Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (March 2021)
22 slides from Energy Recovery's investor presentation, Mar 24, 2021
Slide 1: Driving Industrial Sustainability Delivering Value in Fluid-Flow Processes
NASDAQ: ERII Driving Industrial Sustainability Delivering Value in Fluid‐Flow Processes Energy Recovery Investor Presentation – March 2021
Slide 2: Forward Looking Statement
Confidential & Proprietary 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 expe
Slide 3: Energy Recovery Snapshot
Confidential & Proprietary Product Rev Growth Avg. Growth ‘15 ‐ ’20 21% 2020 27% 2021 (estimated) up to 10% 2022 (estimated) up to 25% 2020 Gross Margin 69% Cash & Securities $115M Debt ‐‐ ENERGY RECOVERY SNAPSHOT 3 Financial Snapshot2 1Energy Recovery estimate; 2Growth and Gross Margin from Product
Slide 4: We Have a Growing ESG Story
Confidential & Proprietary PXs installed worldwide metric tons emissions avoided due to PXs = >2.5M vehicles removed from the road annually1 Of waste metal from our operations is recycled WE HAVE A GROWING ESG STORY saved for customers on energy expenses annually1 product revenue from energy‐efficie
Slide 5: ESG at Energy Recovery
Confidential & Proprietary 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 industrial
Slide 6: Industries Served
Confidential & Proprietary INDUSTRIES SERVED Industry Markets Customer Type Key Benefits Provided o Seawater Desalination o Brackish Water Desalination o International EPC Firms o Desalination OEMs o Plant Owners and/or Operators o Less Energy Consumption o Lower Emissions o Reduced Costs o Industri
Slide 7: Commercially Available Product Categories
Confidential & Proprietary Energy Recovery Devices PX® Pressure Exchanger® COMMERCIALLY AVAILABLE PRODUCT CATEGORIES Pumps 7 Desalination Natural Gas Processing ATMP IsoBoostAquaBold™ Energy Recovery Device Ultra PX™ Industrial Wastewater Treatment Energy Recovery Device Turbocharger Please visit En
Slide 8: Pressure Exchanger Technology Platform
Confidential & Proprietary PRESSURE EXCHANGER TECHNOLOGY PLATFORM Anatomy of a Pressure Exchanger Transfers energy from high‐pressure to low‐pressure fluids (both liquids and gas) through continuously rotating ducts with only one moving part (the rotor) o Our pressure exchanger technology works as a
Slide 9: How Pressure Exchanger Technology Reduces Energy Consumption
Confidential & Proprietary HOW PRESSURE EXCHANGER TECHNOLOGY REDUCES ENERGY CONSUMPTION 9 Sealed Phase Two fluids on opposite sides of PX; rotor duct is sealed, isolating high, low pressure fluid streams 1 2 1 4 2 3 Rotor duct rotates to pressure exchange phase Rotor duct rotates to sealed phase Pre
Slide 10: Pressure Exchanger Technology in Action: PX for SWRO
Confidential & Proprietary 1Ocean or other geological mass PRESSURE EXCHANGER TECHNOLOGY IN ACTION: PX PRESSURE EXCHANGER FOR SWRO Approx. 60% of energy wasted during SWRO prior to implementation of ERDs PX lowers energy consumption by up to 60% 10 Without Energy Recovery Devices (ERDs) With PX Pres
Slide 11: Our PX Platform Has Come to Dominate Large Scale SWRO Desalination
Confidential & Proprietary Our ceramics PX Pressure Exchanger is designed for a 25‐year life, needs no maintenance and has up to 98% efficiency – unrivalled quality that translates into high profitability 0M 10M 20M '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 ERII Competitors OUR
Slide 12: New Water Demand and Technology Shift Driving Secular Shift in SWRO
Confidential & Proprietary Our growth roughly tracks overall SWRO desal capital spend $10M $40M $70M $100M $130M $0B $2B $4B $6B $8B $10B '14 '15 '16 '17 '18 '19 '20 '21 '22 En er gy R ec ov er y Re ve nu e SW RO In du st ry C ap ex SWRO Industry ERI Product Revenue2 NEW WATER DEMAND AND TECHNOLOGY
Slide 13: The World Needs More Water
Confidential & Proprietary THE WORLD NEEDS MORE WATER 13 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 Wat
Slide 14: Existing Fresh Water Supplies Will Likely Not Meet Future Demand
Confidential & Proprietary EXISTING FRESH WATER SUPPLIES WILL LIKELY NOT MEET FUTURE DEMAND 14 The world will only have 60% of the water it needs by 2030 1/4 of all people live in high water‐stress territories Potable water demand expected to increase 30% by 2050 Global population is expected to gro
Slide 15: Technology Shift from Thermal to SWRO: $0.5B TAM
Confidential & Proprietary 23M cubic meters of thermal capacity equivalent to approximately $0.5 Billion in PX sales2 0% 20% 40% 60% 80% 100% 1960s 1970s 1980s 1990s 2000s 2010s 2019 ‐ '20 Thermal vs. SWRO1 (% of Annual Plant Installations) Thermal SWRO o Existing thermal capacity should eventually
Slide 16: Building Long-Term Sustainable Growth and Value
Confidential & Proprietary BUILDING LONG‐TERM SUSTAINABLE GROWTH AND VALUE 16 Revenue Growth Increase Bottom Line Sustainability New Technologies Leverage Existing Assets Environmental Sustainability Develop new PX products, widen technical aperture Large investments in organization not needed for s
Slide 17: Leveraging PX Technology for Diversified Growth Beyond Desalination
Confidential & Proprietary LEVERAGING PX TECHNOLOGY FOR SUSTAINABLE DIVERSIFIED GROWTH BEYOND DESALINATION 17 → Cap R&D Expense to limit size and scope of R&D projects: 15‐20% of revenue in 2021 → Discipline: Maintain rigorous commercial hurdles for ROI, Gross Margin, and Timelines Fluids o Manage p
Slide 18: Ultra PX – Energy Recovery Device for Industrial Wastewater
Confidential & Proprietary o Countries are mandating zero liquid discharge (ZLD) to mitigate environmental effects of industrial wastewater discharge o Ultra High‐Pressure RO (UHPRO) could supplant thermal as the prevalent technology due to superior efficiency, much as it has in SWRO o Our PX can po
Slide 19: VorTeq – 2 Major Hurdles Remain to Commercialize
Confidential & Proprietary VorTeq seeks to protect pumps from abrasive proppant o Increase safety of operations o Reduce emissions, energy intensity of pump operations o Decrease pump failures o Lower maintenance, capital costs Status of Commercialization o Completed multiple frac stages at live wel
Slide 20: Disciplined Focus Driving Top and Bottom-Line Growth
Confidential & Proprietary $44 $50 $58 $61 $73 $92 44% 14% 17% 5% 19% 27% 10% 25% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Projections Actuals z DISCIPLINED FOCUS DRIVING TOP AND BOTTOM‐LINE GROWTH 20 Maintain Gross Margin and Manage OPEX to Drive EBITDA Drive Diversified PX Top Line G
Slide 21: Thank You
3) energy recovery’ Thank You
Slide 22: Contact Us
Confidential & Proprietary CONTACT US 22 James Siccardi, VP, Investor Relations +1.832.474.7628 | Mobile jsiccardi@energyrecovery.com ESG@energyrecovery.com (for ESG inquiries) Energy Recovery, Inc. 1717 Doolittle Drive San Leandro, CA 94577, USA energyrecovery.com