Business Update May 17, Copyright 2017 Renewable Energy Group, Inc.

Transcription

1 Business Update May 17, 2017

2 Safe Harbor Statement This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including the potential benefits of the use of feedstocks and biomass-based diesel as a source of energy, the competitive advantages resulting from our technologies, our financial position, the capabilities of our facilities and our Life Sciences business unit, anticipated product development and sale dates and our potential strategic business initiatives, growth opportunities and trade flows. These forward-looking statements are based on current expectations and assumptions, are subject to change, and actual results may differ materially. Factors that could cause actual results to differ materially include changes in governmental programs and policies requiring or encouraging the use of biofuels; changes in the spread between biomass-based diesel prices and feedstock costs; the future price and volatility of feedstocks; the future price and volatility of petroleum and products derived from petroleum; availability of federal and state governmental tax credits and incentives for biomass-based diesel production; risks associated with fire or explosion at our facilities; the effect of excess capacity in the biomass-based diesel industry; unanticipated changes in the biomass-based diesel market; competition in the markets in which we operate; technological advances or new methods of biomass-based diesel production or the development of energy alternatives to biomass-based diesel; and other risks and uncertainties described from time to time in REG s annual report on Form 10-K for the year ended December 31, 2016, quarterly reports on Form 10-Q and other periodic filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this presentation and REG does not undertake to update any forward-looking statements based on new developments or changes in our expectations. 2

3 REG enables a cleaner world through lower carbon intensity products and services 3

4 REG s main source of revenue is Biomass-Based Diesel, a superb, lower carbon intensity liquid transportation fuel 4

5 Biomass-Based Diesel and REG High Quality and Value REG Advertising REG s Competitive Advantage Ability to produce from a wide range of lower cost raw materials enables pricing flexibility Reliability as an off-take customer for key suppliers of contract-manufactured fuel Ability to meet stringent customer specifications Preferred supplier to key customers and trading 5 partners REG 9000 Biodiesel Marketed based on fuel characteristics, not the type of feedstock Positioned as premium quality product REG 9000 Distilled Biodiesel Eliminates the need to switch to a lower cloud point biodiesel during winter months Is easy to blend with petroleum, since there are fewer minor components REG 9000 RHD 100% hydrocarbon product Used in any diesel engine without modification

6 Growing Global Distillate Market Means Biomass-Based Diesel is Needed to Fulfill Growing Demand Billions of Gallons Historic Demand Expected Demand The global distillate fuel market has grown at a 3.8% annualized rate between 1984 and 2016, going from 137 billion gallons to 472 billion gallons over the period. Annual growth is expected to be 3.3% annually until 2030, resulting in expected global distillate demand of over 743 billion gallons. This growth creates an opportunity for REG products, which are low carbon substitutes for petroleum-based distillate products. For the World, 3% per year annual growth equals new sales opportunities for diesel of >12 billion gallons Source: LMC International, EIA 6

7 REG s impact for our investors and our environment is meaningful 7

8 REG Performance in 2016 $2.0 billion in revenue PHYSICAL PRODUCTS LOWER CARBON INTENSITY 567 million gallons of fuel 4.0 million tons of carbon reduction $102 million of adjusted EBITDA Source: REG Internal Analysis 8

9 Gallons Sold Biomass-based diesel sales over the last decade 500,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 50,000, Note: REG gallons produced and marketed 9

10 Gallons of ULSD REG Total Greenhouse Gas Savings (GHG) Over Time (in ULSD gallons) 300,000,000 REG GHG Reduction 250,000, ,000,000 More than one billion gallons displaced since ,000, ,000,000 50,000, REG is the largest producer of biomass-based diesel in the U.S. Source: REG Internal Analysis 10

11 Over $100 million in EBITDA averaged annually over the past five years Gallons Sold Annual Historical (mm gal) Adjusted EBITDA Annual Historical ($mm) Biofuels Volume Petroleum Volume Revenue Annual Historical ($mm) $148 $97 $108 $102 $ Net Book Value Year end Historical ($mm) $1,015 $1,498 $1,274 $1,387 $2,041 $325 $594 $779 2 $614 $ Note: 1 See Appendix (Slide 76) for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP 2 Decline in net book value primarily due to nonrecurring, non-cash write-off of goodwill Source: REG Internal Analysis 11

