Investors Presentation June 2020 - cropenergies.com · CropEnergies AG, June 2020 4 Ethanol: 70% less GHG emissions compared to fossil fuels* The GHG values of all elements in the

Investors PresentationJune 2020

Dr. Stephan Meeder, CFO

2CropEnergies AG, June 2020

GHG emissions: worldwide >50 bn. t CO2eq./a

Two challenges of our times

Corona: worldwide more than 8 million infectedAs of 16 June 2020

Source: EEA Source: https://www.worldometers.info/coronavirus/worldwide-graphs/#total-cases


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


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


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


World production

2019: 126 million m3 (-1%)

Fuel applications: 109 million m³ (+1%)

2020e: 112 million m3 (-11%)

Fuel applications: 94 million m³ (-14%)

Sourc

e:

FO

Lic

ht

(2020)

The ethanol markets

EU production

2019: 7.2 million m3 (+5%)

Fuel applications: 5.1 million m³ (+6%)

2020e: 6.6 million m3 (-10%)

Fuel applications: 4.2 million m³ (-18%)

World production of ethanol [M m3] EU production of ethanol [M m3]

Sourc

e:

FO

Lic

ht

(2020)

2

4

6

8

2015 2016 2017 2018 2019 2020e

fuel non-fuel

20

40

60

80

100

120

140

2015 2016 2017 2018 2019 2020e

USA Brasil EU other


Source: Eurostat

Political framework EU

EU targets in transport 2020

6% GHG emission reduction in fuels

10% share of renewables

EU: on the way to climate neutrality in 2050

Currently: 40% less GHG – thereof non-ETS (e.g. transport): -30%

“Green Deal”: EU climate target 2030 to be increased to 50-55%

EU: RED II demands more renewable energy by 2030

In transport at least 14% (total at least 32%)

National implementation until mid 2021


RED-II: 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


10

0%

10

0%

98

%

90

%

79

%

70

%

70

%

50

%

45

%

13

%

0%

50%

100%

E10 shares in selected countries

Sourc

e:

eP

UR

E (

2020)

Market development: volumes

Ethanol market in the EU27 in 2020e (in million m³)

Production: 6.6 -10% (4.2 fuel | 2.4 non-fuel)

Consumption: 6.8 -7% (4.2 fuel | 2.6 non-fuel)

Corona crisis 2020: fuel drops, disinfectants (industrial) increase

Premium E10 availability in the EU is gaining pace

E10 established among others in Belgium and France as #1 petrol

The Netherlands: since 1 Oct 2019 available with high acceptance

Denmark, Lithuania, Slovakia und Hungary: since 1 Jan 2020

Plans in Austria and Latvia

4,570 4,838 4,9534,200

1,3231,420 1,450

1,800

855860 870

800

6,7487,118 7,237

6,800

0

2.500

5.000

7.500

2017 2018 2019 2020

Fuel Industrial Potalble

EU27: Ethanol sales [1.000 m3]

,

,

,

Sourc

e:

FO

Lic

ht

(2020)


Market development: prices

FY 2019/20: considerable increase of ethanol prices

Ethanol*: 620 (500) €/m3

CO2 reduction as a price component

Feedstock market 2019/20

Grain**: 180 (190) €/t

EU grain harvest: 320 Mt (+10%) exceeds consumption of 290 Mt

Word grain harvest***: 2,175 Mt (+2%) and stocks of 608 Mt (-3%)

IGC expects balanced market for 2020/21 with about 2,225 Mt

Corona effect on ethanol prices in spring 2020

* Ethanol T2 FOB Rdam, rounded ** wheat (Euronext Paris), next date of expiry, rounded *** all varieties, except rice


Corona crisis: shifting priorities

WHO: COVID-19 is declared a pandemic on 11 March 2020

Increasing mobility restrictions in European countries

Collapse of energy prices

Soaring demand for disinfectants

Enhanced hygiene requirements in hospitals, medical practices and pharmacies

Germany, among others, facilitates use of ethanol

Biocidal approval of technical alcohol and exemption from alcohol tax

CropEnergies assumes social responsibility

Alcohol for about 20 million litres of disinfectants and sanitizers

Fair prices and high availability of technical alcohol mitigates shortage

Priority for public health – fuel sales reduced

Alcohol from Zeitz for disinfectants


Outlook: short-term

Trend in FY 2020/21 depends on containment of coronavirus

EU Commission expects recession (GDP 2020: -7.4%)

