Slides
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Company Representatives Todd Gleason, CEO Marcio Pinto, VP FP&A and Investor Relations January 14, 2026 28th Annual Needham Growth Conference
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Forward-looking statements and Non-GAAP information 2 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 sensitivity of our business to economic and financial market conditions generally and economic conditions in our service areas; 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; 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 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; 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, if any; our ability to successfully realize the expected benefits of our restructuring program; our ability to successfully identify and integrate acquired businesses and realize 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 the 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.
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CECO Environmental ... Mission Critical Solutions … 3 We Protect The Environment We minimize our environmental impact and help our global customers do the same We Protect People Solving customer challenges to ensure their employees work in a safe and productive work environment We Protect Industrial Equipment and Improve Processes We help maximize our customer’s investment in their operating systems and optimize their output
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Well-Positioned For Strong Market Dynamics With Known Risks 4 Strong Steady Uncertain ? + Power Markets: Remains in Super-cycle mode + Natural Gas / Energy Infrastructure + Global Industrial Water and Wastewater = Reshoring Industrial and Global Semiconductor & Electronics = CECO Pricing and Supply Chains = M&A Pipeline ? Geopolitical Tensions and Impact ? Uncertain Broader Economy
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MARKET CAP: $247M $223M $400M $706M $1.06B $2.2B EV: $225M $225M $420M $730M $1.1B $2.5B EV/ADJ. EBITDA: 9.6x 11.1x 11.4x 13.7x 18.8x 27. 3x Delivering Sustainable, Shareholder Value 5 CECO Up ~ 860%* Russell 2000 Up ~10%* S&P 500 Up ~40%* *2026 as of close on 11.9.2026 1) Since 12/31/2021 Since 2021 $6.85 $6.23 $11.68 $20.28 $30.23 $61.80 2020 2021 2022 2023 2024 2026 Y/E Stock Price * 1) $316M $324M $423M $545M $558M TTM $718M FY Revenue
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6 CECO Environmental Building The Leading, Global, Sustainable Industrial Environmental Solutions Company Leading Businesses • Balanced, Niche Leadership Positions o Industrial Air o Industrial Water (new since 2020) o Energy Transition • Global: ~ 50% of Orders Outside U.S. • Strong Organic Growth o Averaged 10%+ Organic Since 2021 o Record Backlog Positions Us for Future Sustainable Value Creation • Focused Capital Allocation Model o Invest in Organic Growth / Expansion o Programmatic M&A o Debt/Balance Sheet Management o Stock Buybacks • Proven M&A Track Record o ~ 50% of Acquisitions Doubled Sales within 24 months of Deal • Management Aligned w/ Shareholders o Strategy deployment o Compensation Programmatic M&A ~ Dozen Strategic Deals Since mid-2020
