Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (December 2020)
21 slides from Energy Recovery's investor presentation, Dec 1, 2020
Slide 1: Driving Industrial Sustainability: Delivering Value in Fluid-Flow Processes
Driving Industrial Sustainability Delivering Value in Fluid-Flow Processes December 1, 2020 Joshua Ballard, Chief Financial Officer, Energy Recovery NASDAQ: ERII
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: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT Financial Snapshot2 We develop and manufacture the PX® Pressure Exchanger®, a technology Product Rev Growth platform that reduces waste, improves operational efficiencies and drives Avg. Rev. Growth ‘15-'19 17% significant cost-savings for our customers 2020 (estimated) 25%
Slide 4: We Have a Growing ESG Story
WE HAVE A GROWING ESG STORY saved for customers on $2.0B energy expenses1 25k PXs installed worldwide product revenue from metric tons emissions avoided 90% energy-efficiency related products 12.4M due to PXs* = >2.5 million vehicles removed from the road PXs use components made Of waste metal from
Slide 5: Pressure Exchanger Technology Platform
PRESSURE EXCHANGER TECHNOLOGY PLATFORM Anatomy of a Pressure Exchanger Transfers energy from high-pressure to low-pressure fluids o We drive benefits by applying this through continuously rotating ducts with only one moving part technology to industrial fluid-flow systems: (the rotor) ▪ Decreased en
Slide 6: How Pressure Exchanger Technology Reduces Energy Consumption
HOW PRESSURE EXCHANGER TECHNOLOGY REDUCES ENERGY CONSUMPTION Sealed Phase Pressure Exchange Phase Two fluids on opposite sides of Rotor duct rotates to 1. Low pressure driven fluid PX; rotor duct is sealed, isolating pressure exchange phase enters the rotor duct high, low pressure fluid streams 2. H
Slide 7: Pressure Exchanger Technology in Action: PX for SWRO
PRESSURE EXCHANGER TECHNOLOGY IN ACTION: PX PRESSURE EXCHANGER FOR SWRO Flagship PX device recycles energy, reducing operational costs and emissions in SWRO facilities Without Energy Recovery Devices (ERDs) With PX Pressure Exchanger Approx. 60% of energy wasted during SWRO PX lowers energy consumpt
Slide 8: Our PX Platform Has Come to Dominate Large Scale SWRO Desalination
OUR PX PLATFORM HAS COME TO DOMINATE LARGE SCALE SWRO DESALINATION Cumulative Won Mega Project1 Desal Capacity (m3/day) 20,000,000 ERII Competitors 10,000,000 0 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Technology Strength = High Margin 70% ERII Gross Margin 2 25% Russell 2000
Slide 9: New Water Demand and Technology Shift Driving Secular Shift in SWRO
NEW WATER DEMAND AND TECHNOLOGY SHIFT DRIVING SECULAR SHIFT IN SWRO Annual SWRO Capital Expenditures1 $8B SWRO Industry $130M ERI Product Revenue2 Energy Recovery Revenue SWRO Industry Capex $6B $100M $4B $70M $2B $40M $0B $10M '14 '15 '16 '17 '18 '19 '20 '21 '22 Our growth roughly tracks overall SW
Slide 10: The World Needs More Water
THE WORLD NEEDS MORE WATER Saudi Water Partnership Company has released its Seven-Year Statement for 2020-26 Africa’s largest dam powers dreams of prosperity in Ethiopia – and fears of hunger in Egypt Alaska Villages Run Dry and Residents Worry About a ‘Future of No Water’ Confidential & Proprietary
Slide 11: Existing Fresh Water Supplies Will Likely Not Meet Future Demand
EXISTING FRESH WATER SUPPLIES WILL LIKELY NOT MEET FUTURE DEMAND 60% >2B People 30% 26% The world will only 1/4 of all people live Potable water demand Global population is have 60% of the water in high water-stress expected to increase expected to grow from it needs by 2030 territories 30% by 2050
Slide 12: Thermal Desalination Technology Shift to RO Underpinning Market Growth
THERMAL DESALINATION TECHNOLOGY SHIFT TO RO UNDERPINNING MARKET GROWTH SWRO Eclipsed Thermal Desalination as Technology of Choice in the 2000s o Existing thermal capacity should eventually be replaced by SWRO without impacting base demand for water o SWRO is more efficient, less energy intensive and
Slide 13: Leveraging PX Technology for Growth and Diversification Beyond Desalination
LEVERAGING PX TECHNOLOGY FOR GROWTH AND DIVERSIFICATION BEYOND DESALINATION Ultra High- Other Future Zero Mixing VorTeq / O&G Pressure RO Industries Enabling Technologies Transformative Technologies o Incremental R&D: widen technical aperture o Potential to transform an industry, as we of highly eff
Slide 14: Zero Liquid Discharge - Ultra High-Pressure RO for Industrial Wastewater
ZERO LIQUID DISCHARGE (ZLD) - ULTRA HIGH-PRESSURE RO FOR INDUSTRIAL WASTEWATER o India and China have mandated ZLD requirements aimed at reducing industrial wastewater discharge and reusing water o We can lower the high cost of ZLD processes by recovering up to 60% of wasted energy depending on syst
Slide 15: We Are Applying Our PX Expertise to Oil & Gas
WE ARE APPLYING OUR PX EXPERTISE TO OIL & GAS Water and Oil & Gas have similarities o High pressure fluid-flow environments o Potential to transfer pressure energy from a high-pressure fluid to a low-pressure fluid o Opportunities to eliminate waste in system – increase efficiencies and decrease cos
Slide 16: VorTeq Protects High Pressure Pumps, Reduces Costs
VORTEQ PROTECTS HIGH PRESSURE PUMPS, REDUCES COSTS Status Quo With VorTeq Frac fluid processed by VorTeq pumps handles Pumps are frac fluid isolated, clean water fed to pumps o Pumps handle frac fluid (water, chemicals o Capital savings ($1M - $2M1) – less pump and sand) redundancy = less waste o Pu
Slide 17: We Must Pass Clear Hurdles to Commercialize the VorTeq
WE MUST PASS CLEAR HURDLES TO COMMERCIALIZE THE VORTEQ o Three critical hurdles ▪ Successfully frac 2-3 live wells ▪ Proof of customer value proposition ▪ Optimize cartridge life before repairs or replacement ✓ Highest operational cost to ERI o Must pass commercialize by June 2021, or cease R&D effo
Slide 18: Disciplined Focus Driving Top and Bottom-Line Growth
DISCIPLINED FOCUS DRIVING TOP AND BOTTOM-LINE GROWTH Drive Diversified PX Top Line Growth1 17% Average Annual Growth Projected Desal Revenue Growth Up to Up to 25% 25% 10% 19% With successful R&D efforts, 17% 5% z diversified growth by applying 44% 14% PX technology across variety of $44 $50 $58 $61
Slide 19: ESG at Energy Recovery
ESG AT ENERGY RECOVERY o First Environmental, Social, Governance (ESG) report issued Sept 2020 ▪ Aligned with SASB and GRI sustainability reporting frameworks; select United Nations Sustainable Development Goals o Our products address climate change, sustainable industrialization, energy efficiency,
Slide 20: Thank You
zo) energy recovery’ Thank You
Slide 21: Contact Us
CONTACT US James Siccardi, VP, Investor Relations Energy Recovery, Inc. +1.832.474.7628 | Mobile 1717 Doolittle Drive jsiccardi@energyrecovery.com San Leandro, CA 94577, USA ESG@energyrecovery.com energyrecovery.com (for ESG inquiries) Confidential & Proprietary 21
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