september 2016 - xebec · • desiccant hla, hra, bpa, vra ... compressed air treatment (cat)...
TRANSCRIPT
Investor Presentation September 2016
www.xebecinc.com
Caution Concerning 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.
Forward-looking Statements
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www.xebecinc.com
A leading provider of compressed air
& gas purification, dehydration,
generation, filtration & separation
solutions for the natural gas, field gas,
biogas, helium, oxygen, nitrogen and
hydrogen global markets.
Companies and public entities looking to
reduce their carbon footprints through
clean energy solutions.
Gas Purification, Separation & Filtration
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Who we are Who we serve What we do
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TSXV: XBC
Xebec designs, engineers, and
manufactures innovative products that
transform raw gases into marketable
sources of clean and renewable energy,
and supports its products with a solid
aftermarket and service offering.
Established in Montreal 1967
www.xebecinc.com
Blainville (QC)
Shanghai
Singapore
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Headquarters in Blainville (QC) Manufacturing and Sales
R&D in Blainville (QC)
Sales & Engineering Office in Houston, Texas
Manufacturing and Sales in Shanghai
Sales & Engineering Office in Brescia, Italy
Sales Partners in Singapore, France, Italy, Austria
Xebec is globally represented with more than 1,500 customers and 9,000 installationsworldwide
Internationally Recognized
Houston (TX)
Italy
France
Austria
www.xebecinc.com 5
15 years of development in adsorption-based gas
purification, separation and filtration; over $60M
invested
Complete proprietary product line with respect to
rotary valves and fast cycle adsorption processes
Integration of membranes into overall system
designs
Strong process capabilities in gas purification &
separation
Ongoing development of next generation
purification products, especially membrane and
hybrid systems
Current adsorption technology is applicable to all
products segments
Xebec H2X unit installed at ExxonMobil
refinery in 2007
Proprietary Products and IP Assets
Membrane module for BGX
biogas upgrading
www.xebecinc.com6
Product Solutions:
Full Range of Capital Equipment
CAPITAL EQUIPMENT SEGMENTS
Biogas Upgrading Units /Systems
• PSA-M3200, PSA-M3300
Compressed Air Dryers
• Desiccant HLA, HRA, BPA, VRA
• Refrigerant Dryers
• Modular Dryers
Compressed Natural Gas Dryers
• STV, STR, DTR
Hydrogen Purifiers
• PSAH3100, H3200, H3300
Membranes
• CO2, RMX
Nitrogen Generators / Skids
• N2X-PSA, N2X-MEMBRANE
Xebec as a capital equipment company has installed over 9000 units globally over the last 50 years
Success has been driven by innovation and proprietary technology
Xebec offers a full range of gas and air purification, filtration & separation products
www.xebecinc.com7
AFTERMARKET SEGMENTS
Xebec CNG Filters & Elements
• XL, XM, XH, XT, XZ, XC, XW
• XV Range for Onboard Vehicles
Xebec Air Filters & Elements
• XL, XM, XH, XT, XZ, XC, OWS
Alternative Elements
• Parker
• DH
• Walker
• Hankison
Parts & Accessories
• Valves
• Drains
• Gauges
• Adsorbents
• Mufflers
• Strainers
Service Offerings
• Probe Recalibration, MRO,
• Leak Detection, Dewpoint
Measurement
• Commissioning Installation
Aftermarket Solutions :
Recurring Revenue On Parts & Service
Recognizing the need to change to a sustainable and profitable, recurring revenue stream, the last 18 months have focused on Filtration and Aftermarket Parts & Service
35% Product Sales
5% Services & Repair
60% Aftermarket
Sales
www.xebecinc.com
Product Driven- Product sells, service
supports- Product innovation- Transaction based- Operational efficiency (price)
and delivery differentiates
Solution Driven- Product sells, Service
differentiates- Engineering driven- Solution approach to Customer
problem- Collaboration
differentiates
Recurring Revenue Driven- Service sells, product
supports- Product viewed as
means to an end- Maximize asset utilization - TCO* differentiates
Imp
act
of
Ap
plic
atio
n/S
ervi
ce S
ales
on
Gro
ss M
argi
n
Hig
