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Corporate Overview

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The premier global company for the engineering, manufacturing
and supply of alternative fuel systems and components.

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Corporate Overview

  1. 1. December 2017 Company Overview
  2. 2. PAGE 2 > 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 > Focusing on core business DRIVING INNOVATION TO POWER A CLEANER TOMORROW The premier global company for the engineering, manufacturing and supply of alternative fuel systems and components. Transformative Actions Set Company on a Sustainable Path Forward > Repaid $55M CDN debentures at maturity on September 15, 2017 > Westport™ HPDI 2.0 commercialization > Positive adjusted EBITDA expected in early 2018 > Continuing to evaluate company's portfolio for exits and divestitures
  3. 3. PAGE 3 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 Injection engine technology) • HESI (High Efficiency Spark Ignited engine technology) • Cryogenics (Fuel Storage and delivery solutions) • 2017 revenue range expected $200-230M • 6% AEBITDA margin YTD • Target 7-10% AEBITDA margins in 2018 and beyond Cummins Westport JV • 50% ownership of Cummins Westport Inc. (“CWI”) • Medium to heavy duty engine markets (trucks, buses, refuse trucks & tractors) • Continued strength in bus and refuse markets • New ultra-low emissions engine lineup for 2018 • $41.5M in cash dividends since 2015 • Westport™ HPDI 2.0 launched • R&D spend expected to decline in 2018 • New development programs expected to be funded by 3rd parties
  4. 4. PAGE 4 MARKET LEADERSHIP Broad Range of Brands and Products for Diverse Applications BREADTH OF REACH Medium-Duty Heavy-DutyPassenger Car & Light Truck Refueling ElectronicsHigh Horsepower BRAND EQUITY IN ALTERNATIVE FUEL SPACE
  5. 5. AUTOMOTIVE
  6. 6. PAGE 6 > 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 SEGMENT Complete Product Lines for Various Fuels and Markets 1. Delayed OEM (“DOEM”) refers to vehicles up-fitted with components and systems after coming off the OEM’s assembly lines but before the vehicle reaches the dealer or end customers Global Customers Our Brands
  7. 7. PAGE 7 High pressure CNG lines CNG cylinder valve Filling valve & external CNG filling valve CNG & LPG reducer Fuel injection railCNG & LPG filter Electronic controls AUTOMOTIVE SEGMENT Examples of Westport Fuel Systems Content in Vehicles
  8. 8. PAGE 8 > 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 advanced products (direct injection, etc.) > Westport Fuel Systems has taken and will continue to take extensive efforts to improve its operating efficiency  Expected 2017 segment revenues of $200-230M  Target AEBITDA margins of 7-10% in 2018 and beyond AUTOMOTIVE SEGMENT Market Dynamics and Outlook 1. Source: NGV Global, World LPG Association, Wards Global Sales Reach Europe 64% Americas 15% Asia 14% Other 7% YTD 2017 Revenue (by destination)
  9. 9. CUMMINS WESTPORT JOINT VENTURE
  10. 10. PAGE 10 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% of new transit buses and ~50% of new refuse trucks in North America are built with Cummins Westport engines > Westport received $41.5 million in cash dividends from Cummins Westport since 2015
  11. 11. PAGE 11 > “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 emissions comparable to battery electric vehicles when used with RNG > ISX12N will be the only zero emissions (“electric equivalent”) heavy duty truck offering in the world – likely for several years CUMMINS WESTPORT LINEUP 2018 Dedicated Natural Gas Engines
  12. 12. PAGE 12 > “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 federal OBD regulation > No new R&D programs are expected following new engine launch in 2018, significantly reducing spending > Westport to appoint CWI’s next President per the JV agreement effective Jan 2018 to Dec 2020 CUMMINS WESTPORT Outlook
  13. 13. CORPORATE AND TECHNOLOGY
  14. 14. PAGE 14 > 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 Tomorrow
