BAUMOT GROUP AG 360 - CLEAN AIR COMPANY - INVESTOR PRESENTATION, JUNE 2018
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BAUMOT GROUP AG
360° – CLEAN AIR COMPANY
INVESTOR PRESENTATION, JUNE 2018
Research & Application Customer
Development service
01 BAUMOT GROUP – AN OVERVIEW
02 PRODUCT
MARKET AND
ANDMEDIA
SERVICE PORTFOLIO
03 FINANCES
04 OUTLOOK
05 APPENDIX
AGENDA
6 July 2018 2
BAUMOT GROUP AN OVERVIEW 01
BAUMOT GROUP – 360° CLEAN AIR COMPANY
~ 50 Employees
offer construction, engineering, and testing services
at 6 European Sites
§ Baumot AG was founded in 1989
§ Leading company in the field of developing highly efficient exhaust gas aftertreatment
§ Active in a growth market: Development into an Original Equipment Manufacturer (OEM) that still has strong products
in the retrofit and aftermarket
§ Diverse product portfolio: Highly efficient SCR systems
(BNOx), particulate filters, aftermarket systems
§ Industries: On-Road and Off-Road markets
6 July 2018 4
MANAGEMENT
Marcus Hausser, CEO
§ Chief Executive Officer of Baumot Group AG since 2012
§ Over 8 years of international management experience and experience in the area
of exhaust gas aftertreatment
§ Previously: CEO of Baumot AG (Switzerland) for 3 years, prior to that senior positions
at Purem North America Iic in Detroit, USA, then a subsidiary of DaimlerChrysler AG
Roger Kavena, COO
§ Chief Operating Officer of Baumot Group AG since 2013
§ In addition, CEO of Baumot AG (Switzerland) since 2012, extensive industry experience
in the area of exhaust gas aftertreatment
§ Strong capital market expertise and a network due to his previous work
as an investment banker Investmentbanker
Qualified management with many years of industry experience.
6 July 2018 5
EXHAUST GAS AFTERTREATMENT FROM A SINGLE SOURCE
Products & Research & Application Customer
Services Development service
§ Products and solutions for innovative § Development of exhaust gas § Training, installation and
exhaust gas aftertreatment aftertreatment systems maintenance
Business fields OEM Retrofit Aftermarket
§ Original Equipment § Retrofit installation § Replacement parts
Manufacturer and solution
Industries Off-Road On-Road Others
§ Land machines § Cars § Stationary facilities
(i.e. power plants)
§ Construction § Commercial
machinery vehicles, i.e. trucks
§ Buses,
Transporters
Baumot Group covers the entire value chain of exhaust gas aftertreatment with its subsidiaries.
6 July 2018 6
COMPANY STRUCTURE
BAUMOT GROUP AG
TWINTEC BAUMOT
BAUMOT AG Technologie GmbH Technologie GmbH
Emission after treatment systems Emission after treatment systems
for Retrofit & Aftermarket for Retrofit & Aftermarket
Development and application of
innovative exhaust gas
aftertreatment systems
|Focus Real Driving Emissions
Training and maintenance for Training and maintenance for
OE, retrofit & aftermarket OE, retrofit & aftermarket
Together with its subsidiaries, Baumot Group offers solutions along the entire value chain for
exhaust gas aftertreatment. Nationally und internationally.
6 July 2018 7
MARKET
AND MEDIA
02
MEGATREND – CLEAN AIR
§ A substantial portion of global NOx emissions is caused by road traffic*
§ Tightened EU regulation since 2017 on to further reduce NOx emissions with road traffic and in cities (Euro 6c)
§ Chinese regulation from 2019 on for new vehicles has been ratified (CN 6 standard)
§ Stricter emission regulations from 2019 on for On and Off road vehicles
News
The tightening of legislation regarding emission limits worldwide is increasingly the market
driver for the Baumot Group.
