Great. Thank you. Good morning, everyone. I'm pleased to be here again. I think this is the third or fourth presentation we've done for Bobby. We've got a lot of exciting things. I'll give you a quick recap about who BioRem is, what we do. We'll talk about some of the progress we've made, and then obviously the most interesting part of the presentation is where are we going from here?
What are our future prospects? Without too much waiting for people to come in here, I'll slowly get started. The obligatory forward-looking statement. Obviously, a lot of things can change. I'm not going to go through every word on this slide, but conditions are dynamic, and things can change in the coming months. Let's start off with what BioRem's vision is, what the mission is.
There are some familiar faces in the audience, and you may notice a slight tweak to our vision, but it's essentially to engineer, design, distribute, and service the most innovative and effective air emission abatement technologies in the world. The slight tweak here, and I'll get into that as we talk about the future prospects for BioRem, is really that service element. Kind of pulling away from a project construction-based lumpy business to trying to build out a foundation of recurring revenue in part of the business model itself.
Established in 1990. IPO in 2005. Some small bolt-on acquisitions over that period. The key dates, and I won't go into a lot of these catalyst moments like Brent said in his presentation yesterday, but current management took over in 2015, and the shareholder structure, capital structure, completely revamped in December of 2021.
Currently with a market cap of about CAD 60 million. About 19 million shares outstanding in total. This is down significantly from a high of 38 million. One of those catalyst moments, I think, where you see an inflection point in the outlook for the company and in the performance and reflected in the share value as well. Great clean balance sheet.
Our debt is extremely low at CAD 1.5 million, and working capital continues to increase. All right, so what does BioRem do? We've kind of gravitated away from BioRem, so those that are familiar with the story, BioRem stands for bioremediation. Back in the 1990s, we were using microbes to clean up soil.
We haven't dealt with soil-based applications since the late 1990s, and we are gravitating away from just being a biological solutions provider and providing a full range of technologies, physical, chemical, providing upfront engineering services, as well as back-end after-sales service and support.
So a full range of services to better serve our customers' needs. It also gives us a much bigger market to go after. So you'll hear me use the term platform. I see BioRem as a platform to bring new technologies and services to a niche market.
Where do we apply these technologies and services? So they can be applied across a wide range of industries. We've been in petrochemical, food and beverage, pet food, chemical production, semiconductor. But the bulk, the core of our business, and this is what differentiates BioRem from most clean tech companies, is our heavy exposure to critical infrastructure.
Critical infrastructure is interesting from a number of perspectives. It is really non-discretionary spending. Regardless of the greater economy, people need to flush their toilets. They need to put their garbage out on the curb. Non-discretionary spending. Budget cycles are extremely long. Once budgets are committed, they do not go away. Projects never get canceled.
Regardless of what is happening in the greater economy, in fact, when the greater economy is going down, usually there is more investment in infrastructure, and we have seen it time and time again in 2007, after 9/11, during COVID. You are always seeing this investment in infrastructure to kind of stimulate the economy, which bodes well for the products and services that BioRem provides. It also gives you a lot of visibility on what the next 12-24 months will look like. What we enjoy best are dealing with the really challenging applications.
We are talking about high-profile, dense urban environments. We are talking about infrastructure that is literally meters away from people's homes, from their barbecues, from their bedrooms, or from their children's schools. We like these challenging applications because we have the knowledge and the proven install base to understand how to attack these types of applications. We love complex air emissions.
We are talking dozens of different types of recalcitrant compounds that interact with one another, and we like to work in jurisdictions with very strong regulations that are actually enforced. We happen to live in a province that actually has one of the tightest quality of life regulations on the planet, I think second to Tasmania, with a one odor unit regulation. Very tough to achieve. Not a lot of people have the data to prove that it can be done. BioRem can do both.
These large, challenging projects are really very profitable for BioRem, and we really set the standard in these types of applications. Really an area that we like to operate in. I have kind of spent a bit of time talking about BioRem. Just quick update. I know we will be meeting with a lot of you over the coming days.
We can get into more detail specifics on technology if you are so inclined, but let us just look at where the corporation is today. 2026 has been a great year, and it looks like it will continue to be a great year. Brent yesterday, I loved his presentation. You had that little guy pushing that giant boulder up the hill. That has been BioRem for the last 10, 20, 30 years, right?
