Fuel Tech, Inc. · NASDAQ:FTEK
Fuel Tech — Investor Presentation (September 2020)
22 slides from Fuel Tech's investor presentation, Sep 14, 2020
Slide 1: Technologies to enable clean efficient energy
Technologies to enable clean efficient energy Investor Presentation September 2020
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech’s current expectations
Slide 3: Business Overview: Emissions Control and Water Treatment Solutions
BUSINESS OVERVIEW Emissions Control and Water Treatment Solutions Revenue by Segment Air Pollution Control Full Year 2019 ▪ Low cap-ex NOX and Particulate Control solutions; 30% - 85% emissions reduction ▪ Capital project sale, typically fixed-price, with turn-key capabilities ▪ Typical customers: f
Slide 4: Investment Summary
INVESTMENT SUMMARY ▪ 50%+ SG&A reduction following a four-year program of focused restructuring activities ▪ New cost structure allows us to profitably leverage top line growth; breakeven revenue is $28 – $32 M depending on product segment mix ▪ Expect a return to more normalized revenue levels, pos
Slide 5: Growing Market and Global Footprint
GROWING MARKET AND GLOBAL FOOTPRINT Solutions Installed in 26 Countries • The global air pollution control systems market was valued at USD $67.8 billion in 2019 and is expected to reach $101.2 billion by 2027, a CAGR of 5.2%. (1) • Market growth driven by government regulations, rising pollution le
Slide 6: Innovative Technology, Engineering and Design
INNOVATIVE TECHNOLOGY, ENGINEERING AND DESIGN 3-D Visualization Creates Custom Solutions ▪ Proprietary Software with Strong IP Protection; Patented Technology – Provides an intuitive interaction between the Models and Design Engineers ▪ Computational Fluid Dynamics (CFD) Model – Customized for each
Slide 7: Diverse, Customizable Portfolio of Low Cap-Ex Emissions Control Solutions
DIVERSE, CUSTOMIZABLE PORTFOLIO OF LOW CAP-EX EMISSIONS CONTROL SOLUTIONS ® ® > ASCR : Advanced SCR: Combines LNB, OFA, SNCR, AIG, > ULTRA : Safe Ammonia Generation System >TIFI® Targeted In-Furnace Injection™: Chemical injection GSG™ + Catalyst > SCR: Selective Catalytic Reduction programs used to
Slide 8: Air Pollution Control Segment: Representative Solutions and Results
AIR POLLUTION CONTROL SEGMENT Representative Solutions and Results SCR Systems ULTRA ® Systems NOx Installed on 1,200+ combustion units Patented, state-of-the-art proprietary technologies 60-80% 60-80% Multi-pollutant control solutions created from a variety of combustion sources utilizing a wide va
Slide 9: Blue Chip Client Base
BLUE CHIP CLIENT BASE UTILTY INDUSTRY GLOBAL 9
Slide 10: Air Pollution Control Segment
AIR POLLUTION CONTROL SEGMENT APC Revenues ($ in MMs) $38.4 ▪ Award activity slower than expected in 2020 due to COVID-19 driven delays $14.1 ▪ Secured $2.2 M of new awards in Q3 2020 $10.6 $3.1 ▪ Pursuing global sales pipeline of ~ $50-75 M; expect to close $10-15 M of new awards in late 2020 or ea
Slide 11: Air Pollution Control Segment: Overview and U.S. Market Drivers
AIR POLLUTION CONTROL SEGMENT Overview and U.S. Market Drivers Domestic Drivers ▪ Gas Turbine and Small Gas Engine demand for SCR and ULTRA systems driven by permits for new units and retrofit regulatory requirements • actively involved with turbine and engine suppliers, Heat Recovery Steam Generato
Slide 12: Air Pollution Control Segment: International Market Drivers
