Analyst Conference, 17 May 2017...2017/05/17 · CropEnergies AG, Analyst Conference, 17 May 2017 Overview business year 2016/17 1. Transport emissions still rising 2. Corporate environment

Analyst Conference, 17 May 2017 Joachim Lutz, CEO

Dr. Stephan Meeder, CFO

CropEnergies AG, Analyst Conference, 17 May 2017

Overview business year 2016/17

1. Transport emissions still rising

2. Corporate environment and markets

EU targets 2020 und draft for 2030

Development of market volumes

Bioethanol prices fluctuating and below previous year

3. CropEnergies: leading ethanol producer in Europe

Significant increase of production

Variable capacity utilization proves its worth

4. Financial statements 2016/17

Growth of revenues and record result

Strengthened asset base and reduced net financial debt

Proposal to double dividend

2


1. Transport emissions still rising

CO2 emissions harm climate

Air quality: NOX and particulates in exhaust

Policy makers need to act

Stricter emission limits

Discussion about diesel bans

Share of renewable energies increases

Reality: rising number of newly

registered cars

2016 (D) 3,350,000 cars (+4%)

thereof 425,000 SUV ( +25%)

and 11,000 e-cars (-8%)

3

Source: uba.de

Climate balance 2016 (Germany): Almost 4 mn t more GHG than 2015 –

transport sector even exceeds 1990 level

20/3/2017

* Short-term forecast UBA, March 2017

17.0%

17.5%

18.0%

18.5%

19.0%

19.5%

20.0%

20.5%

21.0%

150

152

154

156

158

160

162

164

166

Sh

are

in

to

tal

em

iss

ion

s

CO

2e

mis

sio

ns

in

tra

ns

po

rt (

mil

lio

n t

CO

2)

DE: CO2 emissions in transport

Source: UBA, January 2017* short-term forecast UBA March 2017

CO2 emissions in transport

Share of transport emssions in total emissions


A renewable fuel

Carbon sequestration by photosynthesis

6 CO2 + 6 H2O 6 O2 + C6H12O6

Octane number: 116 RON

Certified savings* of 65% CO2eq across the entire value chain

Drastic reduction of particulate matter emissions Study TU Vienna, Prof. Dr. B. Geringer

Bioethanol progress: strong and clean

*) compared to fossil petrol

Core

Mantle

Crust

Atmosphere

Source: TU Vienna, Agrana

Conventional

petrol with

5% bioethanol

E5

Petrol

with

10% bioethanol

E10

Petrol

with

20% bioethanol

E20

Source: University of Maryland,

http://www.geol.umd.edu/sgc/lectures/dynamicearth.htm

4

light

photosynthesis glucose

Reduction

of

particulate

matter of

up to 23%

Reduction

of

particulate

matter of

up to 61%

Less particulate matter through bioethanol in the tank


2. EU: targets 2020 and draft 2030 (“climate and energy package”)

Transport targets 2020: 10 cal.-% renewable energies

As well as 6% GHG savings

Overall target 2030 Eur. Council*: ≥ 40% GHG savings

Draft 2030 EU COM (Nov 2016):

Overall 27 cal.-% renewable energies,

but no specific target for transport sector

Max. 3.8 cal.-% fuels from arable crops

Min. 3.6 cal.-% “advanced” fuels

About 3.2 cal.-% other fuels/energy sources

Draft puts decarbonization at risk

Capacity for “advanced” and a transport target are missing

5

Source: Eurostat (2017)

Share of renewable energies

in the transport sector

EU: targets and ethanol capacities

(mn m3)

Sources: F.O. Licht, own calculations *) October 2014

0

5

10

15

RES-T: 10% arable crops "advanced"fuels

2020 RED-II proposal for 2030

cro

p b

ase

d b

iofu

els

:

ma

x 7

%

ma

x3

.8 %

Installed capacities

min 3.6%

1.4% 2.5%

3.9%

5.2% 5.6% 6.5% 6.7%

0%

2%

4%

6%

8%

10%

12%

2004 2006 2008 2010 2012 2014 2015

Share of renewable energy in fuel consumption of transportTransport

Source: Eurostat (2017)


