BAUMOT GROUP AG 360 CLEAN AIR COMPANY INVESTOR PRESENTATION, DECEMBER 2017 Research & Development Application Customer service
01 02 03 04 05 06 BAUMOT GROUP AN OVERVIEW PRODUCT AND SERVICE PORTFOLIO MARKET AND MEDIA FINANCES OUTLOOK APPENDIX AGENDA 2
BAUMOT GROUP AN OVERVIEW 01
BAUMOT GROUP 360 CLEAN AIR COMPANY ~ 40 Employees offer construction, engineering, and testing services at 4 European Sites Baumot AG was founded in 1989 Technology leader in the field of high efficient SCR exhaust gas aftertreatment systems Active in a growth market: Development into an Original Equipment Manufacturer (OEM) that still has strong products in the retrofit and aftermarket Diverse product portfolio: Highly efficient SCR systems (BNOx), particulate filters, aftermarket systems Industries: On-Road and Off-Road markets 4
MANAGEMENT Marcus Hausser, CEO Chief Executive Officer of Baumot Group AG since 2012 Over 8 years of international management experience and experience in the area of exhaust gas aftertreatment Previously: CEO of Baumot AG (Switzerland) for 3 years, prior to that senior positions at Purem North America Iic in Detroit, USA, then a subsidiary of DaimlerChrysler AG Roger Kavena, COO Chief Operating Officer of Baumot Group AG since 2013 In addition, CEO of Baumot AG (Switzerland) since 2012, extensive industry experience in the area of exhaust gas aftertreatment Strong capital market expertise and a network due to his previous work as an investment banker Investmentbanker Qualified management with many yearsof industry experience. 5
COMPANY STRUCTURE BAUMOT GROUP AG BAUMOT AG Retrofit & Aftermarket worldwide TWINTEC Technologie GmbH Retrofit & Aftermarket in GER BAUMOT Technologie GmbH OE development & Sales Together with its subsidiaries, Baumot Group offers solutions along the entire value chain for exhaust gas aftertreatment. Nationally und internationally. 6
PRODUCT AND SERVICE PORTFOLIO 02
EXHAUST GAS AFTERTREATMENT FROM A SINGLE SOURCE Products & Services Research & Development Application Customer service Business fields OEM Retrofit Aftermarket Original Equipment Manufacturer Retrofit installation and solution Replacement parts Industries Off-Road On-Road Others Land machines Construction machinery Cars Commercial vehicles, i.e. trucks Stationary facilities (i.e. power plants) Buses, Transporters Baumot Group covers the entire value chain of exhaust gas aftertreatment with its subsidiaries. 8
PORTFOLIO RESEARCH & DEVELOPMENT Products and solutions for innovative exhaust gas aftertreatment Efficient, practical and reliable systems for the business fields Retrofit and Aftermarket Increasing focus on OEM customers and tier I suppliers as well as large SCR and DPF retrofit projects Product development & systems for On-Road and Off-Road applications References Baumot AG Emission after treatment systems for Retrofit & Aftermarket Twintec Technologie GmbH Emission after treatment systems for Retrofit & Aftermarket 9
PORTFOLIO APPLICATION Cross-industry conceptual design especially for the OEM business field From conceptualization to simulation to application and testing on the test stand, Baumot Technologie GmbH offers the development of exhaust gas aftertreatment from A to Z. References Baumot Technologie GmbH Development and application of innovative exhaust gas aftertreatment systems to achieve future emission standards. Focus on emissions reduction under real conditions (Real Driving Emissions, RDE) 10
PORTFOLIO CUSTOMER SERVICE Training, installation and maintenance are an integral part of the company s services Particularly in the countries of the Middle East, there is a great need for maintenance because of the poor fuel quality References Baumot AG Training and maintenance for OE, retrofit & aftermarket Twintec Technologie GmbH Training and maintenance for OE, retrofit & aftermarket 11
MARKET AND MEDIA 03