6 July 2018 9
MARKETS – CLEAN AIR
2014 2015 2016 2017 2018 2019
OEM: Demand rising sharply due to the introduction of new emission standards
Iran On-Road
Turkey Off-Road
USA Off-Road
Retrofitting: NOx levels are exceeded in the EU. Retrofitting with SCR (BNOx) systems is necessary
Europe On- /Off-Road
China On-Road
Germany On-Road
UK On-Road
Aftermarket: Growth due to the wear of existing DPF systems
Europe On- / Off-Road
BNOx systems DPF systems
The increasing legal tightening of emissions thresholds worldwide is the
market driver for Baumot Group.
6 July 2018 10OEM
2.1MARKET DEVELOPMENT – SCR MARKET
§ Vehicles equipped with SCR systems are projected to grow at a CAGR of 33% (2014-2019)
and an penetration ratio of 35% to 7.1 million units*
§ SCR market growth will take place mainly in Europe; SCR penetration ratio will jump to 59%
in 2019 from 7% in 2014
2019:
7.1 million units
Global SCR market
2014:
1.7 million units
Significant market growth of exhaust gas aftertreatment due to increasing
legal regulation and high development potential.
*Source: Plastic Omnium
6 July 2018 12EUROPEAN EMISSIONS THRESHOLDS ON-ROAD
§ So far, measurements on the test bench - emission limit measurements are performed only on “artificial”
test bench conditions; NOx emission threshold values are normally not met in real operation
§ From September 2017 on: New test cycle that measures emissions under real drive conditions
§ §
1.0 g/km NOx RDE
0.8 g/km NOx RDE
§ 0.5 g/km § Euro 6c, as of 2017
NOx (Test bench)
§ 0.25 g/km Real Drive Emission
Emissions threshold NOx Emissions must be (RDE) via PEMS*
value reduced by 85% measured under real
BNOx BNOx drive conditions
§ Euro 3, as of 2000 § Euro 6, ab 2014
emissions limit emissions limit
0.5 g/km NOx 0,25 g/km NOx
BNOx SCR System already meets the new ON-ROAD requirements today
due to its high NOx reduction rate at low exhaust gas temperatures.
*PEMS: Portable Emission Measurement System
6 July 2018 13EUROPEAN EMISSIONS THRESHOLDS OFF-ROAD
§ As of 2018: Stage V to be introduced compared to previous emission standards for all engine classes (small and large)
§ Stage V will bring a change in technology: all engines must use a DPF and a temperature-efficient SCR system
Performance class 2014 2015 2016 2017 2018 2019 2020 2021 2022
560 kW Production No emission Stage Stage V
Beginning of the production phase
Tightening and broadening of emission limits for Off-Road vehicles
will lead to a significant increase in demand.
6 July 2018 14OEM: EMISSION LIMIT THRESHOLDS IN THE MIDDLE EAST
§ Key countries in the Middle East are tightening the emission limit thresholds for commercial vehicles Nutzfahrzeuge
§ For example, the new emission guideline FAZ IIIB (equivalent to the European Stage IIIB Directive) will apply in Turkey
starting in October 2018
§ Other countries already have such regulations in force, which are gradually being extended to the original equipment
of all diesel vehicle classes (commercial vehicles) by September 2018
Turkey as an example Another example (Iran)
§ Launching business in 2013 § Baumot already supplies to several OEMs and successfully
completed further tests in H2 2016 / H1 2017
§ In 2016, Baumot successfully signed supply agreements
and engine homologations with two leading agricultural § In order to comply with these new emissions regulations, all
machine manufacturers (OEMs) OEMs must install a DPF (diesel particle filter) at the factory
§ Baumot is currently developing solutions (BNOx) § Representative studies predict a sharp increase in new
together with the manufacturers (OEM) for FAZ IV registrations for passenger cars and trucks
(Stage IV) from 2019 on § Baumot is expected to supply to a large share of OE
§ The two manufacturers together manufacture customers in the future and thus further expand its position
around 20,000 agricultural machines per year as a market leader
§ The total market volume is around 30,000 to 40,000 DPF
units per year
Strengthening and extending the emission thresholds in the Middle East with on- and off-road
vehicles will lead to a significant increase in demand.