Clean tech is a tough business to be in, and it just felt like we were struggling throughout that period of time. I feel that we are at the point where that boulder is starting to roll on its own. The momentum is carrying through. We have been on a great five-year progress journey. 2026 and 2027 appear to be headed in the same direction. Very excited about that.
New products and services are really driving that growth. The growth that we are seeing top line and bottom line is far outpacing what the market growth rates are, which is really nice to see. Bookings are strong. The metrics are simple here. When we report a backlog, it is not a matter of if we are going to deliver that project, it is a matter of when.
We've got a 99+ percent retention rate on our contracts, so it's really when are we going to deliver that. Our bookings year to date approaching CAD 50 million. Nice numbers to be in. Our backlog still remains at near record highs, greater than CAD 70 million. Then this last bucket, it's the unawarded tenders. The reason why I feel so confident about the rest of the year and for 2027 is we've been tracking our bidding activity for almost two decades now.
We have a pool of over CAD 100 million of projects that we've bid that have not been awarded to any contractor yet. If I look back over the last 20 years, our win rate's between 35% and 52% in North America, depending on the region, depending on the product.
It's conceivable in the next 12- 18 months out of this pool that's already been bid, about half of that should be coming BioRem's way. Some of the factors, the indicators I look at to just judge how the company is doing. I don't want to spend a lot of time on past performance, but in 2025, when we did the first presentation of MicroCap, doing about CAD 25 million in revenue.
Last year, got up to about CAD 42 million. During that period, we've almost doubled the EBITDA as well, which was something that we had set as an objective back at that time. We had the 50 and 5, 50 top line, five on the bottom line, and with the stretch goal of CAD 100 million top line, CAD 10 million on the bottom line.
I believe that BioRem will achieve that bottom line far before we ever get up to the CAD 100 million on the top line. What I want you to take away from this slide is simply that when BioRem management sets objectives, we execute the strategies, and we deliver on the results, and I'm trying to set a pattern for the future based on this.
Update on what's driving the growth. I won't get into all of the details here on the numbers, but our new products and services are now accounting for roughly a third of the revenue and a third of what we're bidding. Deployed a large number of projects already across a wide range, the dry scrubbers, chemical scrubbers, noise abatement, and with service.
Our sales funnel is currently sitting at over CAD 220 million, so quite happy at seeing that growth in the potential projects that are actively being pursued. I've talked about what we've done in the past. What are the next steps, right? Let's look towards the future. We see all the same market drivers that we've been talking about, and there's no abatement in these drivers, whether it's immigration,
It could be immigration from external to the countries moving in, but it could be internal migration. You're seeing a lot of people move out of California into Texas, so on and so forth. Whenever people move, you need the infrastructure to support the people moving into those areas, and we see no slowing down from those activities. Same thing goes with all of the other buckets, whether it's the regulations.
What is nice about the infrastructure market is it is independent of what party is in power. You can imagine south of the border right now with the Trump administration, not that much interest in environmental regulations or enforcement. What happens at the municipal level is completely different from state, provincial, or federal levels. If there is a problem with emissions at a wastewater plant or a solid waste facility,
The residents complain, and they complain directly to the mayor. The mayor does not want to deal with these issues, so municipalities, regardless of what the regulations are, independent of those, have their own set of rules that they follow by. We are seeing no letup from that viewpoint. Communities continue to educate themselves.
As communities become more affluent, they demand. First thing you do is you put a roof on your head, you feed your family, you get post-secondary education, then you start to care about water quality, air quality, and we are seeing that demand grow everywhere. We are still seeing every year goes by, infrastructure ages.
All of these market drivers are still there. One of the indicators I look at to judge what is going to happen in the next couple of years is these infrastructure projects do not materialize overnight. A billion-dollar project takes years, up to 10 years to conceptualize, budget, and then execute.
When a municipality is forecasting they are going to have growth rates or they are going to have a problem with one of their facilities, they hire an external consultant like an AECOM, a Stantec, a Jacobs to look at feasibility studies, look at alternatives, look at CapEx, OpEx, different scenarios. That always predates a formal tender.
We track that type of work because the consultants will come out to BioRem and other vendors to work on these different alternatives for the feasibility study. By tracking the amount of budgetary and feasibility study work we do, we know whether two to five years down the road, there is going to be a slowdown in the bidding and the greater economy. It is just a nice other metric to look at, and our budgeting activity is at near record levels. Our bidding activity continues to be at near record levels.
