September 2009 Mr. Kurt Sorschak, President & CEO

Transcription

1 Investor Presentation September 2009 Mr. Kurt Sorschak, President & CEO

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 the completion of the transaction, the synergies that can be achieved by the combination of Xebec and QuestAir, and information regarding the business, operations and financial condition of Xebec. Forward looking information contained in this presentation involve 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. This list is not exhaustive of the factors that may affect forward-looking information contained in this presentation. When used in this presentation, such statements use such words as anticipate, believe, plan, estimate, expect, intend, may, will and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involve 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. 2

3 Investment highlights Gas purification and upgrading technologies targeting the renewable energy sector Strong intellectual property portfolio focusing on natural gas and biogas Global sales and distribution network in North America, Asia and Europe Established international clientele Experienced management team 3

4 Xebec envisions that.. Natural Gas is the bridging fuel for transportation over the next 20 to 30 years The U.S. can be energy independent by 2020 Abundant domestic gas reserves can replace foreign oil 4

5 Mission To provide our customers with innovative solutions that transform raw gases into marketable sources of clean energy 5

6 Strategic milestones Xebec founded Domnick Hunter Ltd. A U.K. based filtration company acquires Xebec Xebec relocates to new manufacturing facility in Blainville Domnick Hunter is acquired by Parker- Hannifin, a U.S. based multinational MBO completed Xebec opens manufacturing facility in Shanghai, China Xebec opens SE Asia and Newcastle (U.K.) sales offices Merger with QuestAir Listing on TSX:XBC + = A World Powered by by Clean Energy A leader in the clean energy sector, offering superior gas purification solutions to a global clientele 6

7 Xebec worldwide > 1,300 customers: OEMs and petrochemicals > 8,700 adsorption systems installed worldwide 175 employees in Canada, Asia and Europe Burnaby (BC) Newcastle (UK) Blainville (QC) Shanghai Singapore Headquarters in Blainville (QC) R&D center in Burnaby (BC) Manufacturing facilities in Shanghai and Blainville (QC) Global sales network based in Singapore and Newcastle (UK) 7

8 Corporate snapshot at September 24, 2009 Stock symbol Shares outstanding Share price Market capitalization Cash position (at June 30/09) TSX:XBC 26.5 million C$0.80 C$21.2 million C$4.9 million 8

9 Technology & Product Offering 9

10 Business segments Xebec engineers and manufactures adsorption equipment and systems for clean energy applications Natural gas dryers for NGV refueling stations Biogas purifiers for biogas upgrading Hydrogen purifiers for hydrogen recovery Distributed small scale natural gas liquefaction 10

11 Segment products Natural gas dryers for NGV refueling stations Hydrogen purifiers for hydrogen recovery Proven design and technology Cost leadership through Chinese manufacturing Full four ranges of products Key Customers: Clean Energy, Petrochina, Sinopec, Shell Cost leadership through compact size Market-leading performance for small-capacity hydrogen plants Low-cost installation Key Customers: HydroChem, Air Liquide, Degussa, Iwatani 11

12 Segment products Biogas purifiers for biogas upgrading Distributed small scale natural gas liquefaction Cost leadership through compact size Low-cost installation Key Customers: Acrona (Verdesis SA), Montauk Energy, SCS Engineers, Phase 3 Compact size Easy and low-cost to install High output up to 30,000 gal/day of LNG Low operating costs Key Customers: Solensa 12

13 Key competitive advantage Strong Intellectual Property (IP) portfolio: 126 patents or applications in 39 patent families worldwide 27 distinct titles issued Key patents have 7-10 years remaining Key areas of IP protection: Rotary valves Structured adsorbent Advanced Pressure Swing Adsorption (PSA) cycles Application of PSA in fuel cell and industrial systems 13

14 The Growing Market for Alternative and Renewable Energy Technologies 14

15 The future market for natural gas 2 major stakeholders: Natural gas exploration Natural gas utilities Main markets: Power generation Industrial Commercial Residential Transportation According to forecasts Natural gas demand and prices to decline over the next 20 years Source: U.S. Energy Outlook Global Insight 15

16 Natural gas as a transportation fuel of the future Growing U.S. demand for carbonneutral, lower cost transportation fuels Obama administration s 10-year goal of energy independence from the Middle East Massive reserves of low-cost natural gas in U.S. Mature OEM technology for natural gas vehicles Impending Nat Gas Act 2009 in the U.S. Legislature 16

17 NGVs Infrastructure build-out CNG: Over 9.6 million NGVs worldwide including 110,000 in the U.S. Annual growth rate of ~ 18% 65 million NGVs by ,000 re-fuelling stations by 2020 LNG: Focus in the U.S. on 6.5 million heavy duty trucks & buses 3.5 million 18 wheelers will need LNG Fuel consumption per truck = 20 cars (~ 130 million cars) Source: IANGV 17

