profitable energy efficiency and emission reduction solution
TRANSCRIPT
1TSX-V: TMG | Corporate Presentation | June 2017
Profitable energy
efficiency & emission
reduction solutions
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This presentation includes “forward-looking information”. For example, statementsabout the opportunities for repeat business, additional orders, entry into new marketsand growth of recurring revenue streams; order backlog; introduction of new productsand services and growth opportunities and strategies are all forward lookinginformation. Such forward looking information reflects Thermal Energy International’s(“TEI”) current expectations with respect to future events and are based oninformation currently available to management. Forward-looking information involvessignificant known and unknown risks, uncertainties and assumptions. Should one ormore of these risks or uncertainties materialize, or should assumptions underlying theforward-looking information prove incorrect, actual results, performance orachievements could vary materially from those expressed or implied by the forward-looking information contained in this presentation.
Readers should not place undue reliance on forward-looking information. Theforward-looking information is made as of the date of this presentation and TEI doesnot assume any obligation to update or revise it to reflect new events orcircumstances, except as required by law.
Forward-looking statements
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Global provider of energy efficiency solutions
We save our customers money & improve their bottom lines by…
Reducing their fuel use and cutting emissions
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Highlights
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Enormous, fast-growing global market
with strong fundamentals
Proprietary products sold to leading
companies in many sectors
Poised to continue strong track record
of growth
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Governments and industries
around the world taking
unprecedented action on
climate change
Increasing energy efficiency is the
fastest, cheapest & easiest way to
reduce GHG emissions
Market fundamentals stronger than ever!
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To meet Paris Agreement 2˚C goal
0
0.5
1
1.5
2
2013 For 2 degreetarget
Source: IEA 2014 & 2016 World Energy Outlook reports
Trill
ion
do
llars
(2
01
3)
Average annual low-carbon investment, 2013 – 2040
Energy efficiencyOther
Renewables
9X growth needed in annual investment in energy efficiency
49% of carbon emission reductions will come from energy efficiency
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Enormous opportunity
1 P&S Market Research Report on Global Waste Heat Recovery Market
20%-50% Amount of industrial energy consumption lost as waste heat1
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Proprietary, proven solutions
FLU-ACE®
Direct contact condensing heat recovery
GEM™Steam traps
~80%We can recover of energy lost in typical boiler plant and steam system operations
High ROI with short, compelling payback
20 year track record
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FLU-ACE® Heat Recovery
Recovers waste heat from process exhaust
Returns hot water for use in production or heating
Sells for $100k to millions each
90% 10-30% 2-5YRSRecovery
RateReduction in Energy Costs
Payback Period
1010
GEM™ Condensate Return System
More efficient than traditional mechanical traps
No moving parts –never needs replacing
100’s to 1,000’s of traps per location; sells for $500 to $2,000 per trap
10-30% 1-2YRS
Reduction in Energy Costs
Payback Period
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GEM steam trap
Mechanical trap
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Customers include F500 &
other leading companies
across many sectors
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$0.82
$4.93$3.96
$5.81
$9.70
$13.15
$8.21
$13.15
$6.80
$12.40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenue excluding mega projects Revenue from mega projects (>$2MM)
($ millions)
10-Year revenue
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FY 2016 highlights
FY 2015 FY 2016
Revenue
FY 2015 FY 2016
Gross Profit EBITDAS
EBITDAS is defined as earnings before interest, taxation, depreciation, amortization, impairment of goodwill and other intangible assets, share-based compensation expense and net write down of lease.
($ millions)
6.8 3.6
(2.0)
12.4 6.8 0.6
FY 2015 FY 2016
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Historical revenue – first 9 months
($ millions)
0
2
4
6
8
10
YTD 13 YTD 14 YTD 15 YTD 16 YTD 17
2017 YTD revenue is 1.9% higher than a year ago
YTD heat recovery revenue was down 10%
YTD GEM sales are up 14% from a year ago
Revenue from mega projects (>$2 million)
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Historical gross profit – first 9 months
($ millions)
0
1
2
3
4
5
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YTD 13 YTD 14 YTD 15 YTD 16 YTD 17
2017 YTD gross profit of
$5.1M is our highest
gross profit for the
first 9 months of any
fiscal year
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EBITDAS – first 9 months
($ thousands)
-2000
-1500
-1000
-500
0
500
YTD 13
YTD 15
YTD 16
YTD 14
YTD 17
EBITDAS of $287K for the first 9 months of FY 2017
Up 53.5% from a year ago
The highest YTD EBITDA in the past 5 years
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Order backlog up 70% from a year ago
Order backlog: The value of projects in respect of which purchase orders have been received but have not yet been reflected as revenue in the Company’s published quarterly financial statements.
0
1
2
3
4
5
6
7
8
9
2013 2014 2015 2016 2017
At the time of reporting Q3 in April of each year
($ millions)
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Recent & planned growth initiatives
Increase penetration in key markets
FY2017: Three new sales people/territories (Ontario, Latin America, Germany)
FY2018 and Beyond: Alberta, Texas, Germany, France, Eastern Europe
Introduce new products
FY2017: Co-gen/CHP (added sales and engineering expertise)
FY2018 and Beyond: Dry-Rex low-temp.
biomass drying Indirect heat recovery Direct fired water
heater
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Support agents/distributors in secondary markets
Increase penetration in key strategic markets
Corporate / Sales Office Agent / Distributor
Growing global presence
* Company has engineering offices in Ottawa and Bristol (U.K.)
Strategic growth in key markets (NA and EU)
Opportunistic growth in secondary markets
Corporate accounts
Strategically targeted sectors
Alternate distribution channels
New products and services
Grow organically
and/or through
accretive
acquisitions
Growth strategy
Strong market fundamentals, enormous growth potential
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Summary
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Enormous, fast-growing market with strong fundamentals
Proprietary products sold to leading companies in many sectors
Poised to continue strong track record of growth
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2
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