pioneering bioproducts · pioneering bioproducts. © brain aktiengesellschaft zwingenberg germany ...

1Pioneering Bioproducts. © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com +49 (0) 6251-9331-0

Corporate Presentation

Zwingenberg, July 9, 2020

BRAIN Group Pioneering Bioproducts


DisclaimerThis document may contain forward-looking statements. These forward-looking statements are subject to risks and

uncertainties, as they relate to future events and are based on current assumptions of the Company, which may

not occur at all in the future or may not occur as assumed. They do not represent a guarantee for future results or

performance of the Company, and the development of economic and legal conditions may materially differ from the

information expressed or implied in the forward-looking statements.

The Company assumes no obligation to update or revise any forward-looking statement contained herein or to

adapt them to future events or developments. The information contained in this document has not been

independently verified. No representation or warranty expressed or implied is made as to, and no reliance should

be placed on, the fairness, accuracy, completeness or correctness of the information or opinion contained herein.

The Company or any of its shareholders, affiliates, advisors, employees or representatives shall have no liability

whatsoever (in negligence or otherwise) for any loss arising from any use of this document or its content or

otherwise arising in connection with this document.

By accepting this presentation you acknowledge that you will be solely responsible for your own assessment of the

market and the market position of the Company and that you will conduct your own analysis and be solely

responsibility for forming your own view of the potential future performance of the Company’s business.

This presentation speaks as of July 9, 2020. Neither the delivery of this presentation nor any further discussions of

the Company with any of the recipients shall, under any circumstances, create any implication that there has been

no change in the affairs of the Company since such date. The term “BRAIN”, as used in this presentation means

B.R.A.I.N. Biotechnology Research and Information Network AG and its affiliates, if not otherwise specified.


BRAIN Group at a Glance

Key facts

• Founded 1993

• 2019 revenues: 38.6 m€

• 300 staff employed

• Since 2016 listed at Frankfurt Stock Exchange

• Five operating companies

Leader in Bioeconomy

• Proven partnership track-record (>100 partnerships)

• Comprehensive proprietary BioArchive of natural solutions

(Result of >450 man years)

• Strong network with international partners and academia

• Substantial funding secured over the last 5 years: 8 m€

Growth opportunities

• New venture creation

• Pipeline of own products

• Internationalization of business

• M&A

300Employees

>100Industrial partnerships

12New product development programs

>100Specialty B2B products

>26Years of experience


Our Space is “White Biotech”

Green biotech

(agricultural)

Red biotech

(medical)

Blue biotech

(marine)

White biotech

(industrial)

BIOTECHNOLOGY

Clear strategic positioning in Biotechnology


Three Product Platforms

Capitalizing on synergies in technology and application

Enzymes

Microorganisms

Bioactive

Natural

Compounds


Three Different Business Models

New Product

Development

Product

SalesTailor-made

Solutions

Each revenue source feeds off the others.

100 products

> 70% of BRAIN

revenue

Earnings models include:

• spin out (SolasCure)

• JV

• run ourselves

• out-license

Earnings models include:

• (IP) license income

• milestone payments

• tech access fee

• strain/molecule sale


Our Solutions Address Key Sustainability Goals

Mission: Creating breakthrough B2B Bioproducts for Nutrition,

Health and the Environment


Products and Solutions with Impact on Sustainability

Products and Solutions help Customers to reach SDG Goals

Ensure Access to Water and

Sanitation / Improve Water Quality

Sustainable Industry, Innovation,

Infrastructure

Sustainable Consumption and

Production Patterns

Combat Climate Change and its

Impacts

BRAIN is providing support when it comes to:

