investors presentation 5 february 2020 · in the netherlands since 1 oct 2019 slovakia, hungary and...

Investors Presentation5 February 2020

Dr. Stephan Meeder, CFO

2CropEnergies AG, 5 February 2020

World greenhouse gas emissions

Source: EEA


Ethanol – important element to decarbonize the transport sector

Domestic

renewable raw

materials

High-quality fuel

which can be

used in petrol

engines

Climate-friendly fuel

produced sustainably


Ethanol: 70% less GHG emissions comparedto fossil fuels*

The GHG values of all elements in the value-added chain are added up

The emissions from ethanol when used in combustion engines is zero

European ethanol reduces annual GHG emissions by >10 Mt**

Cultivation Grain

Transport Grain

Ethanol Production

Ethanol Transport

CO2

Liquefaction

*83,8 gCO2eq/MJ **Own calculations


Reduction by Reduction by

Super (E5)

Reference

Super E10

Measurement:

particulate matter

Super E10

Measurement: NOx

Renewable ethanol – advantages

Ethanol…

As direct blend to petrol (e.g. E5, E10, E85)

As component in ETBE (octane booster)

E10 reduces CO2, NOx and particulate matter

WLTP* benchmark, label in tank flap of all new cars

Potential savings (EU): >20 Mt CO2eq (8 million less cars on the road)

Potential for 20% ethanol blending (Super E20)

Potential savings: >40 Mt CO2eq (16 million less cars on the road)

Successful racing results (Porsche/Nürburgring)

*Worldwide harmonized light-duty vehicle test

Blending

Ethanol

Petrol

E5 E10 E20 E85

Source: bdbe


Our co-products: Food and Fuel

Raw materials are utilized completely

Concept of co-production

Food-grade liquefied CO2

For food and beverages

industries

Vital Wheat Gluten

Valuable protein product for

food and animal feed

industry

ProtiGrain® – DDGS

High protein animal feed

from dried stillage

ProtiWanze® – CDS

Liquid protein animal feed

from stillage


The ethanol markets

World production

2019e: 128 million m3 (+1%)

Fuel applications: 109 million m³ (+1%)

2020e: 129 million m3 (+1%)

Fuel applications: 110 million m³ (+1%)

EU production

2019e: 7.6 million m3 (-3%)

Fuel applications: 5.2 million m³ (-4%)

2020e: 7.7 million m3 (+1%)

Fuel applications: 5.3 million m³ (+2%)

Source: F.O.Licht Source: F.O.Licht

0

2

4

6

8

10

2014 2015 2016 2017 2018 2019e 2020e

(in M

io.

m3)

Ethanol production in the EU [M m3]

fuel non-fuel


Increasing blending obligations in EU countries in 2020

6% GHG-target 2020 requires more non-fossil alternatives

RED II: 1G cap max 7% but not more than 2020 + 1%

EU market 2020e [Mm³]

Production: 5.3 +2% (add. 2.4 non-fuel)

Consumption: 5.9 +6% (add. 2.6 non-fuel)

E10 available in more European countries

In the Netherlands since 1 Oct 2019

Slovakia, Hungary and Denmark as of 1 Jan 2020

2020 plans: Austria, Lithuania, Latvia

Market – E10 availability increases

EU sales fuel ethanol [Mm3]

2.3 2.5 2.7

1.5 1.5 1.50.9 0.9 0.90.8 0.7 0.8

0

2

4

6

8

2018 2019e 2020e

Other EU Germany

France UK

E10 availability across Europe

Source: F.O. Licht

Source: ePURE


162 150 95

197 197133

311 280

175

196186

140

866813

543

375

0

200

400

600

800

1,000

2018 2020 2030 2040

* in particular: buildings, agriculture, w aste

TransportOther Non-ETS*EnergyIndustry

DE: National climate protection law and emission trading system adopted

National Climate protection law

Binding statutory emission limits for all sectors

Transport: reduction from 150 Mt CO2eq in 2020 to 95 Mt CO2eq in 2030

National emission trading system

Applicable on fossil fuels in transport and heating

2021 to 2025: ”fixed price period“ – political agreement to start with 25 €/t

CO2 gradual increase to 55 € until 2025

From 2026 on: auctioning of CO2 certificates

Call for additional measures to achieve goals:

