Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (June 2017)
21 slides from Energy Recovery's investor presentation, Jun 23, 2017
Slide 1: ERI Investor Presentation 2017
ERI INVESTOR PRESENTATION (NASDAQ; ERII) 2017 energy recovery) 4
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMEN This presentation contains forward-looking statements within the “Safe Harbor” provisions of the Private Securities Reform Act of 1995. Forward-looking statements in this report include, but are not limited to, statements about our expectations, objectives, anticipations, pl
Slide 3: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT, MA, 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 in
Slide 4: Developed
Developed Pressure Exchanger Technology 2] Invested in R&D Established Market Leadership in Desalination Increased shipments of Energy Recovery Devices Worldwide *»0 New Corporate x Strategy and Management Team =p Signed 15-year license with Schlumberger Installed first Energy Recovery device in Sau
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS cc Growth = Commercialize VorTeq technology = MTeq productintroduction and commercialization * Alderley agreement to further penetrate Saudi Aramco & greater GCC = Expand water desalination segment's total addressable market Perpetual Innovation = Pressure exchanger technology,
Slide 6: Product Portfolio
PRODUCT PORTFOLIO WATER i OIL & GAS CHEMICALS : Making Desalination Affordable Pressure Exchanger Hydraulic Fracturing: VorTeq hs =, IsoBoost Applications, ® Gas Processing = Ammonia IsoGen Applications q : = Gas Processing = Pipelines = Ammonia 18,000 Installations on 7 continents © energy recovery
Slide 7: Ubiquitous Technology with Significant Revenue Opportunity
UBIQUITOUS TE OLOGY WITH SIGNIFICANT Continue to invest in R&D © 27.5% of OPEX in 2014 © 20.2% of OPEX in 2015 Pressure Exchanger: SLB Licensing Revenue Desal 2016 $54.7M Incremental Revenue Opportunii * 27.8% of OPEXin 2016, Derivative of i $2M Develop derivatives of Pressure Exchanger Technology e
Slide 8: New Product and Market Development
NEW PRODUCT AND MARKET DEVELOPMENT, High rates of flow High pressure ry | = differentials High capital intensity in the form of pumps E03 and ancillary ——- equipment 4) 4) 4] 4% Hostile process fluid applications Flow x Pressure Differential = E © energy recovery Page 8
Slide 9: Efficient Frontier of Product Optionality
EFFICIENT FRONTIER OF P) Return DUCT OPTIONALITY Desalination Early-stage Businesses / Real Options $15 -$20M FCFE VorTeq™ ~ 2015, exclusive licensing agreement with SLB Cash Cow/ Funding Mechanism eG “===> , He PX /Vorteq derivatives target rich product development roadmap IsoGen™—2015, installed f
Slide 10: Go To Market Strategy
GO TO MARKET STRATEG Targeting 24 month development cycles, commencing every twelve months Next concept cycle begins a Consummate Derive Prototype long-term Manufacture value designand | strategic commercial Concept proposition manufacturing | partnership units Sizeand Consummate Initiate Conclude G
Slide 11: $4.1B Addressable Market Opportunity
$4.1B ADDRESSABLE MARKET OPPORTUNITY $4.58 $4.08 $3.58 $3.08 $2.58 $2.08 2 suse Mud Pumping: $1.08 $2.0B $058 $50M ° —— : : Water Upstream Midstream ‘Ammonia TOTAL New Opportuntiel WATER OIL & GAS CHEMICALS DEVELOPING 6 6 @e.,@ © energy recovery” poge 11
Slide 12: Desalination
Slide 13: 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 14: Emerging Markets: Upstream Oil & Gas
Slide 15: VorTeq Integration
VORTEQ INTEGRATION With VorTeq © energy recovery” ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 15
Slide 16: Is VorTeq Disruptive?
IS VORTEQ DISRUPTIVE? With VorTeq Centrifugal Pump Model ing Pumping Model with 15 to 20 PD Pumps New Pumping Model with3 to 4 Centrifugal Pumps Centrifugal Pump Model $8M to $12M p/yr p/fleet* @ Reduced Maintenance: $3M to $4M p/yr p/fleet* e Decreased Pump Redundancy / Lower CAPEX: S1M to $2M p/yr
Slide 17: MTeq Mud Pumping System
MTEQ MUD PUMPING SYSTEM 'uu0 SoUDS CONTROL © energy recovery” Page 17
Slide 18: MTeq Unlocks Value for Operators
MTEQ UNLOCKS VALUE FOR OPERATORS Drilling Configuration with Mieq & Centrifugal Pumps Reduced Logistics Increased Productivity ¥ Lowerload requirements © Less rig-up and rig-down time ¥ Reduction in planned and unplanned rig downtime Reduced Operating Cost: Reduced R&M Increased pump life Fewer pump
Slide 19: Strategic Imperatives
_> Strategic Imperatives - energy recovery”
Slide 20: Current Year Update
RENT YEAR UPDATE Commercialize VorTeq = Onschedule to achieve Milestone success in 2017 = Finalized design and in fabrication stage currently Product Innovation = MTeq introduction demonstrates success of new product development strategy in 2017 Market Expansion * Alliance agreement with Duchting Pu
Slide 21: Thank You
THANK YOU energy recovery) 4