ENABLING PROFITABLE GENERATION OF LOW CARBON FUELS

Transcription

1 ENABLING PROFITABLE GENERATION OF LOW CARBON FUELS

2 Forward-looking Statements Certain statements in this presentation may constitute "forward-looking" statements within the meaning of applicable securities laws. This forward-looking information includes, but is not limited to, the expectations and/or claims of management of Xebec with respect to information regarding the business, operations and financial condition of Xebec. Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Xebec or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements use words like "anticipate", "believe", "plan", "estimate", "expect", "intend", "may", "will" and other similar terminology. This list is not exhaustive of the factors that may affect forward-looking information contained in this presentation. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involving significant risks and uncertainties should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 2

3 Why invest in Xebec? Accelerating revenue and earnings 75% revenue CAGR from 2016 to projected 2019, projected earnings growth of 500% from 2018 to projected 2019 Exponential backlog growth of $ 71.4M in global orders Won business over competitors in France, Italy, US, Canada Operates in a dynamic and growing market of $ 6B + Adoption is accelerating in both private markets and government directives TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 3

4 Climate Change Driving the urgent need for renewable energy Solutions must be put in place NOW Solar and wind are vital to a low-carbon energy transition but they can t be stored yet Other low-carbon options are ready to be utilized, including low carbon renewable gases TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 4

5 What are renewable gases? Low to zero carbon energy Renewable Natural Gas Renewable Hydrogen Synthetic Methane TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 5

6 Renewable Gases Low-carbon fuels that will bridge us to the low-carbon economy Renewable Natural Gas (RNG), Renewable Hydrogen and Synthetic Methane are all low-carbon fuel alternatives What makes gases renewable is their source. In the case of RNG it s waste, specifically decomposing organics, waste water sludge and manure Landfills Waste Water Treatment Waste Anaerobic Digestion Gas Upgrading Renewable Gases (RNG) Agri-Food (Farms) TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 6

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8 Why is Xebec gaining traction? Leading technology and support Xebec s Winning Value Proposition LOWEST OPERATING COSTS MAXIMIZED UPTIME HIGH RECOVERY RATES Equipment design, manufacturing, service and support business with best in class technology for producing renewable gases Invested over $ 60M in proprietary technology that allows developers, operators, and financiers to successfully realize profitable renewable gas projects Over 200 RNG installations globally TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 8

9 Market Recognition Strong value proposition has recently led to major contract wins $ 51M minimum order commitment with Sapio Group of Italy for multiple biogas upgrading plants $ 5.9M contract for multiple units in France for 2019 delivery Entered the Brazil biogas upgrading market with a first order Multi-million dollar order from Enbridge for a turnkey biogas upgrading system - City of Toronto s first RNG facility Landfill gas upgrading order from a large U.S. based customer TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 9

10 Business Model Business model is set up for significant recurring revenue 1 Equipment Sales Design and build systems that deliver Renewable Gases 2 Build, Own, Operate Setup, own and manage low carbon fuel projects 3 Service and Support Industrial products, parts, maintenance and operation contracts TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 10

11 Equipment Sales For renewable gases, compressed air and natural gas TSX: XBC / OTC: XEBEF / FRANKFURT XB6.F 11

12 Build, Own, Operate Mid-Market Energy Infrastructure Assets TSX: XBC / OTC: XEBEF / FRANKFURT XB6.F 12

13 Industrial Products, Service, Support Dryers, Filters, Spare Parts, Commissioning, Remote Monitoring TSX: XBC / OTC: XEBEF / FRANKFURT XB6.F 13

14 Market Size A large and growing global market Strong and growing market in France, Italy, United States, and Canada Market for equipment sales exceeds $ 6B in Xebec target markets - based on estimated need to provide systems for ~1,700 projects Driven by new environmental targets, governmental policy/regulations incentivizing utilities and businesses to use renewable gases As a result, prices for RNG are anywhere from 3-20x fossil fuel based natural gas TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 14