MEGATREND CLEAN AIR A substantial portion of global NOx emissions is caused by road traffic* UN resolution and binding commitments from Member States to reduce global emissions from 2020 Tightened EU regulation from 2017 on to further reduce NOx emissions with road traffic and in cities (Euro 6c) Chinese regulation from 2019 on for new vehicles has been ratified (CN 6 standard) News The tightening of legislation regarding emission limits worldwide is increasingly the market driver for the Baumot Group. 13
MARKETS CLEAN AIR 2014 2015 2016 2017 2018 2019 OEM: Deamnd rising sharply due to the introduction of new emission standards Eastern Europe Off-Road Iran On-Road Turkey Off-Road USA Off-Road Retrofitting: NOx levels are exceeded in the EU. Retrofitting with SCR (BNOx) systems is necessary Europe On- /Off-Road China On-Road Germany On-Road UK On-Road Aftermarket: Growth due to the wear of existing DPF systems Europe On- / Off-Road BNOx systems DPF systems The increasing legal tightening of emissions thresholds worldwide is the market driver for Baumot Group. 14
OEM 3.1
MARKET DEVELOPMENT SCR MARKET Vehicles equipped with SCR systems are projected to grow at a CAGR of 33% (2014-2019) and an penetration ratio of 35% to 7.1 million units* SCR market growth will take place mainly in Europe; SCR penetration ratio will jump to 59% in 2019 from 7% in 2014 2019: 7.1 million units 2014: 1.7 million units Global SCR market Significant market growth of exhaust gas aftertreatment due to increasing legal regulation and high development potential. *Source: Plastic Omnium 16
EUROPEANEMISSIONS THRESHOLDS ON-ROAD So far, measurements on the test bench - emission limit measurements are performed only on artificial test bench conditions; NOx emission threshold values are normally not met in real operation From September 2017 on: New test cycle that measures emissions under real drive conditions 0.5 g/km NOx (Test bench) BNOx 1.0 g/km NOx RDE Emissions threshold value reduced by 85% 0.25 g/km NOx BNOx 0.8 g/km NOx RDE Emissions must be measured under real drive conditions Euro 6c, as of 2017 Real Drive Emission (RDE) via PEMS* Euro 3, as of 2000 emissions limit 0.5 g/km NOx Euro 6, ab 2014 emissions limit 0,25 g/km NOx BNOx SCR System already meets the new ON-ROAD requirements today due to its high NOx reduction rate at low exhaust gas temperatures. *PEMS: Portable Emission Measurement System 17
EUROPEANEMISSIONS THRESHOLDS OFF-ROAD As of 2018: Stage V to be introduced compared to previous emission standards for all engine classes (small and large) Stage V will bring a change in technology: all engines must use a DPF and a temperature-efficient SCR system Performance class <19 kw Production 2014 2015 2016 2017 2018 2019 2020 2021 2022 Noemission Stage Stage V 19-37 kw Production Stage IIIA Stage V 37-56 kw Production Stage IIIA Stage IIIB Stage V 56-130kW Production Stage IIIA Stage IIIB Stage IV Stage V 130-560kW Production Stage IIIB Stage IV Stage V >560 kw Production Noemission Stage Stage V Beginning of the production phase Tightening and broadening of emission limits for Off-Road vehicles will lead to a significant increase in demand. 18
OEM: EMISSION LIMIT THRESHOLDS IN THE MIDDLE EAST Key countries in the Middle East are tightening the emission limit thresholds for commercial vehicles Nutzfahrzeuge For example, the new emission guideline FAZ IIIB (equivalent to the European Stage IIIB Directive) will apply in Turkey starting in October 2018 Other countries already have such regulations in force, which are gradually being extended to the original equipment of all diesel vehicle classes (commercial vehicles) by September 2018 Turkey as an example Launching business in 2013 In 2016, Baumot successfully signed supply agreements and engine homologations with two leading agricultural machine manufacturers (OEMs) Baumot is currently