Zeo Energy Corporation · NASDAQ:ZEO
Zeo Energy — ESGEN Acquisition — SPAC Merger (November 2023)
50 slides from Zeo Energy's SPAC merger presentation, Nov 13, 2023
Slide 1: Company Presentation November 2023
Company Presentation November 2023 CONFIDENTIAL Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This confidential presentation (this “Presentation”) is being delivered to you by ESGEN Acquisition Corp. (“SPAC” or “ESGEN”) in connection with its potential business combination (the “Transaction” or “Business Combination”) with Sunergy Renewables, LLC (“Sunergy” and the combined compan
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, earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBIT
Slide 5: Sunergy Highlights
Sunergy Highlights
Slide 6: Sunergy is a Differentiated, Vertically Integrated Residential Solar Platform
Sunergy is a Differentiated, Vertically Integrated Residential Solar Platform Methodical Market Expansion Premier Growth vs Industry Peers High-growth platform delivering energy and efficiency services to residential customers through a historically profitable business model with ample runway for ac
Slide 7: Team of Proven Industry Operators
Team of Proven Industry Operators Luke Guy Chief Installation & Strategy Officer 20+ years as an entrepreneur and manager Prior experience in residential solar, electric and gas deregulation and mortgage financing 8+ years of solar management experience 5+ years direct sales building Undergrad Studi
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 Successful IPO in a Challenging Environm
Slide 9: Experienced Investors and Board
Experienced Investors and Board As of September 30, 2023 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 $4.5BN+ of equ
Slide 10: Profitable Integrated Residential Solar Platform
`Installs ~2,200+ ~3,100 Net Revenue and Adjusted EBITDA(1) ~$89 million ~$11 million ~$110 million ~$13 million(2) kW Installed ~23,000 kW ~30,000 kW Year-Over-Year Growth Revenue Installs kW Installed 24% 41% 30% Employees In-House Sales Team 110 137 205 270 Profitable Integrated Residential Solar
Slide 11: Differentiated Internal Sales Approach Unlocks Attractive Margins
Differentiated Internal Sales Approach Unlocks Attractive Margins Sunergy’s Sales Process Drives Best-in-Class CAC Multi-tiered sales process maximizes lead generation and conversion efficiencies Senior sales resources focused on high-potential and developed leads to maximize conversion into install
Slide 12: Differentiated Growth Platform Supported by Compelling Value Proposition
Differentiated Growth Platform Supported by Compelling Value Proposition Resilience to increasingly frequent blackouts and utility disruptions Ability to monetize excess power generation through exports to grid Effective monthly payments that are typically lower than utility prices Seamless vertical
Slide 13: Well-Positioned Residential Solar Provider in the Southern U.S.
Well-Positioned Residential Solar Provider in the Southern U.S. Strategic Geographical Presence 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 vol
Slide 14: Vertically Integrated Offering Provides Competitive Strength
Vertically Integrated Offering Provides Competitive Strength Overview of Sunergy’s Installation Segment Integrated installation division unlocks significant operating advantages including increased speed of project completion and higher conversion ratio of sales to installs Certain tasks are execute
Slide 15: Integrated Provider of Distributed Energy Efficiency Solutions
