Aemetis, Inc · NASDAQ:AMTX
Aemetis — Investor Presentation (November 2014)
44 slides from Aemetis's investor presentation, Nov 10, 2014
Slide 1: The Aemetis Biorefinery
The Aeme's Biorefinery Advanced Renewable Fuels and Chemicals Produced by Conversion of Exis;ng Biofuels Facili;es September 2014
Slide 2: Disclaimer
Disclaimer Certain of the statements contained herein may be statements of future expecta:ons and other forward-‐looking statements that are based on management's current views and assump:ons and involve known and unknown risks and uncertain:es that could cause actual results, performance or events
Slide 3: Aemetis Vision
Aeme's Vision Aeme's is an interna'onal renewable fuels and biochemicals company using patented industrial biotechnology for the conversion of first-‐ genera'on ethanol and biodiesel plants into advanced biorefineries. Tradi'onal Corn Ethanol and Advanced Biofuels Non-‐Food, Low Carbon, Less Land Ve
Slide 4: Aemetis Value Proposition
Aeme's Value Proposi'on § Strong posi've cash flow from $178 million biofuels/biochemical revenues in 2013 § 110 million gallons capacity in California and India cost $165 million to build/upgrade § Revenue growth to $400 million per year without addi'onal capital expenditures § Patented technolo
Slide 5: Table of Contents
Table of Contents 1. Introduc'on 7 2. Company Overview 12 3. Industry Overview 26 4. Company Highlights 37 5. Financial Overview 42 5
Slide 6: Introduction
Introduction i
Slide 7: Aemetis Summary
Aeme's Summary § Aeme:s, Inc. was founded in February 2006 by biofuels industry veteran Eric McAfee and has since grown to become a leading second-‐genera:on renewable fuels and specialty chemicals company with $178 million in revenues during 2013 § Since its forma:on, the Company’s primary focus
Slide 8: Aemetis Overview
Aeme's Overview § Keyes Plant was originally constructed in 2008 at a cost of $132 million, then upgraded at a cost of $13 million for a total investment of $145 million Strong Asset Values § India plant was originally constructed in 2008 at a cost of $22 million and upgraded with glycerin refinery
Slide 9: Management Team
Management Team Eric A. McAfee, Chairman and CEO § Founding shareholder of $800 million revenues Pacific Ethanol (NASDAQ: PEIX) § Founding shareholder of several publicly-‐held energy companies including Evolu;on Petroleum (NYSE: EPM) § Founded seven public companies and funded twenty-‐five priva
Slide 10: Board of Directors
Board of Directors Eric McAfee, Chairman and CEO, Founder § Founder of Aeme:s in 2006; Pacific Ethanol (Nasdaq: PEIX); Evolu:on Petroleum (NYSE: EPM); Procera Networks (Nasdaq: PKT) § GlobalScot appointed by First Minister of Scotland to advise on renewable energy Harold Sorgen', Director/Chairman
Slide 11: Company Overview
Company Overview ——————— —-
Slide 12: Aemetis Key Highlights
Aeme's Key Highlights § Owns and operates renewable fuels and chemicals facili:es in US and India − Acquired Cilion, Inc. 60 MGY ethanol plant in Keyes, CA in 2012 • Plant build and upgrade cost $145 million − Built 50 MGY advanced biofuel plant in Kakinada, India in 2008 • Plant build cost $22 mil
Slide 13: Key Company and Industry Milestones
Key Company and Industry Milestones February 2007 Acquired Energy Enzymes -‐ Former DOE funded enzyme technology for enzyme produc:on and integra:on Nov 2008 Built 50 MGY non-‐food feedstock and biomass energy biorefinery in Kakinada, India to use waste stearine and tallow to produce biodiesel and
Slide 14: Aemetis Revenues
Aeme's Revenues Cumula've Ethanol, Biodiesel and Other Revenue $600 $500 $400 ($ in millions) $300 $200 $100 $0 Ethanol Biodiesel Other 14
Slide 15: California Ethanol Plant
California Ethanol Plant 15
Slide 16: California Plant Aerial View
California Plant Aerial View 1) Union Pacific Rail System access 8) One 1.05 MG denatured ethanol storage tank, two 2) Two corn/milo storage tanks (owned by A.L. Gilbert) and one 210,000 gallon 200-‐proof ethanol storage tanks and one feedstock bin (owned by Aeme:s) 63,000 gallon 190-‐proof ethanol
Slide 17: California Plant Description
