BAUMOT GROUP AG 360 - CLEAN AIR COMPANY - INVESTOR PRESENTATION, DECEMBER 2017
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BAUMOT GROUP AG
360° – CLEAN AIR COMPANY
INVESTOR PRESENTATION, DECEMBER 2017
Research & Application Customer
Development service
01 BAUMOT GROUP – AN OVERVIEW 02 PRODUCT AND SERVICE PORTFOLIO 03 MARKET AND MEDIA 04 FINANCES 05 OUTLOOK 06 APPENDIX AGENDA 8 March 2018 2
BAUMOT GROUP AN OVERVIEW 01
BAUMOT GROUP – 360° CLEAN AIR COMPANY
~ 40 Employees
offer construction, engineering, and testing services
at 4 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
8 March 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.
8 March 2018 5
COMPANY STRUCTURE
BAUMOT GROUP AG
BAUMOT AG TWINTEC BAUMOT
Technologie GmbH Technologie GmbH
Retrofit & Retrofit & OE development & Sales
Aftermarket worldwide Aftermarket in GER
Together with its subsidiaries, Baumot Group offers solutions along the entire value chain for
exhaust gas aftertreatment. Nationally und internationally.
8 March 2018 6
PRODUCT AND SERVICE PORTFOLIO 02
EXHAUST GAS AFTERTREATMENT FROM A SINGLE SOURCE
Products & Research & Application Customer
Services Development service
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
§ Commercial (i.e. power plants)
§ Construction
machinery vehicles, i.e. trucks
§ Buses,
Transporters
Baumot Group covers the entire value chain of exhaust gas
aftertreatment with its subsidiaries.
8 March 2018 8
PORTFOLIO – RESEARCH & DEVELOPMENT
§ Products and solutions for innovative exhaust gas aftertreatment
§ Efficient, practical and reliable systems for the business fields Retrofit and Aftermarket
§ Increasing focus on OEM customers and tier I suppliers as well as large SCR and DPF
retrofit projects
§ Product development & systems for On-Road and Off-Road applications
References
§ Baumot AG –
Emission after treatment systems for Retrofit &
Aftermarket
§ Twintec Technologie GmbH –
Emission after treatment systems for Retrofit &
Aftermarket
8 March 2018 9
PORTFOLIO – APPLICATION
§ Cross-industry conceptual design especially for the OEM business field
§ From conceptualization to simulation to application and testing on the test stand, Baumot
Technologie GmbH offers the development of exhaust gas aftertreatment from A to Z.
References
§ Baumot Technologie GmbH –
Development and application of innovative exhaust gas
aftertreatment systems to achieve future emission standards.
Focus on emissions reduction under real conditions
(Real Driving Emissions, RDE)
8 March 2018 10PORTFOLIO – CUSTOMER SERVICE
§ Training, installation and maintenance are an integral part of the company’s services
§ Particularly in the countries of the Middle East, there is a great need for maintenance
because of the poor fuel quality
References
§ Baumot AG –
Training and maintenance for OE, retrofit & aftermarket
§ Twintec Technologie GmbH –
Training and maintenance for OE, retrofit & aftermarket
8 March 2018 11MARKET
AND MEDIA
03MEGATREND – CLEAN AIR
§ A substantial portion of global NOx emissions is caused by road traffic*
§ UN resolution and binding commitments from Member States to reduce global emissions from 2020
§ Tightened EU regulation from 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)
News
The tightening of legislation regarding emission limits worldwide
is increasingly the market driver for the Baumot Group.
8 March 2018 13MARKETS – CLEAN AIR
2014 2015 2016 2017 2018 2019
OEM: Deamnd rising sharply due to the introduction of new emission standards
Eastern Europe Off-Road
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.
