Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Midwest IDEAS Conference 2023
28 slides from Energy Recovery's conference presentation, Aug 23, 2023
Slide 1: Energy Recovery - Midwest IDEAS Conference
NASDAQ:ERII Energy Recovery Midwest IDEAS Conference James Siccardi, VP Investor Relations August 23, 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 - 2022
Product Revenue : 2015 - 2022 1 Average Product Revenue Growth Rapid Growth 16% 2015-2022 $126M $104M $92M $73M $58M $61M $50M $44M 2015 2016 2017 2018 2019 2020 2021 2022 (1) Excludes reported License and Development Revenue 2015 through 2020. 3
Slide 4: Operating Margin: 2015 - 2022
Operating Margin1: 2015 - 2022 Turnaround in Profitability 20% 13% 7% -3% -5% -6% -9% -29% 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 in 2021. 4
Slide 5: Other Strong Fundamentals
Other Strong Fundamentals Average Gross Margin High Margin 70% 2022 Flexible Cash & Securities and NO Balance Sheet $98M DEBT (Q2 2023) 5
Slide 6: 2019 – 2023 Returns: ERII +301% vs. Russell 2000 +35%
2019 – 2023 Returns: ERII +301% vs. Russell 2000 +35%¹ 402 450 400 350 300 250 200 136 150 100 50 2019 2020 2021 2022 YTD 2023¹ ERII Russell 2000 (1) As of August 11, 2023 6
Slide 7: What Is Driving This Value? The PX Technology Platform
What Is Driving This Value? The PX Technology Platform 7
Slide 8: The PX Pressure Exchanger
The PX Pressure Exchanger 2 4 5) energy recovery’
Slide 9: 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 10: 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 11: PX In Action: Desalination
PX In Action: Desalination 11
Slide 12: 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 12
Slide 13: Water: Desalination & Wastewater
Water Desalination & Wastewater 13
Slide 14: 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 14
Slide 15: 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 16: 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 17: 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 17
Slide 18: Disrupting the Global Refrigeration Industry
CO2 Disrupting the Global Refrigeration Industry 18
Slide 19: 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 20: 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 21: 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 21
Slide 22: 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 23: The Future: Creating Long-Term Shareholder Value
The Future Creating Long-Term Shareholder Value
Slide 24: 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 25: Growth Targets
Growth Targets1 Desalination Wastewater $570M Refrigeration $300 $330M $100 $131M - $70 $30 $126M $138M2 $104M $200 $200 $125M - $104 $122 $130M 2021 2022 2023 2024 Low High 2026 (1) These revenue growth range goals, long-term vision and similar statements illustrate possible outcomes of our differe
Slide 26: 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 27: 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 27
Slide 28: energyrecovery.com
BO energy recovery’ energyrecovery.com