110805 Solazyme Investor Presentation Canaccord (Compressed)
Transcript of 110805 Solazyme Investor Presentation Canaccord (Compressed)
SAFE HARBOR SUMMARY
This presentation includes forward‐looking statements that are subject to many risksand uncertainties. These forward‐looking statements, such as our statements about ourshort‐term and long‐term growth strategies, can sometimes be identified by our use ofshort term and long term growth strategies, can sometimes be identified by our use ofterms such as "intend," "expect," "plan," "estimate," "future," "strive" and similarwords. Although we believe that the expectations reflected in our forward‐lookingstatements are reasonable, those statements involve many risks and uncertainties thatmay cause our actual results to differ from what may be expressed or implied in ourstatements. Those risks are discussed in our registration statement on Form S‐1, whichis on file with the Securities and Exchange Commission, particularly in the sectionstitled "Risk Factors" and "Management's Discussion and Analysis of Financial Conditionand Results of Operations." No forward‐looking statement is a guarantee of futureresults, and you should not place undue reliance on our forward‐looking statements,which reflect our views as of the date of this presentation We assume no obligation towhich reflect our views as of the date of this presentation. We assume no obligation toupdate any forward‐looking statement contained in this presentation, except as may berequired by law.
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WE MAKE OIL
WE CONVERT LOW COST PLANT SUGARS TO HIGH VALUE RENEWABLE OILS – FOR FUEL, FOR FOOD, FOR LIFE
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WE MAKE OIL
Limited Suitable Land for Oil Global Petroleum Demand (B barrels / year)
17%
Source: EIA
83% Carbohydrate
17% Oil
Source: FAO
Natural Oils Market Growing (M MT / year)
Carbohydrate Source: FAO
Source: FAO
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PETROLEUM PLANT OILS ANIMAL FATS
THE THREE SOURCES OF OIL TOUCH OUR LIVES DAILY
Jet Fuel
PETROLEUM$2.9 T Market
PLANT OILS$206 B Market
ANIMAL FATS$29 B Market
Paint
Jet Fuel
Dielectric Fluids
Clothing
Computer
Cosmetics
Medicine
Paint
Mattress
Detergent
LotionShampoo
Soap
Floor Tiles
CookiesButter
Cooking Oil
Ceiling Tiles
Lacquer
CandlesLubricants
Tires
Mayo
Cleaner
TV Frame
Spraypaint
Hose
Upholstery
Diesel
Boots
Pet FoodIce Cream
Adhesive
TV Frame
Engine Grease
Car Seating
Fertilizer
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SOLAZYME – A NEW SOURCE OF OIL
Jet Fuel
PETROLEUM PLANT OILS ANIMAL FATS SOLAZYME
Dielectric Fluids
Paint
Jet Fuel
Floor Tiles
Cosmetics
Medicine
Paint
Mattress
Detergent
LotionComputer
Shampoo
SoapClothing
Upholstery
Ceiling Tiles
TV Frame
HoseButter
Cooking Oil
Lacquer
CandlesLubricants
TiresCookies
Mayo
CleanerSpraypaint
Adhesive
TV Frame
Engine Grease
Car Seating
Diesel
Boots
Pet FoodIce Cream
Fertilizer
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OUR TARGET MARKETS
FUELSFUELS CHEMICALSCHEMICALS NUTRITIONALSNUTRITIONALS SKIN & PERSONAL CARESKIN & PERSONAL CARE
TAM = > $800 B TAM = > $100 B TAM = > $50 BTAM = > $600 B
Target Markets > $1.5 trillion
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g $
BREAKTHROUGH BIOTECHNOLOGY PLATFORM
FLEXIBLE INPUTFLEXIBLE INPUT MULTIPLE HIGHMULTIPLE HIGH‐‐VALUE MARKETSVALUE MARKETSFUELSFUELS
Corn and StoverCorn and StoverCorn and StoverCorn and Stover
SugarcaneSugarcaneSugarcaneSugarcane
CHEMICALSCHEMICALS
NUTRITIONALSNUTRITIONALSSwitchgrassSwitchgrassSwitchgrassSwitchgrass
MiscanthusMiscanthusMiscanthusMiscanthus
Waste StreamsWaste StreamsWaste StreamsWaste Streams
Forest ResidueForest ResidueForest ResidueForest Residue
SKIN & PERSONAL CARESKIN & PERSONAL CARE
HIGHLY PRODUCTIVE MICROALGAEHIGHLY PRODUCTIVE MICROALGAE OIL DESIGNED TO SPECIFICATIONOIL DESIGNED TO SPECIFICATION
> 80% oil**The average wild algae only has a 5‐10% oil content
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TAILORING OILS TO ENHANCE VALUE AND MEET CUSTOMER NEEDS
CHAIN LENGTH CONTROL Chain Length Engineering(C10 – C14)
Saturation Engineering
SATURATION LEVELt o
f Total
Percen
t
FUNCTIONAL GROUPS
