B R A I N Biotechnology Research and Information Network : Presentation of 9M Figures 2019/20

BRAIN Group

Pioneering Bioproducts

Investor Presentation, 9M FY 2019/20

Zwingenberg, August 31st, 2020

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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Safe Harbor Statement

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 August 31st, 2020. 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.

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

2

This is Brain

~€39m

'18/'19 Revenues

>27

Years of experience

∼300

Employees

>100

Specialty B2B products

>100

Industrial partnerships

2016

Listed, Frankfurt Prime Standard

Creating Breakthrough Bioproducts & Solutions for Nutrition, Health and Environment

Industrial Biotech	Three
(white)	Product Platforms
	Enzymes
	Microorganisms
	Bioactive
	Natural
	Compounds

From the Lab to Production

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

3

Mission & Vision

"Mission is what an organization is or does. Vision is what an organization desires to become"

Mission

Creating Breakthrough Bioproducts and Solutions for Nutrition, Health and the Environment

Vision

We will be the White Biotech Specialists in finding and exploring high-value niches in our products business and novel solutions in our Science business. We will be much more agile than others and will always look to produce products in-house or with partners

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

4

This is Brain

Brain AG

BioScienceBioIndustrial

		Solutions & Services	Products
Breakthroughs	Stable Service Business with Upside	Innovation & Optimization

Own and Partnered NBD TMS BioActive Compound Libraries Enzymes Microorganisms Bioactives

~€5m annual	~€12m Annual Revenues*	~€26m Annual Revenues
Cost-plus Contract research,
>10% EBITDA Margin*
Investment
Milestones, Technology & License Fees

*FY '18/'19

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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Why Invest in BRAIN

1. Our products address the big societal topics - health, nutrition & the environment
2. Big upsides in breakthrough inventions
3. BRAIN is very well positioned to capture high-growth and high-margin niches in its products businesses
4. Re-shapeour BioIndustrial business: move from a purchase for resale model to an own production model, this creates significant value upside
5. Strong target markets: solid CAGR with EBITDA levels ~30% drives healthy sales and margin growth
6. Space for bolt-on acquisition to accelerate growth with the possibility for transformational growth through larger M&A
7. We operate at the heart of the UN Sustainable Development Goals
8. Ability to fund research with partners and from governmental grants to de-risks R&D effort

Multiple triggers for strong revenue and margin growth

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

6

BRAIN: At the Heart of UN Sustainable Development Goals

Our products and solutions address at least six goals directly

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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Our Targets

This FY

• Significant organic growth despite Covid-19
• Improvement of our EBITDA

•	Prepare the organization for future growth and profitability √
•	Strengthen financial flexibility	√

• Present new strategy and pipeline update to the capital market on Sept. 15th

Mid-Term(4-5 years)

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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5 Strategic Initiatives

Creating breakthrough Bioproducts and Solutions for Nutrition, Health and the Environment.

5 Continuous Corp. Culture Development		1	1	Profitable Top Line Growth
5
	• Can do and high ethics culture				• Excel in specialty niches with high margins
	• Talent management				• Selectively grow outside of Europe
	• Innovation is our passion				• Always look for ways to produce ourselves

• Teamwork is our basis

2

4

4 Accretive M&A

• Successful track record of integrating	3	2	Innovation Pipeline Management
acquired entities
			• Balanced portfolio across markets
• Further build with bolt-on acquisitions
			and technologies
• Transformational M&A in adjacencies				• Breakthrough solutions for big challenges for
				accelerated growth
	3 Continuous Productivity Improvements		• Key customer and application focus

• Strain development
• Focus on working capital efficiencies, cost improvements and free cash flow
• Group revenue synergies
• Explore Bio-Informatics

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

9

New Business Development (NBD*)

Project Selection Criteria

1. Risk-sharingpartner
2. Commercial success chance
3. Technical success chance
4. Cost to Break-even-point
5. Time to Break-even-point
6. Strategic fit
7. NPV

Agile Pipeline & Project Management

1. Divide project into distinct phases
2. Define critical milestones
3. Project manager appointed
4. Regular update meetings (board, head R&D, head business development)
5. Clear decisions to proceed or not

