Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech

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Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Presentation of 3M Figures FY 2018/19
BRAIN – Key Enabler for a Biobased Economy

                                                                  [We are convinced that the bioeconomy is
                                                                  gathering further momentum and we are
                                                                  clearly sensing the confidence that the 21st
                                                                  century will enjoy a more sustainable
                                                                  economy.]
Zwingenberg, 28 February 2019                                     Dr. Jürgen Eck, CEO BRAIN, Annual Report 2017/18

                Engineering Biology.
                © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Disclaimer

This document may contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties, as
they relate to future events and are based on current assumptions of the Company, which may not occur at all in the future or may not
occur as assumed. They do not represent a guarantee for future results or performance of the Company, and the development of
economic and legal conditions may materially differ from the information expressed or implied in the forward-looking statements.

The Company assumes no obligation to update or revise any forward-looking statement contained herein or to adapt them to future
events or developments. The information contained in this document has not been independently verified. No representation or
warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or
correctness of the information or opinion contained herein. The Company or any of its shareholders, affiliates, advisors, employees or
representatives shall have no liability whatsoever (in negligence or otherwise) for any loss arising from any use of this document or its
content or otherwise arising in connection with this document.

By accepting this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the
market position of the Company and that you will conduct your own analysis and be solely responsibility for forming your own view of
the potential future performance of the Company’s business.

This presentation speaks as of 28 February 2019. Neither the delivery of this presentation nor any further discussions of the
Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the
affairs of the Company since such date. The term “BRAIN”, as used in this presentation means B.R.A.I.N. Biotechnology Research
and Information Network AG and its affiliates, if not otherwise specified.

                     Engineering Biology.
                     © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                                2
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Speakers/Management

        Dr. Jürgen Eck                              Manfred Bender                              Ludger Roedder                               Dr. Martin Langer
             (CEO)                                      (CFO)                                       (CBO)                                  (eVP Corporate Dev.)

•   Micro- & Molecular Biologist         •   Master of Business Administration            •   Master of Business Administration        •    Molecular Biologist & Biochemist
•   56 years                             •   53 years                                     •   53 years                                 •    53 years
•   Co-founded BRAIN in 1993             •   Joined BRAIN in 2018                         •   Joined BRAIN in 2018                     •    Joined BRAIN in 1995
•   25+ y of industry expertise          •   20+ y of finance leadership experience       •   20+ y international industry expertise   •    20+ y of management expertise
•   Well connected in industry               as CFO and CEO in listed companies           •   Product Development &                    •    Well connected in industry
•   Management & Strategy                •   Successful in market cap &                       Industrial Transactions                  •    Corporate & Business Development
                                             Revenue Growth                               •   Strategy & Portfolio Management
•   R&D, IP and Technology                                                                                                             •    Marketing & Communication
                                         •   Asset management, M&A

                             Engineering Biology.
                             © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                                                           3
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Our ambition:
To make products more
efficient and healthy as well as
industrial processes more sustainable.

        Engineering Biology.
        © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0   4
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
BRAIN is a key enabler of a bio-based economy

•   Our Mission
    We discover and produce novel biological
    ingredients on the basis of our proprietary BioArchive
    for the attractive B2B markets Nutrition & Health,
    Skin Care and Industrial BioSolutions

     Enzymes             Performance                   BioActive
                        Microorganisms            Natural Compounds

•   Our Commitment
    To grow as a fully integrated bio-specialty
    company, by providing novel bio-based products
    and efficient processes

                  Engineering Biology.
                  © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0   5
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Three business units within BRAIN Group

                             BU                                                            BU
                          Industrial                                                     Nutrition
                         BioSolutions                                                    & Health
     Starter Cultures
    and Performance                              Enzymes       Strains     BioActives                         Enzymes
     Microorganisms                                                                                       Starter Cultures
            for                                                                                         Natural Ingredients
      Green Mining                                                                                               for
    CO2-to Bioplastics                                                                                      Food, Feed,
                                                                                                        Pet food, Beverages
                                                                BU
                                                             Skin Care

                                                    Active Ingredients
                                     Formulated Ingredients and White Label Systems
                                                  for biological skin care
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              © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                         6
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Business models & growth pillars

Tailor Made Solutions                                                                       Products

Programs for Industry                         New Product Development                                    Growing Product Sales
• BRAIN has a long track                      • Pipeline of 12 R&D programs                              • Product sales account for more
 record with dedicated                            fuelling product business                                than 60% of the BRAIN revenues
 contract R&D programs                        • Businesses: a) product sales                             • Portfolio of >100 specialty
• Business: tech-access,                          b) product scalable royalties                            B2B products
 fees and milestone                               via industrial partnerships                            • Business: product sales
 payments or royalties

