CEO 's Review from our FY23 Annual Report

Dear valued Shareholders,

Envirosuite has achieved a significant milestone in FY23, achieving an adjusted EBITDA positive result for the first time and exceeding our stated objective of transitioning to that position during FY23. This has been achieved through strong sales growth, product leadership and robust fiscal management.

We have continued to invest into innovative technology, delivering the most advanced environmental intelligence technology solutions for our customers globally. We have made significant progress in our Mission, creating world leading, science-based  technology  to help our customers act faster, perform better and realise their full potential with environmental intelligence. We have included some of our customer stories this year to bring to life the impact that we are having.

I am also pleased to share our strong FY23 results. We grew statutory revenue to $57.9m during FY23, an 8.3% increase on last year. This directly contributed to a 112.1% increase in adjusted EBITDA to a profit of $0.5m compared to a loss in FY22 of $4.0m.

Our Company grew considerably in the year adding 27 new customer sites (6.5% growth YOY) and new ARR of $9.1m (7.3% growth YOY). This growth was supported by continued improvement in gross profit, achieving 51.6% in FY23.

The breakthrough of achieving a full year adjusted EBITDA profit of $0.5m exceeded our stated target and demonstrated the drive towards sustainable profitability.

Envirosuite has experienced remarkable growth and progress across various aspects of our business during the year.  All our products – EVS Aviation, EVS Industrial and EVS Water – have contributed towards this growth, with EVS Industrial delivering particularly strong new ARR. The Americas  region  has  stood out with impressive results, showcasing our ability to expand our market presence globally. Importantly, we have continued to identify and deliver cross-sell opportunities this year.

We continue to be laser focused on our key market segments and our ambition is to be #1 in each of these segments in the coming years; Aviation, Mining, Industrial, Waste, Wastewater and Water Treatment.

Product Led, Growth Focused

At Envirosuite, we are committed to delivering innovative solutions that integrate cutting-edge science into our products. We have continued to invest in research and development, resulting in the launch of new products and expanded capabilities. These advancements have further solidified our unique points of difference and market leadership, allowing us to better serve our customers and meet their evolving needs.

Americas achieved 20.5% ARR growth this year, led primarily by our EVS Industrial product suite with significant growth in Mining, Industrial and Waste. We expect the  strong  market  tailwinds and Environmental Justice legislation to continue supporting this growth. EMEA created substantial ARR growth of 27.3% with current and new customers in our Aviation segment and APAC saw strong ARR growth.

EVS Aviation

FY23 was a breakout year for the EVS Aviation group as the industry continued to bounce back from the pandemic, with ARR growth of $2.5m (7.4% increase YOY). This was further supported by the re-signing of two of our strategically important customers, Aena and ANA Aeroportos de Portugal, and expansion into the Air Navigation Service Provider (ANSP) market. The growth came through new products including Carbon Emission Modelling and the ANSP solution, as well as new geographic locations, primarily within the Middle East and Africa.

The awareness of the impacts of noise and greenhouse gas emissions within the Aviation sector is gaining further momentum and we are well positioned to support our customers with world-leading products. Importantly we were able to position a total solution for noise, carbon emissions and air quality management for Egyptian Airports Company with five new sites being awarded this year. We look forward to implementing these sites in early FY24.

EVS Industrial

During FY23 we changed the name of our product group from EVS Omnis to EVS Industrial, creating consistency across our portfolios and reflecting the potential for further products to support Omnis in our drive to secure market share in our focus sectors.

EVS Industrial achieved ARR growth of $3.5m (19.3% increase YOY). Mining was once again a strong contributor to our growth with key expansion and scale opportunities including companies such as BHP, Vale, and Teck further strengthening our market leadership position. In Waste, we successfully expanded our partnership with Byers Scientific and we secured additional sites with industry leaders in the USA.

EVS Water

FY23 was a year of market validation with early- stage technology being accepted by some of the world’s leading organisations, while still achieving ARR growth of $0.4m (36.0% increase YOY). NEOM’s water department (ENOWA) selected Envirosuite to help optimise the city’s water infrastructure and water operations to achieve environmental objectives at two existing desalination plants. SeweX achieved commercial success in all our regions and this year we have focused on the importance of scale and time-to- value, with these customers indicating success and further expansion opportunities.

