Westport Fuel Systems, Inc. · NASDAQ:WPRT
Westport Fuel Systems — Investor Presentation (May 2023)
28 slides from Westport Fuel Systems's investor presentation, May 2023
Slide 1: Driving Cleaner Performance
Driving Cleaner Performance Corporate Presentation PAGE 1 May 2023
Slide 2: Disclaimer and Forward-Looking Statements
Westport Fuel Systems Disclaimer and Forward-Looking Statements This presentation contains forward-looking statements, including statements regarding future revenue expectations, future demand for LPG, future growth in markets, future of our development programs (including those relating to HPDI and
Slide 3: Changing the Way the World Moves
Changing the Way Global 7 manufacturing locations Tier 1 OEM Supplier the World Moves Sales in 70 countries 100+ distributors Low-Carbon, >1,400 Patents Affordable Fuels 3
Slide 4: Strategy
Strategy 1 Drive sustainable growth in our existing markets through a diversified portfolio of technology, products, and services 2 Unlock new and emerging markets through the delivery of cleaner, affordable transportation solutions 3 Drive operational excellence and reputation as a Tier 1 supplier
Slide 5: 2023 Priorities
2023 Priorities 1 Improve OEM margins with HPDI being a primary focus ✓ Positive Q1 HPDI price adjustment accounting for inflation 2 Elevate performance and efficiency of our core business units ✓ Announced expanded global hydrogen component manufacturing capabilities in China ✓ LPG OEM program on t
Slide 6: YTD 2023 Highlights
YTD 2023 Highlights • Announced third major OEM collaborator to evaluate our H2 HPDI fuel system • Announced expanded global manufacturing footprint in China supporting ongoing and future growth in hydrogen • Two papers highlighting our industry leading hydrogen HPDI technology were presented at th
Slide 7: Leading Global Supplier
Leading Global Supplier Broad range of products addressing diverse market segments CHANNELS TO MARKET Original Equipment Manufacturers (OEMs) Independent Aftermarket (IAM) Dealers/Distributors Market Segments Light- & Medium-Duty Heavy-Duty Light, Medium and Heavy-Duty Westport Products Fuel Systems
Slide 8: Scale of the Challenge
Scale of the Challenge Urgently need solutions for Well-to-Wheel and Life Cycle CO2 reductions What is Quickly Deployable Innovative Ambitious needed? Solutions Solutions Solutions Cost- Efficient Practical Effective Solutions Solutions Solutions 8
Slide 9: A Portfolio of Solutions is Required
A Portfolio of Solutions is Required OEMs are looking at LPG, LNG, biofuels, fuel cells, electric and hydrogen in the push to decarbonize “The way we see it is there won't be a single winning technology. We actually need a diverse array of technologies to meet all of our customer and application nee
Slide 10: Macro Enablers Driving Growth
Macro Enablers Driving Growth Fuel Availability Low Carbon & Product Regulation Affordability Renewables Availability Mandating cleaner Compelling TCO with Rapid expansion of transportation gaseous fuels infrastructure, alternative We have the products to Westport solutions are fuel usage capture th
Slide 11: Regulatory Momentum in Our Core Regions
Regulatory Momentum in Our Core Regions European Union -15% CO2 fleet -45% CO2 fleet 2040: emissions reduction emissions reduction -90% CO2 1-2 Euro VI for new-truck sales1 for new-truck sales1-2 2010 Euro 72 2030 2035: 2050 -65% CO2 1-2 Substituting fossil China China China fuels and China IV China
Slide 12: Biomethane with HPDI today sets path for H2 HPDI tomorrow
Biomethane with HPDI today sets path for H2 HPDI tomorrow 100%+ 35bcm 57% Carbon reduction using Estimated annual EU Potential biomethane biomethane with HPDI biomethane production by market share for EU heavy- available today 2035 duty vehicles by 2050 HPDI using biomethane is on the road today Sou
Slide 13: Global Hydrogen Demand Increasing; Driving up Investment
Global Hydrogen Demand Increasing; Driving up Investment $240b Global Installed Electrolyzer Capacity Based on Goldman Sachs Global Hydrogen Demand Model 3500 Bull Scenario Announced global hydrogen 3000 investment through 2030 Global net zero by 2050 1.5⁰ 2500 60% (GW) 2000 Base Scenario Global net
Slide 14: H2 HPDI Value Proposition
H2 HPDI Value Proposition Lowest cost to Lowest cost to Low cost to develop industrialize operate 20% more power 10% more efficient than Preserves ICE than a diesel engine diesel engine and equivalent infrastructure and to fuel cell efficiency supply chain investments 15% more torque Minimal changes
