Westport 2012 Annual General Meeting presentation (for the year ending Dec. 31, 2012) given by David Demers, Westport Chief Executive Officer on April 11th, 2013. For more viewing options, visit www.westport.com/media/presentations/
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Westport 2012 AGM Presentation
1. The global leader in natural gas engines.
Powering transportation.
Driving change.
Westport 2012 AGM stock symbols market capitalization
TSX NASDAQ CAD USD
WPT WPRT $1.6 billion $1.6 billion
April 11, 2013 1
2. Forward Looking Statements
This presentation contains forward-looking statements that are based on the beliefs of Westport‘s
management and reflect Westport‘s current expectations. Investors are cautioned that all forward-
looking statements involve risks and uncertainties that could cause actual results to differ materially
from those expressed in these forward-looking statements, including, without limitation, Westport‘s
ability to develop viable fuel systems; Westport‘s ability to provide the capital required for research,
product development, operations, and marketing; product development, production and commercial
launch delays; changing environmental regulations; Westport‘s ability to attract and retain key
personal and business partners; competition from conventional diesel fuelled engines; and
Westport‘s ability to protect its intellectual property. These factors should be considered carefully
and investors should not rely on any forward-looking statements. Investors are encouraged to
review Management‘s Discussion and Analysis and the Risk Factors section in Westport‘s most
recently filed Annual Information Form and filings with securities regulators for a more complete
discussion of factors that could affect Westport‘s future performance. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.
All figures are in U.S. dollars unless otherwise stated.
2
3. Westport Engineers Advanced Natural Gas Engines
We are enabling the global shift to a cleaner, cheaper, more
sustainable energy source for transportation and fundamentally
changing the way the world travels the roads, rails and seas.
market focus position opportunity
Leading the Strong first mover
global shift in advantage with Shifting products
transportation unmatched from ―proof of
from petroleum IP, relationships, concept‖ to
fuels market widespread
to methane coverage, product global adoption
(natural gas) s, and capabilities
3
4. Westport at a Glance
Through its market focus and
position, Westport has moved from
proof of concept to capture the
global emergence of
natural gas vehicles
through a broad range of
transport applications.
4
5. Investment Highlights
1. Key markets are established – Westport is focused on
rapid introduction of new products establishing
technology standards and harvesting investment returns
2. Aggressive price and performance improvements in
all markets to encourage accelerated adoption
3. Leverage key OEM partnerships allowing for fast and
profitable scale up at low risk for all stakeholders
4. Continue developing new markets and new partnerships
5
6. Accelerated Market Adoption
Adoption rate in leading markets moving faster than the gasoline to diesel transformation
Clean Energy Fuels, Shell, Encana, ENN, and others are leading the build-out of natural
gas stations and fuelling infrastructure around the world
100%
New sales of Class 8
diesel trucks, USA1
75%
Share
50%
New registrations New sales of natural gas
of diesel passenger refuse trucks, USA3
cars, Europe2
25%
0%
1950 1970 1990 2010 2030
Data sources: 2. ACEA
1. MacKay & Co., & Wards Auto Group, a 3. Westport 6
division of Penton Media, Inc. 4. Westport
7. Westport is the Technology Leader
Global patent portfolio pivotal to Top 10 Companies with
Westport‘s market leading Natural Gas Engine Related Patents*
position with OEMs Westport 325
Worldwide, Westport and its Toyota 218
affiliates have filed over 700 Fiat 191
patent applications relating to Bosch 169
over 180 inventions in: Ford 167
engine technologies GM 162
fuel system components CAT 158
control methods Honda 142
vehicle integration Siemens 141
other related technologies Daimler 121
Established strong development 0 100 200 300 400
lead times and barriers to entry * Based on the patent search results of publicly available data within the International Patent
with over $390M in R&D and 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 not ("fuel cell" or
"turbine"). This chart includes issued or granted patents from: Australia, Brazil, Canada, China,
commercialization since 1995 European Patent Office Grants, France, Germany, India, Italy, Japan, Poland, Russia, Spain, UK,
USA, USSR, and pending published patent applications from: the European Patent Office, USA,
and the World Intellectual Property Office.
