Ceres Inc. · TSE:3696
Ceres — IPO Roadshow (February 2014)
43 slides from Ceres's IPO roadshow presentation, Feb 26, 2014
Slide 1: Investor Presentation – Ceres, Inc.
Click to edit Master title style Click to edit Master subtitle style Investor Presentation Ceres, Inc. Nasdaq : CERE Issuer Free Writing Prospectus Filed Pursuant to Rule 433 Registration No. 333 - 193556 February 26, 2014
Slide 2: Forward-looking statements
This presentation contains forward - looking statements. All statements, other than statements of historical facts contained in this presentation, including statements regarding our efforts to develop and commercialize our products, anticipated yields and product performance, status of crop planting
Slide 3: The Offering
The Offering ISSUER NAME Ceres, Inc. LISTING CERE / NASDAQ OFFERING SIZE $20MM Gross Proceeds OVER - ALLOTMENT 15% USE OF PROCEEDS General Corporate Purposes, including Working Capital UNDERWRITER Aegis Capital Corp FINANCIAL ADVISOR Trout Capital LLC 3
Slide 4: Richard Hamilton, President and CEO
Click to edit Master title style Click to edit Master subtitle style Richard Hamilton President and CEO
Slide 5: Attractive Business Model with Multiple Revenue Streams
Attractive Business Model with Multiple Revenue Streams Market Opportunities Product Development Pipeline Technology Licensing Milestones and Financial Summary 5
Slide 6: An Ag Biotech & Seed Company
6 An Ag Biotech & Seed Company ▪ Core Technology Platforms − Traits and Marker - Assisted Breeding − Significant Historical Investments ▪ Forward Integration − Complete Seed Company Capabilities ▪ Initial Focus on Brazil & Sorghum – Products on Market – Industrial Performance Confirmed – Early Stage
Slide 7: Global Seed Market
Global Seed Market 1 Billions USD 0 5 10 15 20 25 30 35 40 7 Why Seeds? Food, Feed, Fiber and Fuel ▪ “Capital Light” Industry ▪ Technology Driven ▪ IP Intensive & High Barriers to Entry ▪ High Margins ▪ Upstream in Value Chain ▪ Priced to Value 1 Public reports and Ceres analysis CAGR 8%
Slide 8: We Are Pursuing Large & Growing Global Agriculture Markets
8 We Are Pursuing Large & Growing Global Agriculture Markets Ethanol Biomass Sucrose Biomass - to - Biofuels Large Strategic Players Pushing Forward ~19 Million Hectares 4 Sucrose Sucrose - Producing Sweet Sorghum 5 Has Global Potential ~25 Million Hectares 6 Brazil Ethanol Extender Sweet Sorghum ~
Slide 9: Market Opportunities
Attractive Business Model with Multiple Revenue Streams Market Opportunities Product Development Pipeline Technology Licensing Milestones and Financial Summary 9
Slide 10: Gasoline is the Alternative Fuel in Brazil
Gasoline is the Alternative Fuel in Brazil ~ $18 Billion Ethanol Market 1,2 10 Brazil - Light Duty Vehicle Fleet (2012 – 2022E) 1 ▪ At the Pump: E25 or E100 ▪ The National Fleet of Light Vehicles is Growing at a Rate of 5.9% per Year 1 ▪ Flex Fuel Vehicles Dominate New Car Sales ▪ Domestic Demand fo
Slide 11: Ethanol is Made from Sugarcane in Brazil
Ethanol is Made from Sugarcane in Brazil Sugarcane is Not Harvested Year - Round 11 1 Conab , Cana - De - Açúcar – Safra 2013/2014, August 2013 2 USDA Global Agricultural Information Network Report, Sept 2013 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sugarcane Harvest Renewal Area Cane
Slide 12: Sweet Sorghum Complements Sugarcane
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sorghum Harvest Sweet Sorghum C omplements Sugarcane Extends Season + More Cane Available at Peak Quality 12 Sorghum Planting Sugarcane Harvest 0 1,000 2,000 3,000 4,000 5,000 6,000 Sweet Sorghum Sugarcane Production Costs – São Paulo 2 R $ Per
Slide 13: Sweet Sorghum Proven in Existing Industrial Processes and Infrastructure
Sweet Sorghum Proven in Existing Industrial Processes and Infrastructure 13
Slide 14: Attractive Ethanol Extension Opportunity
Attractive Ethanol Extension Opportunity Grower Opportunity Illustrative Mill Opportunity Illustrative Ceres Opportunity ▪ ~ 1,000 Hectares of Sweet Sorghum Needed per Week of Supply 2 ▪ ~ US$100 per Hectare Seed Price 14 ▪ High Value Crop to Grow on Rotational Acres ▪ Low Cost, Rapid Growth 1 Assum
Slide 15: Focused Distribution Strategy