developing solutions (BNOx) together with the manufacturers (OEM) for FAZ IV (Stage IV) from 2019 on The two manufacturers together manufacture around 20,000 agricultural machines per year Another example (Iran) Baumot already supplies to several OEMs and successfully completed further tests in H2 2016 / H1 2017 In order to comply with these new emissions regulations, all OEMs must install a DPF (diesel particle filter) at the factory Representative studies predict a sharp increase in new registrations for passenger cars and trucks Baumot is expected to supply to a large share of OE customers in the future and thus further expand its position as a market leader The total market volume is around 30,000 to 40,000 DPF units per year Strengthening and extending the emission thresholds in the Middle East with on- and off-road vehicles will lead to a significant increase in demand. 19
RETROFIT 3.2
EXCESSIVE NITROGEN OXIDE EMISSIONS IN BIG CITIES Key 28 German cities and regions, including major cities such as Munich, Cologne, Hamburg and Berlin, violated statutory limits on nitrogen oxides in 2016 The government must act or risks harsh penalties Therefore at the state level, initial driving bans have been issued on diesel vehicles that do not at least meet the Euro 6 emission class According to ADAC, potential driving bans would affect around 13 million owners of diesel cars As a solution, the government is currently discussing the introduction of an Environmental Blue Badge for vehicles whose nitrogen oxide emissions comply with Euro 6 limits Annual average value2016 Source: Federal Environment Agency To comply with nitrogen oxide emission limits, big cities must introduce air pollution measures. One such measure is driving bans on diesel vehicles. 21
EMISSION LIMITS ARE NOT BEING MET To avoid driving bans on diesel vehicles, a Blue Badge is to be introduced Transportation ministers are demanding a retrofit solution to avoid a driving ban on older diesel vehicles that do not comply with the Euro 6 standard Technical solution: By retrofitting with the patented BNOx system, older vehicles can be upgraded to Euro 6 limits under real conditions Test results: Independent tests by ADAC/ZDF and DUH confirm the BNOx system s high efficiency Costs: The price of BNOx conversion is usually EUR 1,500 to 2,000 per vehicle, some of the costs being covered by the automotive industry Software retrofit: The proposed software retrofit only leads to a reduction of nitrogen oxide emissions of 20 to 60% and does not meet the Euro 6 exhaust gas standard The Blue Badge is to be introduced to avoid a general driving ban on diesel vehicles. Diesel vehicles would need to at least comply with the Euro 6 emission standard to qualify. 22
THE SOLUTION: THE BNOx SYSTEM The BNOx system offers the following advantages: Highly efficient nitrogen oxide reduction up to 98% under real conditions Already meets future requirements for real-drive emissions (Euro 6c) Space-saving system that can be used in all passenger cars Low system integration costs through modular design NOx conversion rate, standard SCR System Ad Blue The core: BNOx NH3 generator Temperature sensor Heating current Partial exhaust flow NOx conversion rate, BNOx NH3 + partial exhaust flow Temperature ( C) Temperature ( C) Space velocity (1/h) Space velocity (1/h) Unlike other systems, it already meets Euro 6c limits: very high NOx conversion rate at low temperatures, applicable in real road traffic. 23
BNOx IN THE MEDIA PRINT Autobild Auto Motor Sport Autozeitung TV SWR ZDF WISO ZDFzoom There is no system comparable to the patented BNOx system. Strong media interest regarding BNOx shows high relevance of Diesel retrofit. 24
