The first half of 2019 has been a busy six months, with focus on completing our IPO and preparing the organization to launch a Danish automated production of our decentralized high-efficiency water heater. This half year report was affected by extraordinary costs for the IPO.
The “climate agenda” is international and the UN's "Substainable Development Goals" contribute to the fact that in the years to come, very large resources will be spent on trying to reduce CO2 levels. This goal can primarily be achieved by companies collaborating to develop new technologies that can reduce consumption or be more energy efficient.
As an investor in Waturu Holding A/S, you are helping to pursue that agenda. Waturu has the technology and distribution in place and we will do our best to promote decentralized heating of domestic water. This, for the purpose of saving water and energy and thus reducing the CO2 emission for the heating of hot domestic water.
On the website https://www.un.org/sustainabledevelopment/climate-change/ you can read more about Objective 13, entitled "Climate Action". In addition, you can see the appeal from UN Chief Secretary General António Guterres, that all politicians and business owners around the world must focus on reducing CO2 emissions.
Waturu, will focus on commercial real estate and institutions first, since this is where we can secure the greatest savings and also improve comfort. We start out with our sales efforts in Denmark, but our ambitions are international and that is why we have also chosen an international partner as a distributor to begin with.
Currently Waturu is working on setting up the production, which can be scaled up immediately as sales efforts increase and demand for the product increases. The ambition is to establish a production apparatus that meets the highest standards and which at the same time has the sufficient flexibility to be able to produce our units at prices and at a quality that is absolutely competitive. The demand is expected to increase and come from companies all over the world, that wish to purchase and sell Waturu technology in various industries. The end-buyer typically want to focus on saving water, energy or reducing the use of chemicals, used today to reduce the bacteria level in water.
Since the IPO, Waturu has been contacted by several large international as well as smaller players who are interested in exploring the possibilities of collaboration.
Waturu's business areas can be divided into three main areas, which are the following: Water heating, OEM solutions, and purification of water / wastewater. OEM solutions cover collaboration agreements where Waturu technology is integrated into external companies' products.
Status is that there is considerable activity in all three areas and, as stated in our company description and described above, agreements have already been signed with, for example, Saint Gobain on the distribution of our high efficient electric decentralized water heater.
The OEM area covers among others a solution for bacteria treatment of hot and cold drinking water in hospitals. Waturu collaborates with a Danish University Hospital and the first tests have been conducted focusing on testing the impact of the technology on bacteria, such as Legionella.
The perspective is to sell a solution that can ensure clean bacteria-free water in hospitals internationally. Hospitals are often run from very large properties where the water is circulated at a temperature which is unfortunately perfect for bacteria growth. Countries like the US, where there are many large private hospitals and where there is often challenges with Legionella, could be a good international match for Waturu. The technology can be used centrally or decentralized and this business area can have significant value for Waturu Holding A/S going forward.
Furthermore within the OEM area, we have initiated a collaboration with a large land based fish farm where the technology will ensure clean and bacteria-free water. Initially, the goal with the Waturu technology is to ensure a higher survival rate for the very young fish that are currently dying from bacteria infections. Land-based fish farming is expected to revolutionize the industry. There are very large potential business partners in the field and after an expected successful test, securing the distribution with one or more of these companies will be the next step.
Another interesting product is a new solution that can provide instantaneous boiling water, but without the consumer having a tank fitted in their kitchen cabinet. Here, a collaboration with an international partner has already been established and development of the product is in process. The goal is to eliminate the "standby" heating that the existing solutions require, as this means a waste of energy even when no boiling water is used. Our solution will also reduce the requirement for installation space by 80%. The market potential is considerably large and the first product is expected to be launched from mid-2020, depending on the wishes and requirements of our partner.
The subsidiary, Danish Medtech, is developing positively and as announced, on August 1, 2019, an experienced external director, Jesper Nørregaard, has been hired. Jesper Nørgaard has spent much of his career in Leo Pharma, most recently as General Manager at LEO Pharma Nordic. Jesper Nørregaard has been hired to carry out an IPO of Danish Medtech in 2020 and to be able to commercialize a number of Medtech / Healthcare products, including a new product that can help wound care patients. The company will also conduct a series of clinical trials that could potentially result in a new treatment for childhood eczema.
Separation of Danish Medtech from Waturu Holding A/S is required as the company's business area requires special competencies within Medtech/Medico, as well as to ensure that the focus in Waturu remains on the existing business areas.
Danish Medtech expects to complete a Pre-IPO capitalization in the coming months and, referring to the company announcement no. 10, there has been great interest in participation from existing as well as new investors. Subsequently, Waturu Holding A/S will still be the majority shareholder in Danish Medtech.
We continue to operate at a high level of activity in the second half of the year, where more agreements with partnering companies are expected to be signed, which will provide a good foundation for future growth. Second half year will focus on setting up the production, logistics and the necessary support functions.
The financial accounts are “on course” and shows a lower cost level than expected and that we have hired additional personnel for project, sales and development work. We have also started the setup of an automated production and allocated resources for sales and marketing work.
Today the Board of Directors of Waturu Holding A/S has approved the Half Year report for the first half of 2019. The report has not been subject to audit but review by BDO Revision.
Toke Reedtz, CEO
Michael Nørgaard, CFO
Waturu Holding A/S
About the company
Waturu Holding A/S is a Greentech company that offers an innovative water technology. The technology instantly delivers hot water in a sustainable and responsible manner. The water and energy consumption is lowered by respectively 75% and 94% compared to a district heating solution with circulation. With the savings, a significant CO2 reduction follows. Integration of the company's technology into external products and the treatment of wastewater and industrial water are also business areas of focus. The company initiates automated production in Denmark in 2019, has established subsidiaries and has a patent and patent applications in process.
CEO Toke Reedtz, tel: +45 5188 1262, e-mail: firstname.lastname@example.org
CFO Michael Nørgaard, tel: +45 2720 6214, e-mail: email@example.com
Waturu Holding A/S
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211 11 Malmö