Customer Success and Scalability

An investment into our Customer Success teams has resulted in significant improvement in the usage and capability of our customers around the world. This adoption is further supported by our dedicated environmental intelligence Services team, which supports some of our largest customers in their operational and strategic plans.

This year we reduced the churn within our EVS Industrial group due to the focus on product and user engagement as well as alignment on the right scalable solutions and customer acquisition strategy. This has resulted in a greater understanding of the customer needs and positioned the product for future growth and adoption in our core markets.

FY23 has seen a full year of our Operations Centre in the Philippines and we are delighted with the feedback that we have received around the way these teams have engaged with and supported our customers. This Operations Centre has been critical to scaling the capacity of our business globally to ensure our customers continue to receive quality service and support.

We continuously strive for operational excellence and have implemented key initiatives to improve efficiency across our organization. Highlights include notable transformations in our operations, ensuring streamlined processes and optimized resource allocation. Additionally, we have conducted a thorough review and restructuring of business costs, enabling us to enhance cost- effectiveness without compromising quality.

People and Culture

At Envirosuite, our people are our most valuable asset and we prioritise their growth and well- being. Throughout the year, we have nurtured a culture of collaboration, innovation, diversity and inclusivity. Our dedicated workforce has shown exceptional resilience and adaptability, contributing to our collective success. With the continued focus on people as our primary competitive advantage, we are pleased to see our employee engagement metric improve by 6% to 75% this year. We remain committed to fostering a supportive environment that empowers our employees to thrive both personally and professionally.

The continued success of our Objectives and Key Results (OKR) framework has enabled us to focus on what is critically important for the Company’s success and ensure that we are aligned globally, delivering on our strategy and driving improvement.

Under strong leadership, Envirosuite has been able to navigate complex market dynamics and steer the company towards growth and profitability. Our leadership team remains focused on leveraging our strengths, seizing opportunities, and addressing challenges with agility and determination. With a clear strategic vision, we continue to capitalise on emerging trends and drive sustainable success.

Outlook

Looking ahead, we are confident in our ability to build upon our achievements and capitalise on future opportunities. Our strong financial performance, continued focus on innovation, expanding market presence, high-calibre customer portfolio and talented workforce provide a solid foundation for sustainable growth. We will continue to prioritise customer satisfaction, technological advancements, and responsible business practices to create long- term value for our stakeholders.

We will continue to invest into the Americas region, where we have seen strong growth over the last few years. We have significant momentum in the Americas and the large customer base, and we will ensure that we continue to focus on customer success and our core products to deliver long term value – both direct and through our partnerships.

By leveraging the macro drivers that are supporting our environmental intelligence ambitions, we are well-positioned to achieve considerable growth in the coming years.

We are only just skimming the surface in our EVS Industrial portfolio, with the validation and land- expand-scale success that we  have  seen  this year positioning us strongly for ongoing growth.

• EVS Aviation is flying again, and we are supporting governments and private organisations around the world to deal with a rapidly changing landscape.

• Our world class customer sites continue to validate our EVS Water product offering – it is our opportunity to harness this and turn it into meaningful growth this year.

• We have a strong roadmap of solutions for our customers that will accelerate customer acquisition and value creation.

We have demonstrated our ability to drive strong fiscal management over the last few years, and we will bring this determination into FY24 with a continued focus on cash and capital management. We will leverage our global operational footprint to continue improving our financial ratios and operating leverage. Across the Envirosuite business, we are driving improvement in our efficiency, scalability, productivity, and time-to-value which will drive further improvement in our underlying business metrics.

In closing, I would like to express my gratitude to our shareholders for their unwavering support and trust in Envirosuite. Together, we will forge onwards and embrace the challenges and opportunities that lie ahead as we strive to make a positive impact on both people and the planet.

Access our FY23 Annual Report

Click here to access our FY23 Annual Report on the ASX.