Slides
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July 29, 2025 Q2 2025 Earnings Release
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Forward-looking statements and Non-GAAP information This presentation contains forward-looking statements with predictions, projections and other statements about future events. These statements are made on the basis of management’s views and assumptions regarding future events and business performance. We use words such as “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “will,” “plan,” “should” and similar expressions to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Potential risks and uncertainties, among others, that could cause actual results to differ materially are discussed under “Part I – Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and may be included in subsequently filed Quarterly Reports on Form 10-Q, and include, but are not limited to: the effect of the divestiture of our Fluid Handling business on business relationships, operating results, and business generally, disruption of current plans and operations and potential difficulties in employee retention as a result of the transaction, diversion of management’s attention from ongoing business operations in connection with the integration of recent acquisitions, the amount of the costs, fees, expenses and other charges related to the transaction, the achievement of the anticipated benefits of transactions, our ability to successfully integrate acquired businesses and realize the synergies from acquisitions, as well as a number of factors related to our business, including the sensitivity of our business to economic and financial market conditions generally and economic conditions in CECO’s service areas; the potential for fluctuations in prices for manufactured components and raw materials, including as a result of tariffs and surcharges, and rising energy costs; inflationary pressures relating to rising raw material costs and the cost of labor; dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding estimates and method of accounting for revenue; the effect of growth on our infrastructure, resources, and existing sales; the ability to expand operations in both new and existing markets; the potential for contract delay or cancellation as a result of on-going or worsening supply chain challenges or other customer considerations; liabilities arising from faulty services or products that could result in significant professional or product liability, warranty, or other claims; changes in or developments with respect to any litigation or investigation; failure to meet timely completion or performance standards that could result in higher cost and reduced profits or, in some cases, losses on projects; the substantial amount of debt incurred in connection with our strategic transactions and our ability to repay or refinance it or incur additional debt in the future; the impact of federal, state or local government regulations; our ability to repurchase shares of our common stock and the amounts and timing of repurchases; our ability to successfully realize the expected benefits of our restructuring program; economic and political conditions generally; our ability to optimize our business portfolio by identifying acquisition targets, executing upon any strategic acquisitions or divestitures, integrating acquired businesses and realizing the synergies from strategic transactions; and the unpredictability and severity of catastrophic events, including cyber security threats, acts of terrorism or outbreak of war or hostilities or public health crises, as well as management’s response to any of the aforementioned factors. Many of these risks are beyond management’s ability to control or predict. Should one or more of these risks or uncertainties materialize, or should any related assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. Investors are cautioned not to place undue reliance on such forward-looking statements as they speak only to our views as of the date the statement is made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise. While we report our results in accordance with generally accepted accounting principles in the U.S. ("GAAP"), comments made during this conference call and these materials may include the following "non-GAAP" financial measures: organic revenue, non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, adjusted EBITDA, adjusted free cash flow, adjusted net free cash flow, non-GAAP gross profit margin, non-GAAP operating margin, non-GAAP earnings per basic and diluted share, adjusted EBITDA margin and selected measures expressed on a constant currency basis. These measures are included to provide additional useful information regarding our financial results and are not a substitute for their comparable GAAP measures. Management believes that these measures provide individuals with additional information to better compare the Company's results over multiple periods. Explanations of these non-GAAP measures and reconciliations of these non- GAAP measures to their directly comparable GAAP measures, to the extent the reconciliation be performed without unreasonable efforts, are included in the accompanying "Appendix." Descriptions of many of these non-GAAP measures are also included in our SEC reports. 2