Agile pipeline & project management with a clear path to commercialization

*previously NPD

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

10

Focused New Business Pipeline

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

11

Financial Highlights at a Glance

	9M	9M	Growth	Organic	Q3		Q3	Growth	Organic	Comment
			Growth				Growth
(in € thousand)	2019/20	2018/19			2019/20	2018/19
Revenues	29,554	27,934	5.8%	12.2%	9,625	9,415	2.2%	8.4%
										9M Milestones €581K
BioScience	10,476	7,620	37.5%	37.5%	3,642	2,440	49.3%	49.3%	(PY:€792K)
BioIndustrial	19,127	20,321	-5.9%	2.1%	6,025	6,977	-13.6%	-6.5%
Total operating
performance (1)	30,310	29,705	2.0%	8.1%	10,121	9,889	2.3%	9.3%
Adjusted EBITDA (2)	-553	-2,071	73.3%	71.9%	161	-398	140.5%	147.0%	€354K share-based comp
EBITDA	-907	-2,263	59.9%	58.0%	-38	-507	92.5%	91.5%
EBIT	-3,511	-6,205	43.4%	42.3%	-902	-3,000	69.9%	69.3%
Net Result	-6,108	-7,968	23.3%	21.9%	-1,555	-3,905	60.2%	59.5%
Operating Cash Flow	-5,734	-4,893	-17.2%	-16.8%	-1,593	-2,012	20.9%	19.3%

30.06.202030.09.2019

Cash	18,787	15,160	23.9%	22.9%
Number of Employees	275	283	-2.8%	1.5%
Material Expense Ratio	40.4%	42.3%	- 1.9%	Pt.	- 2.2%	Pt.
Adj. Personnel Expense
Ratio	44.4%	43.6%	0.8%	Pt.	0.5%	Pt.

1. Revenues + change in inventories + other income + R&D grants
2. The reconciliation from adjusted to unadjusted EBITDA can be found on slide 41

Major Events Q3:

• Group: so far no major negative Covid-19 effects materialized
• Very dynamic BioScience business
• BioIndustrial 9M EBITDA margin rising to 13.3% (PY:11.5%), despite low organic sales growth
• Significantly reduced net loss
• Successful cash capital increase, approximately:1.8mio shares and proceeds of EUR15mio
• Minority buy-out of WeissBioTech generates potential to accelerate synergies (signed June 30th , closing July 1st 2020)
• Manfred Bender, CFO, will leave BRAIN end of September
• Lukas Linnig new CFO from October 1st

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

12

Growth Trajectory, Revenues

**

• **

*purchase BioCatalysts Ltd. **divesture Monteil Cosmetics

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

13

Group/Divisional Adjusted EBITDA

• Group adj. EBITDA improved by 73.3%; especially the segment BioScience strongly contributed to an improved EBITDA

• The BioIndustrial segment improved its adj. EBITDA Margin to 13.3% (11.5%) despite low organic sales growth

• The overall BRAIN group grew organically by 12.2% YoY

• Revenues in the segment BioIndustrial were negatively affected due to delays in the commissioning of new production facilities. Organic growth amounted to 2.1%

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

14

Cash & Cash Flow

	9M	9M		Growth	Q3		Q3	Growth	Comment
(in € thousand)	2019/20	2018/19	2019/20	2018/19
Gross Cash Flow	-4,610	-4,897	5.9%		-1,145	-1,455	21.3%
Operating Cash Flow	-5,734	-4,893	-17.2%	-1,593	-2,012	20.9%	Strong working capital reduction PY
Investing Cash Flow	-4,548	-4,521	-0.6%		-76	-1,639	95.3%
Financing Cash Flow	13,914	-749	1958.5%		14,091	611	2205.6%	~14.6mln net proceeds CI
Net change in Cash & Cash Equivalents	3,632	-10,163	135.7%		12,422	-3,041	508.5%
	30.06.202030.09.2019
Cash	18,787	15,160	23.9%
Equity	25,909	17,091	51.6%

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

15

Covid-19 Situation

Secure:Targets:Measures:

•	Health aspects	•	Safety of employees	•	Covid-19 task force
•	Supply chain	•	Business continuity	•	Hygiene concept
•	Operating business	•	Minimize disruptions	•	Personal safety supplies
•	Future pipeline	•	Fulfill customer contracts	•	Physical distancing
				•	Home office
				•	Strict travel restrictions
				•	Flex work
				•	Digitalize workflow

Disruptions: Solascure is facing delays in clinical trials as the relevant test centers have been closed for non Covid-19 patients. Lower sales volumes of enzyme products to ethanol and wine producers.

