Investors Presentation June 2020 - Dr. Stephan Meeder, CFO - CropEnergies
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Investors Presentation
June 2020
Dr. Stephan Meeder, CFO
Two challenges of our times
GHG emissions: worldwide >50 bn. t CO2eq./a Corona: worldwide more than 8 million infected
As of 16 June 2020
Source: EEA Source: https://www.worldometers.info/coronavirus/worldwide-graphs/#total-cases
CropEnergies AG, June 2020 2
Ethanol – important element to decarbonize
the transport sector
High-quality fuel
Domestic
which can be
renewable raw
used in petrol
materials
engines
Climate-friendly fuel
produced sustainably
CropEnergies AG, June 2020 3
Ethanol: 70% less GHG emissions compared
to 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 Transport Ethanol Ethanol CO2
Grain Grain Production Transport Liquefaction
*83,8 gCO2eq/MJ **Own calculations
CropEnergies AG, June 2020 4
Renewable ethanol – advantages
Ethanol… Blending
As direct blend to petrol (e.g. E5, E10, E85)
Ethanol
As component in ETBE (octane booster)
Petrol
E10 reduces CO2, NOx and particulate matter E5 E10 E20 E85
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
CropEnergies AG, June 2020 5
Our co-products: Food and Fuel
Raw materials are utilized completely
Concept of co-production
Vital Wheat Gluten ProtiGrain® – DDGS
Valuable protein product for High protein animal feed
food and animal feed from dried stillage
industry
Food-grade liquefied CO2 ProtiWanze® – CDS
For food and beverages Liquid protein animal feed
industries from stillage
CropEnergies AG, June 2020 6
The ethanol markets
World production EU production
2019: 126 million m3 (-1%) 2019: 7.2 million m3 (+5%)
Fuel applications: 109 million m³ (+1%) Fuel applications: 5.1 million m³ (+6%)
2020e: 112 million m3 (-11%) 2020e: 6.6 million m3 (-10%)
Fuel applications: 94 million m³ (-14%) Fuel applications: 4.2 million m³ (-18%)
World production of ethanol [M m3] EU production of ethanol [M m3]
140 8
USA Brasil EU other fuel non-fuel
120
6
100
80 Source: FO Licht (2020)
Source: FO Licht (2020)
4
60
40
2
20
2015 2016 2017 2018 2019 2020e 2015 2016 2017 2018 2019 2020e
CropEnergies AG, June 2020 7
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%
Source: Eurostat
EU: RED II demands more renewable energy by 2030
In transport at least 14% (total at least 32%)
National implementation until mid 2021
CropEnergies AG, June 2020 8
RED-II: the “toolbox“
Arable crops Annex IX-A Annex IX-B Electricity
Up to 7% Min. 0.2% in 2022 Max. 1.7%, but still Important component
Local, sustainable Min. 1.0 % in 2025
x2 versus today in the future
UCO imports: 10x But: discretionary
Proteins At least 3.5% in 2030
within last 10 years multiplier (x4) does not
Commitment to 1G Strong market save a single gram of
Compatibility with
as reliable basis for potential CO2
low-emission law on waste needs
Very capital intense to be ensured Extension only
transport sector
necessary reasonable if
Investment security additional electricity
and investment will be produced
incentives decisive
CropEnergies AG, June 2020 9
Market development: volumes
EU27: Ethanol sales [1.000 m3]
Ethanol market in the EU27 in 2020e (in million m³)
7,118 7,237
,
7.500 6,748 6,800
Production: 6.6 -10% (4.2 fuel | 2.4 non-fuel) 855
860 870
800
Source: FO Licht (2020)
1,420 1,450
Consumption: 6.8 -7% (4.2 fuel | 2.6 non-fuel) ,
5.000 1,323 1,800
Corona crisis 2020: fuel drops, disinfectants (industrial) increase ,
2.500 4,838 4,953
4,570 4,200
Premium E10 availability in the EU is gaining pace 0
2017 2018 2019 2020
E10 established among others in Belgium and France as #1 petrol Fuel Industrial Potalble
The Netherlands: since 1 Oct 2019 available with high acceptance E10 shares in selected countries
Denmark, Lithuania, Slovakia und Hungary: since 1 Jan 2020 100%
100%
100%
Source: ePURE (2020)
98%
90%
Plans in Austria and Latvia
79%
70%
70%
50%
50%
13%
45%
0%
CropEnergies AG, June 2020 10Market 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
CropEnergies AG, June 2020 11Corona crisis: shifting priorities
Alcohol from Zeitz for disinfectants
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
CropEnergies AG, June 2020 12Outlook: 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
CropEnergies AG, June 2020 13Strategic outlook
Our strategy: bio-based products for a climate friendly world
Renewable chemicals
Climate change remains challenge: GHG targets remain in place
Liquefied CO2
Short-term focus is the optimisation of our sites
Diversification of feedstock flexibility and expansion
Ethanol Neutral alcohol
of feed production in Zeitz completed
Extension of cooperation with SOL group –
construction of CO2 liquefaction in Wanze in preparation Gluten
Mid-term: diversification under investigation
R&D process innovation, alternative feedstocks Fuel ethanol
R&D renewable chemicals, portfolio expansion/growth
ProtiGrain®
Animal feed
CropEnergies AG, June 2020 14Appendix
CropEnergies AG, June 2020 15Wheat 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
CropEnergies AG, June 2020 16Our locations
Wilton, UK
Ensus UK Ltd
Ryssen Chile SpA,
Santiago de Chile, Chile
Tank storages
Rotterdam Tank storages Zeitz, Germany
Amsterdam CropEnergies Bioethanol GmbH
Loon-Plage, France
Wanze, Belgium
Ryssen Alcools SAS
BioWanze SA
CropEnergies AG, June 2020 17The production sites of CropEnergies AG
CropEnergies AG
Mannheim - Germany
Zeitz – Germany Wanze – Belgium Loon-Plage – France Wilton – UK
CropEnergies Bioethanol GmbH BioWanze SA Ryssen Alcools SAS Ensus UK Ltd.
