Thermon Group Holdings, Inc. · NYSE:THR
Thermon — Investor Presentation (June 2011)
22 slides from Thermon's investor presentation, Jun 16, 2011
Slide 1: Investor Presentation 2011
Investor Presentation 2011
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation and responses to various questions may constitute forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements include, without limitation, statements regarding Thermon Group Holdings, Inc.’s (t
Slide 3: Management team
Rodney Bingham President & CEO George Alexander Executive Vice President Jay Peterson Senior Vice President René van der Salm Senior Vice President Has held leadership positions in R&D, Engineering, Product Management and Sales & Marketing 40 years of experience with Thermon Global Head of Sales 40
Slide 4: Who We Are
Who We Are A leading global provider of heat tracing solutions delivering comprehensive, engineered solutions for complex projects around the world Attractive mix between Greenfield and recurring business Serve a large and diverse base of multinational, loyal customers Long history of revenue growth
Slide 5: Highly engineered thermal solutions
Highly engineered thermal solutions used for: Process temperature and flow maintenance Freeze protection Emissions monitoring and environmental compliance Largest facilities contain hundreds of thousands of feet of heat tracing cable a Products 2 I ie Heating Cables and Control Systems Tubing Bundle
Slide 6: Industrial Heat Tracing End Markets
Industrial Heat Tracing End Markets (Products) $35 "10-15 ost $3.0 $3.0 Po $3.0 cacR $30 ase as Ee $25 $03 Power: $25 36% 47% Chemicals: $20 sos ea $20 S15 $15 $1.0 oieces: $1.0 Ta% 905 $05 $0.0 > i. $0.0 ee 2010 2018 2010 2015 MOi&Gas —MChemicals. Power —-M Other mElectric m Steam F L
Slide 7: Greenfield vs MRO/UE business
Defi Project work related to new facilities 4% of Revenue ~40% Size / Length of > $1 milion per customer annually Projects > Gmos. (1-2 yfs lead time) Energy demand Drivers uf Capital spending Turkey solutions Global footprint, local presence Reputation Longstanding customer relationships Strategy |
Slide 8: MRO: Irving Oil Project
Total feet of heat tracing % of total pipes traced: Total heat tracing expenditure: Total project cost: ~1.6 million ~75% $64 million ~$8 billion MRO: Irving Oil Project Original contract value of $6.3 million Recurring revenue generated by small site projects and material purchases Ranged between ~
Slide 9: Loyal Relationships with Customers and Strategic Partners
BASF ConocoPhillips Ei Agip -FLUOR ‘ alll Reliance | y Industries Limited ROSNEFT PEMEX Loyal Relationships with Customers and Strategic Partners, Some for 50+ Years
Slide 10: Sales and Average Gross Margin history
$250 $200 $150 $100 $50 $0 Average Gross Margin: 44% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 a Sales Gross Margin % ===" Median Gross Margin % 75% 60% 45% 30% 15%) “ec
Slide 11: Growth in Global Projected Energy Consumption
Growth in Global Projected Energy Consumption (Guacraion BTU) 800 739 oo Oe 800 | 0 | 1 2007-2015 «2020» 02520302035 8 8 8 Global Growth in Refined Product Demand (lion barrels / day} BResesas 2013, 2017 Asia ll Middle East li Latin America 2021 Growth in Global Upstream Capital Spending (Butens) $7
Slide 12: Canadian and Russian Oil Production and Capital Spending Outlook
Canadian Crude Oil Production Outlook Russian Crude Oil Production Outlook (tnthon bares ay) (ton bares day) 4 1 a 10 3 = 9 a 8 a 7 2 6 | if J 4 2000 2008 2010 2018 2020 2000 2008 2010 2015 2020 Baisting WNew mi Future Expected Canadian Oil Sands Capital Spending Expected CIS Refinery Capital Spendi
Slide 13: Global Footprint Provides Access to High-Growth Markets
Global Footprint Provides Access to High-Growth Markets Worldwide @ Production ation plcts Global footprint, local presence Sales in more than 90 countries worldwide 77 direct sales employees in 16 countries Over 100 independent sales agents and distributors in over 30 countries Manufacturing facili
Slide 14: Reputation for Quality and Critical Nature of Products
- = ERMON] High cost of non-performance Products Critical to Safe Customers place a premium on fast, reliable, on-spec system delivery and Efficient Price is often a secondary consideration Facility Operation Use incumbent brand for MRO/UE to avoid switching complications or compatibility concerns S
Slide 15: Platform for Growth
Platform for Growth Pursue Organic Growth, Including Commercial Market, Steam-to-Electric Conversion and Re-Invest in Business Next Generation Thermal Control Products & Solutions Leverage Installed Base to Expand Recurring Revenue Stream Drive Growth Through Alliances with Major Customers and Suppl
Slide 16: Financial Overview
Slide 17: Financial Highlights
Financial Highlights Long history of driving top-line growth and highly consistent margins High free cash flow generation Highly flexible cost structure Minimal ongoing maintenance capital expenditure requirements Strong balance sheet with flexil lity to pursue strategic growth opportunities
Slide 18: Adjusted Gross Margin and Adjusted EBITDA
$120 $100 90 —Agjsted Grosso eeMargn st —e=Median Comps Margins © a oe Jura tcalyen 208 aye 2011 $e and Sem epee, Adjusted EBITDA and Margin % @) $70 50% $60 oo $576 Fro8 Fv09 Fvi0 fees AowaesEaTOA, Hara ®
Slide 19: Consistent Growth & Low Capital Expenditures
Consistent Growth & Low Capital Expenditures Historical Comparable Revenue Growth —> CY06 = 100% (Adj EBITDA - Capex) / Revenue -> CY Basis aa Margin % 200% 25% 87% THe | 2% 180% 21% 19% 160% 17% 140% 18% 19% 18% Average 120% coms Paty 12%. Average 9% 100% 7% 80% 5% 12/31/2008 12/31/2007 12/34/2008
Slide 20: Investment Highlights
Investment Highlights Attractive end-markets driven by accelerating global growth and development Well-positioned to access high-growth segments of addressable market worldwide A global market leader with respected reputation established over decades Highly engineered, “mission critical” solutions L
Slide 21: Appendix
Slide 22: Reconciliations
Reconciliations Pre-Predecessor/ Predecessor! Predecessor ‘Successor Combined Combined (Non-GAAP) (Non-GAAP) Net Income (Loss) $121,013) 26.401 $18,940 ‘$(18,207) Interest Expense, net 8207 9531 7,36 29.581 Income Tax Expense (Benefit) 24,712 1,795 19,966 (11,274) Depreciation and Amortization 15,89
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