15 Market Validation Companies and governments are making major investments California Agencies Select Dairy Biomethane Projects - $ 319 Million Pilot SNAM: 850M in investments in TEC (Tomorrow s Energy Company), with minimum 200M in new green business lines ENGIE- 800M to develop green gases in the next 5 years in France More growth & jobs 500M in EU funding for clean energy infrastructure State aid: Commission approves 4.7B public support scheme for advanced biomethane and biofuels in Italy TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 15

16 Competitive Landscape High Reliability Low High Operating Expense Low TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 16

17 Financial Highlights Revenue up 100.0% to $8.2M vs Q3 2017: $4.1M Backlog increased by $54.7M $71.4M* vs Nov 28/17: $16.7M Net Profit $0.6M vs Q3 2017: $0.1M Return on Revenue 7.8% vs Q3 2017: 2.3% Positive EBITDA at $1.1M vs Q3 2017: $0.3M GP Margin Improvement vs Q2 34.0% vs Q2 2018: 31.6% Revenue per Employee $373K** vs Q3 2017: $267K Working Capital Ratio 1.4:1 $3.9M vs Dec 31, 2017: $1.8M 1.3:1 Operating Cash Flow $250K vs Q3 2017: $(19K) **annualized *Includes order commitment of $51M over 3 yrs TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 17

18 Positioned for Growth Setting the foundation for $ 40.0M* $ 23M in credit facilities established mid with EDC to satisfy working capital needs Closed a $ 7.0 million equity raise in Q4/18 Closed first acquisition: acquired a Service and Support Company in Ontario in Q4/18 for 2.2 million (2 more acquisitions in 2019) Revenue $ 9.6M $ 14.7M $ 25.0M* Earnings per share (EPS) for 2019 are expected in the range of 0.05 to Year *Includescompany guidance TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 18

19 Investment Summary Xebec is an attractive investment today Rapid Revenue Growth 75% CAGR from 2016 to projected 2019, with growing recurring revenue component Accelerating Earnings Forecasted earnings growth of 500% from 2018 to 2019 with positive double digit earnings growth outlook for coming years Low P/E Multiple Forward P/E multiple of 11 for 2019, compared to average market multiple of 18 for the TSX TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 19

20 Capital Market Profile Exchange and Ticker Info: TSX-V: XBC OTC: XEBEF FRANKFURT: XB6.F Corporate Headquarters: Montreal, Canada Shares Outstanding: 55,786,970 Shares Fully Diluted: 69,207,136 Stock Price: (Jan. 25, 2019): Week High / Low: $ $0.45 Market Capitalization on Date: C$43.51 million In Business Since: 1967 Number of Employees: ~88 Q3/18 Revenues: C$8.2 million TTM Revenues: C$21.3 million Inside Ownership : 17.4% Institutional Ownership : ~30% TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 20

21 Management, Board, Awards Kurt Sorschak Chairman of the Board, President & CEO Co-founder of Xebec, developed it from a local compressed air and gas dryer manufacturer into the international company it is today Dr. Prabhu Rao Board Director & COO Former CEO of McPhy Energy North America, seasoned executive with over 15 years of experience in the alternative energy industry Louis Dufour CFO 20+ years of corporate finance and operational experience, most recently as a Partner of CFO Optimum TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 21

22 Management & Board William Beckett Lead Board Director Joseph H. Petrowski Board Director Guy Saint-Jacques Board Director Dr. Peter Cheng General Manager, Xebec China Dr. Francesco Massari General Manager, Xebec Europe Dr. Amir Ghasdi Director, Business Development TSX-V: XBC / OTC: XEBEF / FRANKFURT: XB6.F 22

23 Xebec's First Italian RNG Project is Operational Photos from the biogas upgrading plant in Modena, Italy

24 Kurt Sorschak President & CEO TSX-V: XBC OTC: XEBEF FRANKFURT: XB6.F