California Plant Descrip'on § Designed by Praj Industries, an industry leading builder of ethanol plants that has been involved in the General design and development of more than 450 alcohol plants § Stabilized produc'on capacity of more than 60 MGY, with permits allowing 75 MGY § Products includ
Slide 18: California Plant Description (continued)
California Plant Descrip'on (con'nued) § Access to the Union Pacific rail line provides access to key feedstock markets § Close proximity (40 miles) to the deep water Port of Stockton allows importa'on of less expensive milo from key interna'onal feedstock markets (e.g., Argen'na) § 100% of ethano
Slide 19: Ethanol Technology & Production Process
Ethanol Technology & Produc'on Process Typical Dry Mill Ethanol Process(1) 1) Aeme:s’ dis:llers grains are sold wet and therefore do not require large and expensive industrial dryers which oqen require significant maintenance. 19
Slide 20: California Production Competitive Advantage
California Produc'on Compe''ve Advantage West Coast loca*on and large local markets provide several advantages over Midwest ethanol producers California Dairy Concentra'on Map § 10% ethanol mandate in California is approximately a 1.3 billion gallon market yearly − With 220 mgy of California produc
Slide 21: Aemetis Process Benchmarking
Aeme's Process Benchmarking Aeme*s sells ethanol in California where it demands a premium price over ethanol sold in the U.S. on average. The Keyes Plant is one of the most efficient and produc*ve facili*es in the industry, with a higher yield than the industry average. Los Angeles Ethanol Price vs. M
Slide 22: India Biodiesel and Glycerin Plant
India Biodiesel and Glycerin Plant 22
Slide 23: India Plant Description
India Plant Descrip'on General § Built and 100% owned by Aeme:s subsidiary Aeme:s Interna:onal § 50 MGY nameplate biodiesel produc'on capacity with refined glycerin unit § Revenues of $32 million in 2013, growing to about $200 million per year at full capacity − Biodiesel: $4.3 million in revenue
Slide 24: Intellectual Property
Intellectual Property The Company operates an R&D lab in Maryland and earned five granted advanced biofuels technology patents 5 Awarded Licensed § Five awarded patents on enzyme and microbe § Chevron Lummus / ARA renewable Jet and Diesel technology: Fuel: − Patented plant wall degrada:ve systems −
Slide 25: Industry Overview
Industry Overview ——————
Slide 26: U.S. Ethanol Production
U.S. Ethanol Produc'on § Ethanol is high octane (113), high oxygen (35%), cleaner burning motor fuel § Ethanol is mandated by Federal Air Quality and renewable fuels laws, replacing the chemical MTBE § The majority of American consumers are using E10 ethanol blends (10% ethanol), and E15 (15% eth
Slide 27: Ethanol in Demand in Export Markets
Ethanol in Demand in Export Markets(1) 2013 U.S. exports, in millions of gallons Canada 325 Europe 39 East Asia Middle 8 East 40 Mexico Jamaica Philippines 10 India 31 13 52 Africa 10 Brazil Peru 47 30 Rest of world =15 1) Source: Renewable Fuels Associa:on www.EthanolRFA.org 27
Slide 28: The Increasing RFS Mandate
The Increasing RFS Mandate (1) In order to meet the increasing Renewable Fuel Standards, obligated par*es are expected to blend greater amounts of ethanol as excess Renewable Iden*fica*on Numbers (RIN’s) are delivered to the EPA or mature § The current RFS was enacted with the Energy Independence an
Slide 29: California Low Carbon Fuel Standard (LCFS)
California Low Carbon Fuel Standard (LCFS) § LCFS is a state-‐enacted policy to reduce greenhouse gas emissions from motor vehicles § Under LCFS, every fuel has a “carbon intensity value” (CI) − CI values es:mate the level of lifecycle greenhouse gas emissions of a par:cular fuel taking into acco
Slide 30: RIN Pricing has Escalated with Diminishing Supply
RIN Pricing has Escalated with Diminishing Supply (1) Aeme*s is one of the few plants equipped and geographically posi*oned to obtain milo for produc*on of the D5 RIN and capture the premium in the market § D6 RIN prices had historically ranged between $0.01 to $0.05 but appreciated significantly in
