Thermal Energy International Inc. · TSXV:TMG
Thermal Energy International — Investor Presentation (November 2020)
40 slides from Thermal Energy International's investor presentation, November 2020
Slide 1: Thermal Energy International
Thermal Energy International Profitable energy efficiency & emission reduction solutions An Innovative Technology Company Providing Sustainability Solutions TSX-V: TMG | enq@thermalenergy.com | www.thermalenergy.com
Slide 2: Forward-looking statements
Forward-looking statements TSX-V: TMG | November 2020 This presentation includes “forward-looking information”. For example, statements about the opportunities for repeat business; the possibility or expectation of additional orders; growth in existing markets; entry into new markets; order backlog;
Slide 3: A proprietary solution provider and a fully accredited engineering firm
Thermal Energy International A proprietary solution provider and a fully accredited engineering firm With a unique mix of: • Proprietary products, and • Process, energy and environmental engineering expertise… We engineer, design and deliver innovative and compelling turnkey energy efficiency projec
Slide 4: Corporate history
Corporate history Global recession, TEI cost TEI growth, Impact of TEI is an R&D co. energy markets cutting and expansion COVID-19 collapse corporate and Global Avg annual revenue $1M 2008 – 2010 reorganization investment Pandemic Avg annual loss $1.1M 1991-2007 EU Recession 2010 – 2015 2016 – 2019
Slide 5: Investment highlights
Investment highlights Enormous, fast-growing global market 1 with strong fundamentals Proprietary products sold to leading companies 2 in many sectors 3 Low capital intensity business model 4 Poised to continue strong track record of growth www.thermalenergy.com | 5
Slide 6: Enormous global market for energy efficiency
Enormous global market for energy efficiency More than 50% of the world’s energy is lost due to inefficiency “Energy efficiency has been called a ‘hidden fuel’. However, the degree of global investment in energy efficiency, and the resulting energy savings, are so massive that energy efficiency is n
Slide 7: Enormous global market for our products
Enormous global market for our products Focused on reducing industrial natural gas use North American & EU market Global market for TEI Products for TEI Products >$50B 1 >$250B 1 1 Calculations based on data from U.S. Dept. of Energy, 2018 Energy Outlook, UK BEIS Natural Gas Prices in IEA countries,
Slide 8: Market fundamentals stronger than ever
Market fundamentals stronger than ever Governments and industries around the world are taking unprecedented action on climate change • Improved energy efficiency can meet 50% of the world’s carbon reduction commitments • 3x more than what all forms of renewable energy can achieve • A 9x increase in
Slide 9: Efficiency is the cheapest solution
Efficiency is the cheapest solution Increasing energy efficiency is the fastest, cheapest and easiest way to reduce GHG emissions • Systematically cheaper than other sustainability solutions • Does not cost money • Saves money and increases profitability McKinsey & Company • Improves competitiveness
Slide 10: Energy savings and carbon emission reductions
Energy savings and carbon emission reductions Thermal Energy International impact to date To date, Thermal Energy International energy saving and carbon emission reducing products installed around the world have delivered for our customers an estimated: • $434 million in energy savings • 4.6 million
Slide 11: Energy savings and carbon emission reductions
Energy savings and carbon emission reductions Thermal Energy International impact to date Every year the energy saved and emissions reduced by Thermal Energy International products installed around the world is equivalent to: www.thermalenergy.com | 11
Slide 12: Products and solutions
Products and solutions Direct contact condensing High efficiency steam Indirect contact steam Indirect contact hot heat recovery system trapping technology boiler economizer water boiler economizer Fuel & CO2 10-20% Fuel & CO2 10-20% Fuel & CO2 8-12% Fuel & CO2 5-10% Savings Savings Savings Savings
Slide 13: Products and solutions - Developing
