Zeo Energy Corporation · NASDAQ:ZEO
Zeo Energy — ESGEN Acquisition — SPAC Merger (February 2024)
50 slides from Zeo Energy's SPAC merger presentation, Feb 1, 2024
Slide 1: Company Presentation January 2024
Filed by ESGEN Acquisition Corporation pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended Subject Company: ESGEN Acquisition Corporation (File No. 001-40927) The following presentation was
Slide 2: Disclaimer
Disclaimer This confidential presentation (thiPresentation s “ ”) is being delivered to you by ESGEN Acquisition Corp SPAC. ” (“or “ ESGEN”) in connection with its potential business combination Transaction (the “ ” or Business “ Combination”) with Sunergy Renewables, LLC Sunergy (“ ” and the combin
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Industry, Market Data and Partnerships: In this Presentation, SPAC and Sunergy rely on and refer to certain information and statistics regarding the markets and industries in which Sunergy competes. Such information and statistics are based on management’s estimates and/or obtain
Slide 4: Disclaimer (cont'd) Non-GAAP Financial Measures
Disclaimer (cont’d) Non-GAAP Financial Measures: This Presentation includes certain financial measures not presented in accordance with generally accepted accounting principles(“GAAP”), including, but not limited to (i) EBITDA, which we define as earnings (loss) before interest expense, income tax e
Slide 5: Sunergy Highlights
—* LZ I. _Sunergy Highlights Bc, Bees bd. ob 4 SUNERGY
Slide 6: Sunergy is a Differentiated, Vertically Integrated Residential Solar Platform
Sunergy is a Differentiated, Vertically Integrated Residential Solar Platform High-growth platform delivering energy and efficiency services to residential customers through a historically profitable business model with ample runway for accelerating expansion Methodical Differentiated Premier Growth
Slide 7: Team of Proven Industry Operators
Team of Proven Industry Operators Timothy Bridgewater Luke Guy Chief Executive Officer, Chief Installation & Strategy Officer Chief Financial Officer ◼ 30+ years of commercial and ◼ 20+ years as an entrepreneur international finance and manager experience ◼ Prior experience in residential ◼ B.S. in
Slide 8: ESGEN Acquisition Corp Overview
ESGEN Acquisition Corp Overview The ESGEN team consists of dedicated management with operational, transactional and investment expertise across the broad energy and infrastructure value chain aligned to be strong partners to create long-term shareholder value ◼ Experienced entrepreneur, executive, i
Slide 9: Experienced Investors and Board
Experienced Investors and Board ESGEN is supported by Energy Spectrum, a tenured and reputable investment firm, and a Board with experience across energy, power and infrastructure arenas Energy Spectrum: Energy Infrastructure Investor with 25+ Years Experience $1.85BN 25+ Years 8 Funds $4.5BN+ asset
Slide 10: Transaction Overview
Transaction Overview ($ and share values in millions) The proposed transaction structure provides investors with a highly compelling route to participate in significant potential upside in Sunergy alongside existing shareholders Pro Forma Valuation Sources and Uses 2023E EBITDA $12 Sources Uses 2024
Slide 11: Profitable Integrated Residential Solar Platform
Profitable Integrated Residential Solar Platform Sunergy Highlights Adj EBITDA Margin 2022 2023E 2022 10,878,068 12.2% 2022 H2 10,056,405 `Installs ~2,100+ ~3,200 2023 H1 4,442,404 9.1% 2023 10,293,963 9.4% LTM 6/30/23 14,498,809 Net Revenue ~$89 million ~$114 million and EBITDA ~$10 million ~$12 mi
Slide 12: Differentiated Internal Sales Approach Unlocks Attractive Margins
Differentiated Internal Sales Approach Unlocks Attractive Margins ◼ Multi-tiered sales process maximizes lead generation and conversion efficiencies ◼ Senior sales resources focused on high-potential and developed leads to maximize conversion into installs ◼ Sales force leverages a custom software p
Slide 13: Differentiated Growth Platform Supported by Compelling Value Proposition
Differentiated Growth Platform Supported by Compelling Value Proposition Effective monthly payments that are typically lower than utility prices Resilience to increasingly frequent blackouts and utility disruptions Ability to monetize excess power generation through exports to grid Seamless vertical
Slide 14: Well-Positioned Residential Solar Provider in the Southern U.S.
