Thermal Energy International Inc. · TSXV:TMG

Thermal Energy International — Shareholder Meeting (November 2017)

42 slides from Thermal Energy International's shareholder meeting presentation, Nov 28, 2017

  1. Slide 1: Annual General Meeting of Shareholders

    Annual General Meeting of Shareholders TSX-V: TMG | November 28, 2017

  2. Slide 2: Forward-looking statements

    Forward-looking statements This presentation includes “forward-looking information”. For example, statements about the opportunities for repeat business; the possibility or expectation of additional orders; growth in existing markets; entry into new markets; order backlog; introduction of new produc

  3. Slide 3: Year end financial results

    Year end financial results

  4. Slide 4: Year end revenue

    Year end revenue ($ millions) FY 2017 highlights:  Record revenue 14 $13.2 12  Up 6.4% over FY 2016 10  GEM revenue up 8 28.6% over FY 2016 6 4  Heat recovery 2 revenue down 9.4% 0 versus FY 2016 FY 15 FY 16 FY 17

  5. Slide 5: Year end gross profit

    Year end gross profit ($ millions) FY 2017 highlights:  Record gross profit 8 $7.4 7  Up 9.5% over FY 2016 6 5  Gross margin of 56.4% 4 versus 54.8% in FY 3 2016 2 1  Higher proportion of 0 GEM revenue FY 15 FY 16 FY 17

  6. Slide 6: Year end operating expenses

    Year end operating expenses ($ millions) FY 2017 highlights: 7  Operating expenses as 6 a percent of revenue 5 were flat despite 4 additional staff and 3 increased marketing 2 activities 1 0 FY 15 FY 16 FY 17 88.3% 52.1% 52.0% Percentage of revenue

  7. Slide 7: Year end EBITDAS and net income

    Year end EBITDAS and net income ($ thousands) FY 2017 highlights: 1000  EBITDAS increased 500 33% to $750K 0  Net income was up -500 52% to $393K -1000 -1500 -2000 -2500 EBITDAS Net loss FY 15 FY 16 FY 17

  8. Slide 8: First quarter financial results

    First quarter financial results

  9. Slide 9: Q1 revenue

    Q1 revenue ($ millions) Q1 2018 highlights:  Record Q1 revenue 3.5 $3.1  Up 45.1% over Q1 3 2017 2.5 2  Heat recovery revenue up 168.6% 1.5 1  Second strongest Q1 0.5 GEM revenue on 0 record Q1 16 Q1 17 Q1 18

  10. Slide 10: Q1 gross profit

    Q1 gross profit ($ millions) Q1 2018 highlights:  Record Q1 gross profit 1.6 $1.5 1.4  Up 4.3% over Q1 2017 1.2 1  Gross margin of 49.0% 0.8 vs 68.2% in Q1 2017 0.6 0.4  Much higher 0.2 proportion of heat 0 recovery revenue Q1 16 Q1 17 Q1 18

  11. Slide 11: Q1 operating expenses

    Q1 operating expenses ($ millions) Q1 2018 highlights: 2  Operating expenses were $1.7M versus 1.5 $1.5M in Q1 2017: 1  More than half of the increase relates to: 0.5  New sales staff  New technical staff 0  Other strategic Q1 16 Q1 17 Q1 18 growth initiatives 61.3% 69.8% 56.1% Percentage of re

  12. Slide 12: Q1 EBITDAS and net income

    Q1 EBITDAS and net income ($ thousands) Q1 2018 highlights: 100  Our second best Q1 0 EBITDAS in the past 5 years -100  EBITDAS lower mainly -200 as a result of change in -300 product mix and growth -400 expenditures -500 EBITDAS Net loss Q1 16 Q1 17 Q1 18

  13. Slide 13: Financial summary

    Financial summary  Record revenue and gross profit for FY 2017 followed by record Q1 revenue and gross profit  L4Q revenue of $14.2 million compared to previous 4 quarters revenue of $12.0 million  Cash balance of $1.3 million  No debt

  14. Slide 14: Order backlog & recent orders

    Order backlog & recent orders

  15. Slide 15: Order backlog remains strong

    Order backlog remains strong ($ millions) Order backlog: The value 9 $7.8 of projects in respect of 8 which purchase orders 7 have been received but 6 have not yet been reflected 5 as revenue in the 4 3 Company’s published 2 quarterly financial 1 statements. 0 Q1 16 Q1 17 Q1 18 At the time of first

  16. Slide 16: Orders from many industries

    Orders from many industries Recently announced orders included in order backlog:  $1.32 million heat recovery order from a hospital group  $3.28 million from 2 separate orders from a leading Fortune 500 food & beverage customer  $351 thousand GEM order from a leading performance materials company

  17. Slide 17: Growth strategy & outlook

    Growth strategy & outlook

  18. Slide 18: Growth strategy

    Growth strategy Growing productivity Enhanced Sales tools & marketing & Corporate support branding accounts Grow organically and through accretive acquisitions

  19. Slide 19: Growth strategy

    Growth strategy Growing productivity Expanding the business Growing our Enhanced team & Sales tools & marketing & Corporate global New support branding accounts presence products Grow organically and through accretive acquisitions

  20. Slide 20: Growth strategy

    Growth strategy Growing productivity Expanding the business Growing our Enhanced team & Sales tools & marketing & Corporate global New support branding accounts presence products Grow organically and through accretive acquisitions