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7 CECO Environmental ... 100% Providing Environmental Solutions for Industry 100% Industrial Diversified Industrials Energy Transition / Power o Gas-fired Power Generation o Datacenter Power Management o Natural Gas Infrastructure o Hydrocarbon Processing o Nuclear o Geothermal o Carbon Capture o Water Supply o General Industrial o EV & Battery Production o Beverage Can Production o Food & Beverage Production o Metals Processing o Water / Wastewater o Semiconductor o Renewables Technology 100% Environmental • Supply Water Treatment • Waste Water Treatment • Ultra - Pure Water Supply • Produced Water Treatment • Oily Water Separators • Reverse Osmosis • Emission Management • Thermal & Acoustics Management • Gas & Liquid Separation/Filtration • Cyclonic Separation • Combustion Mgmt • Carbon Capture • Thermal Abatement • Silencers • Wet/Dry Scrubbers • Oil Mist & Smoke Removal • Odor Management • Dust Removal • Air Flow Management ~25% ~ 35% ~ 40% Energy Transition Industrial Water Industrial Air End-Market Solutions
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8 Sales, Engineering & Admin Manufacturing & Assembly ❑ ~1,600 Employees worldwide Global HQ: Dallas, TX ❑ ~40% Sales Outside of US CECO Environmental ... Global Company To Serve Global Opportunities
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Building Our Sales / Growth Pipeline* Continues to Be Sustainable Growth Predictor 9 Power – Energy Industrial Water Industrial Air Market Drivers: Power Demand, Electrification, Computing / AI, LNG, Nuclear, Geothermal Key Technology: SCR/SNCR/VOC Emissions Treatment, Thermal & Acoustic Mgt., Gas & Liquid Separation & Filtration, Combustion and Burner Mgmt, Market Drivers: Industrial Water & Wastewater Infrastructure, Water Reuse and Recycle, Desalination Key Technology: Dissolved Air Flotation, Oily Water Separations, Ion Exchange, Membrane Water Treatment, Process Water Supply Market Drivers: Industrial Reshoring, Energy Storage, Semiconductors, Electronics, Metals Processing, Construction Materials Production Key Technology: Silencers, Scrubbers, VOC Removal, Thermal Abatement, CatOx, Air Flow Mgmt, Odor Control CECO is Well Positioned on Key Secular Trends in Power, Water and Air *Pipeline is defined as Total Active Order Pursuits for Next ~ 18 Months
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($MM) B2B = Book to Bill 10 $361 $527 $580 $667 B2B >1.1 2021 2022 2023 2024 2025 + $1B +3x higher +30% CAGR Full Year 2025 Bookings Expected to Surpass $1 Billion Expected Record Year in Bookings Reaffirms CECO Market Position + Power Markets: Remains in Super-cycle mode + Natural Gas / Energy Infrastructure + Global Industrial Water and Wastewater = Reshoring Industrial = Global Semiconductor & Electronics + Investments in Talent, Incentives and Systems
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Q3 2025 Earnings Call Executive Summary 11 Q3 2025 Q3 2025 = High-Performance • +64% Backlog, +44% Orders, +46% Revenue • +62% Adj EBITDA • Adj EBITDA margin up 120bps Reaffirm Full Year 2025 Outlook • Orders B2B of > 1.2x (even with record revenues) • Revenue +35% YoY (Midpoint of Guidance) • Adj. EBITDA expected up ~ 50% YoY $850 – 950M Revenue > $1B Orders $110 – 130M Adj. EBITDA Introducing 2026 Outlook Record Pipeline and Record Backlog Market Fundamentals Remain Very Strong Proven Operating Model Another Great Quarter … Outlook Remains Very Strong ✓ ✓ ✓