  15. 15. PAGE 15 Technology Proven! CORPORATE AND TECHNOLOGY Fully Integrated Westport™ HPDI 2.0 Truck Solution HPDI 1.0 Launched HPDI 2.0 Launched 2010 2011 2012 2013 2014 2015 2016 2017 HPDI 1.0 Production Ended > Based on Cummins ISX15 > Fuel system installed by Westport > Sold and warranted by Westport > 1,300 trucks put in service in North America and Australia between 2007 and 2013 > Based on OEM engine > Built, sold and warranted by OEM > Improved components > Reduced costs > OEM validation > Asset-light business model HPDI 1.0 HPDI 2.0
  16. 16. PAGE 16 WESTPORT HPDI 2.0 TRUCK SOLUTION Gas Conditioning Module (GCM) HPDI Control Software Tank Selection Control Manifold Gas Temperature Sensor LNG Tank ModuleOEM Engine Integrated Gas Module LNG Pump Control Manifold Fuel Level Signal CANditioner Cryogenic High Pressure Pump High Pressure Direct Injector On Engine On Chassis On LNG Tank
  17. 17. PAGE 17 > Westport™ HPDI 2.0 orders fulfilled to OEM launch partner > Westport Fuel Systems is a Tier 1 supplier with a fully integrated solution > Europe initial target market due to demand for GHG reduction and higher diesel prices > Active discussions with multiple OEMs  New programs expected to be funded by 3rd parties and will build on existing HPDI 2.0 technology > 15-50 month payback periods expected in some markets4 > R&D and Capex spend expected to decline in 2018 following product launch WESTPORT™ HPDI 2.0 COMMERCIALIZATION Significant Milestone for the Company 1. Source: Volvo AB annual report 2. Source: ENGIE - Blue Corridors report 3. Source: www.globalpetroprices as of November 6, 2017 4. See payback calculations on pages 28-29 in appendix 5. 1 Diesel Liter Equivalent = 0.765 kg of CNG (Source: BLU LNG) 222,000 240,400 227,600 270,000 300,000 2012 2013 2014 2015 2016 TruckSales HD Truck Sales in Europe1 49 46.5 48 49 94 5 0 21 20 15 France Belgium The Netherlands Germany Switzerland Different Excise Tax on Fuels Between Countries in Europe2 Diesel Gas Diesel Fuel Prices / litre by Country3 €/litre(diesel),€/kg(gas)5 1.60 1.45 1.37 1.39 1.36 1.31 1.29 1.31 1.27 1.25 1.27 1.25 1.17 1.15 1.12 0.79 0.63 Norway Sweden UK Italy Switzerland Belgium Denmark Finland Portugal Ireland France Netherlands Germany Czech Rep. Spain Canada USA €/litre
  18. 18. FINANCIAL OVERVIEW
  19. 19. PAGE 19 > Turnaround on track > Now focused on operational excellence > 2017 Automotive revenues of $200-230M AUTOMOTIVE SEGMENT *Adjusted EBITDA is a non-GAAP number 2016 numbers adjusted to exclude discontinued operations ($ in millions) Q3 2016 Q3 2017 Better/(Worse) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Total Revenues 53.6 60.0 12% 59.1 56.4 60.8 60.0 Gross Margin 7.0 14.4 106% 12.4 13.8 14.6 14.4 GM% 13% 24% - 20% 25% 24% 24% R&D $5.0 $3.9 22% $4.2 $3.9 $4.2 $3.9 SG&A $7.5 $9.7 (29%) $8.9 $8.8 $8.1 $9.7 Adjusted EBITDA* (1.2) 3.8 417% 0.4 3.6 3.1 3.8 Adjusted EBITDA %* (0.2%) 6% - 0.7% 6% 5% 6% YEAR OVER YEAR SEQUENTIAL
  20. 20. PAGE 20 > First comparable quarter post merger Revenue growth bolstered by currency Better product profitability Lower spending Improved net income Strengthened balance sheet *Adjusted EBITDA is a non GAAP measure. A complete reconciliation of adjusted EBITDA can be seen in the MD&A 2016 numbers adjusted to exclude discontinued operations WFS Q3 CONSOLIDATED RESULTS ($ in millions) Q3 2016 Q3 2017 Better/(Worse) Total Revenues 56.1 60.8 8% Gross Margin 8.7 14.8 70% GM% 16% 24% - Operating Expenses 41.0 34.9 15% Net Income (Loss) from Continuing Operations (33.6) (15.7) 53% Adjusted EBITDA* (10.8) (5.0) 54% Long-Term Debt 79.0 36.3 54%
  21. 21. PAGE 21 WFS POSITIVE EARNINGS TREND Income & Adjusted EBITDA Adjusted EBITDA is a non GAAP measure. A complete reconciliation of adjusted EBITDA can be seen in the MD&A. Positive and improving Automotive adjusted EBITDA margins Lower R&D spending in Corporate and Tech segment Cost reductions in general and administrative costs Positive CWI net income contributions -$200 -$180 -$160 -$140 -$120 -$100 -$80 -$60 -$40 -$20 $0 $20 2013 2014 2015 2016 2017 Sep YTD ($inmillions) Adjusted EBITDA Income from Operations Positive trend:
  22. 22. PAGE 22 > Market ready technology solutions, available today > Path towards becoming a profitable and sustainable company  Strengthened balance sheet and liquidity position  Restructured and improved the company’s consolidated adjusted EBITDA > Focus on delivering our commitments CONTINUED EXECUTION Adjusted EBITDA is a non-GAAP number. A complete reconciliation of Adjusted EBITDA can be seen in the MD&A.