Annual capacity: Annual capacity: Annual capacity: Annual capacity:
400,000 m³ ethanol 300,000 m³ ethanol >100,000 m³ ethanol for fuel applications 400,000 m³ ethanol
thereof up to 60,000 m3 neutral alcohol 60,000 t wheat gluten 90,000 m³ ethanol for traditional and 350,000 t DDGS
>300,000 t ProtiGrain® (DDGS) >400,000 t ProtiWanze® technical applications
100,000 t liquefied CO2
Raw materials: grain and sugar syrups Raw materials: wheat and sugar syrups Raw material: raw alcohol Raw material: grain
Ethanol for traditional &
ProtiGrain® Gluten Ethanol as Fuel ProtiWanze® Liquefied carbon
technical applications dioxide
Capacity: more than 1.3 million m³ ethanol and more than 1 million tonnes food and animal feed per year
CropEnergies AG, June 2020 18Financials 2019/20 & Outlook
CropEnergies AG, June 2020 19Net earnings for the year
Net earnings for the year [M€]
100
(in € million) 2019/20 2018/19 Δ
75
Operating profit 103.9 32.8 > + 100% 75
Restructuring costs / special items 0.0 10.1 - 100% 51
50
At equity result 0.2 0.2 + 4%
21
Income from operations 104.1 43.1 > + 100% 25
Financial result -3.3 -0.5 < - 100%
0
Earnings before income taxes 100.7 42.5 > + 100% BY BY BY
17/18 18/19 19/20
Taxes on income -26.2 -21.3 - 23%
Net earnings for the period 74.6 21.3 > + 100%
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
CropEnergies AG, June 2020 20Cash flow
Cash flow (+)/
Investments (-) [M€]
150
(in € million) 2019/20 2018/19 Δ 120
Cash flow 120.2 59.1 + 61.1 100
Change in net working capital 5.0 -24.7 + 29.7 59
50
Net cash flow from operating activities 125.1 34.4 + 90.7
Investments in property, plant et al. -29.8 -13.2 - 16.6
0
Payments into current financial investments -15.0 0.0 - 15.0 -13
-30
Cash flow from investing activities -44.8 -13.2 - 31.6 -50
BY BY
Cash flow from financing activities -71.2 -55.8 - 15.4 18/19 19/20
Exchange rate changes 1.4 0.5 + 0.9
Net financial position [M€]
120
Change in cash and cash equivalents 10.5 -34.1 + 44.6 107
90
29/02/2020 28/02/2019* Δ
60
Net financial assets 107.3 26.9 + 80.4
37
Capex higher at € 29.8 (13.1) million in order to improve production 30
27*
facilities
Net financial assets increased significantly to € 107 (27) million 0
28/02/18 28/02/19 29/02/20
*incl. adjustments from IFRS 16
CropEnergies AG, June 2020 21Balance sheet
Shareholders' equity [M€]
520
(in € million) 29/02/2020 28/02/2019 Δ 503
490
Assets
Non-current assets 384.7 382.7 + 2.0
460 449
Current assets 285.0 203.1 + 81.9 446
Total assets 669.6 585.7 + 83.9 430
Liabilities
400
Shareholders' equity 502.9 448.7 + 54.2 28/02/18 28/02/19 29/02/20
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% -
The balance sheet total increases to € 669.6 (585.7) million
ROCE improves significantly to 22.8 (7.1)%
CropEnergies AG, June 2020 22Outlook 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
CropEnergies AG, June 2020 23Financial Calendar Contact
13 May 2020: Annual report and press and analysts’ conference CropEnergies AG
financial year 2019/20
Maximilianstraße 10
8 July 2020: Statement for the 1st quarter of 2020/21 68165 Mannheim
14 July 2020: Annual General Meeting 2020 www.cropenergies.com
7 October 2020: Report for the 1st half of 2020/21
13 January 2021: Statement for the 1st-3rd quarter of 2020/21 Investor Relations Public Relations / Marketing
Stock Information Heike Baumbach Nadine Dejung-Custance
Phone: +49 (621) 71 41 90-30 Phone: +49 (621) 71 41 90-65
ISIN: DE000A0LAUP1
ir@cropenergies.de presse@cropenergies.de
Symbol: CE2
Bloomberg / Reuters: CE2 GY / CE2G.DE
Transparency standard: Prime Standard
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.
CropEnergies AG, June 2020 24Thank you!
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