• Replacing chemicals by biological metal extraction

from e-scrap, incinerator bottom ash and other

mineralic resources

• Reducing CO2 emissions and energy consumption

• Using CO2 as raw material: capture and utilization,

e.g. for production of energy or chemical building

blocks

• Utilizing organic waste streams: e.g. for production

of energy or value compounds

• Managing pollution: e.g. soil and water detoxification

• Recycling phosphate

• Improving production time efficiency

• Transforming waste-streams into products for

unprecedented value chains


Products and Solutions with Impact on Sustainability

Products and Solutions help Customers to reach SDG Goals

End Hunger, Achieve Food

Security and Improved

Nutrition

Ensure healthy Lives

and promote Well-being

• Reduce calorie density in foods while keeping

taste – with our next generation natural sweeteners

• Make food healthier by reducing salt while

retaining savor

• Replace chemical ingredients by biological ones

– e.g. in food, cosmetics (e.g. biologically effective,

aluminium-free antitranspirants, identified by our

innovative cell-based test system)

• Maintain gut health by providing functional

probiotics, avoiding antibiotics

• Reduce human suffering by treatment of open

wounds (e.g. diabetic foot syndrome) with our

enzymatic agent Aurase®

Responsible Consumption

and Production• Reducing the perishability of foodstuffs thanks

to the use of natural bioactive antimicrobials


We create breakthrough solutions supported by a profitably growing

products and services business.

Breakthrough solutions:

New-to-the-world solutions that surprise our

customers and consumers for their inventiveness and

efficacy. We do not seek to copy existing solutions.

Profitably grow business:

We realize that existing products business is key

to success. We will build the existing businesses

organically and through acquisition. Goals are to

be customer intimate, generate cash-flow, and

deepen our know-how. This may mean copying

existing solutions.

Our Vision


Sugar (Substitutes)1

62 bn US $

NPD Focuses on Big Targets (Sample Global Markets)

Sugar (82% of total sweetener market)

High fructose corn syrup

Others (e.g. sugar alcohols)

Natural High IntensitySweeteners (HIS)

1 Finanzen.net 01/2018; LMC-Report 2015 & nutraceuticalsworld.com 2017, 2 industrystatsreport.com, 2020 3 WhaTech, 2018 4 PR newswire (Research and Markets) 2019 5 PR newswire, 2019 6 allied market research 2019

Salt Substitutes 2 Mining Chemicals Market 3

Wound Care 4 & Advanced Wound Care 6 Microbial Control Biocide Market 5

0.84 bn US $ ~7.5 bn US $

8.6 bn US €

19.8 bn US $ 24.8 bn US $

CAGR 4.6 %

2019 2024 E

2019

1.54 bn US $2025 E

CAGR 7.8 %

2022 E

6 bn US $2017

CAGR 4.60 %

CAGR 4.10 %

2024 E2019

10.5 bn US €8,457 mn US $ 13,944 mn US $

AWC

AWC

2018 2026 E

CAGR 6.5 %

AWC


World-class collection of compounds “BioArchive”

Highly distinguishing “Filters” to identify the best candidates

Partnership track-record and skill

Integrated Tool-set from Discovery to Commercialization

We Win Thanks to Four Core Capabilities

“Discovery”

“Monetizing”

1

2

3

4


Products

&

Contract

Research

NEW

R&D

New

Solutions

EBITDA

0 M€

-5 M€

5 M€

Total BRAIN operating cash-flow in 2019/20 was -3.4 m€

We Invest 5 – 7 m€ p.a. to Create New Solutions


Track-Record of Industry Partnerships

Bioactive Natural

Compounds

Enzymes Microorganisms

More than 100 exclusive partner collaborations successfully completed

Industrial

Partner*

*confidential partnerships not disclosed


#3 detergent

business globally#1 European

sugar company

#4 ingredients

supplier globally

Beiersdorf

Low temperature

detergent enzymesOptimisation

of microbial strain for

isomalt production

Skin anti-irritant

Symsitive 1609

Enzymes Microorganisms Bioactive natural

compounds

Product range

BRAIN inside

Industrial partner

Flavorpro™ 786P

flavor creation

in cheese processing

BRAIN

subsidiary

Selected Examples of “BRAIN Inside”