AIR POLLUTION CONTROL SEGMENT International Market Drivers ▪ Europe – Opportunities driven by BREF (Best Available Reference Technology); guidelines issued in August 2017 with a compliance timeline through 2020 and beyond – Guidelines reduced target NOx emissions from current levels – Timeline to be
Slide 13: The U.S. Is Moving Away From Coal and So Is Fuel Tech
THE U.S. IS MOVING AWAY FROM COAL AND SO IS FUEL TECH U.S. Electricity Generation by Major Energy Source (1950-2019) Fuel Tech Revenue by Fuel Source 2010 2019 10% 29% 2018 Coal = 1,847 BN KWh Coal = 966 BN KWh Natural Gas = 988 BN KWh Natural Gas = 1,582 KWh 60% 5% 2019 22% 73% 2019 Coal Natural Ga
Slide 14: FUEL CHEM Segment
FUEL CHEM® SEGMENT ▪ United States: technology is used primarily to support cost FUEL CHEM Revenues reduction efforts of coal-fired utility power plant owners by ($ in MMs) allowing the use of lower cost fuel to remain competitive • new units installed Q2 2019 and Q3 2020 $18.1 $16.4 • added increme
Slide 15: TIFI Bio Program Treatment Benefits
TIFI® BIO PROGRAM TREATMENT BENEFITS ® Removes thick and stubborn Boiler Before TIFI Bio Boiler After TIFI® Bio slag deposits Improves results of soot blowing 40% Reduction in Enhances long-term operability Downtime * Addresses slagging, fouling, and corrosion due to potassium, sodium and chlorides
Slide 16: FUEL CHEM Segment: TIFI Programs
FUEL CHEM® SEGMENT TIFI® Targeted In-Furnace Injection™ Programs Mitigate SO3 Punta Prieta / La Paz, Mexico Improve Fuel Flexibility Before TIFI 6 Hours Later Reduce Slagging and Fouling 6 Hours Later Heat Rate Improvements CO2 Reduction SO3 Mitigation Minimize LPA (Large Particle Ash) Reduce Air He
Slide 17: DGI Dissolved Gas Infusion Technology
DGI TM DISSOLVED GAS INFUSION TECHNOLOGY ▪ Exclusive license (Kadance Corporation) for North America use of micro-nanobubble ▪ dissolved gas technology for specified Proprietary nozzle technology delivers markets supersaturated O2 solutions and other gas-water ▪ Kadance is active in municipal wastew
Slide 18: Highly Efficient Process for Wastewater Management
HIGHLY EFFICIENT PROCESS FOR WASTEWATER MANAGEMENT SYSTEM BENEFITS ▪ Operating costs up to 50% lower than conventional aeration ▪ Can deliver a solution with dissolved O2 content up to 40x that of conventional aeration ▪ Modular, compact, scalable systems for rapid deployment ▪ Patent pending satura
Slide 19: Suspension of Beijing Fuel Tech Operations
SUSPENSION OF BEIJING FUEL TECH OPERATIONS ▪ Commenced January 2019; expected completion 1H 2021 ▪ Driven by competition-induced margin erosion and continued losses ▪ Focusing on cash collections ▪ $4.1 M decline in trade receivables (1/1/19 – 6/30/20) ▪ Eliminating ~ $2.0 M in operating losses ▪ ~$
Slide 20: Financial Overview
FINANCIAL OVERVIEW ($ in Thousands) 6 Mos. 6 Mos. Statement of Operations Summary Q2 2020 Q2 2019 2020 2019 Revenues $4,401 $8,948 $8,179 $19,103 Cost of Sales $3,799 $5,050 $6,050 $11,191 Selling, general and administrative expenses $2,755 $4,455 $6,641 $8,913 Operating loss from continuing ops $(2
Slide 21: Summary
SUMMARY ▪ Improved cost structure, marginal debt profile ▪ Top line breakeven of $28 - $32 M ▪ APC: focused on global development for traditional markets with increasing focus on natural gas solutions ▪ FUEL CHEM: expect improved performance in 2H 2020; focus on new market segments and expanded geog
Slide 22: Thank You
THANK YOU Vince Arnone Devin Sullivan Chairman, President and CEO Senior Vice President (630) 845-4500 (212) 836-9608 varnone@ftek.com dsullivan@equityny.com 22