Slide 1: The Environmental Group Limited 1H23 Financial Results
The Environmental Group Limited ENGINEERING A SUSTAINABLE FUTURE Investor Presentation 1H23 Financial Results February 2023 Presentation should be read in conjunction with the Interim Report 31 December 2022
Slide 2: Disclaimer
Disclaimer EGL advises that these presentation slides contain forward looking statements which may be subject to significant uncertainties outside of EGL’s control. No representation is made as to the accuracy or reliability of forward- looking statements or the assumptions on which they are based.
Slide 3: Service offering and addressable markets by division
Total Air Pollution Control (TAPC) provides highly EGL Waste encapsulates our service offering efficient state-of-the-art industrial air pollution control 1 to the waste industry; world class recycling technologies that prevent harmful gases, particulate matter, plants, dust extraction systems, odor
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Slide 5: 1H23 Financial Results – underlying
1H23 Financial Results – underlying* $40.8M $3.1M $2.2M 51.9% Increase in EBITDA up 53.1% EBIT up 65.2% before Revenue on 1H22 before significant significant items on items on 1H22 1H22 $2.5M $2.0M $2.7M Net cash from Undrawn working Cash on hand operating activities capital facility *Underlying pro
Slide 6: 1H 23 Financial Results commentary
1H 23 Financial Revenue Revenue up by 51.9% on the prior comparable period (pcp), Results with all business units posting improved results. TAPC was an outstanding performer with revenue up 171% on pcp. EGL commentary $40.8M Energy provided strong revenue growth with a solid contribution from Ignite
Slide 7: 1H 23 Financial Results commentary
1H 23 Financial NPAT Results Profit from ordinary activities $1,410,906 up 76.4% on the pcp. commentary $1.4M Earnings per share up 57.1% on pcp. Operating Cash Flow Operating cash flow was $2.5M for the period reflecting the improvement in risk management controls of the tender $2.5M process to smo
Slide 8: Executive Management
Executive Management CEO – Jason Dixon. 10 CFO – Andrew Bush. National Sales & COO – Brenda Borghouts. years executive 25 years experience in Marketing Manager - Paul 20 years Defence and experience for a listed Industrial services and Gaskett. 14 years heavy engineering, ASX 300 company. Contractin
Slide 9: Senior Management
Senior Management Peter Rankin – 30 Aldo Giachero – 15 Charles Borg – 30 Stirling Schunemann Kiril Nikitin –17 years years experience in years experience in years experience in – 14 years experience engineering experience the boiler and emissions control the Gas Turbine with EGL sales, in heavy indu
Slide 10: Operating Units
Operating Units 1 The Envonmertal Group Lied
Slide 11: Baltec Inlet and Exhaust Systems
01 Baltec Inlet and Exhaust Systems 11
Slide 12: Baltec IES revenue and EBIT
Revenue Baltec IES supports the gas turbine industry in its role in assisting the transition from coal- 1H23 $10.5M powered to renewable energy production. Engineering products and custom designs 1H22 $10.0M specifically to meet clients’ requirements: Up 4.4% Key offering EBIT • Turbine performance
Slide 13: 1H23 Results Commentary
1H23 RESULTS COMMENTARY • A very good result with engineering's resources supporting the huge growth in TAPC, while still delivering Baltec’s core products. • Our sales team is now able to visit clients again with 80% of revenue generated from offshore. • Management focus continues to be on margin i
Slide 14: Key Products
Key Products Diverter Inlet Filter Dampers Houses Silencers Bypass and HRSG Guillotine Heating and Exhaust Stacks Dampers Cooling Systems 14
Slide 15: EGL Energy
44EGL EGL Energy
Slide 16: EGL Energy revenue, EBITDA and EBIT
Revenue EGL Energy offers a network of service offices across Australia providing 24/7 1H23 $18.5M sales, service, maintenance and repairs of 1H22 $13.0M boilers, gas fired equipment and other OEM equipment optimising energy efficiency. Up 42.3% Key Offering EBITDA • Sale and Installation of cost-ef
Slide 17: 1H23 Results Commentary
1H23 RESULTS COMMENTARY • Tomlinson revenue increased $2.95M, with EBITDA down $498K on PCP. • Ignite’s revenue was $2.55M with EBITDA $545K, an outstanding performance. • Four projects with 10MW boilers ordered mid year 2021 installed and commissioned this half lost a total of approximately $515K.
