Fluence Corporation Limited (FLC) Earnings Call Transcript & Summary

Thank you for standing by and welcome to the Fluence Corporation AGM. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Paul Donnelly. Please go ahead.

Thank you. Good morning to our Australian shareholders, and good evening to our U.S. shareholders. The time is now 9:00 in Australia on the 4th of June. I would like to welcome all of you to the Fluence Corporation Limited 2020 Annual General Meeting of Shareholders. My name is Paul Donnelly, a Nonexecutive Director of the company, and I am speaking to you from the Melbourne-registered office of Fluence Corporation Limited. As I'm sure you will appreciate in these unusual circumstances, the format of the Annual General Meeting will be a little different this year, but we hope we'll still provide you with an opportunity to hear about the company's progress over the past year and ask questions. Under the company's constitution, the Chair of the meeting must be physically present at the specified venue for the meeting. Accordingly, I am the official Chair of today's meeting. However, Richard Irving, the company's Nonexecutive Chairman, is also in attendance, albeit by video conference, and Richard will take us through the agenda for today's meeting. Before handing over to Richard, we would like to show you a short video about our operations in China. Chester, could you please play the video? Thank you. [Presentation]

Thank you. I will now hand over to Richard.

Thank you, Paul, for your welcome. My name is Richard Irving, and I'm the Nonexecutive Chairman of Fluence, speaking to you from my home office in California. Unfortunately, I cannot join you face-to-face, but thanks to technology, I'm grateful that we can come together in this webcast. I'm pleased to advise that most of our Fluence Directors have joined us online, including Henry Charrabé, Managing Director and CEO; Ross Haghighat, Nonexecutive Director; Dr. Rengarajan Ramesh, Nonexecutive Director; and Paul Donnelly, Nonexecutive Director. We have an apology from Arnon Goldfarb, Nonexecutive Director, based in Israel, where it's the middle of the night. I'm also pleased to welcome Francesco Fragasso, Chief Financial Officer; Ross Kennedy, Company Secretary; David Garvey and Tim Fairclough from BDO, company auditors; Simon Davidson, Partner, Lander & Rogers, legal advisers. And we are very grateful to Phillip Hains and The CFO Solution for hosting today's webcast. Notice of this meeting has been sent to all shareholders. I shall take the notice of meeting as read. Voting details, including any voting exclusions, are set out in the notice of meeting. Given that we cannot hold a public meeting, all voting was required to be lodged by proxy and at least 48 hours prior to the commencement of this meeting. The Chair of this meeting, Paul Donnelly, has advised that he is voting any open votes he holds as proxy in favor of the resolutions. Ross Kennedy, our Company Secretary, has advised that a quorum is present, and so I declare the meeting open. Ladies and gentlemen, thank you for joining us today in these most unusual COVID-19-impacted circumstances. I wish you and your families the best of health. Thank you, too, to Henry and the executive team for taking all steps necessary to secure the continued health and safety of our workforce. I'll now give you a brief update on the progress we have achieved in 2019 and into this year, and then hand over to Henry, who will take us through the company's performance in greater detail before we discuss and present the resolutions. We then welcome your questions during this webcast submitted via the online question-and-answer tool. Fluence's main goals in 2019 were to continue to grow sales of higher-margin Smart Products Solutions, specifically in China, and to grow the recurring revenues. We finished the 2019 year with total contract backlog of USD 265 million, and we're pleased that SPS sales of USD 26.5 million exceeded our revised guidance, showing 21% growth over 2018. This is part of our core strategy to shift away from lower-margin Custom Engineered projects toward higher-margin SPS sales. We have come a long way in China in a short time, as you just saw on the video, and continue to win contracts with major clients such as Beijing China Rail and the Three Gorges Group as well as our 3 existing strategic partners. We're also glad to report that our teams in the factory in Changzhou and in the offices in Beijing and Shanghai are working effectively despite occasional government travel limitations due to COVID-19. Importantly, SPS sales require very little engineering support, enabling us to continue to reduce SG&A spending not only in percentage terms, but also in absolute dollars. In fact, SG&A has continued to significantly fall year-by-year since Fluence's merger in 2017, and we anticipate this to continue this year in 2020. Fluence's proprietary MABR technology enabling scalable, preengineered, quiet, low cost, low energy, rapidly deployed solutions has now become the leader in this emerging space with over 160 MABR plants active globally, multiple times our nearest competitor. We anticipate this number will continue to grow, in particular, thanks to the volume deployments by our China partners as well as other opportunities in the Philippines, Cambodia, the U.S. and Latin America. As noted in the annual report, Fluence's innovative SPS solutions deliver on 10 of the 17 United Nations Sustainable Development Goals, including delivery of clean water, significant power savings