Corporate Presentation May 2012
Oct 29, 2015
Corporate Presentation
May 2012
www.xebecinc.com
Forward looking statements
2
Certain information regarding Xebec Adsorption Inc. (“XBC" or the "Company") set forth in this Presentation contains forward-looking statements. The use of any
of the words "plan", "expect", "project", "intend", "believe", "should", "anticipate", "estimate" or other similar words, or statements that certain events or conditions
"may" or "will" occur are typically intended to identify forward-looking statements. Forward-looking statements are not based on historical facts, but rather on
XBC's internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, product offerings, future capital and other
expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of sales activities, business prospects
and opportunities. These statements are only predictions, not guarantees, and actual events or results may differ materially. In particular, forward-looking
statements included in this document include, but are not limited to, statements with respect to: XBC's growth strategy, technology development and growth
plans.
The forward-looking statements contained herein are subject to numerous known and unknown risks and uncertainties that may cause actual results to vary,
including but not limited to risks associated with: the impact of general economic conditions in Canada, Australia, the US and the UK as well as certain other
countries in which XBC operates; industry conditions including changes in laws and regulations, and changes in how they are interpreted and enforced, in
Canada, Australia, the US and the UK as well as certain other countries in which XBC operates; changes in both corporate and governmental budgets, as well as
changes in personnel of the Company's current and prospective customers, competition; lack of availability of qualified personnel; the results of sales and related
activities; negotiating with foreign governments as well as country risk associated with conducting international activities; fluctuations in foreign exchange or
interest rates; changes in income tax laws or changes in tax laws; ability to access sufficient capital from internal and external sources; and other factors, many
of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on
these and other factors that could affect XBC's operations and financial results are included in reports on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website (www.sedar.com).
With respect to forward-looking statements contained in this document, XBC has made assumptions regarding: availability of skilled labour; timing and amount of
capital expenditures; future exchange rates; the impact of increasing competition; conditions in general economic and financial markets; effects of regulation by
governmental agencies; future operating costs; and other matters. Although the forward-looking statements contained in this document are based upon
assumptions which Management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking
statements.
Management has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide
readers with a more complete perspective on XBC's current and future operations and such information may not be appropriate for other purposes. XBC's actual
results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that
XBC will derive therefrom. The forward looking statements or information contained in this Presentation are made as of the date hereof and the Company
undertakes no obligation to update or revise any forward looking statements or information, whether as a result of new information, future events or otherwise
unless required by applicable securities laws. The forward looking statements or information contained in this Presentation are expressly qualified by this
cautionary statement.
The past performance of XBC presented herein, including the case studies referred to in the Presentation, do not guarantee future results for the Company. The
historical performance of XBC, including the case studies referred to in the Presentation, are shown for illustrative purposes only.
www.xebecinc.com 3
Mission Statement
Provide utilities, municipalities
and industry with innovative,
end-to-end gas upgrading and
conditioning solutions that
transform raw gases into
marketable sources of
clean energy.
www.xebecinc.com
Capital Markets Profile
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Exchange and Ticker Info: XBC on TSX
Shares Outstanding: 39.3 M
Shares Fully Diluted: 53.4 M
Stock Price (June 18, 2012): $0.38
52 Week High / Low: $0.45 / $0.09
Approx Market Cap (June 18, 2012): $15 M
2011 Revenues: $14.2 M
2012 - 3 Month Revenues: $1.5 M
2012 - 3 Month Net Income:* $3.2 M
Inside Ownership %: 25%
Institutional Ownership %: 46%
*Resulted from Patent Sale to Air Products
www.xebecinc.com
Investment Considerations
5
Leading global technology Company offering end-to-end gas upgrading and
purification
Global distribution strategy in markets that are experiencing significant near
term and long term growth
Growing list of customers both new and recurring
Proprietary set of products with significant advantages over competition
Completed restructuring and recap in 2011 … platform built for growth and
profitability for 2012 and beyond
Strong balance sheet and working capital in place to grow business
Solid backlog of $15M and growing
Key Customer agreements in place including exclusive distribution agreement
for 15 biogas plants with Golden Green in China
Plants range from $1.7M to $5.5M.