Products and solutions - Developing Low temperature biomass drying system Renewable energy & water recovery systems 1. Developing Flu-Ace for water recovery • Paid study with multi-national food ingredient company 2. Turnkey water recovery projects • Through first round for NRC-IRAP funding 3. Integ
Slide 14: Broad range of industries and customers
Broad range of industries and customers Our customers include a large number of leading multinational companies across a wide range of industry sectors: • Food & Beverage • Healthcare • Pharmaceutical I • Pulp & Paper • Chemical • Agribusiness • Laundry • Petrochemical • Brewing • Building materials
Slide 15: Sector and geographic diversity
Sector and geographic diversity Customers include leading global companies across many sectors SECTOR VALUE PAYBACK LOCATION Food & Beverage $920K 2.1 yrs Eur Consumer Protein $950K NA Tire Manufacturing $482K 2.0 yrs Eur Food Products $1.4M 1.9 yrs Eur Brewer $650K 1.6 yrs Eur (NA – North America)
Slide 16: Sector and geographic diversity
Sector and geographic diversity Customers include leading global companies across many sectors SECTOR VALUE PAYBACK LOCATION Snack Food Manufacturer $1.5M 3.9 yrs NA Tissue Manufacturer $850K 2.3 yrs NA Animal Nutrition $2.3M 3.1 yrs Eur Chemical Producer $960K 2.9 yrs Eur Food Ingredients $2.4M 2.0
Slide 17: Sample projects
Sample projects Food and beverage industry • $920K order to supply a “Bolt-on” CHP Heat Recovery Solution TO BE installed at a turnkey heat recovery canning and pouch packaging facility in the Eur. Recaptured system to a one of energy will then preheat process water required during the Europe’s larg
Slide 18: Sample projects
Sample projects Consumer protein industry • $950K order from a leading Energy efficient equipment will be used to heat process water consumer protein company for the plant operation producing up to 2,700 US gallons per minute of water heated from 85°F to 140°F. • Efficient equipment and engineering
Slide 19: Sample projects
Sample projects Food-products industry • $1.4M order to supply a Part of a company-wide commitment to improving energy heat recovery system to a efficiency and minimizing emissions, this turnkey, energy saving multinational specialty heat recovery system will deliver both pollution prevention and nu
Slide 20: Investing in growth
Investing in growth Expanding our team & global presence Added • Latin America salesperson (Apr 2016) • Texas salesperson (Feb 2018) • Ontario / CoGen salesperson (May 2016) • EU marketing manager (Apr 2018) • CoGen Engineer (Jul 2016) • North Germany salesperson (Apr 2018) • Junior Engineer (Nov 20
Slide 21: Global presence
Global presence Established sales and engineering platforms in our key markets of North America and the EU Sales territories recently added: • Ontario and Cogen • South Germany • Latin America • North Germany • Texas & US Gulf • Poland Coast Major offices: Ottawa, Canada, Bristol, UK, and Pittsburgh
Slide 22: Business as (un)usual
Business as (un)usual Maintaining operations through COVID-19 • Our customized turnkey best-in-class product and services often require detailed site surveys and facility visits • Most of our clients are essential businesses and continue to operate • Travel restrictions and other Covid-19 mitigation
Slide 23: Business as (un)usual
Business as (un)usual Taking advantage of the COVID-19 slowdown After three years of business expansion with staff and product additions, we used the COVID-19 slowdown to improve and enhance systems and capabilities • Company-wide upskilling and training • Technology upgrades • Product R&D • Improvi
Slide 24: Business as (un)usual
Business as (un)usual Taking advantage of the COVID-19 slowdown By using the current slowdown to improve and enhance systems and capabilities…. • We were not just responding to the current circumstances • But also, preparing for the altered state of business going forward • All of the initiatives ta
Slide 25: Business as (un)usual
Business as (un)usual Emerging into the new normal Using the COVID-19 slowdown to improve and enhance systems and capabilities ensures we… • Emerge from this challenging period in as strong a position as possible • Are able to meet any accumulated demand for increased energy efficiency Taking these
Slide 26: Q1 FY2021 Financial Review
Q1 FY2021 Financial Review Last-twelve-months for the first quarter ending August 31, 2020 www.thermalenergy.com | 26
Slide 27: Revenue
