Xebec Adsorption Inc - The Renewable Gas Company - TSX: XBC
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TSX: XBC Xebec Adsorption Inc. The Renewable Gas Company Q1 2021 Results Investor Webinar May 13, 2021
Presenting Today
Kurt Sorschak Stéphane Brandon Chow
Chairman, Archambault Director, Investor
President & CEO CFO Relations
2
Forward Looking Statements and Non-IFRS Measures
Forward Looking Statements
This investor presentation contains forward-looking statements within the meaning of applicable Canadian securities law. These statements relate to future events or future performance and reflect
the expectation of Management regarding the growth, results of operations, performance and business prospects and opportunities of the Corporation or its industry. Forward-looking statements
typically contain words such as “believes”, “expects”, “anticipates”, “continues”, “could”, “indicates”, “plans”, “will”, “intends”, “may”, “projects”, “schedules”, “would” or similar expressions suggesting
future outcomes or events, although not all forward-looking statements contain these identifying words. Examples of such statements include, but are not limited to, statements concerning: (i)
actions expected to be undertaken to achieve the Company’s strategic goals; (ii) the key market drivers impacting the Company’s success; (iii) intentions with respect to future renewable gas work;
(iv) expectations regarding business activities and orders that may be received in fiscal 2021 and beyond; (v) trends in, and the development of, the Company’s target markets; (vi) the Company’s
market opportunities; (vii) the benefits of the Company’s products, (viii) the intention to enter into agreements with partners; (ix) future outsourcing; (x) expectations regarding competitors; (xi) the
expected impact of the described risks and uncertainties; (xii) intentions with respect to the payment of dividends; (xiii) the management of the Company’s liquidity risks in light of the prevailing
economic conditions; (xiv) the Company’s cost reduction plan; (xv) the search for additional financing over the next months; (xvi) statements regarding the merits of the class action complaints filed
against the Company; and (xvii) 2021 revenue and EBITDA guidance.
These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties that may cause the Company’s actual results, level of activity or performance to be
materially different from any future results, levels of activity or performance expressed in or implied by these forward-looking statements. These risks include, generally, risks related to revenue
growth, operating results, industry and products, technology, competition, the economy, the sufficiency of insurance and other factors which are discussed in greater details in this investor
presentation and in the Annual Information Form of the Corporation filed on SEDAR at www.sedar.com.
Forward-looking statements contained herein are based on a number of assumptions believed by the Corporation to be reasonable as at the date of this investor presentation, including, without
limitations, assumptions about trends in certain market segments, the economic climate generally, the pace and outcome of technological development, the identity and expected actions of
competitors and customers, assumptions relating to the merits of the class action complaints filed against the Company and their impact, the value of the Canadian dollar and of foreign currency
fluctuations, interest rates, working capital requirements, the anticipated margins under new contracts awards, the state of the Corporation’s current backlog, the regulatory environment, the
sufficiency of internal and disclosure controls, the ability of the Corporation to successfully integrated acquired business, and the acquisition and integration of businesses in the future. Other
assumptions, if any, are set out throughout this investor presentation. If these assumptions prove to be inaccurate, the Corporation’s actual results may differ materially from those expressed or
implied in the forward-looking statements. The forward-looking statements contained herein are made as of the date of this investor presentation and are expressly qualified in their entirety by this
cautionary statement. Except to the extent required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements contained herein. Readers should not
place undue reliance on forward looking statements.
Non-IFRS Measures
This investor presentation refers to financial measures that are not recognized under International Financial Reporting Standard (“IFRS”). A non-IFRS financial measure is a numerical indicator of a
company's performance, financial position or cash flow that excludes or includes amounts or is subject to adjustments that have the effect of excluding or including amounts that are included or
excluded in most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS measures do not have any standardized meaning under IFRS and therefore are
unlikely to be comparable to similar measures presented by other companies having the same or similar businesses.
The Corporation believes these measures are useful supplemental information. The following non-IFRS measures are used by the Corporation in this investor presentation: EBITDA, EBITDA
margin, Adjusted EBITDA, Adjusted EBITDA margin, backlog, quote log of Xebec.
3
Record Revenue Quarter
Recovery and Rapid Growth on Track
Quarter saw improved gross margins, FY2021 management
guidance maintained § Saw revenue
contributions of
§ Despite challenging environment, Xebec continues to execute on its
HyGear and
growth objectives
Inmatec
§ Gross margins improved over last quarter as more profitable
contracts were processed
§ Seeing positive indications for a significant economic upturn § Improving economic
alongside accelerated decarbonization targets conditions across
§ RNG and hydrogen industry continues to look favourable and activity
North America and
is accelerating Europe
4
Financial Highlights
(in millions of CAD) Q1 2021 Q1 2020 Change
Total Revenues 20.6 12.2 69%
Gross Margin 4.2 3.1 35%
GM as % of revenues 20% 25%
SG&A 10.9 3.8 187%
SG&A as % of revenues 53% 31%
Adjusted EBITDA (5.8) 0.5
Adjusted EBITDA as a % of revenues N/A 4%
Net Income (Loss) from Continuing Operations (9.2) (0.7)
EPS (0.06) (0.01)
• As at March 31, 2021, the company had $108.5 million of cash compared to $168.6 million as at December 31, 2020.