Growing Product Sales: Top 10 Enzyme Products

< 10% 10-20% > 20%

Brand Enzyme Class Application Affiliate Growth

YOY

FlavorproTM Protease

FLAVOUR

creation

FlavorproTM Peptidase

FLAVOUR

debittering

PromodTM Protease PROTEIN modification

gluten

PromodTM Protease

PROTEIN modification

hydrolysates

DepolTM Betaglucanase

FRUIT / VEGETABLES

Naturals extraction

NATUZYM PectinaseFruit / Beverage

juice yield increase

Pectinase PolygalacturonaseFRUIT / VEGETABLES

juice yield improvement

LipomodTM Esterase

DAIRY

flavour

D-zym GlucoamylaseSTARCH / BioETOH

saccharification

D-zym Alpha-amylaseSTARCH / BioETOH

liquefaction


Pipeline Partner R&D Market Own Production

Salt Taste Enhancer 1.0

Yes

Salt Taste Enhancer 2.0 Yes

DOLCE Natural Sweet Solutions No

DOLCE Natural Sweet Enhancers No

Natural Antimicrobials No

Specialty Enzymes Food Yes

Aurase Yes

Gold from Waste Streams Yes

Green Metal Mining tbd

CO2 for Value Chemicals No

NoUS-CPGC

Jap. Bev-Co.

Natural Beverages

Starch Processing Enzymes Yes

New Product Development Pipeline

BRAIN plans to be supplier of active ingredient in 7 out of 12 programs


Adriaan Moelker: My 100 Day Observations

BRAIN AG Strengths

Strong team culture and team spirit

Trusting work-force

Broad and deep technology know how

Three platforms to tap into: Enzymes,

Microorganism, BioActives

Solid partnership capability and network

Some very strong current industry

partnerships

Good acquisition of Biocatalysts and spin-out

SolasCure

Cost per FTE competitive; inexpensive office

buildings

Culture of cost-awareness

Several impressive talents

Improving profitability YoY

Good IR mentality

Investor and board awareness

Creative and flexible business models, e.g.

spin-out, JV, licenses etc.

BRAIN AG Challenges

Organization Structure

Overly complex

Unclear accountabilities and responsibilities

Business

Not monetizing the efforts strongly enough

Go-to-market view and approach needs to be re-focused

Small sales force

M&A strategy and pipeline underdeveloped

Interaction with the subsidiaries needs to be institutionalized

Improve government and grant funding

Enzyme host strain development needs to be addressed

HR tools and systems

Talent management is key and needs to be strengthened

Little performance management or goal setting

Cost structure

Overheads, compared to the current revenue base

Capital Markets

Clarity on pipeline communication

Focus

Growth plans and initiatives

We will build on our strengths and communicate a growth & strategy update

latest by September


In white biotech there is no comparable business.

Creating breakthroughs is our passion and is based

on the reality of proven biotechnology and business.

BRAIN is unique


Key Financials


8,810,4

21,1

22,8

24,1

27,1

38,6

19,9

0

5

10

15

20

25

30

35

40

45

FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 6M FY 19/20

BRAIN Revenues History

42%

12%

6%

YOY Growth

In M

io.

€


Key Consolidated Financials 6M 2019/20

1 Revenues + change in inventories + other income + R&D grants2 The reconciliation from adjusted to unadjusted EBITDA can be found in the

consolidated profit and loss statement as of March 31, 2020

6M 6M 1-3M 1-3M 4-6M 4-6M

(in € million) 2019/20 2018/19 2019/20 2018/19 2019/20 2018/19

Revenues 19.9 18.5 10.3 9.4 9.6 9.1

BioScience 6.8 5.2 4.0 2.8 2.8 2.4

BioIndustrial 13.1 13.3 6.3 6.6 6.8 6.7

Total operating performance1 20.2 19.8 10.4 9.9 9.8 9.9

Adjusted EBITDA2 -0.7 -1.7 -0.2 -0,0 -0.5 -1.7

EBITDA -0.9 -1.8 -0.3 -0.1 -0.6 -1.6

EBIT -2.6 -3.2 -1.2 -0.8 -1.4 -2.4

Net result -4.6 -4.1 -2.2 -1.2 -2.3 -2.8

Operating cash flow -4.1 -2.9 -0.6 -0.1 -3.5 -2.8

31.03.2020 30.09.2019 31.12.2019

Cash 6.43 15.2 13.2

3 Solascure Ltd. Capital increase EUR1,9mln, Put AnalytiCon Discovery EUR1,6mln

major Capex Büttelborn&Cardiff EUR2,6mln, additional group Capex, negative WC swing


