment plant due to use of softener system. Operator achieved cost reduction by forgoing softener which, however, had negative impact on plant capacity, recovery rates and reverse osmosis. Results: The implementation of ItN s ceramic flat membrane lead to excellent water quality (removal of iron and manganese) and max. recovery rates Excellent reverse osmosis feed quality and stable operation with minimum cleaning requirements. 22

23 Seawater filtration 23

24 Market data - seawater desalination Most desalination plants are gathered at shore lines in tropical and warm areas. The highest market share is gathered at the Arabian Peninsula. Desalination of seawater by evaporation is up to 5 times more expensive than using reverse osmosis instead 24

25 Seawater desalination in Saudi Arabia Water Supply in Saudi Arabia until 2050 Water use/ person in Saudi Arabia is 91 % higher than the international average. (source: SWCC) 70 % of the water use in Saudi Arabia is covered by seawater desalination plants. Saudi Arabia is the biggest producer of desalinated water in the world (4.6 Mio.- m 3 /d) The seawater desalination market is many times higher than the application in ground water Saudi Arabian s government actively pursues the development of water desalination capacities: ~25 Mrd.-US-$ investment ( ) The governmental National Water Company (NWC) intends to invest ~ 66 Mrd.-USD in new plants and improvement measures 25

26 Seawater desalination around the Arabian Gulf MSF (Multi-stage flash) ; MED (Multi effect dist.) and RO (reserve osmosis) seawater desalination plants in the Arabian Persian Gulf; m 3 /d Source: 2010 LATTEMANN 26

27 The old process with sandfilters Chlorination Acid Cl 2 (perm) Coagulant H 3 O + (perm) PAC (perm) rapid mixer M De-Chlorination (perm) rough screen coagulation tank coagulation flocculation to RO seawater intake pump from sea mixing tank filtration pump multimedia sandfilter 27

28 The new process with ceramic flat membranes flocculation ph-adjustment rough screen slow mixer M FeCl 3 (perm.) H 3 O + (perm) filtration pump to RO sedimentation Fe(OH) 3 O 2 (aeration) air blower flotation seawater intake pump from sea O 3 (perm.) air blower filtration tank sludge 28

29 Application in seawater process comparison Traditional process with sand filter M high consumption of different chemicals complex civil works lead to high CAPEX log removal value bacteria very low (< 1.5) low effluent quality with negative effect on RO sandfilter is robust but not easy to clean high energy consumption for high pressure pump of the multi media sandfilter complicated de-chlorination required to protect RO against damages sandfilter-housing mostly from steel is sensitive to corrosion CFM-process with ceramic membranes M Low consumption of two common chemicals Simple civil works with low CAPEX Log removal value bacteria high (> 4.5) Highest effluent quality boosts RO Robust as a sandfilter and easy to clean Low energy consumption for suction pump with only 100 mbar to 400 mbar No de-chlorination required as mechanical removal of bacteria Membranes and racks are made of ceramics and polymers -> no corrosion problem 29

30 Challenges at the seawater desalination Special challenges at seawater treatment are: High water temperatures High saltiness and a lot of biology Special task: Algy bloom season New rack-design in cooperation with 30

31 To Do s of ItN at the seawater desalination Laboratory tests Pilottest Fieldtest 3D-Design Projects sample testing Processdesign Mechanicaldesign Plantautomatisation tooling Software design production Hardware Layout 31

32 The market for ItN The market for deep ground water is a challenging but lucrative niche for ItN. The market for seawater is global and offers a huge potential Deep Ground water 25 mio-$ p.a. Seawater mio-$ p.a. 32

33 Financials 33

34 Business year 2014 in T Increase in turnover of 63 % Increase in foreign sales of 109 % Number of employees increased by 30 % (32 > 42) Temporary quality problems of the production lead to disproportionately cost of materials By change of supplier, quality problems solved Profit below planned figures caused by special factors 34

35 Forecast sales until 2016 (concern) in Mio Based on forecast: current project pipeline and final negotiations 1.3 Mio- turnover (after 1.6 Mio- in the previous year) and -1.9 Mio- EBITDA (after -2,5 Mio- in the previous year) in the first half 2015 Order receipt 2014/2015 until 15 Mio still red figures For the present: the project business will stay temporally volatile Turnover and operating profit of seawater desalination first since about

36 Capital structure Total number of shares Chart since Jul 2012 ISIN WKN Average number of shares traded monthly Designated Sponsor Market Segment DE000A0JL461 A0JL (Jul 2015) Oddo Seydler Bank AG General Standard (Regulated Market) Principal shareholders (ca.) Shareholder structure Institutional investors 25,5 % 23,9 % Fam. Stoll 49,5 % Nanostart AG 18,0 % Free Float 25,5 % Corporate private investors Free Float (incl. Management and staff) 50,6 % 36

37 Summary ItN has a proven technology for the filtration of groundwater and sewage water The new segment seawater desalination opens the access to a very big market ItN Technology advantage: low operating costs and superior filtration The orders for the ItN solutions are rising Turnover of ItN will rise the coming years; forecast for 2015 and 2016 together Mio- Sweet water and drinking water are rare in most parts of the world, demand will rise strongly Therefore the water solutions from ItN have a huge market potential 37

38 Thank you for your attention! Contact ItN Nanovation AG Untertuerkheimer Straße Saarbruecken Germany Tel.: +49 (0) Fax: +49 (0) ItN Water Filtration is a brand of

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