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Q2 2025: Record Performance Sustaining High-Performance with Record Bookings / Revenue / Income CECO Solutions In Demand for Robust Markets … • Backlog at record levels, up 76% YoY • Booked largest order in company history (Power Gen) • Record Orders … Book-to-Bill ~ 1.5x Continued Record Revenue Growth … • Up YoY 35% on Strong Bookings & Backlog Conversion • Up Sequentially 5%, even after divestiture of Global Pumps Delivering Stronger Income / Margin Profile … • Gross Profit Margins ~ 36% reflect better price / productivity • Starting to get better volume conversion .. More to come! Metric Result Performance Backlog $688 Record Orders $274 Record Revenue $185 Above Consensus Adj. EBITDA $23.3 Above Consensus Adj. EPS $0.24 Above Consensus ($MM) 3
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1st Half 2025 Highlights Sales Pipeline Macro Environment 1H’25 Financials / Portfolio • Highest-Ever Sales Pipeline of opportunities, > $5.5-billion • Customer inquiries remain very active ... No impact from changing regulatory frameworks • Inquiry-to-Order cycle time has improved versus 2024 • Recent M&A expanding CECO pipeline in key verticals and geographies • Power Generation, Gas Infrastructure and Semiconductor markets remain incredibly robust • Very steady regional demand in US, Middle East, Asia and India • Despite ‘headline uncertainty’ from U.S. Policies … Limited impact to market momentum • Continue to expect modest inflation impact in 2H’25 • 1H Bookings ~ $502M up 76% YoY; Book-to-Bill ~ 1.4x • Q2 Power-Gen Related Orders helped deliver record bookings • Backlog ~ $688M up 76% YoY • 1H Revenue ~ $362M… up 37% YoY and higher than almost every full year revenues prior to 2022 • Recent M&A delivering on targets; M&A Pipeline = Attractive Tremendous 1st Half Results … Well Positioned for Strong 2nd Half 4
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Updating FY’2025 Outlook … April ’25 FY View Orders/B-2-B (book to bill) Revenue Adj EBITDA Adj. Free Cash Flow* % of Adj. EBITDA ($MM) New Outlook Assumptions Orders • Raising B2B Outlook • ~ $0.5B bookings in 1H with record pipeline Revenue • Raising ~ $25M given expected 2H conversion • Up ~35% YoY … with 20% Organic Growth Adjusted EBITDA • Maintaining Range … Up ~ 50% YoY – Benefits from higher revenue outlook – Continuing investments to support growth • Uncertainty: 2H’25 Inflation Adj. Free Cash Flow • 2H FCF profile improves over 1H *See definition in Appendix. 1.0 – 1.1X 700 – 750 90 – 100 > 60% > 1.2X 725 – 775 90 – 100 > 60% Margins: 12.5% - 13.0% Up YoY ~ +150bps 5
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Building Our Sales / Growth Pipeline* Continues to Be Sustainable Growth Predictor *Pipeline is defined as Total Active Order Pursuits for Next ~ 18 Months ** Adjusted for M&A activities 2015 2020 2015 – 2020 … Low-to-No Growth $1.0B $1.1B Steady Pipeline Size … But Didn’t Expand 2015 Revenue Sales Pipeline Value $367M 2020 Orders $280M No Topline Growth ** Over 5 Year Period 2021 2025E 2021 – 2025E … High-Growth $1.5B $5.5B+ Up 250% and Growing! 2021 Revenue Sales Pipeline Value $324M 2025E Revenue ~ $750M High-Performance Topline Growth 2015 2020 2021 2025E $358M 2015 Orders 2020 Revenue $316M 2021 Orders $361M 2025E Orders ~ $900M+ +26% CAGR +23% CAGR +38% CAGR 6
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Financial Review 7
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Q2’25 and TTM Financial Performance Q2’25 YoY Q2 TTM YoY Backlog $688M 76% $688M 76% Orders Book to Bill $274M 1.48x 95% $883M 1.35x 58% Revenue $185M 35% $656M 16% Adj. EBITDA Margin % $23.3M 12.6% 45% +87bps $70.7M 10.8% 11% (45)bps Adj. EPS 0.24 0.04 0.75 (0.06) • Record Orders … up ~ $133M YoY and ~ $46M / 20% sequentially • 3rd consecutive quarter > $200M w/ largest order in history • Gross Margins ~36%, up 100 bps sequentially / 50 bps YoY on continued productivity, project execution and mix • Adj EBITDA margin up ~ 500 bps sequentially, driven by absence of time-specific Q1 items, execution and cost management • Adj EBITDA up 45% YoY and margins up ~ 90bps Highlights TTM = Trailing 12 Month • YoY: Up ~35% … double-digit growth in both organic and inorganic • Seq: Up ~ $8M / +5% despite divestiture of Global Pump Solutions • Expect continued healthy backlog conversion • Adj EPS up 20%, driven by volume and operational improvements, partially offset by higher interest expenses. • Record Backlog ... Strong bookings in PowerGen, Semicon, Water, and Nat Gas (LNG, Midstream) Strong Across the Board … Highlighted by Q2 Orders up 95% and TTM Orders up 58% 8
