BRAIN Biotech AG · XETR:BNN
BRAIN Biotech — Investor Presentation (February 2022)
60 slides from BRAIN Biotech's investor presentation, Feb 23, 2022
Slide 1: BRAIN Biotech AG Investor Relations Presentation 2022
BRAIN Biotech AG Creating a #BiobasedFuture Investor Relations Presentation 2022 Zwingenberg, February 2022 Creating a #BiobasedFuture © BRAIN Biotech AG Zwingenberg Germany www.brain-biotech.com +49 (0) 6251-9331-0 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document may contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties, as they relate to future events and are based on current assumptions of the Company, which may not occur at all in the future or may not occur as assum
Slide 3: BRAIN at a Glance
BRAIN at a Glance ~ €38m Creating Breakthrough Bioproducts & Solutions for Nutrition, Health and Environment ‘20/’21 Revenues > 28 Years of Experience Industrial Biotech Three (white) Product Platforms ~ 320 Employees Enzymes > 230 Specialty B2B Products Microorganisms > 150 Bioactive Natural Indust
Slide 4: Mission & Vision
Mission & Vision “Mission is what an organization is or does. Vision is what an organization desires to become” Mission Creating Breakthrough Bioproducts and Solutions for Nutrition, Health and the Environment Vision We will be the Industrial/White Biotech Specialists in finding and exploring high-v
Slide 5: When Should You #Think BRAIN?
When Should You #Think BRAIN? in the center of mega-trends Health & Nutrition Creating a BiobasedFuture Vegan & Vegetarian Food: Alternative Protein Base Genome Engineering: (Precise Fermentation / Microbial Production Hosts) Novel Non-Cas9 Nucleases Healthy & Better Tasting Beverages: Biological Pr
Slide 6: This is BRAIN
This is BRAIN BRAIN Biotech AG Breakthroughs & Services Products BioScience BioIndustrial BioActive Compound Enzymes Microorganisms Bioactives Incubator Tailor Made Solutions Libraries Breakthrough Discoveries Discovery Proprietary Bio-Archive Nutrition, Healthcare, Environment, Cosmetics Nutrition/
Slide 7: BRAIN Group – Solutions Provider
BRAIN Group – Solutions Provider 1 Products Business • Focus on high-growth & high-margin niches Value Creation & Synergies • Re-shape from a purchase for resale to an own production model • Strong target markets with healthy sales and margin growth in F&B, healthcare and environment 1 TMS /Librarie
Slide 8: Six Strong Reasons to Invest in BRAIN Biotech AG
Six Strong Reasons to Invest in BRAIN Biotech AG 1. Mega-trends / UN-SDGs: our products address the big societal topics – nutrition, health & the environment. We address at least 5 SDGs directly 2. Incubator products: big upsides in our breakthrough inventions. BEC/BMC potential to be transformation
Slide 9: BRAIN: At the Heart of UN
BRAIN: At the Heart of UN Our Products & Solutions address at least five goals directly • Sugar replacement / Sugar taste enhancer • Salt replacement / Salt taste enhancer • Natural compounds for • Natural aromas food preservation • Wound treatment • Bioactive plant cosmetics • Green mining • Green
Slide 10: Five Strategic Initiatives Centered Around our Core Values
Five Strategic Initiatives Centered Around our Core Values Continuous Corp. Culture Development 1 Profitable Top Line Growth 5 1 5 • Can do and high ethics culture • Excel in specialty niches with high margins • Talent management • Selectively grow outside of Europe • Innovation is our passion Colla
