Profitable energy efficiency & emission reduction solutions

Transcription

1 Profitable energy efficiency & emission reduction solutions TSX-V: TMG Corporate Presentation November

2 Forward-looking statements This presentation includes forward-looking information. For example, statements about the opportunities for repeat business, additional orders, entry into new markets and growth of recurring revenue streams; order backlog; introduction of new products and services and growth opportunities and strategies are all forward looking information. Such forward looking information reflects Thermal Energy International s ( TEI ) current expectations with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forwardlooking information contained in this presentation. Readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this presentation and TEI does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law. 2

3 Global provider of energy efficiency solutions We save our customers money & improve their bottom lines by Reducing their fuel use and cutting emissions 3

4 Highlights 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 4

5 Market fundamentals stronger than ever! 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 5

6 Trillion dollars (2013) To meet Paris Agreement 2 C goal Average annual low-carbon investment, For 2 degree target 9X growth needed in annual investment in energy efficiency 49% of carbon emission reductions will come from energy efficiency Energy efficiency Other Renewables Source: IEA 2014 & 2016 World Energy Outlook reports 6

7 Enormous opportunity 20%-50% Amount of industrial energy consumption lost as waste heat 1 1 P&S Market Research Report on Global Waste Heat Recovery Market 7

8 Proprietary, proven solutions FLU-ACE Direct contact condensing heat recovery GEM Steam traps We can recover ~ 80% of energy lost in typical boiler plant and steam system operations High ROI with short, compelling payback 20 year track record 8

9 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% 2-5YRS Recovery Rate Reduction in Energy Costs Payback Period 9

10 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 Mechanical trap 10-30% 1-2YRS Reduction in Energy Costs GEM steam trap Payback Period 10

11 Customers include F500 & other leading companies across many sectors 11

12 Annual revenue ($ millions) FY 2017 highlights: $13.2 FY 15 FY 16 FY 17 Record revenue Up 6.4% over FY 2016 GEM revenue up 28.6% over FY 2016 Heat recovery revenue down 9.4% versus FY

13 Annual gross profit ($ millions) FY 2017 highlights: $7.4 FY 15 FY 16 FY 17 Record gross profit Up 9.5% over FY 2016 Gross margin of 56.4% versus 54.8% in FY 2016 Higher proportion of GEM revenue 13

14 Annual EBITDAS and net income ($ thousands) EBITDAS Net income 800 $ $ FY 15 FY 16 FY FY 15 FY 16 FY 17 14

15 Q1 revenue ($ millions) Q highlights: $3.1 Q1 16 Q1 17 Q1 18 Record Q1 revenue Up 45.1% over Q Heat recovery revenue up 168.6% Second strongest Q1 GEM revenue on record 15

16 Q1 gross profit ($ millions) Q highlights: $1.5 Q1 16 Q1 17 Q1 18 Up 4.3% over Q Gross margin of 49.0% versus 68.2% in Q Much higher proportion of heat recovery revenue 16

17 Q1 EBITDAS and net income ($ thousands) 100 Operating expenses for the quarter were $1.7M versus $1.5M in Q1 2017: More than half of the increase relates to: New sales staff New technical staff EBITDAS Net loss Other strategic growth initiatives Operating expenses as a percentage of revenue fell to 56% in Q vs. 70% in Q Q1 16 Q1 17 Q

18 Order backlog remains strong ($ millions) $7.8 Q1 16 Q1 17 Q1 18 At the time of reporting year end in October of each year 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. 18

19 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: Super-Efficient Cogeneration FY2018 and Beyond: Dry-Rex low-temp. biomass drying Indirect heat recovery Direct fired water heater 19

20 Growing global presence Increase penetration in key strategic markets Support agents/distributors in secondary markets Corporate / Sales Office Agent / Distributor * Company has engineering offices in Ottawa and Bristol (U.K.) 20

21 Growth strategy Strong market fundamentals, enormous growth potential 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 20

22 Summary Enormous, fast-growing market with strong fundamentals Proprietary products sold to leading companies in many sectors Poised to continue strong track record of growth 22

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