Key Consolidated Financials 6M 2019/20

● The BRAIN Group revenues increased by 7.6% to €19.9m (PY €18.5m), organically +14.1%*

o Group generated a total operating performance (TOP) of €20.2m vs. PY €19.8m (+1.9%)

o The “BioScience” segment increased its revenues by 31.9% to €6.8m (PY €5.2m), mainly due to new

and follow-up projects

o Revenues of the “BioIndustrial” segment decreased slightly to €13.1m (-1.8%), due delays in the

commissioning of new production facilities. Organically revenues increased by 6.5%*

● The reported Group EBITDA amounts to €-0.9m (PY €-1.8m)

o The “BioIndustrial” segment has been able to increase its EBITDA Margin to 11.7% (PY 10.6%)

● The adjusted Group EBITDA amounts to €-0.7m (PY €-1.7m). Adjustments have mainly been driven by

higher employee remuneration from option accounting. Adjustments:

o €155k for personnel expenses resulting from ESOP

● The gross cash-flow has been at €-3.5m vs. PY €-3.4m, almost unchanged to the previous year

● Our Cash position as of March 31st, 2020 amounted to €6.4m

*adj. for the disposal of Monteil Cosmetics


Group Revenues per Segment

• Year over year the segment BioScience performed excellent

• Revenues in the segment BioIndustrial decreased slightly due delays in the commissioning of new

production facilities. Organic growth amounted to 6.5%

• The overall BRAIN group grew organically by 14.1% YoY

5.1806.833

13.34413.102

0 €

5.000 €

10.000 €

15.000 €

20.000 €

25.000 €

6M 18/19 6M 19/20

in T

. €

Revenues segments 6M 19/20

BioScience BioIndustrial

19.935

18.525

5.1806.833

12.297

13.102

0 €

5.000 €

10.000 €

15.000 €

20.000 €

25.000 €

6M 18/19 6M 19/20

in T

. €

Revenues segments 6M 19/20 organic growth

BioScience BioIndustrial

19.935

17.478


Overview of Material Expenses

• In both segment we have realized material expenses cost savings

• The material expense ratio in the BioScience segment as well as the group decreased due to the rise in

revenues

8.554

1.851

6.728

8.048

1.828

6.226

0 €

1.000 €

2.000 €

3.000 €

4.000 €

5.000 €

6.000 €

7.000 €

8.000 €

9.000 €

BRAIN Group18/19 - 19/20

BioScience18/19 - 19/20

BioIndustrial18/19 - 19/20

In T

. €

Material expenses 6M 19/20

43,2%

29,9%

49,3%

39,9%

24,8%

48,5%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%




Material expenses ratio 6M 19/20


Overview of Personnel Expenses

• Personnel expenses grew slightly compared to the previous year

• The groups adj. personnel expense ratio remains stable compared to the previous year

• In BioScience the personnel expense ratio decreased by 8%-pts. compared to the previous year

• In BioIndustrial the personnel expense ratio remained stable compared to the previous year

8.801

5.625

3.176

9.171

6.177

2.993

0 €

1.000 €

2.000 €

3.000 €

4.000 €

5.000 €

6.000 €

7.000 €

8.000 €

9.000 €

10.000 €




IN T

. €

44,0%

89,7%

23,3%

44,7%

81,7%

23,3%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%




* adj.Perso.

