CECO Environmental (NasdaqGS:CECO) FY Conference Transcript

CECO Environmental FY Conference Summary Company Overview - Company: CECO Environmental (NasdaqGS:CECO) - Date of Conference: January 14, 2026 - Key Speakers: Todd Gleason (CEO), Marcio Pinto (VP of P&A and Investor Relations) Key Themes and Transformations - Transformation Journey: CECO has undergone significant transformation since mid-2020, focusing on operational efficiency and market expansion. The initial step involved delayering the organization to enhance focus on individual markets [9][10]. - Market Expansion: Sales in emerging markets have increased from $30 million to nearly $150 million, with a notable expansion in the number of vertical markets pursued [10]. - M&A Strategy: CECO has engaged in approximately 14 acquisitions over the last three and a half years, maintaining a healthy balance sheet with an average acquisition multiple of 7-8 times [16]. Financial Performance - Revenue Growth: CECO reported a revenue of over $1 billion, with a strong pipeline of $6 billion, indicating significant growth potential in the next 18 months [44][66]. - Bookings: The company achieved $300 million in order intake for the quarter, with expectations for large projects in power and industrial water sectors [37][44]. Industry Dynamics - Power Generation: CECO has positioned itself to benefit from the resurgence in power generation, particularly in natural gas infrastructure and emissions management solutions [21][24]. - Industrial Water Market: The industrial water sector is highly fragmented, and CECO aims to build a $200 million to $300 million platform through organic growth and acquisitions [15][56]. Strategic Focus Areas - AI and Electrification: CECO recognizes the importance of AI and electrification trends, particularly in power generation and data centers, and is preparing to capitalize on these opportunities [49][50]. - Global Presence: Approximately 50% of CECO's revenue is generated outside North America, with significant growth expected in international markets, particularly in industrial water [57][58]. Challenges and Opportunities - Margin Management: CECO is focused on improving EBITDA margins, which have been impacted by investments in growth and lower-margin projects. The company aims for mid- to high-teens EBITDA margins in the future [59][61]. - Visibility and Guidance: The company has strong visibility into its pipeline, with a commitment to providing annual guidance based on its robust order book and market knowledge [66][68]. Conclusion CECO Environmental is on a transformative path, leveraging its strengths in industrial air and water solutions while expanding its market presence through strategic acquisitions and investments. The company is well-positioned to capitalize on emerging trends in power generation and industrial water, with a strong focus on maintaining financial health and improving margins.