Second Quarter 2021 Earnings Presentation August 16, 2021
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The assumptions and estimates underlying such financial information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive, and other risks and uncertainties. See “Forward-Looking Statements” above. Actual results may differ materially from the results contemplated by the financial forecast information contained in this Presentation, and the inclusion of such information in this Presentation should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved.. FINANCIAL INFORMATION; NON-GAAP FINANCIAL MEASURES Some of the financial information and data contained in this Presentation, such as Adjusted EBITDA, Adjusted EBITDAR and Adjusted Gross Profit has not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes. A reconciliation of these non-GAAP financial measures to the closest GAAP measure is included in the Appendix to the Presentation. You should review the Company’s audited financial statements prepared in accordance with GAAP, which are included in its Annual Report on Form 10-K/A filed with the SEC. TRADEMARKS This Presentation contained trademarks, service marks, trade names, and copyrights of, the Company, and other companies, which are the property of their respective owners. The information contained herein is as of August 16, 2021, and does not reflect any subsequent events.
Business Highlights Business Highlights Closed acquisition of Novomer, a bioplastics innovator Acquisition advances our mission of reducing plastic waste Improves cost structure Increases production capacity Allows for quicker penetration of addressable market Helped launch the U.S. Plastics Pact’s Roadmap to 2025 Completed debottlenecking initiatives at Kentucky Phase I facility Kentucky Phase II capacity on track for expected completion by Q2 2022 Ordered long lead time items for Georgia Greenfield construction
Blue Chip Customers Select Danimer to Help Fulfill their ESG Commitments 4
Novomer Acquisition Highly Aligned With Long-Term Growth Strategy Transaction Overview Strategic Rationale & Expected Benefits Improves Cost Structure: Substantially reduces CapEx / Ib and production costs. Novomer’s thermocatalytic conversion process is 10x faster than fermentation, offers production simplicity (fewer processing steps), and uses less energy than Danimer’s historical processes. Overall expected ROIC >35% Increases Production Capacity: Danimer will aim to blend an average of 30% RinnovoTM as an input into its resins, freeing up Nodax® for use across a greater volume of finished product pounds Quicker Penetration of Addressable Market: By incorporating RinnovoTM into customer solutions, Danimer expects to have greater flexibility to meet an even broader range of customer needs Announced ~$152 million cash transaction in July 2021; Closed in August 2021 Leverages its proprietary thermocatalytic conversion process to develop high-performing, carbon-efficient, cost-effective polymers and chemicals, including p(3HP), a type of PHA, under its brand name, RinnovoTM Extensive intellectual property portfolio with more than 240 patents and patents pending Transaction expected to meaningfully reduce Danimer’s planned capital expenditures on a per-pound basis while increasing the anticipated overall volume of finished product it will be able to deliver
Nodax® RinnovoTM Key Operating Parameters & Characteristics Bio-based Fermentation production Broad range of properties Good barrier properties Good heat resistance Biodegradability Application Examples Films Fibers Thermoformed sheet Injection molding Paper coatings Key Operating Parameters & Characteristics Bio- or petro-based Catalytic production Narrower range of properties Strong barrier properties Moderate heat resistance Biodegradability Application Examples Barrier Films Fibers Pre-cursor to superabsorbent polymers Nodax® & RinnovoTM Characteristics and Application Examples
Standalone Sales Kentucky Extrusion Expansion Plan Comparison 1 Old Plan: Module 1 estimated completion in 2023; module II estimated completion in 2024. 2 New Plan: Greenfield estimated to come online in mid-2023; Initial RinnovoTM plant estimated completion by early 2024. 3 New engineering estimate at +/- 25% replaces old estimate of $700 million +/- 30%. 4 Estimate range based on the use of nonrenewable feedstocks at the RinnovoTM plant. New Plan(2) Old Plan(1) GA Greenfield GA Greenfield 3 Fermenters DSP I Extrusion I 3 Fermenters DSP II 3 Fermenters DSP I Extrusion I & II RinnovoTM Plant ~$375mm(3) ~$826mm(3) ~$100 – 180mm(4) ~$118mm(3) Module I Module II Extrusion II
Novomer Deal Dynamics to Accelerate Production and Reduce Costs Return Metric Danimer Standalone Greenfield Danimer / Novomer Facility Network Finished Product Capacity (Ibs) 315mm ~390mm(1) Growth Capex $826mm +/- 25% $600mm – $700mm(2) ROIC ~25%(3) >35% Attractive Deal Dynamics (2025E) 1 Based on expected customer mix; includes approximately 60mm pounds inclusive of neat RinnovoTM. 2 Based on the utilization of nonrenewable feedstocks at RinnovoTM plant. 3 Previously communicated ~30% ROIC based on prior standalone greenfield estimate of $700 million +/- 30%.