Personnel expenses 6M 19/20 Personnel expenses ratio 6M 19/20


Overview of Other Expenses

• In the group other expenses decreased significantly due of cost savings

• In BioScience the other expenses ratio decreased by over 5%-pts. compared to the previous year

4.217

1.879

2.340

3.840

1.7992.080

0 €

500 €

1.000 €

1.500 €

2.000 €

2.500 €

3.000 €

3.500 €

4.000 €

4.500 €




In T

. €

Other expenses 6M 19/20

21,3%

30,3%

17,1%19,0%

24,4%

16,2%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%




Other expenses ratio 6M 19/20

* adj. Exp.


EBITDA 6M 19/20

• The group’s EBITDA improved by 50.5% compared to the prior year

• Especially the segment BioScience strongly contributed to an improved EBITDA

• The BioIndustrial segment improved its EBITDA by 8.6% despite a decline in sales

-1.756

-3.167

1.409

-869

-2.437

1.530

-4.000 €

-3.000 €

-2.000 €

-1.000 €

0 €

1.000 €

2.000 €




In T

. €

EBITDA 6M 19/20


Shareholders & Calendar


Notes

• Current number of shares: 19,861,360

• Free float of 45.0%

• Strong long term investor base

• 8,000 shareholders

• WKN 520394 / ISIN DE0005203947

• Symbol BNN

• Prime Standard; Frankfurt/M

Shareholder Structure of BRAIN

DAH Beteiligungs

GmbH

MP Beteili-

gungs-GmbH

Founders/

Management

Free Float

June 16, 2020

Lloyd

Fonds

6.8%

35.3%

4.3%

8.6%

45.0%


Financial Calendar FY 2019/20 and beginning FY 2020/21

August 31, 2020 Publication of the quarterly report for the period ending

June 30, 2020 (9M)

January 14, 2021 Publication of the annual report for the period ending

September 30, 2020 (12M)

February 26, 2021 Publication of the quarterly report for the period ending

December 31, 2020 (3M)

March 10, 2021 Annual General Meeting in Zwingenberg, Germany


Analysts Covering BRAIN

Analyst Company Phone number

Falko Friedrichs Deutsche Bank, Frankfurt +49 69 91 03 62 70

Pierre Corby ODDO BHF, Paris +33 1 44 51 84 04

Markus Mayer Baader Helvea, Munich +49 89 51 50 18 18

Laura López Pineda Baader Helvea, Munich +49 89 51 50 18 04

Dennis Berzhanin Pareto Securities AS, Frankfurt +49 69 58 99 7 434

Manuel Mühl DZ Bank AG, Frankfurt +49 69 7447 51438

Dr. Christian Ehmann FMR Frankfurt Main Research AG +49 69 920 389-15


Thank you for

your attention.

@BRAINbiotech

BRAIN AG

BRAIN Aktiengesellschaft

Darmstädter Straße 34–36

64673 Zwingenberg, Germany

+49 (0) 6251-9331-0

www.brain-biotech.com

Your contact:

Michael Schneiders (Head of Investor Relations)

+49 (0) 6251-9331-86

[email protected]

https://twitter.com/BRAINbiotech

https://www.linkedin.com/company/brainbiotech/


Management

• Diploma in Business Administration

• Year of birth: 1965

• Joined BRAIN in 2018

• 20+ y of finance leadership

experience as CFO and CEO in

listed companies

• Successful in market cap &

revenue growth

• Asset management, M&A

Manfred Bender

(CFO, until Sep. 2020)

• Master of Business Administration

• Year of birth 1964

• Joined BRAIN in Feb. 2020

• 20+ y of professional experience in

industrial biotechnology innovation

• Successful in terms of innovation &

revenue

• Extensive global experience in all key

industrial enzyme segments

Adriaan Moelker

(CEO)

• B.S. in Economics, CFA

• Year of birth: 1993

• Joined BRAIN in 2015

• 7+ y leadership experience in finance, controlling and legal

• Successful in implementing finance controlling systems

• Prior to BRAIN: VC and consulting

• Advisor during the IPO

Lukas Linnig

(CFO, from Oct. 2020)

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