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BIO WITH BITE®
November 2018 • NASDAQ: MBIIInvestor Presentation
NASDAQ: MBIIBio With Bite®
Safe Harbor
2
This presentation contains forward-looking statements that involve substantial risks and uncertainties. All statements,other than statements of historical facts, included in this press release regarding strategy, future operations and plans,including assumptions underlying such statements, are forward-looking statements, and should not be relied upon asrepresenting the Company’s views as of any subsequent date. Such forward-looking statements are based oninformation available to the Company as of the date of this presentation and involve a number of risks anduncertainties, some beyond the Company's control, that could cause actual results to differ materially from thoseanticipated by these forward-looking statements, including any difficulty in developing, manufacturing, marketing orselling the Company’s products, any failure to maintain and further establish relationships with distributors,competition in the market for pest management products, lack of understanding of bio-based pest managementproducts by customers and growers, adverse decisions by regulatory agencies, and the impact of negative publicity andperceptions around the company’s financial restatement. Additional information that could lead to material changes inthe Company’s performance is contained in its filings with the SEC. The Company is under no obligation to, and expresslydisclaims any responsibility to, update or alter forward-looking statements contained in this presentation, whether as aresult of new information, future events or otherwise.
This presentation references product shipments, a measure used by the Company that is not defined by, or presented inaccordance with, generally accepted accounting principles ("GAAP"), to evaluate various aspects of its business. Productshipments is a non-GAAP financial measure and should be considered in addition to, not as a substitute for, productrevenues reported in accordance with GAAP. Product shipments as used in this presentation is defined as productrevenues, plus related party product revenues, plus the incremental amount of deferred revenues accrued during theapplicable period from product shipments. This calculation specifically excludes changes in deferred revenue related tolicense revenues and customer deposits, and is intended to approximate the total value of products sold and undercontract for sale in a given period. Please refer to the Company’s filings with the SEC, including its earnings releases, fora reconciliation of product shipments to product shipments and further discussion of this metric.
© 2018 Marrone Bio Innovations, Inc.
NASDAQ: MBIIBio With Bite®
About Marrone Bio Innovations
3
Marrone Bio Innovations, Inc. (NASDAQ: MBII)
Share Price1 $1.54
Market Cap1 $170.3M
Cash2 $20.5M
Debt2 $20.9M
Revenues (TTM) $18.8M
Shares Outstanding2 110.6M
Insider Holdings3 36.4%
Headquarters Davis, CA
Founded 2006
Employees (FT) 103
1) At November 9, 20182) As of September 30, 20183) Includes all direct ownership from current management and board of directors as of December 18, 2017
▪ Only pure-play public biopesticide company in this disruptive, technology-driven market
▪ 7 existing commercial products with multibillion $ addressable global markets
▪ BIO is highest growth segment of ag inputs supported by favorable long-term trends
▪ In-house production capabilities & agreements with key distributors driving commercial margin & sales improvement
▪ Focused R&D supporting existing product improvements and pipeline of new, near-term products that meet unmet market needs
▪ Valuable patent and intellectual property portfolio
▪ Experienced management team with proven track record
NASDAQ: MBIIBio With Bite®
What Are Biologicals & Why Use Them?
4
What are they?
Biologicals are microorganisms, plant extracts, pheromones, soaps, fatty acids & other natural substances are in three categories:
Biological Category
Biopesticides Biostimulants Biofertilizers
Use Crop Protection Crop Health Crop Nutrition
Regulatory EPA-Registered State Registered State Registered
New Entrants Few Many Many
MBI Products Yes (6 products) Yes (Haven®) No
NASDAQ: MBIIBio With Bite®
1) Marketsandmarketc.com 2016. Biopesticides Market by Type, Origin, Mode of Application, Formulation, & Crop Type - Global Forecast to 2022.2) Lux Research; 2015. An analysis of the biopesticide market now and where it is going.; Dunham Trimmer estimates. 3) Source: Blended numbers and CAGRs from BCC Research, marketsandmarkets, Agropages and Phillips McDougall4) Source: Agrow, Agrifutura and Phillips McDougall
▪ The current market opportunity for our 7 products exceeds $30B4
▪ The global biopesticides market is projected to reach $8.8B by 20221
▪ Biopesticides today are only 5% of the total crop protection market, representing significant room for growth2
▪ The biopesticide market is growing at a CAGR of ~17% vs. ~2.0% in the chemical pesticide market4
Rapidly Growing, Multi-Billion $ Market
5
$3.4B
$8.8B
Estimated Global Biopesticide Market1
NASDAQ: MBIIBio With Bite®
Why do Growers Use Our Products?