40%

45%

50%

55%

60%

65%

2009 2010 2011 2012 2013 2014 2015

Certified avegae greenhouse gas savings of renewable European ethanol compared to petrol (as originally published with reference 83,8)

Source: ePURE 2016

Market development: fuel ethanol in the EU

GHG savings improved

2016: decrease to 5.1 mn m3 -3%

D: unchanged at 1.5 mn m3 ±0%

F: increase to 840,000 m3 +4%

UK: decrease to 760,000 m3 -5%

Outlook 2017: increase to 5.4 mn m³ (+5%)

EU countries prepare for EU targets 2020

EU: Consumption fuel ethanol (1,000 m3)

6

Average GHG savings

of European renewable ethanol (%)

Source: F.O. Licht

Source: ePURE

0

2,000

4,000

6,000

8,000

2015 2016 2017e

Germany France

UK Other EU

CropEnergies AG, Analyst Conference, 17 May 2017 7

Price development in relevant markets

Strong fluctuation of ethanol prices

Sept 2016: all-time low € 427 /m3

End of Feb 2017: € 640 (510) /m3

Various influencing factors

Prices of raw materials decrease further

due to worldwide production surplus

Record harvest 2016/17 (all grain

qualities*): 2,111 mn t (+6%)

EU: decrease to 294 mn t (-6%);

domestic consumption at 285 mn t

Ending stocks at record level of 515 mn t

*) without rice

100

200

300

400

500

600

700

800

900

120

140

160

180

200

220

240

260

280

EtO

H/F

AM

E (

€/m

3)

Wheat (€

/t)

Euronext Paris wheat No. 2

Fuel EtOH

T2 FOB Rdm.

FAME FOB Rdm.

20

30

40

50

60

70

100

200

300

400

500

600

(US

D/b

bl)

(€/t)

ICE Brent Crude

ICE White Sugar No. 5


8371,030

0

200

400

600

800

1,000

1,200

2015/16 2016/17

352

574

0

100

200

300

400

500

600

2015/16 2016/17

(in

1.0

00

t)

8

+23%

Bioethanol production (1,000 m3)

CE expands its no. 1 position in Europe

Full capacity utilization

Progress in managing maintenance and

operation cycles

Progress in efficiency

Utilization according to market situation

Increase of production

1,030 (837) ,000 m³ bioethanol

574 (352) ,000 t protein-rich, dried food and

animal feed products

3. CE: strong production increase

Production of dried food and

animal feed (1,000 t)

+63%

CropEnergies AG, Analyst Conference, 17 May 2017 9

Industry trends

Upstream integration along the value added chain

Efficiency gains by developing large-scale production

sites with proximity to the raw materials

Research activities

Process innovation in production

Concepts for alternative raw materials use

Expansion of product portfolio towards

adjacent sectors: proteins, basic chemicals

Optimization and test of clean

“high performance fuels”

CE: actively managing industrial processes

Production 2016/17 (by weight)

*) proteins, neutral alcohol, liquid CO2

fuel44%

non-fuel*56%


4. Overview 2016/17

Revenues

Bioethanol production

EBITDA

Operating profit

Income from operations

Net income

Net financial debt (versus 29/02/2016)

€ 802 (723) million

1,030 (837) ,000 m³

€ 135 (122) million

€ 98 (87) million

€ 94 (69) million

€ 69 (43) million

€ 9 (66) million

+ 11%

+ 23%

+ € 13 million

+ € 11 million

+ € 25 million

+ € 26 million

- € 57 million

10


Income statement (I)

Revenues increase due to the strong second half-year and

as a result of the restart of the production plant in Wilton

Lower prices for bioethanol and most food and animal feed

products

Operating profit at record level of € 97.6 (86.7) million,

supported by lower grain prices

*without restructuring costs and special items

827723

802

1,056

837

1,030

0

200

400

600

800

1,000

1,200

14/15 15/16 16/17

(in

€m

illio

n /

,0

00

m³)

Revenues / Production

11

(in € million) 2016/17 2015/16 Δ Δ

Revenues 801.7 722.6 + 79.1 + 11%

EBITDA* 134.8 121.5 + 13.2 + 11%

Margin 16.8% 16.8%

Depreciation* -37.2 -34.8 - 2.3 - 7%

Operating profit 97.6 86.7 + 10.9 + 13%

-11

8798

-30

0

30

60

90

120

150

14/15 15/16 16/17

(in €

mill

ion)