12 Value Delivered to Shareholders Net Book Value per share Year end Historical ($mm) Period # of Shares Repurchased Value 22 Repurchased 2Average Price $16.27 $ $14.01 $15.83 $ February 2015 Share Repurchase Program Q ,281 $5,000,000 $9.52 Q ,376 6,518,966 $9.75 Q ,065 7,793,620 $9.31 Q ,391 3,999,994 $8.92 Q ,794 5,816,648 $8.98 Q , ,768 $9.61 Total 3,217,561 $29,999,997 $9.32 March 2016 Share Repurchase Program Q ,442,823 $38,699,407 $8.71 Q ,552 5,589,988 $8.91 Total 5,070,375 $44,289,395 $8.73 Repurchased shares at good investment values Redeemed bonds at a discount Total Share Repurchase Programs Total 8,287,936 $74,289,392 $8.96 Period Principal Amount Value 2 Repurchased Discounted Value March 2016 Convertible Debt Repurchase Program 2 2 Q $63,912,000 $60,898, % Q ,000,000 5,583, % Total $69,912,000 $66,482, % Note: Values of shares or convertible debt repurchased include fees and commissions Source: Company Data Source: Company Data Note 1 Decline in net book value primarily due to nonrecurring, non-cash write-off of goodwill 2 Value of shares or convertible debt repurchase includes fees and commissions 12

13 Value extends far beyond Decarbonization Revitalization Benefiting Cities & Rural Areas Energy Security Long-Term Availability Environmental Stewardship Cleaner, Lower Carbon Intensity Jobs & Economic Development New Investment Energy Diversity Renewable Alternatives Food Security Food THEN Fuel 13

14 Value A Specialized Feedstock Value Chain REG creates valuable advanced biofuel from waste and by-products directly supporting agriculture and food security, while delivering cleaner, lower carbon intensity products and services 72% Of REG s feedstock mix for 2016 comprised Animal Fat, Used Cooking Oil & Inedible Corn Oil Valuable Agricultural Products Secondary Outlet Markets Agricultural Co-Products Waste & By-Products With REG Feedstocks often gain value when producing biodiesel Food THEN Fuel Without REG Fewer choices for disposal of waste feedstocks Source: REG Internal Analysis 14

15 Lower Carbon Intensity & Cleaner Products Delivered Through Existing Infrastructure and channels Business to Business Sales Model Advanced Biofuels > 50% fewer CO 2 emissions Waste & Byproduct Feedstocks Refining Distribution Lipids (Oils & Fats) Crude Oil Extraction (sequestered carbon) Crude Oil Petroleum Refining Distribution Higher CO 2 emissions Source: REG Internal Analysis 15

16 REG s Technologies are Highly Integrated, Agile, and Supportive of Earnings Power and Growth Triglycerides Fatty Acids Lipids Fatty Acids Chemicals Fatty Esters Fatty Alcohols Glycerol Fuel Methyl Esters Glucose Hydrocarbons Sugars Xylose Lubricants Esters Hydrocarbons Sucrose 16

17 Growth Tactics & Strategies Support Financial Returns as well as Societal Benefits Optimize and grow our fully-integrated biomass-based diesel offering across North America Acquisitions Grow our fully-integrated biomass-based diesel offerings internationally Expand further in the production of advanced biofuels and renewable chemicals Organic and with partners Investments Diversify into environmental services, lubricants and specialty products Joint Ventures 17

18 Technology, Organic Growth, Upgrades and M&A are Value Creation Engines Nameplate Biomass-based Diesel Production Capacity Growth (MMGY) Future Advanced Biofuels Houston - Newton Danville - Seneca - Clovis Biodiesel, LLC Albert Lea - New Boston Atlanta - Ultra Green Energy Services - Mason City- Geismar - Grays Harbor - Madison - Petrotec AG - 2 Ralston New Orleans Emporia Clovis Atlanta American BDF, LLC Renewable Chemicals Life Sciences - Synthetic Fuels - Note: 1 Assumes completion of construction of New Orleans, Emporia, Clovis and Atlanta facilities at currently planned nameplate capacity and planned expansion of the Ralston facility. Timing of construction will depend on availability of financing and other factors. 2 In January 2017, REG acquired remaining minority interest to have 100% control of Petrotec. 18

19 Fully Integrated Business Overview Research & Development Construction & Technology Procurement & Multifeedstock Expertise Advanced technology and strong IP to protect it Proven track record of building, operating and upgrading world-class biomass-based facilities Diverse product mix with the potential to target dozens of growing markets Effective risk management strategy that enables consistent returns across varying market conditions Production International Sales & Marketing Risk Management Distribution & Logistics Customer Service & Administration Source: REG Internal Analysis Sophisticated procurement and technology capabilities enable a diverse feedstock mix International nameplate production capacity exceeding 500 million gallons 19 International footprint allows delivery of products around the world Built to serve the growing needs of customers with high quality assurance Profitably procures and transforms lower cost, waste-based feedstocks from around the globe into valuable products that meet strict standards for quality and lower carbon intensity.