Integrated Provider of Distributed Energy Efficiency Solutions Product Offerings Include Solar Plus Complementary Add-On Offerings Carefully assembled product portfolio unlocks a range of benefits to homeowners, including cost savings, reliability and energy independence Majority of jobs feature one
Slide 16: Historically Profitable Business Model
Historically Profitable Business Model 1) Source: Company estimates as of November 6, 2023 Sunergy’s differentiated business model makes every job profitable, driving attractive EBITDA generation with margin expansion as the Company continues to scale Average 9.7 kW/job $3.40 per watt Revenue to Sun
Slide 17: Sunergy is Attractively Positioned in the Market
Sunergy is Attractively Positioned in the Market 2022 Adjusted EBITDA(1) | Margin(2) $10.4M | 12% nmf | nmf $119M | 21% $95M | 5% 2023 H1 Adjusted EBITDA(1)| Margin(2) $4.4M | 9% nmf | nmf $43M | 13% nmf | nmf 2023 Projected EBITDA(1)(4) | Margin(2) $13M(3) | 12% nmf | nmf $222M | 29% nmf | nmf Expo
Slide 18: Fully Funded and Self-Sustaining Business
Fully Funded and Self-Sustaining Business Source: Audited financials for 2021, 2022 and unaudited six months ending June 30, 2023,and three months ending September 30, 2023 Track record of profitability and free cash flow generation, with minimal go-forward capital requirements Strong balance sheet
Slide 19: Sunergy Is Projecting Conservative KPIs
Sunergy Is Projecting Conservative KPIs… Source: Company provided projections 2022-2025 Net Revenue / Sales Rep 2022-2025 Gross Revenue / Sales Rep 2022-2025 Sales Reps (2) 2022-2025 Homes Serviced ($ in thousands) ($ in thousands)
Slide 20: Supporting a Compelling Financial Forecast
…Supporting a Compelling Financial Forecast Source: Company provided projections See page 41 for Adjusted EBITDA reconciliation 2023 estimated adjusted EBITDA excludes costs incurred attributable to merger with ESGEN The Company is unable to reconcile this forward-looking non-GAAP financial measure
Slide 21: Focus on Attractive Markets Underpins Industry Outperformance
Focus on Attractive Markets Underpins Industry Outperformance Source: Company filings and Capital IQ as of September 1, 2023 LTM 6/30/23 growth rate calculated as the growth from 2022 revenue Sunergy Versus Peers Annual Revenue Growth(1) Sunergy Versus Peers Annual Revenue(1) Quarterly Revenue Growt
Slide 22: Solar Penetration Remains Low Paving the Way for Large TAM
Source: PowerMag as of July 29, 2022 Solar Penetration Remains Low Paving the Way for Large TAM A Global Look at Residential Solar Adoption Rates (powermag.com) Sunergy believes that U.S. market adoption is in its early innings and materially lags other international markets, including Australia and
Slide 23: US residential solar is only ~5% penetrated as of 2022
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% Projected Installed Solar Capacity (GW) 9.2 11.6 13.9 16.8 20.0 24.5 30.4 35.7 41.4 48.2 55.7 63.4 71.4
Slide 24: Sunergy has Multiple Avenues for Growth
Sunergy has Multiple Avenues for Growth Organic Regional Expansion Market in existing geographies is underpenetrated Additional potential upside in new geographies 1 Targeting acquisition strategy focused on bolt-on opportunities in selected geographies Strategic M&A 3 Integrated Roofing Service Off
Slide 25: Market Trends Are Favorable To Sunergy
Market Trends Are Favorable To Sunergy Consumer Focus on Energy Efficiency Continues to Increase 6 Regulatory Environment is Favorable 4 Residential Solar Supports Growing Demand for Resilience 3 Utility Price Inflation is a Material Tailwind to Solar Adoption 2 Favorable Economics are Driving Accel
Slide 26: Why Sunergy?
