Westport Fuel Systems, Inc. · TSX:WPRT
Westport Fuel Systems — Q4 2022 Earnings Presentation
18 slides from Westport Fuel Systems's earnings presentation, Mar 14, 2023
Slide 1: Q4 and Full Year 2022 Results
Q4 and Full Year 2022 Results March 14, 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, delayed-OEM vehicle conversions growth, projected renewable hydrogen production costs, future demand for LPG, future stra
Slide 3: Speaking Today
Speaking Today… David M. Johnson Bill Larkin Chief Executive Officer Chief Financial Officer Nasdaq/TSX: WPRT 3
Slide 4: Resolute year, positive trends emerging
Resolute year, positive trends emerging Revenue Adjusted EBITDA[1] ($ millions) ($ millions) • 2022 revenues of $305.7 million, slightly lower then FY21 driven by foreign currency translation from the weakening Euro. Excluding this $312.4 impact revenues would have increased by 9% $17.5 • 2022 Adjus
Slide 5: 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 6: 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 7: OEM business driving towards commercialized solutions
OEM business driving towards commercialized solutions % % 16+ €400m+ 25+ EU commercial vehicle Expected revenue from Delayed-OEM vehicle registrations in 2022 awarded LPG contracts conversions growth vs 2021(1) through 2035 expected in 2023 Leading the shift to lower-carbon alternative fuels 7 [1] S
Slide 8: Advancing Hydrogen Solutions in China
Advancing Hydrogen Solutions in China Developing innovative, specialized, and market-ready emission-reduction solutions Expanded manufacturing footprint in China supports future growth of hydrogen componentry business China is leading the • Ten-year, $10 million investment to build hydrogen innovati
Slide 9: Hydrogen economy and interest is growing
Hydrogen economy and interest is growing $1T 60% 254 Total global clean Production cost Hydrogen refueling energy investment in reduction projected for stations in Europe at 2022, hydrogen renewable hydrogen the end of 2022, a investments grew 3X by 2030 vs. 2020 21% increase in World H2 council gro
Slide 10: Demand and usage of clean, low-cost LPG will persist for decades globally
Demand and usage of clean, low-cost LPG will persist for decades globally LPG Annual Savings 11.3km/year - 13km/lt Petrol € 700 Price advantage drives Annual cost savings in Euros € 600 continued growth in LPG € 500 • Consistent LPG cost savings over € 400 the last 2 years in key markets € 300 • OEM
Slide 11: Fundamentals persisting despite macro headwinds
Fundamentals persisting despite macro headwinds - Lower sales volumes to India for light- + Sales volumes to Western Europe, duty OEM CNG products, CNG/Diesel especially Italy, Eastern Europe and Q4 2022 revenues spread continues to be pressured Asia Pacific negatively impacted by - LNG price differ
Slide 12: Adjusted EBITDA Year Over Year
(1) Adjusted EBITDA Year Over Year - Loss of equity - Increased material, - Increased R&D income due to manufacturing and spending for H2 the termination energy costs HPDI and sale of CWI - Lower sales volumes - Increased sales JV across both IAM and and marketing OEM segments expenses incurred by f
Slide 13: Financial Performance – OEM
Financial Performance – OEM Revenue Gross Margin (1) ($ Millions) amount in $ Millions $57.4 $5.1 -17% $47.8 $5.9M Gross margin 9% of revenue $0.8 Q4 21 Q4 22 Q4 21 Q4 22 Revenue Gross margin • Lower light-duty OEM business sales to OEMs in India, CNG/Petrol spread continues to be pressured (2)% of
Slide 14: Financial Performance – Independent Aftermarket
Financial Performance – Independent Aftermarket Revenue Gross Margin(1) ($ Millions) amount in $ Millions $30.2 $5.4 19% $4.2 $25.3 $1.2M Gross margin Gross margin 17% of 18% of revenue revenue Q4 21 Q4 22 Q4 21 Q4 22 Revenue • Recovery of sales into Western Europe, particularly Italy • Increased sa
Slide 15: Liquidity
Liquidity Addressing margin improvements, and cash conservation • Pricing action taken with customers • Working to monetize high levels of inventory Cash and Liquidity Debt & Cartesian Royalty Payable ($ Millions) ($ Millions) $12.9 $9.9 $5.5 $8.3 $124.9 $69.4 $53.0 $86.2 Q4 21 Q4 22 Q4 21 Q4 22 Cas
Slide 16: In Closing…
In Closing… • Aftermarket business a profit driver with further growth opportunities available • HPDI is on the road and is the solution today, saving customers money and helping fleets hit carbon targets • H2 HPDI is the future of the internal combustion for long-haul trucking • Making the necessar
Slide 17: Appendix
Appendix 17 17
Slide 18: Selected Quarterly Data
Selected Quarterly Data 1 Adjusted earnings before interest, taxes and depreciation is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. 18 2 Gross margin is a non-GAAP measure. Please refer to GAAP and N
Westport Fuel Systems — Q4 2022 Earnings Presentation on 6ix