Total estimated revenue over 4 years - $45M
www.xebecinc.com
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Natural and Renewable Gas Focus
Leading designer, manufacturer
and operator of natural and
renewable gas systems and
hydrogen purification
•Biogas for pipeline injection
•Natural Gas Vehicles(NGV) for
transportation
• Associated gas purification in the
Oil & Gas industry
•Hydrogen purification for
transportation and industrial use
Global presence, with headquarters in Montreal, Canada
Toronto Stock Exchange (TSX: XBC)
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Who we are Markets
Focus Strategy
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• Leverage key
technological advantages
into incremental sales
through direct and indirect
channels
www.xebecinc.com
Blainville (QC) Vancouver (BC)
Shanghai
Singapore
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Headquarters in Blainville (QC) Manufacturing and Sales
R&D in Blainville (QC)
Sales and customer support Office in Vancouver (BC)
Manufacturing and Sales in Shanghai
Sales Office in Singapore
Ability to gain business and service customers worldwide
International Presence
www.xebecinc.com 8
Biogas upgrading plants Natural gas dryers for NGV refueling stations
Rapidly growing market
High recovery, high purity, low energy plants
Key Customers: SEMPRA, Montauk Energy, Halla Engineering, Terasen Gas
Growing market
Cost leadership through Chinese manufacturing
Key Customers: Clean Energy, Petrochina, Sinopec, Shell
Hydrogen purifiers for hydrogen recovery
Business Segments
Evolving market segment
Market-leading performance for small-capacity hydrogen purifiers
Syngas purification
Key Customers: HydroChem, Air Liquide, Linde, Iwatani
Associated Gas (Oil & Gas industry)
Evolving market segment
Market-leading performance for associated gas purification
Key Customer:
Venocco, Warren
Technology
www.xebecinc.com 10
Proprietary Products and IP Assets
Pure Innovation™
15 years of dedicated development in gas purification & separation
and over $60M invested prior to current management
Xebec owns the IP related to its products design
Complete proprietary product line with respect to rotary valves,
structured adsorbent and Rapid cycle PSA
Sale and license back from Air products of 130 patents or
applications in 39 patent families worldwide (March 2012)
Exclusivity for 2 years
Ability to simulate, develop and test gas separation technologies in
line with market and customer requirements
Ongoing development of next generation biogas upgrading
technology
Same PSA technology is applicable to all products
Xebec unit installed at
ExxonMobil refinery in 2007
Xebec Technology
www.xebecinc.com
Products
Biogas (BGX) Natural Gas (NGX) Hydrogen (H2X) Associated Gas
(AGX)
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www.xebecinc.com
Key Customers & Partner
Biogas (BGX) Natural Gas (NGX) Hydrogen (H2X) Associated Gas
(AGX)
20 customers 500+ customers
60 customers
4 customers
1 Partner
5000+
installations in
40 countries
175 installations
in
15 countries
2 installations in
the USA
1 in Indonesia
1 in India
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Market Summary: Natural Gas as Transportation Fuel
www.xebecinc.com
Natural Gas Market – Global Focus
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0%
10%
20%
30%
40%
50%
60%
Asia Europe
N.A. L.A.
Africa
Average % NGV growth 2000 to present by region
Asia has been growing at 51%
The EU has seen growth in the NGV market space and is planning for accelerated growth in Germany, Italy, Sweden, Austria, Switzerland, Spain and others
The U.S. and Canada are in the process of introducing favorable legislation, which will lead to significant future growth in the NGV sector – Economics are driving growth currently
Latin America is continuing to grow its NGV fleets
Africa is seeing good growth
www.xebecinc.com 15
2012 2013 2014 2015
Total Number of
Natural Gas
Stations
253 449 704 1220
Total Number of
Liquid Natural Gas
Stations
102 196 322 479
Total Number of
Liquid Natural Gas
Plants
27 40 53 66
© NGVAmerica Projections to 2015
Projected US NGV Refueling Requirements
The trend towards the adoption of natural gas vehicles will require as
much as 6B$ investment in infrastructure, from which Xebec will benefit.
