Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Sidoti & Co Virtual Small-Cap Conference (January 2022)
28 slides from Energy Recovery's conference presentation, Jan 19, 2022
Slide 1: Sidoti & Co Virtual Small-Cap Conference
NASDAQ: ERII Sidoti & Co Virtual Small-Cap Conference Energy Recovery Presentation – January 19, 2022 James Siccardi, VP Investor Relations
Slide 2: Forward Looking Statements
Forward Looking Statements 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, anti
Slide 3: Energy Recovery has Shown Fundamental Strength in Recent Years
NASDAQ: ERII Energy Recovery has Shown Fundamental Strength in Recent Years
Slide 4: Strong Fundamentals
Strong Fundamentals Avg. Product Revenue Rapid Growth 21% Growth, 2015-2020 2021 Estimated Gross High Margin 68% Margin Strong Balance Sheet $108M Cash & Securities and No Debt Increase in EBITDA margin Growing Profitability 21% since 20181 1 EBITDA margin excludes GAAP recognized license and develo
Slide 5: Share Price Growth of 3.5X Since 2018 – Nearly 2x the Russell 2000
Share Price Growth of 3.5X Since 2018 – Nearly 2x the Russell 2000 70% 60% +58% $22.632 50% +45% $6.531 40% 30% +39% 20% 10% 0% 2019 2019 2020 2020 2021 2021 ERII S&P 500 Dow Jones NASDAQ Russell 1 As of December 28, 2018; 2 As of November 12, 2021 5
Slide 6: We Have a Strong and Growing ESG Story
We Have a Strong and Growing ESG Story saved for customers on metric tons emissions avoided due $2.6B energy expenses annually1 12.5M to PXs – nearly 3M vehicles removed from the road annually1 product revenue from 90%+ energy-efficiency related products 96% PXs use components made from recycled mat
Slide 7: What is Energy Recovery Trying to Achieve?
What is Energy Recovery Trying to Achieve? We seek to accelerate the environmental sustainability of our customers' operations Our solutions reduce waste and energy consumption in industrial fluid-flow systems We revolutionized seawater reverse osmosis desalination (SWRO), reducing energy costs by u
Slide 8: Strategic Pillars for Long-term Sustainable Growth and Value
NASDAQ: ERII 3 Strategic Pillars for Long-term Sustainable Growth and Value Fundamentals
Slide 9: Three Strategic Pillars
Three Strategic Pillars PILLAR 1 PILLAR 2 PILLAR 3 DIVERSIFIED REVENUE GROWTH INCREASE BOTTOM LINE ESG Protect position in SWRO by Maintain high margin story Accelerate environmental improving products and By creating customer value via PX sustainability for customers via operations in a fast-growin
Slide 10: Pressure Exchanger Technology Platform
Pressure Exchanger Technology Platform Best-in-class energy recovery The PX = unbeatably low life-cycle costs Our pressure exchanger technology works as a platform to build product applications The technology is versatile – can handle liquid, gas, and a range of pressures Benefits include lower life
Slide 11: PX Technology Platform – Excelling in a Wide-Range of Pressure Applications
PX Technology Platform – Excelling in a Wide-Range of Pressure Applications o The Pressure exchanger is Energy Recovery’s core technology. This versatile technology acts as a fluid piston, efficiently transferring energy between high- and low-pressure fluids and gases through continuously rotating d
Slide 12: Industries Benefiting from PX Technology
Industries Benefiting from PX Technology Reverse Osmosis Desalination Industrial Wastewater Treatment CO2 Refrigeration 12
Slide 13: Pressure Exchanger Technology in SWRO
Pressure Exchanger Technology in SWRO Incoming seawater routed to pump and PX Low pressure potable water Main pump size PX transfers energy reduced by up to from high pressure 60% brine to seawater 1Ocean or other geological mass The Ocean1 PX lowers energy consumption by up to 60% 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 – equivalent to 75% of the Mediterranean Sea 14
Slide 15: Global Water Stress on the Rise
Global Water Stress on the Rise World Economic Forum 15
Slide 16: 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’ 16
Slide 17: We Help Address The Growing Water Gap In Two Fast Growing Industries
We Help Address The Growing Water Gap In Two Fast Growing Industries REVERSE OSMOSIS INDUSTRIAL DESALINATION WASTEWATER Addressable Market Addressable Market • Expect to double sales to ~$200M by 20261 • ~$1B with potential to triple by 20301 • 10-20% projected avg. annual market growth • Dependent
Slide 18: 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 PROJECTS1 Desal Capacity (m3/day) 20M Millions 18M ERII Competitors 16M 14M 12M 10M 8M 6M 4M 2M 0M '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 TECHNOLOGY STRENGTH = HIGH MARGIN Our ceramics PX
Slide 19: CO2 Refrigeration
NASDAQ: ERII CO2 Refrigeration PX Technology in Gas and Supercritical Liquid Applications
Slide 20: Regulation is forcing a global transition to natural refrigerants
Regulation is forcing a global transition to natural refrigerants such as CO2 due to global warming potential (GWP1) of existing HFC refrigerants Hydrofluorocarbons 1,000 - 13,000 GWP CO2 1 GWP (GWP) Global Warming Potential describes the relative potency of a greenhouse gas, which takes into accoun
Slide 21: PX Technology is a Game Changer for the Refrigeration Industry
PX Technology is a Game Changer for the Refrigeration Industry ~$1B annual TAM for ERI by 20301 1Energy Recovery projections and estimates based on currently available information. Actual results and figures may differ. 21
Slide 22: Disrupting a Large Market with the PX G
Disrupting a Large Market with the PX G CO2 systems drive up operating costs to owners via higher energy consumption Our PX G1300 reduces energy consumption in CO2 systems by recycling pressure energy during operations, much as in desalination Signed first contract in November 2021 for delivery in Q
Slide 23: Pressure Exchanger Technology in CO2 Refrigeration
Pressure Exchanger Technology in CO2 Refrigeration PX G1300 Gas pressurized in PX bypasses the compressor Compressor PX converts low pressure pressurizes CO2 up to gas from evaporator to 1,300 PSI. High pressure gas from ~1300 PSI, saving energy gas cooler is converted in PX to low pressure to creat
Slide 24: Our Goal is to Achieve Long-Term and Sustainable Growth
Our Goal is to Achieve Long-Term and Sustainable Growth by Accelerating the Sustainability of our Customers’ Operations 24
Slide 25: Targeting 25% - 40% avg. Revenue Growth Through 2026
Targeting 25% - 40% avg. Revenue Growth Through 2026 $570M Refrigeration Industrial Wastewater Desalination $300 $330M $100 $150M+ $70 $130M $30 $102M $200 $200 $127 $146 $102 2021 2022 2023 Low High 2026 Note: These revenue growth range goals, long-term vision and similar statements illustrate poss
Slide 26: Maintain Gross Margin and Manage OPEX to grow EBITDA
Maintain Gross Margin and Manage OPEX to grow EBITDA OPEX, % of Product Revenue1,2 EBITDA Margin1,2 12% 19% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 12021 – 2026 are estimated projections; 2Excluding Schlumberger License and Development Reve
Slide 27: Thank You
NASDAQ: ERII Thank You
Slide 28: 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 Lionel McBee, Sr. Mgr., Investor Relations energyrecovery.com +1.832.334.3685 | Mobile limcbee@energyrecovery.com ESG@energyre
Energy Recovery — Sidoti & Co Virtual Small-Cap Conference (January 2022) on 6ix