Tetra Technologies, Inc. · NYSE:TTI
Tetra Technologies — RBC Capital Markets Global Energy, Power & Infrastructure Conference 2021
30 slides from Tetra Technologies's conference presentation, Jun 9, 2021
Slide 1: Global Energy, Power & Infrastructure Conference
RBC Capital Markets Global Energy, Power & Infrastructure Conference June 9, 2021 ©2021 TETRA Technologies, Inc. 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements The information in this presentation includes “forward-looking statements.” All statements, other than statements of historical fact included in this presentation, regarding our management, strategy, future operations, financial position, estimated revenues and
Slide 3: Investment Highlights
Investment Highlights Global leader in onshore water management, high-value completion fluids and related industrial chemicals. Uniquely positioned for a recovering Oil and Gas market and an accelerating Energy Transition market • Diverse revenue stream from O&G, industrial, US & international, onsh
Slide 4: Recent Highlights
Recent Highlights Generating Cash and Reducing Net Debt $189 • Q1 adjusted EBITDA of $9M and adjusted FCF of $5.4M 2019 2020 2021-Q1 $133 $117 • MOU with CarbonFree to jointly advance innovative carbon Adjusted Free Cash Flow capture technology $59 • Advancing PureFlowTM high purity zinc-bromide ene
Slide 5: Compelling ESG Story
Compelling ESG* Story Operations Low Carbon Energy Governance Health & Safety • Innovative • Strong culture of QHS&E • Significant bromine • Separate chair and CEO environmentally-friendly drives product & service reserves with high (non-zinc) CS Neptune® delivery quantities of lithium • Ongoing boa
Slide 6: Business Segments
Business Segments 2020 Completion Fluids & Products Revenue • Over 30% market share* for high value completion fluids Deepwater • Innovation leader with TETRA CS Neptune® Onshore & 23% Shallow Water • Global infrastructure with 20-year bromine 37% supply agreement Industrial 40% • Diverse and stable
Slide 7: Low Carbon Energy Opportunities
Low Carbon Energy Opportunities Lithium • 27,000 acres of brine leases in Arkansas with inferred lithium carbonate equivalent resources of 890,000 tons and an estimated 3.9 million tons of bromine resources • $3.1M of earnings in 2020 from Standard Lithium agreement (TSX:SLL) • SLL agreement for roy
Slide 8: Energy Transition Requires a Mind Shift
Energy Transition Requires a Mind Shift Bromine USA and China Pricing Per MT 2016 to 2021 7000 6000 Global electrification and carbon mineralization requires 5000 mind shift from oil and gas reserves to key mineral 4000 reserves and extraction technology 3000 2000 1000 TETRA’s in-situ value based on
Slide 9: Carbon Capture and Utilization (CCU)
Carbon Capture and Utilization (CCU) • Memorandum of understanding (MOU) with CarbonFree, a carbon capture company that mineralizes CO2 emissions to make commercial, carbon-negative chemicals • CarbonFree's SkyCycle - a second-generation carbon mineralization technology using Calcium Chloride as the
Slide 10: Completion Fluids & Products
Completion Fluids & Products ©2021 TETRA Technologies, Inc. 10
Slide 11: Diverse Fluids Revenue Streams
Diverse Fluids Revenue Streams • Competitive advantage as only vertically integrated completion fluids service provider » Long-term bromine and acid supply agreements » Plants and facilities fully built, require minimal capital » Broad global logistics and distribution network » World class chemists
Slide 12: TETRA's Fluids Network Serving Key Global Deepwater Markets
TETRA’s Fluids Network Serving Key Global Deepwater Markets Top Four Countries for Projected Number of Deepwater Wells Between 2021-2025* 403 North Sea & Europe 229 157 136 All North America Middle East Shale Basins Norway Brazil U.S. UK Corporate Headquarters & Technology Center • Approximately 291
Slide 13: CS Neptune Fluids Technology
CS Neptune® Fluids Technology • Prestigious E&P Special Meritorious Engineering Award winner for Innovation in Drilling Fluids and Stimulation category • Co-authored SPE technical paper with major operator for successful multiple Gulf of Mexico projects • Zinc-free & priority pollutants-free, does n
Slide 14: Resilient High Value Fluids Business Model
Resilient High Value Fluids Business Model Revenue and Adjusted EBITDA Margins Vertically integrated with technology, $80 $80 $79 $75 $71 33% 40% cost and logistics advantages $62 $60 $59 35% $52 30% $ millions $44 $47 29% $40 17% 24% 26% 27% 24% 20% • Third party report on Gulf of Mexico completion
Slide 15: Water & Flowback Services
