The TEG Group PLC

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The TEG Group PLC

• Incorporated in 1995, AIM listing in July 2004
• Demonstration facility at Sherdley Farm since
  2000
• Four owned and operated plants constructed in
  2006-2008
• Sherdley Farm (12,000 tonnes per annum)
• Perth (38,000 tonnes per annum)
• Todmorden (35/50,000 tonnes per annum)
• Exeter (14,0000 tonnes per annum) JV (Verdia)
  plant
• Constructed three plants for 3rd party customers
• Swansea (7,000 tonnes per annum)
• Norfolk (28,000 tonnes per annum)
• Gwynedd (6,000 tonnes per annum)
• Exclusive supplier to the Preferred Bidder for
  Greater Manchester Waste (GMW) PFI contract
• Two plants in construction

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The TEG Silo Cage Plant
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TEG Silo Cage System

• The composting process takes 12-14 days
• Temperature continuously monitored by multiple
  probes
• 500-600 tonnes per annum process capacity in each
  cage
• Insulated walls maintain temperature
• With many obvious benefits
• Full Animal By-Products (ABP) approval
• Continuous operation
• Commercial scale operation
• Consistent quality end product
• Small footprint
• Competitive capital and low operating costs
• No forced aeration
• Very good environmental control (odour, dust
  bio-aerosols)
• Single pass

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TEG Plants

• Perth (38,000 tpa)
• Customers include Sita (Perth Kinross Council),
  Diageo, Grampian
• East Renfrewshire Council commenced April 2008
• Overall 16 increase in sales in H1
• Target to finalise 2 key accounts to complete
  sales
• Todmorden (37,000 tpa)
• Plant full in volume terms in H1
• 45 increase on H2 (2007)
• First 2 lines extended (additional 12,000 tpa)
• Collection round underway restaurants and
  schools
• Target to increase average gate fee
• Sherdley (12,000 tpa)
• Market activity very encouraging
• 98 increase in sales in H1

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The Natural Organic Fertiliser Company Ltd (NOFCO)

• Placement of compost product is critical to
• the success of all composting plants
• Exciting opportunities to develop value out
• of the product - first sale contract
• agreed in Perth
• Opportunities for NOFCO to develop further
• benefit from the management of agricultural
• and industrial crops
• Successful trials have been undertaken
• at Sherdley Farm (Preston) in 2007
• PAS 100 achieved at Todmorden and Perth
• Opens up new markets- declassified as waste
  recognised as a product

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Revenue trends
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Greater Manchester PFI Contracts

• TEG is the exclusive IVC technology supplier to
  the Viridor/Laing consortium that has been
  awarded preferred bidder status for the GMW PFI.
  Assuming the consortium achieves financial close,
  TEG expects to be awarded contracts to build 4
  large facilities over the period 2007 to 2010
• Total plant capacity for the 4 facilities would
  be 175,000 tonnes per annum. Total value to TEG
  will be approximately 37m if full scope is
  awarded
• The plants will process garden and kitchen waste
  collected from households in the Greater
  Manchester region.
• Operating and maintenance contracts will be
  discussed with Viridor during the period
  following financial close but are not part of the
  PFI tender
• Advanced Works Orders awarded in January and
  April 2008
• Construction began in June 2008 on first site at
• Waithlands, Rochdale
• Initial design work completed at Bredbury

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Market Key Points and Legislation

• Statutory target on UK to divert 25 million
  tonnes per annum of waste from landfill by 2020
• 42 million tonnes of organic waste in the UK!
• Key legislative drivers are.
• Landfill Directive 2001
• Statutory targets for reduction of waste to
  landfill
• Penalty system imposed in April 2005 (150 per
  tonne)
• Backed up by landfill tax already in legislation
  increases from April 2008 at 8/t per annum
• Landfill tax now 32/t, landfill approx 60/t
• Waste and Emissions Trading Act 2003
• Landfill Allowance Trading Scheme rewards
  recycling, implemented in April 2005
• Fines o be levied from 2010
• Animal By-Products Regulations 2003
• Driven by the BSE crisis and Foot and Mouth
  outbreaks
• Specific treatment methods for food waste and ABP

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Geographical Spread
Gwynedd
Manchester
Exeter
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Strategy

• Principal strategy remains to grow the business
  by a combination of
• Build Own and Operate projects (BOOs)
• Provide sustainable, long term revenues
• Allow us to take advantage of rising prices
• Average gate fee of less than 40/t secures good
  returns
• Target revenues of 1.3m per annum for a 35,000
  tonne plant
• And plant sales
• Provide large revenues
• Cater for market preferring to run own operations
• Typical sale value in excess of 1m per bank of
  28 cages for TEG PE
• With civil engineering scope included the range
  of sales is 1-10m per plant
• Key strategic sector is Local Authority private
  sector adds opportunities on top
• The Board is examining options to diversify
  technology within the organic sector

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Management The TEG Group PLC

• Nigel Moore (Non-Executive Chairman)
• A former Senior Partner with Ernst Young.
  Non-Executive Director of Vitec plc.
• Michael Fishwick (Chief Executive)
• Strong waste management background
• Built a successful recycling business and sold
  with significant shareholder gain
• Dr. Alan Heyworth (RD Director)
• Expert in composting and fertiliser production
  for over 40 years. Developed the Silo-Cage
  design and joined TEG as a founding shareholder
• Doug Benjafield (Non-Executive Director)
• Experienced waste management industry director
• Former Cleanaway director

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Management TEG Environmental Ltd NOFCO Ltd

• Fergus Healy (Operations Director)
• Experienced operations manager in the waste
  management sector
• Formerly with Cleanaway
• Fiona Maudsley Drain (Technical Director)
• 9 years experience with TEG
• Technical expert in composting technology
• Jayne Pierre (Commercial Director)
• Experienced waste management director
• Former consultant in the waste management sector
• Ron McIlwraith (Engineering Director)

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Summary

• TEG has continued to develop rapidly
• TEG technology is well established and seen as
  leading edge
• The Greater Manchester PFI process is underway
• Gwynedd plant constructed to time and budget in
  2008 plant number 6
• First Verdia plant constructed in 2008 Exeter
  plant number 7
• Plant waste sales increasing quickly
• NOFCO established and opening up new end markets
• The market continues to grow strongly and
  opportunities increase