ACQUISITION OF SCHIRM ACQUISITION OF SCHIRM DATE Replace pic/ - PowerPoint PPT Presentation

ACQUISITION OF SCHIRM ACQUISITION OF SCHIRM DATE Replace pic/ use one of factory NOVEMBER 2017 30 October 2017

AGENDA 1. CONTEXT AND INVESTMENT SUMMARY 2. ABOUT SCHIRM 3. FINANCIAL INFORMATION › Investment highlights 4. OPPORTUNITIES 5. INCORPORATION INTO AECI

1 CONTEXT AND INVESTMENT SUMMARY

3 CONTEXT: 1H17 RESULTS PRESENTATION › Global mining activity gaining momentum » Positive for Group’s Mining pillar » New contracts and increased market share » Footprint expanded » Good order book for mining chemicals › No significant improvement in SA manufacturing sector anticipated to year-end However: » Good opportunities in Water » Agriculture and Food businesses seasonal – stronger 2H historically » Rainfall patterns will affect agricultural sector performance › Pursue further footprint and market expansion › Strong pipeline of acquisitions › Focus on working capital and capex management, and costs › Accelerate growth through Innovation projects, including AECI.GO

4 STRATEGIC PILLARS

5 INVESTMENT SUMMARY Largest provider of Total production volume of Schirm is a 165 000tpa external contract agrochemical 4 synthesis units manufacturer of formulation services agro and fine 55 formulation units in Europe chemicals with a 81 packaging units European and US footprint 800 permanent employees AECI’s first major Integrated acquisition in Europe offering across synthesis, Geographic diversification formulation and Earnings diversification packaging

6 INVESTMENT CASE Long-standing Extension of Market leader relationships with in provision of Schirm’s blue-chip customer formulation manufacturing base and distribution services for expertise agrochemicals in Europe Substantial investment in capex over past two years to deliver growth Enhanced geographic and Supply chain Currency product opportunities diversification in Seasonal diversity earnings benefits

7 GEOGRAPHIC FOOTPRINT USA GERMANY Lübeck 1 Wolfenbüttel Ennis (Texas, USA) Sch ӧ nebeck 2 5 3 5 Baar-Ebenhausen 4

2 ABOUT SCHIRM

9 SCHIRM’S HISTORY: EXPANSION OF VALUE CHAIN AND FOOTPRINT Schirm established Agrochemicals Acquired by 2000: acquisition Imperial acquires - focus on pharma formulations Lehnkering of formulation Lehnkering and all repacking services plant, Ennis subsidiaries, incl. Schirm 1957 1972 1975 1992 2000 - 2008 2011 Acquired 2002: first MPP 2008: acquisition of Agrochemicals Sch ӧ nebeck synthesis plant in Wolfenbüttel packaging site Sch ӧ nebeck business › Other milestones » ’13 : new extrusion facility, Wolfenbüttel » ’15 : new blending and repacking facility, Baar-Ebenhausen » ’16 : new fungicide formulation centre, Sch ӧ nebeck » ’17 : new synthesis capacity, Sch ӧ nebeck » ’17: new Henkel plant, Wolfenbüttel

10 SCHIRM FOOTPRINT DETAILS Schönebeck Lübeck Synthesis units: 4 Formulation units: 5 Formulation units: 7 Packaging units: 15 Packaging units: 16 Production volume: 12 000t Production volume: 33 000t Ennis/Texas Formulation units: 26 Packaging units: 16 Distribution storage: 28 000m 2 Production volume: 77 000t Wolfenbüttel Baar-Ebenhausen Formulation units: 6 Formulation units: 11 Packaging units: 12 Packaging units: 22 Production volume: 32 000t Production volume: 11 000t

11 VALUE CHAIN VALUE CHAIN COMPETITIVE ADVANTAGE AND ENHANCED FINANCIAL STABILITY - ENTIRE VALUE CHAIN Synthesis Formulation Packaging › Process engineering, › Formulation of active › Packaging and labeling of scale-up and synthesis ingredients liquid and solid products of organic compounds in all pack sizes › Wide range of Description › Broad range of reaction technical capabilities › Services include types hazardous substances No. of units 4 55 81 Current: 2 400t Production 98 500t 63 100t Expanded: 5 400t – 6 400t Volume (tpa)

12 REVENUE AND SERVICE SPLIT BY END-MARKET APPLICATION BY PRODUCTION SERVICE Agrochemicals 80% Fine chemicals 20% Synthesis 7% Formulation 53% Packaging 40%

13 CUSTOMERS: LONG-STANDING RELATIONSHIPS FOCUSED ON END MARKETS WITH ATTRACTIVE GROWTH RATES, SUPPORTED BY GLOBAL MEGATRENDS PRODUCT SPILT KEY PRODUCT CATE TEGORI ORIES ES (~ %) Mid-term market growth (~ %) Revenue: € 91m Herbicides 50 3 4 25 Fungicides 10 2 Insecticides Other 15 Agrochemicals 80% KEY CUSTOMERS