Well-Positioned Residential Solar Provider in the Southern U.S. ◼ Sunergy is a leading Florida-based provider of integrated rooftop photovoltaic (“PV”) solar, energy storage and energy efficiency solutions to residential customers ◼ Sunergy’s sales process drives high volumes with low customer acqui
Slide 15: Vertically Integrated Offering Provides Competitive Strength
Vertically Integrated Offering Provides Competitive Strength ◼ Integrated installation division unlocks significant operating advantages including increased speed of project completion and higher conversion ratio of sales to installs ◼ Certain tasks are executed in-house while others are sub-contrac
Slide 16: Integrated Provider of Distributed Energy Efficiency Solutions
Integrated Provider of Distributed Energy Efficiency Solutions ◼ Carefully assembled product portfolio unlocks a range of benefits to homeowners, including cost savings, reliability and energy independence ◼ Majority of jobs feature one or more margin-accretive “adders” to core PV solar offering Pro
Slide 17: Historically Profitable Business Model
Historically Profitable Business Model Sunergy’s differentiated business model makes every job profitable, driving attractive EBITDA generation with margin n expansio as the Company continues to scale (1) Illustrative Sunergy per Job Unit Economics Average 9.7 kW/job $3.40 per watt Revenue to Sunerg
Slide 18: Sunergy is Attractively Positioned in the Market
Sunergy is Attractively Positioned in the Market 2022 EBITDA $10.4M nmf $119M $95M 2023 H1 EBITDA $4.7M nmf $43M nmf 2023 Projected EBITDA $12M nmf $222M nmf Exposure to Attractive National National National Regional MarketsP Vertically Integrated Sales Multiple Sales Partners Large Dealer Network L
Slide 19: Fully Funded and Self-Sustaining Business
Fully Funded and Self-Sustaining Business ($ in millions) ◼ Track record of profitability and free cash flow generation, with minimal go-forward capital requirements ◼ Strong balance sheet supported by a net cash position Recent Results Reflect Continued Revenue Growth with Sustained Profitability B
Slide 20: Sunergy Is Projecting Conservative KPIs
Sunergy Is Projecting Conservative KPIs… 2022-2025 Homes Serviced 2022-2025 Sales Reps 7,500 00 6,000 400 4,500 3,000 200 1,500 0 0 2022A 2023P 2024P 2025P 2022A 2023P 2024P 2025P 2022-2025 Net Revenue / Sales Rep ($ in thousands) $800 $600 $400 $200 $0 2022A 2023P 2024P 2025P Net Revenue per Sales
Slide 21: Supporting a Compelling Financial Forecast
…Supporting a Compelling Financial Forecast (1) 2022-2025 Net Revenue 2022-2025 Gross Profit ($ in millions) ($ in millions) $300 $75 257 63 232 $50 45 53 $200 173 38 156 $25 $100 114 22 16 89 $0 2022A 2023P 2024P 2025P $0 2022A 2023P 2024P 2025P Gross Profit Forward-Year Range Net Revenue Forward-Y
Slide 22: Solar Penetration Remains Low Paving the Way for Large TAM
Solar Penetration Remains Low Paving the Way for Large TAM ☼ Sunergy believes that U.S. market adoption is in its early innings and materially lags other international markets, including Australia and Europe ☼ Material policy support with continuing deterioration of utility value proposition provide
Slide 23: Poised for Strong Growth with Continued Market Penetration
Poised for Strong Growth with Continued Market Penetration ☼ US residential solar is only ~5% penetrated as of 2022 ☼ Top 15 states represent ~86% of total US residential solar capacity; CA residential solar represents ~40% of that, all other states are <10% U.S. Resi Solar Penetration Projected to
Slide 24: Sunergy has Multiple Avenues for Growth
Sunergy has Multiple Avenues for Growth 1 2 3 Strategic M&A Organic Regional Integrated Roofing Service Expansion Offering • Targeting acquisition strategy • Market in existing geographies is • Competing roof and solar panel underpenetrated warranties create a virtuous cycle focused on bolt-on oppor
Slide 25: Market Trends Are Favorable To Sunergy
Market Trends Are Favorable To Sunergy Favorable Economics are Driving Fragmented Market provides 7 1 Accelerating PV Solar Adoption Consolidation Opportunity Consumer Focus on Energy Utility Price Inflation is a 6 2 Efficiency Continues to Material Tailwind Increase to Solar Adoption Residential So
Slide 26: Why Sunergy?