20 Research & Development Research & Development Construction & Technology Procurement & Multifeedstock Expertise Production International Sales & Marketing Risk Management Distribution & Logistics REG has deep roots in developing new technologies and processes spanning multiple industries Inter-disciplinary capabilities across oleochemical, petrochemical and biotech platforms Over 600 active and pending patents across biomass-based diesel, renewable hydrocarbon diesel and renewable chemical domains Integrated technology commercialization capabilities give REG a competitive advantage Customer Service & Administration Source: REG Internal Analysis 20

21 Construction & Technology Research & Development Construction & Technology Procurement & Multifeedstock Expertise Production International Sales & Marketing Risk Management Distribution & Logistics REG s extensive expertise in building and operating a wide array of advanced biofuel facilities continues to be a driving force in our growth Completed dozens of projects with total value in excess of $200M Expertise in Engineering and Construction Materials Project Engineering and Construction Management Manufacturing Facilities Design and Layout Manufacturing Process Engineering and Design Services Plant modifications Plant maintenance Process systems Manufacturing Operations Management Customer Service & Administration Source: REG Internal Analysis 21

22 $/gal (yield adjusted) Procurement & Multi-Feedstock Expertise Research & Development Construction & Technology Procurement & Multifeedstock Expertise Production Feedstock Flexibility Mitigates single feedstock price risk Allows pursuit of lower-cost alternatives Improves supply assurance across feedstock categories Enables wider usage of crude and waste raw materials Feedstock Prices $4.90 Average $0.25 per gallon advantage for % 2016 REG Mix Typical REG Feedstocks Average$0.37 per gallon advantage for 1Q 2017 Animal Fat, Used Cooking Oil & Inedible Corn Oil 28% Soybean & Canola Oil Inedible Corn Oil (Crude Used Cooking Oil Choice White Grease Tech Tallow Soybean Oil (Crude) RBD Palm Oil (Delivered International Sales & Marketing Risk Management $4.40 $3.90 $3.40 $2.90 $2.40 Distribution & Logistics Customer Service & Administration Source: REG Internal Analysis $1.90 $1.40 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Source: The Jacobsen 22

23 Production Research & Development Albert Lea, MN Danville, IL Crude Feedstock Capable Emden, Germany Geismar, LA Madison, WI Construction & Technology Procurement & Multifeedstock Expertise Mason City, IA New Boston, TX Newton, IA Oeding, Germany Seneca, IL Production International Sales & Marketing Refined Feedstock Fermentation Facility Grays Harbor, WA Houston, TX Ralston, IA Okeechobee, FL Feedstock Processing Facility Burlo, Germany Risk Management Partially Completed or Repairs Required: Atlanta, GA Clovis, NM Emporia, KS New Orleans, LA Distribution & Logistics Customer Service & Administration Source: REG Internal Analysis 13 Biomass- Based Diesel Plants MMGY NAMEPLATE CAPACITY

24 International Sales & Marketing Research & Development Construction & Technology Procurement & Multifeedstock Expertise Production International Sales & Marketing Risk Management Distribution & Logistics Main Fuel Products Co-Products Bio-based Products 1 REG 9000 Biodiesel Glycerin Flavors & Fragrances REG 9000 Distilled Biodiesel REG 9000 RHD Renewable Hydrocarbon Diesel Renewable Naphtha Renewable LPG Verdesoil TM Blended Fuel Heavy Esters Nutrition Bioheat Blended Fuel ULSD Heating Oil Renewable Chemicals Plastics Personal Care Paints & Coatings Home & Industrial Cleaning Participation across different regions with several products enables opportunity Customer Service & Administration Source: REG Internal Analysis 1 Estimated product categories based upon technology platform potential 24

25 Risk Management Research & Development REG s risk management policy works to minimize volatility from feedstock costs and fuel prices across varying market conditions Construction & Technology Procurement & Multifeedstock Expertise Production International Sales & Marketing Risk Management Distribution & Logistics Customer Service & Administration Source: REG Internal Analysis 25

26 Distribution & Logistics Research & Development REG s growing sales and supply chain capabilities allow us to serve customers in over 20 countries around the world Construction & Technology Procurement & Multifeedstock Expertise Production International Sales & Marketing Risk Management Distribution & Logistics Customer Service & Administration Source: REG Internal Analysis Fuel Sales 26

27 Customer Service Research & Development Construction & Technology Procurement & Multifeedstock Expertise Production International Sales & Marketing Risk Management Distribution & Logistics REG is focused on product support and services while providing excellent service to customers and vendors Supply Chain Management ensures supply assurance and timely fulfillment Credit offers customers financial flexibility and the ability to quickly procure product Sales personnel focus on providing flexible and competitive solutions to meet customers needs Transportation offers several methods of distribution to maximize the value of delivered product Operation Services provides personalized support throughout contract fulfillment Quality Assurance strives to ensure that customers receive products and services as contracted REG Access TM Portal provides direct access to transactional information Customer Service & Administration Source: REG Internal Analysis 27

28 Financial Information 28

29 Biodiesel Value Components (per gallon) Without state incentives With state incentive (CA example) RIN $ % BTC $ % ULSD $ % RIN $ % LCFS $ % BTC $ % ULSD $ % Source: OPIS Averages for March

