Nordex SE Capital Markets Day Frankfurt 17/09/2013

Transcription

1 Nordex SE Capital Markets Day 2013 Frankfurt 17/09/2013

2 AGENDA 1. Overview and strategy update Dr. Jürgen Zeschky 2. Financials Bernard Schäferbarthold 3. Market Update Lars Bondo Krogsgaard 4. Germany and the current EEG discussion Thorsten Herdan (VDMA) 5. Product development and Generation Delta Jan Hagen 6. Panel Discussion Nordex Board Andreas Ufer (KfW IPEX) Andrew Garrad (GL Garrad Hassan) Moderation Eize de Vries (Windpower Monthly) Capital Markets Day 2013 Frankfurt M. Nordex SE

3 A LOOK IN THE REAR VIEW MIRROR: CMD 2012 Capital Markets Day 2013 Frankfurt M. Nordex SE

4 Cost of Materials 78 % Cost of Materials 75 % Structural Costs Structural Costs IN 2012, WE DEFINED FIVE STRATEGIC ACTION AREAS TO REACH MID-TERM TARGETS Key messages CMD 2012: 2012 Actual Critical company size and performance defined Key strategy areas 2015/17 Targets Sales 1.5bn Sales 1.1bn EBIT 1% 1 Focused sales and customer strategy Focused approach in markets & customer segments Differentiation: Added value to our customers EBIT 5% EBIT 2 Improved operational excellence In project order execution phase: huge impact on costs Efficiency in production 3 Reduction in cost of materials Improve materials cost ratio from 78% to 75% WTG Cost-Down / CORE 15 programme 4 Pursue development of excellent products Delta platform NXT 8.1 (IEC 1+2) + NXT 8.2 (IEC 3) Improvement in towers and blades required 5 Finalize restructuring US + CN China: downsizing, ramp down production, focus APEC US: focus on marketing & sales, scrutinize production Capital Markets Day 2013 Frankfurt M. Nordex SE

5 IN H1/2013, WE MADE SIGNIFICANT PROGRESS ON THE PATH TO TARGET REALIZATION 1 Customer & Sales Sales strategy implemented Good product fit in NX focus markets 2 Operational Excellence Global Planning Office (GPO) up and running Order execution tightened 3 Material Cost (CORE 15) Cost reductions in WTGs in line with plan Some to do s for NR58.5 & high towers 4 Product Development First Delta generation turbines installed and sold NXT 8.2 development about to start 5 Restructuring US + CN Strategic alignment on track Production to be ramped down by YE without additional one off expenses Order intake, contribution margin and sales in H1 above targets Quality of order execution improved despite higher output Costly inefficiencies in project execution minimized All WTG types meet budgeted cost targets for 2013 N100/3.3MW & N117/3.0MW launched; first WTGs installed; competitive product portfolio completed Significant reduction in structural costs; one off items booked in 2012; regional HQ remain as bases for profitable business in Asia and Americas Capital Markets Day 2013 Frankfurt M. Nordex SE

6 STRUCTURAL ALIGNMENT: SETUP OF A NEW BUSINESS MODEL WITHOUT LOCAL PRODUCTION Status Quo e vs Measures & Targets Inadequate order volume in both regions to justify local production Americas PTC/ITC uncertainty: Market extremely volatile Price pressure caused by shale gas and high overcapacities among wind OEMs Limited activities outside the US China Market hard to adress for Western OEMs USA Costs FTE China Costs FTE Significant reduction of the cost base Measures Americas Jonesboro assembly to be closed by YE 2013 New target markets outside the US Focus NXD on American markets outside US Measures APAC Assembly sites in China closed Future sales focus outside China Targets No further losses Transformation into a profitable business: APAC: 100 MW OI; ~110 FTE) Americas 200 MW OI; ~130 FTE) Capital Markets Day 2013 Frankfurt M. Nordex SE

7 PROJECT MANAGEMENT OFFICE (PMO) ESTABLISHED TO MONITOR AND CONTROL STRATEGY IMPLEMENTATION 2012: Critical company size and setup defined Key areas Focused Sales and Customer Strategy Improved Operational Excellence Reduced Materials Cost (CORE 15) Superior Products Implementation Vehicle Permanent tracking of timelines, qualitative and quantitative target achievements >100 projects/ measures Dedicated Team Monthly reporting & review Capital Markets Day 2013 Frankfurt M. Nordex SE

