Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (November 2019)
23 slides from Energy Recovery's investor presentation, Nov 18, 2019
Slide 1: Resource Efficiency in Desalination: Driving Affordability
So energy recovery’ Resource Efficiency in Desalination Driving Affordability November 20, 2019 Joshua Ballard, Chief Financial Officer, Energy Recovery NASDAQ: ERI
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: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT © For more than 20 years, Energy Recovery has created technologies that solve complex challenges for industrial fluid flow markets ‘© We design and manufacture solutions that reduce waste, improve operational efficiency, and drive significant cost-savings for our customers i
Slide 4: Why Energy Recovery?
WHY ENERGY RECOVERY? energy recovery’ Sf] energy recovery" Our technologies lower production costs of clean water and oil & gas, enabling more affordable access to these critical resources Our Water solutions are in desalination facilities on seven continents, reducing carbon emissions and helping t
Slide 5: Desalination's Global Impact and Growth
Desalination's Global Impact and Growth
Slide 6: Water Scarcity Is a Global Challenge
WATER SCARCITY IS A GLOBAL CHALLENGE FINANCIAL TIMES The New York Gimes No end to crisis in sight as drought grips India’s Flash Drought in the South Chennai _) Brings Record Heat Without Rain RNING £8 REUTERS Pend | Miners Face Looming Water | _ Chile's president announces water criss yd) Crisis te
Slide 7: Fresh Water Scarcity Is Increasing, Creating Global Demand Gaps
FRESH WATER SCARCITY IS INCREASING, CREATING GLOBAL DEMAND GAPS 2 ® ® « >2B People 30% 26% The world will only 1/4 of all people live Potable water demand Global population is have 60% of the water in high water-stress expected to increase expected to grow from it needs by 2030 territories 30% by 20
Slide 8: Desalination Is 2-3% of Global Fresh Water Supply
DESALINATION IS 2-3% OF GLOBAL FRESH WATER SUPPLY? SWRO Desalination CAPEX S| nd Increasing as World Adapts to Water Scarcit mi Actual Projected : 7 0 E L ill 2018 2015 +Raymond James, 2DesalData Forecasts D energy recovery’ Contidenite Proprietary
Slide 9: SWRO Is the Most Cost-Efficient Desalination Solution
SWRO IS THE MOST COST-EFFI JENT DESALINATION SOLUTION Decline in Specific Energy Consumption of SWRO System’ 25 20 Px Pressure , Exchanger (PX) ae eee fe revolutionized ad installed 1997 in ppalieacheel Conary Islands pies cnet costs by upto 1 60% 1978 1980 1990 2000 2002 2005 2008 Specific Energy C
Slide 10: Thermal Desalination Decommissioning Creating Incremental Demand
THERMAL DESALINATION DECOMMISSIONING CREATING INCREMENTAL DEMAND ‘© Thermal desalination dominated, but operational costs are ~2x higher than SWRO today = $1B SWRO retrofit of two Saudi thermal plants will generate OPEX savings of $360M/year* ‘© Potential for 100 - 150 new SWRO mega projects (250,00
Slide 11: Inside the PX Pressure Exchanger
Inside the PX Pressure Exchanger ——@
Slide 12: SWRO Desalination Process Overview
SWRO DESALINATION PROCESS OVERVIEW ; pretaearimenT i PG : a : Sanit Intake Pump | (psowed at rotation) FiterFeed Pump Multimedia iter Cartridge Fier RO (REVERSE OSMOSIS) SYSTEM High Pressure Pump RO Membrane System Product Water Tank SS SS a wy BR RO Reject Water Stream Sf] energy recovery" cone Pro
Slide 13: PX Pressure Exchanger Recycles Hydraulic Energy, Reduces Energy Costs
PX PRESSURE EXCHANGER RECYCLES HYDRAULIC ENERGY, REDUCES ENERGY COSTS Approx. 60% of Energy Wasted Seawater Pump pushes high pressure ‘seawater through membranes D energy recovery’ low pressure Memaranes potable & energy wasted + ashigh pressure 1 brine hits valve The Ocean ith PX Pressure Exchanger
Slide 14: Our Core Technology Is the Pressure Exchanger
OUR CORE TECHNOLOGY IS THE PRESSURE EXCHANGER © Our pressure exchanger acts like a fluid piston, transferring energy between high- and low-pressure fluids through continuously rotating ducts = Provides benefits in a variety of industrial applications using high-pressure fluids © We use pressure exch
Slide 15: Precision, Strength Key to Pressure Exchanger Performance
PRECISION, STRENGTH KEY TO PRESSURE EXCHANGER PERFORMANCE 62 bar / 900 psi Typical Brine Pressure When Entering PX Pressure Exchanger 2.5 bar / 36 psi Normal Tire Pressure of Medium Sized Car 100 bar / 1457 psi Pressure 1000m Under Sea Sf] energy recovery" ‘© Micron gaps between internal pressure ex
Slide 16: How Pressure Exchanger Technology Works
HOW PRESSURE EXCHANGER TECHNOLOGY WORKS Sealed Phase Pressure Exchange Phase 1. Low pressure driven fluid centers the rotor duct Two fluids on opposite sides of pressure exchanger; rotor duct is sealed, isolating high, low pressure fluid streams Rotor duct rotates to pressure exchange phase 2. High
Slide 17: Ceramic Manufacturing Drives Durability, Lowers SWRO Facility Lifecycle Cost
CERAMIC MANUFACTURING DRIVES DURABILITY, LOWERS SWRO FACILITY LIFECYCLE COST Alumina Raw Material We carefully select the highest quality ‘alumina powder Spray Dry Using our proprietary formulation, we blend and spray dry the raw alumina to be suitable for green body formation. Pressing We use a col
Slide 18: Ceramic Manufacturing Drives Durability, Lowers SWRO Facility Lifecycle Cost
CERAMIC MANUFACTURING DRIVES DURABILITY, LOWERS SWRO FACILITY LIFECYCLE COST Firing Hard Grinding Finished Ceramic Green parts are kilefired 100% of our ceramics are This process results in precise, to ensure durability. inspected to ensure quality high-purity ceramic before being ground to meet com
Slide 19: Global Reach of Energy Recovery Water Solutions
GLOBAL REACH OF ENERGY RECOVERY WATER SOLUTIONS 17M cubic meters/day of potable water produced people's daily water consumption met ‘year saved for customers >11.5M metric tons CO, emissions prevented/year ~ equal to >2.4M cars >20K devices installed worldwide D energy recovery’ Energy Recovery esti
Slide 20: Strong Historical and Projected Revenue Growth
STRONG HISTORICAL AND PROJECTED REVENUE GROWTH Revenue: 25% CAGR 2014-2018; Significant Projected Growth Actual jected +10-15% 20-25% 415-1756 ie 575M ‘$58M 345M | | 2018 2015 2016 2017 2018 2019 2020 2021, ‘© Water gross margins have grown from less than 54% in 2014 to approximately 70% today ‘© De
Slide 21: Strategic Objectives
STRATEGIC OBJECTIVES Build and enhance Commission Commercial infrastructure for growth Development Center Grow and expand market presence in SWRO desalination and beyond Sf] energy recovery" Commercialize VorTeq a
Slide 22: Thank You
So energy recovery’ Thank You
Slide 23: Contact Us
CONTACT US Joshua Ballard, CFA, CMA +1 (510) 483-7370 | Office +1 (832) 814-2380 | Mobile jballard@energyrecovery.com Sf] energy recovery" Vv) Energy Recovery, Inc. 1717 Doolittle Drive San Leandro, CA 94577, USA energyrecovery.com 23
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