6
The appeal of biologicals in both conventional and organic markets:
More Effective Natural & Safe
Shorter Timeline &
Cost
Improved yields & qualityNo residues (especially important for export markets)
Faster time to market
Faster field entry = better labor management
Environmentally friendly production; Biodegradable
~4 years for biologicals vs. +11 years for chemicals
Can be used in both organic and conventional production
Safe for growers/workers to handle
EPA allows expedited process for biologicals
Minimized risk of pest resistance
Meet consumers demands
Significantly lower development cost (<$10M for biologicals vs. $280M for chemicals)
Biologicals + Chemicals = Better performance than either input alone
NASDAQ: MBIIBio With Bite®
Our Biologicals Increase Growers’ ROIs
Organic
Biopesticide rotations and tank mixes
No Residues for Export
Early sprays & last spray before harvest
Conventional
In the tank with chemicals to enhance control, reduce resistance
1 2 3
• $1,400/Acre Increase
• >9X ROI
• 1,000 lb/Acre Increase(+12%)
• >4X ROI
• ~Seven bushel/Acre Increase
• >3X ROI
• 7,000-10,000 lb/Acre Increase
• Better Grade• >5X ROI
• +35% higher yield
• +$2,000/Acre• 20X ROI
7
Very High Conversion From “On-farm Demo” to Sale
• +17% higher yield
• 5-9X ROI
Grower ROI Drives Adoption (Examples)
NASDAQ: MBIIBio With Bite®
Strong Product PortfolioFinding Solutions for Pests, Diseases and Crop Stress
8
Product What is it? Category What Does it Do?
Knotweed extract
FungicidePlant health
• Controls plant diseases and improves plant health• Strong on powdery mildew
New strain of Bacillus bacteria
FungicidePlant health
• Controls plant diseases and improves plant health• Strong on downy mildews, white and gray molds
New species of bacteria
Insecticide• Stops feeding and reproduction of a broad range
of chewing and sucking insects, mites and flies
New species of killed bacteria
Insecticide• Stops development of a broad range of chewing
and sucking insects, mites and flies
New species of killed bacteria
Nematicide• Controls broad spectrum of root-feeding
nematodes to increase yields & quality
Coconut oil extract
Crop stress reduction
• Reduces sun & water stress, increasing yields & quality
New strain of bacteria
Molluscicide• Industry’s only biological solution for invasive
zebra & quagga mussels
NASDAQ: MBIIBio With Bite®
Biostimulant (yield and stress) State registrations only
2018 Updated Pipeline
9
Nematicide
Herbicide (burndown)MBI 011
MBI 303
EPA approved
NematicideMBI 302
Nematicide
MBI 005
EPA approved
See
king P
artne
rs
Herbicide (pre- and post emergence)
MBI 304
EPA approved (needs cost reduction)
EPA approved (needs mfg partner)
EPA approved
MBI 506-8
Ennoble™
EPA package largely developed
MBI 014
Nematicide
Herbicide (burndown)
EPA approved
Pip
elin
e
Herbicide EPA Submission in Progress
Nematicide
Nematicide EPA approved
Herbicide (pre- and post emergence) EPA approved (needs cost reduction)
EPA approved (needs mfg partner)
Biofumigant EPA approved
EPA package largely developed
Ne
ar T
erm
MBI’s current R&D is primarily focused on supporting existing commercial products; however, we have a very robust pipeline of products in queue
Nematicide
Pre-Development Development Regulatory Nat’l LaunchDiscovery
Strategic Collaborations
EPA approvedRegalia+Stargus
Regalia+Azoxy Biofungicide + Chemical Pre-mix EPA package in prep
Biofungicide Pre-mix EPA package in prep
NASDAQ: MBIIBio With Bite®
Marketing & Distribution Strategy
10
North America International
Regional & National Distributor/Retailer
In process with several local/regional companies for all world regionsDistributor/Retailer
MBI has a growing number of “on-farm” demos, to create grower pull-through demand, as well as educational seminars with distributors, which creates push-
through demand.