Why Sunergy? High Growth Business Historically Profitable Clean Balance Sheet Secular Growth Industry 26
Slide 27: Appendix
ll., Appendix Zak . ee Bie, Hie tidy, 4. = 4 SUNERGY
Slide 28: Integrated Model Drives Profitability and Operational Excellence
Integrated Model Drives Profitability and Operational Excellence ☼ Integrated model seeks to minimize time from initial contact to final install and: ☼ Minimize customer frustration and attrition ☼ Reduce customer acquisition cost (CAC) ☼ Ensure sales agents are rewarded with commissions from recogn
Slide 29: Strategic Geographic Presence — Florida
Strategic Geographic Presence — Florida A $17.6B 12,612 Total Solar Investment Solar Installed (MW) In State 12,168 6.07% Growth projected Percentage of state’s over the next 5 years electricity from solar (MW) ▪ Florida's abundant sunshine and favorable climate make it an ideal market for residenti
Slide 30: Strategic Geographic Presence — Arkansas
Strategic Geographic Presence — Arkansas B $1B 695 Total Solar Investment Solar Installed (MW) in State 3,568 1.65% Growth projected Percentage of state’s over the next 5 years electricity from solar (MW) ▪ Favorable policy environment with net metering, solar tax credits, and property tax exemption
Slide 31: Strategic Geographic Presence — Texas
Strategic Geographic Presence — Texas C $22.7B 18,801 Total Solar Investment Solar Installed (MW) in State 40,579 5.13% Growth projected Percentage of state’s over the next 5 years electricity from solar (MW) ▪ Abundant solar resources and favorable climate make Texas a prime location for residentia
Slide 32: Strategic Geographic Presence — Missouri
Strategic Geographic Presence — Missouri D $1.4B 534 Total Solar Investment Solar Installed (MW) in State 2,187 1.07% Growth projected Percentage of state’s over the next 5 years electricity from solar (MW) ▪ Missouri’s ample solar resources make it a prime location for residential solar investments
Slide 33: Organic and Strategic Geographical Expansion Supports Potential Growth
Organic and Strategic Geographical Expansion Supports Potential Growth ◼ Despite strong growth in Florida, management believes there is still substantial TAM to be penetrated in the coming years as demand for residential solar systems grows ⚫ Sunergy is well-positioned with an established local pres
Slide 34: Favorable Economics are Driving Accelerating PV Solar Adoption
Favorable Economics are Driving Accelerating PV Solar Adoption 1 ◼ The EIA expects the pace of solar generation capacity additions to surpass traditional competing sources, such as natural gas, nuclear and coal, over the next two decades, with the economics for renewable energy sources supported by
Slide 35: Utility Price Inflation is a Material Tailwind to Solar Adoption
Utility Price Inflation is a Material Tailwind to Solar Adoption 2 ◼ Utility price increases have incentivized solar adoption for residential and commercial applications ◼ The majority of coal power stations in the U.S. are older than 30 years; these aging and less efficient plants are more capital
Slide 36: Residential Solar Supports Growing Demand for Resilience
Residential Solar Supports Growing Demand for Resilience 3 ◼ Recent natural events with the potential to disrupt utility operations have resulted in energy resilience gaining increasing focus among residential, commercial and industrial customers (1) ◼ New records for number of electricity disturban
Slide 37: Regulatory Environment is Favorable
Regulatory Environment is Favorable 4 ◼ Advancement of clean energy solutions is expected to remain a key priority going forward, supporting a range of federal and regional policies that support rooftop solar adoption ◼ Regulatory incentives have supported the proliferation of distributed PV solar s
