CES Energy Solutions (CEU) Small-Cap Growth Virtual Investor Conference summary

Business model and operations

• Provides molecular-level chemical solutions, sourcing basic chemicals globally and manufacturing in Kansas and British Columbia.

• Vertically integrated, manufacturing and blending own chemistry, with decentralized divisions in Canada and the U.S.

• Autonomous divisional leadership with centralized functions for finance, legal, HR, and risk management.

• Focus on resilient, countercyclical balance sheet and working capital management.

• Technology-driven, with nine labs, over 100 patents, and 240+ technical staff.

Financial performance and strategy

• Generated CAD 210 million in free cash flow last year, with a 13% cash-on-cash yield and ROACE of 23%.

• Market cap of CAD 1.65 billion, enterprise value over CAD 2 billion, and a dividend yield just under 2%.

• Maintains more working capital than total debt, with a strong credit rating and bond maturity extended to 2029.

• CapEx is 2%-3% of revenue, significantly lower than industry peers.

• Management completed a buyback of nearly 9% of shares and plans to renew for up to 10% over the next year.

Market position and growth

• Holds leading market shares: 23% in U.S. drilling fluids, 35%-40% in Canadian drilling fluids, and tied for #1 in Canadian production chemicals.

• Revenue run rate at $2.4 billion, with 70% from the U.S. and 30% from Canada.

• Serves all major North American basins, with a customer base dominated by large public companies.

• Market share growth driven by high service intensity and technology, not price increases.

• Over 80% of revenue comes from companies with market caps of $10 billion-$700 billion.