8 1 FOCUSED SALES AND CUSTOMER STRATEGY: ORDER INTAKE AND MARGINS WELL AHEAD OF PLAN Status Quo 2012 Performance 2013 Measures & Targets New sales strategy defined: Differentiators: Turnkey, close to the customer, meeting special requirements Focused approach: clear set of focus markets per sales region + defined customer segments, implementation of regional strategies Push N117/2400, boost service business and own project development, Germany initiative Order Intake [EUR m] >1,0 Actual to Aug 13 1,3-1,4 Guidance FY 13 Guidance already covered to a large extent Measures: Further optimization of sales and service processes and tools Strengthen turnkey excellence center Continuous monitoring of new target markets for sales and project development Targets 2015 OI: EUR 1.5 bn Sales: EUR 1.5 bn Higher profitability: 5% EBIT margin Capital Markets Day 2013 Frankfurt M. Nordex SE

9 2 OPERATIONAL EXCELLENCE: ORDER EXECUTION IMPROVED, COSTS REDUCED Status Quo 2012 Performance 2013 Measures & Targets Unplanned extra costs of EUR 30m for tower and blade supply and logistics due to: Delayed supplies Insufficient quality of deliveries Process inefficiencies EBIT improvement 2013 Target 2013: +1% pt. extra costs significantly below 2012 level Measures: Optimizing Global Planning Office (GPO) with a strong focus on capacity planning and monitoring Further SQA process improvements Targets 2015 Proven supply chain with zero defects and timely delivery Extra costs lower than plan * as of end August Capital Markets Day 2013 Frankfurt M. Nordex SE

10 3 COST OF MATERIALS / CORE 15: BUDGETED COST REDUCTION TARGETS WILL BE MET Status Quo 2012 Performance 2013 Measures & Targets Materials quota of 78%, needs to be reduced to compensate for the overall price pressure in the market Cost-cutting programme N- Ergize with dedicated measures for the main components tower, blades, nacelle Cost reduction Target 2013: EUR 100k/WTG Forecast YE: EUR 100k/WTG Measures: Cost down programme CORE15 Future focus on cost reduction for high towers / hybrid towers and long blades (e.g. NR 58.5) Target % reduction in cost of materials compared to 2012 Capital Markets Day 2013 Frankfurt M. Nordex SE

11 4 SUPERIOR PRODUCTS: NEW PRODUCT DEVELOPMENT NXT 8.1 IS ON SCHEDULE Status Quo 2012 Performance 2013 Measures & Targets Established N117/2400 as industry benchmark for IEC 3 sites NXT 8.1 (Delta) development project to complete competitive product portfolio in wind classes IEC 1 & 2 NXT 8.1 (Delta) Planning Apr 2012 Concept Sept 2012 Detailing March st installation June 2013 DECS/DiBT cert. July 2013 Ramp-up Jan 2014 Measures: Ramp up Generation Delta Development of NXT 8.2 IEC 3 Generation Delta Development of a long blade beyond NR 58.5 Optimization of the tower portfolio (design to cost/value; R120; PH 141) Strong focus on control technology Targets: Start of production for Generation Delta (NXT 8.1; IEC 1+2) in January 2014 Launch of NXT 8.2 (IEC 3) mid 2015 Capital Markets Day 2013 Frankfurt M. Nordex SE

12 4 SUPERIOR PRODUCTS: STRONGER FOCUS ON BLADES AND CONTROL TECHNOLOGY PREPARING THE TECH BOOST Engineering resources control technology blades towers Engineering resources and structure aligned to product strategy One competitive WTG per wind class IEC I-III Capital Markets Day 2013 Frankfurt M. Nordex SE

13 4 SUPERIOR PRODUCTS: NEAR-TERM DEVELOPMENT FOCUS ON NXT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 NXT-8.1 Ramp-up DELTA NXT-8.1 NXT-6 NXT-8.2 Extension DELTA to IEC3a NXT-8.2 NXT-GEN Innovations on the way to grid parity Tech Boost NXT-GEN Capital Markets Day 2013 Frankfurt M. Nordex SE