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PROVEN TECHNOLOGY ENABLES SIGNIFICANT MARGIN OPPORTUNITIES
TargetTarget Gross
Margins
60‐80% 40‐70% 30‐60% 30‐60%
$2,500 – $20,000 / MT
$20,000 – $4 M / MT
$1,000 – $2,300 / MT
$1,800 – $5,000 / MT
Legend:
<$1,000 / MT (1)
FUELSFUELS
<$1,000 / MT
CHEMICALSCHEMICALS
$1,000 – $2,000 / MT
NUTRITIONALSNUTRITIONALS
$1,000 – ~$1 M /MT (2)
SKIN & PERSONAL CARESKIN & PERSONAL CARE
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Average Selling PriceCost of Production(1) Production cost over time based on built‐for‐ purpose commercial manufacturing facility utilizing sugarcane feedstock(2) The ~$1 million / MT production cost and $4 million / MT ASP is for Alguronic Acid®
LOW COST PRODUCTION PROVEN AT SCALE
Lab5‐15 liter
S S F i
Commercial*128,000 liter
S San Francisco
Pilot Plant600‐1,000 literS San Francisco Commercial
75,000 literPennsylvania and CaliforniaIn operation since 2007
Demonstration20,000 liter
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128,000 literPeoria, Illinois
*Acquired May 2011
DEMONSTRATION AND COMMERCIAL FACILITY TODAY
Solazyme PeoriaSolazyme PeoriaSite acquisition March 2011
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VALUE CHAIN
DOWNSTREAM, DISTRIBUTIONDOWNSTREAM, DISTRIBUTIONMANUFACTURINGMANUFACTURINGUPSTREAMUPSTREAM
FERMENTATIONFERMENTATION BRANDING CONSUMPTIONBRANDING CONSUMPTIONFEEDSTOCKFEEDSTOCK
FUELS & CHEMICALSFUELS & CHEMICALS
FERMENTATIONFERMENTATION BRANDING, CONSUMPTIONBRANDING, CONSUMPTIONFEEDSTOCKFEEDSTOCK
FUELS
NUTRITIONALSNUTRITIONALS
CHEMICALS...and others
SKIN AND PERSONAL CARESKIN AND PERSONAL CARE
Commodity‐Based Contracts
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COMPELLING SITE SPECIFIC VALUE PROPOSITION
Multiple Tailored Oils(~100K MT of oil)
T t ASP
One Modular Facility(Capex ~$90‐110 M)
FUELS & CHEMICALSFUELS & CHEMICALSOne Feed Stream(~300K MT of sugars)
Target ASPs$1k–5k/MT
SugarcaneSugarcaneSugarcaneSugarcane
Target ASPs$2.5k‐20k/MTPartner‐Owned Mill
Corn and StoverCorn and StoverCorn and StoverCorn and Stover NUTRITIONALSNUTRITIONALS
Low switching costsSKIN & PERSONAL CARESKIN & PERSONAL CARE
Target ASPs$20k‐4m/MT
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SOLAZYME ROQUETTE NUTRITIONALS
Feedstock supply
Technology Know‐how
Feedstock supply Working capital Global distribution 100% capex for commercial plant (>50k MT)
/50/50 JOINT VENTURE
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BUNGE SOLAZYME JV FRAMEWORK AGREEMENT
Key PointsKey Points
• 100,000 MT (30M gallons) renewable oil production facility
• Located at a Bunge sugar cane mill in Brazil
• Equity funded by both parties
• Value sharing mechanism provides SZYM compensation for technology contributions
• Commercial engineering and permitting begins immediately
• Ground breaking in first half of 2012
• Plant start‐up projected for 2013 cane harvest
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FUELS COMMERCIALIZATION FUELSFUELS
TAM = > $800 B
Shipping large quantities thatmeet fuel standardsShipping large quantities… …that meet fuel standards…
CURRENT FUELS PARTNERSCURRENT FUELS PARTNERS
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FUELS – ALREADY TESTED
Solazyme’s 100% algal‐derived hydrotreated renewable jet fuel (HRJ‐5)
Solazyme’s 100% algal‐derived hydrotreated renewable diesel (HRF‐76)(HRJ‐5) (HRF‐76)
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BARREL OF OIL
Average Value: $200‐600/barrelAverage Value: $200‐600/barrel
SOLAZYME OIL
Average Value: $90‐110/barrelAverage Value: $90‐110/barrel
PETROLEUM
>80% =
Plasticizers
Lubricants
Jet
VALU
EVA
LUE Tailored Oil
Diesel
Diesel Sweetener
Gasoline
Heating Oil
Tar
Asphalt
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CHEMICALS COMMERCIALIZATION CHEMICALSCHEMICALS
TAM = > $600 B
SOAPS, SURFACTANTS AND DETERGENTS
EXAMPLE OILSEXAMPLE OILS MARKETSMARKETS PARTNERSPARTNERS
Oil Size ASP ($/MT)
Linseed* $ 2 B $3,100
PAINTS, COATINGS AND PLASTICIZERS
Palm Kernel $11 B $1,765
Coconut $ 7 B $1,803
S fl $18 B $1 700
FUNCTIONAL FLUIDS DIELECTRICS
Sunflower $18 B $1,700
SOLAZYME’S VALUE PROPOSITIONI d i ld FUNCTIONAL FLUIDS – DIELECTRICS,
LUBRICANTS, AND HYDRAULICS Increased yield
Improved product performance
Improved stability
