KTG GROUP 2014 // SEPTEMBER 2014 SOWING-NURTURE-HARVEST e harvest begins now KTG AT A GLANCE Factsheet • 20 years of experience in large-scale farming • ›43,000 ha of farmland in Germany and the Baltic States (thereof 6,000 ha own land) • Entire operational area is one of the biggest in Western Europe • 60,000 ha of farm management in Romania and Russia • Integrated business model: Agriculture / Renewable Energy / Food • e largest producer of organic cereals in the EU • e 1st IPO of an agricultural company in Germany • Investmentgrade-Rating since 5 years • KTG Energie AG with 53 MW on the grid Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 2 KTG IS „EUROPEAN“ … and remains regionally RUSSIA KTG headquarters KTG farm management ROMANIA KTG products in 22 countries Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 3 CLIMATE CHANGE WILL IMPACT FARMING Increase in days of drought per year until 2100 70% of world grain production 2–7 55° Russia Lithuania Poland 7–11 2–7 Belarus 2–7 2–7 Germany 7–11 7–11 France 11–16 45° 16–20 Spain Ukraine 7–11 Czech Republic 11–16 7–11 11–16 Italy 16–20 Slovakia 2–7 11–16 Romania BosniaHerzegovina 7–11 11–16 Bulgaria SOURCE: UK-MODEL HARDM3P, FINK ET AL Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 4 MEGA-TRENDS UNBROKEN Energy consumption and world population CO2 neutral energy from renewables 30 POPULATION IN BN COAL UNITS IN BN T 24 18 Energy consumption Change in food pattern 12 6 Urbanization, industrialization +80 million population / year 0 1920 1940 Population 1960 1980 1992 2000 2014 2020 2040 SOURCE: USDA ACCORDING TO STRIEWE/TOEPFER Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 5 KTG GROUP Integrated Business Model Process heat, organic fertilizer Agricultural products Agricultural products Renewable resources ORGANIC FARMING CONVENTIONAL FARMING ENERGY PRODUCTION, BIOGAS FOOD Corn, wheat, rye, spelt, oats, triticale, lupins, vegetable, rape, lucerne, grass Corn, wheat, rye, barley, rape, sugar beet, sorghum, triticale Electricity, heat, biofertilizers, bio-gas, plant engineering services, biological support Peas, carrots, potatoes, convenience food (frozen) 1994 1998 2006 2011 Farm management, Agricultural services COMPLEMENTARY AGRICULTURAL ACTIVITIES Farm-Management, Cultivation of Special Crops, Purchase and Sale of Machinery, Agricultural Services Ackern für‘s Leben Field to plate COMPANY PRESENTATION // SEPTEMBER 2014 6 KTG-BUSINESS MODEL STANDS FOR: Integrated value chain in agricultural- and food industry Nurturing Our Skills Cultivating 1 2 Ackern für‘s Leben Trading Sorting 3 9 10 Eating Harvesting 8 Converting Cleaning Storaging 4 5 7 6 Peeling COMPANY PRESENTATION // SEPTEMBER 2014 7 BIOGAS A MULTI-TALENT Energy for the future Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 8 HEAT ON ITS WAY Energie of the future • KTG Group since 2013 owner of the "Laerm" patents • Use of the heat in the environment of biogas plants • KTG utilizes technology already successfully for in-house and third-party business • New container-generation early 2014 • 50 containers until 2017 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 9 INNOVATION Use of intercrops / beet leaf / corn stover of corn sugar beet leaf corn stover sugar beet Biogas (15 t/he) Ackern für‘s Leben Food (60 t/he) Biogas (30 t/he) corn Food (8 t/he) COMPANY PRESENTATION // SEPTEMBER 2014 10 » Tilling a new field. « Massive investments from 2011 to 2013 in the food segment Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 KTG INVESTS IN ASSET VALUES, LIKE FARMLAND AND PRODUCTION PROPERTIES Our assets: 6 of 18 modern production sites Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 12 LOCATION PUTLITZ: SYMBIOSIS 7,000 ha farming and 5 MW biogas 2007/08 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 13 FRENZEL IN RINGLEBEN Modern frozen food production on 10,000 sqm 2011 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 14 NOA NATURÖLMÜHLE ANKLAM AG Oil mill with water and train access 2012 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 15 CENTER FOR FRESH POTATOS Modern potato logistics on 10,000 sqm 2011 2013 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 16 KTG ACADEMY PUTLITZ 2013 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 17 OUR YOUNGEST CHILD Grouping of the food entities KTG Group is hedging more and more of agricultural commodities by processing within the company. Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 18 OUR BRANDS and concepts Regional produced products: - Cereals - Oils - fresh vegetables - high quality convenience food Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 19 OUR BRANDS and concepts Organic food: More than 200 products of an entire organic product portfolio (extract) Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 20 OUR BRANDS and concepts (extract) Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 21 OUR BRANDS and concepts Frozen Food: - vegetables - convenience - manufactured products (extract) Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 22 » e Nespresso Effect. « Maximizing value by branding THE BRAND EFFECT e „Nespresso“ example 1 Package 500g = 4.99 € 1kg = 10 € Ackern für‘s Leben 1 Capsule x8 value added 5g = 0.39 € 1kg = 80 € COMPANY PRESENTATION // SEPTEMBER 2014 24 KTG-MODEL //1 Example: Branding potatoes Raw potato 1 Package 600g = 0.12 € 600g = 1.20 € Assumption: Current market producer price of about 210 € per ton 330g potato content is 55% residual product after processing B2B (15% EBIT) B2BC (18% EBIT) Ackern für‘s Leben x10 value added COMPANY PRESENTATION // SEPTEMBER 2014 25 KTG-MODEL //2 Example: Branding grain Raw goods Package 500g = 0.10 € 500g = 2.30 € 200€/t average producer price for grain in 2008-2013 Share in flakes: 500g grain in 1 package B2B (12% EBIT) B2BC (18% EBIT) Ackern für‘s Leben x23 value added COMPANY PRESENTATION // SEPTEMBER 2014 26 INVESTMENT PHASE COMPLETED Growth since 2011 International Farming: Russia Romania +10,000 hectares thereof 3,000 owned +27 MW +New Segment with 50 €m sales Harvesting has been started Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 27 2013 ALREADY SHOWS THE DIRECTION ree strong segments generate solid earnings Revenues in €M % 50 180 + 162 EBIT in €M 30 29 4% * +8 166 27 66 24 24 144 Foods 126 108 110 33 50 90 72 16,1 IPO proceeds Only 10 month 32 Energy 21 18 15 12 13 9 54 36 45 50 6 Agriculture 3 18 2012 2013 2012 2013 *adjusted by the IPO proceeds in 2012 Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 28 » e harvest begins now « Investment phase completed Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 H1 2014: HARVEST PHASE BEGINS June 2014 KTG lifts hidden reserves: Sale 4,000 hectares in Lithuania for 20 million euros (book value of EUR 10 million) Back rent for 18 years Strong earnings growth and increase of hidden assets Development H1 2014 (adjusted for Land Sale) • Revenues: +50% to 100 €M • EBIT +97% to 23,7 €m Revenues in €m % 48 100 • + EBITDA +82% to 31,3 €m • Half year profit 10,6 €m (1,0 €m) • Already positive cash flow - strong second half of the year still follows 80 70 50 • Total 44,000 hectares 40 • 6,000 hectares in ownership 30 • thereof Lithuania 500 ha 68 26 32 26 Energy 20 10 9 H1 2013 Ackern für‘s Leben Food 7 Farmland as of June 30 thereof East-Germany 5,500 ha (hidden assets approx. 100 €m) Others 6 50 90 60 • 100 11 Agriculture H1 2014 COMPANY PRESENTATION // SEPTEMBER 2014 30 DEVELOPMENT OF REVENUES by divisions: Total 2012 bis 2015; [€m] Investments enabling sales and earnings growth in the future have largely been completed! 350 >300 315 136 280 Food >230 245 105 210 165 175 80 66 140 Energy 60 110 105 30 70 32 35 45 2012 Ackern für‘s Leben 50 20 10 60 72 50 2013 International Agriculture 2014E 2015E COMPANY PRESENTATION // SEPTEMBER 2014 31 2014 OUTLOOK Significant sales and earnings growth without significant investments • Optimization of the investments made • Dynamic start into the year • Good weather conditions • New orders at Bio-Fach, Fruit Logistica und Anuga • Segment Food will increase sales to 100 EURm • Segment Energy reaches 53 MW until end of July 2014 • Group sales will rise significantly over 200 EURm Ackern für‘s Leben Strengthen equity and reduction of interest expense due to reduction of debt financing and rising earnings. COMPANY PRESENTATION // SEPTEMBER 2014 33 THE HARVEST PHASE STILL CONTINUING ree strong divisions generate solid returns Agricultur Energy Food 2016/ 2017 Σ Ackern für‘s Leben Revenue approx. >120 EURm Revenue approx. 