14 Business Performance Successful H1 Promising outlook H2 and increase of guidance Progress in strategy implementation NORDEX CONFIRMS MID-TERM TARGETS DESPITE DEMANDING MARKET ENVIRONMENT External threats Challenging markets Stressed competition Mid-term targets formulated in 2012 strategy Sales growth to 1.5bn EBIT at 5% Free CF positive Narrowing the forecast horizon from 2015/17 to 2015 Confirmation of our midterm targets for 2015 Costs high towers Costs blades High capacity utilization Internal challenges Capital Markets Day 2013 Frankfurt M. Nordex SE

15 AGENDA 1. Overview and strategy update Dr. Jürgen Zeschky 2. Financials Bernard Schäferbarthold 3. Market Update Lars Bondo Krogsgaard 4. Germany and the current EEG discussion Thorsten Herdan (VDMA) 5. Product development and Generation Delta Jan Hagen 6. Panel Discussion Nordex Board Andreas Ufer (KfW IPEX) Andrew Garrad (GL Garrad Hassan) Moderation Eize de Vries (Windpower Monthly) Capital Markets Day 2013 Frankfurt M. Nordex SE

16 OVERVIEW OF FINANCIAL TARGETS AND KPI S 2013e Target 2015 Order Intake bn 1.5 bn Sales bn 1.5 bn Gross Margin 22.5% 25% EBIT Margin % 5% W/C ratio 10 15% 10% CAPEX mn mn Capital Markets Day 2013 Frankfurt M. Nordex SE

17 ORDER INTAKE & SALES: NORDEX WILL REACH CRITICAL MASS BEFORE PLAN Sales & order intake development e Order Intake Revenue 2013e 2015e Slight growth in line with the market trend from 2014 onwards 2. Nearly full capacity utilization in Rostock 3. Share of new products (N117/2400 and DELTA) will increase e 2015e Capital Markets Day 2013 Frankfurt M. Nordex SE

18 GM in % GROSS MARGIN: THE MOST IMPORTANT PROFIT DRIVER Gross margin development e 25,8 25, ,0 Main drivers: ASP, product costs/material prices, capacity utilization Revenue (meur) EBIT (%) 2010 * after one-off items , ,5 2013e e `14e 2015e 1, ,101 1,300 1, e > % -2.9%* -5.5%* % > 5.0% 1. Pricing pressure normalized since 2012 (to around 4% p.a.) 2. Start of serial production N117/2400 in mid Launch of Generation Delta in 2/ Completion of n-ergize (- 15% product cost) in WTG 100 (now CORE 15 ) - most of the measures implemented 6. Capacity utilization close to 100% Capital Markets Day 2013 Frankfurt M. Nordex SE

19 Cost of WTG Cost of WTG GROSS MARGIN: COST CUTTING PROGRAMME WTG 100 ALMOST COMPLETED Cost reductions for all main components Example N100/2500 R100 92% of target already reached Measures: price renegotiation for all parts, redesign b and c- parts in nacelle & tower Example N117/2400 R120 57% of target already reached Measures: price renegotiation of third party blades, raw material costs, new 3 rd party supplier, redesign of tower parts Capital Markets Day 2013 Frankfurt M. Nordex SE

20 EBIT: CONCENTRATION OF PRODUCTION IN ROSTOCK WILL DRIVE PROFITABILITY Capacity, utilization rate and efficiency in production MW Capacity Incl. CN+US Rostock 3-shift mode As a result of the closure of the plants in the US and China, Nordex no longer operates with excess capacity e 2014e 2015e Production in Rostock increased from single shift to 1.5 shifts 1000 Assembly hours per WTG Further increases in production would require only relatively modest investment in manpower and tools e Capital Markets Day 2013 Frankfurt M. Nordex SE

21 GROSS MARGIN: STRUCTURAL ALIGNMENT DRIVES EFFICIENCY Development of value added per employee e 150 Gross profit/fte (TEUR/per employee) Decrease in head count in Europe by 12% in 2011/12 2. Decrease in head count in USA/China in Significant efficiency gains achieved as a result of improvements in production, project management and supply chain e 2014e 2015e Capital Markets Day 2013 Frankfurt M. Nordex SE

22 EBIT: OPEX INCREASE LOWER THAN SALES INCREASE Development of Sales vs. OPEX (meur) Main drivers: Staff costs, relatively fixed operating expenses (offices, travel, IT etc.) Sales OPEX CAGR 12-15: ~10% CAGR 12-15: ~5% e 2014e 2015e Set-up in focus markets completed - only a few countries (for example: ZA, URU) need to be expanded Stronger focus on mid-size projects to ensure logistical economies of scale for cranes and commissioning teams Other operating expenses develop in line with inflation rather than sales Capital Markets Day 2013 Frankfurt M. Nordex SE