30 Biodiesel Pricing & COGS Per Gallon $4.50 Averages for March 2017 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- $1.00 $1.45 $1.54 Reported Value Without State and Local Incentives Note: 1 Illustrative Midwest multiple feedstock plant running on lower cost feedstock 30 $2.94 Jacobsen B100 Upper Midwest $1.12 $0.71 $2.15 Costs ULSD - NYMEX RIN Value - OPIS BTC B100 - Jacobsen Feedstock Operating Costs Margin Potential 1

31 Over $100 million in EBITDA averaged annually over the past five years Gallons Sold Annual Historical (mm gal) Adjusted EBITDA Annual Historical ($mm) Biofuels Volume Petroleum Volume Revenue Annual Historical ($mm) $148 $97 $108 $102 $ Net Book Value Year end Historical ($mm) $1,015 $1,498 $1,274 $1,387 $2,041 $325 $594 $779 2 $614 $ Note: 1 See Appendix (Slide 76) for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP 2 Decline in net book value primarily due to nonrecurring, non-cash write-off of goodwill Source: REG Internal Analysis 31

32 Quarterly Financial Update 3/31/2017 Gallons Sold Quarterly Historical (mm gal) Adjusted EBITDA Quarterly Historical ($mm) $(14) $26 $17 $22 $2 $8 $32 $60 $1 1Q Q Q Q 2015 Biofuels Volume 1Q Q Q 2016 Petroleum Volume 4Q Q Q Q Q Q Q Q Q Q Q 2017 Revenue Quarterly Historical ($mm) Net Book Value Quarterly end Historical ($mm) $231 $374 $395 $388 $298 $558 $625 $560 $419 $728 $721 $713 $614 $617 $578 $591 $610 $593 1Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 2017 (1) 2015 EBITDA is adjusted for retroactive BTC; See Appendix (Slide 77) for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP 32 Source: REG Internal Analysis

33 REG Performance over the last decade GALLONS SOLD % CAGR $2,041 REVENUE 1 $ % CAGR ADJUSTED NET INCOME 1 $34 2 $ % CAGR ADJUSTED EBITDA 1 $1 $ % CAGR Note: (1) REG financial results for 2016 and 2007 in million & REG Analysis (2) Net income excluding impairment of $1.78 million (3) Net income excluding asset impairment of $18 million

34 Strong Financial Position $ in millions 3/31/ /31/ /31/ /31/ /31/ /31/2012 Cash & Marketable Securities Net Working Capital $82.2 $116.2 $47.1 $80.3 $153.2 $66.8 $200.3 $229.3 $181.6 $243.1 $249.3 $109.2 Total Assets $1,041.1 $1,136.6 $1,223.6 $1,367.7 $740.9 $495.8 Term Debt 1 $217.1 $217.9 $256.6 $252.9 $34.2 $37.0 Net Book Value $610.2 $614.0 $778.7 $594.1 $324.8 Common Shares (millions) As of 3/31/17 Common Outstanding RSU s 0.9 PRSU s 0.2 Note: 1 Term debt before netting of the debt issuance costs of $6.3 million, $4.1 million and $5.2 million at December 31, 2016, 2015 and 2014 respectively. 2 Insider ownership of outstanding common shares is 2.59% 3 Stock appreciation rights outstanding as of 12/31/2016 per our 10-K filing is 2.5 million. SAR s are settled as equity or cash at the discretion of the board

35 Historical Condensed Income Statement ($mm) Revenue $ 2,041.2 $ 1,387.3 $ 1,273.8 $ 1,498.1 $ 1,015.0 COGS $ 1,869.7 $ 1,276.8 $ 1,113.2 $ 1,258.7 $ Gross Profit $ $ $ $ $ 58.3 Selling, General & Administrative Expenses $ 88.3 $ 73.4 $ 62.7 $ 46.1 $ 42.4 Research & Development Expense 1 $ 18.2 $ 16.9 $ 12.4 $ - $ - Impairment of Tangible/Intangible Assets 2 $ 17.9 $ $ - $ - $ - Income/(Loss) from Operation $ 47.2 $ (154.7) $ 85.5 $ $ 15.9 Other Income/(Expense) $ 1.8 $ (5.7) $ 0.6 $ (2.0) $ 7.8 Income tax Benefit/(Expense) $ (4.3) $ 8.7 $ (3.6) $ (4.9) $ (1.5) Net Income/(Loss) 3 $ 44.7 $ (151.7) $ 82.5 $ $ 22.3 EBITDA $ $ 50.2 $ $ $ 96.5 Note: 1. For 2012 and 2013, Research and Development Expenses were included in SG&A Expenses/COGS. 2. $175 million charge for 2015 is related to impairment of goodwill. $17.9 million charge for 2016 is related to impairment of physical assets at Emporia ($15.6M) and other plants. 3. See Appendix (Slide 76) for a definition of Adjusted EBITDA and a detailed reconciliation to Net Income in accordance with GAAP 4. Total balance may not foot due to rounding. 35