Slide 11: Our Incubator
Our Incubator rising pipeline valuation rNPV Profit Market Model R&D Current Time-to-Market Potential Options Platform Project Pipeline Partners R&D Market *1 *2 *3 Status 3–5 years out 1–3 years out In pre-launch Small Prod, Fee, M/O Natural fermented beverages 1 Will Exit @ MSP Launch ‘22 Salt tas
Slide 12: Management & Employee Incentives
Management & Employee Incentives Since the IPO BRAIN Biotech AG’s board as well as management compensation has been closely linked and aligned with shareholder interests Executive Board • fixed salary • variable component based on individual quantitative & qualitative targets • stock component, see
Slide 13: Financial Highlights 3M FY 2021/22 at a Glance
Financial Highlights 3M FY 2021/22 at a Glance excellent start to the year in both divisions; solid adj. EBITDA improvement Organic Organic 3M 3M Growth Growth Q1 Q1 Growth Growth Comment (in € thousand) 2021/22 2020/21 2021/22 2020/21 Revenues 10,177 8,078 26.0% 18.6% 10,177 8,078 26.0% 18.6% very
Slide 14: Long-Term Revenue Growth Trajectory
Long-Term Revenue Growth Trajectory Strong BioScience recovery, also driven by „We CRISPR for You“ * ** *** **** As stated: we expect to go back on the growth track in FY 21/22 – very strong start in Q1 Breatec will add to growth from Q2 *purchase BioCatalysts Ltd. **divestment Monteil Cosmetics
Slide 15: Adjusted EBITDA
Adjusted EBITDA BioScience: positive operating leverage & higher amount of Tech Access Fees Adjusted EBITDA 3M 21/22 1.500 € • Group adj. EBITDA strongly improving due 1.000 € 884 to dynamic sales growth and positive 500 € operating leverage 313 0€ • BioScience: strong YoY recovery; lower In T. € mi
Slide 16: Cash & Cash Flow
Cash & Cash Flow strong OCF, very solid cash position maintained 3M 3M Q1 Q1 Growth Growth (in € thousand) 2021/22 2020/21 2021/22 2020/21 Comment Gross Cash Flow -1,573 -1,719 8.5% -1,573 -1,719 8.5% Operating Cash Flow -193 -2,132 91.0% -193 -2,132 91.0% Strong WC management Investing Cash Flow -1
Slide 17: Covid, Rising Supply Chain Risks & Cost Inflation
Covid, Rising Supply Chain Risks & Cost Inflation pandemic effects vanishing, selected supply chain restraints Covid Summary: Secure: BRAIN Group: negative Covid-19 effects from FY 20/21, especially on • Health aspects BioScience, are vanishing. Selected supply chain restraints hinder even • Supply
Slide 18: Our Targets
Our Targets Guidance and Mid-Term Targets FY 21/22 Guidance (ex Breatec) Mid-Term Targets, Unchanged (issued 3M, February 23rd, 2022) (issued 09/‘20, 4-5 year targets) (excluding CRISPR) Group sales: EUR 43-45 million BS: growth 15-25% Double group revenue from base ‘18/19 BI: growth 10-15% Do
Slide 19: Our Share Ownership
Our Share Ownership* DAH Beteiligungs GmbH Lloyd Fonds 5.6% 4.0% Founders/ Management Free Float 6.6% (in definition German Stock • Number of shares: 21,847,495 Exchange ~51%) 45.2% • Free float of ~ 45% • Strong long-term investor base • 8,900 shareholders • WKN 520394 / ISIN DE0005203947 38.6% •
Slide 20: Financial Calendar
Financial Calendar AGM ANNUAL GENERAL MEETING (Virtual) 2020/21 Annual General Meeting (FY 2020/21) March 9th, 2022 HALFYEAR STATEMENT Publication of the half year report as of March 31st, 2022 (6M) May 30th, 2022 QUARTERLY STATEMENT Publication of the quarterly statement as of June 30th, 2022 (9M)
Slide 21: Thank you for your attention.
