Investors Presentation Dr. Stephan Meeder, CFO October 2018
Ethanol the alternative to fossil fuel Domestic renewable raw materials High-quality fuel which can be used in petrol engines Climate-friendly fuel produced sustainably 2
EU - Framework Renewable Energies Directive EU shares of renewable energy in transport Overall goal 10% renewable energies in the transport sector in 2020 Of which up to 7% conventional biofuels Biofuels from wastes and residues: quota 0.5% + double counting Paris Climate Agreement: restrict global warming to less than 2 C Source: Eurostat Most pressing concern: transport lags behind Deployment of renewables in transport stagnates Road transport still 95% reliant on fossil oil Source: Eurostat (2018) 3
EU fuel market today (2016): reality and fiction 70% Petrol Ethanol Biodiesel Diesel 25% 1% 4% 20% Biodiesel/HVO* Palm-based 20% Ethanol 60% Crops Annex IX-A Annex IX-B Electricity 0,5% 0,7% 0,5% 3,3% Others 0,1% still 95% fossil only 5% of renewable energies on road virtually inflated to 7.2% by multipliers Far away from meeting renewable energy targets and GHG-targets 2030 * Excluding palm oil based fuels Source: Eurostat, own estimations 4
Ethanol: applications and EU market Ethanol As direct blend to petrol (E5, E10, E85) As component in ETBE (octane booster) Sales of fuel EtOH in H1 2018 (1,000 m 3 ) 1.000 +6% 750 500 +13% +7% EU ethanol market 2018e (in million m³) Production: 5.3 + 2% (+ 2.4 non-fuel) 250 2,000 +0% +23% FR DE BE FI UK Sales and share of E10 (H1 2018) 100% Consumption: 5.3 + 1% (+ 2.6 non-fuel) Reality: sales up by 7%* in Jan.-May 2018 1,500 1,000 75% 50% EU fuel consumption in 2017: 309 million t * Eurostat, own estimate 500 25% 0% FR DE BE FI UK Sales of E10 (1,000 t) share of E10 (%) Sources: BAFA, SNPAA; Eurostat, own calculations 5
The ethanol markets World production EU production 2017: 120 million m 3 (+2%) 2017: 7.7 million m 3 (+10%) Fuel applications: 101 million m 3 (+3%) Fuel applications: 5.3 million m 3 (+12%) 2018e: 126 million m 3 (+5%) 2018e: 7.7 million m 3 (+1%) Fuel applications: 109 million m³ (+7%) Fuel applications: 5.4 million m³ (+2%) 140 120 100 World production of ethanol [M m³] USA Brazil EU Other 10 8 Ethanol production in the EU [M m³] Bioethanol for fuel applications Alcohol for traditional applications 80 6 60 4 40 20 2 0 2013 2014 2015 2016 2017 2018e 2019e Source: F.O.Licht 0 2013 2014 2015 2016 2017 2018e 2019e Source: F.O.Licht 6
Our co-products Raw materials are utilized completely Concept of co-production Vital Wheat Gluten Valuable protein product for food and animal feed industry ProtiGrain DDGS High protein animal feed from dried stillage Food-grade liquefied CO 2 For food and beverages industries ProtiWanze CDS Liquid protein animal feed from stillage 7
Our locations CropEnergies Inc., Houston, USA Wilton, UK Ensus UK Ltd Trading office São Paulo, Brazil Ryssen Chile SpA, Santiago de Chile, Chile Tank storages Rotterdam Tank storages Amsterdam Zeitz, Germany CropEnergies Bioethanol GmbH Loon-Plage, France Ryssen Alcools SAS Wanze, Belgium BioWanze SA 8
(in million / in,000 m³) CropEnergies: status quo Financial year 2017/18 Increase of production and strengthening #1 position Dividend: 25 (30) eurocents First time debt free Perspective Short term: ethanol prices burden result 2018/19 Long term: Framework until 2030 (RED II) under discussion 1.400 1.200 1.000 800 600 400 200 0 Revenues / Production 1.149 1.030 837 882 802 723 15/16 16/17 17/18 9
( /t or /m 3 ) Profitability drivers Volatile ethanol prices Price expectation * below previous year March-Aug. 462 /m³ ( 569 in prev. year) Raw materials prices have risen Global grain harvest ** 2018/19 of about 2.1 billion tons at previous year s level expected World stock level lower at 446 Mt (-10%) EU harvest 284 Mt (-7%) slightly below consumption of 286 Mt CE benefits from natural hedge, i.e. strong price correlation between grains and proteins * ethanol T2 FOB Rdam ** without rice 700 600 500 400 300 200 100 Fuel EtOH T2 FOB Rdm. (1M) Gross profit for wheat-etoh Net raw material costs Euronext Paris wheat No. 2 10
European ethanol prices (in /m 3 )* 700 650 2016 2017 2018 600 550 500 450 400 * 1M future ethanol T2 FOB Rotterdam 11