as of January 22, 2013 7
8. Converting R&D to ROI Proprietary technology enables latest diesel and gasoline
engines to operate on natural gas (or other gaseous fuels)
Compatible with current and future engine technology; preserves
Product Commercialization Roadmap and improves performance, efficiency, emissions
earlier 2011 2012 2013 2014 2015
Westport 2.4L Ford F-250/350 Ford F-450/550 Volvo 13L Cummins Westport
Volvo V70
Industrial Engine Westport WiNG Westport WiNG Westport HPDI ISB6.7 G
Cummins Westport Westport
Westport JumpStart
5.9L & 8.3L LNG Tank System
Cummins Westport Cummins Westport
8.9L ISL G ISX12 G
Westport HPDI 15L Weichai Westport
WP12HPDI
Weichai Westport
6.8–11.6L Westport Product
colour legend automotive urban trucking off-road fueling
8
11. Cummins Westport Joint Venture
50:50 JV established in 2001, Key recent growth driver:
revised 2004 and 2012 (ten year deal) refuse trucks in North America – approaching 50%
natural gas market penetration
28% revenue CAGR from CY 2006–2012 medium truck applications
Products
ISL G ISX12 G ISB6.7 G
8.9L 11.9L 6.7L
SEGR SEGR SEGR
250–320hp 320–400hp
660–1,100 lb-ft 1,150–1,450 lb-ft
available now 2013 launch 2015 launch
11
12. Addressable Market:
Urban Commercial Fleets in North America
annual current future
CWI Engines in North America by Segment
market CWI CWI
(cumulative)
30,000 turnover engine engine
5,000 –
Transit Bus ISL G n/a
Truck 6,0001
25,000
Refuse Coach,
2,000 – ISB6.7 G
Coach/Shuttle/Specialty Shuttle, ISL G
4,0002 (2015)
20,000 Speciality
School Bus
School Bus 20,000 – ISB6.7 G
Transit n/a
Type C 30,0003 (2015)
15,000
School Bus 3,000 –
ISL G n/a
Type D 6,0003
10,000 Refuse 5,000 – ISX12 G
ISL G
Truck 7,0004 (2013)
5,000 71,000 – ISB6.7 G
Class 6 & 7 ISL G
97,0005 (2015)
110,000 – ISX12 G
0 Class 8 ISL G
199,0006 (2013)
1. New Flyer Annual Information Form March 2012 4. CWI analysis
2. CWI analysis 5. ACT Research of all OEMs’ sales in class 6 & 7 from 2009-2011 12
3. School Bus Fleet magazine annual market survey 6. ACT Research of all OEMs’ sales in class 8 from 2009-2011
13. Cummins Westport Financial Summary
USD$MM 2007 2008 2009 2010 2011 2012
Revenue $ 66.4 $ 92.9 $ 101.5 $ 117.1 $ 163.9 $ 198.0
Cost of revenue 43.2 68.3 69.3 71.8 92.4 136.6
Expenses 13.1 14.8 16.3 18.1 22.1 26.1
Operating income* $ 10.1 $ 9.8 $ 15.9 $ 27.2 $ 48.4 $ 35.4
Operating income % 15.2% 10.5% 15.7% 23.2% 30.1% 17.9%**
Capital expenditures - 0.2 - 0.4 0.3 0.2
* Excludes foreign exchange effects and bank charges
** The decrease in CWI operating income percentage for the year ended December 31, 2012 was primarily due to warranty adjustments as a result
of fleets using smaller CWI ISL G 8.9L engine in broader applications with higher duty cycles in order to take advantage of strong economic
benefits of driving natural gas trucks. Excluding warranty adjustments and higher extended coverage claim impact, CWI operating income
percentage would have been 26%.
