Fluence Corporation Limited (FLC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Doug Brown. I'm the Chairman of the Board, and I will be chairing the meeting today. It is my pleasure to welcome you to the Annual General Meeting of Fluence Corporation Limited. We advise that we have complied with the relevant requirements for convening this meeting and that a quorum is present. I therefore declare the meeting open. I would like to introduce my fellow directors who are present online today: Tom Pokorsky, the company's Managing Director and CEO; Paul Donnelly, the company's Lead Independent Director; the company's Non-Executive Director; Nikolaus Oldendorff; and our senior executives, which includes Ben Fash, our Chief Financial Officer; Spencer Smith, our Chief Legal Officer; and Rick Cisterna, who is our Chief Commercial Officer. Mel Ashton, another Non-Executive Director of the company, has sent his apologies and will not be attending the meeting. I would also like to introduce our Company Secretary, Melanie Leydin. Our auditors, BDO, are represented by Kathy Robertson and her team, and they are also in attendance. As the notice convening this meeting has sent to all shareholders on the Fluence Corporation Limited register in accordance with the company's constitution, unless there are any objections, I intend to take the notice of the meeting and explanatory statement as read. Melanie?

As mentioned earlier, shareholders will be able to participate, ask questions and cast votes at the appropriate time whilst the meeting is in progress. Visitors are reminded that whilst we welcome you at this meeting, it is a shareholders' meeting, and you may not comment or ask questions. Shareholders may ask questions by sending a text or request audio to speak. Please note that we may experience some lag, and this may cause some delay in text questions or comments coming to our attention. We encourage you to lodge them as early as you can. Shareholders wishing to ask questions via text, please select the Q&A icon located at the bottom of your screen. Type your name and who you represent, along with your questions in the Ask a Question box and press the send arrow. And your questions will be addressed at the appropriate time. Shareholders wishing to speak and ask a question, an audio questions facility is available during this meeting. Please select the raise hand icon located at the bottom of your screen. You'll be placed on queue and authorized to speak when we reach the Q&A session. And prior to asking your questions, can you please state your full name and who you are representing. Regarding voting on today's resolutions, all shareholders, proxy holders and authorized corporate representatives who are entitled to vote will be able to do so via the webinar poll. It is important to note that if you have lodged a proxy form and voted prior to the meeting, you do not need to vote again at this meeting unless you wish to change your proxy instructions. For those proxy holders, shareholders and authorized corporate representatives who have not yet voted prior to the meeting, please cast your votes on each of the resolutions when the poll is opened. For proxy holders, you will have a summary of proxy votes, which details the voting instructions, if any, for the items of business. By completing the voting via the webinar poll when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. Where the Chair has been appointed proxy on behalf of the shareholder, the Chair of the meeting intends to vote these in favor of all of the resolutions. For shareholders, proxy holders and authorized corporate representatives who intend to vote today, please observe the following poll voting instructions. When the poll is declared open, a poll window will appear. To vote, simply select the direction in which you would like to cast your vote and the selected option will be marked. To submit your vote, simply click on the submit button. I will now hand back to Tom for the update on the company's operations.