and waste-to-energy solutions. These significant and beneficial environmental impacts are increasingly being noted by global investors and partners. Importantly, we achieved financial close for the EUR 165 million Ivory Coast water treatment plant contract in January of this year, which we anticipate helps enable us to sustain EBITDA profitability first reported last quarter. We anticipate this project will also help us to become cash flow-positive beginning this quarter, subject to meeting conditions precedent. We were very pleased with the strong support we have received from shareholders over the year, including a successful capital raise in the fourth quarter of 2019 to strengthen the company's balance sheet and support growth opportunities. At this point, we target meeting any further working capital growth needs via non-dilutive sources. The current COVID crisis presents much of the world with an unprecedented pandemic together with tremendous economic disruption. Since it began, our highest priority has been for the continued welfare of Fluence's employees and contractors. We set initial guidance at the end of January prior to the COVID-19 crisis. Unlike many of our peers, based on best available information, we continue to reiterate that guidance, including continued SPS and recurring revenue growth this year and sustained EBITDA profitability. While reaffirming guidance, we expect to see some first half 2020 revenue shift to the second half of the year. We have, therefore, moved to conserve cash in all jurisdictions, including the deferral of Board member fees and a 30% deferral of our most senior management salaries at headquarters. In addition, we have applied for COVID-19 relief funding made available by different governments in jurisdictions where we operate to help offset any costs and temporary cash collection delays associated with the pandemic, and we fast track reductions in overhead costs. I wish to thank my fellow Directors and Henry, together with the executive team, for their significant contributions and energy throughout the year. I also acknowledge the contribution of Peter Marks, who retired from the Board on the 31st of March of this year after nearly 5 years involvement from the very early days of Emefcy to Fluence, which is now recognized as a leading global innovative provider of water and wastewater treatment solutions. Despite the pandemic, Henry and his team remain committed to delivering on the full promise of our highly competitive Smart Products Solutions. And we remain confident that your patience in these difficult times will be rewarded as further successes are reported. I will now ask Henry to present an overview of the business and our strategic opportunities to achieve this success. At the end of the presentation, we will answer any questions that have been submitted through the online portal, including any questions related to the formal resolutions. Thank you, Henry. Henry, we can't hear you, I think.

Thank you, Richard. Sorry about that. I'm starting again. My name is Henry Charrabé, Managing Director and CEO of Fluence. Thank you, Richard, for handing over to me. I'm also only able to participate on this call from home in New York. I'm gladful -- grateful to be with you and to be able to present and talk to you about Fluence. Just some highlights for the 2019 year and the very successful first quarter we had in 2020. As Richard mentioned, we met and exceeded our revised guidance for Smart Products Solutions in 2019. We have increased our Smart Products Solutions 360% from 2018 to 2019, underpinned by 3 of those announced partnerships, which is the exact focus of what Fluence intends to do, which is to grow the Smart Products Solutions segment. And then, of course, we had the successful raise of over AUD 38 million in the fourth quarter last year. In summary, for 2020 and the first quarter, we had over $47 million of U.S. revenue, our strongest quarter to date, which allowed us to become EBITDA-profitable, and $34 million of those were attributed to the Ivory Coast project. Achieving that incredibly important milestone of becoming EBITDA-profitable in the first quarter allows Fluence to really start a new chapter. We also have been able to book over $12 million and have now a backlog of over $228 million going forward. The cash balance, as you may recall, at the end of the first quarter, was just shy of USD 17 million. So as a result, and despite the pandemic, at the end of the first quarter, we were able to reaffirm the guidance that we've given for the market in 2020, which is outlined here on those 3 areas. We are strongly positioned to further grow and reach our Smart Products Solutions revenue increase to at least $32 million, which is a 20% year-over-year growth. We think we can get to a recurring revenue of at least $9 million, which would be a 30% year-over-year growth, and of course, be EBITDA-profitable sustainably for the entire year. Importantly, as we said, where we are focusing this company is to continue to allocate our resources and our efforts in the Smart Products Solutions segment. You can see here on the pie chart how that has been developed and evolved over the last couple of years in 2019, already allowing us to almost have half of our revenue attributed to Smart Products Solutions. At the same time, we are transitioning to Smart Products Solutions and recurring revenue in order to continue to increase gross margins and decrease costs, which would allow us to continue to remain EBITDA-profitable. And then, of course, the significant