Slide 18: Key Products
Key Products Industrial Industrial Large Commercial Steam Boilers Package Burners Hot Water Boilers Thermal Oil Biomass Steam and Heaters Hot Water Generation 18
Slide 19: Total Air Pollution Control
03 Total Air Pollution Control 19
Slide 20: TAPC revenue and EBIT
Revenue 1H23 $9.6M TAPC designs, manufactures 1H22 $3.5M and services flue gas treatment systems which prevent harmful contaminants being Up 171% discharged into the atmosphere. EBIT Key offering 1H23 $1.5M • Scrubbers including dry and wet for the removal 1H22 $0.5M of particulates and gaseous cont
Slide 21: 1H Results Commentary
1H 23 RESULTS COMMENTARY • Massive revenue growth up 171% with new projects in the lithium and rare earth sector performing very well. • EBIT $1.5M for the half up 186%, with margin expansion to 16%. • Orders are placed for large componentry of the major projects at the time of contract award to mit
Slide 22: Key Products
Key Products Dry Wet Electrostatic Scrubber Scrubber Precipitators Fabric Filters Aeromixes Flue-Gas (Baghouse) & Cyclones Desulphurisation 22
Slide 23: EGL Waste
04 EGL Waste 23
Slide 24: EGL Waste revenue and EBIT
Revenue EGL Waste division encapsulates offering many of EGL’s service lines to the waste industry 1H23 $2.2M 1H22 $0.1M • Turmec’s world class recycling plants under the exclusive Australian agency. • Dust extraction and asbestos detection systems in waste processing facilities. EBIT • Boilers & au
Slide 25: 1H23 Commentary
1H23 COMMENTARY • For the half year EGL Waste generated revenue of $2.2M and delivered EBIT of $318K. • Fabrication of the Rino Resources plant on schedule with phase 1 & 2 shipments arrived in Australia. Installation commenced mid January and is expected to take approximately six months to complete
Slide 26: EGL Water
05 EGL Water 26
Slide 27: EGL Water PFAS removal technology
EGL Water division has enhanced patented technology designed to protect our environment by the removal of Per- and polyfluoroalkyl chemical substances (PFAS) from contaminated water. • PFAS was primarily used in aircraft fire fighting as a fire retardant however its use expanded into plastics and cl
Slide 28: 1H Commentary
1H 23 COMMENTARY • The first commercial plant was delivered on time and on budget in September. • Installation commenced on site late November, with the plant completed by mid January for EPA approval. • The current pilot licence for PFAS separation trials has been closed with all information provid
Slide 29: Outlook
03 Outlook 29
Slide 30: Outlook
Outlook 01 02 03 04 Updated forecast at the AGM Margin and process Continue to develop the “One TAPC, Baltec & Engineering for normalized EBITDA to improvement will remain a EGL” culture to sell multiple to report directly to COO improve greater than 35% for focus of the business. services lines to
Slide 31: Forward Outlook
Forward Outlook 05 06 07 08 Tomlinson improve TAPC will continue its strong Baltec focus will be steady EGL Water – commercial margin in the second half performance delivering very margin improvement. sale of PFAS separation with boiler inflation costs good earnings growth for plants to commence and
Slide 32: EGL outlook continued
EGL outlook continued • EGL has budgeted for improved earnings in all operating divisions. • At this stage we expect EBITDA to increase by over 35% year on year after significant items*. • Risk mitigation strategies are constantly assessed while working in the current inflationary environment. • Man
Slide 33: Questions?
Questions? 33
Slide 34: Head Office
HEAD OFFICE Level 1, Suite 1 10 Ferntree Place Disclaimer Notting Hill EGL advises that these presentation slides contain forward looking statements which may be Victoria 3168 subject to significant uncertainties outside of EGL’s control. No representation is made as to the Phone: 03 9763 6711 accur
Slide 35: Appendix A: Reconciliation of Statutory (4D) to underlying results
Appendix A Reconciliation of Statutory (4D) to underlying results Less 4D Significant Underlying 1H FY23(SM) Items Business Revenue 40.8 40.8 Costs of sales (32.4) (32.4) Gross profit 8.3 8.3 Employee expenses (3.3) 0.19 (3.1) Professional fees (0.7) (0.7) Marketing expenses (0.1) (0.1) Occupancy ex