Thank you, Melanie. So I will give you a brief overview of the operations for 2024 and what we're doing this year. And I will ask Ben to join in on a few of the slides on some of the financial discussions. We can go to the start, please, after the disclaimer. Okay. In 2024, we did have some underperformance in areas, which led to the poor financial performance, but we also made progress in many areas with our new strategy for the company. I'll address some of those accomplishments and the underperformance areas. The first thing we did early in the year was we sold off the Aeromix business for approximately $2 million in net proceeds. And as you may recall, the Aeromix business was not a core business. It was not a systems business. And it actually was not a real profitable business. So by selling that off, we did get some net proceeds, and we moved on from a distraction, if you will. The next thing we did is we, of course, paid off the entire Upwell loan completely, thanks in part to some line of credit from a couple of shareholders, which you are aware of. But the most important thing here is in addition to the covenant changes, we are paying a significantly lower interest amount and it's saving the company money. On the strategic side, we started seeing progress in the recurring revenue task that we were promoting, and we increased recurring revenue by about 30%. In addition, the idea of going into more profitable areas from the large CES projects, we increased our gross margins by 30% also. And finally, as part of our program to trim the fat, if you will, we did reduce our fixed cost by 11% from 2023 and 25% since 2022. So we continued on that path. Another area of our focus on our strategic plan was to increase the revenue for IWR, which is Industrial Water and Reuse & IWB, which is Industrial Wastewater & Biogas. And both of those units delivered strong growth, revenue and EBITDA. Finally, we grew our sales pipeline, especially in North America, which, as you may recall, several years ago, we had little or no sales operations there. We also did some internal things. We launched some core values with the entire corporation and staff. And we had some technology improvements and enhancements within the company in our ERP and CRM system. So we did a lot of work in 2024, but because of some underperformance in areas, our financial numbers did not show it. Primarily, this came from delays on the Ivory Coast Addendum. We had expected well over $25 million in revenue from that Addendum, and I think we got $4 million or $5 million or thereabouts because of delays in the project, which basically ruined the financial performance of the year. In addition, China still is struggling with a bad economy and the revenue reduction in China and Southeast Asia was significant last year. We are working very hard to get that back and to reset the business there. But China still is a tough area because of the economic conditions in China. We did miss on the amount of new orders we expected last year, and that was mainly due to delays in the projects, not losing the orders, which we will start to see the benefit from this year. And finally, with all the revenue and EBITDA underperformance, clearly, our operating cash flow was not the best, and that is a result of poor performance in the other areas. Next slide, please. I'll let Ben address the next couple of slides on some of the financial highlights for the year.

Thank you, Tom. A number of the highlights Tom did discuss. So I'll try and move through the financial update relatively quickly. As Tom discussed, despite a very challenging year financially, revenue of $51.5 million and an EBITDA loss of $4 million, there were some bright spots to highlight. Specifically in our core business units, when you exclude the impact -- the negative impact of the Ivory Coast and the slowdown in China, our fiscal 2024 revenue growth was $6.5 million or almost 20%. The reality was is that the administrative delays that we experienced on the Ivory Coast Addendum project and the slowdown in the Mainland China market really had the biggest impact on our year and impacted revenue negatively. But another point is that the Q4 revenue, the fact that we were able to deliver $21.2 million demonstrated the ability for our business to be profitable when we exceed that $20 million mark. In Q4, we delivered $1 million of EBITDA, which demonstrates the ability for this business to be profitable at those levels. As Tom talked about, our strategy to increase SPS and recurring revenue is taking form, taking shape. Our recurring revenue growth was 30%, 30.5% to be exact. And because of that, our gross margins are increasing. So we -- for the first time in the company's history, we exceeded gross margins of 30% for the year, which is an increase of 2% and continue to go up as we perform well in that area. A lot of work was done last year on reducing our overhead costs. Our SG&A and R&D savings in the year were reduced by $2.6 million or 11.4%. But since this management team has been in place, if you look back from the beginning of 2022, we've reduced fixed cost overhead by 25% or over $6 million. Looking forward, we have set out guidance for fiscal 2025 for revenue of $80 million to $95 million and EBITDA of $3 million to $5 million, and we believe that we are on track to meet those goals. Q1 was on track with revenue of $16.6 million and breakeven EBITDA, which is in line with our expectations. And that includes revenue growth of 64.5% in the quarter. We also improved EBITDA by over $1.6 million over the same quarter in 2023 (sic) [ 2024 ]. Finally, we finished Q1 of 2025 with a cash balance of $8.5 million plus an additional $3.7 million in security deposits, like I said, as of March 31, 2025. Please flip to the next slide. So this is a quarterly view of our financials last year. And I think a few things jump off the page. Number one, we obviously had a slow start to the year, and that put us in a bad position to have the year that we had hoped for. As a result of the Ivory Coast Addendum and the delays that we did not anticipate, we had very good reason to believe that the Ivory Coast Addendum was to move forward in early 2024. But as a result of delays due to the financing, we weren't able to start that project until Q4. But once that project did get going and we were able to deliver a strong quarter of $21.2 million, the profitability followed. And so I think it shows that the operating leverage we have in this business with higher gross margins and lower fixed cost overhead can deliver very strong profitability as we look forward. Next slide, please. So we've talked an awful lot about the strategic transition that we are attempting to make in this business. And we believe that we are making continued progress on transitioning our business away from low-margin CES projects and focus more toward SPS and recurring revenue. We're also focused on growing the company in North America and again, making good progress. If you look at the bar charts in fiscal 2024, you can see that those are increases in both of those areas, increasing SPS and recurring revenue as well as growth in North America. And when you look at the medium-term targets where we would like our business to be at about 60% SPS plus another 25% to 30% of recurring revenue, we are starting to -- or we're getting close to those goals. This -- one of the benefits of the business, the size of Fluence is the diversification that we have across multiple end markets, geographies and products. And as part of that strategic transition, we are trying to take advantage of that diversification to build a more resilient and sustainable business going forward. Next slide, please. Tom, I'm going to turn it back over to you to talk about some of the early order success so far this year.