reduction in SG&A from just north of $47 million 2 years ago in 2017 to $29 million by the end of 2019 and further reductions in 2020 allow us to have a very strong path to continued profitability. In summary, you see the financials on this next slide, where we have come from 2017 to 2019. And again, the highlights on the last column of the 2020 guidance, which would get us to $32 million in Smart Products Solutions, $9 million in recurring revenue and to remain EBITDA-positive for the year. At the same time, we continue to obviously focus on executing the very important Ivory Coast project, sign new partners to find new ways in which we can further expand our Smart Products Solutions business and focus on any recurring revenue items, including aftermarket service and operation and maintenance. As most of you know, our products are perfectly positioned to address what is probably the fastest-growing area in the water and wastewater market, which is the decentralized market. Our proprietary, unique and highly competitive MABR product is part of our Aspiral system, which you see on the left side of your screen. A containerized system that, if you are in China, you can call us and only tell us where in China you are and what the wastewater treatment flow is that you would like to have treated, and within 5 weeks, you have a fully plug-and-play wastewater treatment plant delivered to you. Secondly, you see the SUBRE product, which is the submerged version of our MABR module, which allows you to treat either existing or newbuild centralized plants and increase the capacity by merely submerging those MABR modules by over 20% to 30% overnight. The NIROBOX, which is our Smart Products Solution for the desalination and brackish water treatment market, because as we all know, water is never a problem until it's an emergency, to have that product up and available within weeks when there's water shortage in coastal areas, resorts and industrial areas all around the world is a great product for us to continue to focus on. And then, of course, as we said before, we are changing the market. We are no longer focusing on Custom Engineered products per se, but we standardized our systems. We value-engineer them upfront. We have preengineered systems that would all fall under the preengineered products under Smart Products Solutions, which means that you have at least 51% of your engineering already standardized and a gross margin of no less than 25%. And finally, the Custom Engineered Solutions segment, which is part of our legacy business, and of course, which falls into the business that we are now conducting the Ivory Coast project in as well as other services that we offer, which are highly competitive, for example, our anaerobic digestion systems out of Italy where we take wastewater and produce biogas from biomass. As I mentioned before, the highly unique and differentiated MABR system is one of the ways where Richard said that we have really outperformed our competitors, and the reason for that is on this slide. You can see that in every single category compared to other systems that might have very similar sounding acronyms but very different technologies, from MBBR to MBR to FMBR, the Fluence MABR system is lower in CapEx, lower in OpEx and has less energy consumption. These are real numbers even from a very competitive market like China, where we have installed systems, while at the same time, you can see that the upgrades I mentioned for the SUBRE product also allows us to be lower in OpEx, lower in energy and lower in chemical use. And you can see the increased treatment capacity by up to 30% by merely submerging our modules. So as a result, many of you may have seen that the Global Water Intelligence magazine in their February edition announced the top 10 water and wastewater treatment technology innovations of the decade. We're very proud to be #4 on that list and only speaks to the efficacy and the promise that MABR holds for the future. But this is not only because we believe it, but we can show it. In a very conservative, slow-moving market, we have been able to introduce the MABR system, and then 2.5 years have grown that from just a couple of pilot plants to now over 160 worldwide. Combine that with the NIROBOX plants, and you see we have over 280 Smart Products Solutions in containerized systems all around the world. Obviously, China, as we heard from the video at the beginning, and as you know, is one of our greatest strengths and where we can see channel partners that we continue to develop and continue to help us win bulk orders. It is not by chance that we were able in China not to win 1 or 2, but with 1 customer in ITEST, win 70 wastewater treatment Aspiral plants within 4 months. If that trend continues, we continue to develop, despite the challenges of COVID, channel partners in China, continue to have strategic announcements that we can make and try to develop any and all strategic partners into volume orders and continue to have those discussions. China remains one of the main focus areas for us and one of the great promises that Fluence holds, but by no means the only one. Many of you asked about the Ivory Coast project, and let me briefly introduce it again. It is a milestone project for Fluence, which has been more than 3.5 years in the making when we finally signed the commercial contract last year. It's a EUR 165 million project with the Federal Government of Ivory Coast and it is supported by the Israeli Export Credit Agency and is, therefore, mitigating the political risk as