School Bus Refueling Station
Market Opportunity: BIOGAS
www.xebecinc.com
Fit in the Renewable and Natural Gas Value Chain
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www.xebecinc.com
Biogas Market: Focus on N.A. and Asia
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The global market for biogas upgrading
equipment was $52.3 million in 2010
Growth to $338.5 million by 2016
5-year compound annual growth rate (CAGR)
of 22%
The Asia-Pacific market is estimated to reach
nearly $30.1 million in 2011 and is expected to
increase at a 22.8% compound annual growth
rate to reach nearly $83.9 million in 2016
www.xebecinc.com
Biogas Segment: Key Business Highlights
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Started and commissioned Xebec’s first two biogas
plants: Halla (Korea) and Sempra (U.S.)
Received a RMB 7.1 Million order for a biogas
upgrading plant for Heilongjiang Loonggas
Investment Co., Ltd. in China
Received order for RMB 11.5 Million for landfill gas
upgrading system from Golden Green
Key agreements in place including exclusive
distribution agreement for 15 biogas plants with
Golden Green in China
Plants range from $1.7M to $5.5M
Total estimated revenue over 4 years - $45M
Hal Snyder (Sempra), Mayor Sam Abed (Escondido) and
Kurt Sorschak at press event in February 2011
www.xebecinc.com
Project Location Biogas Source End-Use
2006 - 2009
Scenic View Dairy MI, US Digester Pipeline
Rumpke Landfill OH, US Landfill Pipeline
Widnau Switzerland Digester Pipeline
Lavigny Farm Switzerland Digester Pipeline
UNH NH, US Landfill Turbine
SKS Austria Digester CNG
Swiss Farmer Switzerland Digester Pipeline
STEP Switzerland Digester Pipeline
Hilarides Dairy CA, US Digester CNG
Daesung Seoul, Korea Landfill CNG/LNG
SKS Austria Digester CNG
2010 - YTD
Sempra Energy CA, US Waste Water Pipeline
Halla Engineering Seoul, Korea Digester CNG
SKS Austria MSW Pipeline
SKS Austria MSW Pipeline
SKS Austria Waste Water CNG
Verdemobil France MSW CNG
WELtec China Agricultural Digester CNG
Huimiing China Landfill CNG
Terasen Gas Canada Landfill Pipeline
PT Indo Raya Indonesia Chemical Plant Pipeline
Xebec Biogas Installations
Extensive experience in the biogas segment
gained through the successful completion of
multiple international projects
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70% of all upgrading projects are for
renewable gas to transportation fuel
www.xebecinc.com
Market Analysis – Landfill Sites North America
• Accepting waste or have been closed
for less then five years
• At least 1.8 mm tons of waste in place
• Minimum Flow of 800 SCFM
461 342 SCFM X 2,200$* (per scfm per year)
1.1B$ market per year for renewable gas
* 2,200$ (per scfm) based on Xebec’s technological advantage
Available Sites 300 to 350 landfills
Addressable market based on flow
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www.xebecinc.com
Market Analysis – Waste Water Treatment Plants
• Operational AD
• Influent of min. 20 MGD
• Minimum Flow 350 SCFM
100 000* SCFM X 2,200$* (per scfm per year)
220M$ market per year for renewable gas
* 2,200$ (per scfm) based on Xebec’s technological advantage
Available Sites 70 to 100 WWTP
Addressable market based on flow
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Market Summary: Hydrogen Purification
www.xebecinc.com 24
Hydrogen Purification Market
Global investment in plants and equipment
estimated to be worth $2.2 billion in 2010
expected to increase to $5.4 billion in 2015
Largest segment - Energy Conversion
expected to increase from $1.3 billion to
$3.7 billion by 2015
Second-largest segment – Hydrogen
Production
expected to increase from $650 million in
2010, to $1.1 billion in 2015
Xebec unit installed at ExxonMobil
refinery in 2007
www.xebecinc.com
Hydrogen Segment: Recent Highlights
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Delivered an H-3200 to Grasys (Russia)
Received an order $2.05 Million for a H-3200
hydrogen purification unit from Deok-Yang
Company Ltd., the leading hydrogen supplier
in South Korea
Iwatani - Continued relationship +10 years)
with solid orders in 2011
H-3100 in Japan for the HydroEdge project
www.xebecinc.com
Market Overview – H2 and Syngas
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Past Present Future
Steam
power
Syngas
clean-up
Biofuels
Hydrogen
separation
Fuell
cells Refinery Vehicles
Xebec PSAs, together with H2 gas scrubbing, as a solution,
have a promising growth in the the Syngas markets
Gasification
Gasification
Plant
Market Summary: Associated Gas
www.xebecinc.com
Market Summary: Associated Gas
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Burning and/or flaring, wastes a valuable clean energy resource and emits carbon dioxide, a greenhouse gas.