Thanks, Ben. Appreciate it. As you can see, I mean, these orders represent some of the early success and they're all first quarter. At the end of the first quarter, we also had -- I think we mentioned it on our quarterly report, about $9 million in verbal orders, which the paperwork wasn't done yet. I believe since that time, we've finished up on at least $7.5 million, $8 million of that $9 million in orders, which they were all under the ASX announcement criteria. So there -- but they're all nice sized $1 million to $2 million or a little bigger orders. Those we will be putting on our website and let you know about them. But for the first quarter, what's important about some of these orders? There's about 9 or 10 orders here that we have on here because they're strategically important. The first one is a dairy processing company in Italy. It's a confidential client at this point. They don't want their name, but it is a $2.3 million job, but it's another waste-to-energy project with an anaerobic digester for a dairy, and we are now building up quite a reputation in the dairy industry for this type of process. And I can tell you there are several more potential orders on the way because of this. The second one is Wilshire Road Development. It is a housing development in California. It's for an MABR Phase 1 of 3 potential phases. It's over -- it's $2.3 million, which means there could be another 2 orders like this as the development grows. But what's really important about this, it's the first MABR in California for us. So it's another location where a state has approved our technology. The third one is Dow. It's a 2-year O&M contract for about $1.4 million. It's the second renewal of this. They give these contracts instead of giving a 5 or a 10-year, they give 2 years, but we have gotten our third and fourth year with them. So it's enhancing our recurring revenue, and there's no reason to believe it won't continue on for several more years. There was a company in the U.S. and Indiana, an apple processor, a fruit processor that also bought the Italian wastewater process for just under $1 million. Again, it's important because one of our important strategic initiatives was to bring the Italian technology over to North America, and it's another order in North America for that technology. The next one is a small MABR in Hawaii. Again, another state that has approved our MABR technology. And finally, on the MABR side, we had -- we've got an order from a company in Missouri, which is Central U.S. This area is loaded with small wastewater treatment plants that are lagoons that are failing. And we're talking dozens and dozens of these. In fact, this customer owns a number of these facilities. It's a utility customer that is private and getting one with them is just the start of many more potential. And then we got an order for our new system -- our new process. It's an offshoot of an MABR for a side stream for high-strength nitrogen. It was actually tested there with this client, and we got a second order for a complete plant. It's not big, but it's from a big company, and I can say it's in Korea. I cannot say the name of the company, but I'll let you to imagine an auto company in Korea. And then the final one, we're putting it in here because while China is in trouble financially, and there's not a lot of money to go around, there's still a need there. And when they do get the money released from the central government, we can get orders. And this is from our ITEST customer, which has really started the progress in China several years ago, but they're still buying. And we are in the process of negotiating an extension to that contract agreement to get more work from them as the money frees up. So China is not dead. It's just slow. Okay. Next slide, please. Okay. I'm not going to spend too much time on this one. It's the discussion of our pipeline. We brought this slide in a couple of years ago. A couple of key points on here is we made it a priority to start growing the pipeline. And in our business, pipeline are projects that are being worked on that could someday turn into an order, but they are real projects. They are not just saying this automotive company is going to build 30 plants in the next 10 years. Therefore, there's 30 projects. No, these are named in their locations, and they actually have some predesign going on, on them. But you don't get orders in our business unless you've been working a pipeline for some time. So building up this pipeline is what's going to be very important to start creating our order booking and backlog growth down in the future. What's very interesting about this, and in my career, I've never seen quite this split, but you have a very -- you have several hundred million dollars worth of projects, but there are 380 projects. And the important thing of that means if one gets lost or 10 get lost or 20 get lost, you're not losing your whole pipeline because there's a mix of various size. It's not like there's $100 million job that wipes out 1/3 of the pipeline. And to me, that's very, very important. And this feeds into our backlog, which ultimately feeds into the growth of the revenue each year. So Ben, do you want to add anything on this before we move on? But I just -- we have it in every presentation, but it is so important to keep this growing before we even see the orders.

