Conference Call 1st - 3rd quarter 2019/20

13 January 2020

Joachim Lutz, CEO Dr. Stephan Meeder, CFO

Highlights

  • Market and political environment
    • DE: National climate protection law and emission trading system
    • Development of market volume and prices
  • Development of CropEnergies Group
    • Steady capacity utilization with usual maintenance periods
  • Financials 1st - 3rd quarter 2019/20
    • Operating profit 70 (19) M€
    • High demand and prices for renewable, sustainable ethanol
    • Confident outlook for remaining FY 2019/20

Annual average global temperatures

from 1850-2018

using Data from UK Met Office

Prof. Ed Hawkins, University of Reading

Source: https://showyourstripes.info/

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DE: National climate protection law and emission trading system adopted

  • National Climate protection law
    • Binding statutory emission limits for all sectors
    • Transport: reduction from 150 Mt CO2eq in 2020 to 95 Mt CO2eq in 2030
  • National emission trading system
    • Applicable on fossil fuels in transport and heating
    • 2021 to 2025: "fixed price period" - political agreement to start with 25 €/t
      CO2 gradual increase to 55 € until 2025
    • From 2026 on: auctioning of CO2 certificates
    • Call for additional measures to achieve goals:
      • Increase GHG target from 6% (2020) to 16% (2030)
      • Reform of energy tax from volume (litre)-base into CO2-pricing

GHG emissions in Germany

  • reality and targets [Mt CO2eq]

1,000

866

Transport

813

Other Non-ETS*

800

Energy

196

186

Industry

600

311

543

280

140

400

175

197

197

375

200

133

162

150

0

95

2018

2020

2030

2040

* in particular: buildings, agriculture, w aste

GHG emissions from fuels

[kg CO2eq/liter]

4 3.4

3.0

32.7

2

2.8

2.3

2.1

1

0.3

0.7

0.7

0

0.7

combustion

upstream

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Market - E10 availability increases

  • Increasing blending obligations in EU countries in 2020
    • 6% GHG-target 2020 requires more non-fossil alternatives
    • RED II: 1G cap max 7% but not more than 2020 + 1%
  • EU market 2020e [M m³]

Production:

5.3 +2% (add. 2.4 non-fuel)

EU sales fuel ethanol [M m3]

8

Other EU

Germany

6

France

UK

0.8

0.7

0.8

0.9

4

0.9

0.9

1.5

1.5

1.5

2

2.3

2.5

2.7

0

2018

2019e

2020e

Source: F.O. Licht

Consumption: 5.9 +6% (add. 2.6 non-fuel)

E10 availability across Europe

  • E10 available in more European countries
    • In the Netherlands since 1 Oct 2019
    • Slovakia, Hungary and Denmark as of 1 Jan 2020
    • 2020 plans: Austria, Lithuania, Latvia

Source: ePURE

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Market development: prices

Higher ethanol and lower raw material prices in 1st - 3rd quarter

European ethanol prices [€/m3]

Ethanol*: € 605 (475) /m3

700

Grain**: € 178 (187) /t

600

Feedstock supply 2019/20

500

Unchanged EU biomass situation: starch long, protein short

Net imports protein sources: 42 Mt, net exports starch sources: 16 Mt

400

FY 17/18

FY 18/19

FY 19/20

Stagnating/shrinking farm acreage in the EU

  • EU grain harvest: 316 Mt (+9%)

European wheat prices [€/t]

Exceeds demand of 290 Mt by 9%

225

Increase of ending stocks by 21% to 57 Mt

200

World grain harvest***: 2,162 Mt (+1%)

175

1% below demand of 2,188 Mt

150

Ending stocks 594 Mt (-4%)

125

FY 17/18

FY 18/19

FY 19/20

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

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Developments in the CropEnergies Group

  • Q1-Q3:Ethanol production 729 (771),000 m3 (-5,5%)
    • Ethanol production in Q3 lower than last year 251 (277),000 m3 due to planned maintenance
  • Progress in CropEnergies' biorefinery concept
    • Enhanced CO2 liquefaction further reduces process emissions

Ethanol production [1,000 m3]

800

771

729

400

0

Q1-Q3 18/19

Q1-Q3 19/20

  • Extension of residue based ethanol production/feedstocks
  • Co-operationin protein based meat replacer
  • Growth in neutral alcohol specialities