6 July 2018 15RETROFIT
2.2EXCESSIVE NITROGEN OXIDE EMISSIONS IN BIG CITIES
§ The european environemental agaeny has is planing to sue 12
EU member states for exeeding nitrogen oxides limits.
Germany alone is facing annual penaltis of at least EUR 120
Key million per annum
§ 19 German cities and regions, including major cities such as
Munich, Cologne, Hamburg and Berlin, violated statutory
limits on nitrogen oxides in 2017
§ The government must act or risks harsh penalties and diesel
driving bans
§ Therefore at the state level, initial driving bans have been
issued on diesel vehicles
§ According to ADAC, potential driving bans would affect
around 13 million owners of diesel cars. Around 1 – 2 million
diesel cars must be retrofitted with a hardware device in
order avoid diesel bans
Annual average value2016 § As a solution, the government is currently discussing the
Source: Federal Environment Agency introduction of a hardware retrofit scheme (BNOx) for vehicles
whose nitrogen oxide emissions comply with Euro 6 limits
To comply with nitrogen oxide emission limits, big cities must introduce air pollution measures.
One such measure is driving bans on diesel vehicles or a hardware retrofit.
6 July 2018 17EMISSION LIMITS ARE NOT BEING MET
§ To avoid driving bans on diesel vehicles, a hardware retrofit is to be
introduced
§ Transportation ministers at staat level are demanding a hardware
retrofit solution to avoid a driving ban on older diesel vehicles that
do not comply with the Euro 6 standard
§ Technical solution: By retrofitting with the patented BNOx system,
older vehicles can be upgraded to Euro 6 limits under real conditions
§ Test results: Independent tests by ADAC/ZDF and DUH confirm the
BNOx system’s high efficiency
§ Costs: The price of BNOx conversion is usually EUR 1,500 to 2,000 per
vehicle, some of the costs being covered by the automotive industry
§ Software retrofit: The proposed software “retrofit” only leads to a
reduction of nitrogen oxide emissions of 20 to 60% and does not meet
the Euro 6 exhaust gas standard
A hardware retrofit is to be introduced to avoid a general driving ban on diesel vehicles. Diesel
vehicles would need to at least comply with the Euro 6 emission standard to qualify.
6 July 2018 18THE SOLUTION: THE BNOx SYSTEM
The core:
N H3 + partial exhaust flow
The BNOx system offers the following advantages: BNOx NH3 generator
§ Highly efficient nitrogen oxide reduction up to 98%
under “real conditions”
§ Already meets future requirements for “real-drive emissions”
(Euro 6c) Tem perature sensor
Heating current
§ Space-saving system that can be used in all passenger cars
§ Low system integration costs through modular design Ad Blue
Partial exhaust flow
N O x co n ve rsio n ra te , stan d ard S C R S yste m N O x co n ve rsio n ra te , B N O x
T e m p e ra tu re (°C )
S p ace ve lo city (1 /h ) T e m p e ra tu re (°C )
S p ace ve lo city (1 /h )
Unlike other systems, it already meets Euro 6c limits: very high NOx conversion rate at low
temperatures, applicable in real road traffic.