Kentucky Phase II Expansion: Fermentation Chiller Building Update Greenfield Part 2 Nameplate capacity 125MM lbs.(1) 5 6 7 8 9 10 Kentucky Phase II Fermentation Chiller Building Kentucky Phase II Fermentation Chiller Building Pre Construction (December 2020) Construction Progress (August 2021) Kentucky Phase II: Nameplate capacity of 45MM lbs of finished product expected to be completed in Q2 2022
Kentucky Phase II Expansion: Downstream Processing Facility Update 9 10 Kentucky Phase II Downstream Processing Kentucky Phase II: Nameplate capacity of 45MM lbs of finished product expected to be completed in Q2 2022 Pre Construction (December 2020) Construction Progress (August 2021) Kentucky Phase II Downstream Processing
Kentucky Phase II Expansion: Extrusion Facility Update 5 6 7 8 9 10 Kentucky Phase II Extrusion Facility Pre Construction (December 2020) Construction Progress (August 2021) Kentucky Phase II Extrusion Facility Kentucky Phase II: Nameplate capacity of 45MM lbs of finished product expected to be completed in Q2 2022
Q2 2021 Financial Summary PHA increased to 29% of revenue vs 7% in Q2 2020 Completed warrant redemption in June, simplifying capital structure Costs influenced by: Elevated fixed-cost absorption at our Kentucky Facility as we scale up production Investments in headcount and salaries to support future expansion plans Public company costs Key Messages Financial Summary Notes: 1 - Adj. Gross Profit, Adj. EBITDAR and Adj. EBITDA are non-GAAP financial measures. See Appendix for reconciliations to nearest GAAP measure. 2 - Totals may not foot due to rounding.
Modeling Assumptions for 2021 Volumes: Phase I production at ~50% of nameplate capacity at the beginning of the year, expected to scale to 100% by year end Phase I turnaround completed in 2Q’21 to debottleneck and accelerate scale-up Phase II production expected to commence in 2Q’22 Operating Costs: Total SG&A and R&D costs expected to be $31mm for the year, including the post-acquisition period for the Novomer acquisition, and excluding D&A, stock-based compensation, and one-time items Year-over-year increase due to acceleration of investments in headcount and research & development to support our rapid long-term expansion Cash Taxes: Zero cash taxes Capital Expenditures: Expected to be $125 million to $150 million, inclusive of investments in Novomer for the post-acquisition period
Danimer is a Next Generation Bioplastics Company ` Experienced Leadership Team and Board of Directors with Proven Track Record 6 Significant Tailwinds From Increased Corporate and Legislative Initiatives on Environmental Impact of Global Pollution Crisis 2 Highly Attractive PHA Technology Serves as a Best End-of-Life Solution for Plastics 1 Rapidly Growing Blue Chip Customer Base Driving Demand in Excess of Current Capacity 5 Leading PHA Innovator with Patent Protected Technology and 14 Years of Production Know-How 3 Strong Partnerships with CPG Brands, Including Pepsi and Nestle, and Key Converters such as Wincup and Genpak 4
Appendix
EBITDA and EBITDAR Reconciliation Note: 1 - Totals may not foot due to rounding.
Adjusted Gross Profit Reconciliation Note: 1 - Totals may not foot due to rounding.