23 WORKING CAPITAL: REDUCTION OF W/C REDUCES FREE CAPITAL EMPLOYED Development of Nordex`working capital e WC in m EUR ,2% +30,0% WC in % WC in meur WC in % of Revenues ,7% Target range ,7% e 2015e Capital Markets Day 2013 Frankfurt M. Nordex SE

24 WORKING CAPITAL: MEASURES WITH SIGNIFICANT IMPACT DEFINED AND IMPLEMENTED W/C measures in all business processes Customer to cash Forecast to fulfil Procure to payment Nordex measures: Aligned payment schedule to execution Improved receivables management across all countries Nordex measures: Alignment / Just-intime delivery of projects across the whole value chain Inventory optimization in production and in service Reduction of component lead times through optimized sourcing / production processes Nordex measures: Improvement of supplier payment terms Use of reverse factoring Increased flexibility in material call-offs for production Capital Markets Day 2013 Frankfurt M. Nordex SE

25 CAPEX: FOCUS ON PRODUCT DEVELOPMENT CAPEX development (in meur) in meur 80 EUR p.a e 2014e 2015e R&D incl. expenditure on tools to develop new products will remain the major focus of CAPEX Depreciation on R&D expenditure around 20% Capital Markets Day 2013 Frankfurt M. Nordex SE

26 SUMMARY FINANCIALS We are on track to achieve our financial targets Earnings growth over the next two to three years will mainly come from a further improvement in the gross margin and lower structural costs. Operating expenses will rise in line with inflation Nordex no longer has excess capacity but can increase production with relatively little incremental cost and investment More efficient use of working capital will limit financial requirements for new business Reduction in capital employed positive free cash flow expected from 2015 onwards Reaching our goals Capital Markets Day 2013 Frankfurt M. Nordex SE

27 AGENDA 1. Overview and strategy update Dr. Jürgen Zeschky 2. Financials Bernard Schäferbarthold 3. Market Update Lars Bondo Krogsgaard 4. Germany and the current EEG discussion Thorsten Herdan (VDMA) 5. Product development and Generation Delta Jan Hagen 6. Panel Discussion Nordex Board Andreas Ufer (KfW IPEX) Andrew Garrad (GL Garrad Hassan) Moderation Eize de Vries (Windpower Monthly) Capital Markets Day 2013 Frankfurt M. Nordex SE

28 GLOBAL GROWTH Global growth rate at ~6 % (Onshore: ~4%; Offshore ~20%) Grid-connected installations in GW % Africa & Middle East Eastern Europe Southern Europe Northern Europe Latin America North America 5 28 APAC Offshore 2013e 2014e 2015e 2020e Source: MAKE Market update Q2/2013 Capital Markets Day 2013 Frankfurt M. Nordex SE

29 VOLUME MARKETS NORDEX ALREADY WELL POSITIONED Volume continues to centre around a few markets TOP Onshore volume markets 2013e 2020e China 166,4 47.4% U.S. 36,5 10.4% India 25,1 7.2% Germany 14,1 4.0% Brazil 13,9 3.9% Canada 12,8-3.7% Mexico 8,7 2.5% Turkey 7,8 2.2% UK 7,0 2.0% Australia 6,8 1.9% France 6,5 1.9% Sweden 5,8 1.7% Italy 4,1 1.2% Poland 3,7 1.0% Ireland 3,4 1.0% S. Africa 3,3 0.9% Chile 3,1 0.9% Greece 3,0 0.8% Japan 2,8 0.8% Romania 2,5 0.7% Total Installed GW in 2013e 2020e Source: MAKE Market update Q2/2013; grid-connected capacity; bold= NX-focus markets Share of total installed volume Nordex focus markets account for >60% of the onshore potential (ex China) Stable potential of >11 GW p.a. in established markets in total (Germany, France, UK, Scandinavia etc.) Above average growth potential in emerging markets like Turkey, South Africa, Latin America Double digit market shares targeted in focus markets Capital Markets Day 2013 Frankfurt M. Nordex SE

