Fluence Corporation

AU: FLC

AU$290.2m market cap

AU$0.54 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

Fluence has enjoyed exceptional bookings in FY19 so far. Aside from the US$188m CES (custom engineered solution) win in Ivory Coast, it has also secured a $20m contract in Egypt, a $10m desalination contract in Brazil and a further ITEST deal. Meeting FY19 forecasts requires y-o-y growth to accelerate but they are now substantially underpinned by this order book and expectations that ‘smart product solutions’ will double. Despite growing evidence of execution, in our view the company’s exceptional long-term growth prospects are not factored into the current valuation.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 33.2 (23.6) (21.7) (7.0) N/A N/A
2018A 101.1 (8.5) (10.5) (2.5) N/A N/A
2019E 152.0 (2.3) (4.6) (0.8) N/A N/A
2020E 266.5 23.0 20.6 3.8 10.0 N/A
Last updated on 23/07/2019
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 23/07/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net cash (US$m) 14.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 42.1 8.0 38.5
Relative* 38.7 1.3 27.2
52-week high/low A$0.6/A$0.3
*% relative to local index
Key management
Henry Charrabe CEO
Richard Irving Executive Chairman