Slide 38: Inflation Reduction Act Provides Substantial Tailwinds
Inflation Reduction Act Provides Substantial Tailwinds 5 ◼ .R. 537 , also known as the Inflation Reduction Act (“IRA”), was 2022 – 2031 U.S. Federal Support for signed by President Biden in August 2022 (3) Energy Transition Technologies ◼ Key incentives for homeowners: Inflation Reduction Act Bipart
Slide 39: Consumer Focus on Energy Efficiency Continues to Increase
Consumer Focus on Energy Efficiency Continues to Increase 6 ◼ Homeowner focus on residential energy efficiency and weatherization has accelerated as a result of inflation in electricity prices combined with the rising cost of energy commodities ◼ Demand for key energy efficiency solutions, including
Slide 40: Bc, Bees bd. ob SUNERGY
Bc, Bees bd. ob 4 SUNERGY
Slide 41: Reconciliation of Non-GAAP Metrics
Reconciliation of Non-GAAP Metrics Reconciliation of Revenue (Loss) to EBITDA ($) FY2022A Net income (loss) $8,665,770 Depreciation and amortization 1,706,243 Other income: Other income, net 2,510 PPP loan forgiv eness ( 73,809) Interest expense 51,295 Tax prov ision / (benefit) - EBITDA $10,352,008
Slide 42: Forecast Assumptions
Forecast Assumptions Sunergy Business Drivers In developing the projected financial information in this presentation, Sunergy’ management gave consideration to num timates and erous esmade certain assumptions. These included, among others: ◼ Continued growth of the solar energy industry and adoption
Slide 43: Summary Risk Factors
Summary Risk Factors All references to we “,” “ us” and our “ ” and Sunergy “ ” refer to the business and operations of Sunergy prior to the consummation of the proposed Business Combination or to the business and operations of Newco following the Business Combination, as applicable. The risks liste
Slide 44: Summary Risk Factors (Cont'd)
Summary Risk Factors (Cont’d) Risks Related to Sunergy’s Operations ◼ We may be unable to sustain our level of profitability in the future. ◼ Our growth depends in part on the success of our relationships with third parties, including our equipment suppliers, contractors and dealers, including deale
Slide 45: Summary Risk Factors (Cont'd)
Summary Risk Factors (Cont’d) Risks Related to Sunergy’s Operations (Cont’d) ◼ Our business is concentrated in certain markets, putting us at risk of region-specific disruptions, including hurricanes or other extreme weather events. ◼ Expansion into new sales channels could be costly and time-consum
Slide 46: Summary Risk Factors (Cont'd)
Summary Risk Factors (Cont’d) Risks Related to Sunergy’s Operations (Cont’d) ◼ A failure to hire and retain a sufficient number of employees and service providers in key functions would constrain our growth and our ability to timely complete customers’ projects and successfully manage customer accou
Slide 47: Summary Risk Factors (Cont'd)
Summary Risk Factors (Cont’d) Risks Related to Regulation and Policy ◼ Our business currently depends on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely
Slide 48: Summary Risk Factors (Cont'd)
Summary Risk Factors (Cont’d) Risks Related to ESGEN and the Business Combination ◼ An active trading market for the post-Business Combination Class A common stock, 0.0001 par value per share (the “Newco Stock”) Common , may not be available on a consistent basis to provide stockholders with adequat
Slide 49: Summary Risk Factors (Cont'd)
Summary Risk Factors (Cont’d) Risk Relating to the Post-Business Combination Company and its Common Stock ◼ We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to ensure compliance with public company responsibili
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