well as collection risk. We signed the commercial agreement last year and the financial close on January 7 of this year. It is for 150,000 cubic meter a day water treatment plant, which will help the largest city in Ivory Coast, Abidjan, to get very needed water supply for their citizens. This opportunity allows us to have what's very unique, very strong revenue forecast for the next 2 years. Once we receive notice to proceed, we will construct that plant in 24 months with an average gross margin expectation of around 18% throughout the project. A great opportunity lies also that as and when we execute this plant, we will be in a strong position to bid on an operation and maintenance contract, which will be a long-term recurring revenue contract, which would fall into our Smart Products -- I'm sorry, which would fall into our revenue -- recurring revenue business segment. So therefore, it provides further opportunity even after the plant is built and will fit perfectly into the focus of Fluence in 2 years, which is more and more Smart Products Solutions and recurring revenue. Fluence focuses very much not because we want to focus on ESG Sustainability Goals and United Nations because it's modern or hip or right thing to do, but because it also comes with our business. Every time we treat water and wastewater, we contribute to the United Nations Sustainable Development Goals, whether it is reducing poverty as we allow people to have, in decentralized areas, water and wastewater, and as all of you know, most waterborne diseases are because people have to drink and be exposed to untreated wastewater, which causes waterborne diseases; or it has to helped gender inequality because most female parts of the populations are responsible for bringing or cleaning water; and obviously, increased sanitation in other areas. We're very proud that our solutions have a potential annual savings of more than 1 million gigawatt hours per year, which is equivalent to more than 700 million tons of CO2 emission. As you can see, our MABR, NIROBOX as well as, for example, our waste-to-energy systems really produce and conform, which would allow all of us to provide a better planet for the next generation. So in our waste-to-energy systems, we are producing clean energy, which is generated from converted biomass to biogas, and is an equivalent saving of over 85,000 tons of CO2 emissions per year. So as you can see, almost 9 billion liters of water have been recycled and reused by Fluence systems. We have over 121 billion liters of drinking water produced and we have over 187 million -- billion liters of wastewater treated per year, all of which, I think, makes every shareholder proud that you can be part of this company as much as we are. Now we have to focus on the effects that have occurred over the last couple of months. As you -- all of you know, we have announced that all of our Fluence staff is our first and foremost focus and we've taken necessary precautions all around the world to make sure that our staff and their families are safe and are healthy. Obviously, the first wave of the epidemic reached China, but we were able to fastly and quickly affect our systems and our operations, and everybody there is back to work. Then, of course, it had certain interruptions all around the world, spreading from our operations in Israel, to the Middle East, to Italy, the United States and now obviously also finally to Argentina and Brazil. We are proud to say that our workers are safe and that we have implemented work-from-home operations as well as eliminating any unnecessary travel. However, it obviously has an effect on our bookings. As Richard said earlier, we assume that some of our first half year bookings will fall into the second half year. And the fact that we cannot travel makes, obviously, certain relationships and certain partnerships more difficult to develop, but we are having a very good relationship and work as much as we can through online media and to make sure we can further push and promote Fluence's business. So what's most important at this point is cash management and, obviously, the customer interaction where we actively reach out. And you can tell that, in China and elsewhere, we are able to continue to book orders and continue to promote Fluence's products. So what does 2020 hold? So obviously, we continue to want to focus on the strong growth of Smart Products all around the world. Secondly, we aim to, as we said before, try to sign at least 1 to 2 bulk order or strategic agreements in China to get them to a same level as our other 3 have gotten us. Next, we want to execute the Ivory Coast project on budget. We are in the last attempts to reach conditions precedent. Our strongest goal and hope is that we can get there in the second quarter and that the payment will follow right thereafter. We anticipate to remain EBITDA-profitable, and of course, become cash flow-positive, as we said before, once the payments from Ivory Coast are received. We further want to increase our recurring revenue and we have tremendous opportunities for aftermarket services and our operation and maintenance contracts in other places around the world. And lastly, as Richard also mentioned, we want to identify and close non-dilutive funding options in order not to go and tap the market again. So with that said, I would love to take or we would love to take your questions. And I will invite my other colleagues to, obviously, join in the discussions. And I will address -- we will try to address any questions that you might have.

