Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Midwest IDEAS Conference 2022
25 slides from Energy Recovery's conference presentation, Aug 24, 2022
Slide 1: Midwest IDEAS Conference
NASDAQ: ERII Midwest IDEAS Conference Jim Siccardi, VP Investor Relations August 24, 2022
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: Industries Benefiting from PX Technology
Industries Benefiting from PX Technology Desalination Industrial Wastewater Treatment CO2 Refrigeration 3 33
Slide 4: Ongoing Strong Fundamentals
Ongoing Strong Fundamentals Avg. Product Revenue Rapid Growth 20% Growth, 2015-2021 High Margin >65% 2022 YTD Product Gross Margin Strong Balance Sheet $87M Cash & Securities and No Debt 4 44
Slide 5: Strong Share Price Performance
Strong Share Price Performance $22.292 >3x increase in share price since 2018, outpacing major indices 34% CAGR over same period 12,668.162 1,908.932 $6.871 2019 2020 2021 2022 YTD ERII NASDAQ Russell 1 As of January 2, 2019 2 As of August 3, 2022 5 55
Slide 6: Who We Are and What We Do
Who We Are and What We Do We seek to achieve long-term sustainable growth by accelerating the environmental sustainability of our customers’ operations Our solutions reduce waste and energy consumption We revolutionized seawater reverse osmosis (SWRO) desalination, reducing energy costs by up to 60%
Slide 7: Targeting 25% - 40% Average Revenue Growth
Targeting 25% - 40% Average Revenue Growth $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 possible outco
Slide 8: Leading ESG Performance
Leading ESG Performance saved for customers on metric tons emissions avoided due to PXs $3.9B energy expenses annually1 14.5M – nearly 3M vehicles removed from the road annually1 98%+ product revenue from energy-efficiency related sources 30TWh Saved in Electricity Consumption 1 Awards & Recognition
Slide 9: The PX is Energy Recovery's Core Technology
The PX is Energy Recovery's Core Technology 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) • Best-in-class energy recovery application • Unmatched low life-cyc
Slide 10: PX Technology in Action
PX Technology in Action Industry Highlight: PX Technology in SWRO Desalination Industrial Wastewater Treatment CO2 Refrigeration 10 10
Slide 11: 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) 20M 18M 16M ERII Competitors 14M 12M Millions 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 Pressure Exch
Slide 12: PX Technology is Addressing the Global Water Supply Gap
PX Technology is Addressing the Global Water Supply Gap INDUSTRIAL DESALINATION WASTEWATER Addressable Market Addressable Market • Targeting sales of ~$200M by 20261 • ~$1B with potential to triple by 2030 2 • 10-20% projected avg. annual market growth • Dependent on regulation to realize full TAM t
Slide 13: 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 13 13
Slide 14: 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 Hot, dry summer: Dutch government declares water shortage 14 14
Slide 15: Sampling of Industrial Wastewater Applications
Sampling of Industrial Wastewater Applications Li-ion Battery Manufacturing Textile Production Coking Mining Li-ion Brine Mining 15 15
Slide 16: Industrial Wastewater Applied to Lithium Market
Industrial Wastewater Applied to Lithium Market EV Battery Lithium Ore Lithium Brine Battery Manufacturing Mining Mining Recycling Waste Recovery of Wastewater Evaporation streams to lithium, ZLD ponds fertilizer metals & salts Direct Lithium Extraction (DLE) 16 16
Slide 17: ERII's PX Technology – Easing the Transition to CO2 Refrigeration
ERII's PX Technology – Easing the Transition to CO2 Refrigeration ~$1B annual potential TAM for ERI by 20301 1Energy Recovery projections and estimates based on currently available information. Actual results and figures may differ. 17 17
Slide 18: PX Technology in CO2 Refrigeration
PX Technology in CO2 Refrigeration PX G13001 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 create cold We have
Slide 19: Transitioning from Harmful HFCs to Natural CO2 Refrigerants
Transitioning from Harmful HFCs to Natural CO2 Refrigerants Global Warming Potential (100 Years)2 • The global refrigeration industry is a leading user of hydrofluorocarbons (HFCs) - powerful man-made greenhouse gases with a Global Warming Potential (GWP) 1 of 1,000 – 13,000 GWP versus 1 GWP from CO
Slide 20: 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 “A new, groundbreaking application of our pressure exc
Slide 21: ESG Strategy & Development
ESG Strategy & Development Framework Alignment Materiality Assessment Development of Goals, Targets, & KPIs • Aligned with UN SDGs 6, 7 and 9 • Engaged shareholders representing 38% of • Developed 6 goals and 13 sub-KPIs across shares outstanding and 12% of employees the 4 most material areas includ
Slide 22: Governance: Board Structure & Composition
Governance: Board Structure & Composition Director & Position 1 2 3 Robert Yu Lang Mao Chairman, President & Chief Executive Officer Pamela Tondreau Lead Independent Director C Alexander J. Buehler Director C M M 4 of 7 Directors are Diverse Joan Chow* Director M M Average Director has Served >5 Yea
Slide 23: Unique Value Proposition
Unique Value Proposition Energy Recovery’s Sustainable Growth Rests on Three Strategic Pillars 23 23
Slide 24: Thank You
BO energy recovery: Thank You
Slide 25: Contact Us
Contact Us James Siccardi, VP, IR Energy Recovery, Inc. +1.832.474.7628 | Mobile 1717 Doolittle Drive jsiccardi@energyrecovery.com San Leandro, CA 94577, USA Lionel McBee, Director, IR energyrecovery.com +1.832.334.3685 | Mobile limcbee@energyrecovery.com ESG@energyrecovery.com (for ESG inquiries) 2