Slide 31: EPA Approval of E15 in 2012 Removed the 10% Blend Wall
EPA Approval of E15 in 2012 Removed the 10% “Blend Wall” § Prior to August 2012, gasoline / ethanol blends were primarily limited to 10%(1), referred to as E10, by the EPA § The term “Blend Wall” refers to the maximum amount of ethanol that can be blended in to gasoline as a result of this 10% lim
Slide 32: Favorable Supply / Demand Dynamics
Favorable Supply / Demand Dynamics In the near term, Aeme*s is well posi*oned to benefit from the exis*ng supply / demand imbalance Demand Factors Supply Factors § At 15% of U.S. gasoline consump'on, total ethanol § There are 211 U.S. ethanol plants with aggregate produc:on demand would increase fr
Slide 33: Demand Outlook
Demand Outlook Environmental policy, air quality, energy security and the growing need for domes*c fuel sources are an*cipated to drive growth for ethanol for the foreseeable future. Other factors driving ethanol demand include increased usage of ethanol for octane enhancement, high gasoline prices
Slide 34: Benefits of Grain Sorghum as a Feedstock Alternative to Corn
Benefits of Grain Sorghum as a Feedstock Alterna've to Corn § Grain Sorghum (Milo) is a genus of numerous species of grasses and is mainly grown in dry and hot climates of the U.S. which are not conducive to corn produc:on § From an ethanol feedstock perspec:ve, milo has several advantages over cor
Slide 35: Corn and Milo Prices Have Been Declining to the Benefit of Aemetis
Corn and Milo Prices Have Been Declining to the Benefit of Aeme's Corn futures prices are falling as U.S. corn produc*on for the 2014 crop year is expected to be as high as 170 bushels per acre U.S. Corn and Milo Pricing U.S. Corn and Milo Pricing 8.00 Corn Milo 7.75 7.50 7.25 7.00 6.75 Price Receive
Slide 36: Company Highlights
Company Highlights 36
Slide 37: Strategically Located to Serve Large Addressable Markets
Strategically Located to Serve Large Addressable Markets Aeme*s plants are strategically located to cost effec*vely serve three large target markets: renewable fuels, food & feed and biochemicals. Plasorm Products Market Size Market Drivers Aeme's Strategic Advantage California Biofuels Advanced Cali
Slide 38: Favorable Supply and Demand Dynamics
Favorable Supply and Demand Dynamics § Increasing consump:on of advanced biofuels is mandated by the new renewable fuel standard (“RFS”) schedule in the Energy Independence and Security Act of 2007 § Milo-‐based ethanol using milo, biogas and a Combined Heat & Power system was approved by the EPA
Slide 39: Margin Improvement from Advanced Biofuel Production at Keyes Plant
Margin Improvement from Advanced Biofuel Produc'on at Keyes Plant Aeme*s is the first converted corn ethanol plant that has received EPA approval to produce advanced biofuels (D5 RIN) using milo/ biogas/ Combined Heat & Power system § In June 2013, Aeme:s achieved high-‐volume produc:on of lower-‐
Slide 40: Margin Improvement from Ending Diesel Subsidies in India
Margin Improvement from Ending Diesel Subsidies in India The Indian Government is reducing subsidies to the diesel market, increasing the price of diesel and biodiesel in India to world market prices § Historically, the Indian government set the market price of diesel by providing diesel producers
Slide 41: Financial Overview
Financial Overview 41
Slide 42: Aemetis Historical Financial Performance
Aeme's Historical Financial Performance 1) Excludes debt ex;nguishment costs, intangibles amor;za;on and share-‐based compensa;on. 42
Slide 43: Summary of Aemetis $36 million of Approved EB-5 Funding
Summary of Aeme's $36 million of Approved EB-‐5 Funding § Congress created the EB-‐5 program in 1990 to benefit the U.S. economy by aOrac:ng investments from qualified foreign investors § Aeme's is approved for up to $36 million of EB-‐5 financing by US Customs & Immigra'on Service (USCIS) § Aeme
Slide 44: Advanced Renewable Fuels and Chemicals Produced by Conversion of Existing Biofuels Facilities
Advanced Renewable Fuels and Chemicals Produced by Conversion of Exis;ng Biofuels Facili;es www.aeme:s.com