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Record Backlog Trend Continues * Starting Backlog – Revenue + Net Orders +/- FX + Acquired Backlog = Ending Backlog ($MM) B2B = Book to Bill $214 $312 $371 $390 $391 $438 $541 $602 $91 $151 $128 $145 $141 $162 $219 $228 $274 $94 $116 $154 $126 $138 $136 $159 $177 $185 0 40 80 120 160 200 240 280 320 -20 20 60 100 140 180 220 260 300 340 380 420 460 500 540 580 620 660 700 Q4'21 Q4'22 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Backlog Orders Revenue $688 Book-to-Bill FY’22 FY’23 ~ 1.2x ~ 1.1x ~1.2x FY’21 ~ 1.1x FY’24 Backlog + Pipeline Supports Sustainable Double-Digit Growth Outlook ~1.4x 1H’25 ~3.2x 9
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Sustained Gross Profit Improvements Delivered Record Quarter TTM basis (TTM GP/TTM Revenue) $128 $171 $181 $191 $193 $196 $213 30.3% 31.4% 32.4% 33.6% 34.8% 35.2% 35.0% 35.2% 29. 0% 31. 0% 33. 0% 35. 0% 37. 0% 39. 0% 100 .0 120 .0 140 .0 160 .0 180 .0 200 .0 220 .0 Q4'22 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 ($MM) TTM = Trailing 12 Month Q2 Highlights • Continued Sourcing Benefits • Improved Project Pricing • Short Cycle Mix • Improving Project Execution 2025+ Actions • Continued Execution and Sourcing Focus • Price and Cost Actions to Mitigate Inflation • Focus shift to EBITDA Margin and Expenses as Strong Gross Margins are Maintained Continued Progress on Productivity, Price/Mix, and Project Execution +80% $231 36.2%35.2%35.8%33.4%35.6%35.7%34.6%32.3%Period % - 10
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Q2’25 Cash Flow and Indebtedness Update Free Cash Flow ($MM) YTD 2024 YTD 2025 YoY Gaap Net Income (incl. NCI) $6.0 $45.5 $39.5 D&A $7.0 $10.2 Gain on Sale -- $(64.5) Working Capital $(12.0) $(10.6) Other Net Operating Assets $6.9 $5.8 Operating Cash Flow $7.9 $(13.6) $(21.5) CapEx $(7.2) $(4.4) $2.7 Adj. FCF $0.7 $(18.0) $(18.8) Gross Debt Position Dec 31, 2024 $216.9 Cash Used / (Generated) from Ops $13.6 M&A + CapEx Investments [Net] $(3.8) Net Bank Debt Activity $18.9 Other Cash Used / (Generated) $(9.4) Jun 30, 2025 $236.2 Notes: ‒ “Borrowing Capacity” is the lower of 1) EBITDA x Sr. Lev. Ratio Cap less Revolver Debt or 2) Total Revolver Capacity less Revolver Debt + Letters of Credit. ‒ Cash Proceeds from GPS Divestiture are classified as Investing Cash Flows. ‒ See definition of Adjusted Cash Flow in Appendix. 2.6 x 2.7 x Dec 31. 2024 Jun 30. 2025 Leverage Ratio 1 $69 $104 Dec 31. 2024 Jun 30. 2025 Capacity 2 1/ Leverage Ratio = Net Debt / TTM Bank EBITDA; Net Debt = $236.2 – 36.8 = $199.4 2/ Capacity = Current RCF Capacity + Net US and Canada Cash 11
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Final Comments 12
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Q2 Summary CECO Environmental Protecting People, the Environment and Industrial Equipment Demand Environment is Very Robust • Pipeline of $5.5B+ up ~ $1B YoY • Strong customer engagement • Limited impact from trade and geopolitical tensions Strong Q2 and 1H Performance • +76% Backlog, +95% Orders, +35% Revenue • +45% Adj EBITDA, > 36% Gross Profit Margin Updated Full Year Outlook • Orders B2B of > 1.2x even with record revenues • Revenue outlook increased $25M … +35% YoY • Adj. EBITDA expected up ~ 50% YoY … even with investments Portfolio Transformation • M&A integrations on track • Revenue and Cost synergies on track • Reloading the Pipeline 13
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Appendix Non - GAAP Reconciliation Tables and Supplemental Materials
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Revenue Excluding Acquisitions NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 15
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Non-GAAP Operating Income and Margin NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 16
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Non-GAAP Net Income, Adjusted EBITDA, and Margin NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’ s amounts may not equal the total amounts for the respective year. 17
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Adjusted Free Cash Flow NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. * Other Adjustment: excluding tax payments related to tax gain on the divestiture of GPS business in Q1 2025. Payments are expected to occur through Q1 2026. * 18