The World Bank estimates that over 150 billion cubic meters (or 5.3 trillion cubic feet) of natural gas are being flared and vented annually.
Flaring gas adds about 350 million tons of CO2 in annual emissions.
This is more than the potential yearly emission reductions from projects currently submitted under the Kyoto mechanisms.
Xebec’s PSA technology can help clean associated gas and make it available as a replacement for diesel.
Xebec has entered into a co-marketing agreement with Primoris.
www.xebecinc.com
Associated Gas : Recent Highlights
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Delivered an M-3200 system ($1.2M) to PT Indo Raya Kimia in Indonesia, a leading producer of carbon disulphide in Asia Pacific
Received an order for an M-3200 system to upgrade natural gas at a greenfield chemical plant to be constructed in Valayat, Gujarat State, India.
The total value of the contract was approximately CAD2.3 million. Xebec's PSA was purchased by Grasim Industries Limited, a leading producer of Viscose Stable Fiber ("VSF") in Asia.
PXP associated gas project for pipeline injection
Growth Strategy, Backlog, Competition, Sales
www.xebecinc.com
Return to Profit and Growth
Profit
Leverage Chinese Supply Chain - Improve Margins
Tightly Control SG&A
Focus on higher margin recurring revenue opportunities (aftermarket & gas
conversion/BOO)
Grow Revenues
Growth
Launch new Associated Gas product applications
Integrate current product offerings into end-to-end solutions
Focus on North American NGV market
Capitalize on upcoming Quebec Biogas opportunities
Expand the sales distribution network in Asia-Pacific, Africa and in South America
Integrate other profitable companies in order to increase its critical mass through
M&A activities
Carry on its R&D efforts in Blainville and through partnerships with universities
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www.xebecinc.com
Backlog and Revenue Model
The current backlog as of June 2012 is $15M
The Golden Green agreement stands for 15 biogas plants, for which one PO has been received. Plants range from $1.7M to $5.5M. Total estimated revenue over 4 years: $45M
In the Biogas market, the Company intends to move from being solely an equipment manufacturer to being an owner and operator of biogas plants
Partnership agreement with Primoris Service Corporation in order to expand offering in the associated gas market to the oil & gas industry
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www.xebecinc.com
Competitors
Biogas (BGX) Natural Gas (NGX) Hydrogen
(H2X)
•Acrion Technologies Inc.,
•Cirmac International BV,
•Lackeby Water Group (PURAC),
•Guild Associates Inc,
•MT-Biomethan GMBH,
•Carbotech AC GmbH,
• Haase Energietechnik AG,
•Ros Roca Group,
• Flotech/Greenlane,
• Yit Vatten Och Misjoteknik,
•Air Liquide,
•MalmBerg Water AB
• A.R.C. Technologies Corp.
•SPX Corp., Parker-Hannifin
Corporation,
• Aircel Corp.,
• PSB Industries Inc.,
•Xi’An Unionfilter Purification
Equipment Co. Ltd.,
•Zander Aufbereitungstechnik GmbH
• Tecno Project Industriale s.r.l.