CE reached an operating profit of € 8 million in the 1st quarter

Improvement of 2nd quarter expected due to relaxation of mobility restrictions

Ethanol: demand stabilisation and chance for impulses

Ethanol industry is part of system-relevant infrastructure

CE is facing high demand for disinfectants and sanitizers

Normalisation of fuel demand expected in 2nd half of the year

Targets for GHG reduction and renewable energy in force

Price expectations in the EU: uncertainty will remain

Volatility of ethanol prices will remain high


Ethanol

Gluten

Neutral alcohol

Renewable chemicals

Liquefied CO2

Fuel ethanol

ProtiGrain®

Animal feed

Strategic outlook

Our strategy: bio-based products for a climate friendly world

Climate change remains challenge: GHG targets remain in place

Short-term focus is the optimisation of our sites

Diversification of feedstock flexibility and expansion

of feed production in Zeitz completed

Extension of cooperation with SOL group –

construction of CO2 liquefaction in Wanze in preparation

Mid-term: diversification under investigation

R&D process innovation, alternative feedstocks

R&D renewable chemicals, portfolio expansion/growth


Appendix


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


Our locations

Wanze, Belgium

BioWanze SA

Loon-Plage, France

Ryssen Alcools SAS

Tank storages

Rotterdam

Wilton, UK

Ensus UK Ltd

Ryssen Chile SpA,

Santiago de Chile, Chile

Zeitz, Germany

CropEnergies Bioethanol GmbH

Tank storages

Amsterdam


Annual capacity:

>100,000 m³ ethanol for fuel applications

90,000 m³ ethanol for traditional and

technical applications

Raw material: raw alcohol

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:

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


Net earnings for the year

Unrealized currency effects result in reduction of the financial result to € -3.3 (-0.5) million

Net earnings amounting to € 74.6 (21.3) million also reached a record level

51

21

75

0

25

50

75

100

BY17/18

BY18/19

BY19/20

Net earnings for the year [M€]

(in € million) 2019/20 2018/19 Δ

Operating profit 103.9 32.8 > + 100%

Restructuring costs / special items 0.0 10.1 - 100%

At equity result 0.2 0.2 + 4%

Income from operations 104.1 43.1 > + 100%

Financial result -3.3 -0.5 < - 100%

Earnings before income taxes 100.7 42.5 > + 100%

Taxes on income -26.2 -21.3 - 23%

Net earnings for the period 74.6 21.3 > + 100%


(in € million) 2019/20 2018/19 Δ

Cash flow 120.2 59.1 + 61.1

Change in net working capital 5.0 -24.7 + 29.7

Net cash flow from operating activities 125.1 34.4 + 90.7

Investments in property, plant et al. -29.8 -13.2 - 16.6

Payments into current financial investments -15.0 0.0 - 15.0

Cash flow from investing activities -44.8 -13.2 - 31.6

Cash flow from financing activities -71.2 -55.8 - 15.4

Exchange rate changes 1.4 0.5 + 0.9

Change in cash and cash equivalents 10.5 -34.1 + 44.6

29/02/2020 28/02/2019* Δ

Net financial assets 107.3 26.9 + 80.4

Cash flow

Capex higher at € 29.8 (13.1) million in order to improve production facilities

Net financial assets increased significantly to € 107 (27) million *incl. adjustments from IFRS 16

59

120

-13

-30-50

0

50

100

150

BY18/19

BY19/20

Cash flow (+)/ Investments (-) [M€]

3727*

107

0

30

60

90

120

28/02/18 28/02/19 29/02/20

Net financial position [M€]


(in € million) 29/02/2020 28/02/2019 Δ

Assets

Non-current assets 384.7 382.7 + 2.0

Current assets 285.0 203.1 + 81.9

Total assets 669.6 585.7 + 83.9

Liabilities

Shareholders' equity 502.9 448.7 + 54.2

Non-current liabilities 65.5 48.5 + 17.0

Current liabilities 101.3 88.5 + 12.8

Total liabilities and equity 669.6 585.7 + 83.9

Capital Employed 456.1 462.3 - 6.2

ROCE 23% 7% -

Net financial assets 107.3 26.9 + 80.4

Equity ratio 75% 77% -

Balance sheet

The balance sheet total increases to € 669.6 (585.7) million

ROCE improves significantly to 22.8 (7.1)%

446 449

503

400

430

460

490

520

28/02/18 28/02/19 29/02/20

Shareholders' equity [M€]


Outlook 2020/21

Climate protection will remain an important environmental policy goal in the medium term

For the 1st quarter, CE reached an operating profit of € 8.1million

An improvement is expected for the 2nd quarter vs. the 1st quarter since the restrictions on production and mobility that have been in place since mid-March 2020 have been relaxed in more and more countries

CropEnergies expects an improvement in the course of the financial year, but with a significant decline in revenues and operating profit in comparison to the previous record year

The forecast will therefore be substantiated in line with the course of the corona pandemic


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


Thank you!

Investors Presentation June 2020 - cropenergies.com · CropEnergies AG, June 2020 4 Ethanol: 70% less GHG emissions compared to fossil fuels* The GHG values of all elements in the

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