36 Stock Information Symbol Exchange REGI NASDAQ 50 Day Avg Daily Volume (371,813 as of 5/17/17 per NASDAQ) Market Cap (5/17/17) Analyst Coverage $430.3 million, $11.15 per share Canaccord Genuity: John Quealy Piper Jaffray: Brett Wong Roth Capital Partners: Craig Irwin 36

37 REG Generates Value for Shareholders in Many Ways Revitalization Benefiting Cities & Rural Areas Energy Security Long-Term Availability Environmental Stewardship Cleaner Air, Lower Carbon Food Security Food THEN Fuel Energy Diversity Renewable Alternatives Jobs & Economic Development New Investment 37

38 Appendix 38

39 REG Geismar 39

40 Geismar Capabilities REG Geismar has produced on average above nameplate capacity for 5 consecutive months Current Products Renewable hydrocarbon diesel (RHD) Renewable naphtha Renewable propane REG Synthetic Fuels technology platform offers many growth opportunities to expand and optimize REG Geismar Installation of Specialty Products Line RHD capacity expansion Jet fuel production Renewable paraffin specialty chemicals Lighter fluid REG Geismar (75 MGY) Specialty Products Line (12 MGY) (acquired in 2015) 40

41 % Nameplate Capacity Geismar Production History 120% 100% Hydrogen Shortage or Significant Mechanical & Processing Issues Dynamic Fuels, LLC REG Geismar, LLC 80% 10 Day Flood 60% Mechanical Issues 40% 20% Dynamic Fuels: Plant down & for Sale 2 incidents requiring significant repairs - Plant down 0% Capacity 5 per. Mov. Avg. (Capacity) 41

42 REG Geismar Land Purchase Purchase of 82 acres for $20 million Includes more than 61 acres adjacent to the facility Lease cancellation on existing property The transaction is expected to reduce REG s operating costs and create opportunities for expansion 42

43 REG Life Sciences 43

44 Innovative Technology Creating Value REG Life Sciences has developed a unique biotechnology platform that is built on three fundamental pillars: 1. A World-Leading Technology Platform 2. Large and Profitable Target Markets 3. Strong Intellectual Property This unique platform allows for the creation of thousands of novel compounds that can target dozens of highly profitable markets. A strong intellectual property portfolio ensures this value is sustainable long into the future. World Leading Technology Photo 2003 Griffiths et al; text material 2009 by Steven M. Carr Large and Profitable Markets Strong Intellectual Property 44

45 REG Life Sciences: Who we are Commercial ready industrial fermentation platform technology with best-in-class microbial fatty acid production technology and intellectual property R&D center in South San Francisco, CA with state-ofthe-art labs Multi-feedstock capable fermentation facility in Okeechobee, FL 45

46 REG Life Sciences Platform Overview Reprogrammable oleaginous E. coli Flexibility to create 1000 s of unique structures with unique market applications Proven track record of platform acceleration and commercialization First sale in 4Q 2016 Potential to commercialize 10 products within 3 years Proven multi-feedstock fermentation facility Photo 2003 Griffiths et al; text material 2009 by Steven M. Carr Flexibility to use multiple feedstocks including: corn sugars, cane sugars, cellulosic sugars and low cost, low carbon intensity crude glycerin Experienced technical team with deep industry knowledge Source: REG Internal Analysis 46

47 Broad & Diverse Product Applications Industrial Chemicals Zero-VOC Solvents Rheology Modifiers Adhesives Agrochemicals Textile Coatings Block Surfactants Metal Working Fluids Plastics Medium Chain Copolymers Polyamides and Polyesters Polyurethanes Long Chain Copolymers Plasticizers The value of REG s molecules has been confirmed by subject experts for the listed applications Animal Nutrition Functional / Active Enhanced Nutrition Personal Care Specialty Surfactants Emulsifiers Rheology Modifiers Emollients Paints & Coatings Zero-VOC Solvents Emulsifiers / Formulation Acids Rheology Modifiers Pharma & Laboratory APIs / Pharma / Research Specialty Solvents Human Nutrition Nutraceuticals Texture / Property Enhancers Enhanced Nutrition Ingredients Home & Industrial Cleaning Performance Surfactants Solvents Emulsifiers Lubricants Lubricant Additives Specialty Application Base Stock Food-contact Lubricants Flavor & Fragrance Flavor Ingredients Fragrance Molecules Carrier Oils Source: REG Internal Analysis 47

