Firs Fir t s Solar Corpor a Corpor t a e t Ov er Ov view Q November 2, 2009

Transcription

1 First Solar Corporate Overview Q November 2, 2009

2 Forward Looking Statement During the course of this presentation the company will make projections and other statements that are forward looking statements within the meaning of the federal securities laws. The forward looking statements in this presentation are based on current information and expectations, are subject to uncertainties and changes in circumstances, and do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in the company s most recent annual report on Form 10 K, quarterly report on Form 10 Q, and other filings with the Securities and Exchange Commission. First Solar assumes no obligation to update any forward looking information contained in this presentation or with respect to the announcements described herein First Solar, Inc. 2

3 Our Mission To create enduring value by enabling a world powered by clean, affordable solar electricity First Solar, Inc. 3

4 Our Strategy Sustainable Solar Markets Leading Shares in the Most Attractive Markets Business Model that Drives Superior Returns on Capital Sustainable Competitive Advantages Enduring Business Value Reduce solar electricity costs to sustainable levels through technology development, operational excellence and scale Use price, adaptive business models and partnerships to expand markets Own and develop the technologies necessary to be the low cost provider of solar electricity Maintain financial discipline that assures superior returns on invested capital 2009 First Solar, Inc. 4

5 Our Company Mainz,Germany European Sales Sl Frankfurt (Oder), Germany Manufacturing began in 2007 (212 MW) Oakland, CA Project Development Tempe, Arizona Corporate Headquarters Bridgewater, NJ EPC Perrysburg, Ohio Manufacturing began 2006 (159 MW => 212 MW) Kulim, Malaysia Manufacturing began (848 MW) One of the largest solar manufacturers world wide; shipped >1.5 GW cumulative volumes Global footprint Approximately 1.3 GW production capacity operating or announced through st PV maker to produce modules <$1/watt ($.85/watt in Q3 2009) 2009 First Solar, Inc. 5

6 First Solar Segments Module Manufacturing: Glass In < 2.5 Hours Module Out Breakthrough thin film process technology Semiconductor Deposition Cell Definition Final Assembly Fully integrated, continuous process & Test Cost reduction trajectory t di driven by productivity it and technology improvements System Solutions: Utility scale PV systems Engineering, procurement and construction capabilities (turnkey solution) Monitoring & Maintenance Program predictable lifetime expenses 2009 First Solar, Inc. 6

7 PV Module Technology & Manufacturing First Solar Fully Integrated, Automated and Continuous Thin Film Process Glass In < 2.5 Hours Module Out Semiconductor Deposition Cell Definition 98 99% reduction in semiconductor material Final Assembly Fully integrated, continuous & Test process vs. batch processing Large 60 x 120cm (2' x 4') substrate vs. 6" wafers Conventional Crystalline Silicon Batch Technology Polysilicon Ingot Wafer Solar Cell Solar Module 2009 First Solar, Inc. 7

8 Sustainable Environmental Profile Carbon Footprint is a Fraction of Conventional Sources Carbon footpr rint (gco 2 eq/kw Wh) Coal Oil Gas CC Biomass CHP First So olar PV multi Si (13.2%)* Nuclear (US) PV CdTe (10.9%)** Wind Sources: *de Wild Scholten, M., presented at CrystalClear Final Event in Munich on May 26, **de Wild Scholten, M., Solar as an environmental product: Thin film modules production processes and their environmental assessment, presented at the Thin Film Industry Forum, Berlin, April, Both PV technologies use insolation of 1700 kwh/m 2. All other data from ExternE project, 2003; Kim and Dale, 2005; Fthenakis and Kim, 2006: Fthenakis and Alsema, 2006; Fthenakis and Kim, in press First Solar, Inc. 8

9 "Copy Smart" Capacity Growth Driven by increasing efficiency, run rate, and yields 1,272MW 1,219MW Malaysia 4 Ml Malaysia 3 Malaysia 2 Malaysia 1 German Facility Ohio Expansion Ohio Base 25MW 100MW 308MW 716MW First Solar, Inc & 2006 based on Q406 run rate; 2007 based on Q407 run rate; 2008 based on Q408 run rate; based on Q309 run rate 9

10 Q3 Production 292 MW; annualized rate 1.2 GW MW Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q First Solar, Inc. 10