BNOx RETROFITTING IN THE UK State subsidized SCR retrofit project The UK government has approved grants of GBP 150 million for retrofitting city buses and taxis with SCR systems In London alone, 5,800 city buses are to be retrofitted with SCR systems between 2017 and 2020 Other large cities such as Birmingham and Manchester will follow the example of London and also score points by introducing air purity plans Of around 12 possible suppliers, only 5 were accepted : The Baumot Group is one of these five The average selling price for a BNOx SCR retrofitting system for city buses is EUR 15,000 Other countries such as Italy, Spain and France have to introduce similar measures to improve air quality https://www.gov.uk/government/news/government-pledges-290-million-boost-for-low-emission-vehicles In London, approx. 5,800 city buses need to be retrofitted with SCR systems by 2020 The Baumot Group is one of five qualified suppliers. 25
BNOx RETROFITTING IN GERMANY Government subsidized retrofitting of city buses in major German cities As a result of the Diesel Summit, EUR 150 million has been allocated for the retrofitting of city buses and coaches with EUR 150 million for the retrofitting of city buses In Germany, around 18,000 city buses with Euro-5 or older engines are in use The Baumot Group is one of the first manufacturers to be awarded contracts under the government's bus retrofit subsidy programme The average retail price for a BNOx SCR retrofit system for city buses is 15.000 Other countries such as Italy, Spain and France have to introduce similar measures to improve air quality In Approximately 18,000 city buses with Euro 5 or older engines are in use in Germany The Baumot Group profits early on from government subsidies for retrofitting. 26
FINANCIALS 04
SELECTED FINANCIAL FIGURES in EUR million 2013 1 2014 2 2015 3 2016 3 H1 2017 2 Sales revenue 10.4 29.2 26.8 38.3 5.1 Gross profit 5.0 13.7 15.1 32.4 2.5 Gross profit margin 48% 46.9% 56.3% 84.7% 47.6% EBITDA 1.3 1.9-4.2-3.6-2.7 Revenues in H1 2017 below expectations due to several factors: Deconsolidation of the Kontec Group Introduction of the emission standard Stage FAZ IIIB in Turkey was postponed to 2018 Lower gross profit margin due to deconsolidation of the Kontec Group EBITDA impacted by the deconsolidation of Kontec, further development of the BNOx system and declining revenues EBITDA margin 17% 6% -15.8% -9.3% -52.5% Net debt 1.6-2.8-3.8 0.024* 0.017* *positive figure 1 3 Baumot AG before the reverse takeover Twintec AG, Baumot AG; Kontec GmbH consolidated 2 Twintec AG, Baumot AG without Kontec GmbH Fiscal year 2016: Further developed strategically, operating performance negatively impacted by the deconsolidation of the Kontec Group in the short term 28
BALANCE SHEET in EUR million Assets 2013 1 2014 2 2015 3 2016 4 H1 2017 4 Current assets 6.1 8.5 13.0 5.7 3.6 Non-current assets 0.8 13.5 20.5 7.5 6.5 Liabilities Equity 4.6 12.3 14.2 4.5 1.0 Equity ratio 67% 56% 42% 34% 9% Current liabilities & provisions 0.6 6.1 18.8 6.2 4.2 Non-current liabilities & provisions 1.7 3.6 5.7 0 0 Total assets 6.9 22.0 33.7 13.4 11.2 1 3 Baumot AG before the reverse takeover Twintec AG and Baumot AG; Kontec GmbH consolidated 2 4 Twintec AG, Baumot AG; without Kontec GmbH Twintec AG, Baumot AG; Kontec GmbH deconsolidated Kontec was deconsolidated from the balance sheet as of December 31, 2016. 29
SHARE Shareholder structure 12.34% 16.48% 71.18% Cleantech Ltd. RMK Beteiligungen GmbH* & Family Kavena Free Float * 100% attributable to COO Roger Kavena Basic share information Baumot Group AG WKN A2DAM1 ISIN DE000A2DAM11 Ticker symbol TINA Transparency level Open Market Principal trading venue Xetra Total number of shares 30,404,797 Designated sponsor Lang & Schwarz Broker GmbH, equinet Bank AG 30
OUTLOOK 05