14 CUSTOMERS: LONG-STANDING RELATIONSHIPS FOCUSED ON END MARKETS WITH ATTRACTIVE GROWTH RATES, SUPPORTED BY GLOBAL MEGATRENDS PRODUCT SPILT KEY PRODUCT CATEGORIES(~ %) Mid-term market growth (~%) Revenue: € 21m Biocides 20 5 Personal care 6 20 Adhesives 15 4 Rubber 10 4 Other 35 Fine chemicals 20% KEY CUSTOMERS

15 PRODUCTION FOOTPRINT BY SITE Baar- Schönebeck Lübeck Wolfenbüttel Ennis/Texas Ebenhausen Revenue ( € m) 44,239 15,013 19,417 14,513 19,517 % of total revenue 1 4 5 27 47 Product split (%) 53  Agrochemicals  Fine chemicals 73 96 99 95 Utilisation (%) 62 38 63 51 71      Synthesis      Formulation      Packaging      Distribution storage State-of-the-art Competence centre Competence centre Competence centre Full range of      synthesis facility, for fine chemicals for granulation for liquid formulation and including pilot plant formulation formulation filling portfolio Highlights Powder and granule  Development Small fillings fillings Liquid fillings Optimally located to     department capture southern US market

16 LÜBECK KEY FACTS 7 573m 2 21 383m 2 Property size Production area 121 63% Employees Capacity utilisation 12 000t 5 Production volume Formulation units: in 2015/16 3 solid, 2 liquid

17 WOLFENBÜTTEL KEY FACTS 21 750m 2 10 750m 2 Property size Production area 150 51% Employees Capacity utilisation 32 000t 6 Production volume Formulation units: in 2015/16 2 solid, 4 liquid

18 SCHÖNEBECK KEY FACTS 150 000m 2 15 000m 2 Property size Production area 256 62% Employees Capacity utilisation 33 000t 173m 3 Production volume Reactor volume in 2015/16 (synthesis) 7 4 Formulation units: Synthesis plants, including 1 pilot plant 3 solid, 4 liquid

19 BAAR-EBENHAUSSEN KEY FACTS 35 000m 2 21 400m 2 Property size Production area 126 38% Employees Capacity utilisation 11 000t 11 Production volume Formulation units: in 2015/16 10 solid, 1 liquid

20 ENNIS, TEXAS KEY FACTS 169 036m 2 52 405m 2 Property size Production area 213 27 870m 2 Employees Distribution warehouse 77 000t 71% Production volume Capacity utilisation in 2015/16 26 Formulation units: 13 solid, 13 liquid

21 LEADERSHIP TEAM Dirk Unterstenh ӧ fer Alfred Ludorf Dr. Karsten Mielke Senior Manager CEO CFO Business Development › Years in industry: 22 › Years in industry: 23 › Years in industry: 19 › Joined Schirm in ’95, re- › Joined Schirm in ’92, › Joined Schirm in ’12 joined in ’14 re-joined in ’09 › Previously Senior › Previously Head of › Previously Controller at Business Manager at Supply Chain at Lehnkering (’89 – ’92 ) CBW Chemie (’98 – ’11 ) Cheminova Germany and Head of Controlling (’13 – ’14 ) and Commericial Director at at Hellweg (’05 –’09 ) St ӓ hlerTec Germany (’09 – ’12 )

3 FINANCIAL INFORMATION

23 PURCHASE CONSIDERATION › Purchase consideration of € 110,5m (incl. cash of € 6,5m) Pu Purchase Consideration 53 544 Equity 49 390 Loan 6 516 Cash Wolfenbuttel Business (CMS) 396 Wolfenbuttel Property 670 110� 516

24 TRANSACTION CONSIDERATIONS › Imperial to retain certain warehousing and distribution operations on Sch ӧ nebeck and Wolfenbüttel sites » AECI has entered into a separate agreement to lease warehouse space » AECI retains the option to acquire the warehouse campus in Schönebeck for a maximum amount of € 9m » Entered into 25-year lease on Wolfenbüttel property ~ AECI to pay Imperial a pre-payment fee of € 3,5m › Transaction structured as a “locked - box” » Effective date of 30 June ’17 » Subject to a separate trade working capital adjustment mechanism » Trade working capital pegged at € 25m ( €21m at 1 July ’17)

25 FINANCIAL POSITION AT 30 JUNE ’17 Fixed assets 54 365 Net working capital 18 033 Cash 6 516 Other liabilities 15 125 - 63 790 Less: Loan - ICL 49 390 Net Assets per SENS 14 400 › Fixed assets include € 25m expansion capex › Other large liabilities comprise mostly pension liabilities

26 RECENT FINANCIAL PERFORMANCE JUNE YE 2015 2016 2017 Revenue 105 113 113 EBITDA 14 14 14 EBITDA% 13,5% 12,8% 12,3% › Plants largely seasonally- utilised, hence strategic capex in ’16 and ’17 › Majority of earnings typically generated January to June » Objective: create July to December season - fine chemicals and other geographies › Favourable finished goods storage contracts negotiated with Imperial › Enhanced earnings derived from the rental prepayment of € 3,5m