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Many Positives For Q4’25 and Heading Into 2026 12 Energy Transition Industrial Water Industrial Air • Nat Gas Power-Gen Capacity Growth ̶ Electrification + Baseload Needs ̶ Significant Q4’25 and 2026 Opportunities in Pipeline • More Nuclear and Geothermal • Robust LNG Plant and Midstream Gas Transport Opportunities • Permit Efficiency Improved • Targeting Mega-Jobs ($30M+) in Industrial Wastewater and International Produced Water • CECO’s Ind’l Water M&A Advanced Key EPC Relationships and Reference Jobs • Water Reuse and Water Scarcity Major Themes In Growing Markets • Global Semiconductor Strength plus Onshoring Fabs Gaining Real Investment • More Industrial Reshoring with Significant Automation Investments • CECO’s Industrial Air Leadership Enables More Global Industrial Market Penetration Operations | Supply Chain | Macro (-) Fluctuating Tariff and Commercial Policy (-) Inflation Pressure Increases (-) / + Regulatory Policy + Strong Execution and Margin Expansion (-) / + Skilled / Key Resource Availability + M&A = Remain Programmatic
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Appendix Slides 13
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14 Organic Growth Programs / Investments • Sales Team, Engineers and Project Managers • CapEx: Biz. Growth, ERP Migration, Cybersecurity M&A Transactions • Active Pipeline … Air / Water / Energy Transition • Targeting ROIC > 25% Debt Management • Maintain a Healthy Balance Sheet … Leverage ~2.0X • New Credit Facility Expands Capacity Stock Buybacks • $15M repurchased since 2021 (avg. price ~ $8.20) • $10M remaining on authorization Capital Allocation Strategy Investment Drivers CECO Environmental ... Focused Capital Deployment For Growth … Organic Growth & CapEx Up ~2X+ Since 2020 M&A Programs Remain Programmatic Stock Buybacks $15M Since 2021 Debt Management Maintaining Healthy Leverage
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Q3 2025 and TTM Financial Performance Q3’25 YoY Q3 TTM YoY Backlog $720M 64% $720M 64% Orders Book to Bill $233M 1.18x 44% $954M 1.33x 65% Revenue $198M 46% $718M 30% Adj. EBITDA Margin % $23.2M 11.8% 62% +118bps $79.6M 11.1% 26% (31bps) Adj. EPS 0.26 86% 0.86 18% • Continued Orders Momentum … up ~ $70M YoY; Strength in Power, Semicon, Water, and Natural Gas Infrastructure • PowerGen orders of significant size, continue to be booked • 4th consecutive quarter > $200M; average ~$238M • Gross Margins ~33%, flat YoY with continued productivity and project execution offset by mix and seasonal absorption dynamics • Adj EBITDA up 62% YoY and margins up ~ 120bps • Adj EBITDA margin down sequentially on lower gross profit offset by lower G&A/Corporate spend rate Highlights TTM = Trailing 12 Month • YoY: Up ~ $62M … double-digit growth in both organic and inorganic • Seq: Up ~ $12M / +7% on early revenues from Power orders booked in prior quarters • Adj EPS up 86%, driven by volume and operational excellence, partially offset by higher interest expenses. • Record Backlog ... Broad-based end market demand Strong Across the Board … TTM Orders up 65% (B2B = 1.33) 15 B2B = Book to Bill * Note: Natural Gas Infrastructure includes processing, transport, storage and LNG
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Record Backlog Trend Continues * Starting Backlog – Revenue + Net Orders +/- FX + Acquired Backlog = Ending Backlog ($MM) B2B = Book to Bill $214 $312 $371 $390 $391 $438 $541 $602 $720 $91 $151 $128 $145 $141 $162 $219 $228 $274 $233 $94 $116 $154 $126 $138 $136 $159 $177 $185 $198 0 40 80 120 160 200 240 280 320 -20 20 60 100 140 180 220 260 300 340 380 420 460 500 540 580 620 660 700 740 Q4'21 Q4'22 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Backlog Orders Revenue $688 Book-to-Bill FY’22 FY’23 ~ 1.2x ~ 1.1x ~1.2x FY’21 ~ 1.1x FY’24 Backlog + Pipeline Supports Sustainable Double-Digit Growth Outlook ~1.4x 1H’25 ~3.4x 16 ~1.3x YTD’25