               Engineering Biology.
               © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0        CONFIDENTIAL                  7
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Growing product sales: Top 10 enzyme products

                                                                                                  < 10%   10-20%   > 20%

        Engineering Biology.
        © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                            8
Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
New Product Development Pipeline

•   Additional product revenues from new product development in 2018/19 expected
•   BRAIN plans to be supplier of active ingredient in 7 out of 12 programs
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Presentation of 3M Figures FY 2018/19 - BRAIN - Key Enabler for a Biobased Economy - Brain Biotech
Statement

Statement of the CEO Dr. Jürgen Eck:

„We are very satisfied with the performance of the BRAIN
Group in the first quarter of the financial year 2018/19 with a
growth in total operating performance compared to the previous
year. It is satisfactory to learn that both business segments
contributed to a positive start in the year.

Of strategic importance is the product-scalable BioIndustrial segment. In this segment we were able
to report a significant increase in the total operating performance, but also organically meaning
without the contribution of our newly acquired subsidiary Biocatalysts Ltd we were able to generate
positive growth. The set-up and implementation of the three business units Nutrition & Health, Skin
Care and Industrial BioSolutions, focusing on the most promising markets, has contributed to this
development.

Based on the first quarter, we continue to expect a positive business development with a double-
digit increase in total operating performance."
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                © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0   CONFIDENTIAL   10
Key Financials

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       © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0
Key consolidated financials

                                                                                                            Total Operating Performance by Segments [€m]
Key consolidated financials 3M 2018/19
                                                                                                               3M 2016/17     3M 2017/18      3M 2018/19
                                                                      3M                 3M
                                                                                                                                                9.9
(in € million)                                                 2018/19            2017/18                                             +64%*
Revenues                                                              9.4                5.3
                                                                                                                      6.6
Total operating          performance1                                 9.9                6.0                                    6.0

    BioScience                                                        3.4                2.9
                                                                                                                                                6,5
    BioIndustrial                                                     6.5                3.1
Adjusted EBITDA                                                      -0.0               -1.3                          3,4
                                                                                                                                3,1
    Acquisition and integration costs                                 -0.0               -0.3
    Employee participation program
                                                                      -0.0               -0.1
    AnalytiCon Discovery GmbH
                                                                                                                      3,2       2,9             3,4
    Share based compensations                                         -0.0                0.0

EBITDA                                                               -0.1               -1.7
Operating cash flow                                                  -0.1                1.4                  Adjusted EBITDA [€m]
                                                                                                              3M 2016/17      3M 2017/18      3M 2018/19
                                                          31.12.2018 30.09.2018
Cash                                                                23.8               25.5                                                       -0.0
                                                                                                                                  -1.3
                                                                                                                      -1.9

1   Revenues + change in inventories + other income + R&D grants                                                 BioScience       BioIndustrial    *Change yoy

                            Engineering Biology.
                            © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                                          12
Key Financials 3M FY 2018/19
BRAIN Group revenues in FY 2018/19 increased by 78.7% to Euro 9.4m (3M 2017/18: Euro 5.3m)

BRAIN Group generated a total operating performance (TOP) of Euro 9.9m (3M 2017/18: Euro 6.0m)

     • Revenues of the BioIndustrial segment increased by 116.6% to Euro 6.6 m (3M 2017/18: Euro 3.1m) and
       TOP increase by 108.9% to Euro 6.5m (3M 2017/18: Euro 3.1m)

     • The BioScience segment increased its TOP by 15.3% to €3.4m (3M 2017/18: Euro 2.9m), mainly due to
       new and follow-up projects as well as received milestones. Revenue increased by 26.3% from €2.2m to
       €2.8m.

The adjusted BRAIN Group EBITDA increased from Euro -1.3m (3M 2017/18) to -0.0m

     • BioIndustrial segment with positive EBITDA Euro 0.8m (3M 2017/18 -0.1m)

     • BioScience adj. EBITDA increased about Euro 0.3m to Euro -0.9m (3M 2017/18 -1.2m)

The brutto cash-flow at Euro -0.8m (3M 2017/18 Euro -2.5m) reflects the stronger operating perfomance yoy

     •   The operating cash-flow descreased from Euro 1.4m (3M 2017/18) to Euro -0,1m due to last years one
         time effects

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Business Events

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       © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0
Business events in first quarter of FY 2018/19

•   Suntory Beverage & Food Europe and BRAIN AG start Joint Development Program
    BRAIN AG and Suntory Beverage & Food Europe (SBFE), the regional division of
    Suntory Beverage & Food operating in the non-alcoholic beverage business in EMEA
    through a broad variety of brands, announced on 26 November 2018 the start of a JDP to
    develop new natural beverage solutions for specified product categories of SBFE‘s
    portfolio. The joint development activities will address growing demands for new varieties
    of natural ingredients in beverages.