Revenue Annual and last twelve months for the first quarter ending August 31, 2020 ($ millions) 25 • 31% CAGR prior to COVID-19 global $21.1 $21.4 pandemic being declared in March 2020 $19.3 20 $17.4 • FY2020 (May 31) revenue still up despite COVID-19 global pandemic 15 $12.4 $13.2 • Last twelve mon
Slide 28: Gross profit
Gross profit Annual and last twelve months for the first quarter ending August 31, 2020 ($ millions) 10 • LTM gross profit impacted by COVID-19 $9.0 global pandemic 9 $8.0 $8.1 8 $6.9 • LTM gross margin remained steady at 42% 7 $6.3 $5.8 6 5 4 $3.1 3 2 1 0 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 LTM 46%
Slide 29: Operating expenses
Operating expenses Annual and last twelve months for the first quarter ending August 31, 2020 ($ millions) • FY2020 and LTM operating expenses down 9 $8.2 $7.8 due to: 8 $7.5 • COVID-19 cost saving measures 7 $6.3 $5.4 $5.4 $5.6 implemented 6 5 • COVID-19 government wage subsidies 4 • Despite decrea
Slide 30: EBITDA
EBITDA Annual and last twelve months for the first quarter ending August 31, 2020 ($ thousands) • After record EBITDA for FY2020, LTM is 3000 showing the impact of COVID-19 $1,921 2000 $1,465 • Excluding the $1.3 million in strategic 1000 $564 $750 $617 growth-oriented investments made during $176 F
Slide 31: Net income
Net income Annual and last twelve months for the first quarter ending August 31, 2020 ($ thousands) • FY2020 and LTM net loss impacted by 1500 a $3.1 million non-cash write down of 1000 $619 goodwill and other intangible assets 500 $259 $393 0 • Excluding the $3.1 million in goodwill and FY 15 FY 16
Slide 32: Cash position
Cash position Year end and first quarter ending August 31, 2020 ($ millions) • Cash position remains strong and largely 6.0 unchanged 5.0 $4.8 $4.6 $4.2 4.0 $3.3 $3.0 3.0 2.0 $1.1 1.0 $0.7 0.0 May.15 May.16 May.17 May.18 May.19 May.20 Aug.20 www.thermalenergy.com | 32
Slide 33: Working capital
Working capital Year end and first quarter ending August 31, 2020 ($ millions) • Working capital position remains strong 4.0 $3.7 3.5 • May 31, 2020 working capital was the $2.9 strongest it had been in over 10 years 3.0 2.5 • August 31, 2020 working capital further $2.0 $2.0 benefited from a low in
Slide 34: Order Book
Order Book Order backlog as of reporting date ($ millions) • Order backlog has dropped since last year 16.000 $14.6 due to COVID-19 but remains the second- 14.000 best October order backlog in company history 12.000 10.000 $9.3 $9.6 • While order backlog is lower: 8.000 $7.8 $7.8 • Orders received f
Slide 35: Senior management
Senior management William M. Crossland, B. Sc, MBA Robert Triebe, M.Sc., P.Eng. B. Sc. President & CEO; Director COO More than 25 years of experience delivering corporate Recognized expert in environmental technologies, growth, development, finance and M&A transactions to a responsibilities have ran
Slide 36: Board of directors
Board of directors John Kelly William M. Crossland, B. Sc, MBA Chairman President & CEO; Director One of Ottawa’s most respected executives and serial More than 25 years of experience delivering corporate entrepreneurs. Ottawa’s Business Man of the Year (2001) and Lifetime Achievement Award (2014).
Slide 37: One of Canada's fastest growing companies
One of Canada’s fastest growing companies • Sep 2019 & 2020 - Named one of Canada’s Top Growing Companies, in the Globe and Mail, Report on Business’s annual ranking two years in row www.thermalenergy.com | 37
Slide 38: Investment summary
Investment summary Enormous, fast Proprietary products Poised to continue growing, global sold to leading strong track record of market with strong companies across growth fundamentals sectors • Low capital intensity business model • Ever-increasing demand for • Proprietary business-centric energy e
Slide 39: Capitalization
Capitalization TSX-V TMG Recent Price: $0.080 52 Week Range: $0.150 - $0.050 # of Shares: 160.5 million Market Cap: $12 million Cash: $4.6 million Total Debt: $3.2 million Share data as of November 9, 2020 Balance sheet data as of August 31, 2020 www.thermalenergy.com | 39
Slide 40: Connect
A great growth story, that is waiting to be told! www.thermalenergy.com Connect Thermal-Energy-International on LinkedIn GoThermalEnergy on Twitter An Innovative Technology Company Providing Sustainability Solutions TSX-V: TMG | enq@thermalenergy.com | www.thermalenergy.com
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