2017 Annual Meeting Fiscal year 2016 in review

Transcription

1 2017 Annual Meeting Fiscal year 2016 in review

2 FORWARD-LOOKING STATEMENTS AND DISCLAIMER This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such statements are made in good faith by Southwest Iowa Renewable Energy, LLC ( SIRE, us or we ) and are identified by including terms such as may, will, should, expects, anticipates, estimates, plans, or similar language. In connection with these safe-harbor provisions, SIRE has identified in its annual report on Form 10-K, and in its other filings with the SEC, important factors that could cause actual results to differ materially from those contained in any forwardlooking statement made by or on behalf of SIRE, including, without limitation, the risk and nature of our business and the effects of general economic conditions on us. We may experience significant fluctuations in future operating results due to a number of economic conditions, including, but not limited to, competition in the ethanol industry, commodity market risks, financial market risks, counter-party risks, and risks associated with changes to federal policy or regulation. The cautionary statements and risk factors in this disclaimer and our Form 10-K expressly qualify all of SIRE s forward-looking statements in this presentation. The forward-looking statements contained in this presentation are included in the safe harbor protection provided by Section 27A of the Securities Act of SIRE further cautions that such factors are not exhaustive or exclusive. SIRE does not undertake to update any forward-looking statement which may be made from time to time by or on behalf of SIRE unless an update is required by applicable securities laws.

3 Focus for 2016 Return to Shareholders Operate Safely Operate Profitably Diversification Manage Risk Low Cost Ethanol Producer Energy Precondensor Yield Precondensor and an additional Fermentor Plan for 2016 thru 2020

4 Total Days Without a Lost Time Day Accident 2663 Days

5 $60.00 Net Income In Millions $ $50.00 $48.61 $40.00 $30.00 $20.00 $10.00 $13.76 $5.09 $5.63 $- FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16

6 EBITDA In Millions $ $80.00 $70.00 $66.79 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $27.29 $18.27 $8.92 $- FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16

7 Ethanol Production In Millions of Gallons FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16

8 $ $ $ $80.00 $60.00 $ Bank and Subdebt In Millions $ $56.71 Subdebt Bank Debt $40.00 $20.00 $30.89 $27.36 $16.50 $- 9/30/13 9/30/14 9/30/15 9/30/16 12/31/16

9 Costs In Dollars per gallon $0.70 Depreciation Interest $0.60 Operations $0.50 $0.40 $0.30 $0.20 $0.10 $- 9/30/13 9/30/14 9/30/15 9/30/16 12/31/16

10 Book Value per Share Per Unit $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $8,157 $7,570 $7,602 $7,734 $3,165 9/30/13 9/30/14 9/30/15 9/30/16 12/31/16

11 TRADES Number of Shares Price Per Share 11/9/ $5,200 11/3/ $5,200 11/3/ $5,200 10/11/ $5,200 10/3/ $5,200 9/26/ $5,200 9/22/ $5,200 7/5/ $5,400 5/6/ $5,400 4/4/ $5,400 2/16/ $5,600

12 OUR NEW GUARD SHACK

13 OUR NEW FERMENTER

14 Fiscal Year 2016 SIRE bought 42.9MM bushels of corn Cost of corn bought - $156.0MM ($3.64 / bu) SIRE sold 122.0MM gallons of ethanol SIRE sold 353,285 tons of DG

15 $4.30 $4.10 $3.90 $3.70 $3.50 $3.30 $3.10 $2.90 $2.70 $2.50 Flat Price Corn $- $(0.10) $(0.20) $(0.30) $(0.40) $(0.50) $(0.60) Spot Corn Basis

16 DDG Price & Relationship to Corn $ $ $ $ $ $90.00 $70.00 $ % 170% 150% 130% 110% 90% 70% 50% Spot DDG Value to Corn

17 $1.90 $1.70 $1.50 $1.30 $1.10 $0.90 $0.70 $0.50 $0.30 $0.10 SIRE Margin & FOB Ethanol Values SIRE Margins FOB Ethanol Values

18 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Corn, Oil & Ethanol Prices Corn/bu Crude Oil/gal SIRE Ethanol/gal