Operating profit


Revenues

Revenues increase by + 11% to € 802 (723) million

Bioethanol:

Lower price level (market average** 509 (565) €/m³)

Sales increase by 16% to 1,153 (997) + 156,000 m³

Own production: 1,030 (837) + 193,000 m³

+ Trading volume: 140 (178) - 38,000 m³

- Tolling for 3rd parties/Change in stock: -17 ( -18) + 1,000 m³

Food and animal feed:

Higher production volume and higher grain share in the raw

material mix

Sales increase by 63% to 574 (352) + 222,000 t

** NYMEX Ethanol (Platts) T2 FOB Rdam T2 (Future Cont. 1)

* Trading volume / Tolling for 3rd parties/ Change in stock

1,054

8191,013

229*

178*

140*

1,283

997

1,153

0

200

400

600

800

1,000

1,200

1,400

14/15 15/16 16/17(in ,

000 m

³)

Sales volume bioethanol

59%

41%

Sales 2016/17

Germany Other countries

12

1,056

837

1,030

0

200

400

600

800

1,000

1,200

1,400

14/15 15/16 16/17

(in

,0

00

m³)

Production bioethanol


(in € million) 2016/17 2015/16 Δ Δ

Revenues 801.7 722.6 + 79.1 + 11%

Total output 807.1 721.1 + 86.1 + 12%

Cost of materials* -589.1 -520.3 - 68.8 - 13%

Spread (gross) 218.1 200.8 + 17.3 + 9%

27.0% 27.8%

Further oper. expenses/income* -83.3 -79.3 - 4.0 - 5%

EBITDA* 134.8 121.5 + 13.2 + 11%

in % of total output

Lower grain prices could not completely offset the

decrease in revenues

As a result, smaller specific gross margin per unit sold and

slight rise of the materials expense ratio to 73.1% (72.5%)

of overall performance

However, this is overcompensated by the positive volume

effect

EBITDA increases to € 134.8 (121.5) million

EBITDA


25

122

135

0

30

60

90

120

150

14/15 15/16 16/17

(in €

mill

ion)

EBITDA

13

120

201218

15%

28% 27%

0%

10%

20%

30%

40%

50%

0

40

80

120

160

200

240

14/15 15/16 16/17(in €

mill

ion)

Spread (gross) /in % of total output



Restructuring costs and special items decrease considerably to

€ 3.9 (18.1) million

Income from operations increases by € 25.2 million to € 93.9 million

-39

69

94

-60

-30

0

30

60

90

120

14/15 15/16 16/17

(in €

mill

ion)



14

(in € million) 2016/17 2015/16 Δ Δ

Revenues 801.7 722.6 + 79.1 + 11%

EBITDA* 134.8 121.5 + 13.2 + 11%

Margin 16.8% 16.8%

Depreciation* -37.2 -34.8 - 2.3 - 7%


Restructuring costs / special items -3.9 -18.1 + 14.2 + 79%

At equity result 0.2 0.0 + 0.1 > 100%

Income from operations 93.9 68.7 + 25.2 + 37%


Income statement (II)

Financial result improves to € -4.1 (-5.7) million due to the

decline in net debt; including negative currency translation effects

from € 2.1 (1.6) million

Tax ratio down to 23% (32%)

Net earnings improve to € 68.8 (42.6) million

(in € million) 2016/17 2015/16 Δ Δ

Revenues 801.7 722.6 + 79.1 + 11%

EBITDA* 134.8 121.5 + 13.2 + 11%


Restructuring costs / special items -3.9 -18.1 + 14.2 + 79%

At equity result 0.2 0.0 + 0.1 > 100%

Income from operations 93.9 68.7 + 25.2 + 37%

Financial result -4.1 -5.7 + 1.6 + 28%

Earnings before income taxes 89.8 63.0 + 26.8 + 43%

Taxes on income -21.0 -20.3 - 0.7 - 3%

Net earnings for the period 68.8 42.6 + 26.1 + 61%

Earnings per share (in €) 0.79 0.49 + 0.30 + 61%


15

-58

43

69

-80

-60

-40

-20

0

20

40

60

80

14/15 15/16 16/17

(in €

mill

ion)