  21. Slide 21: Sales tools & support

    Sales tools & support  Heat Recovery Analysis & Proposal Generator  Increases analysis and response speed  Screen out poor opportunities quicker  GEM data sizing data base  Online library of sales support resources, case studies, slide decks, product animations, technical FAQ  On-going and reg

  22. Slide 22: Sales tools & support – incentive funding

    Sales tools & support – incentive funding Creates compelling event, provides 3rd party validation, improves customer ROI  UK SALIX  NHS Efficiency fund  Wisconsin - Focus on Energy  California - PG&E  Quebec - BEIE  EU funding in Poland  Germany: KfW 294  OCE target GHG program.  UK Heat Re

  23. Slide 23: Enhanced marketing and branding

    Enhanced marketing and branding  Added a Sales & Marketing Coordinator (Ottawa) in May 2017  Hiring a Sales & Marketing Coordinator (UK) IN Jan/Feb 2018  New internal and new external newsletters a  Updated product brochures and case studies  Launched German website in October 2017 Goal: Better

  24. Slide 24: Corporate accounts update

    Corporate accounts update  Existing customer engaged at a corporate level  Manufacturing sites in more than 1 sales territory  More than $2 million in sales potential  Director of Corporate Accounts (appointed January 2016) to mentor and develop the team  Corporate account opportunities expecte

  25. Slide 25: Corporate accounts update

    Corporate accounts update Fortune 500 Leading Major hospital Major hospital food & performance group #1 group #2 beverage leader materials co. Multinational Leading travel Leading food Global beer agribusiness destination ingredients company company company business Fortune 500 life Global building

  26. Slide 26: Growing our team & global presence

    Growing our team & global presence Added:  Quebec (2014)  Midwest US (2014)  Southeast UK (2014)  Latin America (2016)  Ontario / CoGen (2016)  Germany (2017)  EU Sales Director (2017)  Engineering / CoGen (2016)  Senior engineering (2017)  Junior engineering X2 (2017)

  27. Slide 27: Growing our team & global presence

    Growing our team & global presence Added: Planned:  Quebec (2014)  Midwest US (2014)  Texas (expect to hire soon)  Southeast UK (2014)  Latin America (2016)  Germany (interviewing candidates for 2nd person)  Ontario / CoGen (2016)  Germany (2017)  Northwestern North  EU Sales Director (201

  28. Slide 28: Growing our team & global presence

    Growing our team & global presence Hired a European Sales Hired a Senior Project Director in July 2017 Engineer in October 2017  20+ years of  Former CTO at Sofame international sales Technologies Inc. experience (capital  Strengthens our goods & services) engineering & product  +10 years of sal

  29. Slide 29: Growing our team & global presence

    Growing our team & global presence Increase penetration in key Support agents/distributors strategic markets in secondary markets Corporate / Sales Office New Sales People / Territory EU Sales Director * Company has engineering offices in Ottawa and Bristol (U.K.) Agent / Distributor

  30. Slide 30: Strategic territory expansion

    Strategic territory expansion Germany – Large industrial market with strong market fundamentals  High fuel costs  Aggressive carbon reduction targets  Attractive incentives

  31. Slide 31: Introduce new products

    Introduce new products July 2016 Launched our Super- Efficient Cogeneration™ solution August 2017 Received our 1st order  $1.46 million order from a leading Fortune 500 food & beverage customer

  32. Slide 32: Introduce new products

    Introduce new products  Co-gen  First order received  Dry-Rex low-temp. biomass drying  Working with local customer to relocate BC based decommissioned Dry-Rex  Indirect heat recovery  Direct fired water heater (Percomax – Sofame)  Combined direct contact water heater and direct contact heat

  33. Slide 33: Our long term track record

    Our long term © track record

  34. Slide 34: Revenue

    10 12 14 0 2 4 6 8 1993 1994 ($ millions) Revenue 1995 1996 Base business 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Revenue from mega projects 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 L4Q

  35. Slide 35: Revenue

    Revenue ($ millions) 14.2 14 12 10 8 6 4 2 0 1993 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1995 1998 2001 2004 2007 L4Q Base business Revenue from mega projects *L4Q = last 4 quarters ending with Q1 2018

  36. Slide 36: Revenue – base business

    Revenue – base business CAGR 17% CAGR 11% CAGR 20% 14 12 ($ millions) 10 8 6 4 2 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 L4Q

  37. Slide 37: Revenue

    Revenue 1993 – 2009 (17 years) $23.5M $105.9 million 2010 – 2017 (8 years) $82.4M

  38. Slide 38: Profitability

    Profitability FY1993 to FY2009 17 0 0 Years in Years with Years with period + EBITDAS net income

  39. Slide 39: Profitability

    Profitability FY1993 to FY2009 17 0 0 Years in Years with Years with period + EBITDAS net income 8 5 4 FY2010 to FY2017

  40. Slide 40: Growth strategy summary

    Growth strategy summary Strong market fundamentals, enormous growth potential Growing productivity  Sales tools & support  Enhanced marketing & branding Grow organically  Corporate accounts and/or through Expanding the business accretive  Growing our team & global acquisitions presence  New pro

  41. Slide 41: Visit our website at www.thermalenergy.com

    Visit our website at www.thermalenergy.com Like @GoThermalEnergy on Facebook Follow @GoThermalEnergy on Twitter

  42. Slide 42: Falling natural gas prices

    Falling natural gas prices (USD/mmBTU) June 2008 Nov. 2017

Thermal Energy International — Shareholder Meeting (November 2017) on 6ix