Water & Flowback Services ©2021 TETRA Technologies, Inc. 15
Slide 16: Water Management
Water Management United States Water Services Market (2021) Capital Intensity Service Segment Market 2021 – 2025 • Market estimated to be >$20B Size % CAGR • Focused on value-added, differentiated, Disposal 32% 3% environmentally-friendly offerings in the Acquisition 8% 5% highest return on investme
Slide 17: Digitized Integrated Water Management Solution
Digitized Integrated Water Management Solution Oil Recovery Recycling Sourcing Temporary Transfer Storage Pit Lining Poly Pipe & Pipeline Treatment Flowback Blending Distribution Automation (Real-Time Monitoring & Control) ©2021 TETRA Technologies, Inc. 17
Slide 18: Differentiating through Technology and Digitization
Differentiating through Technology and Digitization TETRA SteelTM 1200 BlueLinxTM Automated Lay Flat Hose Control System • Leader in produced water market • Safer and improved service quality • Transferred ~ 100M bbls of • Entire system digitization and produced water in Permian basin in automation
Slide 19: Water & Flowback Services
Water & Flowback Services Revenue and Adjusted EBITDA Margins Market share gains due to our technologies, $80 $79 $73 40% digitizing operations and integrated solutions $73 $57 $57 $60 30% $ millions $40 13% 15% 15% 10% 12% $25 $22 $31 $31 20% • Secured second project in Argentina for a fully $20 1%
Slide 20: Financial Overview and Summary
Financial Overview and Summary ©2021 TETRA Technologies, Inc. 20
Slide 21: Quarterly Financial Trends
Quarterly Financial Trends $ millions Revenue Adjusted EBITDA $180 $25 16.1% 16.4% 18% $153 14.6% $160 $140 $136 16% $132 $133 $20 11.6% $140 11.3% 11.3% 14% $120 $96 9.3% 10.0% 12% $100 $15 7.4% 10% $73 $75 $77 $80 8% $10 $60 6% $40 $5 4% $20 $10 $17 $15 $22 $22 $9 $7 $11 $9 2% $- $- 0% Adjusted Fr
Slide 22: Enhanced Capital Structure
Enhanced Capital Structure Balance Sheet and Liquidity(1) • Deconsolidation of CSI Compressco allows TETRA to “screen” better $ millions, except ratios and %s • Potential to be included in the Russell 2000 Cash $ 54 Debt • Reduced term loan by $36M since Q3-2020 ABL ( Aug, 2023 maturity) $ - (2) Ter
Slide 23: Market Performance & Capital Allocation
Market Performance & Capital Allocation As of 6/4/2021 2021 Share Performance vs OSX Capital Allocation Priorities TTI 435% • Focused on two core segments targeting organic investments with cash paybacks <18 months 157% 100% OSX • Reduce outstanding debt, targeting leverage ratio below 2.0X 31-Dec-2
Slide 24: Investment Highlights
Investment Highlights • Build on core competencies of fluids and aqueous chemistry » Industry leading position on high value completion fluids » Vertically integrated chemicals business participating in multiple industry segments » Market leading position for treating and recycling produced water »
Slide 25: Appendix
Appendix ©2021 TETRA Technologies, Inc. 25
Slide 26: Market Capitalization and Enterprise value
Market Capitalization and Enterprise value (thousands, except per share amounts) Market Capitalization: TTI Market price per share on 06/04/2021 $ 3.75 Shares outstanding as of 05/03/2021 126,588 Market Capitalization $ 474,705 Enterprise Value: TTI Market capitalization based on 06/04/2021 Stock Pr
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Completion Fluids & Products - Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation '($ in Millions) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-2020 Q1-2021 Income (Loss) Before Taxes $6.2 $14.6 $11.3 ($66.1) $19.4 $16.0 $11.8 $11.0 $9.0 Interest Income/Expense ($0.2)
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation TTI excl. Disc. Operations - Adj. EBITDA and Ad. EBITDA Margin Reconciliation '($ in Mil) Q2-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2 2020-Q3 2020-Q4 2021-Q1 2020 & 2021-Q1 Income (Loss) Before Taxes ($9.3) ($2.2) ($4.0) ($112.6) $3.7 ($12.2) ($9.5) ($7.2) ($11.8) (
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation TETRA Net Debt - Reconciliation (In $ Millions) 2021-Q1 2020 YE 2019 YE Non-restricted cash $ 54.2 $ 67.3 $ 15.3 Carrying value of long-term debt: Asset-based credit agreement $ - $ - $ - Term credit agreement $ 171.2 $ 199.9 $ 204.6 Net Debt $ 117.0 $ 132.6 $ 189.3 ©2021 TET
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation TETRA only Adjusted Free Cash Flow Reconciliation From Continuing Operations (in $ Millions) 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2 2020-Q3 2020-Q4 2021-Q1 TTI Consolidated Cash from operations $ 7.4 $ 31.0 $ 46.6 $ 5.3 $ 22.2 $ 38.2 $ 4.4 $ 12.1 $ 5.8 Capital Expend