  23. 23. PAGE 23 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 research and development expenditure expectations, Target adjusted EBITDA margins, timing and amounts relating to adjusted EBITDA, the effect of the reorganization and restructuring of our business, the demand for our products, the future success of our business and technology strategies, investment in new product and technology development and otherwise, cash, capex and capital requirements and future levels, intentions of partners and potential customers, the performance and competitiveness of Westport's products and expansion of product coverage, future market opportunities, speed of adoption of natural gas for transportation and terms and timing of future agreements as well as the combined company’s management's response to any of the aforementioned factors. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance or achievements expressed in or implied by these forward looking statements. These risks and uncertainties include risks and assumptions related to our revenue growth, revenues attributable to HPDI, operating results, industry and products, the general economy, conditions of and access to the capital and debt markets, governmental policies, regulation and approvals, technology innovations, fluctuations in foreign exchange rates, operating expenses, the availability and price of natural gas, global government stimulus packages, the acceptance of and shift to natural gas vehicles, the relaxation or waiver of fuel emission standards, the inability of fleets to access capital or government funding to purchase natural gas vehicles, the development of competing technologies, our ability to adequately develop and deploy our technology, the actions and determinations of our joint venture and development partners, as well as other risk factors and assumptions that may affect our actual results, performance or achievements or financial position discussed in Westport’s most recent Annual Report on Form 40-F for the year ended December 31, 2016, and other filings made by the companies with securities regulators. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in these forward looking statements except as required by National Instrument 51-102. The contents of any website, RSS feed or twitter account referenced in this presentation are not incorporated by reference herein. This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the United States Securities Act of 1933, as amended. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction. This presentation contains certain financial outlook information and related financial projections for Westport Fuel Systems based on a number of assumptions. Such financial outlook information is provided solely to allow readers to better model potential opportunities available to Westport Fuel Systems and estimate financial performance of various business segments and may not be appropriate for any other purpose and should not be relied upon. In this presentation, we present Adjusted EBITDA, which was derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles. We use Adjusted EBITDA in a number of ways to assess our consolidated operating performance and believe this information is helpful to investors in identifying trends in our operating performance. However, Adjusted EBITDA should be considered supplementary information and should not be used as a substitute for GAAP measures of operating performance and cash flow. See the Company's Financial Report to Shareholders for the period ended June 30, 2017. CAUTIONARY NOTE Forward Looking Statements
  24. 24. APPENDIX
  25. 25. PAGE 25 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 • Breadth of applications Automotive - vapor and liquid LPG • Monofuel, bi-fuel, dual fuel solutions LNG • Complete systems • Unique cryogenic expertise • Weight advantage over CNG • Breadth of applications • Fuel storage solutions Liquefied Natural Gas RNG • 100% substitute for fossil based CNG & LNG • Breadth of applications (also HPDI 2.0 solution is compatible with RNG) • Fuel storage solutions Renewable Natural Gas (Biomethane) H2 • High pressure components available • Automotive applications • Hydrogen/CNG blends or pure hydrogen Hydrogen
  26. 26. PAGE 26 > Long history and 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 applications MARKET LEADER Leading Premier Technology Position * As of July 11, 2017 and based on the patent search results of publicly available data within the International Patent Classification F02, meeting the search term criteria: one of ("engine" or "combustion" or "injector" or "injection valve") and ("natural gas" or "methane" or "gaseous fuel") and in the claims, not ("fuel cell" or "turbine"). This chart includes published patent applications and issued or granted patents from: Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, China, Czech Republic, Denmark, Eurasian Patent Organization, European Patent Office, Estonia, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, India, Ireland, Italy, Japan, Latvia, Luxembourg, Malaysia, Mexico, Moldova, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Romania, Russian Federation, Serbia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Tunisia, UK, Ukraine, USA, USSR, Yugoslavia, and the World Intellectual Property Office. 139 175 182 240 285 287 370 378 670 686 Daewoo Continental Denso GE Porsche Bosch Ford Toyota Caterpillar Westport Fuel Systems Top 10 Companies with Gaseous Fuel Engine Related Patents* • On-engine system • Off-engine system • Full system integration • Components
  27. 27. PAGE 27 WESTPORT HIGH PRESSURE DIRECT INJECTION > Revolutionary new alternative fuel technology for heavy duty truck segment; 90-95% natural gas and 5% to 10% diesel fuel > Current natural gas truck engines use spark ignition to initiate combustion, which is less efficient and powerful than the equivalent diesel engine. More energy (heat) goes out the exhaust – 10% to 15% higher fuel consumption > HPDI uses direct injection and compression ignition – same as a diesel engine > Same horsepower, torque and fuel efficiency as the equivalent diesel engine > No change to major engine components, powertrain, gearing, exhaust after-treatment system, cooling capacity or engine braking HPDI 2.0 HAS 20% LOWER TANK-TO-WHEEL GHG EMISSIONS THAN AN EQUIVALENT DIESEL ENGINE AND CAN RUN ON 100% RENEWABLE FUELS.