18 Biogas utilization options Solid Separated Organics Heat or Steam Landfill Agricultural Waste Biomethane/ Renewable Natural Gas Wastewater Electricity 18

19 Opportunity for biogas upgrading technologies $500 million program in Quebec to build anaerobic digesters to process municipal waste New law in S. Korea prohibiting ocean disposal of organic waste by December 2011 (London Convention) German legislation favors biogas upgrading for larger installations German target from 42 million m 3 currently to 6,0 billion m 3 by 2020 Biogas upgrading the legislative drive in the U.K. Renewable Fuel Standard (RFS 1) in the U.S. since 2007 RFS 2 will qualify landfill and biogas as advanced biofuel Biogas Production Incentive Act of 2009 (bonus of US$4.27 mmbtu) 19

20 Recent Financial & Operational Highlights 20

21 Selected financial information (in C$ unless indicated otherwise) For the six months ended June * 2008 Revenue 9,010,635 6,720,462 Gross margin (%) 39% 30% Net loss (482,559) (308,414) Cash 4,927, ,377 *Includes 19-day contribution from QuestAir transaction completed on June 12, 2009 Revenue increase driven by strong sales in Asia Gross margin improvement due to Shanghai manufacturing efficiencies Net loss reflects the addition of the Shanghai facility as well as transaction-related expenses Cash increase due to the QuestAir transaction 21

22 Diversified product lines (% of revenues) * 7% 3% 9% 1% 25% 14% 68% 73% Natural gas dryers Compressed gas filtration Air dryers (industrial) *Includes 19-day contribution from QuestAir transaction completed on June 12, 2009 Gas purification Engineering services % 25% 7% 0% 0% 2009* 73% 14% 9% 1% 3% 22

23 Diversified geographic reach (% of revenues) * 27% 2% 13% 1% 5% 71% 35% 46% Middle East North America South America *Includes 19-day contribution from QuestAir transaction completed on June 12, 2009 Europe % 71% 0% 27% 2% 2009* 46% 35% 13% 5% 1% Asia 23

24 Strategic priorities Complete integration and leverage QuestAir technology Continue to build leadership positions in targeted growth markets Natural gas dehydration Biogas upgrading Enter natural gas liquefaction market Continue to build sales traction and partnerships in world markets 24

25 Experienced management team Kurt Sorschak President & CEO Jean Vézina VP Finance & CFO Co-founder of Xebec Lead management buyout from Parker-Hannifin in 2007 Previously General Manager of the Canadian Division of Parker Hannifin Founding member of the Quebec Biogas Association More than 25 years of financial management experience VP Finance & CFO at Xebec since February 2009 Previously CFO at Axcan Pharma for 15 years Andrew Hall VP Asia-Pacific & Acting VP Sales & Business Development Previously President & CEO of QuestAir Also held process engineering positions with Teck Cominco and Gold Fields of South Africa Dr. Donald Gongaware VP Operations Previously Vice President, Operations with QuestAir Also held a number of senior management positions in the clean energy and chemicals industries, including Prometheus Energy Dr. Daryl Musselman VP Engineering & Technology Previously Vice President Technology with QuestAir Also worked in design and product development for a Tier 1 automotive supplier 25

26 Investment highlights Gas purification and upgrading technologies targeting the renewable energy sector Strong intellectual property portfolio focusing on natural gas and biogas Global sales and distribution network in North America, Asia and Europe Established international clientele Experienced management team 26

27 Xebec peers Company Name Recent Price Market Cap TEV (1) Gross Margin LTM TEV/Revenues LTM 2009E 2010E TEV/EBITDA (2) LTM 2009E 2010E LTM P/E 2009E 2010E Fuel Systems Solutions, Inc. $ % 1.6 x 1.6 x 1.3 x 10.2 x 10.8 x 8.6 x 18.2 x 21.5 x 18.0 x Clean Energy Fuels Corp. $ % 6.4 x 6.3 x 3.8 x neg nmf 22.8 x neg neg 62.7 x Westport Innovations Inc. $ % 2.8 x 2.6 x 1.6 x neg neg 80.3 x neg neg neg Xebec Adsorption Inc. $ % 1.0 x na na 10.3 x na na 19.7 x na na Total Average % 3.0 x 3.5 x 2.2 x 10.2 x 10.8 x 37.2 x 19.0 x 21.5 x 40.3 x *Source: Company Filings, Reuters Estimates, Capital IQ All amounts in CAD millions, except per share data. Share prices as at September 24, 2009 (1) Total Enterprise Value = Market Cap + Net Debt + Minority Interest + Preferred Shares (2) Earnings before interests, taxes, depreciation and amortization 27

28 Contact information Kurt Sorschak President President & CEO CEO Jean Vézina Vice Vice President President Finance Finance & CFO CFO

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