EU: Renewable Energies Targets 2030 (RED II) Overall target: 32% share of renewable energy Transport: at least 14% renewable energy Crop-based fuels: unchanged Development of alternative fuels from waste and residues Multipliers (e.g. renewable electricity for cars) Less feedstock from carbon-rich areas (e.g. palm oil from rain forest areas) by 2030 Less GHG emission requires less fossil and more renewable energy 7,2% virtual 2,2% 5% Renewables in transport 10% 2016 2020 target GHG savings in non-ets sectors 14% 2030 target 30% 7% 10% 2015 2020 target 2030 target 12
Source: epure 13
The production sites of CropEnergies AG CropEnergies AG Mannheim - Germany Zeitz Germany CropEnergies Bioethanol GmbH Wanze Belgium BioWanze SA Loon-Plage France Ryssen Alcools SAS Wilton UK Ensus UK Ltd. Annual capacity: Annual capacity: Annual capacity: Annual capacity: 400,000 m³ ethanol thereof up to 60,000 m 3 neutral alcohol >300,000 t ProtiGrain (DDGS) 100,000 t liquefied CO 2 300,000 m³ ethanol 55,000 t wheat gluten >350,000 t ProtiWanze >100,000 m³ ethanol for fuel applications 90,000 m³ ethanol for traditional and technical applications 400,000 m³ ethanol 350,000 t DDGS Raw materials: grain and sugar syrups Raw materials: wheat and sugar syrups Raw material: raw alcohol Raw material: grain ProtiGrain Gluten Ethanol as Fuel Ethanol for traditional & technical applications ProtiWanze Liquefied carbon dioxide Capacity: more than 1.3 million m³ ethanol and more than 1 million tonnes food and animal feed per year 14
Produkte Financials H1 2018/19 & Outlook 15
Income statement: 1 st half 2018/19 (in million) 6M 18/19 6M 17/18 Δ Revenues 393.2 459.7-14% EBITDA* 33.7 66.5-49% Operating profit 14.2 47.3-70% Income from operations 14.2 46.7-70% Financial result -1.1 0.2 - Earnings before income taxes 13.1 46.8-72% Taxes on income -6.0-11.9 + 50% Net earnings for the period 7.1 34.9-80% Earnings per share (in ) 0.08 0.40-80% * without restructuring costs and special items 50 40 30 20 10 0 Net earnings for period [M ] 35 1st half 17/18 16 2nd half 17/18 7 1st half 18/19 Financial result affected by currency losses from declining GBP Tax rate rises to 46 (25)% 16
Cash flow (in million) 6M 18/19 6M 17/18 Δ Cash flow 27.5 53.7-26.2 Change in net working capital -1.5-14.7 + 13.2 Net investments -4.7-12.4 + 7.7 Exchange rate changes et al. 0.2-0.1 + 0.3 60 40 20 Cash flow (+)/ investments (-) [M ] 44 28 Free cash flow before dividends 21.6 26.5-4.9 0 Dividends for prior year -21.8-26.2 + 4.4 Free cash flow -0.2 0.3-0.5-20 -12 1st half 17/18-5 1st half 18/19 31/08/2018 31/08/2017 Δ Net financial position 36.6-8.8 + 45.4 Investments reduced to 4.7 (12.4) million for improvements in the production plants Dividend payment of 21.8 million made in July 2018 17
Balance sheet structure (in million) 31/08/2018 31/08/2017 Δ 460 Shareholders' equity [M ] Assets Non-current assets 391.2 417.6-6% Current assets 198.5 173.8 + 14% 440 446 441 Total assets 589.7 591.4-0% Liabilities Shareholders' equity 440.5 422.6 + 4% Non-current liabilities 50.9 46.3 + 10% Current liabilities 98.3 122.5-20% Total liabilities and equity 589.7 591.4-0% 420 400 423 31/08/17 28/02/18 31/08/18 Net financial position 36.6-8.8 - Equity ratio 75% 71% Equity ratio increased again by 4%-points to 75 (71)% Net financial position significantly improved to 36.6 (-8.8) million 18
Outlook 2018/19 (as of 22.10.2018) Challenging market environment with low ethanol prices Revenues to range between 750-780 million EBITDA in the range of 55-75 million Operating profit to range between 15-35 million Production pause in Wilton, UK, from end of November 2018 on 19
Financial Calendar 09 January 2019: Statement for the 1 st -3 rd quarter of 2018/19 15 May 2019: Annual report and press and analysts conference financial year 2018/19 10 July 2019: Statement for the 1 st quarter of 2019/2020 16 July 2019: Annual General Meeting 2019 09 October 2019: Report for the 1 st half of 2019/20 Stock information ISIN: Symbol: Bloomberg / Reuters: Transparency standard: DE000A0LAUP1 CE2 CE2 GY / CE2G.DE Prime Standard Contact CropEnergies AG Maximilianstraße 10 68165 Mannheim Investor Relations Heike Baumbach Phone: +49 (621) 71 41 90-30 ir@cropenergies.de Public Relations / Marketing Nadine Dejung-Custance/ Clarissa Sonnenschein Phone: +49 (621) 71 41 90-65 presse@cropenergies.de Disclaimer www.cropenergies.com 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. 20