Fluence Corporation

AU: FLC

AU$180m market cap

AU$0.34 last close

Fluence is a global supplier of water and wastewater treatment solutions. Its decentralised products provide municipal customers with ‘plug and play’ solutions that are both quicker to deploy and substantially cheaper than traditional alternatives.

Investment summary

An impressive Q4 (73% y-o-y organic revenue growth) saw Fluence deliver on its FY18 target. Demand for its higher margin smart product solution (SPS) remains strong with revenues expected to ‘at least’ double y-o-y in FY19. Its target of EBITDA breakeven by Q419 is reaffirmed and we expect our profit forecasts will be largely unchanged by these results. With $38m of net cash and growing evidence of execution, we believe investors can now focus on the long-term growth story.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2016A 0.8 (8.8) (9.1) (4.27) N/A N/A
2017A 33.2 (23.6) (21.7) (7.00) N/A N/A
2018E 105.6 (17.5) (19.1) (4.04) N/A N/A
2019E 149.1 (1.8) (3.7) (0.70) N/A N/A
Last updated on 18/02/2019
Industry outlook

Fluence’s ‘plug and play’ solutions can cost-effectively boost the performance of existing centralised treatment plants and address unserved, greenfield rural populations. Aspiral and SUBRE are based on a proprietary technology (MABR) that offers both superior treatment and lower energy costs. We see rising government spending on rural wastewater treatment in China as a particularly large opportunity.

Last updated on 18/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net cash (US$m) 37.9
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.5) (13.0) (34.3)
Relative* (12.8) (17.9) (36.1)
52-week high/low A$0.5/A$0.3
*% relative to local index
Key management
Henry Charrabe CEO
Richard Irving Executive Chairman