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YTD 2025 Cash Flow and Indebtedness Update Free Cash Flow ($MM) YTD 2024 YTD 2025 YoY GAAP Net Income (incl. NCI) $8.1 $47.0 $38.9 D&A $10.5 $18.7 Gain on Sale -- $(63.7) Working Capital $(5.3) $(14.4) Other Net Operating Assets $9.7 $22.1 Operating Cash Flow $23.0 $9.7 $(13.3) CapEx $(11.2) $(8.7) $2.5 Free Cash Flow $11.8 $0.9 $(10.9) Gross Debt Position Dec 31, 2024 $216.9 Cash Used / (Generated) from Ops $(9.7) M&A + CapEx Investments [Net] $(1.5) Net Bank Debt Activity $0.9 Other Cash Used / (Generated) $10.3 Sept 30, 2025 $216.9 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 2.3 x Dec 31. 2024 Sept 30. 2025 Leverage Ratio 1 $69 $109 Dec 31. 2024 Sept 30. 2025 Capacity 2 1/ Leverage Ratio = Net Debt / TTM Bank EBITDA; Net Debt = $216.9 – 30.6 = $186.3 2/ Capacity = Current RCF Capacity + Net US and Canada Cash 17
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Introducing Full Year 2026 Outlook 2025 Outlook Orders/B-2-B (book to bill) Revenue Adj EBITDA Adj. Free Cash Flow* % of Adj. EBITDA ($MM) 2026 Outlook *See definition in Appendix. > 1.2X 725 – 775 90 – 100 > 60% > 1.1x 850 – 950 110 – 130 50% - 60% 18 > $1B Up 15% to 25% YoY Up 20% to 40% YoY +100 – 150 bps YoY Maintaining Strong Double-Digit Organic Growth • Record opportunity pipeline of ~ $5.8B • Expecting Strong Q4’25 & Q1’26 High Value bookings currently in active bidding process Key Items • Record backlog levels entering 2026 • Strong execution track record • G&A leverage and continued sourcing and operational savings • Maintain multi-year margin expansion • Operating Excellence + Introducing 80/20 • Continue to drive working capital programs • Expect typical EBITDA to cash conversion cycle
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Q3 2025 Summary CECO Environmental Protecting People, the Environment and Industrial Equipment Well-Positioned in Very Strong Markets • Sales Pipeline of $5.8B grew $300M in past quarter • Strong customer engagement • Balanced across end markets and regions • Limited impact from trade and geopolitical tensions Strong Q3 and YTD Performance • +64% Backlog, +44% Orders, +46% Revenue • +62% Adj EBITDA, up 120bps in margin • Acquisitions contributing nicely Reaffirmed Full Year 2025 Outlook • Orders B2B of > 1.2x even with record revenues • Revenue tracking toward high-end … +38% YoY • Adj. EBITDA expected up ~ 50% YoY … even with investments Introducing 2026 Outlook: Strong Topline and Bottomline Growth • Expect to enter 2026 with record backlog + sales pipeline 19
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Revenue Excluding Acquisitions NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 20 (dollars in millions) Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Annual 2023 2024 2024 2024 2024 2024 2025 2025 2025 2025 TTM 544.9$ 126.3$ 137.5$ 135.5$ 158.6$ 558.0$ 176.7$ 185.4$ 197.6$ 559.7$ 718.3$ - - - - - - - 8.1 8.5 16.6 16.6 (51.1) (10.0) (4.7) (7.9) (10.6) (33.2) (34.3) (40.3) (33.3) (107.8) (118.4) 493.8$ 116.3$ 132.8$ 127.6$ 148.0$ 524.8$ 142.4$ 153.2$ 172.9$ 468.5$ 616.5$ Organic Revenue Revenue as reported in accordance with GAAP Revenue attributable to divestitures Revenue attributable to acquisitions