19 Financial Summary January 2017

20 Operational Information FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16 Gallons Sold (millions) Average Price/Gallon $2.07 $1.53 $1.42 $1.45 Bushels Ground (millions) Net Cost of Corn Ground $189.4 $155.6 $151.3 $33.3 Yield (Ethanol/Bushel)

21 Financial Highlights (millions, except per gallon) FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16 Revenue $319.4 $242.1 $223.3 $52.1 Cost of Corn $189.4 $155.6 $151.3 $33.3 Crush Margin / Gallon $1.13 $0.71 $0.56 $0.74 EBITDA $66.8 $27.3 $18.3 $8.9 Net Income $48.6 $13.8 $5.1 $5.6

22 Financial Highlights (millions ) FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16 Bank Debt $30.0 $30.9 $27.4 $16.5 Bank Debt/Gallon Bank Debt- Repayment Subdebt Payments Interest Payments $0.24 $0.25 $0.22 $0.14 $38.8 $(0.9) $3.5 $10.9 $22.7 $26.7 N/A N/A $4.4 $1.9 $1.3 $0.3

23 Financial Highlights Calendar 12/31/14 (millions ) Calendar 12/31/15 Calendar 12/31/16 2/1/17 Cumulative To Date Distributions N/A $13.3 $3.3 $4.5 $22.2 Taxable Income (Loss) Tax Loss Carryforward Tax Benefit of Tax Loss 35% Tax Benefit of Tax Loss Carryforward per Unit $59.2 $9.9 $18.2 N/A ($45.9) $74.0 $64.1 $45.9 N/A N/A $25.9 $22.4 $16.1 N/A N/A $3,499 $1,945 $1,683 $1,206 N/A

24 $25.00 $20.00 $15.00 $10.00 Quarterly Crush Margin In Millions $ $22.2 $16.6 $16.0 $13.0 $16.3 $22.7 $21.2 $5.00 $- 6/30/15 9/30/15 12/31/15 3/31/16 6/30/16 9/30/16 12/31/16

25 Liquidity In Millions $ 40 $ $31.1 $32.1 $ /30/14 9/30/15 9/30/16 12/31/16

26 Ethanol Yield (gallons/bushel) FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16

27 DDG Equivalent Production In Tons (000 s) FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16

28 Corn Oil Production In millions of pounds Thousands FYE 9/30/14 FYE 9/30/15 FYE 9/30/16 QE 12/31/16 8.0

29 SIRE MECHANDISING TEAM Kristan Barta, Commercial Manager Morgan Sladek, Commercial Trainee Dustin Ploeger, Senior Merchandiser

30 2017 CORN REVIEW Acres Yield Usage Stocks Local Markets

31 Planted Acres (millions)

32 Yield (bushels per acre)

33 18,000 Total Supply (millions) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

34 8,000 Total Usage (millions) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Food, Alcohol & Industrial Feed & Residual Exports

35 45% Corn Acres to Ethanol Production 40% 35% 30% 25% 20% 15% 10% 5% 0%

36 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 Stocks to Use and Corn Price Stock/Use (%), 15.9% Avg Farm Price ($/Bu), $ % 20% 15% 10% 5% 0% STOCKS TO USE Assumes billion bushels production / billion usage Carryout of 2.32 billion bushels

37 SIRE CORN Million Bushels to Buy Flat Price, Deferred pricing, Basis contracts, HTA s, Alliance Advantage, On Farm Pick-Up. Enogen / EGQS Program Competitive market for our local producers while buying the best net back for SIRE.

38 SIRE CORN 2017 Expecting largely uneventful basis moves but seasonal Selling outside of Harvest has been slow and predictable Watch for quick-ship opportunities based on logistics Local markets are anticipating producers carrying length into the summer months (similar to last year)

39 SIRE STRENGTHS Our greatest strength in corn merchandising comes from our shareholder base we value your business!!!

40 SIRE CO-PRODUCTS 2016 Calendar Year Sales -209,968 tons DDG s by truck -57,386 tons DDG s by rail -128,931 tons Wet Feed -16,776 tons Corn Oil LOCAL BUSINESSES DEPEND ON OUR CO-PRODUCTS

41 Focus for 2017 Operate Safely Operate Profitably Manage Risk Plan for 2017 thru 2020 Questions? Operate Plant at High Volume When Margins Allow Continue Retiring Debt Quickly

42 THANK YOU!