VERBIO Vereinigte BioEnergie AG

Quarterly Report • Nov 8, 2018

Quarterly interim statement for the period ended September 30, 2018 (Q1 2018/2019)

Group key figures

[in EUR million]

Profitability	Q1 2018/2019	Q1 2017/2018	Q2 2017/2018	Q3 2017/2018	Q4 2017/2018	2017/2018
Sales revenue	170.7	178.2	174.0	161.0	172.7	685.9
EBITDA	16.6	15.9	14.5	4.3	10.1	44.8
EBIT	11.0	10.3	8.9	–1.2	4.4	22.4
EBIT margin (%)	6.5	5.8	5.1	–0.7	2.5	3.3
EBT	11.0	10.2	8.9	–1.2	4.3	22.2
Net result for the period	7.8	7.4	5.9	–1.1	2.9	15.1
Earnings per share (EUR)	0.12	0.12	0.09	–0.02	0.05	0.24
Operating data	Q1 2018/2019	Q1 2017/2018	Q2 2017/2018	Q3 2017/2018	Q4 2017/2018	2017/2018
Production (tonnes)	180,333	183,663	183,055	178,231	177,562	722,511
Production (MWh)	154,444	131,110	164,434	168,878	143,890	608,312
Utilisation Biodiesel/Bioeth anol (%)	98.8	100.6	100.3	97.7	97.3	99.0
Utilisation Biomethane (%)	103.0	87.4	109.6	112.6	95.9	101.4
Investments in property,
plant and equipment	10.5	4.6	5.5	8.1	8.4	26.6
Number of employees 1)	580	535	535	548	563	563
Net asset position	30.09.2018	30.09.2017	31.12.2017	31.03.2018	30.06.2018	30.06.2018
Net financial assets	92.7	120.4	106.9	83.4	90.1	90.1
Equity	308.3	304.0	309.6	295.3	300.2	300.2
Equity ratio (%)	81.3	80.8	81.1	80.7	82.0	82.0
Balance sheet total	379.4	376.3	381.6	366.0	366.0	366.0
Financial position	Q1 2018/2019	Q1 2017/2018	Q2 2017/2018	Q3 2017/2018	Q4 2017/2018	2017/2018
Operating cash flow	10.3	7.4	–9.0	–3.1	15.8	11.1
Operating cash flow per share (EUR)	0.16	0.12	–0.14	–0.05	0.25	0.18
Cash and cash equivalents 2)	93.2	122.3	108.3	83.8	90.5	90.5

1) at the balance sheet date

2) at the balance sheet date, including cash on segregated accounts

Segment key figures

[in EUR million]

Biodiesel	Q1 2018/2019	Q1 2017/2018	Q2 2017/2018	Q3 2017/2018	Q4 2017/2018	2017/2018
Sales revenue	112.9	114.7	117.3	107.3	117.5	456.8
EBITDA	13.7	5.1	9.3	–0.1	10.1	24.4
EBIT	12.5	3.9	8.1	–1.2	8.8	19.6
Production (tonnes)	119,658	121,445	119,789	116,005	118,972	476,211
Utilisation (%)	101.8	103.4	102.0	98.7	101.3	101.3
Number of employees 1)	116	112	113	112	113	113

Bioethanol (incl. biomethane)	Q1 2018/2019	Q1 2017/2018	Q2 2017/2018	Q3 2017/2018	Q4 2017/2018	2017/2018
Sales revenue	55.4	60.9	53.9	51.3	53.0	219.1
EBITDA	2.6	10.6	5.1	4.3	–0.1	19.9
EBIT	–1.6	6.3	0.9	0.0	–4.4	2.8
Production (tonnes)	60,675	62,218	63,266	62,226	58,590	246,300
Production (MWh)	154,444	131,110	164,434	168,878	143,890	608,312
Utilisation Bioethanol (%)	93.4	95.7	97.3	95.7	90.1	94.7
Utilisation Biomethane (%)	103.0	87.4	109.6	112.6	95.9	101.4
Number of employees 1)	289	257	257	266	260	260

Other	Q1 2018/2019	Q1 2017/2018	Q2 2017/2018	Q3 2017/2018	Q4 2017/2018	2017/2018
Third party revenues	4.4	4.0	4.0	3.8	3.9	15.7
EBIT	0.1	0.1	0.0	–0.1	0.0	0.0

1) at the balance sheet date

Business report and the Group's position

VERBIO AG's results for the first three months of the financial year 2018/2019 were slightly higher than in the same period in the previous year.

Group revenues fell by 4 percent to EUR 170.7 million compared to the previous year (Q1 2017/2018: EUR 178.2 million).

The result before interest, taxes and depreciation and amortisation (EBITDA) totalled EUR 16.6 million for the first three months of the financial year 2018/2019, a slight increase compared to the previous year (Q1 2017/2018: EUR 15.9 million) due to a strong fall in material costs, less the offsetting effects of increased personnel expenses and other operating expenses. The Group result before taxation and interest (EBIT) is also comparable with the first quarter of the previous year, amounting to EUR 11.0 million (Q1 2017/2018: EUR 10.3 million). The net result for the period amounted to EUR 7.8 million (Q1 2017/2018: EUR 7.4 million). Based on the result for the period, earnings per share are EUR 0.12 (Q1 2017/2018: EUR 0.12).

