Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (May 2017)
28 slides from Energy Recovery's investor presentation, May 15, 2017
Slide 1: ERI Investor Presentation 2017
ERI INVESTOR PRESENTATION (NASDAQ; ERI) 2017 energy recovery’ 4
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation contains forward-looking statements within the “Safe Harbor” provisions ofthe Private Securities Litigation Reform Act of 1995. Forward-looking statementsin this report include, but are nt limited to, statements about our ‘expectations, objectives, antiipa
Slide 3: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT TAA, Who We Are ‘An energy solutions provider and technology leader in applying fluid dynamics and advanced materials science What We Do Create markets to preserve or eliminate pumps that are subject to and destroyed by hostile process fluids Convert wasted pressure energy i
Slide 4: Company milestones 1992-2016
1992 - 2014 2015 2016 Developed x0 New Corporate Commenced Pressure Sx Strategy and B collaborative Exchanger Management VorTeq testing Technology Team with Schlumberger AQ] invested in nao Signed 15-year Secured largest license with purchase order in esebiaes Schlumberger company history Market Lea
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS. Growth © Commercialize VorTeq technology Alderley agreement to further penetrate Saudi Aramco & greater GCC = Expand water desalination segment’s total addressable market s 4 Perpetual Innovation = - Pressure exchanger technology, adaptable to other industries = Target-rich pr
Slide 6: Core Technology — The Pressure Exchanger
CORE TECHNOLOGY — THE PRESSURE EXCHANGER: seve Lo testes 7 a 4
Slide 7: Product Portfolio
PRODUCT PORTFOLIO WATER CHEMICALS Making Desalination Affordable IsoBoost Applications * Gaz Processing 18,000 Installations
Slide 8: Ubiquitous Technology with Significant Growth
UBIQUITOUS TECHNOLOGY WITH SIGNIFICANT GROWTH Continue to invest in R&D 27.8% otorexinans $2M *202%ctorexina0is 27.8% ctorcxnms ClchngerTechnlagy een ‘months, inannual cycles Licensing Sea Peeme perannum Desal Beli 2016 2020+ $54.7M Incremental Revenue Opportunity $200M+
Slide 9: New Product and Market Development
NEW PRODUCT AND MARKET DEVELOPMENT High rates of flow High pressure differentials menied High capital intensity in the form of pumps and ancillary 2s equipment SS SS oss | es Hostile process fluid applications Flow x Pressure Differential = Energy Density © energy recovery” paces
Slide 10: Efficient Frontier of Product Optionality
EFFICIENT FRONTIER OF PRODUCT OPTIONALITY Desalination Early-stage Businesses / Real Options '$15-S20MFCFE eres i Gatoal vorreg -2035 ecuseleeangagreement wh 8 Funding ‘Mechanism @ --> A revert servatnes tre eneroduct ‘devlogment rosa leocen™=2015, nals Dios Branco taciey uote 2016 secured Petaling
Slide 11: Go to Market Strategy
GO TO MARKET STRATEGY ‘Targeting 24 month development cycles, commencing every twelve months Prototype esignand | manufacturing | product Months © energy recovery” ge 2
Slide 12: $4.1B Addressable Market Opportunity
$4.1B ADDRESSABLE MARKET OPPORTUNITY Wud Pumping, WATER Ol & GAS CHEMICALS @ 6 ©
Slide 13: Desalination
Slide 14: Desalination — Our First Disruptive Technology
DESALINATION — OUR FIRST DISRUPTIVE TECHNOLOGY. The “PX Pressure Exchanger” * 18,000 PX devices installed worldwide * 25-year life with no maintenance * Dominant global market share = 60% gross margins Compelling short and long term market opportunity * Global water demand / supply gap * Expand prod
Slide 15: Emerging Markets: Upstream Oil & Gas
Slide 16: VorTeq Hydraulic Pumping System
VORTEQ HYDRAULIC PUN G SYSTEM)
Slide 17: VorTeq Integration
VORTEQ INTEGRATION Status Quo PS everey recovery cn iano. ee
Slide 18: Is VorTeq Disruptive?
IS VORTEQ DISRUPTIVE: | @ Reduced Maintenance: Q centrifugal Pump Mode! $3Mto $4M p/yrp/fieet* $8M to $12M p/yrp/fleet* | @ Decreased Pump Redundancy / Lower CAPEX: S1Mto $2M p/yrp/fieet* settee
Slide 19: SLB Licensing Agreement Structure
SLB LICENSING AGREEMENT STRUCTURE ‘Agreement provides exclusive rights to ERI’s VorTeq™ Hydraulic Pumping System for on-shore hydraulic fracturing (Field of Use) = Commercializes the VorTeq™ technology with one of the industry's most respected oil-field services companies Highlights ® Schlumberger p
Slide 20: MTeq Mud Pumping System
MTEQ MUD PUMPING SYSTEM Status Quo
Slide 21: MTeq Unlocks Value for Operators
MTEQ UNLOCKS VALUE FOR OPERATORS Drilling Configuration with MTeq & Centrifugal Pump: Reduced Logis Increased Productivity © Lower load requirements © Less rig-up and rig-down time © Reduction in planned and ‘unplanned rig downtime Higher Reliability & Safety © Reduced RAM BS Increased pump ite Fewe
Slide 22: Emerging Markets: Midstream & Chemicals
Slide 23: Our Solution — Gas Processing, Ammonia, and Pipelines
OUR SOLUTION — GAS PROC SSI Ne G, AMMONIA, AND PII IsoBoost and IsoGen recover pressure energy and increase reliability of pumping systems ‘= Save millions of dollars in energy over life of plant * Improve reliability, availability, maintainability * Decrease carbon footprint Licensing Agreement wit
Slide 24: Our Solution — Gas Processing and Ammonia
OUR SOLUTION — GAS PROCESSING AND AMMONIA, Status Quo With IsoBoost Wasted Pressure Energy & High Pump CAPEX Reduced OPEX & Pump CAPEX Deveney recovery ine
Slide 25: Solution - Pipelines
OLUTION - PIPELINES Status Quo Vertical Pipelines Must Be Depressurized © everay recovery With IsoGen 4% \ A) sh all fb: au = a =
Slide 26: Strategic Imperatives
~- Strategic imperatives : Z 3 energy recovery
Slide 27: Strategic Imperatives
STRATEGIC IMPERATIVES, Commercialize VorTeq + Onschedule to achieve Milestone success in 2017 Deployment estimated to commence in 2018, Product Innovation * Innovate and achieve proof of concept of new products that are derivatives of Pressure Exchanger technology every 24 months, in annual cycles M
Slide 28: Thank You
THANK YOU a a energy recovery’ 4