So one question, if I may go to right away, that was addressed -- already submitted, is where do we see other channel partners beyond China? Again, China is a tremendous market where you have a central government demanding that only 10% of treated rural wastewater should be treated to 70%. That 60% delta allows Fluence a phenomenal opportunity. Despite that or on top of that, we see the same opportunities in other places around the world. So we are discussing channel partnerships in other areas around the world, but nowhere will they lead as quickly and as strongly to success as in China, but that linear growth is really what we're going for, not for the one-off sales of an individual Aspiral, but really have channel partners and others in many jurisdictions around the world. Another question that was asked was, what are the effects of COVID-19? As I mentioned earlier, we and everybody else are suffering from the same challenges that this virus brings with us -- with it. For us, especially, that we will -- cannot travel, cannot see our customers and cannot push our orders as much as we would otherwise. Having said that, water and wastewater is not a luxury. People need it and we will continue to turn to Fluence to give them a fast, clean and good, reliable solution. And so obviously, the attention that this virus has given the need for wastewater treatment will ultimately, we believe, benefit Fluence's model. As I mentioned earlier, many questions about Ivory Coast. We are working very hard to get to the conditions precedent this quarter. There are bureaucratic challenges and signing contracts and Ivory Coast Airport closed, which makes even delivering documents a little challenging. And as soon as we reach conditions precedent, we will make an announcement and hope that, after that, we will get to become cash flow-positive. Francesco, do you want to add anything on Ivory Coast? Or do you see questions where you want to jump in as well?

No, you described correctly the situation on Ivory Coast. I will take the opportunity to talk a little more and answer the question about the cash flow for Q2. As we said, Q2, subject of collection from Ivory Coast, will be cash positive. But independently from Ivory Coast collection and despite the negative impact of COVID-19 on collection and on project execution, we expect operation to use, in Q2, less cash than the $7.9 million used in Q1. This improvement is in line with expectation that Fluence business, independently from the large Ivory Coast project, is converging to a breakeven.

Thank you, Francesco. And again, many questions about San Quintin. We are continuously talking to our partners in Mexico. We are asking them to proceed with that project. We also hope to have an update on that before the end of Q2. Again, challenges that we are faced with is the fact that we cannot merely travel and meet with them, but everything has to be done over video call, which makes certain discussions more difficult, but we are definitely going to give an update once we can proceed with that project as well. Many questions about our cash situation. As we mentioned, we are currently exclusively focused on non-dilutive cash options. And obviously, as we said before, when the Ivory Coast monies come in, then we will be cash flow-positive. A question about India. India, in the past, has been a great challenge and a great opportunity. So far, Fluence is a company of 360 people globally. And as we try to further reduce SG&A and costs and investments, we want to be very careful of where to put our hard-earned money and your shareholder investment. So therefore, India continues to be a great opportunity and we continue to look into opportunities to maybe see if there are channel partners or others. We want to make sure that we tackle those areas first that give us the greatest potential, and those right now are in China and other places. But in the future, certainly, India as well as many other places around the world, can and will benefit from the Fluence water and wastewater treatment solutions. Richard, Francesco, do you see questions that have not been answered? There's a question about the projects currently in China. Yes, we are actively bidding on projects in China. As you may know, Fluence has a great setup in China, which we don't directly sell to the end user, but we have integrated partners. These partners tend to win long-term PPP projects. And we then, once they win, sell our MABR systems to them. So as they bid on these projects, and very often these projects specify MABR as the lowest cost, reliable alternative to get to non-potable reuse of water, which is called Class 1A in China, Fluence is in the strongest position. But very often, we do not bid directly, but we bid through partners in China.

Yes. My only comment, maybe to add to what you said earlier, Henry, in terms of partnerships globally, as we have now proven that the MABR technology works not only in these Aspiral units, but also in these central plant upgrades or newbuilds at larger scale, and of course, with the NIROBOX having been proven in many locations around the world, our future is really about partnerships. What we don't want to do is just hire an ever-enlarging sales force and have to pay for all those feet on the street. We really want large partners with an urgent need that will be receptive to our solutions to meet that need. So what that means is quite likely, for example, in the Middle East and island destinations, NIROBOX partnerships. China, as Henry said, is the most urgent need for wastewater treatment, but the kind of scales where we specialize and I would say that the partnerships which we signed initially for a single unit with China Rail and with Three Gorges could turn into very, very exciting relationships, matching or significantly exceeding the partnerships we've signed to date. So that is our future globally, and we want to make sure that we compete in geographies where there's the most urgent need and the clearest business value proposition that we can deliver.