5
Quarterly Financials Trend
Xebec is on track to continue its significant revenue growth with FY2021 will showing an improvement in
profitability.
$30
$ Millions
$20
$10
$-
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
$(10)
$(20)
$(30)
$(40)
Revenue Adjusted EBITDA Net Income
6
Business Segment Overview
Cleantech Business
Services
Service & Parts & RNG Plants,
Industrial Business Support, Support H2 Generation &
Cleantech Purification
Network
Equipment
O&M
Sale
RNG
Infrastructure Hydrogen Generation
Products (SMR and
Electrolysers)
On-site Oxygen and
Nitrogen Generators
Infrastructure
Business 7
Cleantech Systems
(CAD million) Q1 2021 Q1 2020 Change
Systems Revenues 9.9 8.0 24%
• Continue working through lower margin contracts
• Impact from less profitable contracts felt in Q1 and as noted from the
extraordinary events in Q4
• Ramping up production of BGX Biostream™ units
• In response to customer demand, 11 units in production in the coming
months
• Objective to hit two units per month production capacity in August 2021
• Supported by new capacity created from Nortec acquisition
• Hydrogen activity continues to be robust
• Many high-profile projects and partnerships being announced worldwide
• Xebec continues to work on partnerships to accelerate adoption of
technologies (Coregas and OmAir)
• Decentralized Production Hub strategy to be released later this year
8
Industrial Service & Support
(CAD million) Q1 2021 Q1 2020 Change
Support Revenues 10.7 4.2 161%
• Revenue growth strong as a result of recent acquisitions and
organic growth
• Seeing full contributions from service companies acquired last year (Air
Flow, Titus)
• Approximately 1 month contribution from Inmatec
• Gross margins improving
• 35% in Q1, trending towards long-term target of 40%+ for the segment
• Increased our manufacturing capacity with Nortec
• Creates additional capacity for Blainville, Québec for Biostream units
• Will be a “Center of Excellence” for dehydration products and service
• Prepares for more regulations on local sourcing and manufacturing
9
Record Sales and Deliveries for Oxygen Generators
• Inmatec is performing above expectations
• On-site oxygen generation is benefiting from the accelerated need for
supply in response to COVID-19
• Countries such as India have been particularly hard hit and large
customers
• Continued follow-on orders from customers
• Another order received in the last week from India for 41 on-site oxygen
units
• Anticipating strong order bookings and are increasing inventory in
anticipation
• Dr. Peter Biedenkopf hired as General Manger
• Doctorate in chemistry with over 24 years of professional experience
• Past experience at Daimler, Deutsche Bank and Linde Gas, Tyczka
GmbH and cobos Fluid Service GmbH
• Reports to Marinus van Driel, President of Xebec Europe
10Canada’s Largest Helium Purification Facility
Large-scale helium
purification project
• Recently commissioned project
utilizing Xebec’s PSA
technology
• He used in MRI machines, fiber
optics, cell phones, computer
chips, hard drives, rockets, etc..
• Selling $1M / month in He
• New opportunities developing
for He due to shortages
worldwide
• Approximately 20 projects
actively being developed in
Helium purification facility opens in North America
Saskatchewan
11Renewable Gas Infrastructure
• Infrastructure Québec activities have all been rolled under GNR
Québec Capital fund (“GNRQC”)
• Team based out of Montréal and started operations in Q3/20
• Positive environment for RNG projects in Québec
• Several programs (PSPGNR, PBTMOC, etc…) to support source
separated organics, agriculture and renewable energy production
• RNG target of 10% by 2030, doubling bioenergy production
• Plan to recover 70% of organic waste by 2030, diverting waste from
landfills
• GNRQC is the leading fund in Québec for RNG projects
• Over 20 projects being evaluated for investment, objective to complete
several investments in 2021
• Xebec expects to participate in the sale and servicing of the upgrading
equipment for projects
12Outlook and Management Guidance
2021 Management Guidance 2021E 2020A
Revenues $110 - $130M $56.5M
Adjusted EBITDA Margin 3.0 - 4.0% Negative
§ Expecting significant
topline revenue
growth
§ Maintain our FY2021 guidance
§ Guidance supported by backlog of $88.5 million (as of May 12, 2021)
§ Subsequent quarters expected to have higher revenues and improved § Return to positive
operating leverage adjusted EBITDA in
2021
13Q&A Period
14Thank you for attending Xebec Adsorption Inc. 730, Industrial Blvd. 1 450-979-8700 Blainville, QC J7C 3V4 1 877-469-3232 Canada www.xebecinc.com TSXV: XBC
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