Increase GHG target from 6% (2020) to 16% (2030)

Reform of energy tax from volume (litre)-base into CO2-pricing

GHG emissions in Germany

– reality and targets

[Mt CO2eq]

0.7 0.7

0.7

2.8

2.3

2.1

3.43.0

2.7

0.3

0

1

2

3

4

combustion upstream

GHG emissions from fuels[kg CO2eq/liter]


Profitability drivers

Higher ethanol and lower raw material prices in 1st - 3rd quarter

Ethanol*: € 605 (475) /m3

Grain**: € 178 (187) /t

Raw materials prices on moderate level

World grain harvest*** 2019/20 at 2,162 Mt (+1%)

World stocks lower at 594 Mt (-4%)

EU harvest 318 Mt (+9%) above consumption of 290 Mt

CE benefits from “natural hedge”

Strong price correlation between grains and proteins

*Ethanol T2 FOB Rdam ** Wheat (Euronext Paris), next date of expiry *** All varieties, except rice

100

200

300

400

500

600

700

[€/t o

r €/m

3]

Euronext Paris wheat No. 2

Net raw material costs

Fuel EtOH T2 FOB Rdm. (1M)

Gross profit for wheat-EtOH


European ethanol prices [€/m3]*

*1M future ethanol T2 FOB Rotterdam


EU climate goals – RED II

EU Commission aims at climate-neutral Europe in 2050

2030 GHG-target: 40% reduction (compared to 1990) –

increase to 55% under discussion

RED II published on 18 Dec. 2018

National implementation until mid 2021

RED II: more renewables to reduce CO2

footprint of energy usage

At least 32% renewable energiesin 2030 (2017: 17%)

Transport: at least 14% renewablesVolume cap for biofuels from arable crops

Promotion of biofules from waste and residues

Greenhouse gas emissions in the EU

[Mt CO2eq]


RED-II: Overall target of 14% in 2030 –the “toolbox“

Up to 7%

Local, sustainable

Proteins

Commitment to 1G as reliable basis for low-emission transport sector necessary

Arable crops

Min. 0.2% in 2022

Min. 1.0 % in 2025

At least 3.5% in 2030

Strong market potential

Very capital intense

Investment security and investment incentives decisive

Annex IX-A

Max. 1.7%, but still x2 versus today

UCO imports: 10x within last 10 years

Compatibility with law on waste needs to be ensured

Annex IX-B

Important component in the future

But: discretionarymultiplier (x4) does not save a single gram of CO2

Extension only reasonable if additional electricity will be produced

Electricity


Strategic outlook

Demand: chance for new impulses

GHG reduction targets and renewable energy

CO2 pricing can complement GHG sector targets for transport

Strategy

Short-term: optimise production sites, protein co-products

Medium-term: R&D process innovation, alternative feedstocks

Long-term: R&D biochemicals, expansion of product portfolio /- growth

Ethanol

Gluten

Neutral alcohol

Ethanol chemistry

Liquefied CO2

Fuel ethanol

ProtiGrain®

Animal feed


Wheat proteins as meat alternative

BeneoPro W-Tex as meat alternative

Investment in the amount of € 4.3 million by sister company Beneo

Start of operation: 1st March 2019

Replacement of meat in products such as burgers, nuggets and bolognese

Facility is operated by BioWanze

Sales are concluded by Beneo

Trend: meat replacement

Growing demand for plant-based proteins worldwide

Average annual growth rate of 5.5%* expected in Europe in the next 5 years

*Global Data Market Analyzer


Source: ePURE

Biorefinery of the future


Our locations

Wanze, Belgium

BioWanze SA

Loon-Plage, France

Ryssen Alcools SAS

Tank storages

Rotterdam

Wilton, UK

Ensus UK Ltd

Trading office

São Paulo, Brazil

Ryssen Chile SpA,

Santiago de Chile, Chile

Zeitz, Germany

CropEnergies Bioethanol GmbH

Tank storages

Amsterdam


The production sites of CropEnergies AG

Capacity: more than 1.3 million m³ ethanol and more than 1 million tonnes food and animal feed per year