30 GROWTH MARKETS NORDEX READY TO TAP INTO MARKET POTENTIAL A number of interesting high growth markets Countries with a CAGR >10% Ireland 3,4 24% South Africa 3,3 41% Chile Greece 3,0 17% 3,1 Japan 2,8 53% Ukraine 2,4 South Korea 0,7 21% New Zealand Egypt 2,1 93% Norway 1,9 18% Argentina 1,8 15% Pakistan 1,7 17% Venezuela 1,4 27% Peru 1,4 21% Philippines 1,2 Vietnam 0,8 28% 0,5 19% CAGR 2013e-2020e Total GW installed in 2013e -2020e 11% Ireland: early mover; >200 MW track record South Africa: >300 MW under contract Norway: building largest wind farm in Norway (Midtfjellet110 MW) Pakistan: market leadership; conversion of conditional order backlog into firm order backlog Source: MAKE Market update Q2/2013; grid-connected capacity; bold= NX-focus and watch list markets Capital Markets Day 2013 Frankfurt M. Nordex SE

31 EXPECTED ORDER INTAKE TRENDS IN THE COMING YEARS Turbine Trends IEC 3 WTGs will account for half of the order intake N117/2400 will remain the bestseller for the next 2-3 years Mid term share of Generation Delta: >60% More EUR/MW high towers and long blades >60% of WTGs will be equipped with large blades (>100m) High towers (>100m hub height) becoming more important share of >30% expected Increasing share of turnkey and NxD Summary Main countries in the near term will be Germany, Turkey, USA, South Africa and UK/Ireland Order intake growth expected to be above the market CAGR Double digit market shares in Nordex focus markets targeted Capital Markets Day 2013 Frankfurt M. Nordex SE

32 CONTINUING GROWTH ABOVE INDUSTRY AVERAGE Order intake development Nordex vs. the industry Nordex OI (in meur) % +15% +10% e 2015e Continued execution of current sales strategy Industry OI (publically announced orders ) -4% -37% Q1 `12 vs Q1 `13: -8% Source industry benchmark in GW: MAKE Consulting Q Capital Markets Day 2013 Frankfurt M. Nordex SE

33 GROWTH IN ORDER INTAKE SINCE 2010 AND AGAINST THE INDUSTRY TREND Doing Things Differently Source industry benchmark: MAKE Consulting Capital Markets Day 2013 Frankfurt M. Nordex SE

34 REVENUES THROUGH FIVE VALUE STREAMS Business area New unit sales Own development Service sales Value stream Volume sales Valueadded sales Turn-key sales Business rationale Accept lower project margins in return for volume bussines, cap sales to required base-load Improve project margins through sales to small and mediumsized valueadded customers Leverage t/k experience to drive project margins. Enter small/midsize project niche Leverage unique NXD position and pipeline to drive project margins Leverage Nordex WTG business to generate stable revenue stream, drive efficiency to improve margins Examples Case: Hasanbeyli Case: Harzkopf Case: Dorper Case: Fillières = Nordex strategy change 2012 Capital Markets Day 2013 Frankfurt M. Nordex SE

35 CASE - VALUE ADDED SALES Germany project Harzkopf (14.4 MW) WTG type: 6x N117/2400 Tower type / Hub height: Hybrid tower PH 141 / 141 m Investor: Hermann Hoffmann Group Value-added sales Special features: Unconventional investor - first large wind project to diversify the business Site located in a forest area First project with NR58.5 produced by Nx Lead time from firm order intake to commissioning 9 months Capital Markets Day 2013 Frankfurt M. Nordex SE

36 CASE - VOLUME SALES Turkey project Hasanbeyli (50 MW) WTG type: 20x N100/2500 Tower type / Hub height: steel tower R80 / 80m Investor: Eksim Yatirim Holding A.S. Volume sales Special features : Call off from a framework contract and leveraging an established customer relationship Sale of a mature product in a highly competitive market Capital Markets Day 2013 Frankfurt M. Nordex SE

37 CASE - TURN KEY SALES South Africa project Dorper (100 MW) WTG type: 40x N100/2500 Tower type / Hub height: steel tower R80 / 80m Developer: Rainmaker Energy Projects Ltd. Turn key Special features : One of the largest projects in the first South African tender round Reference project to establish Nordex as a TOP 3 OEM Successful start of construction in H Capital Markets Day 2013 Frankfurt M. Nordex SE