100 EURm Revenue approx. >200 EURm >500 EURm EBIT›20 EURm EBIT ›15 EURm EBIT ›15 EURm >50 EURm COMPANY PRESENTATION // SEPTEMBER 2014 34 PLEASING RUSSIA BUSINESS KTG owns 17.5% and has "manageable" 15 €m invested • Soyuz benefits from sanctions • Pork prices to record high • Very good harvest in 2014 • Operational development plan • Growth financing secured by cash flow and local banks SOJUZ Group Agricultural production Fodder factory Pig production Meat plant on approx. 50,000 ha; black soil 150,000t storage capacity 800,000 pigs p.a. in planning 280,000t production capacity Ackern für‘s Leben 3 more complexes under construction COMPANY PRESENTATION // SEPTEMBER 2014 35 » e gold is on the field. « Jim Rogers „Buy land. It is not made any more.“ Mark Twain Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 FARMLAND PRICE DEVELOPMENT International comparison Average price for agricultural land compared by different countries (€/ha) (Source: BVVG, KTG) 50,000 West Germany 45,000 € 45,000 40,000 35,000 30,000 East Germany 25,000 € 25,000 20,000 15,000 Lithuania / Romania 10,000 5,000 € 5,000 0 2007 Ackern für‘s Leben 2008 2009 2010 2011 2012 2013 2014 COMPANY PRESENTATION // SEPTEMBER 2014 37 FARMLAND PRICE DEVELOPMENT e development will continue 75,000 € 75,000 West Germany 67,500 60,000 52,500 45,000 € 45,000 East Germany 37,500 30,000 22,500 Lithuania / Romania 15,000 12,000 € 7,500 0 2007 2008 Ackern für‘s Leben 2009 2010 2011 2012 2013 2014 2020 COMPANY PRESENTATION // SEPTEMBER 2014 38 HIDDEN ASSETS Accounting according to German trade law standard (HGB) ⇾ Approx. 6,000 ha owned farmland ⇾ Approx. 4 Mio. shares ⇾ Book Value: Approx. 30 €m ⇾ Book Value: Approx. 4.0 €m ⇾ Market Value: Approx. 140 €m ⇾ Market Value: Approx. 48 €m (5,000 €/ha Lithuania / 25,000 €/ha East-Germany) ⇾ Hidden Assets >100 €m + 50 ha Wind usage areas (12 €/share) ⇾ Hidden Assets approx. 44 €m 144 €m = 23.1 € per sahre or 155 % the market value Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 39 EXCHANGE BOND 2010/2015 Early initiation of refinancing • Repayment secured by mix Numerous options for repayment • Exchange offer (until 2014/09/24) • Public Offering • Increase in profitability • Rapidly increasing cash flow in 2014 and 2015 • Refinancing of biogas plants built through long-term secured loans • Liing of hidden reserves (eg sale and lease-back of arable land) • Bond 2014/2019 • Volume: up to EUR 50,000,000 • Term: 15.10.2014 bis 14.10.2019 • Coupin: 7.25% p. a. • ISIN: DE000A11QGQ1 • Exchange: Frankfurt Stock Exchange (Entry Standard) Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 40 INVESTING IN KTG AGRAR • Benefiting from mega trends such as population growth, CO2 reduction, change of eating habits. • Massive investments in asset values in the past created hidden values: farmland, biogas plant, agricultural properties, food production.' • Moving from investment stage to harvest stage - general foundations for sales and earnings growth are completed. • Increase of cash flow based on mature investments and profit growth. Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 41 OUR GOALS Leading position in our core segments: 1 • Agricultural production • Food production // from field to plate • Renewable energy production // CO2-Reduction 2 Increasing profitability • Revenue 2016/17e • EBIT 2016/17e Actively shaping our markets 3 • e.g. GMO free soy (Europe's largest producer) • Food production from field to plate • Largest organic grain producer in Western Europe Ackern für‘s Leben COMPANY PRESENTATION // SEPTEMBER 2014 42 THANK YOU FOR YOUR ATTENTION Investor Relations Fabian Lorenz / IR.on AG [email protected] Tel.: +49 221 914 0976 Investor Relations Fabian Lorenz / IR.on AG [email protected] Tel.: +49 221 914 0976 Share: DE000A0DN1J4; Bond I: DE000A1ELQU9; Bond II: DE000A1H3VN9 Ackern für‘s Leben COMPANY UNTERNEHMENSPRÄSENTATION PRESENTATION // SEPTEMBER // MÄRZ 2014 2014 43
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