Clean Air Power Ltd John Pettitt, Chief Executive Peter Rowse, Finance Director April 2013 1
Dual-Fuel Engine Management Software enables heavy duty trucks to operate on a combination of diesel and natural gas, with no change to the base engine. Leyland UK: Headquarters and operations Poway USA: Engineering R&D, component & emissions production 2
Clean Air Power: Overview Tier 1 supplier of Dual-Fuel system to major European truck manufacturer Tier 1 supplier of components to Global Truck OEM, Mercedes- Benz, L3 Natural gas injectors, filter systems, high speed hydraulic valves Original patent holder remains with the company Approximately 200 man-years of Dual-Fuel know-how 3
In the production phase Validation Development New Executive Management Admission to AIM OEM Demo European OEM Devm t Navistar Phase 1 Genesis EDGE Euro 5 Sales US Genesis EDGE European OEM Production Production US EPA2010 Genesis EDGE 2005 2010 2012 2014 2015 2016 4
Agenda 2012 Results Clean Air Power operators LNG Infrastructure Natural Gas truck market US Genesis EDGE Summary 5
2012 Financial Information 6
Group Income Statement Summary Income Statement ( 000) 000 2011 2012 Prelim Total Revenue 4,585 7,942 Gross Margin 2,563 3,518 % 56% 44% Administration Expenses (4,238) (4,580) Amortisation & Depreciation (430) (1,130) Other Costs (140) (29) Operating loss before exceptional costs (2,245) (2,221) Financing 5 1 Net Loss (2,240) (2,220) 7
Balance Sheet Summary Balance Sheet ( 000) 2011 2012 Prelim Non-Current Assets 4,029 3,893 Inventories 670 1,208 Trade and other receivables 816 1,102 Cash 2,422 3,204 Total Assets 7,937 9,407 Total Equity 6,223 7,131 Total Liabilities 1,714 2,276 Total Equity and Liabilities 7,937 9,407 8
Cashflow Statement Cashflow from operating activities Cashflow Statement ( 000) 2011 2012 Prelim Loss on ordinary activities before tax (2,240) (2,220) Amortisation and Depreciation 430 1,130 Working Capital movements 590 (159) Other non-cash movements 209 (95) Net Cash outflow from operating activities (1,011) (1,344) Less: Capital Expenditure (1,955) (1,099) Add: Net Cash inflow from financing activities and forex 2,978 3,225 Cash and cash equivalents at 1 January 2,410 2,422 Cash and cash equivalents at 31 December 2,422 3,204 9
Who s using CAP systems? 10
Sainsburys started with a single Genesis in 2008 and a further 5 in 2009 They were a trial customer for the Volvo MethaneDiesel in 2010 In 2012 they converted 49 Volvo FM13s using the Genesis EDGE Dual-Fuel system Wiseman Dairies initially ordered 2 Genesis systems in 2007 and a further 20 in 2008 Following a grant from TSB, Robert Wiseman Dairies, collaborating with Chive Fuels, Cenex and MIRA, will, in 2013, trial the use of 40 new warranted dual-fuel 40 tonne articulated trucks substituting diesel with natural gas from two upgraded public access liquefied natural gas stations, one in the West Midlands and one in Scotland. 11
B&Q is committed to reducing its CO2 emissions from business travel and haulage to 50 percent by 2023 As a national retailer with a global supply chain we have a very big impact when it comes to transportation, which has implications for carbon emissions too. 21% of total UK emissions result directly from transport B&Q operating 25 Dual Fuel trucks incorporating Clean Air Power technology at their facility in Swindon B&Q s retail logistics service manager Michelle Thomas said: We re pleased to announce the introduction of 50 dual fuel lorries which is helping us meet our 2023 deadline to cut transport carbon emissions ahead of time 12
Stobart Group Trial customer for European OEM product Ordered 20 OEM Dual Fuel vehicles in 2012 Phil Spittle, Eddie Stobart General Manager Fleet, said: The award is recognition from the grocery industry that we are helping to make a real difference with regards to sustainable distribution. The environment is an important issue for both Nestlé and Eddie Stobart so this partnership has been significant and extremely positive. The gas-powered trucks have helped cut carbon emissions and reduce both companies impact on the environment" 13
