CECO Environmental (CECO) 16th Annual East Coast IDEAS Conference summary

Strategic transformation and acquisition impact

• Acquisition of Thermon accelerates growth targets, creating a combined entity with over $1.5 billion in pro forma revenue and $250 million in pro forma EBITDA, advancing strategic goals by four years.

• Integration is on schedule, with a dedicated management office and collaboration between both companies to optimize processes and capture $40 million in cost synergies by year three, with upside potential.

• Revenue mix is now more balanced, with 60% long-cycle and 40% short-cycle, reducing volatility and supporting margin improvement.

• Thermon brings new products, notably liquid load banks and medium voltage heaters, enhancing offerings in data centers and industrial markets.

• The acquisition supports international expansion and leverages a larger global footprint, especially in industrial water and emissions management.

Financial performance and outlook

• 2026 guidance projects $2 billion in orders, $1.27–$1.37 billion in revenue, and $195–$225 million in adjusted EBITDA, with pro forma full-year revenue exceeding $1.5 billion and $265 million in EBITDA.

• Bookings momentum is strong, with $550 million booked by early June, compared to $527 million for all of 2022, and a book-to-bill ratio forecasted to rise from 1.3x to 1.5x.

• Orders up ~60% YoY to $1.1B in 2025, with 2026 guidance raised to ~$2.0B on an $8B+ pipeline.

• Free cash flow is expected to exceed 55% of adjusted EBITDA, with synergies contributing to margin expansion.

• Shareholder value has increased significantly, with stock price rising from $7 in 2020 to $95 recently.

Integration, synergies, and operational strategy

• $40 million in cost synergies are targeted by year three, with $15 million run-rate by end of 2026 and $30 million by 2027.

• Integration leverages a collaborative approach, combining best practices from both companies and focusing on process improvement beyond cost synergies.

• Early synergy capture includes $5 million from C-suite and public company cost reductions, with further upside expected from commercial synergies.

• Commercial synergies are expected to add 1–2 points of organic growth, leveraging international reach and product momentum.

• Integration is fostering new career opportunities for employees and is viewed positively by both workforces.