6 July 2018 19CASE STUDY DUH3 EXHAUST TESTS
Emissions under real conditions
E U R O 5 ve h icle E U R O 5 ve h icle w ith B N O x syste m
0, 8
0, 7
N O x reduction
0, 6 -88.4 w ith BN O x -93.3
0, 5 % %
N O x (g /km )
0, 4
0, 3
0, 2
EU5
0, 1 EU6
0
EU RO 5 (W LT C) ERU O 5 +B NO x ( W LTC) EU RO 5 +B NO x ( PEM S)
1 2 3
Em issions class Lim it Test cycle NOx NOx NOx § The BNOx system is the leading retrofit
[g/km ] em issions em issions reduction system for achieving Euro 6 emissions
[g/km ] w ithout BN O x w ith
[g/km ] BN O x
under real conditions
1 EURO 5 0.18 WLTC1 0.68 - - § A Euro 5 diesel vehicle retrofitted with
BNOx achieves better values under real
EURO 5 0.18 WLTC1 0.079 0.68 -88.4 %
2 w ith BN O x conditions than a Euro 6 vehicle
3 EURO 5 0.18 PEMS2 0.069 1.03 -93.3 %
w ith BN O x
1 W LTC: W orld Light-Duty Test Cycle
2 PEM S: Portable Em issions M easurem ent System
3 DU H: Deutsche Um w elthilfe
6 July 2018 20CASE STUDY ZDF ADAC EXHAUST TESTS PROVE BNOx EFFECTIVENESS
Emissions under real conditions
E U R O 5 ve h icle E U R O 5 ve h icle w ith B N O x syste m
0, 8
0, 7 N O x Reduktion
-95.3 -98.7
0, 6 w ith BN O x
0, 5
% %
N O x (g/km )
0, 4
0, 3
0, 2
EU5
0, 1 EU6
0
Pr üf s t and (W LT C) Pr üf s t and (H igh way) Pr üf s t and (W LT C) Pr üf s t and (H igh way) Rea lbed ingu ngen,
PEM S ( Cit y, C ount r y
Si de, H ighw ay)
1 2 3 4 5
Test m ethods Test cycle N O x em issions N O x em issions NOx
[g/km ] w ithout BN O x reduction EURO 6 emissions
[g/km ] w ith BN O x
were documented with a retrofitted
BNOx system
1 Test facility WLTC1 0.748 - -
§ Real conditions (RDE)
2 Test facility Autobahn 0.742 - -
§ WLTC
Test facility WLTC1 0.035 0.748 -95.3 %
3 § Highway tests
with BNOx
4 Test facility Autobahn 0.01 0.742 -98.7 %
w ith BN O x
5 Real conditions PEMS2 0.027 - -
1 W LTC: W orld Light-Duty Test Cycle
w ith BN O x 2 PEM S: Portable Em issions M easurem ent System
6 July 2018 21BNOx IN THE MEDIA
PRIN T
Autobild Auto Motor Sport Autozeitung
TV
SWR ZDF WISO ZDFzoom
There is no system comparable to the patented BNOx system.
Strong media interest regarding BNOx shows high relevance of Diesel retrofit.
6 July 2018 22BNOx RETROFITTING IN GERMANY
Government subsidized retrofitting of city buses in major German cities
§ As a result of the Diesel summit in 2017, EUR 107 million
has been allocated for the retrofitting of city buses and
coaches with a hardware device (BNOx)
§ The funding will be used to retrofit around 14,000 city
buses until end of 2020 and it will cover between 40 -60%
of the total costs
§ The Baumot Group is one of the first manufacturers to be
awarded contracts under the government's bus retrofit
subsidy programme
§ The average retail price for a BNOx SCR retrofit system
for city buses is € 15.000
§ Other countries such as Italy, Spain and France have to
introduce similar measures to improve air quality
In Approximately 14,000 city buses with Euro 5 or older engines are in use in Germany
The Baumot Group profits early on from government subsidies for retrofitting.
6 July 2018 23BNOx RETROFITTING IN THE UK
State subsidized SCR retrofit project
§ The UK government has approved grants of GBP 190
million for retrofitting city buses and taxis with SCR
systems
§ In London alone, 5,800 city buses are to be retrofitted
with SCR systems between 2017 and 2020
§ Other large cities such as Birmingham and Manchester
will follow the example of London and also score points by
introducing air purity plans
§ Of around 12 possible suppliers, only 5 were accepted :
The Baumot Group is one of these five
§ The average selling price for a BNOx SCR retrofitting
system for city buses is EUR 15,000
§ Other countries such as Italy, Spain and France have to
introduce similar measures to improve air quality
https://www.gov.uk/government/news/government-pledges-290-million-boost-for-low-emission-vehicles
In London, approx. 5,800 city buses need to be retrofitted with SCR systems by 2020 –
The Baumot Group is one of five qualified suppliers.