48 REG Life Sciences Product Pipeline Product Multi-Functional Fatty Acid (Musk) Fragrance Intermediate 3 Performance Chemical 1* Performance Chemical 2* Phase 1: Early Development Phase 2: Mid Development Phase 3: Advanced Development Phase 4: Pre- Launch Anticipated First Sale Octyl Acetate 2017 Octanol (Plastics) 2018 C8/C10 Esters Nutrition 2017 Capability Phase 1 Phase 2 Phase 3 Phase 4 First Sale Additional Discovery Phase Molecules TBD TBD TBD Glycerin Feedstock Cellulosic Feedstock** * Anticipated initial application as specialty surfactant **Jointly funded research and development effort with ExxonMobil Progress Through Advancements 48

49 Opportunities Current Present-1.5 years Grow high-margin businesses Expand product suites and segment markets to increase volumes Potentially stand-alone for spin-our or licensing Fragrances and Flavors, Nutritional Supplements, Cosmetic Actives Near-Term 2-3 years Provide new supply for strong partnerships New supply source of performance products into growing markets High demand, attractive specialty pricing Sustainable Plastics, Specialty Surfactants, Zero- VOC Solvents, Animal Nutrition Mid-Term 3-5 years Offer unique competitive advantages Novel molecules or routes to disrupt industries and enable innovations IP-protected, sustained competitive positioning High-Performance Polymers, Safer Polymer Systems, Novel Rheology Modifiers Source: REG Internal Analysis 49

50 Mass Yield Product Platform Acceleration 2 Products in 8 Years 6 Products in 3 Years 30% 25% Performance Chemical 2 Multi-Functional Fatty Acid 20% 15% 10% Biodiesel Detergent Alcohol Performance Chemical 1 Octanol Fragrance Intermediate 3 C8/10 Esters 5% 0% Source: REG Internal Analysis 50

51 Proven multi-feedstock fermentation facility Multiple products through commercial launch scale Regulatory requirements satisfied for commercial sales Demonstrated production on lower cost, low carbon intensity crude glycerin Tolled for multiple third parties with different microbial platforms, proving manufacturing flexibility Fermentation Facility Okeechobee, Florida Source: REG Internal Analysis 51

52 Regulatory Matters 52

53 Leveraging photosynthesis and the CO 2 cycle boosts earning power, improves our environment, and delivers renewable fuel CO 2 Cycle Factory emissions Photosynthesis Plant respiration Animal respiration Organic carbon Decay organisms Dead organisms and waste products Fossils and fossil fuels 53

54 World Demands Cleaner, Lower Carbon Intensity Solutions Physical Product Regulation Americas Europe Asia Pacific Biodiesel Mixture Excise Tax Credit (BTC) Canadian Provincial Programs Clean Water and Clean Air Acts Food Safety Modernization Act (FSMA) Low Carbon Fuel Standards (California and Oregon) Renewable Fuel Standard (RFS2) Renewable Identification Numbers (RINS) Renewable Volume Obligation (RVO) State Chemical Incentives State Fuel Incentives Tax Policies Toxic Substances Control Act (TSCA) International Sustainability Carbon Certification (ISCC) Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) Renewable Energy Directive (RED) Double counting incentives for wastes and residues Paris Accords Feedstock Incentives National Biofuel Programs Provincial Biofuel Programs 54

55 Billions of Gallons Billions of Gallons RFS2 Volume Requirements 1, Biomass-based diesel 1.63 bn gal 1.73 bn gal 1.90 bn gal 2.00 bn gal 2.10 bn gal Advanced biofuel 2.67 bn gal 2.88 bn gal 3.61 bn gal 4.28 bn gal n/a Cellulosic biofuel 33 mm gal 123 mm gal 230 mm gal 311 mm gal n/a Total renewable fuels bn gal bn gal bn gal bn gal n/a Growth in Biomass Based Diesel Standard Growth Advanced Biofuels Standard Source: 1 EPA 11/23/2016 Final RVOs as of 11/23/2016 for all categories Note: 2 All volumes are ethanol-equivalent, except for biomass-based diesel which is actual. 55

56 (billions of gallons) (billions of gallons) RFS2 Fundamentals and RINs Biodiesel is the highest volume commercially available, domestically produced Advanced Biofuel Commercially available drop-in fuel, compatible with existing diesel infrastructure RFS2 program strengthens demand and has strong support $0 direct outlay from U.S. government Federal support for the Ag industry Multi-feedstock, raw material flexibility Biomass-based diesel RINs are valid for compliance with the Advanced Biofuel and Renewable Fuel RVOs U.S. RFS2 Biomass-based Diesel Volume Requirements 1, Biomass-based diesel Cellulosic Biofuel Advanced biofuels U.S. RFS2 Renewable Fuel Volume Requirements 1,3,4 D4 RINs Can Satisfy 3 RVO Categories 1, Biomass-based diesel Cellulosic Biofuel Advanced biofuels Total Renewable Fuel Renewable Fuel (D6) Corn ethanol Butanol Advanced Biofuel (D5) Sugarcane ethanol Biomass-based Diesel (D4) Biodiesel Renewable diesel Cellulosic Diesel (D7) Cellulosic Biofuel (D3) Cellulosic ethanol Renewable gasoline Biogas Source: 1 EPA Note: 2 Oval sizes not proportionate to volumes 3 Cellulosic Biofuel RVO is 1.61% of Total Renewable Fuel RVO in /2018 RVO are finalized - published on 12/12/2016 in Federal Register 56