38 CASE - PROJECT DEVELOPMENT (NXD) France projects Fillières (10 MW) and Chaussée de César Sud (10 MW) WTG type: 4x N90/2500 LS / 4x N100/2500 Tower type / Hub height: steel tower R80 / 80m Investor: Stadtwerke München (municipal utility company) Nordex Development Special features : Turn key ready delivery Transnational investments of a German municipality Basis for a strong customer relationship with an important municipality customer Recent signing of a follow up project (10 MW; Chaussée de César Sud) with SW Munich Capital Markets Day 2013 Frankfurt M. Nordex SE

39 KEY SUCCESS FACTORS IN SALES Windmoney Cash flow Tool Processes Focus Leverage of NxD know how IRR calculation from the investor s point of view Evaluation of optimized pricing points Cash flow simulation in the offer phase Ensuring working capital optimzed payment terms for the whole project execution cycle Improved process during offer phase (Gate) Standardized process to evaluate new markets (SMEEP) Service calculator within sales calculator CRM database Focus markets Must win projects Order drive Effect on: EBIT Working capital quota OpEx/EBIT Order intake Capital Markets Day 2013 Frankfurt M. Nordex SE

40 KEY SUCCESS FACTORS IN NXD Markets Further diversification New target markets in preparation (Finland, South Africa) Pipeline Reallocation of resources fewer investments in the US, stronger focus on Latin America Push N117/2400- projects in the French core market Processes Strong focus on financial and industrial investors Leverage financial vehicle Careful mining of project pipeline to identify best deals Windmoney tool Efficent core team (~45 FTE) Effect on: Order intake Order intake / EBIT Working capital / OpEx Capital Markets Day 2013 Frankfurt M. Nordex SE

41 OWN PROJECT DEVELOPMENT (NXD) REMAINS A STRATEGIC ASSET TO DRIVE MARGINS Project Pipeline per region and status Trends and highlights Americas EMEA North Gate 2 (Detailed studies) 27% 16% 26% >2 GW 38% EMEA South 20% EMEA East Gate 3 (Ready to sell) Gate 0 4% 12% (Desk) >2 GW 58% Track record / projects built: >500 MW especially in France and USA with EBITmargins above average Project focus on France, Sweden, USA, Poland, Honduras, Chile - Finland and South Africa under observation Promising pipeline (>2 GW) becoming more and more mature and diversified Sale of Beebe 1b to utility Exelon despite tough market conditions First projects in France sold via NxD financial vehicle Strong customer relationships with investors like Exelon, Allianz, Stadtwerke München, AXA, Falck, Akuo, BNP Paribas established Gate 1 (Initial studies) Capital Markets Day 2013 Frankfurt M. Nordex SE

42 SERVICE REVENUES AT NORDEX WITH SOLID AND STABLE GROWTH RATES Service Revenue in Million EUR Trends and highlights +62% >130 Between 2010 and 2012, Service Revenues increased by 62% - CAGR >20% 2013 will also grow at a double digit growth rate to a level of >EUR 130 mn Revenue growth has continuously outpaced the growth rate of number of turbines under service 74 >+20% Higher revenues per turbine being realised due to a switch to more full service contracts Profitability of signed service contracts is also increasing Service quality constantly improving high WTG availability (98%) Capital Markets Day 2013 Frankfurt M. Nordex SE

43 KEY SUCCESS FACTORS IN SERVICE Markets Products Processes German WTG sales resulting in long-term service revenues (length of contracts ~14 yrs) Emerging markets (ZA, URU) with 10 yr contracts secure the setup of our own service network Four main contract packages available Rotor service in ramp-up phase Service claim management established Purchasing prices for spare parts significantly reduced Service sales strengthened Effect on: Service OI EBIT OpEx/ EBIT Capital Markets Day 2013 Frankfurt M. Nordex SE

44 PRICE PRESSURE REMAINS - PRICING AND MARGIN QUALITY IS UP TO US Price and margin factors UNIQUE PRODUCT FEATURES MARKET MAKER POSITION DRIVING VALUE THROUGH SCOPE COMPETITIVE LCOE EBIT 5% SELECTING THE RIGHT CUSTOMERS EARLY MOVER IN NEW MARKETS Capital Markets Day 2013 Frankfurt M. Nordex SE

45 SUMMARY The implementation of our 2012 strategy is fully on track The full P&L impact of the strategic measures will be seen over the next two years Markets remain difficult in most cases, but Nordex is gaining market share The N117/2400 and the new Delta generation are highly competitive products, which will boost our future sales Delivering on our promises Capital Markets Day 2013 Frankfurt M. Nordex SE

