Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (August 2020)
29 slides from Energy Recovery's investor presentation, Aug 18, 2020
Slide 1: Energy Recovery Investor Presentation August 2020
Exhibit 99.1 Energy Recovery Investor Presentation August 2020 NASDAQ: ERII
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation contains forward‐looking statements within the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward‐looking statements in this report include, but are not limited to, statements about our expectations, objectives, antic
Slide 3: About Energy Recovery
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Slide 4: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT o For more than 20 years, Energy Recovery has created technologies that solve complex challenges for industrial fluid flow markets o We design and manufacture solutions that reduce waste, improve operational efficiency, and drive significant cost‐savings for our customers in
Slide 5: Why Energy Recovery?
WHY ENERGY RECOVERY? Our technologies lower production costs of clean water and oil & gas, enabling more affordable access to these critical resources Our Water solutions are in desalination facilities on seven continents, reducing carbon emissions and helping to combat water scarcity around the glo
Slide 6: Our Product Categories
OUR PRODUCT CATEGORIES Water Energy Recovery Devices Pumps PX® Pressure Exchanger® Oil & Gas Hydraulic Fracturing Solution *in development Confidential & Proprietary 6
Slide 7: Our Core Technology Platform Is the Pressure Exchanger (PX)
OUR CORE TECHNOLOGY PLATFORM IS THE PRESSURE EXCHANGER (PX) o Our pressure exchanger acts like a fluid piston, transferring energy between high‐ and low‐ pressure fluids through continuously rotating ducts o PX technology provides benefits in a variety of industrial applications using high‐pressure
Slide 8: How Pressure Exchanger Technology Works
HOW PRESSURE EXCHANGER TECHNOLOGY WORKS Sealed Phase Pressure Exchange Phase Two fluids on opposite sides of Rotor duct rotates to 1. Low pressure driven fluid PX; rotor duct is sealed, isolating pressure exchange phase enters the rotor duct high, low pressure fluid streams 2. High pressure motive f
Slide 9: Investing in Multi-Disciplinary Engineering Talent
INVESTING IN MULTI‐DISCIPLINARY ENGINEERING TALENT Significant investments in R&D team in recent years to strengthen our capabilities o Over 5x increase in R&D headcount since 2013 – one‐third of ERI holds engineering degrees o Expertise in critical disciplines to incubate and commercialize new indu
Slide 10: Evolving Manufacturing Capabilities
EVOLVING MANUFACTURING CAPABILITIES Advanced ceramics manufacturing capabilities help drive water success o Vertically integrated ceramics manufacturing facility located in‐house in CA . Creates potential competitive barrier to entry o Best practices ensure high‐quality production process . Approxim
Slide 11: Historical Financial Results
HISTORICAL FINANCIAL RESULTS Revenue: 18% CAGR 2015‐2019 Product Gross Margin Strength $87M 72% 71% $75M $69M 67% $58M 64% $45M 56% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Cash Rich, Unlevered Balance Sheet We are positioned to make critical investments in our business o Exploring opportun
Slide 12: Water – Global Demand Trends Driving Robust Future Outlook
Water – Global Demand Trends Driving Robust Future Outlook for Energy Recovery
Slide 13: Fresh Water Scarcity Is Increasing
FRESH WATER SCARCITY IS INCREASING Fresh water demand is increasing, creating global demand gaps o Water demand driven by population growth, industrialization, rapid urbanization, climate change o The world will only have 60% of the water it needs by 20301 o Potable water demand expected to increase
Slide 14: Thermal Desalination Decommissioning Creating Incremental Demand
THERMAL DESALINATION DECOMMISSIONING CREATING INCREMENTAL DEMAND Thermal seawater desalination was the dominant technology through the 1990s o Operational savings from devices like the PX made SWRO significantly cheaper than thermal . Thermal OPEX costs today are roughly 2x higher than SWRO . $1B SW
Slide 15: PX Pressure Exchanger Recycles Hydraulic Energy, Reduces Energy Costs
PX PRESSURE EXCHANGER RECYCLES HYDRAULIC ENERGY, REDUCES ENERGY COSTS Without Energy Recovery Devices (ERDs) With PX Pressure Exchanger Seawater Low pressure Incoming seawater routed potable water to pump and PX Low pressure potable water Main pump size PX transfers energy Pump pushes high pressure