13
15. Growth in LNG Fueling Infrastructure
Public – open
Built – not open
2013 – planned
Source: Westport analysis January 2013, Clean Energy Fuels, Encana, Shell, and BLU., FortisBC, Gaz Metro 15
17. North America:
Natural Gas Offerings for the Trucking Market
regional haul long haul heavy haul
Engine size 8–12L 13–15L 15–16L
Annual sales volume* 52,500 117,200 30,000
Current engines CWI ISL G Westport 15L Westport 15L
Development engines CWI ISX12 G [2013] Volvo 13L (w/ Westport HPDI) [2014] Westport 15L
Kenworth Freightliner Mack
T440 T470 T660 T800B T800SH W900S M2 - 112 SD - 114 Cascadia Granite / Pinnacle legend
9
CWI ISL G 9L
9 9 12 15 12 9/12 9 9 12 12
12
CWI ISX12 G
Navistar Peterbilt Volvo
TranStar 320 382 384 365 367 386 388 VNM VNL
15
Westport 15L
9 9/12 9 9/12 9/12 15 15 15 9 12
*Polk database of new truck sales based on 2011 registrations, Westport analysis 17
18. Global Truck Market Opportunity
China first, followed by India and Europe
China LNGV Population Natural Gas Stations in China
LNG Station
3,000 CNG Station
14
12 2,500 33% 350
118%
10 CAGR
CAGR 2,000
(thousands)
8
1,500 123
20
6 13.3 15
2,500
1,000
4
1,604
1,477
1,329
500
2 3 4 7
5.8
293
355
410
480
537
3.1 0
0 0.3 0.7 0.9 2003 2004
2003 2004 2005 2006
2005 2006 2007 2008
2007 2008 2009 2010
2009 2010 2011
2011
Sources: China Automotive Technology and Research Center, www.chinaev.org, China Road Transport Association, Westport analysis 18
19. Strong Growth in China
First announced Weichai Westport JV in 2008; formal JV commenced July 2010
Hong Kong
Light-duty component business has >60% share in China* Peterson (CNG)
Equipment
35%
Existing NG engine business demonstrating strong growth in China 25% 40%
Current priorities: launch Westport HPDI technology for Asian market in 2013
with broad LNG infrastructure
Westport revenue model
Sale of components to JV and to vehicle OEMs
Participate in the JV‘s profitability
Weichai Westport Financial Summary
USD$MM 2008 2009 2010 2011 2012
Revenue $ 9.9 $ 19.0 $ 44.8 $ 109.8 $ 272.1
Cost of revenue 8.1 15.7 35.9 90.1 234.3
Expenses 1.6 2.5 6.4 14.1 28.1
Net income $ 0.1 $ 0.8 $ 2.4 $ 5.6 $ 8.2
Net income % 1.3% 4.2% 5.4% 5.1% 3.0%
WPT 35% interest* - - $ 0.6 $ 1.9 $2.9
Engines sold 720 1,696 3,602 8,451 22,025
* Westport began reporting its income from WWI in July 2010
*Westport analysis 19
20. Fuel Storage Applications:
The New Westport™ LNG Tank System
Proprietary Westport technology, hydraulic
optimized for spark-ignited power
module
engines, such as CWI
The 120 or 150 gallon single-tank
systems can run for ~350 to 450 miles,
respectively, on cold (unsaturated) LNG tank
LNG fuel – ranges double for and pump module
dual-tank
A single 150 gallon Westport LNG Tank System takes the place
of 3 standard CNG tanks, lowering fuel storage costs, speeding
up refueling, and reducing overall vehicle weight by 600 lbs
Fuel-flexibility with either warm (saturated) or cold
(unsaturated) LNG – increasing vehicle range by up to 10%
when using cold LNG driver
display
westport.com/is/core-technologies/westport-lng-tank-system
20
21. Global Automotive Market
Approximately 14.9M1 natural gas passenger car & light commercial vehicles on the road
Approximately 79.5M2 passenger car & light commercial sales annually for all fuel types
Approximately 1.5M3 compressed natural gas vehicle sales annually including aftermarket
Canada & USA4 Western Europe4 Eastern Europe4 Greater China4
Light Vehicles Light Vehicles Light Vehicles Light Vehicles
Produced
12.6M Produced
12.8M Produced
6.3M Produced
18.7M
Light Vehicles Light Vehicles Light Vehicles Light Vehicles
Sold
16.2M Sold
13.2M Sold
5.1M Sold
19.2M
Latin America4 India4 Australia & NZ4
Light Vehicles Light Vehicles Light Vehicles
Produced
6.8M Produced
3.8M Produced
0.2M
Light Vehicles Light Vehicles Light Vehicles
Sold
6.8M Sold
3.3M Sold
1.1M
‗Light vehicle‘ refers to passenger cars, light passenger trucks &
1.NGVA Europe (2012) 3.NGV Global (2011)
vans, minibuses, and light commercial vehicles usually less than 3.5 21
2.IHS (2012) 4.IHS (2012)
tons and not more than 7 tons
22. NGV Components & Complete Solutions
off-engine on-engine complete industrial engines
components components
complete systems designed to specific OEM platforms
22
24. Significant Off Road Opportunities
target vehicles opportunity OEM partners worldwide units
MINING
(RESOURCE EXTRACTION) mine haul 19,406 engine units
2bn gal of diesel consumed annually by (>127 ton)4
trucks
the top 10 mining companies alone 13,890 engine units
drill rigs and operating around the world1 (drill rigs & frac
frac pumps pumps)5
RAIL diesel
mainline Rail industry consumes 9bn gal of
freight diesel fuel annually, half of this in North 50,594 engine units
locomotives America2 (mainline