OUTLOOK GROWTH THROUGH INNOVATIONS Medium-term expected sales and earnings development: EUR 30-35 million in sales and an EBITDA margin in the mid-single-digit percentage range in 2018 without the Blue Badge/ Diesel Retrofit for Passenger Cars Competitive advantage thanks to BNOx: Patented BNOx technology enables manufacturers to meet the requirements of the statutory emission standards (Euro 6c standard) Early positioning for the retrofitting of city buses in Germany: orders in Berlin and Paderborn, one of the first suppliers to benefit from the agreed subsidies from the "Diesel Summit" Strong position in the new growth markets: Leading OE supplier in the Middle East, technological market leadership in SCR systems (BNOx) Possible upside potential: Diesel retrofitting in Germany Further diesel retrofitting in Italy, France and Spain Certification of particulate filters in the USA Successful completion of initial pilot projects in China 32
OUTLOOK FOR 2018 In EUR million 100 Sales EBITDA 80 60 40 Euro 6c regulation OEM positioning Deconsolidation of Kontec GmbH and Interkat Introduction of the Off-Road standard Stage V Introduction of the On-Road standard CN 6 Significant growth of revenue & earnings 20 0 2016 1 2017e 2018e 2020-20 1 Twintec AG, Baumot AG, Kontec GmbH consolidated Positive market environment: In the upcoming years Baumot will profit from its investments in market development and technology in the past. 33
APPENDIX 06
CASE STUDY DUH3 EXHAUST TESTS Emissions under real conditions 0,8 EURO 5 vehicle EURO 5 vehicle with BNOx system NOx (g/km) 0,7 0,6-88.4 0,5 % NOx reduction with BNOx -93.3 % 0,4 0,3 0,2 EU5 0,1 EU6 0 EURO 5 (WLTC) ERUO 5 + BNOx (WLTC) 1 Emissions class EURO 5 + BNOx (PEMS) 2 Limit [g/km] 1 EURO 5 0.18 2 EURO 5 0.18 3 EURO 5 0.18 Test cycle WLTC1 WLTC1 with BNOx PEMS2 with BNOx 3 NOx emissions [g/km] NOx emissions without BNOx [g/km] NOx reduction with BNOx 0.68 - - 0.079 0.68-88.4 % 0.069 1.03-93.3 % The BNOx system is the leading retrofit system for achieving Euro 6 emissions under real conditions A Euro 5 diesel vehicle retrofitted with BNOx achieves better values under real conditions than a Euro 6 vehicle 1 WLTC: World Light-Duty Test Cycle 2 PEMS: Portable Emissions Measurement System 3 DUH: Deutsche Umwelthilfe 35
CASE STUDY ZDF ADAC EXHAUST TESTS PROVE BNOx EFFECTIVENESS Emissions under real conditions NOx (g/km) 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 EURO 5 vehicle EURO 5 vehicle with BNOx system -95.3 % -98.7 % NOx Reduktion with BNOx Prüfstand (WLTC) Prüfstand (Highway) Prüfstand (WLTC) Prüfstand (Highway) Realbedingungen, PEMS (City, Country Side, Highway) 1 2 3 4 5 EU5 EU6 1 2 3 4 5 Test methods Test cycle NOx emissions [g/km] NOx emissions without BNOx [g/km] NOx reduction with BNOx Test facility WLTC 1 0.748 - - Test facility Autobahn 0.742 - - Test facility Test facility Real conditions WLTC 1 with BNOx Autobahn with BNOx PEMS 2 with BNOx 0.035 0.748-95.3 % 0.01 0.742-98.7 % 0.027 - - EURO 6 emissions were documented with a retrofitted BNOx system Real conditions (RDE) WLTC Highway tests 1 WLTC: World Light-Duty Test Cycle 2 PEMS: Portable Emissions Measurement System 36
DISCLAIMER This document was prepared by Baumot Group to provide an overview of the company and its business activities. Baumot Group bases this on information from reliable sources. Nevertheless, no guarantee for the accuracy and completeness of the information can be given. The liability of Baumot Group, the Management Board, the employees, shareholders and advisors of Baumot Group for missing or inaccurate information, opinions, forecasts or statements in this document or other written or oral statements or for other legal reasons is excluded. This document does not constitute an offer or invitation for subscription or purchase of a security, share in a company or completion of another legal transaction, nor does this document or information contained therein serve as a basis for a contractual or other obligation of any kind. 37
BAUMOT GROUP 360 CLEAN AIR COMPANY INVESTOR PRESENTATION, DECEMBER 2017 THANK YOU!