Westport Fuel Systems, Inc. · TSX:WPRT
Westport Fuel Systems — Non-Deal Roadshow (July 2017)
35 slides from Westport Fuel Systems's roadshow presentation, Jul 14, 2017
Slide 1: Company Overview
July 10-13, 2017 Company Overview A final base shelf prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the Canadian provinces (other than Quebec). A copy of the final base shelf prosp
Slide 2: Cautionary Note and Risk Factors
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. There are certain risk factors that should be carefully reviewed by prospective purchasers. See "Risk Factors" in the final base shelf prospectus relating to these securities.
Slide 3: Offering Summary
Offering Summary Issuer Westport Fuel Systems Inc. Symbol / Exchange WPRT / NASDAQ GS Offering Type Registered Common Stock (100% Primary) Offering Size $25 million Over-Allotment Option 15% Management Participation Yes Marketing July 10th – July 13th Expected Pricing July 14th (pre-market open) Use
Slide 4: Westport and Fuel Systems merged in June 2016, bringing together two industry leaders
Westport and Fuel Systems merged in June 2016, bringing together two industry leaders Nancy Gougarty appointed CEO in July 2016 Global management team with extensive industry experience Driving innovation to power a cleaner tomorrow The premier global company for the engineering, manufacturing and s
Slide 5: New Leadership Driving Change Across the Company
CEO since July 2016 COO from July 2013 to July 2016 Focus on transforming the company into a profitable and sustainable organization Extensive tenure at TRW and General Motors 30+ years of automotive expertise including roles in application engineering, finance, operations, sales and engineering Nan
Slide 6: Segments
SEGMENTS 1. Adjusted EBITDA is a non-GAAP number Automotive Systems and components for Passenger cars, Commercial vehicles, Trucks Electronics and High Pressure components CNG Refueling OEM & Aftermarket Corporate & Technology Advanced Engineering GDI / PFI technology HPDI (High Pressure Direct Inje
Slide 7: Broad Range of Brands and Products for Diverse Applications
Market leadership Broad Range of Brands and Products for Diverse Applications Breadth of Reach Medium-Duty Heavy-Duty Passenger Car & Light Truck Refueling Electronics High Horsepower Brand Equity in Alternative Fuel Space
Slide 8: Automotive
Automotive
Slide 9: Automotive Segment: Complete Product Lines for Various Fuels and Markets
Market leader for alternative fuel systems and components Serves customers in 70+ countries with leading brands Vertically integrated solutions (OEM, DOEM1) and aftermarket kits Propane (LPG), natural gas (CNG & RNG), and hydrogen solutions create fuel cost savings and reduced emissions Automotive S
Slide 10: Examples of Westport Fuel Systems Content in Vehicles
High pressure CNG lines CNG cylinder valve Filling valve & external CNG filling valve CNG & LPG reducer Fuel injection rail CNG & LPG filter Electronic controls Automotive Segment Examples of Westport Fuel Systems Content in Vehicles
Slide 11: Automotive Segment Market Dynamics and Outlook
More than 50M LPG and CNG vehicles globally, ~4% of total1 Many countries have penetration rates in excess of 10% Each region has its own characteristics: fuel price differential, government policies and fueling infrastructure Market consolidation in recent years; OEMs demanding more technologically
Slide 12: Cummins Westport joint venture
CUMMINS WESTPORT joint venture
Slide 13: Cummins Westport Joint Venture
CUMMINS WESTPORT Joint Venture Global Leader in Spark Ignited Natural Gas Engines 50% Joint Venture with Cummins Inc. formed in 2001; ends in 2021 Develops and sells 5.9-12.0 litre spark-ignited natural gas engines for trucks and buses Over 70,000 Cummins Westport engines on the road worldwide ~ 30%
Slide 14: 2018 Dedicated Natural Gas Engines
“Move to Zero” emissions strategy All engines at low or ultra-low NOx, 50% to 90% below current standards Able to run on renewable natural gas (RNG) EPA/ARB Ultra Low emissions and On-Board Diagnostics (OBD) certification Lowest emission medium- and heavy-duty engines in North America Equivalent emi
Slide 15: Cummins Westport Outlook
“Move to Zero” emissions strategy offers performance and reliability at an ultra-low emissions level, available TODAY Strength in bus and refuse markets: continued positive owner-operator feedback Higher spending in recent years to develop 6.7 litre engine, ultra-low NOx technology, and to meet fede
Slide 16: Corporate and technology
Corporate and technology
Slide 17: Delivering Products for Tomorrow
Proprietary technologies and vast intellectual property portfolio Advanced Engineering HPDI (High Pressure Direct Injection engine technology) HESI (High Efficiency Spark Ignited engine technology) Cryogenics (Fuel Storage and delivery solutions) Corporate and technology Delivering Products for Tomo
Slide 18: Fully Integrated Westport HPDI 2.0 Truck Solution
Corporate and technology Fully Integrated Westport™ HPDI 2.0 Truck Solution HPDI 1.0 Launched HPDI 2.0 Launch 2010 2011 2012 2013 2014 2015 2016 2017 HPDI 1.0 Production Ended HPDI 1.0 HPDI 2.0 Based on Cummins ISX15 Fuel system installed by Westport Sold and warranted by Westport 1,300 trucks put i