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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. 21 (dollars in millions) Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Annual 2023 2024 2024 2024 2024 2024 2025 2025 2025 2025 TTM 34.7$ 7.7$ 9.3$ 7.2$ 11.3$ 35.4$ 61.9$ 18.1$ 9.4$ 89.3$ 100.6$ Operating Margin in accordance with GAAP 6.4% 6.1% 6.8% 5.3% 7.1% 6.3% 35.0% 9.8% 4.8% 16.0% 14.0% Acquisition and integration expense 2.5 0.2 0.5 1.2 2.3 4.2 8.1 - 0.3 8.4 10.7 Amortization expense 7.5 2.2 2.2 2.2 2.2 8.8 3.1 2.9 6.1 12.2 14.3 Earn-out and retention expense (income) 0.7 - - 0.5 (0.2) 0.3 - (6.6) - (6.5) (6.8) Gain on divestiture - - - - - - (64.5) - 0.8 (63.7) (63.7) Restructuring expense 1.3 0.1 0.4 (0.1) - 0.5 - 0.5 0.2 0.7 0.7 Divestiture expense - - - - - - - 0.6 - 0.6 0.6 Executive transition expense 1.4 - - - - - - 0.2 0.7 0.9 0.9 Asbestos and other legal matter expense - - 0.2 - - 0.2 - 2.6 - 2.6 2.6 48.1$ 10.2$ 12.6$ 11.0$ 15.6$ 49.4$ 8.6$ 18.3$ 17.5$ 44.5$ 59.9$ 8.8% 8.1% 9.2% 8.1% 9.8% 8.9% 4.9% 9.9% 8.9% 8.0% 8.3%Non-GAAP Operating Margin Operating Income as reported in accordance with GAAP Non-GAAP Operating Income
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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. 22 (dollars in millions) Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Annual 2023 2024 2024 2024 2024 2024 2025 2025 2025 2025 TTM 12.9$ 1.5$ 4.5$ 2.1$ 4.9$ 13.0$ 36.0$ 9.5$ 1.5$ 47.0$ 51.9$ Acquisition and integration expense 2.5 0.2 0.5 1.2 2.3 4.2 8.1 - 0.3 8.4 10.7 Amortization expense 7.5 2.2 2.2 2.2 2.2 8.8 3.1 2.9 6.1 12.2 14.3 Earn-out and retention expense (income) 0.7 - - 0.5 (0.2) 0.3 - (6.6) - (6.5) (6.8) Gain on divestiture - - - - - - (64.5) - 0.8 (63.7) (63.7) Restructuring expense 1.3 0.1 0.4 (0.1) - 0.5 - 0.5 0.2 0.7 0.7 Divestiture expense - - - - - - - 0.6 - 0.6 0.6 Executive transition expense 1.4 - - - - - - 0.2 0.7 0.9 0.9 Asbestos and other legal matter expense - - 0.2 - - 0.2 - 2.6 - 2.6 2.6 Foreign currency remeasurement (1.0) 0.9 0.6 0.3 2.4 4.2 0.6 (1.4) 2.0 1.2 3.6 Tax benefit (cost) of expenses 1.3 (0.9) (1.0) (1.0) (1.7) (4.6) 20.2 0.4 (2.3) 18.3 16.6 Non-GAAP Net Income 26.6$ 4.0$ 7.4$ 5.2$ 9.9$ 26.7$ 3.5$ 8.7$ 9.3$ 21.7$ 31.4$ Depreciation expense 5.1 1.3 1.3 1.4 1.8 5.8 2.0 2.1 2.3 6.4 8.3 Non-cash stock compensation 4.5 1.7 2.2 1.9 1.7 7.5 3.4 2.9 3.3 9.6 11.2 Other (income) / expense 0.8 0.6 0.1 0.1 (0.3) 0.5 0.0 - 0.1 0.1 (0.3) Interest expense 13.4 3.4 3.3 2.6 3.7 13.0 6.2 4.9 5.1 16.2 19.9 Income tax expense 5.7 1.6 1.4 2.6 2.3 7.9 (1.6) 4.1 2.8 5.3 7.6 Non-Controlling Interest 1.6 0.6 0.4 0.5 - 1.5 0.5 0.6 0.3 1.4 1.4 Adjusted EBITDA 57.7$ 13.2$ 16.1$ 14.3$ 19.1$ 62.8$ 14.0$ 23.3$ 23.2$ 60.7$ 79.5$ 10.6% 10.5% 11.7% 10.6% 12.0% 11.3% 7.9% 12.6% 11.7% 10.8% 11.1% Basic Shares Outstanding 34,665,473 34,844,838 34,918,412 34,966,625 34,978,382 34,927,313 35,028,301 35,286,065 35,359,969 35,225,740 35,163,179 Diluted Shares Outstanding 35,334,090 36,175,998 36,302,664 36,488,788 36,559,198 36,381,910 36,689,320 36,558,493 36,396,693 36,549,130 36,550,926 Earnings per share: Basic 0.37$ 0.04$ 0.13$ 0.06$ 0.14$ 0.37$ 1.03$ 0.27$ 0.04$ 1.33$ 1.48$ Diluted 0.37$ 0.04$ 0.12$ 0.06$ 0.13$ 0.36$ 0.98$ 0.26$ 0.04$ 1.29$ 1.42$ Non-GAAP earnings per share: Basic 0.77$ 0.11$ 0.21$ 0.15$ 0.28$ 0.76$ 0.10$ 0.25$ 0.26$ 0.62$ 0.89$ Diluted 0.75$ 0.11$ 0.20$ 0.14$ 0.27$ 0.73$ 0.09$ 0.24$ 0.26$ 0.59$ 0.86$ Non-GAAP Operating Margin Net Income as reported in accordance with GAAP