Yes, 2 points that I'd want to leave people with. Number one, we're continuing to see growth in new orders. $12 million of bookings in Q1 is growth of over 20% compared to the prior quarter. And our core business units, municipal and our 2 industrial business units are close to that 20% mark. So again, continued traction in the areas we're focusing on. And another point I would just say is that given our guidance for the year, one of the things that gives us confidence in our ability to deliver that -- the revenue of $80 million to $95 million is the fact that we're sitting on backlog to be recognized this year plus the revenue that has already been recognized in Q1 equal to $66 million. And that's about 75% of the midpoint of our guidance, which is a good place to be as we sit here today. So that's another data point that I think is worth highlighting in terms of the strength of our backlog position and why that gives us confidence for the remainder of the year.

Okay. Next slide, please.

Okay. Tom, I'll take this, if...

Yes, if you like.

Okay. Great. So we've talked a fair bit about the items that impacted 2024 and the negative financial performance. As we look forward, we were showing, obviously, the guidance that we have out there for 2025 of $80 million to $95 million and $3 million to $5 million of EBITDA. And I think what's important to see is as we are making our way through this strategic transition and focusing heavily on our SPS and recurring revenue in our core business units, what we are seeing is that gross margins are improving, right? We delivered over 30% gross margin in 2024. That is projected to dip down a little bit because the Ivory Coast Addendum is contributing more revenue in 2025. But in our core business units, those gross margins continue to grow. We also obviously have reduced our fixed cost overhead burden to under $20 million per year. This was at $26.7 million just 2 years ago. So combining a business that's able to grow the more profitable parts of our business, the higher-margin parts of our business, while at the same time, significantly lowering our overhead gives us an awful lot of confidence that as this business grows and scales, it will deliver outsized profit and profitability growth. So when we look forward into what we will call our medium-term target, call it, 2 to 3 years from now, we believe this is a business that can generate $120-plus million of revenue at 32% to 35% gross margins and delivering double-digit EBITDA margins. That's what this team is focused on. And I know that this is -- we have put a chart like this up here before. I think the delays in the Ivory Coast Addendum project probably put us maybe a year behind where we wanted to be here, but we still believe that those targets are valid, and we are focused on them as a management team. Next slide, please. Tom, I'll turn it back to you to conclude.