Focused Distribution Strategy 15 Customer Base Comparison ~40% of U.S Corn Production = ~44,000 Top Farmers 1 ~40% of Brazilian C rush Capacity = ~ Top 20 Mill Groups 1 1 Source: USDA , Anuario Da Cana 2013 - Brazil Sugar and Ethanol Guide. ▪ Product Pricing Established ▪ Attractive Yields at Pilot
Slide 16: Historical Sweet Sorghum Yield Range
0 1000 2000 3000 4000 5000 6000 2011 2012 2013 Current Mill Evaluations Key Objectives for the 2014 Harvest Year 16 ▪ Yields Have Consistently Improved − Mills Doubled Yields in 2013 Compared to 2012 Historical Sweet Sorghum Yield Range Calculated Liters of Ethanol Per Hectare 1 Yield results based
Slide 17: Key Objectives for the 2014 Harvest Year
0 1000 2000 3000 4000 5000 6000 2011 2012 2013 Current Mill Evaluations Key Objectives for the 2014 Harvest Year 17 ▪ Yields Have Consistently Improved − Mills Doubled Yields in 2013 Compared to 2012 ▪ Demonstrate Performance of New Products & Pipeline − Greater Consistency in Mill Execution and Per
Slide 18: Addressing Our Commercialization Challenges
Addressing Our Commercialization Challenges 18 ▪ Broader Field Evaluations ▪ Better Products ▪ Better Execution by Mill Drought Hybrid Adaptation Crop Management Issue Solution CERES BRAZIL ADVISORY COUNCIL Roberto Rodrigues, Chairman Former Minister of Agriculture of Brazil Industry Executives in E
Slide 19: Biomass in Brazil Offseason Source of Power
Biomass in Brazil Offseason Source of Power ▪ Biomass is a Common Source of Thermal Power in Brazil − High Natural Gas Prices & Limited C oal R eserves ▪ Market Opportunity for Sorghum Biomass − Ethanol Mills that Sell Power to Grid − Agribusiness Companies (e.g., Juice E xtractors, Meat Processors)
Slide 20: Sucrose from Sorghum – Global Sucrose Market
▪ Sucrose from Sorghum – Crystalized at Pilot Scale – Blended at Industrial Scale – High Sucrose Hybrids in Advanced Hybrid Testing 2 ▪ Advantages Over Sugarcane – Lower Costs – Fast Scale - Up – Broad Adaptation – Shorter Breeding Cycles Global Sucrose Market 25 Million Hectares of Sugarcane 1 20 1
Slide 21: Global Biomass to Biofuels
21 Global Biomass to Biofuels: First Commercial Biorefineries Coming Online Ceres Energy Crop Products Provide Greater Scale and Superior Economics Large - Scale Deployment Will Require Billions of Tons of Biomass 1 1 U.S. DOE Billion Ton Update Report (August 2011)
Slide 22: Product Development Pipeline
Attractive Business Model with Multiple Revenue Streams Market Opportunities Product Development Pipeline Technology Licensing Milestones and Financial Summary 22
Slide 23: Plant Breeding Increases Yield
23 Plant Breeding Increases Yield Open - Pollinated Double Cross Biotech Single - Cross Hybrids Bushels/Acre Crop Productivity Average U.S. Corn Yields 1 Energy Sorghums Today Headroom for Innovation Yield Potential Has Been Demonstrated Sorghum Hybrid Under Development Commercial Sorghum Hybrid 1 S
Slide 24: Continuous Improvement from Ceres Product Pipeline
24 Continuous Improvement from Ceres Product Pipeline First Commercial Products 2011 Commercial Hybrids 2012 First Generation Hybrids 2010 Advanced Hybrid Trials 2013
Slide 25: Ceres Product Development Process Provides Continuous Improvement
25 Ceres Product Development Process Provides Continuous Improvement Breeding, Germplasm Development & Trait Introgression Advanced Hybrid Testing Elite Hybrid Testing Pre - Commercial Hybrid Testing Commercial Launch Hybrids in Our Pipeline Have Demonstrated Economically Compelling Yields ~3 – 4 Ye
Slide 26: Germplasm and Traits Create Competitive Advantage and IP
Combination of Germplasm and Traits Creates Competitive Advantage and IP 26 Top Performing Proprietary Seed Products Patents, Plant Variety Protection and Breeder Rights Germplasm Elite Parents Hybrid Lines Breeding Traits Broad Portfolio Field Validated Biotechnology
Slide 27: Sorghum Trait Pipeline
Best event Average event Average controls Traits Discovery Phase 1 Phase 2 Phase 3 Phase 4 Two Species Greenhouse Field Deregulation Commercial Sorghum High Sugar Pest Resistance 27 Sorghum Trait Pipeline High Sugar Trait in Sorghum 1 Total Fermentable Sugars Relative to Controls 300% ▲ ▪ Positive F
Slide 28: Technology Licensing
Attractive Business Model with Multiple Revenue Streams Market Opportunities Product Development Pipeline Technology Licensing Milestones and Financial Summary 28