Thank you, Richard. One other question is about whether Fluence is currently looking into any acquisitions. We believe, right now, Fluence is best served in delivering on our own products and have organic growth. Having said that, if there was an opportunity in the future that would really benefit our systems, our solutions, our footprint, we'll definitely entertain it, but right now, our focus is to grow organically and not have an active path towards seeking out acquisitions. So again, one more thing I'd like to say about Ivory Coast and cash collection. So as we are pushing very hard, and second quarter is obviously -- the end of the second quarter is only 4 weeks away, and we still believe we can get to conditions precedent this quarter. Fluence is in a strong cash position and will allow us that whether we ultimately get the cash in -- on June 28 or on July 10, we will be a cumulatively cash flow-positive for the year. So although, obviously, it makes a big difference of when the cash is obviously collected, for Fluence as a company and strategically, it does not make as big of a difference because, obviously, the 10 or 15 days would not make a big difference. And as Francesco said, we believe that the cash burn in Q2 will be vastly reduced from the cash burn in Q1. So with that said, I don't see any other questions. So I would like to turn back over to you, Richard, to go through the formal business of this AGM.

Great. Thank you, Henry. So I note that we've now already addressed any questions in relation to the formal business agenda. And so I now table Item #1, the financial reports. I now table the financial report and the reports of the Directors and auditor for the financial year ended December 31, 2019. Thank you. The financial report of the company and the reports of the Directors and auditor for the financial year ended December 31, 2019, are received. And now the proposed resolutions. Number 1, the adoption of the remuneration report. The company's remuneration report for the financial year ended December 31, 2019, forms part of the Director's report and is set out in Pages 16 to 41, inclusive of the annual report. I now move as an ordinary resolution that the remuneration report for the financial year ended December 31, 2019, as set out in Pages 16 to 41, inclusive of the annual report, be adopted. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution, so the final voting position is as shown on the following slide. I declare the resolution carried. Thank you. Resolution #2, reelection of Director, Mr. Arnon Goldfarb. I now move as an ordinary resolution that Mr. Arnon Goldfarb, being a Director of the company who retires in accordance with Clause 4.3(c) of the constitution of the company and being eligible, is reelected as a Director of the company. As mentioned earlier, Arnon, is not able to join the meeting. So I will read out his abbreviated Director profile as set out in the notice of meeting. Mr. Goldfarb serves as Nonexecutive Director of the company. Currently, he's a partner at More Ventures and has significant entrepreneurial experience and interests in chemistry, materials and industrial processes. Until early 2011, Mr. Goldfarb served as CEO of TMB Water, a water project company active in desalination, aquaculture and water treatment efforts in Israel and abroad, and the predecessor of RWL water. Prior to establishing TMB in 2001, Mr. Goldfarb spent 17 years with Israel Chemicals Ltd., where he served as Corporate VP for Business Development and Chairman of the R&D, Fertilizers and Chemicals, and Ceramics units. He was also a Director at ICL's Israel Desalination Engineering, IDE, subsidiary as well as its potash, phosphate and bromine subsidiaries. Previously, Mr. Goldfarb worked in the oil and gas industry in Israel and is the -- and the U.S. as a production and facilities engineer with Superior Oil and Israel National Oil Co., and as a production and field manager for Israel's Sadot natural gas field. Mr. Goldfarb serves as Chairman of Atlantium Technologies; as well as on the boards of TGA, a waste treatment facility; TSP, a chemical company; and Hpnow, a company that provides on-site hydrogen peroxide generation solutions. Arnon continues to make a significant contribution to the company, particularly in supporting the Israel business unit. Proxies are as set out in the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. I declare the resolution carried. Thank you. Congratulations, Arnon. Resolution #3, the reelection of Director, Dr. Rengarajan Ramesh. I now move as an ordinary resolution that Dr. Rengarajan Ramesh, being a Director of the company, who retires in accordance with 4.3(c) of the constitution of the company and being eligible, is reelected as a Director of the company. On behalf of Dr. Ramesh, I will read out his abbreviated Director profile as set out in the notice of meeting. Dr. Ramesh serves as a Nonexecutive Director of the company and is a member of the Audit and Risk Committee. Dr. Ramesh has been an Operating Partner at Eagletree Capital since 2010. Previously, he supported RWL Water's efforts to evaluate the best water