This week alone, I have got 12 in Canada and the U.S. that are closing. Very exciting times. We just see the demand and the drivers. There does not appear to be any slowdown. I am going to knock on wood. I do not want to jinx this roll that seems to be going on right now. We can talk a little bit about the global market overall. There are about 13 or 14 firms out there that do market research. I do not want to get too hung up on the numbers.
They do not generally change that much year-over-year, but the consensus seems to be that in North America alone, the annual expenditure is just around CAD 1 billion with a growth rate somewhere between 5% and 7%. What is important here, that encompasses a wide range of markets that BioRem is currently not active in.
A good portion of this billion CAD annually is dealing with power generation and combustion gas byproducts, which is a sphere that we currently don't operate in. What's interesting here, though, in the graphs is it just shows the relative proportion of how the technologies can be applied, with roughly 40% using physical technologies, and then 30% chemical and 30% biological. The other trend to note is the application of chemical technologies is declining, while biological technologies are increasing at the fastest rate within that group.
I've also thrown the five-year BioRem growth rate numbers here just to illustrate a couple of things. A little bit more modest than what you saw over the last three years. I like to be a little bit more conservative when I look at the numbers, but still growing top line at about 12%, which is almost double the market growth rate.
That makes us happy. But really looking at the bottom line is demonstrating operational efficiency. EBITDA is growing much faster than the top line is, and you'll notice over what period this happened. Over COVID, over hyperinflation afterwards, over the tariff wars. Very proud of the organization and what the team's been able to do with just innovative solutions on a day-by-day basis to deal with these challenges.
I think those are the numbers that really stand out here. All right, we've talked about the drivers. These are the external factors that give me a warm and fuzzy for the future. What is BioRem doing about this? How are we capitalizing on this opportunity? The growth strategy remains the same. Ryan did an amazing job yesterday with his speech about successful companies and the approach to M&A activity. But for us, it's a two-prong approach.
It's organic, which we've executed on the last five years, combined with an inorganic element. The organics, we still have a lot more new technologies to bring to market. We've got still geographic territories to expand the current offerings into. We've got the service group expansion, which I've alluded to a couple of times, and we're going to spend a bit of time digging into that shortly. Then there's investment in sales, sales.
Our company, every individual in the company is sales driven. Without sales, you can't do anything. Get the sale in, figure out a way to deliver it. On the inorganic side, we exercise a lot of discipline. We are not into financial engineering. We're here to build a global powerhouse of a company that's going to stand the test of time. You'll notice that we went from 38 million outstanding shares down to 17 million.
During that period, we've gotten rid of our debt, and we've built out a cash position. Ideally, any future transaction would be done in a non-dilutive fashion, but we still have some room there given the low number of shares outstanding. Really looking for an accretive deal. We're looking at technology, we're looking at geography. Vertical integration, while not very sexy, actually makes a lot of sense for a company like BioRem.
About 80% of our costs fall into two or three buckets. While not sexy, we are considering some vertical integration moves as well. I've talked about just the overall general growth strategy, and just to remind everyone, this is what we've been focused on for the last five years and will continue to do so. But let's talk about the service opportunity a bit because this really excites me. No one likes a lumpy business.
I always tell investors, "Don't look at us quarter over quarter." If the road to the facility hasn't been built yet, I can't ship my equipment. If there's a problem on site and I'm ready to go on March 25th, but it gets delayed to April 1st, my quarter gets shifted, right? Do not look at BioRem quarter by quarter. Look at us over 12 months and you'll see we're not as lumpy as you believe it is from first glance.
The service opportunity is one that I'm hoping will help smooth out these peaks and valleys and bring a recurring revenue portion to the business, if not the majority of our business in the future. Let's just, quick background. Over 23,000 wastewater plants in the U.S. alone, over 3 million kilometers of sewer lines, and over 200,000 lift stations.
Just a lift station, you can imagine, if your house is in a valley, the wastewater plant is up on top of a hill. When you flush your toilet, it won't go anywhere, right? You need, basically it's a pump station. The sewage gets pumped up. The problem with these pump stations is they're literally meters away from people's homes. They're in residential areas. All of these areas demonstrate just the magnitude of the service opportunity that's out there.
It's not just the BioRem systems. If we look at BioRem alone, we have almost 3,000 installations. They tend to be regionally based. If I look at Charleston, I look at Miami, Chicago, Toronto, or Vancouver, we have literally dozens of systems in each of these areas, and that concentration lends itself for cost-effective delivery of services.