GrowerGrower
Regional & National Distributor/Retailer
Well established partnerships throughout the U.S.
NASDAQ: MBIIBio With Bite®
▪ Bangor, MI facility purchased (2012) and retrofit for ~$15M ($10M USDA loan guarantee). Named Marrone Michigan Manufacturing (M3 or MMM)
▪ Key benefits include:
▪ Three 20,000L fermentation tanks and associated seed tanks, formulation and mixing tanks, granulation, centrifugation
▪ Rapidly scalable with demand; ample acreage for drying, packaging & warehousing. Future additions:
– Larger fermentation tanks
– Larger granulation capacity
– Add Venerate & Majestene capacity
▪ Current production at M3: Regalia, Grandevo & Zequanox
Vertically Integrating Manufacturing
11
Controlled IP1
Flexible, Faster Scale-Up
Better Margins, Cost Controls & ROI3
2
NASDAQ: MBIIBio With Bite®
Our Competitive Advantages
12
In-house Discovery & In-licensed Technology
• Internally-discovered break-through products• Can rapidly develop others’ discoveries • Add our IP to in-licensed technology
Unique And Broad Screening Process
• We source, isolate and process our microbes differently• 18,000+ screened microorganisms• 350+ plant extracts• Tested against the broadest range of targets
Natural Product Chemistry Advantage
• Identify and patent natural compounds produced by our microbes• Proprietary analytics for higher efficacy, broader spectrum and
consistency• Understand mode of action• Stronger IP
Rapid Development &
Commercialization
• Targeted launch with key large growers• Highly bio-specialized R&D and commercial teams• Commercialized multiple products in record time
Formulation, Fermentation & Manufacturing
Expertise
• Formulation and fermentation expertise = performance > chemicals• Early elimination of strains that won’t scale • Process optimization capabilities can yield attractive prices/margins
1
2
3
4
5
MBI has developed & commercialized 7 New Active Ingredients in 11 years
NASDAQ: MBIIBio With Bite®
Our patent portfolio currently includes 400+ issued & pending patents (U.S. & foreign)
Strong Patent Portfolio
13
177 Pending Patents
(31 U.S. & 146
foreign)
234 Issued
Patents (35 U.S. & 199
foreign)
• Novel strains and species • Pesticidal cDNA products• Specific uses for pest management
Microorganisms
• Individual compounds produced by the microorganism & their use for pest management
• Novel mixtures of compounds • Fermented and synthetic versions
NaturalProduct
Chemistry
• With other biological & chemical pesticidesMixtures
• Granules, liquids, powders, etc. of the microorganisms & its compoundsFormulations
• Addition of new uses such as seed & soil treatment & more pests
New Uses, New Pests
NASDAQ: MBIIBio With Bite®
Different Business Models for Chemicals and Biopesticides and Small versus Large Company
Biopesticide
3-5 Years & <$5 Million
Discovery Launch
Average Chemical Pesticide
~12 Years & $280 Million Development Time & Cost
Discovery Launch
• Massive upfront capital
• Thousands of field trials before launch
• Global launch with large marketing spend; Peak sales in 3 years
• EPA registration granted before full range of label data on pest targets and crops
• Commercial development continues while selling
• Peak sales don’t occur for 7-10 years
14
NASDAQ: MBIIBio With Bite®
MBI’s Unique & Agile Innovation Model
15
• Quick to market – MBI can bring products to market quickly due to quicker regulatory, safer & extensive experience
• Capital efficient – MBI is able to sell product to early adopter customers and fund future developments/R&D
• Ongoing R&D – Valuable data from early customers is collected and used to improve future generations of product. Allows for rapid and continued innovation.