46 AGENDA 1. Overview and strategy update Dr. Jürgen Zeschky 2. Financials Bernard Schäferbarthold 3. Market Update Lars Bondo Krogsgaard 4. Germany and the current EEG discussion Thorsten Herdan (VDMA) 5. Product development and Generation Delta Jan Hagen 6. Panel Discussion Nordex Board Andreas Ufer (KfW IPEX) Andrew Garrad (GL Garrad Hassan) Moderation Eize de Vries (Windpower Monthly) Capital Markets Day 2013 Frankfurt M. Nordex SE

47 GUEST SPEAKER THORSTEN HERDAN (VDMA) Germany as a role model for mature wind markets and the current EEG-discussion Capital Markets Day 2013 Frankfurt M. Nordex SE

48 AGENDA 1. Overview and strategy update Dr. Jürgen Zeschky 2. Financials Bernard Schäferbarthold 3. Market Update Lars Bondo Krogsgaard 4. Germany and the current EEG discussion Thorsten Herdan (VDMA) 5. Product development and Generation Delta Jan Hagen 6. Panel Discussion Nordex Board Andreas Ufer (KfW IPEX) Andrew Garrad (GL Garrad Hassan) Moderation Eize de Vries (Windpower Monthly) Capital Markets Day 2013 Frankfurt M. Nordex SE

49 IN A NUTSHELL N117/2400 Highly Efficient & Proven Performance for light wind Fully IEC Type Certified ahead of schedule >300 Turbines in the field or under contract worldwide Generation Delta Development on Track key milestones reached Certificates obtained in time, first 3 turbines feeding in Highly competitive for medium & strong wind sites Keeping our promises Result of robust, interdisciplinary development process NX PEP applied and continuously refined since 2010 Solid basis for future developments Bringing CoE Down Onshore wind most CoE competitive renewable w/ potential NX Product Strategy focused on driving onshore wind to grid parity, next steps lined up in products & technology Capital Markets Day 2013 Frankfurt M. Nordex SE

50 INTENSIVE PRODUCT DEVELOPMENT IS ONE ELEMENT OF STRONG BUSINESS PERFORMANCE 2013 Strong Order Intake: +61% H1-on-H1 N117/2400 for light wind conditions - taking off worldwide with 60% of order intake in H1/2013 Successfully certified and delivered 2014 Launch of Generation Delta: N117/3000 for medium wind sites and N100/3300 for strong wind sites Installation of first turbines Generation Delta: Series Deliveries starting January Highly competitive products for all wind classes Capital Markets Day 2013 Frankfurt M. Nordex SE

51 EVOLUTIONARY: MULTI MW PLATFORM Generation Beta N90/2500 Generation Gamma N100/2500 N117/2400 Generation Alpha N80/ years of experience and more than 5,000 MW installed Evolutionary strategy in product development Capital Markets Day 2013 Frankfurt M. Nordex SE

52 NORDEX N117/2400 Proven: Design and Performance Confirmed: Properties on first turbines Lowest noise turbine in its class N117/2400 Wind class acc. to IEC Climate Version Hub Height Tip Height Sound power level acc. to IEC /-14 IEC3a NCV CCV 91m <150m 120m <180m db(a) N117/2400 Most efficient turbine for light wind with proven performance Capital Markets Day 2013 Frankfurt M. Nordex SE

53 FIRST INSTALLATION OF N117/2400 ON TIME N117/2400 No. 1 in Stadum, Germany Installation finished: First Production: /12/16 03:32 am Energy Production As of MWh Full load hours h Capacity Factor (raw) 38,1% Capacity Factor (adjusted) 43,1% Measurement campaign Power Quality Noise Emission Power Curve Load Measurement finished finished finished finished Installation on time, measurements finished, properties confirmed. Capital Markets Day 2013 Frankfurt M. Nordex SE

54 N117/2400: PROVEN PERFORMANCE Power curve according IEC (Wind Consult) Noise Emission according IEC (GL Garad Hassan, D) Power quality according Technische Richtlinie Teil 3 Rev./ Version 22, FGW (Wind Consult) Key Performance characteristics confirmed by independent measurement institutes. Capital Markets Day 2013 Frankfurt M. Nordex SE