8 March 2018 14OEM
3.1MARKET 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
8 March 2018 16EUROPEAN 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
8 March 2018 17EUROPEAN 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.
8 March 2018 18OEM: 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.
8 March 2018 19RETROFIT
3.2EXCESSIVE NITROGEN OXIDE EMISSIONS IN BIG CITIES
§ 28 German cities and regions, including major cities such as
Munich, Cologne, Hamburg and Berlin, violated statutory
limits on nitrogen oxides in 2016
Key § The government must act or risks harsh penalties
§ Therefore at the state level, initial driving bans have been
issued on diesel vehicles that do not at least meet the Euro 6
emission class
§ According to ADAC, potential driving bans would affect around
13 million owners of diesel cars
§ As a solution, the government is currently discussing the
introduction of an Environmental Blue Badge for vehicles
whose nitrogen oxide emissions comply with Euro 6 limits
Annual average value2016
Source: Federal Environment Agency
To comply with nitrogen oxide emission limits, big cities must introduce air pollution measures.
One such measure is driving bans on diesel vehicles.
8 March 2018 21EMISSION LIMITS ARE NOT BEING MET
§ To avoid driving bans on diesel vehicles, a Blue Badge is to be
introduced
§ Transportation ministers are demanding a 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
The Blue Badge 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.
8 March 2018 22THE SOLUTION: THE BNOx SYSTEM
The core:
BNOx NH3 generator NH3 + partial exhaust flow
The BNOx system offers the following advantages:
§ Highly efficient nitrogen oxide reduction up to 98%
under “real conditions”
§ Already meets future requirements for “real-drive emissions”
(Euro 6c) Temperature 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
NOx conversion rate, standard SCR System NOx conversion rate, BNOx
Temperature (°C)
Space velocity (1/h) Temperature (°C) Space velocity (1/h)
Unlike other systems, it already meets Euro 6c limits: very high NOx conversion rate at low
temperatures, applicable in real road traffic.
8 March 2018 23BNOx IN THE MEDIA
PRINT
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.
8 March 2018 24BNOx RETROFITTING IN THE UK
State subsidized SCR retrofit project
§ The UK government has approved grants of GBP 150
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.
8 March 2018 25BNOx RETROFITTING IN GERMANY
Government subsidized retrofitting of city buses in major German cities
§ As a result of the Diesel Summit, EUR 150 million has been
allocated for the retrofitting of city buses and coaches
with EUR 150 million for the retrofitting of city buses
§ In Germany, around 18,000 city buses with Euro-5 or
older engines are in use
§ 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 18,000 city buses with Euro 5 or older engines are in use in Germany
The Baumot Group profits early on from government subsidies for retrofitting.
8 March 2018 26FINANCIALS
04SELECTED FINANCIAL FIGURES
§ Revenues in H1 2017 below expectations due to
in EUR million
several factors:
20131 20142 20153 20163 H1 20172
§ Deconsolidation of the Kontec Group
Sales revenue 10.4 29.2 26.8 38.3 5.1 § Introduction of the emission standard Stage FAZ
IIIB in Turkey was postponed to 2018
Gross profit 5.0 13.7 15.1 32.4 2.5 § Lower gross profit margin due to deconsolidation of
the Kontec Group
Gross profit
48% 46.9% 56.3% 84.7% 47.6% § EBITDA impacted by the deconsolidation of Kontec,
margin
further development of the BNOx system and
EBITDA 1.3 1.9 -4.2 -3.6 -2.7 declining revenues
EBITDA margin 17% 6% -15.8% -9.3% -52.5%
Net debt 1.6 -2.8 -3.8 0.024* 0.017*
*positive figure
1 Baumot AG before the reverse takeover 2 Twintec AG, Baumot AG without Kontec GmbH
3 Twintec AG, Baumot AG; Kontec GmbH consolidated