Spain s HAM Criogénica Group purchased their first Mercedes Axor Genesis Dual-Fuel in 2007 followed by 10 more Genesis EDGE systems in 2010 In 2012, CAP developed the Renault Magnum variant together with HAM and delivered 62 systems in 2012 In 2013, 20 more systems have been delivered In 2012, a major global logistics company installed 27 Genesis EDGE systems for their UK contract with NISA. 14
LNG Infrastructure:- Europe 15
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LNG Infrastructure:- Europe Development accelerating Major players: Shell, Linde, Gazprom & Gas Natural Fenosa GNF opening 5 new LNG stations in Spain during 2013 Gasrec opening first major UK LNG station in April 2013 6 more planned through 2014 EU Commission Clean Power for Transport proposes max. distances between NG filling stations EU-wide: 400 km for LNG by 2020 18
Gasrec, DIRFT, Daventry Opening April 2013 Eventual capacity to fuel 700 trucks per day 6 more planned in UK 19
LNG Infrastructure:- USA 20
LNG Infrastructure:- USA Clean Energy Fuels installed 70 LNG stations in 2012 Similar number planned in 2013 Many located at Pilot-Flying J truck stops Total station capacity by end of 2013 approximately 75,000 trucks per day Oil giant Royal Dutch Shell is set to invest more than $300m James Burns, Shell s manager of LNG transportation fuels, will pay the costs of setting up 200 LNG pumps at 100 locations in the Travel Centers of America chain Burns says Shell will entice truck fleets to buy LNG-powered trucks and to pump their LNG by selling long-term contracts that guarantee the price they pay for the natural gas derived fuel will be at least 30% cheaper than diesel (on an energy-equivalent basis) for the lifetime of their trucks. They can lock in their fuel savings for however long they keep that truck, which is often as long as five years. 21
USA - LNG Distribution map * Clean Energy Fuels website 22
Clean Energy Fuels 23
Infrastructure driving Natural gas vehicle market 24
Exponential NGV Growth in Progress 25
CO2 Emissions by Sector» Within industry transport is the second largest CO2 contributor Within transport long haul duty cycle is the largest CO2 contributor Source: AEA 26
North American Class 8 NG Trucks - % of total Source: Westport 27
Global truck market >16 tons Global truck Volumes 000 units Product / Emissions Standard Western Europe 242 E5 to 2014 thereafter E6 Other EU 38 As above N America 216 US2010/US2013 Brazil 112 E3/E5 Russia (est) 100 E5 China 900 E3/E5 India 237 E3 Australia 9 E5 28
CAP Market strategy 29
Market strategy 2013 / early 2014 Euro 5 Genesis EDGE & OEM Late 2013 / 2014 Euro 5 Genesis EDGE & possibly OEM product US Genesis EDGE 2014 Euro 5 Genesis EDGE & possibly OEM product 30
US Genesis EDGE program 31
US Genesis EDGE - Timeline Feasibility study completed 1st engine sourced Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Engine in test cell Development truck leased 2nd engine sourced 2nd engine in test cell in UK Truck running in Dual-Fuel mode ACT Expo Washington DC 3rd engine in test cell in UK First 10 trial vehicles Second 10 trial vehicles Certification testing Initial production Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 32
US Genesis EDGE Demonstration Unit Installed engine system 33
US Genesis EDGE Test cell 1 Exhaust side Inlet side 34
Washington DC 24 27 th June 2013 35
US Genesis EDGE Operator interest remains very high Trial customer agreed, subject to sourcing trucks Some emission challenges Three after-treatment companies quoting solutions Plan to drive demonstrator from San Diego Washington DC LNG not available throughout route; some running on diesel required! Route back will encompass altitude & high ambient operation 36
R&D Activity 2013 product focus is on Euro 5 sales and US2010 development In addition: 2 year funded research project in partnership with Brunel University to develop the next generation of advanced Dual- Fuel combustion systems using natural gas and diesel The project will be carried out at Brunel University s Centre for Advanced Powertrains and Fuels Euro 6 prototype R&D funding awarded by Niche Vehicle Network for after-treatment packaging development in partnership with Eminox Ltd 37
Summary Natural gas infrastructure is growing rapidly Demand for heavy duty products expected to grow exponentially Targeting US, Eastern Europe & Brazil for sales growth in 2014 Progressing product development partnership opportunities 38