6 July 2018 24FINANCIALS
03SELECTED FINANCIAL FIGURES
§ Revenues in 2017 below expectations due to several
in EUR million
factors:
2013 2014 2015 1 2016 1 2017
§ Deconsolidation of the Kontec Group
Sales revenue 10.4 29.2 26.8 38.3 9.8 § Introduction of the emission standard Stage FAZ
IIIB in Turkey was postponed to 2018
Gross profit 5.0 13.7 15.1 32.4 3.2
§ Lower gross profit margin due to deconsolidation of
the Kontec Group
Gross profit
48% 46.9% 56.3% 84.7% 32.0% § EBITDA impacted by the deconsolidation of Kontec,
margin
further development of the BNOx system and
EBITDA 1.3 1.9 -4.2 -3.6 -6.2 declining revenues
§ Investments in BNOx system for retrofitting diesel
1 Twintec AG, Baumot AG; Kontec GmbH consolidated vehicles and market development for city buses in
2017: EUR 2.7 million
§ EBITDA adjusted for investments 2017:
EUR -3.5 million
Fiscal year 2017: Further developed strategically, operating performance negatively impacted by
the deconsolidation of the Kontec Group in the short term
6 July 2018 26BALANCE SHEET
in EUR million
2013 2014 2015 1 2016 2017
Assets
Current assets 6.1 8.5 13.0 5.7 3.2
Non-current assets 0.8 13.5 20.5 7.5 4.8
Liabilities
Equity 4.6 12.3 14.2 4.5 0.0
Equity ratio 67% 56% 42% 34% -6.3%
Current liabilities
0.6 6.1 18.8 6.2 5.9
& provisions
Non-current liabilities &
1.7 3.6 5.7 0 1.7
provisions
Total assets 6.9 22.0 33.7 13.4 8.8
1 Twintec AG and Baumot AG; Kontec GmbH consolidated 2 Equity refers to the Group, not to the AG. As a result of several measures, negative equity will be positive again in 2018
Kontec was deconsolidated from the balance sheet as of December 31, 2016
6 July 2018 27SHARE
Shareholder structure
14.48%
Basic share information Baumot Group AG
85.52%
WKN A2G8Y8
ISIN DE000A2G8Y89
R M K B ete i l gi u ng en Gmb H* &F am i l y Ka ve n a Ticker symbol TINA
Transparency level Open Market
Fr ee Fl o at
Principal trading venue Xetra
Total number of shares 16.722.634
Designated sponsor Lang & Schwarz Broker GmbH,
* 100% attributable to COO Roger Kavena equinet Bank AG
6 July 2018 28OUTLOOK
04OUTLOOK – GROWTH THROUGH INNOVATIONS
§ Medium-term expected sales and earnings development:
§ EUR 30 - 35 million in sales and an EBITDA margin in the mid-single-digit percentage range without the
“Blue Badge/ Diesel Retrofit for Passenger Cars”
§ Competitive advantage thanks to BNOx: Patented BNOx technology enables manufacturers to
meet the requirements of the statutory emission standards (Euro 6c standard)
§ Early positioning for the retrofitting of city buses in Germany: orders in Berlin and Paderborn, one of the
first suppliers to benefit from the agreed subsidies from the "Diesel Summit"
§ Strong position in the new growth markets: Leading OE supplier in the Middle East, technological
market leadership in SCR systems (BNOx)
§ Possible upside potential:
§ Diesel retrofitting in Germany
§ Further diesel retrofitting in Italy, France and Spain
§ Certification of particulate filters in the USA
§ Successful completion of initial pilot projects in China
6 July 2018 30APPENDIX
05DISCLAIMER This document was prepared by Baumot Group to provide an overview of the company and its business activities. Baumot Group bases this on information from reliable sources. Nevertheless, no guarantee for the accuracy and completeness of the information can be given. The liability of Baumot Group , the Management Board, the employees, shareholders and advisors of Baumot Group for missing or inaccurate information, opinions, forecasts or statements in this document or other written or oral statements or for other legal reasons is excluded. This document does not constitute an offer or invitation for subscription or purchase of a security, share in a company or completion of another legal transaction, nor does this document or information contained therein serve as a basis for a contractual or other obligation of any kind. 6 July 2018 32
BAUMOT GROUP 360° – CLEAN AIR COMPANY INVESTOR PRESENTATION, APRIL 2018 THANK YOU!
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