11 Line run rate up 2.5% Q/Q Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q First Solar, Inc. 11

12 Module Cost Per Watt Trend Control of technology, manufacturing process and supply chain enables predictable cost reduction Targeting $65 $.65.70/w by 2012 and $52 $.52.63/w by 2014 $1.75 $1.59 $1.50 $1.40 $1.25 $1.23 $1.14 $1.18 $1.08 $1.00 $0.98 $0.93 $0.87 $0.85 $0.75 $0.50 FY05 FY06 FY07 Q108 Q208 Q308 Q408 Q109 Q209 Q First Solar, Inc. 12

13 Module Cost Reduction Roadmap $2.94/W Q cost per watt = $0.85 $0.93/W 100% 18 25% 4 6% 4 6% 3 4% 2% $ /W 56 68% 2004 Cost/Watt Q1 09 Cost/Watt Efficiency Throughput Spending Low Cost Plant Scale 2014 Location Cost/Watt Target 2009 First Solar, Inc. 13

14 Competitive Cost Environment Adju usted Module Co ost 1 $/Watt 2.20 Avg Competitor 2.00 Best of Breed Q Q4 09? Longterm? FSLR Q Cost Roadmap FSLR Target 2012 Range Poly Si Cost $/Kg 1 FSLR adjusted module cost = module cost + added balance of system cost for lower efficiency modules. Best of Breed and Average Competitor based on Street solar sector analyst estimates 2009 First Solar, Inc. 14

15 Conversion Efficiency Potential of First Solar CdTe 18% Practical Potential 15.3% Research ~ % 12.5% Development ~ % Process Integration ti Q109 Current Production 2009 First Solar, Inc. 15

16 Systems Project Cost Structure Development Module EPC Standard 2009 First Solar, Inc. * IDC = interest during construction 16

17 Balance of System* Cost Reduction Roadmap ~$1.40 /W 100% 2% 8% 7% 1% 12% $ /W Target 65 70% Q1 09 BOS Engr., Proj. Mgmt. Mounting Hardware Inverter Transformer Other Electrical Installation 2014 BOS * Includes standard EPC costs; excludes site specific and development costs, as well as interest during construction and BOS profits 2009 First Solar, Inc. 17

18 The Migration from Existing Subsidy Markets to Transition Markets is Discontinuous Transition Markets Sustainable Markets Existing Subsidy Markets Constraints Large Scale Solar Requires Modification of Existing: Physical Infrastructures Institutional Frameworks Business Models 2009 First Solar, Inc. 18

19 Success Components of Market Migration Existing Markets Drive scale to lower cost Price to enable throughput and capture market share FiT digression High subsidy dependent Finite market Transition Markets Policy incentives (i.e. RPS, carbon legislation, government funding) Continued cost reduction Optimized value chain Local investment / resources Manufacturing R&D Grid infrastructure development Capacity shortfalls Sustainable Markets Price parity with marginal unit of generation Increased energy consumption Grid integration and stability Intermittency solution Environmental sustainability Water conservation GHG emission reduction Carbon footprint 2009 First Solar, Inc. 19

20 Cost Reduction Solar Electricity (LCOE) Medium Resource 1400 hours High Resource 1800 hours U.S. /kwh U.S. /kwh Transition Sustainable FSLR 2014 $6.00 $5.00 $4.00 $3.00 $ Transition Sustainable FSLR 2014 $6.00 $5.00 $4.00 $3.00 $2.00 Note: Assumes 7.5% unlevered IRR, 10% ITC, 2.5% electricity power price escalator, FSLR panels, utility scale plant, install labor and site specific cost estimates. Includes owner development costs, financing costs and O&M First Solar, Inc. 20

21 Sales Channels Sell modules to developers and IPPs under multi year agreements Project developers design and develop turnkey commercial solar power plants Develop solar PV project sites in the U.S. and Canada Sell EPC and monitoring to create PV electricity plants for U.S. utilities Europe/Asia U.S./Canada 2009 First Solar, Inc. 21

22 Representative Projects PV Modules Site: Dimbach, Germany Site: Margreid, Italy Site: Narbonne, France System Size: 1.4MW (DC) System Size: 697kW System Size: 7MW Project Developer: Beck Energy GmbH (Blitzstrom) Project Developer: juwi Solar GmbH Project Developer: EDF Energies Nouvelles 2009 First Solar, Inc. 22

23 U.S. Utility Business Model First Solar EPC Services / Development Capabilities Regulated/Public Utilities IPP Utility Affiliates IPP Other Utility Retained Generation 2 MW AC SCE PPA Partner 10 MW AC Sempra PPA Direct 21 MW AC Blythe Regulated/Public Utilities 2009 First Solar, Inc. 23

