The document is an investor presentation for Xebec, a renewable gas company that designs and manufactures equipment to produce renewable natural gases like biogas from organic waste. Xebec has growing revenue, a large backlog of orders, and sees significant market potential as governments implement targets to increase renewable gas usage to reduce emissions. The company presents itself as an attractive investment opportunity in the renewable energy transition with proprietary technology, commercial success, and exposure to expanding markets for renewable gases.
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 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 forwardlooking statements.
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3. Introducing Xebec. The Renewable Gas Company™
Decarbonizing our future with renewable gases
TSX-V: XBC | OTC: XEBEF
Xebec designs, engineers and manufactures equipment to produce renewable gases such as
RNG from waste, providing a revenue source for end users like gas utilities & the public sector.
With proven proprietary technology, Xebec is a facilitator in the rapidly developing Global
Energy Transition space.
Mandated targets and global recognition of the economical viability in renewable gases –
Canada for example has a 5% RNG target for 2025 – a volume increase of 250x in next 6 years
Xebec is attractively valued relative to its peers with an exponentially growing backlog of
$71.4M that proves its technology capabilities
Why invest now?
3
Who are we?
4. Three main sources: organic waste, wood waste and electricity are all
carbon neutral - no carbon is added to the atmosphere
What is Renewable Natural Gas (RNG)?
Fossil equivalent of natural gas made from renewable sources
Advantages of RNG
Cost-effective energy storage
medium
Practical applications in heating
and transportation
Interchangeable, compatible
with natural gas assets
Circular economy, waste
management tool
Electrolysis MethanationElectricityWind & Solar
(Energy Storage)
Renewable
Natural Gas
(RNG)
Thermo
Gasification
Gas
Upgrading
Wood
Waste
Forest/Wood Waste
(Cellulose Materials)
Anaerobic
Digestion
Gas
Upgrading
Organic
Waste
Landfills
Agri-Food
(Farms)
Waste Water
Treatment
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5. Why is RNG Relevant?
Climate change is driving the energy transition to 100% renewables
Wind and solar have become prevalent in the past 20 years
In Canada, 66% of all electricity is from renewables, 10% of
which is from wind and solar and 0.02% is from RNG
Canada has a 5% RNG target for 2025 –
requires volume increase of 250x in next 6 years
At the cusp of explosive growth for RNG -
similar to the early days of wind and solar
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6. Electricity Utilities are successfully shifting to renewable solar and wind energy
Gas Utilities recognize if they don’t move to RNG, they will face declines in demand for their
services and see an acceleration towards electrification of their customer base
Investors are facing the prospect of significant losses and hundreds of billions of dollars of
stranded gas assets if the business model does not shift towards renewable gases
Gas Utilities are starting to lobby governments and policy makers to support a shift toward
zero carbon renewable gases with appropriate legislation and regulation
Single Biggest Driver of RNG are Gas Utilities
RNG represents the lifeblood for gas utilities and its investors
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7. How Will Gas Utilities Transition?
By adopting RNG through three production processes
COMMERCIALIZATION
TIMELINE
Anaerobic
Digestion
Pyro-GasificationElectrolysis
Methanation
100%
30%Power-to-Gas
70%
45%Gasification
25%
25%Anaerobic
Digestion
0%
RESOURCE
TYPE
BiomassElectricity
TECHNOLOGY
SECTOR
INVESTMENTS
TO BE ASSESSED
POWER-TO-GAS
PYRO-
GASIFICATION
ANAEROBIC
DIGESTION
Production of methane by
electrolysing water using
renewable electricity followed
by methanation of hydrogen
in the presence of renewable
carbon dioxide
Production of methane from
organic matter, mainly
forestry waste (wood), via a
thermo-chemical process
Production of methane using
micro-organisms that break
down organic matter in the
absence of air
INVESTMENTS
TO BE ASSESSED
INVESTMENTS
$7 - $10 BILLION
Now3to8years8to15years
http://images.transcontinentalmedia.com/LAF/lacom/rapportgnrreduce06022019.pdf
http://www.grtgaz.com/fileadmin/medias/communiques/2018/EN/Etude-mix-gaz-100-pourcent-renouvelable-EN.pdf
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8. Ultimate Energy Vision: Integrated Networks
Using RNG makes large scale energy storage economically viable
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RNG has 1,000,000x the storage capacity of lithium ion batteries. Storage is
up to 1 year versus half a day and costs 20-30x less to transport and store
Electricity Network
Power-to-Gas
Electricity
Generation
8
9. Leading Technology
Invested over with $60M in proprietary technology
continuous investment
Commercially Proven
Over 200 gas installations globally
Perfect Timing
The tipping point is now – climate change
acceptance; government policy change;
consumer conviction; industry readiness
So Why is Xebec Gaining Traction?