Okay. So what are our growth drivers? What are our challenges? And where do we have some opportunities for the rest of 2025 and beyond? Well, the first and foremost, we talked about the pipeline feeds the orders, which increases the backlog. And with our strong backlog position, we see no reason why we can't have a very, very good 2025 for the rest of the year if we perform and if we get -- we turn the backlog into revenue, which should not be a problem. There are some projects that see delays because of politics and permits and stuff. But for the most part, the bigger backlog we have, again, it's like the pipeline with you lose one here and there for the time period you're working on, it doesn't blow up the whole year, like Ivory Coast did to us last year. So with our strong backlog position, we can drive the growth in 2025. And as we continue booking the orders, it's going to drive the growth in 2026 also. Where are we doing this? We're doing it mainly in North America. With the pipeline, we're doing in the municipal part. And we're also doing it in the 2 industrial groups in a bit of Brazil, Argentina and parts of Southern Europe. So again, these are right with our strategy. We're going to continue driving the sales in those areas with higher margins and higher growth potential. We're also continually working on recurring revenue. We already talked about some growth, but we've been doing just BOO and O&M. We are introducing this year more into the rental fleets and the leasing. We are getting constant questions about this. Yes, there's some capital involved in it, and we have to manage that well. But once we get it going, it will enhance our recurring revenue. And Ben, what is it? Our goal is to get up over 25% to 30% in recurring revenue in the midterm, and we're well on our way to getting there. And again, that just simply means 25% of the revenue for the year is already in-house before we don't have to wait for projects to come in. So we're working on that. Finally, the Ivory Coast, obviously, has been around a long time. The Addendum was a bit of the growth for us. But what we're working on now, we are at the point where we're finishing the commissioning of the plant, getting ready to pump water to the towers. And we have been asked by the authorities there to start the negotiation on the long-term operating contract. And they have made it very clear they want to give us money for the next 18 months to idle the plant while they finish some distribution piping and -- but sign it all up at once with a 15-year operating contract, which is millions of dollars a year. And we are now into the negotiations on that and the final pricing. So that could be -- Ivory Coast could turn out to add some growth and some higher margin to us compared to the past 5, 6 years, whatever it was. So those are the growth areas. And what's not listed here, but we should point it out, we are putting together a new plan for Southeast Asia. We actually have to start over. We got a new management team, and we are working on the plan, but I don't expect to see fruits of that labor this year, maybe next year. So what are some of the challenges? You've all heard of the U.S. administration's tariff discussions. And quite frankly, navigating that environment is a little tricky. We are working on navigating the environment. We talked in the previous calls about having 4 or 5 projects in America that are going to be affected in particular by the Chinese tariffs. But our teams have done a very good job so far mitigating any material costs on those tariffs. I'm not going to go into details how, but it's moving production around. And we believe we're going to see some delays on several million dollars' worth of work going from quarter 2 to quarter 3 and 4, but we think we can salvage the margin on those jobs and not take a major hit on that. So there -- it's not done by itself. There's a significant effort in the company to deal with this situation. That leads to the manufacturing strategy. We talked in the past about the membrane facility being built in the U.S. The membrane machine is on the ground in the U.S. The lease is signed, I believe, and we're erecting the machine in a place in Tennessee. But because of some of the other issues going on with tariffs and other things, I think we have to look at much more versatility in our manufacturing, in particular, in North America and the steel side and some of the tanks and things like that, which we will be doing. Again, a challenge for us in growth strategy in Southeast Asia and China. Like I said, we're starting over with an entire new team there. And we think we have a plan in place that's going to work, but it's going to take some time, and it's going to be a challenge, and it's going to take a lot of time and effort of work. And then, of course, I would be remiss if I didn't state a challenge for us was our share price performance. And it is, and we recognize it, and we're just going to work hard to outperform and make that better the best we can. So I believe that is it on the formal presentation for our operations. If I'm not mistaken, Ben, is there another slide?

No, that's all.

So at this point, we will entertain some questions on the operations before we move on to our formal business.

Thanks, Tom. There's a number of questions that have come through, which I'll pose through to you now. First one, there appears to be sustained pressure, which has put the share price at historic lows. Can the Board comment on whether they are aware of any larger holders reducing their positions? And what steps have been taken to broaden or stabilize the shareholder base?

Ben, do you want to address that?

I can take an answer to that. So look, broadly speaking, the company is -- has a difficult time commenting or speculating on the short-term share price movements. We do understand the disappointment and frustration shareholders have felt by the recent performance. As significant shareholders ourselves, we feel that pain, and we're aligned to share that disappointment. Ultimately, we feel like the best way to ensure share price performance and that the market price reflects value is that we deliver on our long-term operational plan, which is what we are working every single day to do. We think that the guidance that we have out there shows a meaningful growth in this business, and we're committed to delivering sustainable profitable growth going forward, and we think that, that will ultimately get reflected in the share price. With respect to specific holders and movements, we, as management, are not involved at the granular level. Of course, we monitor the register and take note of ASX filings of large shareholders. We were made aware that there was a large shareholder that recently exited their position. And so that occurred last week. We hope and presume that, that sell-off may take some of the pressure that we've seen in the share price off, but time will only tell. Again, ultimately, our belief is that if we, as management, deliver the operating results that, that will generate demand for the shares and ultimately increase the share price. We work -- we do make concerted efforts, proactive efforts to broaden or stabilize our shareholder base all the time. We continue to engage directly with the investor community through our Investor Relations team. We provide a business update every quarter. We announce orders that are either strategic or over the $3 million threshold. And we're working on some unique investor relations strategies and communications that we're planning to roll out over the coming months that we're hopeful that people will engage with. So we are working on all those efforts. I think that would be my answer.

Thanks, Ben. Another question. Many shareholders, including insiders, have acquired shares at materially higher levels than today's price. What action is the company taking to ensure that its operational progress and path towards profitability are being effectively communicated to the market and reflected in the valuation?