Annual capacity:

400,000 m³ ethanol

thereof up to 60,000 m3 neutral alcohol

>300,000 t ProtiGrain® (DDGS)

100,000 t liquefied CO2

Raw materials: grain and sugar syrups

Annual capacity:

300,000 m³ ethanol

60,000 t wheat gluten

>400,000 t ProtiWanze®

Raw materials: wheat and sugar syrups

Annual capacity:

>100,000 m³ ethanol for fuel applications

90,000 m³ ethanol for traditional and

technical applications

Raw material: raw alcohol

Annual capacity:

400,000 m³ ethanol

350,000 t DDGS

Raw material: grain

Wilton – UK

Ensus UK Ltd.Wanze – Belgium

BioWanze SAZeitz – Germany

CropEnergies Bioethanol GmbH

CropEnergies AGMannheim - Germany

ProtiGrain® Liquefied carbon

dioxideProtiWanze®Ethanol for traditional &

technical applicationsEthanol as FuelGluten

Loon-Plage – France

Ryssen Alcools SAS


Financials 2019/20 & Outlook


Outlook 2019/20

Insider information publication according to section 17 MAR of 16 December 2019:

Revenues are now expected to reach around € 900 million

Operating profit is expected to be approximately € 100 million

This is equivalent to an EBITDA of around € 145 million


Highlights 9M 2019/20

*Incl. adjustments from IFRS 16

729 (771) ,000 m³

667.6 (596.1) million €

101.9 (48.5) million €

70.3 (19.1) million €

50.2 (12.9) million €

89.7 (26.9*) million €

- 6%

+ 12%

+ 53 million €

+ 51 million €

+ 37 million €

+ 63 million €

Ethanol production

Revenues

EBITDA

Operating profit

Net earnings

Net financial assets (vs. 28 Feb 2019)


Revenues

Production decrease by 6%

Production capacity utilisation adjusted to suit market conditions and to carry

out regular maintenance activities

Increase in revenues due to significantly higher sales prices for ethanol

Average ethanol price**: € 605/m3 (€ 475/m3 in previous year)

(in € million) 9M 19/20 9M 18/19 Δ

Revenues 667.6 596.1 + 12%

EBITDA* 101.9 48.5 > + 100%

Margin 15.3% 8.1% -

Depreciation* -31.6 -29.3 - 8%

Operating profit 70.3 19.1 > + 100%

78%21%

1%

Revenues 9M 2019/20

Ethanol Food and animal feed products Other revenues

*Without restructuring costs and special items **Ethanol FOB Rotterdam

679596

668

847771 729

0

200

400

600

800

1,000

9M17/18

9M18/19

9M19/20

Revenues / Production[M€ / 1,000 m3]


EBITDA

EBITDA benefits from first-time adoption of IFRS 16

EBITDA doubled despite higher raw material prices

(in € million) 9M 19/20 9M 18/19 Δ

Revenues 667.6 596.1 + 12%

Overall performance 651.2 601.4 + 8%

Cost of materials* -481.2 -481.1 - 0%

Spread (gross) 170.0 120.3 + 41%

in % of overall performance 26.1% 20.0% -

Further operating expenses/income* -68.1 -71.8 + 5%

EBITDA* 101.9 48.5 > + 100%

88

48

102

0

30

60

90

120

9M17/18

9M18/19

9M19/20

EBITDA [M€]

158

120

170

24%20%

26%

0

50

100

150

200

9M17/18

9M18/19

9M19/20

Spread (gross) / in % of overall performance [M€]

*Without restructuring costs and special items


Operating profit

Slightly higher depreciation from first-time adoption of IFRS 16

Increase in operating margin from 3.2% to 10.5% yoy

59

19

70

0

20

40

60

80

9M17/18

9M18/19

9M19/20

Operating profit [M€]

