Westport Fuel Systems, Inc. · NASDAQ:WPRT
Westport Fuel Systems — Investor Presentation (November 2020)
34 slides from Westport Fuel Systems's investor presentation, Nov 15, 2020
Slide 1: Investor Presentation
Investor Presentation November 15, 2020
Slide 2: Forward Looking Statements
Westport Fuel Systems Forward Looking Statements This presentation is being issued for informational purposes only, is not intended to provide the basis for any credit or other evaluation and does not form part of any offer or invitation to sell or issue any securities or any solicitation of any off
Slide 3: Why invest?
Why invest? Premier technology position and patent portfolio in clean, gaseous fuel systems and components Our solutions deliver performance, fuel efficiency and economic benefits while meeting ever more stringent emissions standards to address global climate challenges Recognized global brand
Slide 4: Westport Fuel Systems at a Glance
Westport Fuel Systems at a Glance Tier 1 Manufacturing Renewable Automotive Supplier 7 Global Locations Alternative Fuels 70 1,400 >100 Patents & Countries (Sales) Global Distributors Applications Nasdaq:WPRT / TSX:WPRT PAGE 4
Slide 5: Alternative Fuel Capabilities
Alternative Fuel Capabilities Broad Range of Products that Deliver Emission Reductions LPG CNG LNG H2 Liquefied Petroleum Compressed Liquefied Hydrogen Gas / Propane / Natural Gas Natural Gas Autogas • Components and complete • Components and complete • Complete systems • High and low pressure syste
Slide 6: Hydrogen Capabilities
Hydrogen Capabilities • Pioneer in H2 components Pressure Relief Device Remote PRD (PRD) tank end plug supplied under GFI brand • Full portfolio of H2 components • 350 bar pressure: > 40% market share for tank Filling valve (pending) valves • 700 bar pressure: market shifting in this direction • MD/
Slide 7: Hydrogen Development Pathway
Hydrogen Development Pathway Already participate across all transportation application and sell components to Tier 1 suppliers Optionality for another cost- competitive pathway to reduce CO2 emissions on a proven ICE platform Testing to commence Q1 2021 Nasdaq:WPRT / TSX:WPRT PAGE 7
Slide 8: Performance Highlights: Executing on our Strategy
Performance Highlights: Executing on our Strategy • 2019 Transportation revenue of $305M Deliver Sustained Growth • Growth mainly due to HPDI ramp in Europe and development revenues • Independent Aftermarket generated an increase of $5.8M • Tripled HPDI volume in Europe in 2019, continued growth tra
Slide 9: Macro Trends Driving Rapid Change
Macro Trends Driving Rapid Change Stringent Regulatory Demand for Clean, Refuelling Renewable Gas for Sustainability Leadership Frameworks Affordable Transport Infrastructure Build-Out Transport at Scale and Differentiation • European CO2 • Population growth • CNG and LNG • The “ready now” • Deploy
Slide 10: Stringent Regulatory Frameworks Driving a Real-Time Market Response
Stringent Regulatory Frameworks Driving a Real-Time Market Response Nasdaq:WPRT / TSX:WPRT PAGE 10
Slide 11: HPDI Delivers CO2 Emission Reductions Now
HPDI Delivers CO2 Emission Reductions Now Europe (2019 baseline): The only commercially viable, cost-competitive HD technology solution available today to meet EU regulations -15% CO2 required by 2025 -30% CO2 required by 2030 Fossil LNG • HPDI 2.0 reduces CO2 more than United States: o The 2025 EU