Summary:

BRAIN Group: so far no major negative Covid-19 effects materialized.

Travel restrictions and physical distancing make it more challenging to visit customers for new projects.

Our business development team is working here with creative solutions and trying its best to keep effects on the commercial project pipeline as low as possible.

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

16

Outlook & Current Management Focus

Outlook FY 19/20, Confirmed √

• Significant organic growth despite Covid-19
• Improvement of our EBITDA

• Some negative Covid-19 effects on SolasCure
• Enzyme volumes to bio-ethanol & wine producers negatively affected
• Q4 EBITDA will not match the very positive Q2/Q3 trend (board alignment, other operational effects)

Current Management Focus

•	Prepare organization for future growth and profitability √
•	Introduce new organizational structure √
	• Focus Business Development (Sales) √
•	Business prioritization in the new business development pipeline √

• Build M&A pipeline
• Execute bolt-on value enhancing M&A transactions
• Enzyme host organism optimization & development
• Introduce group benchmarking and best-practice transfer
• Centralizing of corporate functions over the mid-term

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

17

Our Share Ownership*

• Current number of shares: 19,861,360

• Free float of ~45%

• Strong long-term investor base

• ∼8,000 shareholders

• WKN 520394 / ISIN DE0005203947

• Symbol BNN

• Prime Standard; Frankfurt/M

*End of June, 2020

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

18

Brain in the Media*

TV

• Tagesthemen (ARD), June 5th 2020, Minute 23:22: "From Ash to Gold", Green Mining from Waste Streams
• [w] wie wissen (ARD), May 2nd 2020, Sugar Replacement, "The Better Stevia", Brain Taste Cells Technology
• [w] wie wissen (ARD), April 25th 2020 Minute 18:00, Gold Green Mining from electronic waste, BioXtractor

On our Webpage /Publications

• Analysis of Calcium Signaling in Live Human Tongue Cell 3D-Cultures upon Tastant Perfusion
• Biotechnological upcycling of plastic waste and other non-conventional feedstocks in a circular economy
• An Ustilago maydis chassis for itaconic acid production without by‐products
• Towards Novel Bioactive Antiperspirants for Cosmetic Applications
• Marker-freegenome editing in Ustilago trichophora with the CRISPR-Cas9 technology
• BRAIN BioXtractor: Biobased Metal Extraction for the Circular Economy
• In vitro skin three-dimensional models and their applications

Please visit also our Blog "News & Views"

• https://www.brain-biotech.com/news

*Please contact us, we are happy to provide the media links

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

19

Financial Calendar

CAPITAL MARKETS DAY

CMD Analysts/Institutional Investors

Technology Campus, Zwingenberg

September 15th, 2020

ANNUAL REPORT

Publication of the annual report as of September 30th, 2020 (12M)

January 14th, 2021

QUARTERLY STATEMENT

Publication of the quarterly statement as of December 12th, 2020 (3M)

February 26th, 2021

ANNUAL GENERAL MEETING

Annual General Meeting (FY 2019/20)

March 10th, 2021

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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Appendix

	Page
Our sustainability contributions	25
Corporate Governance	26
Barriers to entry	27
NBD deep dive	28
Service business deep dive	29
Partnerships "Brain Inside"	30-31
Our enzyme business	32
Enzyme production, expression hosts	33
SolasCure Ltd.	34
BioArchive	35
R&D/Technology Platforms	36
HR - "The BRAINies", our core capital	37
Detailed management & employee incentives	38
Peers by business activity	39
Detailed financials
Detailed organic vs. reported	40
Cost ratios	41
Adj. vs reported	42
Financial debt vs. financial liabilities	43
Balance sheet	44
M&A criteria & history	45
Management CV	46-47
Our share	48
Analyst coverage	49
Glossary	50-53

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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Thank you for your attention.

BRAIN Aktiengesellschaft

Darmstädter Straße 34-36

64673 Zwingenberg, Germany www.brain-biotech.com

Your contacts:

Michael Schneiders, Head of IR

+49 (0) [e-mail]

Martina Schuster, IR +49 (0) [e-mail]

@BRAINbiotech

BRAIN AG

Pioneering Bioproducts.

© BRAIN Aktiengesellschaft Zwingenberg Germany www.brain-biotech.com [phone]

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