Thank you for your attention. BRAIN Biotech AG Darmstädter Straße 34−36 64673 Zwingenberg, Germany +49 (0) 6251-9331-0 www.brain-biotech.com Your contacts: Michael Schneiders, Head of IR & Sustainability Martina Schuster, IR +49 (0) 6251-9331-86 +49 (0) 6251-9331-69 [email protected] MS@brain-bi
Slide 22: Appendix
Appendix Page Strong sustainability contributions 23 Where BRAIN can make a difference 24 Corporate Governance 25 High barriers to entry 26 NBD deep dive 27 Service business deep dive 33 Partnerships ”BRAIN Inside” 34 Enzyme production, expression hosts 36 Enzyme value chain 38 SolasCure Ltd. 39 Bio
Slide 23: Strong Sustainability Contributions
Strong Sustainability Contributions BRAIN is empowering the biological transformation of the industry • Industrial biotechnology is at the heart of the Bioeconomy • Utilize natural raw materials efficiently • Improve industrial manufacturing processes to become more efficient and natural • Create ne
Slide 24: Trends – Where BRAIN Can Make a Difference
Trends – Where BRAIN Can Make a Difference Insects one run = 1500 Gbp = 1.74 Mio x Protein Pea Protein base data Next Generation Sequencing NGS Genetic Microbiome BioTech Engineering Food Grade Micro- organisms Sustainability Customer Preferences Creating a #BiobasedFuture © BRAIN Biotech AG Zwingen
Slide 25: Corporate Governance
Corporate Governance Principles and policies defining BRAIN’s responsible operations • Dual German AG structure consisting of a management board and a fully independent supervisory board • We comply with all statutory corporate governance regulations as well as the recommendations of the German Corp
Slide 26: High Barriers to entry
High Barriers to entry Our novel products & solutions are based on: • Proprietary BioArchive with >450 person years to reproduce • Extensive patent portfolio, around 175 patents granted and around 40 patent families • Trade secrets • Broad and deep technology know-how in enzymes, microorganisms and
Slide 27: NBD Deep Dive, The Pipeline
NBD Deep Dive, The Pipeline Large Market Potential Natural Beverage 2 • Partners: Japanese Beverage Company • Scope: undisclosed, confidentially agreement • Exclusive to partner • Technology Platform: microorganism • Research Business Model: milestone payments • Commercial Model: starter cultures, p
Slide 28: NBD Deep Dive, The Pipeline
NBD Deep Dive, The Pipeline Large Market Potential BRAIN CRISPR Non-Cas9 Associated Nucleases (BEC/BMC) • Genome Editing: directed and precise change or use of a chromosomal target in a given organism; “the power to program cells” • CRISPR = clustered regularly interspaced short palindromic repeats
Slide 29: NBD Deep Dive, The Pipeline
NBD Deep Dive, The Pipeline Medium Market Potential PHA 121 / Pharvaris N.V.* • Is a clinical-stage discovery and development company, founded in 2015 (CH) • IPO at the NASDAQ (phvs) on February 9th, 2021 • Focus: treatment of hereditary angioedema (HAE) • HAE: medical disorder caused by gene mutati
Slide 30: NBD Deep Dive, The Pipeline
NBD Deep Dive, The Pipeline Medium Market Potential Perillic Active • Partners: US distribution partner contracted (non-disclosed); toll manufacturing • Scope: nature based anti-microbial for food, feed, drinks and cosmetic applications, generated from industrial side streams; fermented orange oil •
Slide 31: NBD Deep Dive, The Pipeline
NBD Deep Dive, The Pipeline Small Market Potential Natural Beverage 1 • Partners: Suntory • Scope: nature based low calorie drink innovation through fermentation • Exclusive to Suntory, in a certain field • Technology Platform: microorganism/starter cultures • Research Business Model: milestone paym
Slide 32: NBD Deep Dive, The End-Markets
NBD Deep Dive, The End-Markets 2026 10.27 bn US$ Sugar Substitutes Market1 6.3% CAGR 2018 6.35 bn US$ 2026 20.03 bn US$ Advanced Wound Care Market 2 5.4% CAGR 2019 12.84 bn US$ 2027 46.85 bn US$ Mining Chemicals Market 3 6.5% CAGR 2019 28.13 bn US$ 2025 1.54 bn US$ Salt Substitutes Market 4 7.8% CAG
Slide 33: Service Business Deep Dive
Service Business Deep Dive Programs with industry partners • BRAIN Biotech AG has a long track record with dedicated contract R&D programs • Monetization: tech-access, fees and milestone payments, royalties or entity formation/profit participation • Non-cyclical service contract business with secula
Slide 34: Partnerships „BRAIN Inside“
Partnerships „BRAIN Inside“ More than 100 exclusive partner collaborations successfully completed Speciality High-performance Bioactive Natural Enzymes Microorganisms Compounds Industrial Partner* *confidential partnerships not disclosed Creating a #BiobasedFuture © BRAIN Biotech AG Zwingenberg Germ
Slide 35: Partnerships „BRAIN Inside“
Partnerships „BRAIN Inside“ Novel Solutions with high value added for our partners Speciality High-performance Bioactive Enzymes Microorganisms Compounds Product range Beiersdorf BRAIN inside Low temperature Flavorpro™ 786P Optimisation Skin anti-irritant detergent Flavor creation of microbial strai
Slide 36: Enzyme Production, Expression Hosts
Enzyme Production, Expression Hosts For expression hosts, a wide variety of protein expression systems are available Enzymes can be expressed in cell cultures of bacteria or yeasts. Factors for choosing an expression system • Protein quality • Functionality • Regulatory • Production speed and yield
Slide 37: Enzyme Production, Expression Hosts
Enzyme Production, Expression Hosts Strain Development: Setting the Scene Creating a #BiobasedFuture © BRAIN Biotech AG Zwingenberg Germany www.brain-biotech.com +49 (0) 6251-9331-0 37
Slide 38: We Cover the Entire Enzymes Value Chain
We Cover the Entire Enzymes Value Chain All steps are underpinned by strong customer application knowledge Discovery Protein and Enzyme Expression/Secretion: Large Scale Formulation Marketing and Engineering Bioprocesses & scale-up Fermentation And Blending Sales BRAIN Zwingenberg Biocatalysts Bioca
Slide 39: SolasCure Ltd.