treatment technologies and companies around the world. Dr. Ramesh has held senior management positions at GE Water and Process Technologies, including Chief Technology Officer, a role which he held for more than 4 years. As CTO, Dr. Ramesh played a key role in the development and implementation of the strategy that led to the creation of GE's $2.5 billion global water platform. While at GE, he also led the technology and engineering organizations for GE Sensing, GE Security and GE Fanuc. He also served on the Board of GE's Asia Pacific American Forum. In addition to his role at GE, Dr. Ramesh served in numerous senior management roles over a 2-decade career with A. Schulman, a global multibillion-dollar specialty chemicals manufacturer. He also served on the International Advisory Board for the Ministry of Environment and Water, Government of Singapore from 2006 to 2016. He currently serves on the Board of Students2Science, a nonprofit organization serving inner-city schools by proving hands on lab training to teachers and students. Ramesh also continues to make a significant contribution to the Board through his extensive and understanding of the water industry. Proxy votes were as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. I declare the resolution carried. Thank you. Congratulations, Dr. Ramesh. Resolution #4, ratification and approval of previous issue of private placement shares. And I'll move as an ordinary resolution that, for the purposes of ASX Listing Rule 7.4, shareholders ratify and approve the issue of 81,818,181 shares at AUD 0.44 per share, which took place on the 29th of October 2019 by way of a private placement. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. I declare the resolution carried. Thank you. Resolution #5, ratification and approval of previous issue of SPP shares. I now move as an ordinary resolution that, for the purposes of ASX Listing Rule 7.4, shareholders ratify and approve the issue of 5,381,453 shares pursuant to a Share Purchase Plan, which took place on November 20, 2019, at an issue price of AUD 0.44 per share. Proxy votes were as set out on the slide. The open proxies have been voted in favor of the resolution so the final voting position is as shown on the following slide. I declare the resolution carried. Thank you. Resolution #6, approval of additional 10% placement capacity. I now move as a special resolution that, for the purposes of ASX Listing Rule 7.1A, approval is given to the issue of equity securities totaling up to 10% of the issued capital of the company at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A and on the terms and conditions set out in the Explanatory Memorandum. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. Resolution #7, amendment to option terms for cashless conversion. I now move as an ordinary resolution that, for the purposes of ASX Listing Rule 6.23.4, approval is given to amend the terms of options which have been issued under the 2015 Fluence Employee Share Option Plan, to allow for non-Australian-based shareholders of Fluence employee share options to be able to elect to exercise their options using the cashless conversion method, as calculated in accordance with the formula and on the terms and conditions set out in the Explanatory Memorandum. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. Resolution #8, approval of the company's 2020 Employee Share Option Plan. I now move as an ordinary resolution that, for the purposes of ASX Listing Rule 7.2 (Exception 13), approval is given to approve the terms of the 2020 Fluence Employee Share Option Plan, and that the issue of securities pursuant to the ESOP within 3 years from the date of this resolution be an exception to Listing Rules 7.1. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. Thank you. Resolution 9A, an update to the company's constitution regarding hybrid meetings. I now move as a special resolution that the constitution of the company be amended by deleting Clause 7.5(b) and replacing it with a new Clause 7.5(b) as set out in the notice of meeting. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is shown on the following slide. Resolution 9B, update to the company's constitution regarding direct voting. I'll now move as a special resolution that the constitution of the company be amended by inserting a new Clause 7.7(n) as set out in the notice of meeting. Proxy votes are as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. And finally, Resolution 9C, update to the company's constitution, restricted securities. I now move as a special resolution that Clause 11.10 of the constitution of the company be deleted in its entirety and replaced with a new Clause 11.10 as set out in the notice of meeting. Proxy votes were as set out on the slide. The open proxies have been voted in favor of the resolution. So the final voting position is as shown on the following slide. I declare all of the foregoing resolutions as having been passed. And thank you very much for that. This concludes the Fluence Corporation Limited 2020 AGM. I hope next year to see you all in person. Thank you very much for your participation.