Product mix Q1-Q3 19/20 [by weight of dry matter]

fuel

non-fuel

43%

57%

Note: non-fuel includes protein-rich food and feed, neutral alcohol, liquefied CO2

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Highlights 9M 2019/20

  • Ethanol production
  • Revenues
  • EBITDA
  • Operating profit
  • Net earnings
  • Net financial assets (vs. 28 Feb 2019)

729 (771) ,000 m³

- 6%

667.6 (596.1) million €

+ 12%

101.9 (48.5) million €

+ 53 million €

70.3 (19.1) million €

+ 51 million €

50.2 (12.9) million €

+ 37 million €

89.7 (26.9*) million €

+ 63 million €

*incl. adjustments from IFRS 16

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Revenues

(in € million)

9M 19/20

9M 18/19

Revenues

667.6

596.1

+ 12%

EBITDA*

101.9

48.5

> + 100%

Margin

15.3%

8.1%

-

Depreciation*

-31.6

-29.3

- 8%

Operating profit

70.3

19.1

> + 100%

  • Production decrease by 6%
  • Production capacity utilisation adjusted to suit market conditions and to carry out regular maintenance activities
  • Increase in revenues due to significantly higher sales prices for ethanol
    • Average ethanol price**: € 605/m3 (€ 475/m3 in previous year)

Revenues / Production

1,000

[M€ / 1,000 m3]

847

771

800

729

600

679

596

668

400

200

0

9M

9M

9M

17/18

18/19

19/20

Revenues 9M 2019/20

78%

21%

1%

Ethanol Food and animal feed products Other revenues

*without restructuring costs and special items **ethanol FOB Rotterdam

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EBITDA

120

EBITDA [M€]

9M 19/20

9M 18/19

(in € million)

102

Revenues

667.6

596.1

+ 12%

90

88

Overall performance

651.2

601.4

+ 8%

60

48

Cost of materials*

-481.2

-481.1

- 0%

Spread (gross)

170.0

120.3

+ 41%

30

in % of overall performance

26.1%

20.0%

-

0

9M

9M

9M

Further operating expenses/income*

-68.1

-71.8

+ 5%

17/18

18/19

19/20

EBITDA*

101.9

48.5

> + 100%

Spread (gross) / in % of

200

overall performance [M€]

EBITDA benefits from first-time adoption of IFRS 16

158

170

EBITDA doubled despite higher raw material prices

150

120

100

24%

26%

20%

50

0

*without restructuring costs and special items

9M

9M

9M

17/18

18/19

19/20

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Operating profit

(in € million)

9M 19/20

9M 18/19

Revenues

667.6

596.1

+ 12%

EBITDA*

101.9

48.5

> + 100%

Margin

15.3%

8.1%

-

Depreciation*

-31.6

-29.3

- 8%

Operating profit

70.3

19.1

> + 100%

Margin

10.5%

3.2%

-

  • Slightly higher depreciation from first-time adoption of IFRS 16
  • Increase in operating margin from 3.2% to 10.5% yoy

Operating profit [M€]

80

70

60

59

40

20

19

0

9M

9M

9M

17/18

18/19

19/20

*without restructuring costs and special items

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Highlights: 3rd quarter 2019/20

Ethanol production

251

(277) ,000 m³

- 9%

Revenues

220.0 (202.9) million €

+ 8%

EBITDA

37.0 (14.8) million €

+ 22 million €

Operating profit

26.6 (5.0) million €

+ 22 million €

Net earnings

18.4

(5.8) million €

+ 13 million €

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Operating profit: 3rd quarter 2019/20

(in € million)

Q3 19/20

Q3 18/19

Revenues

220.0

202.9

+ 8%

EBITDA*

37.0

14.8

> + 100%

Margin

16.8%

7.3%

-

Depreciation*

-10.4

-9.8

- 6%

Operating profit

26.6

5.0

> + 100%

Margin

12.1%

2.4%

-

  • Lower production mainly due to maintenance activities
  • Operating profit multiplied
    • Significantly higher ethanol sales prices
    • Lower net raw material costs

40

Operating profit [M€]

30

29

27

20

15

14

10

5

0

Q3

Q4

Q1

Q2

Q3

18/19 18/19 19/20 19/20 19/20

*without restructuring costs and special items

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Income from operations

(in € million)

