DGAP-News: KTG Energie AG / Key word(s): Miscellaneous KTG Energie AG: Letter to the Shareholders 21.01.2016 / 11:26 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Letter to KTG Energie AG Shareholders Dear Shareholder, At the beginning of the year we'd like to share the latest information on KTG Energie AG with you. The installed capacity of 60 MW gives your company guaranteed payment rights on over EUR1.5 billion until 2030 as well as a potential EBITDA of over EUR450 million. In 2016 we want to continue our growth and acquire new biogas plants for our portfolio. Over the last few years we have invested considerably more than EUR200 million in the construction of biogas plants. We are now running biogas plants with an output of over 60 MW and we are the leading producers in Germany and in Europe. In 2016 we are planning to make over EUR90 million in net sales and to further expand our leading market position through targeted acquisitions. We can see good opportunities opening up on the market. Our biogas plants have reached 8,200 to 8,400 full-load hours per year and thus over 95% capacity utilisation. By comparison, the German average is 7,500 hours, i.e. about 85%. This competitive edge enables us to acquire plants which have, above all, biological problems and/or issues in securing the required input. With good engineering and robust construction, we are in a position to optimise those plants upon purchase. These are cases where we can make full use of our advantages and use them to the best profitable effect. Speaking of profits: we will pay out a substantial part to you as dividends again. This is our philosophy, and we continue to be committed to it. Even in the previous year we delivered a dividend yield of approximately 4.5%, which we intend to increase further for 2015. Our dividend pledge is matched by our business model. The overproportional ratio between current receipts and interest payments allows substantial payouts. For the current year we are expecting a cash/interest cover of 1.8, and we are expecting this value to be clearly above 2.5 in 2018. This means that current annual receipts will be so high that they can easily shoulder the interest burden of two and a half years. This cash flow also justifies our high dividend pledge. In addition, we are of course helped by input costs that are contractually secured over a number of years. Moreover, as we have long-term security not only for our sales prices but also for the purchase prices of substrates, this is risk-free on our part. As a result, we have maximum planning security - also for our dividend policy. To match the secured business model, our 10.7% equity ratio is equally appropriate, and we intend to keep increasing this ratio over the coming years. This is particularly relevant against the background of our guaranteed revenues beyond 2030 and also our fixed input costs. Furthermore, year on year, we have achieved a substantial reduction in our debt-equity ratio. From 2013 to 2014 we reduced the ratio between net financial debt and EBITDA from 9.5 to 6.25, i.e. by over 50%. In the current financial year we will reduce this ratio even further, aiming to reach 5. With a net financial debt of EUR159 million (HY 2015), we will have secured revenues of EUR1.5 billion until 2030. Given that we have an EBITDA ratio of 30%, we can expect at least EUR450 million. Even for 2015/2016 our plant portfolio provides us with EUR90 million in potential revenues. Since 2011 we have more than quadrupled the revenues and earnings of KTG Energie AG. For the sake of completeness, we'd like to repeat that we will not need to use our cash flows to repay our EUR50 million loan. Instead, we will pay back our loan through refinancing, i.e. through the long-term refinancing of our plants through bank loans. Our cash flow serves the purpose of funding operating activities only. In the previous year we realised one third of the total capacity that was added within our industry in Germany, thus ensuring further guaranteed revenues (another EUR350 million) until 2034. These plants, too, will be refinanced in the current financial year through favourable KfW loans - at an interest rate under 3% - so that any loan funds that are currently tied up will then be freely available again without detriment to our cash flow. As in previous years, our development was very good in the 2014/2015 financial year. Your company has good finances as well as a long-term guarantee for its revenues. Analysts have therefore concluded that the fair value of our share price is between EUR15.50 and EUR18.50. Based on the current share price this leads to chances of 55 to 85%. Yours sincerely, Dr. Thomas Berger Contact: Investor Relations / Press Tobias M. Weitzel BSK Becker+Schreiner Kommunikation GmbH Phone: +49 2154-8122 16 E-mail: [email protected] --------------------------------------------------------------------------- 21.01.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: KTG Energie AG Ferdinandstr. 12 20095 Hamburg Germany Phone: +49 40 76755372 Fax: +49 40 76755374 E-mail: [email protected] Internet: www.ktg-energie.de ISIN: DE000A0HNG53, DE000A1ML257, WKN: A0HNG5, A1ML25 Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart; Open Market (Entry Standard) in Frankfurt End of News DGAP News Service --------------------------------------------------------------------------- 431265 21.01.2016