•Air Liquide,
HydroChem,
Linde and
Iwatani
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www.xebecinc.com
Competitive advantage
Lower capex and opex than any competing process
Higher recovery
Proven reliability and simple to maintain
Higher purification rate in one single process
Removes N2 and O2 in one single process
Lower foot print
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Financial Information FY 2011 and Q1 2012
www.xebecinc.com 36
Diversified Product Lines (% of revenues)
2011 – $14.2 M 2010 – $13.5 M
Gas
purification
2011 32% 11% 1% 35% 11% 11%
2010 41% 23% 3% 33% 1% 0%
Licensing
Natural
gas
dryers
Aftermarket &
Service
Air dryers
(industrial)
Engineering
services
www.xebecinc.com 37
Diversified Geographic Reach (% of revenues)
2011 2010
Middle North others
Europe Asia East America
2011 0% 72% 6% 1% 20%
2010 1% 53% 10% 11% 20%
www.xebecinc.com 38
2011 Selected Financial Information
Reflects the effect of the cost control measure and the restructuring of the company
Lack of working capital slowed the growth, this improves in 2012
Reflects a non-recurring licenses revenue of $1.5M
Reflects a better revenue recognition policy
(in C$ unless indicated otherwise)
For the twelve months ended Dec 31 2011 2010
Revenue 14,203,463 13,475,211
Gross margin (%) 29% 2%
EBITDA 100,000 (12,000,000)
Net loss (1,456,950) (13,592,711)
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Management
Kurt Sorschak, President & CEO, Director, Founder
► Kurt Sorschak is the President and the Chief Executive Officer, of Xebec since 2007. From 2004 to 2007, he was the General Manager of the Canadian division of Domnick Hunter’s air dryer manufacturing facility, at that time the largest adsorption dryer plant in North America. In 2005, he became the General Manager for the Xebec division of Parker-Hannifin Corporation, after Parker-Hannifin Corporation bought Domnick Hunter Ltd. Mr. Sorschak also worked in different managerial capacities in Europe. He obtained an Associate Degree from the American University in Paris, France, in 1982, and a Masters of Law Degree from the University of Munich, Germany, in 1988.
Eric Favreau, Vice-president & CFO:
► Mr. Favreau is Vice-President and Chief Financial Officer of Xebec since June 2011. From September 2008 to May 2011, he was Chief Financial Officer of Noveko International Inc. From September 2006 to September 2008, he was Vice-President and Chief Financial Officer of Eloda Corporation, from November 2005 to September 2006, CFO of Positron Networks PNI Inc., and from March 2005 to November 2005, he was a partner of NanoVenture LLP, an investment fund.
Graham Robson, Vice-president Asia-Pacific
► Since joining Xebec in November 2004, Mr. Robson held the positions of VP Business Development and Director Supply Chain. Prior to joining Xebec, Mr. Robson held positions in manufacturing, operations improvement, program management and supply chain, with General Motors South Africa, Ford South Africa, Atlantis Diesel Engines, Toyota South Africa, Philips Electronics UK and Rolls Royce plc, in the UK and Canada. Mr. Robson held middle and senior management positions with Toyota, Philips Electronics and Rolls Royce. He is a Mechanical Engineering graduate from the Durban University of Technology.
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www.xebecinc.com
Investment Considerations
40
Leading global technology Company offering end-to-end gas upgrading and
purification
Global distribution strategy in markets that are experiencing significant near
term and long term growth
Growing list of customers both new and recurring
Proprietary set of products with significant advantages over competition
Completed restructuring and recap in 2011 … platform built for growth and
profitability for 2012 and beyond
Strong balance sheet and working capital in place to grow business
Solid backlog of $15M and growing
Key Customer agreements in place including exclusive distribution agreement
for 15 biogas plants with Golden Green in China
Plants range from $1.7M to $5.5M.
Total estimated revenue over 4 years - $45M