9M 19/20

9M 18/19

Revenues

667.6

596.1

+ 12%

EBITDA*

101.9

48.5

> + 100%

Margin

15.3%

8.1%

-

Depreciation*

-31.6

-29.3

- 8%

Operating profit

70.3

19.1

> + 100%

Restructuring costs / special items

0.0

10.1

< - 100%

At equity result

0.1

0.1

+ 2%

Income from operations

70.5

29.4

> + 100%

  • No restructuring costs or special items in current financial year

Income from operations [M€]

80

70

60

58

40

29

20

0

9M

9M

9M

17/18

18/19

19/20

*without restructuring costs and special items

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Net earnings for the period

(in € million)

9M 19/20

9M 18/19

Revenues

667.6

596.1

+ 12%

EBITDA*

101.9

48.5

> + 100%

Operating profit

70.3

19.1

> + 100%

Restructuring costs / special items

0.0

10.1

< - 100%

At equity result

0.1

0.1

+ 2%

Income from operations

70.5

29.4

> + 100%

Net earnings for the period

60

[M€]

50

45

42

30

15

13

0

9M

9M

9M

17/18

18/19

19/20

Financial result

-2.6

-1.0

< - 100%

Earnings before income taxes

67.9

28.4

> + 100%

Taxes on income

-17.6

-15.5

- 14%

Net earnings for the period

50.2

12.9

> + 100%

Earnings per share (in €)

0.58

0.15

> + 100%

Financial result increases due to unrealized currency effects

Tax rate drops to 26 (55)%

*without restructuring costs and special items

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Cash flow

(in € million)

Cash flow

Change in net working capital

Net cash flow from operating activities

Investments in property, plant et al. Payments into current financial investments

Cash flow from investing activities

Cash flow from financing activities

Exchange rate changes et al.

Increase/Decrease in cash and cash equivalents

9M 19/20

80.7

15.3

96.0

-19.7-14.9

-34.6

-52.2

1.5

10.7

9M 18/19

42.9+ 88%

7.1 > + 100%

49.9+ 92%

-8.5

< - 100%

0.0

-

-8.5

< - 100%

-64.9

+ 20%

0.0

-

-23.5

-

Cash flow (+) /

Investments* (-) [M€]

90

81

60

43

30

0

-8

-30

-20

9M

9M

18/19

19/20

*excl. financial investments

30/11/2019

30/11/2018

Net financial assets**

89.7

56.5

+ 59%

  • Higher investments in PPE to enhance production plants
  • Significant improvement of net financial assets

**Net financial assets as of 30/11/2019: excl. adjustments from IFRS 16

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Balance sheet structure and financial ratios

(in € million)

30/11/2019

30/11/2018

Assets

Non-current assets

382.4

385.8

- 1%

Current assets

274.6

207.2

+ 33%

Total assets

657.0

593.1

+ 11%

Liabilities

Shareholders' equity

480.6

442.3

+ 9%

Non-current liabilities

57.8

49.7

+ 16%

Current liabilities

118.6

101.1

+ 17%

Total liabilities and equity

657.0

593.1

+ 11%

Net financial assets*

89.7

56.5

+ 59%

Equity ratio

73%

75%

-

  • Strong cash base
  • Increase in equity reflects positive earnings situation

500

Shareholders' equity [M€]

480

481

460

440

442

432

420

400

30/11/17

30/11/18

30/11/19

*Net financial assets as of 30/11/2019: excl. adjustments from IFRS 16

CONFERENCE CALL 1ST-3RD QUARTER 2019/20

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Outlook 2019/20

  • Insider information publication according to section 17 MAR of 16 December 2019:
    • Revenues are now expected to reach around € 900 million
    • Operating profit is expected to be approximately € 100 million
    • This is equivalent to an EBITDA of around € 145 million

CONFERENCE CALL 1ST-3RD QUARTER 2019/20

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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

Stock Information

ISIN:DE000A0LAUP1

Symbol:CE2

Bloomberg / Reuters:

CE2 GY / CE2G.DE

Transparency standard: Prime Standard

Disclaimer

Contact

CropEnergies AG

Maximilianstraße 10

68165 Mannheim

www.cropenergies.com

Investor Relations

Heike Baumbach

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

ir@cropenergies.de

Public Relations / Marketing

Nadine Dejung-Custance

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

presse@cropenergies.de

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.

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End

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CropEnergies AG published this content on 13 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 January 2020 09:02:01 UTC