Slide 29: Licensing Opportunities
Licensing Opportunities Biotech Traits Well Established 1 Source : i saaa.org 29 Global Area of Biotech Crops 1 Million Hectares (1996 - 2012) Number of Hectares has Increased E very Year Ceres Innovative Biotech Trait Development System ▪ Well Validated − $137m Licensing A greement with Monsanto in
Slide 30: Ceres Field Validated Traits in Hand
30 Salt Tolerance Increased Grain Yield Ceres Field Validated Traits in Hand Large, Clear Increases Across Multiple Species Higher Biomass Drought Tolerance
Slide 31: Biotech Trait Commercialization Pipeline
Crop Discovery Phase 1 Phase 2 Phase 3 Phase 4 Two Species Greenhouse Field Deregulation Commercial Corn/Maize Ceres Gen - 1 Ceres Gen - 2 Rice Sugar B eet Sugarcane Wheat and Soybean 31 Biotech Trait Commercialization Pipeline 1 AgServe Economic Forecast, International Agriculture Outlook 2 Public
Slide 32: Proprietary Tools Like Google Earth for DNA
32 Proprietary Tools Like “ Google Earth Mapping Program” for DNA ▪ Developed to Visualize Large Volumes of Genetic Data ▪ Provides Extra Speed and Efficiency to Our Pipeline ▪ Non - Exclusively Licensed : Google Earth is a trademark of Google Inc.
Slide 33: Potential Persephone Applications Beyond Plant Science
▪ Genomic Medicine Trends – $1,000 Human Genome – Need for DNA Display Tools – Growing Use of Bioinformatics in Drug Discovery ▪ Potential Biomedical Customers – Academic Researchers – Pharma and Biotech – Clinical Geneticists 33 Potential Persephone™ Applications Beyond Plant Science New Era of Per
Slide 34: Completed and Upcoming Milestones
34 Completed and Upcoming Milestones Completed Potential Business Development Milestones ▪ Dec. 2011, Rice Traits – Out - License Collaboration ▪ July 2012 , Sugar Beet Traits – Out - License Collaboration ▪ April 2012, Persephone™ – Syngenta Extends License ▪ Persephone Software – Additional Out -
Slide 35: Experienced Management Team
Richard Hamilton, CEO Ceres chief executive and board member since 2002; CFO (1998 - 2002) Paul Kuc, CFO 17 years in seed industry in finance leadership; 12 years with Monsanto Wilfriede van Assche, General Counsel >25 years legal experience in plant biotechnology and seed industries Roger Pennell,
Slide 36: Board of Directors
Walter De Logi , Chairman Ceres co - founder; former CEO of a plant biotech firm sold in 1996 Raymond Debbane Director since 1998, The Invus Group; Chairman of W eight Watchers International Richard Flavell Ceres CSO (’98 - ’12); f ormer director of John Innes Centre. Director since 2009 Daniel Glat
Slide 37: Milestones and Financial Summary
Attractive Business Model with Multiple Revenue Streams Market Opportunities Product Development Pipeline Technology Licensing Milestones and Financial Summary 37
Slide 38: Paul Kuc, Chief Financial Officer
Click to edit Master title style Click to edit Master subtitle style Paul Kuc Chief Financial Officer
Slide 39: Cash Position
39 Cash Position Ceres Historic Overview & Future Outlook ▪ Strong Balance Sheet − No Long - Term Debt 1 ▪ “Capital Light” Business − Flexibility − Cost Reduction Targets 2 o FY14 $5m o FY15 $8 - 10m Select Balance Sheet Items November 30, 2013 3 Cash 4 $24.4m Total Assets $30.9m Working Capital $21
Slide 40: Use of Proceeds
Use of Proceeds 40 ▪ General Corporate Purposes − Including Working Capital ▪ Offering Proceeds Will Allow Us − Two Planting Cycles − New Product Introductions − Potential Out - Licensing Opportunities of Traits and Persephone ™ Long - Term Operating Metrics (Percent of Revenue) Revenue 100% Blended
Slide 41: Capitalization Table
Capitalization Table As of November 30, 2013 41 Expiration Date Weighted Average Exercise Price Shares Common Shares 25,224,269 Offering Shares 1 15,862,069 Basic Shares Outstanding 41,086,338 Outstanding Options 2 Variable $6.18 3,378,818 Outstanding Warrants Variable $20.34 2,082,045 Fully Diluted
Slide 42: Investment Summary
▪ Seed Business Dynamics ▪ Industrial - Validated Product ▪ Sustainable High Gross M argins ▪ Multiple Opportunities for Long - Term Growth 42 Investment Summary Ceres Sorghum Hybrids
Slide 43: Thank You
Click to edit Master title style Click to edit Master subtitle style Thank You investor.ceres.net