Leading technology, commercially proven, perfect timing
Value proposition
Lowest lifecycle cost
Reliability
Flexible and scalable
Service and support network
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10. $51M minimum order commitment with Sapio Group of Italy for
multiple biogas upgrading plants
$5.9M contract for multiple units in France for 2019 delivery
Entered the Brazil biogas upgrading market with a first order
Multi-million dollar order from Enbridge for a turnkey biogas
upgrading system - City of Toronto’s first RNG facility
Order from one of the largest waste-to-energy landfill operators in the U.S
We Have Significant Market Recognition
Strong value proposition has led to recent major contract wins
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11. Systems
Design and build systems that deliver renewable gases
Infrastructure
Setup, own and manage renewable gas projects
Support
Industrial products, parts, service and operational support
1
2
Business Model
Three business segments driving significant recurring revenue
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12. This is the segment driving
our recent revenue and
backlog growth
We provide the systems for
upgrading to renewable
natural gas
Systems
For producing renewable gases
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13. Finance and own mid-market
renewable gas projects
Sell the gas directly to utilities
through offtake agreements
First project planned for Q2/19
Source of future recurring
revenue
Infrastructure
Build, Own, Operate Mid-Market Energy Infrastructure Assets
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14. Source of current recurring
revenue – O&M contracts
and parts
Local service and support,
key competitive advantage
Accretive acquisitions for
continuing recurring revenue
$10 - $12M recurring revenue
projected for 2019
Support
Local Service, Support, Spare Parts and Remote Monitoring
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15. Strong and growing core markets in France, Italy, United States and Canada
Market for system sales currently exceeds $6B in Xebec target markets - based on
announced projects Xebec estimates a potential of ~1,700 systems
Driven by new environmental targets, governmental policy/regulations incentivizing utilities
and businesses to use renewable gases
As a result, prices for RNG are anywhere from $9 to $75 MMBtu, or 3 to 20x the price of
fossil natural gas
Core Market Size
A large and global market
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16. Market Validation
Industry and governments are making major investments
ENGIE - €800M to develop green
gases in the next 5 years in France
California Agencies Select
Dairy Biomethane Projects –
$319M Pilot
€850M in investments in
Tomorrow’s Energy Company
(TEC), with minimum €200M in
new green business lines
Commission approves €4.7B public
support scheme for advanced
biomethane and biofuels in Italy
More growth & jobs €500M in EU
funding for clean energy infrastructure
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18. Net Profit
$0.6M
vs Q3 2017: $0.1M
GP Margin Improvement vs Q2
34.0%
vs Q2 2018: 31.6%
Operating Cash Flow
$250K
vs Q3 2017: $(19K)
Financial Highlights
Revenue up 100.0% to
$8.2M
vs Q3 2017:$4.1M
Return on Revenue
7.8%
vs Q3 2017: 2.3%
Revenue per Employee
$373K**
vs Q3 2017: $267K
**annualized
Backlog increased by $54.7M
$71.4M*
vs Nov 28/17: $16.7M
Positive EBITDA at
$1.1M
vs Q3 2017: $0.3M
Working Capital Ratio – 1.4:1
$3.9M
vs Dec 31, 2017: $1.8M – 1.3:1
*Includes order commitment of $51M over 3 yrs
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19. Positioned for Growth
Setting the foundation for 2019
$23M in credit facilities established mid-2018
with EDC to satisfy working capital needs
Closed a $7.0M equity raise in Q4/18
Closed first acquisition: a Service and Support
Company in Ontario in Q4/18 (Two more
acquisitions in 2019)
Earnings per share (EPS) for 2019 are expected
in the range of 0.05 to 0.07
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Revenue
2016
$9.6M
$14.7M
$25.0M*
$40.0M+*
2017 2018 2019
Year
*Company guidance
19
20. Why Invest in Xebec?
Growth, Earnings and Valuation
Rapid Revenue Growth
75% CAGR from 2016 to projected 2019
Growing recurring revenue component, $10-$12M for 2019
Strong Profit Growth
Forecasted earnings growth of 500% from 2018 to 2019
with positive double digit earnings growth outlook
Record Order Backlog and Quote Pipeline
Sales activity currently represents over $500 million
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21. Capital Market Profile
Exchange and Ticker Info: TSX-V: XBC | OTC: XEBEF
Corporate Headquarters: Montreal, Canada
Shares Outstanding: 55,786,970
Shares Fully Diluted: 69,207,136
Stock Price (March 07, 2019): 1.25
52 Week High / Low: $1.33 - $0.45
Market Capitalization on Date: C$71 million
In Business Since: 1967
Number of Employees: ~88
Q3/18 Revenues: C$8.2 million
TTM Revenues: C$21.3 million
Inside Ownership: 17.4%
Institutional Ownership: ~30%
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22. Management, Board, Awards
Kurt Sorschak
Chairman of the Board, President & CEO
Co-founder of Xebec, developed it from a local compressed air and
gas dryer manufacturer into the international company it is today
Dr. Prabhu Rao
Board Director & COO
Former CEO of McPhy Energy North America, seasoned executive
with over 15 years of experience in the alternative energy industry
Louis Dufour
CFO
20+ years of corporate finance and operational experience,
most recently as a Partner of CFO Optimum
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23. Management and Board
Joseph H. Petrowski
Board Director
Guy Saint-Jacques
Board Director
Dr. Francesco Massari
General Manager, Xebec Europe
Dr. Amir Ghasdi
Director, Business Development
William Beckett
Lead Board Director
Dr. Peter Cheng
General Manager, Xebec China
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