SolasCure Ltd. Revolutionizing Chronic Wound Care through Biomimicry For BRAIN: Latest Funding, Q1 ‘22 • Discovering a unique technology and spinning it out in 2017 as a separate company • GBP 3.7 Mio Series B1 in total • 41% shareholding of BRAIN Biotech AG, at equity consolidated • BRAIN participa
Slide 40: BRAIN BioArchive – Nature‘s Toolbox
BRAIN BioArchive – Nature‘s Toolbox ~ 53,000 ~ 13,000 54 Characterized Plant fractions Metagenome Microorganisms available for isolation libraries campaigns 450 ~ 13,000 231 Habitat collections Plant fractions available Giga-bp DNA ready and environmental for isolation campaings to screen samples 46
Slide 41: BRAIN BioArchive – Nature´s Toolbox
BRAIN BioArchive – Nature´s Toolbox A proprietary In-House Screening Resource Biomaterial source Compound source Biodiversity Chemical/Synthetic space Chemodiversity profiling High quality Cultivation and/or extraction Rationally selected Fractionation or isolation Good access (resupply & costs) Str
Slide 42: R&D / Technology Platforms – Industrial Biotechnology Toolkit
R&D / Technology Platforms – Industrial Biotechnology Toolkit Bio-based resources Candidate discovery BioArchive – industry leading collection of natural resources and metagenome libraries High-throughput isolation – extraction and purification of natural products from variable • MetXtraTM: unique i
Slide 43: HR: People – Our Core Capital
HR: People – Our Core Capital* BRAIN is a Knowledge Driven Enterprise Innovation is our Passion & Teamwork our Basis • Strong corporate culture • Global scientific and university network • Technology campus • BRAIN alumni platform ~39 9 years average age years average tenure 54% 8 55% female employe
Slide 44: Detailed Management & Employee Incentives
Detailed Management & Employee Incentives ✔ Since the IPO BRAIN Biotech AG’s board as well as management compensation has been linked and aligned with shareholder interests Executive Board variable component based on individual quantitative & qualitative targets (Fix + performance based bonus) stock
Slide 45: Peers by Business Activity
Peers by Business Activity BRAIN Biotech AG BioScience BioIndustrials Solutions&Services Customized Products Advanced Wound Care Incubator/NBD 21st BIO Brightseed Amyris Smith&Nephew* C-Lecta (now Kerry Group) Christian Hansen (Santyl) Codexis Corbion Dyadic Ingredion/Pure Circle Evotec* Evolva Morp
Slide 46: Detailed Financials – Organic vs. Reported
Detailed Financials – Organic vs. Reported Long-term reported revenues per segment Long-term organic revenues per segment 45.000 € 45.000 € 0% 0% 40.000 € 40.000 € 35.000 € 43% 26.411 28.236 35.000 € 26.411 28.236 88% 30.000 € 12% 30.000 € 6% -15% 25.000 € 6% in T. € 25.000 € in T. € 8% 18.767 20.00
Slide 47: Detailed Financials – Expenses Development
Detailed Financials – Expenses Development Creating a #BiobasedFuture © BRAIN Biotech AG Zwingenberg Germany www.brain-biotech.com +49 (0) 6251-9331-0 47
Slide 48: Detailed Financials – Adjusted vs. Reported
Detailed Financials – Adjusted vs. Reported For a like-for-like comparison BRAIN Biotech AG adjusts its EBITDA for its employee stock ownership program, performance based numeration in daughter companies, acquisition & integration costs (in € thousand) 12M 20/21 12M 19/20 EBITDA -2,533 -3,876 Gain o
Slide 49: Detailed Financials – Financial Debt vs. Financial Liabilities
Detailed Financials – Financial Debt vs. Financial Liabilities For or a detailed analysis of our EV calculation, our financial liabilities include: €thousands Sept 30th, 2021 Comment Liabilities from put option rights 4,401 Biocatalysts Ltd. Call/Put options '23/'24, earlier exercise possible, curre