Slide 12: Natural Gas Offers OEMs a Compliance Pathway for Europe's Light-Duty Emission Standards
Natural Gas Offers OEMs a Compliance Pathway for Europe’s Light-Duty Emission Standards • EU represents ~ 70% of our sales The EU’s stringent regulations for passenger cars/vans requires a ~33% • LNG vehicle reduction in CO2 emissions in 2025 and ~50% in 2030 compared to 2018. registrations and infr
Slide 13: Competitive Total Cost of Ownership and Emission Reductions
Competitive Total Cost of Ownership and Emission Reductions Nasdaq:WPRT / TSX:WPRT PAGE 13
Slide 14: Total Cost of Ownership and Emission Reductions
Total Cost of Ownership and Emission Reductions Passenger Cars Heavy-Duty Trucks Petrol LPG CNG Diesel HPDI LNG Incremental price per vehicle €1,000 €1,500 €40,000 Fuel cost (€/litre or kg) €1.50 €0.65 €0.95* €1.36 €0.95* Annual distance (km) 20,000 20,000 20,000 120,000 120,000 Fuel consumption (km
Slide 15: HPDI 2.0 – Commercially Available and Viable Now
HPDI 2.0TM – Commercially Available and Viable Now • Regulation and total Westport Battery Hydrogen cost of ownership Long Haul HD Truck Application Diesel HPDI Electric FCV will drive growth 2.0™ • Same torque and efficiency as diesel Meet EU 2025/2030 requirements? X engine with reduced CO2
Slide 16: Future Heavy-Duty Transportation Fuel and Technology Mix
Future Heavy-Duty Transportation Fuel and Technology Mix Difference Compared to Diesel Heavy Duty Truck, 400 mile daily range @ current costs and technologies: Fuel Fuel + Propulsion Daily Daily Fuel System Storage Storage System Fueling Fuel Size Weight Cost Time Cost (cubic feet) (pounds) (approxi
Slide 17: Clean, Market-Ready, and Sustainable Transportation at Scale
Clean, Market-Ready, and Sustainable Transportation at Scale Nasdaq:WPRT / TSX:WPRT PAGE 17
Slide 18: Global Overview of Natural Gas and LPG Vehicles
Global Overview of Natural Gas and LPG Vehicles Natural Gas Vehicles in Service LPG Vehicles in Service • 55 million natural (in thousands) (in thousands) gas and LPG vehicles are Africa 295 North America Mexico 350 Japan 340 China 240 USA 210 currently in service, Europe 2,063 225 Australia 700 wit
Slide 19: China: World's Largest Natural Gas Truck Market
China: World’s Largest Natural Gas Truck Market • Class 7 and 8 HD natural gas vehicles offered by 40 OEMs Natural Gas Trucks in Operation in China (2009 – 2019) • The majority of HD natural gas trucks are Natural Gas Trucks powered by LNG • LNG costs ~35 to 55% 350 less than diesel 303 300 (‘000s U
Slide 20: Fuel Availability Drives Scale: Europe Case Study
Fuel Availability Drives Scale: Europe Case Study • LNG fueling infrastructure grew 90% since 2017 • 330+ LNG stations spanning 21 countries • CNG fueling infrastructure grew 10% in 2019 • 3,800 CNG stations with ten countries having more than 100 CNG stations Source: NGV Europe (2020) Available at
Slide 21: LNG for Heavy-Duty Trucking Scaling in Europe
LNG for Heavy-Duty Trucking Scaling in Europe • LNG truck registrations increased 175% in 2019 Start HPDI 2.0 HPDI 2.0 Launched (Europe) HPDI 2.0 Development & Program Supply Agreement (China) • CNG vehicle registrations increased 40% over 2017 2014 2015 2016 2017 2018 2019 2020 Heavy-Duty Natural G
Slide 22: Can We Make Road Transport Carbon Neutral?