Slide 19: Westport HPDI 2.0 Truck Solution
WESTPORT HPDI 2.0 TRUCK SOLUTION Gas Conditioning Module (GCM) HPDI Control Software Tank Selection Control Manifold Gas Temperature Sensor LNG Tank Module On Engine On Chassis On LNG Tank OEM Engine Integrated Gas Module LNG Pump Control Manifold Fuel Level Signal CANditioner Cryogenic High Pressur
Slide 20: Westport HPDI 2.0 Commercialization
Begin shipping HPDI 2.0 commercial components to OEM launch partner in second half of 2017 Westport Fuel Systems will be a Tier 1 supplier with a fully integrated solution Europe initial target market due to higher diesel prices and demand for GHG reduction Active discussions with multiple OEMs New
Slide 21: Financial Overview
Financial Overview
Slide 22: Achieving critical objectives to improve financial position
Successful Company-wide restructuring efforts following June 2016 merger and new CEO appointment in July 2016 Sold Industrials business for $87.5 million cash Achieved $30 million of run-rate, merger cost savings one year early Consolidating Automotive footprint across Europe, North America, South A
Slide 23: Financial update
Financial update 2Q 2017E Revenue: $57-59M Cash: ~$87.0M 1Q 2017A Revenue: $60.0M Gross Margin: 29.2% AEBITDA: ($4.1M) Cash: $47.7M FY 2017E Automotive Segment Revenue: $200-230M Note: Figures from continuing operations Common Shares Outstanding at July 8, 2017: 111,176,445
Slide 24: Key Points: Equity Financing and 2H 2017 Pro-Forma Cash Walk
Key Points Cash used in operations expected to decline going forward Commercial launch of HPDI 2.0 technology Decline in HPDI-related R&D expenses4 Continued realization of expense reductions Reduction of cash interest expense by ~$3.8M per year, assuming full repayment of the subordinated debenture
Slide 25: Debt Repayment Schedule
Subordinated Debentures of CAD$55 million (USD$42 million1) due on September 15, 2017 Senior revolving was refinanced in March 2017 for five years at similar terms Convertible debt with Cartesian Capital has a conversion price of USD$2.17 Other bank financing is a 0.3M € mortgage loan repayment whic
Slide 26: Forward-looking statements
This presentation contains forward-looking statements, including statements regarding the result, timing and financial metrics associated with Westport Fuel Systems' operating business units and consolidated business, revenue and cash usage expectations, Target adjusted EBITDA margins, timing and am
Slide 27: Appendix
Appendix
Slide 28: Alternative fuel capabilities
alternative fuel capabilities Broad Range of Fuels that Deliver Emission Reductions CNG Compressed Natural Gas Components and complete systems Breadth of applications Monofuel, bi-fuel, dual fuel solutions LPG Liquefied Petroleum Gas / Propane / Autogas/ BioLPG Components and complete systems Breadt
Slide 29: Premier Technology Position
Long history of deep technology innovation and engineering capabilities Strong intellectual property position Existing and applied for patents covering CNG, LNG, and LPG components and systems worldwide Significant investment in research and development for gaseous fuelled transportation application
Slide 30: Westport HPDI 2.0 technology
Westport High pressure direct injection HPDI 2.0 has 20% lower tank-to-wheel GHG emissions than an equivalent diesel engine and can run on 100% renewable fuels. Revolutionary new alternative fuel technology for heavy duty truck segment; 90-95% natural gas and 5% to 10% diesel fuel Current natural ga
Slide 31: Westport HPDI Payback analysis
Westport™ HPDI Payback analysis NOTE: ALL PRICES WILL BE SET BY THE OEM Source: Fuel price data from www.globalpetroprices.com and Westport Fuel Systems analysis In Various Countries FOR ILLUSTRATIVE PURPOSES ONLY
Slide 32: Westport HPDI Payback analysis In Various Countries
Westport™ HPDI Payback analysis In Various Countries NOTE: ALL PRICES WILL BE SET BY THE OEM Source: Fuel price data from www.globalpetroprices.com and Westport Fuel Systems analysis FOR ILLUSTRATIVE PURPOSES ONLY
Slide 33: 1Q 2017 Results
Restructuring and efficiency actions taken since the merger are yielding improvements, with further actions to come Industrial business moved to Discontinued Operations in 1Q’17 financial performance 1Q 2017 Results As of March 31, 2017 1Q 2017 Product Revenue $56,329 Service & Other Revenue 3,694 T
Slide 34: Cartesian Overview
Executed January 11, 2016 and amended March 6, 2016 Three main tranches of investment in Westport by Cartesian: Payment to Westport of $17.5 million in exchange for certain contingent payment rights (CWI and HPDI / Volvo royalty amounts) Purchase of an economic interest in the Weichai Westport Inc.
Slide 35: Industry experienced executive team
Industry experienced executive team Clear Alignment of Goals Ashoka Achuthan CFO 20+ years of Senior Finance roles with Siemens in Asia, Europe and North America Proven track record of financial management, investments and driving profitability Board member of Cummins Westport and Weichai Westport A
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