hM
edLo
w
45%
35%
20%
Time2015 20172012 2019
*TCO=Total Cost of Ownership
Evolution From Products to Aftermarket
Product
Focus
System
Focus
Parts & Service
Focus
www.xebecinc.com 9
Total Sales and EBITDA
2011- 2016 Sales, EBITDA and GM
Aftermarket Sales
Share Price
Forecast
2011 2012 2013 2014 2015
Sales ($000 CAD) 14,203 15,179 11,311 14,368 11,351
EBITDA -0.4% 22.2% 7.0% -2.7% -18.0%
-25.0%-20.0%-15.0%-10.0%-5.0%0.0%5.0%10.0%15.0%20.0%25.0%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Sales ($000 CAD) EBITDA
AMX AMX AMX AMX AMX AMX
2011 2012 2013 2014 2015 2016
Sales 1,340,025 2,079,302 3,876,844 3,876,579 4,453,828 5,139,734
GM$ 1,000,102 1,299,980 2,347,785 1,969,190 2,360,529 2,826,854
GM% 75% 63% 61% 51% 53% 55%
0%
10%
20%
30%
40%
50%
60%
70%
80%
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Sales GM$ GM%
www.xebecinc.com
Population and income are key drivers behind growing demand for energy, especially natural gas and renewables
Global Drivers of Growth
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Shares of primary energy Annual demand growth by fuel
Info from BP Energy - 2016 Energy Outlook
www.xebecinc.com
Compressed Air Treatment (CAT) market continues to grow. Increasing importance of the MRO market segment.
Compressed Air Treatment Growth
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Info Radiant Insights, October 2015
NA compressed air treatment equipment market size, by product. 2012-2020 (USD million)
Global compressed air treatment equipment market size, by application. 2012-2020 (USD billion)
www.xebecinc.com
Other Growth Opportunities
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A membrane natural gas sweetening plant with Xebec’s 8” hollow fiber membranes
Nearing commercialization of new, unique technology
Highly efficient CO2 membranes (early 2017)
www.xebecinc.com
Other Growth Opportunities
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H3300
Hydrogen
Purification Unit Iran Market
Sanctions lifting; over 350 system
installations in Iran prior to sanction regime;
Opportunities in parts and new installations
Hydrogen
Support early adoption of fuel cell vehicles
using Xebec proprietary rotary valve
technology
Signed major client in 2015 with strong
potential for 2017 and beyond
www.xebecinc.com
Focus on Shareholder Value
Focus on high margin recurring revenue opportunities –Air & Gas Filtration Products, Parts and Service
Focus on standard products as lead generators to parts & service
Leverage Chinese supply chain – reduce direct costs to improve margins on commodity products
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Short Term Focus – Breakeven & Breakout
www.xebecinc.com
Focus on Shareholder Value
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Develop acquisition strategy in Aftermarket
Grow national and international partnerships to develop additional revenue opportunities at home and abroad
Enter and grow the natural gas sweetening membrane business
Continue applied product-related R&D efforts through partnerships with companies and universities
Medium Term Focus – Profitable Growth
www.xebecinc.com
Stock Price XBC-V (Sept 21-2016) $0.10
52-Week Low/High $0.05 - $0.20
Ave Daily Volume (3 mo.) 24,000
Shares Outstanding 39,363,867
Fully Diluted Shares 45,268,447
Insider Holdings (est) 20%
Market Cap $4,526,845
Capital Structure & Ownership
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www.xebecinc.com
Xebec is a turn-around moving towards a sustainably profitable and recurring business model with attractive additional business opportunities
Xebec’s focus on the Aftermarket segment is rapidly paying off – sales are strengthening and the breadth of the product portfolio now offers solid short term opportunities
Xebec is well positioned to capture renewable natural gas contracts with new partnerships in Europe, North America and Asia
Hydrogen purification opportunities tied to FCEV and fork trucks are increasing
Testing of the CO2 membrane product has yielded excellent results -Xebec expects to launch in early 2017
Summary and Outlook
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