57 1/2012 3/2012 5/2012 7/2012 9/ /2012 1/2013 3/2013 5/2013 7/2013 9/ /2013 1/2014 3/2014 5/2014 7/2014 9/ /2014 1/2015 3/2015 5/2015 7/2015 9/ /2015 1/2016 3/2016 5/2016 7/2016 9/ /2016 1/2017 3/2017 Historical RIN Prices $2.00 $1.50 $1.00 $0.50 $0.00 D4 Biomass-based Diesel D5 Advanced Biofuel D6 Other Renewable Fuel Source: REG, OPIS 57

58 California Low Carbon Fuel Standard CARB was ordered by a state court in 2013 to halt the LCFS at 1% until the policy was re-adopted. The re-adopted LCFS began compliance in The reductions from the 2010 baseline will be 1% in 2015; 2% in 2016; 3.5% in 2017; 5% in 2018; 7.5% in 2019; and 10% in

59 Carbon Credit $/MT LCFS Credit Prices $140 LCFS Carbon Credit $120 $100 $80 $60 $40 $20 $0 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Source: OPIS 59

60 Gallons LCFS Biomass-based Diesel Growth 120,000, ,000,000 80,000,000 60,000,000 Biodiesel RHD 40,000,000 20,000,000 - Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Source: REG Analysis of CARB Data 60

61 States with Notable Biomass-Based Diesel Policies New York City LEGEND Low Carbon Fuels Standard Mandate - Fuel use or Bioheat Tax Incentive - sales Tax Incentive - production Fleet Requirement Bioheat Mandate passed Awaiting Surrounding States Policy currently suspended No major policy Note: Current as of 01/31/2017 Source: DOE Alternative Fuels Data Center and Individual State Statues 61

62 Federal Biodiesel Tax Incentive Biodiesel Mixture Excise Tax Credit (BTC) Lapsed January 1, 2017 American Renewable Fuel and Job Creation Act Bi-partisan House & Senate Bills to Reinstate and Reform BTC to a Domestic Producer Incentive S Sens. Chuck Grassley & Maria Cantwell H.R Reps. Kristi Noem & Bill Pascrell Both bills would reinstate the incentive retroactively from Jan.1, 2017 and extend it through Dec. 31, Copyright 2016

63 National Biodiesel Board Fair Trade Coalition Petitions U.S. Dept. of Commerce Filed antidumping and countervailing duty petitions against Argentine and Indonesian imports Biodiesel imports surged by 464 percent from 2014 to 2016 U.S. manufacturers lost 18.3% of market share May 5: ITC determined US industry has been injured by these imports, continues investigation 63 Copyright 2016

64 Gallons Increased Biodiesel/RHD Imports to US 160,000, ,000, ,000,000 Annual Totals: MG MG MG Source: EIA 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Copyright 2016

65 President s Executive Order Promoting Agriculture & Rural Prosperity It is in the national interest to promote American agriculture and protect the rural communities where food, fiber, forestry, and many of our renewable fuels are cultivated. Federal Task force created to identify legislative, regulatory and policy changes to advance rural America. to further the Nation's energy security by advancing traditional and renewable energy production in the rural landscape. 65 Copyright 2016

66 Other Matters 66

67 Experienced Management Team Daniel J. Oh President & Chief Executive Officer Natalie Merrill Vice President, Chief of Staff Chad Stone Chief Financial Officer Jean Scemama Vice President, REG Energy Europe & International Trading & Commodities Brad Albin Vice President, Manufacturing Chad Baker Controller, Chief Accounting Officer Eric Bowen Vice President, Corporate Business Development & Legal Affairs Todd Robinson Treasurer Gary Haer Vice President, Sales & Marketing Jonathon Schwebach Director, Global Tax Biographies available at 67

68 Broad Marketing and Logistics Capabilities Distribution Footprint at Plants, Terminals and to Customers 40 terminal locations (plus 12 plants) Delivered biodiesel and co-products to 47 states, 4 provinces in Canada, U.K and Peru in

69 Excellent Supply Chain Management and Logistics are Critical for Profitability 2016 Movement Control 46,616 REG Arranged Truckloads 43 States/Provinces 4,955 Railcars 33 States/Provinces 87 Water Movements 3 States and 8 Countries 15,054,385 gallons via Pipeline 3 States Railcar movement accounts for all cars monitored and/or moved with product and empty. Water movement accounts for all barges, ships, and containers monitored and/or moved with by REG. 69