Fiscal year 2016: Further developed strategically, operating performance negatively impacted by
the deconsolidation of the Kontec Group in the short term
8 March 2018 28BALANCE SHEET
in EUR million
20131 20142 20153 20164 H1 20174
Assets
Current assets 6.1 8.5 13.0 5.7 3.6
Non-current assets 0.8 13.5 20.5 7.5 6.5
Liabilities
Equity 4.6 12.3 14.2 4.5 1.0
Equity ratio 67% 56% 42% 34% 9%
Current liabilities
0.6 6.1 18.8 6.2 4.2
& provisions
Non-current liabilities &
1.7 3.6 5.7 0 0
provisions
Total assets 6.9 22.0 33.7 13.4 11.2
1 Baumot AG before the reverse takeover 2 Twintec AG, Baumot AG; without Kontec GmbH
3 Twintec AG and Baumot AG; Kontec GmbH consolidated 4 Twintec AG, Baumot AG; Kontec GmbH deconsolidated
Kontec was deconsolidated from the balance sheet as of December 31, 2016
8 March 2018 29SHARE
Shareholder structure
12.34%
16.48%
71.18%
Basic share information Baumot Group AG
WKN A2DAM1
ISIN DE000A2DAM11
Cleantech Ltd. Ticker symbol TINA
RMK Beteiligungen GmbH* & Family Kavena Transparency level Open Market
Free Float Principal trading venue Xetra
Total number of shares 30,404,797
Designated sponsor Lang & Schwarz Broker GmbH,
* 100% attributable to COO Roger Kavena equinet Bank AG
8 March 2018 30OUTLOOK
05OUTLOOK – 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 in 2018
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
8 March 2018 32OUTLOOK FOR 2018
Introduction of the On-Road standard CN 6
In EUR million
100 Introduction of the Off-Road standard Stage V
Sales
EBITDA
Significant growth of
revenue & earnings
80 Euro 6c regulation
OEM positioning
60
Deconsolidation of Kontec
GmbH and Interkat
40
20
0
2016 1 2017e 2018e 2020
-20 1 Twintec AG, Baumot AG, Kontec GmbH consolidated
Positive market environment: In the upcoming years Baumot will profit from its investments in
market development and technology in the past.
8 March 2018 33APPENDIX
06CASE STUDY DUH3 EXHAUST TESTS
Emissions under real conditions
EURO 5 vehicle EURO 5 vehicle with BNOx system
0,8
0,7
NOx reduction
0,6 -88.4 with BNOx -93.3
0,5 % %
NOx (g/km)
0,4
0,3
0,2 EU5
0,1 EU6
0
EURO 5 (WLTC) ERUO 5 + BNOx (WLTC) EURO 5 + BNOx (PEMS)
1 2 3
Emissions class Limit Test cycle NOx NOx NOx § The BNOx system is the leading retrofit
[g/km] emissions emissions reduction system for achieving Euro 6 emissions
[g/km] without BNOx with
[g/km] BNOx under real conditions
1 EURO 5 0.18 WLTC1 0.68 - - § A Euro 5 diesel vehicle retrofitted with
BNOx achieves better values under real
2 WLTC1 conditions than a Euro 6 vehicle
EURO 5 0.18 0.079 0.68 -88.4 %
with BNOx
3 PEMS2
EURO 5 0.18 0.069 1.03 -93.3 %
with BNOx
1 WLTC: World Light-Duty Test Cycle
2 PEMS: Portable Emissions Measurement System
3 DUH: Deutsche Umwelthilfe
8 March 2018 35CASE STUDY ZDF ADAC EXHAUST TESTS PROVE BNOx EFFECTIVENESS
Emissions under real conditions
EURO 5 vehicle EURO 5 vehicle with BNOx system
0,8
0,7 -95.3 -98.7 NOx Reduktion
0,6 with BNOx
% %
0,5
NOx (g/km)
0,4
0,3
0,2
EU5
0,1 EU6
0
Prüfstand (WLTC) Prüfstand (Highway) Prüfstand (WLTC) Prüfstand (Highway) Realbedingungen,
PEMS (City, Country
Side, Highway)
1 2 3 4 5
Test methods Test cycle NOx emissions NOx emissions NOx
[g/km] without BNOx reduction EURO 6 emissions
[g/km] with BNOx
were documented with a retrofitted
BNOx system
1 Test facility WLTC1 0.748 - -
§ Real conditions (RDE)
2 Test facility Autobahn 0.742 - -
§ WLTC
3 WLTC1
Test facility
with BNOx
0.035 0.748 -95.3 % § Highway tests
4 Autobahn 0.742
Test facility 0.01 -98.7 %
with BNOx
5 PEMS2 1 WLTC: World Light-Duty Test Cycle
Real conditions 0.027 - - 2 PEMS: Portable Emissions Measurement System
with BNOx
8 March 2018 36DISCLAIMER 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. 8 March 2018 37
BAUMOT GROUP 360° – CLEAN AIR COMPANY INVESTOR PRESENTATION, JULY 2017 THANK YOU!
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