Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Southwest IDEAS Conference 2023
27 slides from Energy Recovery's conference presentation, Nov 15, 2023
Slide 1: Energy Recovery
NASDAQ:ERII Energy Recovery Southwest IDEAS Conference James Siccardi, VP Investor Relations November 15, 2023
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: Product Revenue: 2015 – 2023E
Product Revenue : 2015 – 2023E 1 Average Product Revenue Growth Rapid Growth 16% 2015-2022 140 $135M 130 $126M 120 110 $104M 100 $92M 90 80 $73M 70 $58M $61M 60 $50M 50 $44M 40 2015 2016 2017 2018 2019 2020 2021 2022 2023E (1) Excludes reported License and Development Revenue 2015 through 2020. 3
Slide 4: Operating Margin: 2015 – 2022
Operating Margin1: 2015 – 2022 Turnaround in Profitability 30% 20% 20% 10% 13% 7% 0% -9% -3% -6% -5% -10% -20% -29% -30% 2015 2016 2017 2018 2019 2020 2021 2022 (1) Calculation excludes reported License and Development Revenue in 2015 through 2020 and the one-time impairment of VorTeq related assets
Slide 5: Other Strong Fundamentals
Other Strong Fundamentals Average Gross Margin High Margin 70% 2022 Flexible Cash & Securities and NO Balance Sheet $106M DEBT1 (1) As of 3Q 2023 5
Slide 6: What Is Driving This Value? The PX Technology Platform
What Is Driving This Value? The PX Technology Platform 6
Slide 7: The PX Pressure Exchanger
The PX Pressure Exchanger 2 4 5) energy recovery’
Slide 8: Unique Value Proposition: Reduce Emissions & Save Customers Money
Unique Value Proposition: Reduce Emissions & Save Customers Money metric tons emissions avoided annual customer energy $3.9B savings1 14.5M annually – roughly equivalent to 3M vehicles1 product revenue from energy- saved in electricity 98%+ efficiency related sources 30TWh consumption1 (1) Energy Re
Slide 9: Our PX Technology Revolutionized the Desalination Industry
Our PX Technology Revolutionized the Desalination Industry Reduces energy costs by up to 1 60% 3 Designed for a 25-year life Transfers energy at up to 98% 2 efficiency 4 Needs no maintenance Significant Customer Value Proposition Translates into ERII Profitability 70% ERII Gross Margin1 25% Russell
Slide 10: PX In Action: Desalination
PX In Action: Desalination 10
Slide 11: Global Leader in Desalination Expanding the PX Into New Industries
Global Leader in Desalination Expanding the PX Into New Industries Water Desalination Wastewater CO2 Refrigeration 11
Slide 12: Water
Water Desalination & Wastewater 12
Slide 13: World-Wide Demand for Fresh Water Continues to Outstrip Supply
World-Wide Demand for Fresh Water Continues to Outstrip Supply The United Nations estimates a 40% gap in freshwater supplies by 2030 13
Slide 14: The World Needs More Water
The World Needs More Water FINANCIAL TIMES No end to crisis in sight as drought grips India’s Chennai The Washington Post Arizona’s water troubles show how climate change is reshaping the West THE HILL How will the US deal with its water crisis? MEED Saudi Water Partnership Company has released its
Slide 15: Freshwater Scarcity Driving Re-use and New Capacity Build (Desal)
Freshwater Scarcity Driving Re-use and New Capacity Build (Desal) Desalination Wastewater Targeting sales of $200M by 2026 Up to $1B Potential TAM Unlimited Drought Resistant Water Supply Variety of Industries Globally Costs Decreasing Steadily with Scale Regulatory Driven Municipal Industrial Lithi
Slide 16: Our PX Dominates Large Scale Desalination Today
Our PX Dominates Large Scale Desalination Today Cumulative Won Mega Projects1 Desal Capacity (m3/day) ERII Competitors 24.4M 25M 20M Millions 15M 10M 5M 2.4M 0M '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 (1) Mega Projects produce >50,000 cubic meters of water per day 16
Slide 17: Disrupting the Global Refrigeration Industry
CO2 Disrupting the Global Refrigeration Industry 17
Slide 18: Strong Regulatory Shift is Driving Shift to Natural Refrigerants (CO2)
Strong Regulatory Shift is Driving Shift to Natural Refrigerants (CO2) CO2 drives up operating HFCs are up to 13,000x worse 1 for environment than CO2 3 pressures, increasing electricity usage up to 5x Developed countries have Our PX reduces electricity 2 agreed to reduce HFCs 85% by 4 consumption i
Slide 19: HFC Phase-Down and CO2 Installations
HFC Phase-Down and CO2 Installations HFC Phase-down Timeline: EU & US CO2 Installations: EU & US HFC Phase-down Timeline: EU & US CO2 Installations: EU & US 100% 40 Thousands 80% 30 60% 20 40% 20% 10 0% - EU US EU US (1) Based on IPCC data: https://unfccc.int/process/transparency-and-reporting/green
Slide 20: The PX G1300 Saves Electricity By Recycling High-Pressure Energy
The PX G1300™ Saves Electricity By Recycling High-Pressure Energy The PX G1300 is like a compressor which does not consume electricity or water, where energy is reclaimed from otherwise wasted pressure energy. Standard CO2 Refrigeration System With PX G1300TM 20
Slide 21: Showing Initial Success
Showing Initial Success November Signed first contract for delivery in 2021 2022 First units commissioned and OEM 2022 partnership agreements signed Q1 2023 Installed first Carrefour unit Distribution agreement with Fieuw Koeltechnic, Q1 2023 PX G1300 incorporated in Epta Group’s new XTE product lin
Slide 22: The Future: Creating Long-Term Shareholder Value
The Future Creating Long-Term Shareholder Value
Slide 23: Our Strategy Rests on Three Strategic Pillars
Our Strategy Rests on Three Strategic Pillars Desalination Leadership Profitable Diversified Growth Sustainability Protect position in De-risk revenue and drive Engineer and manufacture desalination by improving high margin growth by sustainability focused products and operations in a entering diver
Slide 24: Growth Targets
Growth Targets Desalination Wastewater Refrigeration $310M - $350M2 $100M $131M - $141M – $30M - $50M $126M $138M2 152M2 $104M $180M - $124M - $128M - $200M $104M $122M $131M $135M 2021 2022 2023 2024 2026 (1) These revenue growth range goals, long-term vision and similar statements illustrate possi
Slide 25: Maintain High Gross Margin and Manage OPEX to Grow EBITDA
Maintain High Gross Margin and Manage OPEX to Grow EBITDA OPEX, % of Product Revenue1,2 EBITDA Margin1,2 12% 19% '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 (1) 2023 – 2026 are estimated projections (2) Excluding Schlumberger License and Development Revenue throug
Slide 26: Contact Us
Contact Us James Siccardi VP, Investor Relations +1.832.474.7628 Energy Recovery, Inc. jsiccardi@energyrecovery.com 1717 Doolittle Drive San Leandro, CA 94577, USA Lionel McBee energyrecovery.com Director, Investor Relations +1.832.334.3685 limcbee@energyrecovery.com 26
Slide 27: energyrecovery.com
BO energy recovery’ energyrecovery.com