Net assets and financial position

Cash flows

Cash flow from operating activities in the first three months of the financial year 2018/2019 amounted to EUR 10.3 million (Q1 2017/2018: EUR 7.4 million). The increase compared to the previous year is primarily due to the lower level of the annual seasonal increase in inventories.

Due to the Group's ongoing investment activities, total cash outflows from investment activities in the first three months of 2018/2019 were EUR 9.8 million (Q1 2017/2018: EUR 3.1 million). The cash outflows from investment activities primarily resulted from payments made for investments in property, plant and equipment, as previously announced and in line with plan.

There were no significant cash flows from financing activities in either the current period or the same period in the previous year.

As a result, cash and cash equivalents increased by EUR 0.8 million in the period July 1, 2018 to September 30, 2018. Cash and cash equivalents reported in the balance sheet at September 30, 2018 amounted to EUR 29.3 million.

Net cash

The remaining bank and loan finance arrangements are more than offset by cash and cash equivalents, term deposits and segregated accounts of EUR 93.2 million, so that the reported net cash balance at September 30, 2018 amounted to EUR 92.7 million (June 30, 2018: EUR 90.1 million).

Development of the Biodiesel and Bioethanol segments

The results in the first quarter of the financial year 2018/2019 were primarily driven by significantly higher margins in the Biodiesel segment compared to the same period in the previous year. On the other hand, the first quarter of 2018/2019 saw lower margins for Bioethanol compared to the same period in the previous year, primarily due to higher raw material prices. However, production plant utilisation was high in both the Biodiesel and Bioethanol (including Biomethane) segments. The production volume of biodiesel and bioethanol in the period from July 1, 2018 to September 30, 2018 totalled 180,333 tonnes, compared with 183,663 tonnes in the same period in the previous year. In addition, 154.4 GWh of biomethane were produced in the first three months of the financial year 2018/2019 (Q1 2017/2018: 131.1 GWh).

Outlook, opportunity and risk report

Outlook

VERBIO is making no changes to the results forecasts provided in the 2017/2018 annual report published on September 26, 2018. Accordingly, EBITDA is expected to be around EUR 45 million and the net cash balance at the end of the financial year is expected to be approximately EUR 73 million before the effect of any acquisitions.

Risk and opportunity report

There have been no changes to the opportunities and risks presented in the 2017/2018 annual report, and no changes in the risks and opportunities profile of the VERBIO Group during the reporting period. There are no present risks or discernible potential risks that present a threat to the ability of the Group to continue as a going concern.

Consolidated profit and loss account

for the period July 1, 2018 to September 30, 2018

	EUR (thousands)	Q1 2018/2019	Q1 2017/2018
1.	Sales revenue (including energy taxes collected)	170,791	178,339
	less: energy taxes	–102	–102
	Revenue	170,689	178,237
2.	Change in unfinished and finished goods	2,048	1,054
3.	Own work capitalised	184	0
4.	Other operating income	2,932	2,125
5.	Cost of materials	–141,874	–150,222
6.	Personnel expenses	–7,873	–6,360
7.	Depreciation and amortisation	–5,593	–5,563
8.	Other operating expenses	–9,143	–8,252
9.	Result from commodity forward contracts	–322	–698
10.	Operating result	11,048	10,321
11.	Interest income	0	3
12.	Interest expense	–37	–94
13.	Financial result	–37	–91
14.	Result before tax	11,011	10,230
15.	Income tax expense	–3,210	–2,861
16.	Net result for the period	7,801	7,369
	Result attributable to shareholders of the parent company	7,800	7,314
	Result attributable to non-controlling interests	1	55
	Result per share (basic and diluted)	0.12	0.12

Consolidated balance sheet

at September 30, 2018

	EUR (thousands)	30.09.2018	30.06.2018
	Assets
A.	Non-current assets
I.	Intangible assets	509	334
II.	Property, plant and equipment	172,464	167,962
III.	Financial assets	55	55
IV.	Deferred tax assets	3,235	3,392
	Total non-current assets	176,263	171,743
B.	Current assets
I.	Inventories	47,687	45,171
II.	Trade receivables	49,126	45,233
III.	Derivatives	3,241	3,392
IV.	Other short-term financial assets	6,310	2,691
V.	Tax refunds	303	195
VI.	Other assets	7,184	9,006
VII.	Term deposits	60,042	60,042
VIII.	Cash and cash equivalents	29,282	28,516
	Total current assets	203,175	194,246