EPA submission of Version 1.0
Formulation and Process
Early adopter customers try
Version 1.0 generating new
sales
Version 2.0 developed while waiting for EPA
approval of Version 1.0
Version 2.0 is placed with
existing and new customers
NASDAQ: MBIIBio With Bite®
Key Market Segments
16
0
100
200
300
400
500
600
700
US Row Crop Pesticide Market Size ($M)
Access via larger partners
Fruit, Vegetable, Nut & Vine –Primary MBI Focus with
Internal Resources
$2 BillionTAM
$1.5 BillionTAM
NASDAQ: MBIIBio With Bite®
Domestic Targets ($M)
Almonds$249
Tomatoes$172
Walnuts$39
Potatoes$136
Grapes$127
Oranges$113
Leafy$109
Apples$104
Cucurbits$80
Legume Veggies$37
Peaches$34
Cole Crops$33
Cherries$33
Plums$28
Onions$26
Cannabis$23
Market Attractiveness
Co
mp
etit
ive
Fit
Low High
High
Primary Focus Crops
Secondary Focus Crops
Key Focus Areas- Cannabis- Almonds- Grapes- Leafy Greens- Organic Crops- Soil
o Seedo In-Furrowo Drip
17
$M
NASDAQ: MBIIBio With Bite®
International Targets ($M)
Increasing Market Accessibility (Registration and Alignment)
Incr
ease
d M
arke
t A
ttra
ctiv
enes
s
Opportunistic Target Markets Current Strategic Target MarketSeeking Partners 18
$M
NASDAQ: MBIIBio With Bite®
Targeted Revenue Breakout – 2023
19
Seed Treatment11%
New Partnerships14%
International28%
Cannabis, Leafy Greens, Grapes,
Almonds33%
Potatoes, Oranges, Apples, Peaches, Plums, Cherries,
Tomatoes, Legume Veggies, Walnuts, Onions, Cucurbits,
Cole Crops14%
NASDAQ: MBIIBio With Bite®
$9
.1M
$9
.8M
$1
4.0
M
$1
8.2
M
FY14 FY15 FY16 FY17
Select Financials
20
(USD $ in Millions) TTM (9/30/18) TTM (9/30/17)
Revenue $18.8 $17.5
Net Income (Loss) ($19.9) ($31.4)
(USD $ in Millions) Sept 30, 2018 June 30, 2018
Cash & Cash Equivalents $20.5 $23.3
Debt1 $20.9 $21.8
Total Stockholder’s Equity $18.0 $22.0
• MBI has experienced above-industry average revenue growth, while keeping costs flat and increasing margins
1
February 2018: MBI closed comprehensive financing and debt restructuring transactions, by which the company received $27.3M in net proceeds and reduced outstanding debt by more than 70%
April 2018: MBI completed public offering, by which the company received $12.7M in net proceeds
1) Debt balance includes principal as well as interest deferred until 12/31/2022
NASDAQ: MBIIBio With Bite®
$9.1 $9.8
$14.0
$18.2
FY14 FY15 FY16 FY17
Annual GAAP Revenue ($M)CAGR = 19%
39%
45%
39%
41%
46%
48%47%
48.3%
Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318
$2
.7M
$3
.3M
$4
.2M
$4
.3M
$6
.5M
$5
.8M
$4
.2M
$5
.4M
Financial Performance Improving
21
Quarterly GAAP Revenue Operating Expenses Gross Margins
$7
.1M
$6
.6M
$7
.8M
$7
.6M $
7.9
M
$7
.2M
$8
.3M
$6
.8M
Percent Growth
-7% -3% -9% -19% Percent Growth
23% 4% -11% 29%
Achieved Record 48.3% Gross Margins in Q318
NASDAQ: MBIIBio With Bite®
Our Continuous Margin Enhancement
Greater Scale-50,000L @ Contractor
Achieved Yield Increases Potency Improvements
Same protection with less product
6X g/L 3X g/L 3X g/L
Overhead ↓Volume ↑Yields ↑
Additional yield increases in progress to reduce COGs
Potential With Strain Improvement
Technologies
MBI-014
MBI-005
22
NASDAQ: MBIIBio With Bite®
▪ Only pure-play public biopesticide company in this disruptive, technology-driven market
▪ 7 existing commercial products with multibillion $ addressable global markets
▪ BIO is highest growth segment of ag inputs supported by favorable long-term trends
▪ In-house production capabilities & agreements with key distributors driving commercial margin & sales
▪ Focused R&D supporting existing products and pipeline of new, near-term products that meet unmet market needs
▪ Valuable patent and intellectual property portfolio
▪ Experienced management team with proven track record
Key Takeaways
23
1
$9
.1M
$9
.8M
$1
4.0
M
$1
8.2
M
FY14 FY15 FY16 FY17
Total GAAP Revenues($Millions)
NASDAQ: MBIIBio With Bite®
Contact Us
Company Contact:Pamela (Pam) MarroneFounder & CEOMain: [email protected]
Investor Relations Contact:Greg FalesnikManaging Director – MZ North AmericaMain: [email protected]
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