What steps are we taking to ensure the communications taking place? Okay. Well, I mean, I'll answer and then Ben, you can follow up. But after every quarterly report, we allow and ask anybody interested in getting an audience with us to answer their questions, any investors who want, and we go into deeper diving detail to the extent we can legally. So we talk to investors all the time, and we're always open to a discussion through our Investor Relations people to have those discussions, and we communicate things. There are -- there have been some complaints about communicating orders, but we are under some ASX rules on what we communicate. So we use our website for some of these PR releases. But we are trying as hard as possible, and we are very open to communicate with shareholders and investors if they ask.

Thanks, Tom. And then another question received, given the company is targeting positive EBITDA in 2025 and has previously referenced the potential for a strategic sale, how is the Board thinking about timing and milestones for exploring such options? And is the company actively preparing to position itself?

I can only say on that we are not discussing any plans like that at this point in time. And there's been no offers given to us.

If I could answer -- chime in on that, Tom. It's clear to us that to receive a fair and reasonable value for the company in the event that we someday do entertain a sale of the business, we have to deliver on our financial performance first.

Thanks, Doug. Okay. Other questions that have come through. Could Chair or CEO -- this is from a relatively new shareholder. Can the Chair or the CEO please provide a quick summary of how we have reached the $224 million in accumulated losses? And what learnings or mistakes do we believe we've made over the journey?

Doug, do you want that? Or should I?

Yes. First of all, the vast majority of the losses were accumulated before the new management team was put in place. And so we're not in a position to talk about what the previous management did. We are focused on turning around the business and delivering profit for the company. And so we can't -- I don't think we're in a position to opine on how the previous management accumulated such losses.

Thanks, Doug and Tom. Next couple of questions. I'm happy to answer these. One of the questions is why is the company's office headquartered at 100 Albert Road? And can we have a hybrid AGM rather than the virtual AGM format? 100 Albert Road is the company's registered office. It's a requirement in Australia to have an Australian registered office, and this is where the corporation requirements for the Australian entity is undertaken. Therefore, that's why it's at an Australian address. The hybrid AGM can be considered. It is considered whether we hold a virtual in-person or hybrid prior to each AGM. We find that we have the largest reach to shareholders via a virtual AGM, which allows people to come from various places. We can consider a hybrid AGM at a place in Australia in the future. The other question was, is the AGM being recorded and will be made available on our website? Yes, it is. So then just moving on to another question. Okay. From the last update, our projects that are scheduled for quarter 2 may be pushed back to later part of the year due to the U.S. tariff situation. Now that a new deal with China has been inked and the projects now -- are the projects now be back to schedule? And would there be other projects that could get pushed forward as it is only a 90-day resolution?

I can answer that. Like I said, we have only really 4 projects under construction or in process that are affected by the China tariffs. First and foremost, the China tariff situation is not completely over yet. There's been a lot of news, but there's still a 50-plus or minus percent tariff for China that used to be 25%. There's still the [ fentanyl ] tariff, which is additive to the original 25%. So there's still a reason to try and manage these jobs without paying the sizable China tariffs. We will continue to manage these 4 projects as we complete them. Any new projects that come up, we will evaluate when we price the projects as to how we're going to deal with them, whether we build them in the Mid-East, whether we build them in America, it will depend on a number of things, but we will make that decision on a project-by-project basis, depending on the situation at hand.

Thanks, Tom. And just on from that, there was a mention of the additional $8 million verbal order for IWR and IWB in the first quarter update, which a portion could have a higher value than the $3 million announcement threshold. Are these orders being inked yet?

Many of them have. I think I mentioned that. I believe we -- Ben, what is our total? Are we over $8 million or $7.8 million or something of that in the last several weeks?

Not formally inked, Tom, but they are very, very close if they haven't been inked formally. And we have confidence in those orders coming in, in due course, actually, probably more than that. We've got verbal orders at this point, including some of those, yes, like closer to [ $10 million ] to [ $12 million ]. So continue to be confident of both those orders as well as some additional ones coming in. To answer the question on could -- which portion could have a value higher than the $3 million announcement threshold, unlikely any of them will be above that $3 million threshold. They are all in the $1 million to $3 million value range.

There was -- I can say this, there were 3 orders in Argentina by the same client that totaled $3.6 million that we inked. There was a $2.1 million or $2.2 million order in Italy, another one that we ink. And then there's $3 million or $4.5 million ones we're finalizing at this point in time. So those are all coming to be, but they're not adding up to the ASX threshold at all.