20 * Advanced drying oil
TAILORED OILS VALUE PROPOSITION: PKO CHEMICALSCHEMICALS
TAM = > $600 B
Tailored Oil Case Study: Palm Kernel Oil
PKO is used in soaps, detergents and food
Palm Kernel Oil Solazyme’s Oil (PKO+)
Low Value Solazyme’s technology can produce oils with 25‐50% more desired fatty acids
Solazyme’sTailored Oil Technology
Low ValueFatty Acids
Market Size of $11 B
Low ValueFatty Acids
Technology
55%High ValueFatty Acids
(Lauric & Myristic))
80%High ValueFatty Acids
(Lauric & Myristic)
Price PKO = $1,765/MT Est. Price PKO+ = $2,382/MT
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NUTRITIONALS COMMERCIALIZATION NUTRITIONALSNUTRITIONALS
TAM = > $100 B
Native and refined algal oils
Composition of first product similar to olive oil
Natural algal flours and powdersg f p
Can replace eggs, butter and oil
Golden Chlorella
i h i d hi h il i l
Tailored nutritional oils
Designer oils for improved functionality
High protein and high oil nutraceuticals
FUNCTIONAL AND HEALTH BENEFITS
No trans fatf
Longer shelf lifef l h
esigner oils for improved functionality
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Lower saturated fat Specific melting characteristics
SKIN & PERSONAL CARE COMMERCIALIZATION SKIN & SKIN & PERSONAL CAREPERSONAL CARE
TAM = > $50 B
Highlights
$3.6 million in sales in less than four months
ALGURONIC ACID®
U.S. & European DistributionSold in 850 Sephora storesSpring & Summer launches SOLD OUT on QVC
CanadaSold in all 26 Sephora Canada storesJuly 5th launch on The Shopping Channel
U i d Ki dUnited KingdomSold in 60+ Space NK storesJuly 28th launch
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1H 2011 FINANCIAL HIGHLIGHTS
Revenue $15 1MRevenue
Product revenue
Research and Development programs
$15.1M
$3.6M
$11.5M
Non‐GAAP Operating Expenses
Non‐GAAP Net Loss
($24.3M)
($15.6M)
Capital Expenditures
Ending Cash and Investments
($10.1M)
$266M
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MANUFACTURING PLAN TO SUPPORT >$1 BILLION IN REVENUE
Solazyme Peoria and contract manufacturing meet near‐term needs
Plan to >550,000 metric tons of tailored oil capacity
C t bi di fft k d l d 2015 it Current non‐binding offtakes exceed planned 2015 capacity
2013 Fuels & Chemicals facility estimated cost $90‐110 million
NUTRITIONALSNUTRITIONALSFUELS & CHEMICALSFUELS & CHEMICALS
500,000Phase 3
300,000
,
55,300 55,300
Phase 1Phase 2
1,300 2,600
100,0005,300 10,300
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(in Metric Tons)
COMPLETED
BUILDING VALUE
• Commenced retrofit of Peoria facility
E d d Al i
20132H 2011COMPLETED
• Integrated DOE biorefinery online
B k d 100K MT f ili
• Commence production at Peoria
Al i ™ li i
• 100K MT facility for Fuels and Chemicals completed
B k d Ph III
2012
• Expanded Algenist distribution channels
• Produced over 283K liters of in‐spec fuel for U.S. Navy
• Break ground 100K MT facility
• Phase II facility for SRN
• Second skin care line
Produce additional 283K liters
• Algenist™ line extensions
• Phase I facility for SRN
• Rapid prototyping of new tailored oils
• Break ground on Phase III facility for SRN
• Break ground on additional capacity for tailored oilsNavy
• Secured Phase II DoD funding for additional 283K liters of in‐spec fuel
• Produce additional 283K liters of in‐spec fuel for U.S. Navy
• Rapid prototyping of new tailored oils
• Brazil R&D lab operational
• Additional feedstock/mfg partnership
tailored oils
• Rapid prototyping of new tailored oils
• Additional feedstock/mfg • Expanded
commercialization management team
• Initiated additional fuel demonstration
• Binding offtakes
• Algalin Flour product launch for SRN
• Additional feedstock/mfg
• Expansion of downstream partnerships
partnerships
• Expansion of downstream partnerships
• Positive EBITDA by FYEdemonstration / g
partnerships
• Expansion of downstream partnerships
• Positive EBITDA for Skin and
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• Positive EBITDA for Skin and Personal Care by FYE
INVESTMENT HIGHLIGHTS
Large Market Opportunity
PETROLEUM$2.9 T Market
Products on Shelves Today
PLANT OILS$206 B Market
ANIMAL FATS$29 B Market
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THANK YOU
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