diesel Fuel represents approximately 24% of locomotives)6
passenger US railroad operating costs3
locomotives
MARINE ferries
Marine industry consumes 13bn gal of
diesel fuel annually2
tugboats Emissions reduction in sensitive coastal
and inland waterways are a priority 25,000 engine units
PSVs (small vessels)7
Some examples of LNG ferries and
work and platform support vessels (PSV) in
crew boats Scandinavia, but no widespread
adoption yet
1. Morgan Stanley/Parker Bay, Westport analysis 2012, Westport Analysis by SCI Verkehr GmbH, Westport analysis
2. UN Energy Statistics Database 2008 5. Baker Hughes Rotary Rig Count Report, Westport 7. Diesel and Gas Turbine Magazine 2011 Marine
3. Burlington Northern 2008 Annual Report analysis Propulsion Order Survey, Westport analysis
24
4. Parker Bay Mobile Mining Equipment Database 6. Diesel Locomotives – Global Market Trends 2011
25. North America:
Potential Off-Road Business Models
Fuel Delivery
proprietary cryogenic
components deliver
high pressure fuel
Fuel Storage
LNG fuel storage
solutions
Engines
Apply Westport HPDI
technology
25
27. Business Unit Realignment
Previous Structure Realignment
Light Duty Applied Technologies
OMVL and Emer (Italy)
Westport (Sweden) - Volvo V70 bi-fuel system
aftermarket conversion kits, direct to OEM systems
OMVL and Emer (Italy) Westport (Australia)
aftermarket conversion kits, direct to OEM systems
Wesport (Australia) On-Road Systems
Westport™ WiNG Power System for Ford F-250/350/450/550 Westport (Sweden) - Volvo V70 bi-fuel system
Westport™ 2.4L and Westport™ 3.8L Industrial engines Westport™ WiNG Power System for Ford F-250/350/450/550
Mobile and stationary industrial applications incl. forklifts Westport™ 2.4L and Westport™ 3.8L Industrial engines
Mobile and stationary industrial applications incl. forklifts
Heavy Duty Westport™ 15L system with Westport™ HPDI technology
Westport™ 15L system with Westport™ HPDI technology Volvo 13L system with Westport™ HPDI technology
Volvo 13L system with Westport™ HPDI technology Westport™ LNG Tank System (North America)
Weichai Westport HPDI 12L system JumpStart mobile refuelling solutions
Westport™ LNG Tank System (North America) Products for On-Road Systems after development
JumpStart mobile refuelling solutions
New Markets and Off-Road Systems
Corporate including High-Horsepower Weichai Westport HPDI 12L system
CAT development program Products for Off-Road Systems after development
SDTC / EMD development program
Corporate and Technology Investments
Tata Motors development program
GM, CAT, Tata, and Volvo development programs
GM development programs
SDTC / EMD development program
Joint Ventures 2 new OEM development programs
Cummins Westport and Weichai Westport Joint Ventures
Cummins Westport and Weichai Westport
27
32. Overcoming Challenges
Perception Actual
Emerging Global patent portfolio protects our technology leadership position and OEM relationships
competition
Dependent upon OEM-centric business model allows Westport to grow quickly and minimize capital investments
OEM partners Westport is an essential partner to help OEMs improve their competitive position, increase market
share, and get to market faster with natural gas engines
Profitability is Westport is focused on long-term sustainable profits—establishing technology & market leadership
unclear Product launches will generate new investment returns while increasing economies of scale will
drive cost reductions and enhance operational efficiencies
Cummins Westport and Weichai Westport have proven our profitable business model
High average Westport 15L HPDI system ASP has decreased by 11% year over year (2012 vs. 2011)
selling price (ASP) Westport WiNG Power System is priced at an industry-leading $9,500
Limited fueling Clean Energy Fuels, Shell, ENN, Encana, Chesapeake, ConocoPhillips, and others have committed
infrastructure to build the natural gas infrastructure in N.A., China and Europe
Automotive >90% of the vehicles sold globally are light-duty1 and >64% of transportation fuel is consumed by
market is light-duty vehicles in the U.S.2
unattractive Westport has relationships with 8 of the 10 largest automotive OEMs in the world
Westport Applied Technologies business unit gross margin for the year ended December 31, 2012
was 27.6%
Combustion technology development programs with GM highlight strong technology and competitive
advantage
1.The Gas Vehicles Report, September 2012
2.NPC Future Transportation Fuels Study, August 2012 32
33. Pure-play global leader for
natural gas as a transportation fuel
Capital
Valuable Talented &
Strong Efficient &
Strategic & Experienced
First-Mover Scalable
Business Management
Advantage Business
Alliances Team
Model
www.westport.com
33