70 Customer Delivery Points in 2016 Note: REG delivered biodiesel and co-products to 47 states, 4 provinces in Canada, U.K. and Peru in

71 Potential and Existing International Trade Flows REG Ames REG Amsterdam REG Biorefineries Operating Facilities REG Regional Offices REG Terminal Locations 71

72 Commercial Platforms Compliance EH&S Government Affairs HR IT Systems & Support Logistics & Distribution Manufacturing Oracle JDE ERP system Plant Information Systems & Real-Time Data Procurement Quality Management Systems Regional Locations Sales & Marketing Supply Chain Management Video Teleconference, Lync, & VOIP..and more 72

73 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 $/gallon Spreads Over Time $6 $5 RFS implemented $1 biodiesel tax credit $1 biodiesel tax credit $1 biodiesel tax credit expired $1 biodiesel tax credit $1 biodiesel tax credit $1 biodiesel tax $4 $3 $2 $1 $- 7.5 lbs sbo/gal Source: The Jacobsen, CME Group, REG Spot BD-ICO SBO CBOT ICO Spot Biodiesel 73

74 USD Energy Market Prices $5 $4 $3 $2 $1 $0 WTI Crude Oil NY Harbor ULSD Spot SME Chicago Source: EIA, CME Group, OPIS 74

75 Adjusted EBITDA Reconciliation - Annual ($mm) Net Income (Loss) (151.71) (Income) Loss from Equity Investments (0.44) Income Tax (Benefit) Expense (8.70) 4.27 Interest Expense Other Income (0.93) (0.17) (0.38) (0.66) (0.47) (15.80) Change in fair value of Seneca Holdco liability 2.10 (0.35) Change in fair value of preferred stock conversion feature embedded derivatives (7.94) (11.97) Stock issued for glycerin termination Change in fair value of contingent liability (6.63) (0.36) 7.90 Bargain purchase gain from acquisition (5.36) - Gain on involuntary conversion (9.89) Impairment of goodwill Impairment of asset Straight-line lease expense 1.90 (0.29) (0.65) (0.64) (0.42) (0.29) Depreciation Amortization (0.45) (0.75) (0.75) (0.21) (0.72) (0.36) Other Non-recurring lease cancellation Non-recurring business interruption (0.86) Non-cash Stock Compensation Adjusted EBITDA before 2012 BTC Retroactive BTC (57.75) Adjusted EBITDA 1, Note: 1 Adjusted EBITDA is a Non-GAAP financial measure that REG defines as net income adjusted for net interest expense, income taxes, depreciation and amortization, and further adjusted for other items, that REG does not believe are indicative of its core operating performance, including (Income) Loss from equity investments, impairments on assets/and of investments, other income, non-cash stock compensation, change in fair value of Seneca Holdco liability, change in fair value of interest rate swaps and change in fair value of preferred stock conversion feature embedded derivatives and straight line lease expense. 2 On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which reinstated a set of tax extender items including the reinstatement of the federal biodiesel blenders tax credit for 2013 and retroactively reinstated the credit for The retroactive credit for 2012 resulted in a net benefit to us that was recognized in first quarter 2013, but because this credit relates to the operating performance and results of 2012 it is excluded from 2013 Adjusted EBITDA and allocated to the 2012 periods based upon gallons sold. 3 Total balance may not foot due to rounding 4 Represent the impairment charge to write down the carrying value of certain assets, mostly attributed to the company s Emporia facility, to remaining salvage value. 75

76 Adjusted EBITDA Reconciliation ($mm) 1Q 16 2Q 16 3Q 16 4Q Q 17 Net Income (Loss) (6.89) (15.9) Income tax (benefit) expense (1.2) Interest expense Gain on involuntary conversion (3.54) (1.00) (3.47) (1.88) (9.89) - Other (income) expense, net 0.09 (15.74) (2.70) 2.55 (15.80) 0.49 Change in fair value of contingent liability (0.02) Impairment of assets Straight-line lease expense (0.09) (0.08) (0.07) (0.04) (0.29) (0.03) Depreciation Amortization (0.14) (0.13) (0.13) 0.05 (0.36) 0.13 Non-cash stock compensation 1.08 (0.86) Adjusted EBITDA 1, Note: 1 Adjusted EBITDA is a Non-GAAP financial measure that REG defines as net income adjusted for net interest expense, income taxes, depreciation and amortization, and further adjusted for other items, that REG does not believe are indicative of its core operating performance, including (Income) Loss from equity investments, impairments on assets/and of investments, other income, non-cash stock compensation, change in fair value of Seneca Holdco liability, change in fair value of interest rate swaps and change in fair value of preferred stock conversion feature embedded derivatives and straight line lease expense. 2 Total balance may not foot due to rounding. 76