Thanks, Tom and Ben. Okay. This is a question just with respect to Doug and Niko. We have witnessed your continued support for the company through your grant of the credit facilities, injecting fresh funds through the rights issue and continuing buying over some shares, either in a block deal or through the market, and we'd like to express gratitude for your support. The question is that we don't expect you to have to put in fairly substantial amounts of money just to support and own an EPC water company. What are the assets in the company that prompt you to invest in Fluence?

How about Niko, if I take that first. I think, at least for me personally, I think the company has a very strong technology in some high-growth areas in wastewater treatment and waste to energy. And I think that the future for the company looks quite strong. This has clearly been a turnaround that we've invested in, that I invested in, and I knew it was a turnaround when I made the investment. And I'm happy to see that significant progress is being made on that turnaround. It is not complete yet. It's starting to show signs that we're making the right progress. But I'm a strong believer that the company has some very competitive products in markets that are showing significant growth potential. That's why I invested. And the team that we brought in to run the company, I think, is really strong.

Good morning, Australia. That's actually basically also there were a lot of talking points there, which I would like to support. I mean I invested into the company basically because of the vision and the people and of course, the business case. And I think we're seeing the first fruits of this new strategy, and that's why I went forward and invested in Fluence. So I see this turnaround story in a positive light. And that's why we've made this support. And we are strong supporters and believers of the vision, which is portrayed here.

Thanks, Niko. Just following on from that, just in relation to MABR, what would be the longer-term strategy? And how do we plan to see MABR moving from the adoption stage to it being an industrial default application? To you, Tom.

Yes. What was the last part about industrial?

How do we plan to see MABR moving from the adoption stage to it being an industrial default application?

Okay. I'm sorry. I was thinking industrial treatment versus municipal treatment, but I understand. That is a very good question. And one thing that was shocking to me, and I think shocking to Ben because he followed the MABR development over the last 7 or 8 years also. I was extremely surprised when I came to work for Fluence that the MABR had not been adopted as a standard default process in America yet. And after digging into it and finding out, I think the main reason is that the MABR process is important for nutrient removal and especially nitrogen removal. The American standards, at least in North America, which is roughly 50% of the global market, the American nutrient and nitrogen standards have not been adopted in every state. Unlike basic clean water, which is very basic clean water, the federal government doesn't control these standards. Every state has their own control of the standards. And until every state puts in rules for nitrogen removal at a high level, there won't be a need for a nitrogen removal default system. When that happens, I do believe the MABR will become, if not the only 1 of 2 default systems for nitrogen removal. It's already starting in places like Iowa, Missouri, California. But for example, Texas, they are anywhere near getting ready for these requirements. Wisconsin and Michigan are getting close. The Chesapeake barriers getting close, but it's going to take time. And when those regulations are put in place, which they will, it will be more widely accepted and adopted. And let me be clear, cities and townships are not going to spend money on a new process for nitrogen removal until someone forces them to do it. That's just the way it is. So I hope that answers it.

Thanks, Tom. And then there's just a question just regarding since the annual report was published, there's been a fairly high volume of transactions in the market, either in block or normal trades. Just wondering if a top 20 shareholder list could be made available on the platform, just to show some transparency on where the top 20 stands now, which will help make better informed decisions. I mean, subject to the Board, I'm happy to answer that, that I will take that back to the Board and put that to them, but I don't see any concerns with doing that either on the website or on the platform. So there's other questions here, but they're in relation to the resolutions, the formal resolutions. So as far as the operational questions, there's no other questions through the chat channel nor any audio questions. So that concludes the operational Q&A, and we may now proceed with the formal business for today.