24 Utility Scale EPC Projects in CA/Southwestern U.S. 1.3 GW AC 550 MW Stateline 300 MW 48 MW 30 MW 21 MW Sunlight 250 MW Niland 55 MW 2009 First Solar, Inc. 24

25 Sarnia (20 MW AC) nearing completion and sold to Enbridge in Q4 First Canadian project from OptiSolar (212 MW AC) acquisition UPDATE 2009 First Solar, Inc. 25

26 Ordos City (China) MOU for 2 GW AC Solar PV Plant Mike Ahearn welcomes Chairman Wu Bangguo of the Standing Committee of the National People's Congress of China to First Solar Chinese government expanding use of renewable energy Potential goal of 20 GW by 2020 Feed in tariff expected MOU signed in presence of Chairman Wu MOU contemplates 2 GW PV system in four phases: Phase 1: 30 MW starting June 1, 2010 Phase 2 and 3 : 100 MW and 870 MW by 2014 Phase 4: 1,000 MW by 2019 Cao Zhichen, vice mayor of Ordos Municipal Government and Mike Ahearn sign MOU Site: Ordos City, Inner Mongolia Size: 2 GW (AC) 2009 First Solar, Inc. 26

27 Creating Enduring Value 20% RONA = 15% WACC + 5% EVA Spread RONA integrates P&L performance with asset intensity and capital efficiency We target 80 th percentile performance within the Russell 3000 index RONA = NOPAT / (Total Assets Non Interest Bearing Liabilities) EVA = RONA WACC Achieving a 20% RONA requires Income Statement and Balance Sheet Scale 2009 First Solar, Inc. 27

28 Net Sales and Operating Income Trends Net Sales Operating Income % 29.5% 33.2% 37.3% 37.2% 40.2% 38.8% 33.9% $197 $267 $349 $434 $418 $526 $481 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q First Solar, Inc. 28

29 Balance Sheet Total Cash Total Debt $M Q109 Q209 Q309 1 Total Cash includes all other marketable securities. Total Debt includes short term debt, short term portion of LT debt, notes payables to related parties 2009 First Solar, Inc. 2 Includes $49M restricted cash to payoff IKB debt after quarter close 29

30 Operating and Free Cash Flow 1 $M Operating Cash Flow Free Cash Flow $250 $200 $206 $203 $150 $137 $100 $63 $75 $50 $59 $64 $19 $42 $0 $11 $1 $36 ($50) $23 $41 $179 $114 ($100) ($150) ($200) $154 $ Q108 Q208 Q308 Q408 Q109 Q209 Q Cumulative Free Cash Flow $ 23 $ 63 $ First Solar, Inc. Free Cash Flow is a non GAAP measure ; see Key Quarterly Financial Data for reconciliation to Operating Cash Flow 30

31 Financial Model from June 24, 2009 Analyst Meeting Transitional Markets Model Scaling to 3 4 GW Gross Margin 35 40% Operating Expense 7 11% Operating Margin 25 30% Stock Based Comp 2 4% RONA % 25 30% = 2009 First Solar, Inc. 31

32 2009 Guidance as of 10/28/2009* Prior Guidance Update Low Update High Revenue $1.9 $2.0 B $1.975 B $2.025 B Startup Expense $10 M $14M $14M Stock Based Compensation $75 80 M $85 M $85 M Operating Margin 31 33% 33% 34% 33% Annual Tax Rate 9 11% 7 8% 7 8% Share Count (Year End) M M M Capex $ M $ M $ M *Guidance as Q earnings call, 10/28/ First Solar, Inc. 32

33 Summary: First Solar Differentiation FSLR has a sustainable winning growth platform in the electricity industry Proprietary technology provides low levelized cost of energy (LCOE) Proven performance and reliability >1.5GW modules produced ~ 1.3GW of capacity 1, proven production scaling. >22M modules produced European system integrators and IPP partners, and growing U.S utility relationships EPC experience One of the largest U.S. and Canadian utility scale project development pipelines Industry s first comprehensive, pre funded end of life collection and recycling gprogram Strong balance sheet and cash flow Superior growth, business model, RONA, cash flow and net cash position 1 Operating or announced through 2010, based on Q line run rate 2009 First Solar, Inc. 33

34 Key Quarterly Financial Data 2009 First Solar, Inc. 34

35 Corporate Overview