Net earnings/lossfor the period


Cash flow

Working Capital rises after restarting Wilton

Investments slightly under previous year

Free cash flow includes € 13.1 million dividend payment and reduces

significantly the net financial debt to € 9.3 million

(in € million) 2016/17 2015/16 Δ

Cash flow 107.2 87.3 + 19.9

Change in net working capital -21.8 14.3 - 36.1

Net investments -15.8 -16.8 + 0.9

Exchange rate changes et al. 0.0 -0.1 + 0.0

Free cash flow before dividends 69.5 84.7 - 15.3

Dividends for prior year -13.1 0.0 - 13.1

Free cash flow 56.4 84.7 - 28.4

28/02/2017 29/02/2016 Δ

Net financial debt 9.3 65.7 - 56.4

87

107

-17 -16

-40

-20

0

20

40

60

80

100

120

15/16 16/17

(in €

mill

ion)

Cash flow (+) / Investments (-)

16


Balance sheet structure

Shareholders equity rises to € 425.8 (367.2) million

Equity ratio increases to 71% (62%)

Net financial debt significantly reduced to € 9.3 (65.7) million

due to strong cash flow

(in € million) 28/02/2017 29/02/2016 Δ Δ

Assets

Non-current assets 428.7 459.8 - 31.1 - 7%

Current assets 169.3 131.7 + 37.6 + 29%

Total assets 597.9 591.5 + 6.4 + 1%

Liabilities

Shareholders' equity 425.8 367.2 + 58.6 + 16%

Non-current liabilities 65.2 103.0 - 37.8 - 37%

Current liabilities 106.9 121.2 - 14.3 - 12%

Total liabilities and equity 597.9 591.5 + 6.4 + 1%

Net financial debt (NFD) 9.3 65.7 - 56.4 - 86%

Equity ratio 71% 62%

Gearing (NFD/Equity) 2% 18%

150

66

9

0

30

60

90

120

150

180

(in

€m

illio

n)

Net financial debt

332

367426

0

100

200

300

400

500

(in €

mill

ion)

Shareholders' equity

17


Dividend

Cash flow rises again

Payout ratio increases and continued attractive dividend yield

(in € per share) 2015/16 2014/15

Earnings 0.79 0.49

Cash flow 1.23 1.00

Dividend* 0.30 0.15

Payout ratio 38% 31%

*proposal

Share price end of business year € 8.28 € 3.80

Dividend yield 3.6% 3.9%

18


Outlook 2017/18e

Business performance will again significantly depend on sharply fluctuating price

developments on the bioethanol markets

Forward prices for bioethanol in Europe, which, however, are of only limited

informative value, indicate a drop in price from the current spot price level

Based on continuing high capacity utilisation rates, revenues expected to range

between € 800 to € 875 million

Against this background and on the basis of current grain prices, operating profit

expected to range between € 40 and € 80 million; equivalent to an EBITDA of

between € 80 and € 120 million

CropEnergies should be completely debt-free for the first time in its corporate history

19


Contact

CropEnergies AG

Maximilianstraße 10

68165 Mannheim

Investor Relations

Dr. Lilia Filipova-Neumann

Phone: +49 (621) 71 41 90-30

[email protected]

Public Relations / Marketing

Nadine Dejung-Custance

Phone: +49 (621) 71 41 90-65

[email protected]

www.cropenergies.com

Stock information

ISIN: DE000A0LAUP1

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.

Financial Calendar

12 July 2017: Interim report 1st quarter 2017/18

18 July 2017: Annual General Meeting 2017

11 October 2017: Interim report 1st half 2017/18

10 January 2018: Interim report 1st-3rd quarter 2017/18

16 May 2018: Annual report and press and analysts’ conference

financial year 2017/18

20

Documents

Analyst Conference, 17 May 2017...2017/05/17 · CropEnergies AG, Analyst Conference, 17 May 2017 Overview business year 2016/17 1. Transport emissions still rising 2. Corporate environment