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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. 23 (dollars in millions) Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Annual 2023 2024 2024 2024 2024 2024 2025 2025 2025 2025 TTM Cash provided by (used in) operating activities 44.6$ 1.2$ 6.7$ 15.1$ 1.8$ 24.8$ (11.7)$ (7.7)$ 15.3$ (4.1)$ (2.3)$ Capital Expenditures (8.4) (3.1) (4.1) (4.0) (6.2) (17.4) (3.4) (1.1) (4.2) (8.7) (14.9) Other adjustments* - - - - - - - 5.8 7.9 13.7 13.7 36.2$ (1.9)$ 2.6$ 11.1$ (4.4)$ 7.4$ (15.1)$ (3.0)$ 19.0$ 0.9$ (3.5)$ Adjusted Free Cash Flow
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Tariff Environment – Current State and Mitigation Actions Mexico / Canada China / Asia U.S. Capacity EU / ME / India ‒ Majority of supply is USMCA qualified or exempt ‒ Capacity to support additional demand ‒ Limited-to-No China exposure (importing to U.S.) ‒ Vietnam and Korea exposure limited to power and energy projects with exemptions ‒ Asia-for-Asia supply and project execution ‒ Internal capacity for fabrication in China and Korea ‒ Targeting 100% USMCA qualification or exemption ‒ EU for EU supply and project execution ‒ Internal capacity for fabrication in UK and Germany ‒ Securing customer deviation for US supply ‒ Customer-specified German tech for select projects ‒ Manufacture in-region, for region General • Working with our customers to ensure contractual language and protections are sufficient, secure favorable INCO terms • Anticipating and working to mitigate inflationary impact on raw materials • Resiliency and diversification of our operations and supply chain supportive of mitigation of tariff impacts * Assumes tariff rates and imposition on April 28, 2025 are maintained for the remainder of 2025 Better Positioned Than “Covid Supply Chain Shock Quarter(s)” to Handle External Disruptions … Rapid Mitigation Actions Underway to Largely Offset Anticipated Cost Risks* 24 ‒ Existing U.S. supply capacity addresses meaningful portion of U.S. demand ‒ Continuing to develop new sources of U.S. capacity and strengthen supply chain capabilities ‒ Selective insourcing to existing CECO facility
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Tariff Outlook for the Remainder of 2025 Category Gross Impact * Materials $1 – 2 Components (1) $1 – 3 Fabrications $1 – 5 Total $3 – 10 Ongoing Mitigations Key Assumptions • Canadian & Mexican imports retain USMCA compliance/exemptions • 25% tariff rates on “raw” steel and aluminum remain in place • 10% reciprocal tariffs remain in place • Tariff rates as of April 28 remain effective through the rest of the year 25 * Estimated impacts as of April 28, 2025 (1) Finished items including pumps, valves, filters, sensors, control panels Headcount & Process Optimization ~ $3 Supply Chain Efficiencies $0 – 2 Other Actions $0 – 1 Pricing Pass Thru Cost TBD Total Actions Identified $3 – 6 • We buy in-region, for-region. Cost and revenue bases are largely aligned • We are a portfolio of agile, niche businesses with adaptable supply chains • Surcharges/inflation triggers in contract T&C language • Use free trade zones, when possible, to defer duty payment • Canadian & Mexican imports are exempted by USMCA ($MM)