(in € million) 9M 19/20 9M 18/19 Δ

Revenues 667.6 596.1 + 12%

EBITDA* 101.9 48.5 > + 100%

Margin 15.3% 8.1% -

Depreciation* -31.6 -29.3 - 8%


Margin 10.5% 3.2% -



(in € million) 9M 19/20 9M 18/19 Δ

Revenues 667.6 596.1 + 12%

EBITDA* 101.9 48.5 > + 100%


Restructuring costs / special items 0.0 10.1 < - 100%

At equity result 0.1 0.1 + 2%

Income from operations 70.5 29.4 > + 100%

Financial result -2.6 -1.0 < - 100%

Earnings before income taxes 67.9 28.4 > + 100%

Taxes on income -17.6 -15.5 - 14%

Net earnings for the period 50.2 12.9 > + 100%

Earnings per share (in €) 0.58 0.15 > + 100%

Net earnings for the period

Financial result increases due to unrealized currency effects

Tax rate drops to 26 (55)%

42

13

50

0

15

30

45

60

9M17/18

9M18/19

9M19/20

Net earnings for the period [M€]



Higher investments in PPE to enhance production plants

Significant improvement of net financial assets

Cash flow

43

81

-8

-20-30

0

30

60

90

9M18/19

9M19/20

Cash flow (+) / Investments* (-) [M€]

*excl. financial investments

**Net financial assets as of 30/11/2019: excl. adjustments from IFRS 16

(in € million) 9M 19/20 9M 18/19 Δ

Cash flow 80.7 42.9 + 88%

Change in net working capital 15.3 7.1 > + 100%

Net cash flow from operating activities 96.0 49.9 + 92%

Investments in property, plant et al. -19.7 -8.5 < - 100%

Payments into current financial investments -14.9 0.0 -

Cash flow from investing activities -34.6 -8.5 < - 100%

Cash flow from financing activities -52.2 -64.9 + 20%

Exchange rate changes et al. 1.5 0.0 -

Increase/Decrease in cash and cash equivalents 10.7 -23.5 -+ 0.0

30/11/2019 30/11/2018 Δ

Net financial assets** 89.7 56.5 + 59%+ 0.0


Balance sheet structure and financial ratios

Strong cash base

Increase in equity reflects positive earnings situation

432

442

481

400

420

440

460

480

500

30/11/17 30/11/18 30/11/19

Shareholders' equity [M€]

*Net financial assets as of 30/11/2019: excl. adjustments from IFRS 16

(in € million) 30/11/2019 30/11/2018 Δ

Assets

Non-current assets 382.4 385.8 - 1%

Current assets 274.6 207.2 + 33%

Total assets 657.0 593.1 + 11%

Liabilities

Shareholders' equity 480.6 442.3 + 9%

Non-current liabilities 57.8 49.7 + 16%

Current liabilities 118.6 101.1 + 17%

Total liabilities and equity 657.0 593.1 + 11%

Net financial assets* 89.7 56.5 + 59%

Equity ratio 73% 75% -


Disclaimer

This presentation contains forward-looking statements based on assumptions and estimates made by the executive board of CropEnergies AG. Although the executive board may be convinced that these assumptions and

estimates are reasonable, the future actual developments and future actual results may vary considerably from the assumptions and estimates due to many external and internal factors. For example, matters to be mentioned

in this connection include changes in the general economic conditions, competitive product and pricing pressures and developments in the regulatory framework. CropEnergies AG assumes no responsibility and accepts no

liability for future developments and future actual results achieved being the same as the assumptions and estimates included in this presentation. This presentation includes percentage and number rounding.

Investor Relations

Heike Baumbach

Phone: +49 (621) 71 41 90-30

[email protected]

Contact

CropEnergies AG

Maximilianstraße 10

68165 Mannheim

www.cropenergies.com

Stock Information

ISIN: DE000A0LAUP1

Symbol: CE2

Bloomberg / Reuters: CE2 GY / CE2G.DE

Transparency standard: Prime Standard

Public Relations / Marketing

Nadine Dejung-Custance

Phone: +49 (621) 71 41 90-65

[email protected]

Financial Calendar

13 May 2020: Annual report and press and analysts’ conference financial year 2019/20

8 July 2020: Statement for the 1st quarter of 2020/21

14 July 2020: Annual General Meeting 2020

7 October 2020: Report for the 1st half of 2020/21

13 January 2021: Statement for the 1st-3rd quarter of 2020/21

investors presentation 5 february 2020 · in the netherlands since 1 oct 2019 slovakia, hungary and...

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