Slide 50: Detailed Financials – Balance Sheet
Detailed Financials – Balance Sheet Creating a #BiobasedFuture © BRAIN Biotech AG Zwingenberg Germany www.brain-biotech.com +49 (0) 6251-9331-0 50
Slide 51: M&A Criteria & History
M&A Criteria & History Qualitative mid-term M&A criteria Quantitative mid-term M&A criteria • B2B only • Bolt-on character • Clearly focused on the product business • Profitable or at least break-even • Niche applications and producers • Value accretive within 1-2 years post synergies • Europe focus
Slide 52: Management CV – Executive Board
Management CV Executive Board Adriaan Moelker (CEO) Lukas Linnig (CFO) • Master of Business Administration • B.S. in Economics, CFA • Year of birth 1964 • Year of birth: 1993 • Joined BRAIN in 2020 • Joined BRAIN in 2015 • 20+ y of professional experience in • 7+ y leadership experience in finance
Slide 53: Management CV – Selected Senior Management
Management CV – Selected Senior Management Dr.-Ing. Ute Dechert Dr. Michael Krohn Dr. Martin Langer (VP HR & Processes) (EVP, Head of R&D) (EVP, Head of Business Development) • Doctor of Engineering • PhD Molecular Biology • PhD, Molecular Biologist & (Biochemistry) Biochemist • Joined BRAIN in 1997
Slide 54: Analyst Coverage
Analyst Coverage Bank Analyst Target Price Recommendation Markus Mayer 20.50 € Buy Falko Friedrichs/Jan Koch 13.00 € Buy Dr. Mohamad Vaseghi 14.00 € Buy Damien Choplain 12.50 € Buy Dr. Christian Ehmann 23.00 € Buy Creating a #BiobasedFuture © BRAIN Biotech AG Zwingenberg Germany www.brain-biotech.co
Slide 55: Glossary I
Glossary I Aurase® Enzymatic agent as part of an innovative gel-based medical device for the biotherapeutic treatment of chronic wounds Bioactive natural compounds Used to develop products for the food, beverages, skin care, cosmetics and chemical industries Bio-based Bio-based products are goods ma
Slide 56: Glossary II
Glossary II Biotechnology Application-oriented sub-sector of biology; includes insights and methods from microbiology, genetics, biochemistry, technical chemistry and process engineering; utilizes biological processes e.g. for industrial applications BEC BRAIN Engineered Cas: BRAIN‘s first proprieta
Slide 57: Glossary III
Glossary III Circular bio-economy Term derived from the fusion of the two concepts of the “bio-economy” and the “circular economy”; circular bio-economy focuses on the sustainable, resource-efficient utilization of biomass in integrated production chains (e.g. biorefineries) while BRAIN demonstratio
Slide 58: Glossary IV
Glossary IV Enzymes Proteins that accelerate biochemical reactions in their function as biocatalysts; play an important role in the development of biobased products; BRAIN identifies and develops optimized enzymes and biocatalysts for complex process and application requirements FRESCO BRAIN develop
Slide 59: Glossary V
Glossary V Microorganism Microscopically small unicellular or multicellular organisms, e.g. bacteria, algae, fungi or viruses New Business Systematic further development of existing and development of new business opportunities Development (NBD) including e.g. R&D and marketing activities New Produc
Slide 60: Glossary VI
Glossary VI Tailor-Made-Solutions Dedicated contract R&D programs for the development of tailor-made solutions for industry TMS Urban mining Sustainable extraction of valuable substances from secondary raw materials and waste flows in order to retain them in value chains in the long term White Biote
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