Slide 16: Our Water Solutions: Energy Recovery Devices
OUR WATER SOLUTIONS Energy Recovery Devices PX Pressure Exchanger AT Turbocharger o Most widely used ERD in SWRO o Efficiencies up to 80% o Unmatched efficiencies for desalination o Volute insert technology for best up to 98% efficiency range o Highest uptime in the market (99.8%) o Lower initial ca
Slide 17: Our Water Solutions: Pump Products
OUR WATER SOLUTIONS Pump Products AquaBold High Pressure Pump Vertical and Horizontal Circulation Pumps o Water lubricated bearing for long life and o Specialized pumps pair with PX application low maintenance o Designed for long life with low maintenance o Cast, duplex stainless‐steel hydraulics fo
Slide 18: Global Reach of Energy Recovery Water Solutions
GLOBAL REACH OF ENERGY RECOVERY WATER SOLUTIONS 17M cubic Helps produce water >11.5M metric tons meters/day of to meet daily $2.0B/year saved for CO2 emissions >20,000 devices potable water consumption of customers prevented/year – installed worldwide produced >50M people equal to >2.4M cars Energy
Slide 19: Distribution Strategy Leverages Our Strength
DISTRIBUTION STRATEGY LEVERAGES OUR STRENGTH Global Water Distribution Channel o Sales and technical service organization's tenure and global reach delivers advantages in a relationship‐driven market . Entrenched, stable team located in 11 countries across 5 continents o Strong relationships and ext
Slide 20: Our IP and Global Footprint Have Driven Growth and Profitability
OUR IP AND GLOBAL FOOTPRINT HAVE DRIVEN GROWTH AND PROFITABILITY Global Water Demand Drives Growth Historical Water Revenues o Global demand for water continues to take on increased levels of importance $73M +11% +20% +14% $61M Larger numbers of projects, in increasingly $54M o $48M greater size, ar
Slide 21: Focused on Expanding Our Water Business
FOCUSED ON EXPANDING OUR WATER BUSINESS We currently focus on only 1‐2% of a project’s 1 capital spend Average Desal Project Capital Spend o Energy recovery devices make up a small fraction of CAPEX and are critical to make Intake/Outfalls Pretreatment 7% 6% plant operations affordable Engineering &
Slide 22: Oil & Gas – Material Progress Made on Path to Commercializing VorTeq
Oil & Gas – Material Progress Made on Path to Commercializing VorTeq Technology
Slide 23: We Are Applying Our Water Expertise to Oil & Gas
WE ARE APPLYING OUR WATER EXPERTISE TO OIL & GAS Water and Oil & Gas have similarities o High pressure fluid‐flow environments o Potential to transfer pressure energy from a high‐pressure fluid to a low‐pressure fluid o Opportunities to eliminate waste in system – increase efficiencies and decrease
Slide 24: Single Skid VorTeq
SINGLE SKID VORTEQ o Elegant, single PX skid solution VorTeq Production Model 1.0 . Takes advantage of higher sand concentrations . Easily scalable to flow rate, pressure and overall configuration requirements . Less intrusive to frac operations . Easy access to repair or service o Less expensive an
Slide 25: VorTeq Protects High Pressure Pumps, Reduces Costs
VORTEQ PROTECTS HIGH PRESSURE PUMPS, REDUCES COSTS Status Quo With VorTeq Frac fluid processed by VorTeq pumps handles Pumps are frac fluid isolated, clean water fed to pumps o Pumps handle frac fluid (water, chemicals o Capital savings ($1M ‐ $2M1) – less pump and sand) redundancy = less waste o Pu
Slide 26: Our Commercial Development Center Is Critical to Growth
OUR COMMERCIAL DEVELOPMENT CENTER IS CRITICAL TO GROWTH Rigorous VorTeq testing ongoing o Center uses industry standard equipment to simulate pressures, flow, and operating conditions of a frac site o Allows us to confirm system reliability and repeatability in real‐world conditions Expanded testing
Slide 27: Strategic Summary
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Slide 28: Energy Recovery – A Balanced Risk / Reward Approach
ENERGY RECOVERY – A BALANCED RISK / REWARD APPROACH Water Incubation Steady, Visible Growth Refocus on new verticals in 2020 o Global water demand outlook remains o Leveraging learnings from VorTeq to robust in 2020 despite economic challenges improve R&D and commercialization globally due to COVID
Slide 29: Thank You
BO energy recovery” Thank You
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