4& SUNERGY Why Sunergy? ad High Growth Business Ee] Historically Profitable aya Clean Balance Sheet S Secular Growth Industry
Slide 27: Appendix
Appendix
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 recognized rev
Slide 29: Strategic Geographic Presence — Florida
Solar Energy Industries Association (SEIA) State Factsheet (Data through Q2 2023) Florida's abundant sunshine and favorable climate make it an ideal market for residential solar. With an average of over 230 sunny days per year, homeowners can harness this renewable energy source to power their homes
Slide 30: Strategic Geographic Presence — Arkansas
Solar Energy Industries Association (SEIA) State Factsheet (Data through Q2 2023) Favorable policy environment with net metering, solar tax credits, and property tax exemptions, making Arkansas an attractive area for residential solar investments Growing market demand, abundant solar resources, comp
Slide 31: Strategic Geographic Presence — Texas
Solar Energy Industries Association (SEIA) State Factsheet (Data through Q2 2023) Abundant solar resources and favorable climate make Texas a prime location for residential solar investments Expanding market demand, coupled with state incentives like rebates and tax exemptions, create a compelling e
Slide 32: Strategic Geographic Presence — Missouri
Solar Energy Industries Association (SEIA) State Factsheet (Data through Q2 2023) Missouri’s ample solar resources make it a prime location for residential solar investments Growing market demand, coupled with state and local incentives, create a compelling environment for residential solar investin
Slide 33: Organic and Strategic Geographical Expansion Supports Potential Growth
Organic and Strategic Geographical Expansion Supports Potential Growth Source: SEIA / Wood Mackenzie U.S. Solar Market Insight 2022 Year in Review Source: NREL Average Daily Solar Irradiance. Data as of February 2018 South defined as Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina
Slide 34: Favorable Economics are Driving Accelerating PV Solar Adoption
Favorable Economics are Driving Accelerating PV Solar Adoption Source: EIA Photovoltaic Module Shipments Report as of March 2023 Source: EIA Energy Outlook as of March 2023 U.S. Generation by Source(2) Average Cost of PV Modules(1) The EIA expects the pace of solar generation capacity additions to s
Slide 35: Utility Price Inflation is a Material Tailwind to Solar Adoption
Utility Price Inflation is a Material Tailwind to Solar Adoption Source: BloomberNEF as of March 24, 2023 Source: Total company functional spending of U.S. Investor-Owned Electric Companies. Edison Electric Institute Industry Outlook as of September 2022 Source: U.S. Energy Information Administratio
Slide 36: Residential Solar Supports Growing Demand for Resilience
Residential Solar Supports Growing Demand for Resilience Electricity disturbance is defined as an electrical incident or disturbance that is sufficiently large enough to cross Department of Energy reporting thresholds. Select example events include damage or destruction of a facility, operational fa
Slide 37: Regulatory Environment is Favorable
Regulatory Environment is Favorable Source: SunPower Investor Presentation as of March 2022 Source: National Renewable Energy Laboratory Solar Industry Update as of January 26, 2023 Source: DSIRE and NC Clean Energy Technology Center as of September 2023 Source: DSIRE and NC Clean Energy Technology
Slide 38: Inflation Reduction Act Provides Substantial Tailwinds
Inflation Reduction Act Provides Substantial Tailwinds Low- to moderate-income households defined as those making less than 150% of their Area Median Income (AMI) Source: Solar.com Solar Learning Center Source: Evergreen Climate Innovations August 2022 Cleantech Roundup as of September 14, 2022 Tax
Slide 39: Consumer Focus on Energy Efficiency Continues to Increase
Consumer Focus on Energy Efficiency Continues to Increase Source: EnergySage, Regional ROIs on Attic Insulation as of March 2023 Selected Energy Efficiency Solutions Energy Efficiency Projects Support Strong ROI(1) Homeowner focus on residential energy efficiency and weatherization has accelerated a
Slide 40: Appendix
Appendix
Slide 41: Reconciliation of Non-GAAP Metrics
Reconciliation of Non-GAAP Metrics Source: Audited financials for 2021, 2022 and unaudited six months ending June 30, 2023,and three months ending September 30, 2023 Reconciliation of Net Income (Loss) to Adjusted EBITDA ($)
Slide 42: Forecast Assumptions
Forecast Assumptions Other Assumptions Include: Gross revenue includes adders such as insulation, roofing, heat/water pumps and battery storage The continued growth of the solar energy industry and adoption of residential solar energy systems by homeowners The continuation and expansion of U.S. fede
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 listed belo
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 dealers w
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-consuming.
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 account
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 af
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 Common Stock”), may not be available on a consistent basis to provide stockholders with adequate
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 responsibiliti
Slide 50: Sunergy