Total assets 379,438 365,989

EUR (thousands)		30.09.2018	30.06.2018
	Liabilities and equity
A.	Equity
I.	Share capital	63,000	63,000
II.	Additional paid-in capital	487,681	487,681
III.	Other reserves	1,367	1,018
IV.	Retained earnings	–244,644	–252,444
V.	Reserve for translation adjustments	–252	–233
	Total equity attributable to owners of the parent	307,152	299,022
VI.	Non-controlling interests	1,196	1,195
	Total equity	308,348	300,217
B.	Non-current liabilities
I.	Bank loans and other loans	0	11
II.	Provisions	155	155
III.	Deferred investment grants and subsidies	4,842	5,102
IV.	Other non-current financial liabilities	1,718	2,010
V.	Deferred taxes	585	437
	Total non-current liabilities	7,300	7,715
	C. Current liabilities
I.	Bank loans and other loans	409	369
II.	Trade payables	37,462	31,185
III.	Derivatives	1,581	2,159
IV.	Other current financial liabilities	7,112	7,294
V.	Tax liabilities	9,767	9,342
VI.	Provisions	3,991	4,349
VII.	Deferred investment grants and subsidies	1,036	1,035
VIII.	Other current liabilities	2,432	2,324
	Total current liabilities	63,790	58,057
	Total equity and liabilities	379,438	365,989

Consolidated cash flow statement

for the period July 1, 2018 to September 30, 2018

EUR (thousands)	Q1 2018/2019	Q1 2017/2018
Net result for the period	7,801	7,369
Income tax expense	3,210	2,861
Interest result	37	91
Depreciation and amortisation	5,593	5,563
Non-cash expense	216	366
Non-cash expenses	–89	–98
Loss on disposal of property, plant and equipment and disposal of investment grants	305	23
Release of deferred investment grants and subsidies	–259	–254
Non-cash changes in derivative financial instruments	69	448
Increase in inventories	–2,516	–9,346
Decrease (previous year period: increase) in trade receivables	–3,893	4,758
Decrease (previous year period: increase) in other assets and other current financial assets	–2,150	1,737
Decrease in provisions	–547	–807
Increase in trade payables	5,564	1,684
Decrease in other current financial and non-financial liabilities	–367	–6,262
Interest paid	–37	–90
Interest received	0	3
Income taxes paid	–2,613	–681
Cash flows from operating activities	10,324	7,365
Acquisition of intangible assets	–434	–7
Acquisition of property, plant and equimpment	–9,827	–4,133
Proceeds from disposal of property, plant and equipment	591	4
Proceeds from grants and subsidies received	83	1,073
Cash flows from investing activities	–9,587	–3,063
Cash outflows for the repayment of financial liabilities	0	–13
Proceeds from new financial liabilites	29	0
Cash flows from financing activities	29	–13
Change in cash funds resulting from business transactions	766	4,289
Change in cash funds due to effects of exchange rates	0	–83
Cash funds at beginning of year	28,516	54,722
Cash funds at end of year	29,282	58,928

Financial calendar 2018/2019

September 26, 2018	Publication of the annual report 2017/2018 Analyst's conference/annual financial statements press conference
November 8, 2018	Publication of the quarterly statement for the period ended September 30, 2018 (July 2018 to September 2018)
February 1, 2019	Annual general meeting in Victor's Residenz-Hotel, Leipzig
February 7, 2019	Publication of the half-yearly interim report 2018/2019 (July 2018 to December 2018) Analyst's conference/financial statements press conference
May 9, 2019	Publication of the quarterly statement for the period ended March 31, 2019 (July 2018 to March 2019)
September 25, 2019	Publication of the annual report 2018/2019 Analyst's conference/annual financial statements press conference

Contact address and imprint

Publisher/editing and text/pictures

VERBIO Vereinigte BioEnergie AG

Contact

VERBIO Vereinigte BioEnergie AG Ritterstraße 23 (Oelßner's Hof) 04109 Leipzig Phone: +49 341 308530-0 Fax: +49 341 308530-999 www.verbio.de

Forward-looking statements

Diese This quarterly statement includes various statements concerning forecasts, expectations and information that relate to the future development of the VERBIO Group and VERBIO Vereinigte BioEnergie AG. These statements are based on assumptions and estimates and may be associated with known and unknown risks and uncertainties. Actual developments and results, as well as the financial and asset situation, may therefore differ substantially from the expectations and assumptions stated. Such differences may be due, among other things, to market fluctuations, changes in worldwide market prices for raw materials as well as financial markets and exchange rates, changes in national and international laws and directives, or fundamental changes in the economic and political climate. VERBIO does not intend to and does not undertake an obligation to update or revise any forward-looking statements to adapt them to events or developments after the publication of this statement.

This quarterly statement is published in German (original version) and in English (non-binding translation). It is available for download at http://www.verbio.de in both languages.

We will be delighted to send you additional information about VERBIO Vereinigte BioEnergie AG on request at no charge. Phone: +49 341 308530-251 Fax: +49 341 308530-999 E-Mail: ir@verbio.de

VERBIO Vereinigte BioEnergie AG

Ritterstraße 23 (Oelßner's Hof) 04109 Leipzig T: +49 341 308530-0 F: +49 341 308530-999 ir@verbio.de www.verbio.de