•   Global beverage company joins BRAIN’s newly established FRESCO program for
    nature-based preservation ingredients
    BRAIN AG, AnalytiCon Discovery GmbH and a leading consumer product market player
    with a highly diverse portfolio of beverage products, headquartered in Japan, announced
    on 11 December 2018 the start of a strategic partnership within the FRESCO program.
    Within this program, BRAIN Group is developing bioactive natural ingredients with
    preserving or preservation enhancing traits for diverse industrial applications. The
    program will also contribute to reducing product losses resulting from microbial decay.

                 Engineering Biology.
                 © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0   15
FRESCO: Natural microbial control for food safety

Goal: sustainable use of food products

• Globally, 1.3 billion tons of food are thrown away p.a.- 180 to 190 kg per head1;2

• Food losses worldwide: 30 and 40%2

• Approximately 70% of food losses are post-harvest losses3

• One quarter saved, could feeds 870m people3

• 21% of food waste arises from spoilage4

        Need for natural preservatives to reduce post-harvest losses

                               Source: 1 New York Times 2017;2 WWF Deutschland 2015; 3 UN F.A.O. 2015; 4 wrapni.org.uk 2011
             Engineering Biology.
             © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                          16
FRESCO: Natural microbial control for food safety

BRAIN Solution                                                                       Market
• Natural preservatives from the BioArchive                                          • Total biocide market: 8.5 bn US$1

                                                                                     • Actual antimicrobials / preservatives
                                                                                          are in discussion; not solely in food
                                                                                          sector

                                                                                     • Increased consumer demand for
                                                                                          healthy, all natural food and clean
• Joint industrial partnership of AnalytiCon
                                                                                          label
  Discovery GmbH, BRAIN AG and a globally
  operating Japanese beverage company
• Additional companies invited to join FRESCO

                                                                                                             Source: 1 gminsights.com

              Engineering Biology.
              © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                                   17
Business events after end of first quarter of FY 2018/19

•   Manfred Bender takes over as CFO and Ludger Roedder as CBO of BRAIN
    As of 1 January 2019 Manfred Bender was appointed as Chief Financial Officer (CFO) of
                                                                                                           Manfred   Ludger
    the Management Board of BRAIN AG. On the same day Ludger Roedder was appointed                         Bender    Roedder

    as Chief Business Officer (CBO) on the Management Board of BRAIN AG.

•   Scheduled exercise of put option rights of shareholders of a subsidiary
    After the end of the first quarter, BRAIN AG increased its financial share at AnalytiCon
    Discovery GmbH to 99.70% through exercising the put option rights of the minority
    shareholders. BRAIN AG will pay out the purchase price in the lower seven-digit range
    over a period of three years to the shareholders.

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Shareholders & Calendar

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       © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0
Shareholder structure of BRAIN

 DAH Beteiligungs                      Founders/
     GmbH                             Management
                                                                                   Notes
               8,6%        8,7%
                                                                                   •     WKN 520394 / ISIN DE0005203947 /
                                                                                         Acronym: BNN
                                                                                   •     Prime Standard Frankfurt/M
       45,0%                                                                       •     IPO on February 09, 2016
                                      37,7%
                                                                                   •     Current number of shares: 18,055,782
                                                                                   •     Free float of 45.0%

                                          MP Beteili-
                                                                                   •     Strong long term investor base
Free Float                               gungs-GmbH                                •      7,000 shareholders

                                                                                                                 Status February 12, 2019

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               © BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.de +49 (0) 6251-9331-0                                      20
Financial Calendar FY 2018/19

07 March 2019                                         Annual General Meeting in Zwingenberg,
                                                      Germany

31 May 2019                                           Publication of the mid-year financial
                                                      statement for the period ending
                                                      31 March 2019 (6M)

30 August 2019                                        Publication of the quarterly report for
                                                      the period ending 30 June 2019 (9M)

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Thank you for your interest.
       BRAIN Aktiengesellschaft
       Darmstädter Straße 34-36
       64673 Zwingenberg, Germany

       +49 (0) 6251-9331-0
       www.brain-biotech.de

       Your Contact:
       Dr. Martin Langer
       ml@brain-biotech.de

       +49 (0) 6251-9331-16

              @BRAINbiotech

              BRAIN AG

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