  28. 28. PAGE 28 > 152 current stations in operation  123 public, 29 private  3 countries have over 20 each: the UK (many private), Spain, and the Netherlands > 137 future stations identified  135 public, 2 private  Impressive growth in France  Start-up in Hungary, Romania and other countries LNG STATIONS IN EUROPE Source: GLE database, LNG Blue Corridors project, NGVA Europe, Westport Fuel Systems analysis – November 2017 Update
  29. 29. PAGE 29 WESTPORT™ HPDI PAYBACK ANALYSIS * NOTE: ALL PRICES WILL BE SET BY THE OEM ** DLE = Diesel Liter Equivalent Source: Fuel price data from www.globalpetroprices.com and Westport Fuel Systems analysis In Various Countries FOR ILLUSTRATIVE PURPOSES ONLY Incremental Truck Cost for HPDI * Country A Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel Fuel Cost/liter € 1.49 € 1.49 € 1.49 € 1.49 € 1.49 € 1.49 € 1.49 € 1.49 € 1.49 € 1.49 LNG Fuel Cost/DLE** € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 Annual distance (km) 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Diesel Liters used per year 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 LNG DLE** used - 34,178 - 34,178 - 34,178 - 34,178 - 34,178 Annual Fuel Cost € 53,640 € 29,226 € 53,640 € 29,226 € 53,640 € 29,226 € 53,640 € 29,226 € 53,640 € 29,226 Annual Fuel Cost Savings € 24,414 € 24,414 € 24,414 € 24,414 € 24,414 Payback Period (months) Incremental Truck Cost for HPDI * Country B Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel Fuel Cost/liter € 1.27 € 1.27 € 1.27 € 1.27 € 1.27 € 1.27 € 1.27 € 1.27 € 1.27 € 1.27 LNG Fuel Cost/DLE** € 0.62 € 0.62 € 0.62 € 0.62 € 0.62 € 0.62 € 0.62 € 0.62 € 0.62 € 0.62 Annual distance (km) 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Diesel Liters used per year 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 LNG DLE** used - 34,178 - 34,178 - 34,178 - 34,178 - 34,178 Annual Fuel Cost € 45,720 € 23,962 € 45,720 € 23,962 € 45,720 € 23,962 € 45,720 € 23,962 € 45,720 € 23,962 Annual Fuel Cost Savings € 21,759 € 21,759 € 21,759 € 21,759 € 21,759 Payback Period (months) € 35,000 € 40,000 € 45,000 € 50,000 € 60,000 19.3 22.1 24.8 27.6 33.1 € 35,000 € 40,000 € 45,000 € 50,000 € 60,000 17.2 19.7 22.1 24.6 29.5
  30. 30. PAGE 30 WESTPORT™ HPDI PAYBACK ANALYSIS In Various Countries * NOTE: ALL PRICES WILL BE SET BY THE OEM ** DLE = Diesel Liter Equivalent Source: Fuel price data from www.globalpetroprices.com and Westport Fuel Systems analysis FOR ILLUSTRATIVE PURPOSES ONLY Incremental Truck Cost for HPDI * Country C Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel Fuel Cost/liter € 1.50 € 1.50 € 1.50 € 1.50 € 1.50 € 1.50 € 1.50 € 1.50 € 1.50 € 1.50 LNG Fuel Cost/DLE** € 0.70 € 0.70 € 0.70 € 0.70 € 0.70 € 0.70 € 0.70 € 0.70 € 0.70 € 0.70 Annual distance (km) 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Diesel Liters used per year 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 LNG DLE** used - 34,178 - 34,178 - 34,178 - 34,178 - 34,178 Annual Fuel Cost € 54,000 € 27,198 € 54,000 € 27,198 € 54,000 € 27,198 € 54,000 € 27,198 € 54,000 € 27,198 Annual Fuel Cost Savings € 26,802 € 26,802 € 26,802 € 26,802 € 26,802 Payback Period (months) Incremental Truck Cost for HPDI * Country D Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel HPDI Diesel Fuel Cost/liter € 1.12 € 1.12 € 1.12 € 1.12 € 1.12 € 1.12 € 1.12 € 1.12 € 1.12 € 1.12 LNG Fuel Cost/DLE** € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 € 0.76 Annual distance (km) 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Diesel Liters used per year 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 36,000 2,182 LNG DLE** used - 34,178 - 34,178 - 34,178 - 34,178 - 34,178 Annual Fuel Cost € 40,320 € 28,419 € 40,320 € 28,419 € 40,320 € 28,419 € 40,320 € 28,419 € 40,320 € 28,419 Annual Fuel Cost Savings € 11,901 € 11,901 € 11,901 € 11,901 € 11,901 Payback Period (months) € 35,000 € 40,000 € 45,000 € 50,000 € 60,000 35.3 40.3 45.4 50.4 60.5 € 35,000 € 40,000 € 45,000 € 50,000 € 60,000 15.7 17.9 20.1 22.4 26.9
  31. 31. PAGE 31 > Record quarter net income for the year > R&D downward trend CUMMINS WESTPORT INC. *2016 adjusted for change in accounting policy related to warranty ($ in millions) Q3 2016 Q3 2017 Better/(Worse) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Total Revenues 67.5 75.5 12% 70.4 70.7 79.5 75.5 Gross Margin* 22.0 27.9 27% 17.6 21.8 28.6 27.9 GM%* 33% 37% - 25% 31% 36% 37% R&D 8.1 7.6 6% 8.6 10.8 7.2 7.6 % of sales 12% 10% - 12% 15% 9% 10% SG&A 6.4 5.3 17% 4.5 5.8 5.0 5.3 % of sales 10% 7% - 6% 8% 6% 7% Net income* 4.9 11.6 137% 4.1 3.5 10.6 11.6 % of sales* 7% 15% - 6% 5% 13% 15% YEAR OVER YEAR SEQUENTIAL
  32. 32. PAGE 32 > Westport™ HPDI 2.0 orders fulfilled to OEM launch partner > Continued cost discipline CORPORATE & TECHNOLOGY SEGMENT ($ in millions) Q3 2016 Q3 2017 Better/(Worse) Q4 2016 Q1 2017 Q2 2017 Q3 2017 R&D 9.4 9.1 3% 10.6 8.3 10.0 9.1 SG&A 9.5 6.5 32% 5.8 6.5 7.9 6.5 Total $18.9 $15.6 17% $16.4 $14.8 $17.9 $15.6 2016 numbers adjusted to exclude discontinued operations YEAR OVER YEAR SEQUENTIAL
  33. 33. PAGE 33 Q3 CASH WALK *Note: Gross proceeds were $28.7M • Cash used in operations • Working capital • Exit costs • Transaction costs • Debenture paid off Beginning balance Operations Dividends Restructuring CapEx Capital raise Reduced debt Ending balance $87.7 ($7.2) $5.3 ($9.9) ($3.8) $26.0* $51.1 ($47.0) ($inmillions)
  34. 34. PAGE 34 > Executed January 11, 2016 and amended March 6, 2016 > Three main tranches of investment in Westport by Cartesian: 1) Payment to Westport of $17.5 million in exchange for certain contingent payment rights 2) Purchase of an economic interest in the Weichai Westport Inc. joint venture 3) Purchase of a $17.5 million Westport unsecured convertible note with an annual interest rate of 9%, convertible at $2.17 per share and maturing on June 1, 2021 CARTESIAN OVERVIEW Investment Agreement & General Security Interests

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