Most municipalities that have greater than 100,000 people as a population level have multiple systems. We see that by addressing each of these regions where we may have a higher concentration, we can service not only BioRem's equipment, but other equipment that may be there. What does a service opportunity look like? I'm going to wrap up the presentation, just kind of saying a little bit more detail of what I see the service opportunity looking like.
We estimate it at almost CAD 0.5 billion annually in North America. The bulk of it is in consumables. One of the technology bubbles that we operate in is the physical sphere. Think of it as a sponge. You've got a giant sponge. You soak up the pollutants out of the air. At some point, that sponge is full and needs to be removed, disposed of, and replaced.
That market alone is anywhere between CAD 150 million and CAD 400 million a year. Most municipalities will have dozens and dozens of these systems. They'll put out tenders for multi-year contracts to do all of the systems in their catchment area. We're not geared totally to go after that cost effectively, but it provides us with a huge opportunity to grow into. There's preventative maintenance. One of the other areas is performance assessments and predictive life.
These systems work till they don't. If they stop working at the wrong time of the client's budget cycle, they're stuck with a lot of off-site emissions and potentially lawsuits. With performance assessments, by providing predictive life assessments, we're able to help the clients predict and budget for equipment replacement. There's replacement parts. You're in a corrosive, abrasive environment. You've got sensitive instrumentation.
They take a lot of calibration, a lot of wear and tear, and need frequent replacement. Just a bunch of these buckets, and then there's all the front-end engineering. It's doing the site assessment, identifying what the problem is, coming up with feasibility studies, alternatives, CapEx, OpEx. There's dispersion modeling, where you model the emissions leaving the facility and how they impact the surrounding community.
So a wide range of front-end and back-end services that can be applied here. Then just to show you where we've gone with limited resources applied to this segment to date. Just a few short years ago, that was about CAD 1.5 million. Last year, we did CAD 4 million in revenue. Roughly 10% of the revenue came from service. In the first half of this year, we are up to CAD 4 million.
As of the last quarter, Q2 financial statements, we started segmenting construction-based project work and service work, just to hold the team accountable and show the progress that we're making in this area. Just keep a close look on that. We've invested a lot of people into the group. We've got a dedicated service manager. We have sales.
We have another two field service technicians, and we're going to continue to invest in that group and see what we can make out of this opportunity. On that note, I think I've kind of given you just the high level of what BioRem is, how we've performed, where I see the opportunity. On that note, I will stop talking and open it up for any questions there may be. Yes, sir.
Is business metrics-heavy at all, or who runs the capital? Who's investing?
The majority of the projects are municipal. As a startup, it's a horrible environment to be in. I'm going to be a little facetious, but it's 90% on delivery, 10% whenever the hell they want to pay that last 10%. Okay? But once you're in and you're able to cash flow the projects, it's a barrier entry to additional competition, so it's a good scenario. We don't need a lot of capital other than to cash flow the projects.
We don't really manufacture anything, and so this is a really good question. We're really just a bunch of smart gals and guys with laptops. We integrate technologies. We have a very diverse supply chain on every continent, which enables us to deal with a lot of these currency fluctuations, tariffs. But essentially, we don't need capital because we're not fabricating the equipment ourselves. Everything's subcontracted out. Yes, sir.
On the organic growth, we have talked about three years, great numbers, five years, try to bump it down a little bit for three years. But why so much success? Good execution, it is a new product. It is unbeatable.
I like to think tremendous leadership, but in reality,
Take the credit.
I think it is a number of factors. I think it is the new product. Instead of competing for one pie, we are now competing in three pies, so it is a bigger market that we are going after. But I also think a good portion of it is operational efficiencies. When I look back to when we took over the company, we were doing under CAD 20 million, I think CAD 15 million a year and had 69 people.
We are now doing CAD 40 million-CAD 50 million a year with 38 people. So I think I am really proud of what the organization has done. I think the internal structure and processes give us capacity. That capacity enables us to be very competitive on a job if we need to take the job, and we can deliver that job at a lower cost than most people.
I think between those two things, and then I think the sales organization's doing a better job of getting market intelligence, competitive information, working with a tight group of estimators and engineers internally so that we're getting the price right on bid day. I think those three factors are what's leading to the growth that you're seeing.
No, I'm sorry.
Oh, sorry. I will be around if anyone wants to talk afterwards.