Slide 15: Significant Test Results With Scania
Significant Test Results With Scania Real-world demonstration of the tremendous value and best-in-class performance that HPDI offers Producing performance and emissions results exceeding the diesel parent engine • Significant brake thermal efficiency improvement, when H2 HPDI applied to best-in- cla
Slide 16: HPDI Offers Greater CO2 Reductions per Euro Invested
HPDI Offers Greater CO2 Reductions per Euro Invested Cost Abatement in Tonnes of CO2 Reduced per €1,000 Invested WTW CO2 – includes fuel source and manufacturing emissions 16 14 12.8 Fuel Cells (tonnes CO2 per €1,000, per year) HPDI offers 12 More efficient HPDI solutions superior 10 Less efficient
Slide 17: Market Opportunities
Market Opportunities Three major global OEM engagements underway Key discussions ongoing with OEMs in all key global markets evaluating H2 HPDI Reaching secondary markets through existing OEM customer sales channels 17
Slide 18: Capturing LPG Fuel System Market Share
Capturing LPG Fuel System Market Share Pricing advantage drives continued demand ~35% ~40% Current IAM LPG Current OEM LPG LPG supply agreement with leading European OEM begins generating revenue late 2023 market share market share New OEM supply agreement drives our • Euro 6 deliveries begin in Q4
Slide 19: Diversified, Global Market Demand in Independent Aftermarket
Diversified, Global Market Demand in Independent Aftermarket Significant market share in key markets: • Europe, Middle East, South America, Asia Pacific, and Africa Trends: • Key growth due to high fuel prices, government incentives, and infrastructure improvements • Historical markets continue to g
Slide 20: Delayed-OEM Continues to be a Profit Driver
Delayed-OEM Continues to be a Profit Driver • Best-in-class bi-fuel systems • Lower investment for the development and production of alternative fuel vehicles • Shorter time to market • Higher flexibility in following market demand • Extension of the model range to smaller local volumes not justifyi
Slide 21: Clearly defined priorities
Clearly defined priorities Improving financial and operational strength Enhance financial performance • Revisit all contracts to secure price increases given inflationary conditions • Increase HPDI sales volumes, driving economic of scale and advance commercialization of H2 HPDI • Drive profitable g
Slide 22: Efficiently Allocating Capital
Supporting organic growth Right-sized capital program ($12-$15 million) Efficiently Repayment of debt Allocating $20 million of debt to be repaid in 2023 Capital Inorganic growth Accretive M&A targets that consolidate market share and advance growth 22
Slide 23: Delivered a Strong First Quarter
Delivered a Strong First Quarter Q1 23 Revenue Q1 23 Gross Margin Q1 23 Adj. EBITDA[1] Millions ($USD) Millions ($USD) $82.2 16% $(4.5) 7% YoY 34% YoY 26% YoY • Higher sales volumes in our • Higher sales volumes across • Higher revenues and improved delayed OEM, fuel storage, multiple businesses dro
Slide 24: Sustainability is a Core Principle
Sustainability is a Core Principle Sustainability is at the core of our technology strategy, our product portfolio, and our operations Governance Our ESG Strategy Stakeholder Engagement • Formed a 10-member ESG • Focused on taking • Learning, improving, and ensuring Steering Committee, led by the co
Slide 25: Why Westport?
Why Westport? Why Westport? • Leader in transportation fuel systems for clean, low carbon fuels • Enabling lower costs for our customers: lower cost of operation and low cost of emissions compliance • Proprietary HPDI fuel system technology, proven and in production now • Demonstrated superior perfo
Slide 26: Questions?
Questions? 26 26
Slide 27: Executive Leadership Team
Executive Leadership Team David M. Johnson Bill Larkin Lance Follett Fabian Redon Chief Executive Officer Chief Financial Officer Chief Legal Officer & Executive Chief Technology Officer & Board Director Vice President Nicola Cosciani Tim Smith Bart van Aerle EVP, Global Operations EVP & Chief of St
Slide 28: Independent Directors
Independent Directors Daniel M. Michele J. Brenda J. Rita Forst Hancock Buchignani Eprile Chair Anthony Prof. Dr. Karl Viktor Eileen Philip (“Tony”) Schaller Wheatman Hodge Guglielmin 28
Westport Fuel Systems — Investor Presentation (May 2023) on 6ix