Can We Make Road Transport Carbon Neutral? With zero net-carbon biomethane and a fossil gas BLEND, there is enough renewable gas feedstock to power 100% of the EU 28 truck energy demand in 2030 Source: WFS Analysis (2019) presented to SAE International with estimates based on CARB LCFS averages and
Slide 23: 3Q20 Results
3Q20 Results Nasdaq:WPRT / TSX:WPRT PAGE 23
Slide 24: 3Q20 Headline Financial Results
3Q20 Headline Financial Results Revenues $65.4 million Q-o-Q sales increased 82% Positive Net Income $0.8 million Liquidity Improved: Cash Balance increased by $17 million to $46.3 million Nasdaq:WPRT / TSX:WPRT PAGE 24
Slide 25: Financial Highlights – 3Q20 v 3Q19
Financial Highlights – 3Q20 v 3Q19 ($ millions, except income per share) 3Q20 3Q19 $ O/(U) • Lower revenues due to the pandemic’s impact on IAM and OEM LD sales. Sales Revenue $ 65.4 $ 75.4 $ (10.0) showed progressive Cost of revenue 55.4 57.5 (2.1) recovery from the first half of the year Gross Mar
Slide 26: Segmented Performance – 3Q20 vs 3Q19
Segmented Performance – 3Q20 vs 3Q19 • OEM revenue increased due to higher sales 3Q20 volumes of HPDI Operating Depreciation & Equity partially offset by Revenue Income (loss) Amortization Income contractual price OEM $ 37.4 $ (4.8) $ 2.1 $ (0.3) concessions and reduced IAM 28.0 1.7 1.3 - engineerin
Slide 27: Liquidity – Cash Flow
Liquidity – Cash Flow Adjusted Operating Cash Flow ($ millions) 3Q20 3Q19 $ O/(U) Net cash from (used by) operating activities before • Impact to adjusted W/C $ 0.3 $ 3.5 $ (3.2) operating cash flow from loss of gross Change in working capital (4.6) (6.7) 2.1 margins partially offset CWI Dividend 4.
Slide 28: 3Q20 Liquidity Position
3Q20 Liquidity Position • Cash balance increased by $17m in 3Q20 due Liquidity Liabilities to: o $23M in Liquidity Cash Position 3Q20 2Q20 Liabilities 3Q20 2Q20 Decree backed loans Canada (WPI) $5 $5 Cartesian – Convertible $10 $17 with UniCredit and Italy (MTM) $27 $12 EDC – Term Loan $13 $13 Deuts
Slide 29: Delivering Clean Transportation Solutions
Delivering Clean Transportation Solutions Cost Competitive and Financial Discipline and Gaseous Fuels Industry Commercially Available Performance Leader Developed, validated, in Strong record of improvement Sales in 70 countries production, for sale and in use CNG, LNG, RNG, LPG, H2 Sustainable prof
Slide 30: Appendix
Appendix Westport @uel Systems
Slide 31: Navigating COVID-19
Navigating COVID-19 • All plants operating at normal capacity • Monitoring guidance from public health officials; Continue to maintain safe work environment, first class customer service and support • Worked with existing and new lenders to secure government-backed financing in Canada and Italy to s
Slide 32: 2019 Corporate Highlights: Steady Revenue Growth
2019 Corporate Highlights: Steady Revenue Growth • Transportation revenue grew to $305M • Up 13% over 2018 ($ in millions) • Up 33% over 2017 • Revenue growth due to HPDI volume ramp and increased DOEM services Balanced business with market-ready solutions and customers in 70 countries PAGE 32 Nasda
Slide 33: 2019 Corporate Highlights: Positive Net Income From Continuing Operations
2019 Corporate Highlights: Positive Net Income From Continuing Operations • $41M improvement from 2018 2017 Net Income 2018 Net Income 2019 Net Income ($62.9M) ($40.8M) $0.2M • $62M improvement from 2017 4.9 0.6 ($ in millions) • Two quarters of (3.0) (2.3) (5.7) positive net income from continuing
Slide 34: 2019 Corporate Highlights: Positive EBITDA and Adjusted EBITDA
2019 Corporate Highlights: Positive EBITDA and Adjusted EBITDA • First full year of positive EBITDA EBITDA Adjusted EBITDA • Seventh consecutive 2017-2019 2017-2019 quarter of positive 15 11.7 15 9.4 adjusted EBITDA 10 10 8.5 7.3 8.1 ($ in millions) 5.4 5.3 4.2 5 4 4.3 3.6 5 3 5 0.2 0.2 0 0 • Positi
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