Okay. Thank you, Tom and Melanie. I will now move to the formal business of today's meeting. Before opening the poll, I wish to remind shareholders that the poll will remain open for an additional minute or 2 after we have considered all resolutions. I now declare the poll open. I now refer you to the first item of business as set out in the notice of the meeting. If you have a question on this item of business, please follow the questioning process, which was previously outlined. We will address your questions after the last resolution. The first item of business pertains to the receipt and consideration of the financial report of the company, together with the directors' report and the auditor's report for the year ending December 31, 2024. These items are contained in the annual report, so I ask that they be taken as read. The annual report is available on the ASX announcement platform or on the company website. The Corporations Act requires the accounts and reports to be laid before shareholders at the Annual General Meeting. However, except as set out in resolution 1 to be considered later, there is no requirement for a vote of members to be taken on them. No written questions to the auditor under Section 250 PA of the Corporations Act were received by the cutoff date 5 business days before this meeting. Questions may be directed through myself to the auditor in relation to the conduct of the audit, the audit report, the company's accounting policies or the independence of the auditor. As this matter does not require a vote, we will now move on to the first resolution. I now turn to the first resolution in today's notice of meeting. The remuneration report is set out in the company's 2024 annual report. The remuneration report sets out the company's remuneration arrangements for the directors and key management personnel of the company. The vote on this resolution is advisory only and does not bind the directors or the company. The proxies received with respect to each item of business at today's meeting are outlined in the presentation displayed on the screen. I move that the shareholders consider and, if thought fit, pass the ordinary resolution. [Voting]

As resolutions 2 to 4 involve me personally, I will hand the chair to Tom to conduct these resolutions.

Thanks, Doug. I will now move to resolution 2, which relates to the reelection of Doug Brown as Director of the company. I move that the shareholders consider and, if thought fit, pass the ordinary resolution. [Voting]

Okay. I now move to resolution 3, which relates to the approval to grant security pursuant to the revolving credit facility to Douglas Brown and Nikolaus Oldendorff as lenders. I move that the shareholders consider and, if thought fit, pass the ordinary resolution. [Voting]

Okay. I now move to resolution 4, which relates to the approval of the director share purchase plan. I move that the shareholders consider and, if thought fit, pass the ordinary resolution. [Voting]

I now hand the chair back to Doug to conduct the next item of business.

I now move to resolution 5, which relates to the approval of the 10% placement capacity. I move that the shareholders consider and, if thought fit, pass the special resolution. As this is a special resolution, it requires 75% of the votes in favor in order to be deemed as passed. [Voting]

We will now go to the shareholders' questions for these resolutions.

Thanks, Doug. We have a couple of questions. The first one is -- it's a question for the auditors. We have noted the independent auditor's report is fairly clean despite the account shows a negative equity. Could you share your confidence in the aspect of the company as a going concern? Now just as mentioned prior, our questions to the auditors can only go to audit process. So I might either have Ben and maybe BDO might be able to come in over the top as to what the process was.

Yes. I -- since this is a question directed at our auditors, I think I'll ask Kathy to answer if she deems.

So I'm happy to talk through the audit process, which is that we performed our audit procedures in respect of going concern in accordance with the auditing standards. And we concluded that the company has sufficient cash flows for the going concern period. I don't think it's my place to comment on the nature of those cash flows as that has been presented by management as part of the operational overview at the start of the meeting.

Right. Thanks, Kathy. Thanks, Ben. And just a question in relation to resolution 5, which is our additional 10% placement capacity. Just saying it's not good practice to allow our Board to selectively place up to 25% over a 12-month period. What is our history of doing selective placements? And why are we asking for this authority? And has there been substantial protest vote against this resolution? So I can answer the last part there, is that we have always put this resolution up for the last 2 years. It has been carried with no substantial vote against the resolution. It was only in 2022 where it wasn't carried. That was the only year. So just on the first 2 questions, I'll go through you, Doug, which is what is our basis for asking for the 10%?

Generally speaking, it's advisable to give the company flexibility should certain events arise. We have no specific plans to issue that capital or issue those shares. But it's generally, in my view, just a sound practice to have the increased flexibility. This is a vote that required a 75% shareholder approval to pass. And as you saw, I think, on the previous slide, we substantially exceeded that.

Thanks, Doug. And just a follow-on from that, not so much a question, but just a consideration for the Board that the next time that a capital raising is done is that the smaller retail shareholders are considered for a pro rata renounceable. So we'll take note of that. Thank you. There are no other questions that have come through, and there's no audio questions. So we may proceed to conclude.

So let's provide a minute or 2 for additional time for the poll voting to be completed. So I'll make note of the time, and we'll give it another minute and a half. [Voting]

As the additional time is now up, I declare the poll closed. Ladies and gentlemen, since the poll is now closed and there is no other business that can be brought forward at this meeting, I declare the meeting closed. Thank you very much.

Thank you all. We will now close the webinar.