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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; orderbacklog; introduction of new products and services and growth opportunitiesand strategies are all forward looking information. Such forward lookinginformation reflects Thermal Energy International’s (“TEI”) currentexpectations with respect to future events and are based on informationcurrently available to management. Forward-looking information involvessignificant known and unknown risks, uncertainties and assumptions. Shouldone or more of these risks or uncertainties materialize, or should assumptionsunderlying the forward-looking information prove incorrect, actual results,performance or achievements could vary materially from those expressed orimplied 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 andTEI does not assume any obligation to update or revise it to reflect newevents or circumstances, except as required by law.
Revenue
0
2
4
6
8
10
12
14
2009 2010 2011 2012 2013 2014 2015
($ millions)
Revenue excl. hospitals and mega projects
Revenue from mega projects
Revenue from hospitals
Gross profit
0
1
2
3
4
5
6
7
8
2009 2010 2011 2012 2013 2014 2015
($ millions)
(59.7%) (61.2%) (53.4%)(53.0%)(60.6%)(42.9%)(48.2%)
Percentages figures are gross profit as a percentage of total revenue.
Total cash expenses
0
1
2
3
4
5
6
7
2009 2010 2011 2012 2013 2014 2015
($ millions)
Cash expenses minus sales commissions
Sales commissions and incentives
FY 2015 summary
Sales down due to absence of large projects and drop on hospital sales
Gross profit remains stable subject to product mix
Costs control remains good, expenses relatively stable over 6 years
The focus is on delivering more sales!Without increasing costs!
Q1 2016 financial results
($ millions)
Highest Q1 revenue & gross profit in 5 years
0
0.5
1
1.5
2
2.5
3
Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016
Revenue Gross Profit
Recent orders
Secured 4 projects in the past 3 weeks for a combined total of ~$3.4 million
$641,000 heat recovery project with a leading animal feed supplier
$965,000 heat recovery order from a major hospital
$1,530,000 heat recovery + GEM project with a multi-site hospital
$229,000 heat recovery expansion for a leading gypsum company
Trending favourably in FY 2016
0
0.5
1
1.5
2
2.5
3
3.5
Hospital orders ($ millions)
FY15 hospital revenues
YTD FY16 revenue + orders received
Order backlog ($ millions)
0
2
4
6
8
A year ago Today1
1 Includes backlog announced at the end of Q1+ orders announced subsequently
3.1 6.9
Strengthening sales & marketing
Hired 7 sales & marketing staff between January and September 2014 for a net increase of 3
New sales people have qualified 158 opportunities
Launched new & improved website – March 2015
Continued to build our following on social media
Enhanced and created new marketing materials
Our following on social media
Continue to build our presence and following on YouTube, SlideShare and LinkedIn
4,885 followers(1,407 a year ago)
1,551 page likes(1,103 a year ago)
Enhanced marketing materials
New case studies and white papers
New brochures, including foreign language brochures
New sector-specific marketing materials
Corporate accounts strategy
Definition:
Existing customer
Manufacturing sites in more than 1 sales territory
> $1.5 million GEM and/or $5 million in heat recovery sales potential
40 potential corporate accounts identified
Director of Corporate Accounts to be appointed.
Fortune 500food &
beverage leader
Leading diversified healthcare company
1st order: Dec. 2012
10 sites partially converted to GEM
5 sites have FLU-ACE heat recovery systems
$4.4 million in orders to date
Customer has > 100 sites
1st order: Feb. 2014 ($161K)
2nd order: Aug. 2015 ($520K)
1 site penetrated so far
Negotiating 2nd site
Customer has operations in 50 countries
Recent progress
Fortune 500 food and beverage co.
Major hospital group with >130 sites
Multinational synthetic materials co.
Global Pricing Agreement negotiated (June 2015)
Master Purchase Agreement signed (July 2015)
Corporate intent to replace all traps with GEM over next 5 years
Master Contractor Agreement signed (July 2015)
1st project submitted for approval
12 sites visited; 4 projects in development
Recent corporate and cross-selling success
Oct. 2015: $1,530,000 Hospital Group, HR & GEM – repeat customer with multiple sites
Oct. 2015: $229,000 Gypsum company HR system expansion – repeat customer with multiple sites
Aug. 2015: $520,000 Healthcare company, GEM – repeat customer with multiple sites
April 2015: $750,000 Food and Beverage leader – repeat customer with multiple sites
Sector-based strategy
Focus on sectors where we have significant success:
Develop sector-specific marketing materials
Coordinated email and calling campaigns to target customers
Hospitals Food & Beverage Chemical/Petro Pulp & Paper
Sector-based strategy: hospitals
200 90 24
Targeted hospitals contacted in key
markets
Projects open at 45 hospitals
Projects sold so far to 15 hospitals
since 2011
0
20
40
FY14 FY15 YTD16
Projects developed
New products and intellectual property
DryRex biomass dryer
Target markets identified
Working with partner to determine feasibility of relocating decommissioned unit
Indirect heat recovery system (China Petrochemical Project)
Unit installed and coated and uncoated surface testing underway
TEI and partner preparing joint research proposal for enhanced second generation heat exchanger design
New products and intellectual property
Direct condensing water heater (gas-fired FLU-ACE)
Design complete
Awaiting funding for testing and certification
Opal trap (3-stage GEM filtration system)
Patents granted: UK and US (September 2015)
Patents pending: other key markets
Outlook
Secured 4 projects in the past 3 weeks for a combined total of ~$3.4 million
Hospital orders are up significantly from fiscal 2015
Order backlog of $6.9 million1
Short term strategy – Drive sales efficiency
1 Includes backlog announced at the end of Q1+ orders announced subsequently
Growth strategies
Increase penetration in existing key markets
Enter new markets
Cross-selling
Corporate accounts
Sector-based initiatives
Introduce new products & services
Grow organically
and/or through
accretive
acquisitions
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