55 N117/2400: FULLY IEC TYPE CERTIFIED Design Evaluation Conformity Statement According to IEC Ed.3 For all tower types 91m, 120m, 141m Einheitenzertifikat (German Grid Cert) According to SDLWindV 2009 Typenprüfung (German Type Approval) According to DIBt-Richtlinie, March 2013 For all tower types 91m, 120m, 141m Type Certificate According to IEC Ed.3 Schedule: September 2013 Obtained: July 2013 Full IEC Type Certification obtained ahead of schedule. Capital Markets Day 2013 Frankfurt M. Nordex SE

56 N117/2400: TAKING OFF WORLDWIDE 15x Monaincha 8 x Nyby-Ii 9x Honkajoki 34x Beebe I +19x Beebe II 1x Dradenau II 1x Stadum 1x Behrendorf 1x Hohen-Luckow 302x N117/2400 in total MW in the field or order intake 21x Florida 28x Juan Pablo Terra 56 x Amakhala 5x Rotes Land 5x Kirchhain 6x Harzkopf 7x Hohenahr 4x Ruhlkirchen 7x Hochheim 7x Bayrischer Odenwald + 39 Others 8x Wetzdorf 5x Schwanfeld 6x Remlingen 5x Illschwang 2x Ursensollen 8x Zöschingen Installed Order Intake Status: August 2013 Capital Markets Day 2013 Frankfurt M. Nordex SE

57 CHALLENGE IN 2011: REVIEW PRODUCT OFFERING FOR MEDIUM AND STRONG WIND SPEEDS Result of Market Analysis & Requirement Engineering Sessions Clear need to improve products for medium and strong wind speeds (IEC 2a and IEC 1a) Answer is Nordex Generation Delta. Capital Markets Day 2013 Frankfurt M. Nordex SE

58 GENERATION DELTA COMPLETES STRONG PRODUCT PORTFOLIO FOR ALL WIND CLASSES Rotor diameter 117 m N117/2400 N117/ m N100/2500 N100/ m N90/2500 6,0 6,5 7,0 7,5 8,0 8,5 9,0 9,5 10,0 Wind speed [m/s] IEC 3a IEC 2a IEC 1a Strong interest from markets such as Capital Markets Day 2013 Frankfurt M. Nordex SE

59 GENERATION DELTA TURBINE TYPES AT A GLANCE Wind class acc. to IEC Hub Height Tip Height 75 m < 125 m N100/3300 N117/3000 N117/3000 IEC 1a IEC 2a IEC 3a 100 m < 150 m 91 m < 150 m 120 m < 180 m 141 m < 200 m Climate Versions NCV (-20*C) CCV (-30*C) HCV (-20*C), NCV (-20*C) CCV (-30*C) NCV (-20*C) CCV (-30*C) Altitude of installation Up to 2000m above sea level Sound power Acc. to IEC / db(a) + optimized sound modes db(a) + optimized sound modes db(a) + optimized sound modes Capital Markets Day 2013 Frankfurt M. Nordex SE

60 PROVEN TECHNOLOGY Electrical system (DFIG) Proven and highly economical solution Not dependent on permanent magnets Grid compatible Drive train concept Modular drive train layout with three point suspension Tried and tested gear box from qualified and established suppliers Aerodynamic designs Tested blade designs NR50 / NR58.5 with proven power curves Existing blade moulds = Fast Ramp-up Main technical concepts and first supplier setup for main components identical to Generation GAMMA and earlier platform generations Capital Markets Day 2013 Frankfurt M. Nordex SE

61 AT THE NEXT STAGE OF EVOLUTION Increased Annual Energy Production Designed for Reliability Improved Service & HSE friendliness AEP Availability OPEX Lower Cost of Energy for medium wind sites and strong wind sites. Capital Markets Day 2013 Frankfurt M. Nordex SE

62 INCREASED: ENERGY PRODUCTION Power [kw] N117/3000 IEC2A N117/3000 N100/2500 Larger: swept area Stronger: rated output AEP compared to N100/ IEC2a (8,0 m/s at 100m) +22% +31% Higher: hub heights R91 R120 Wind speed [m/s] Capital Markets Day 2013 Frankfurt M. Nordex SE

63 LOW: SOUND POWER LEVELS db(a) ,0 db(a) N117/3000 IEC2A various sound-optimised modes Wind speed [m/s] 3 m/s 4 m/s 5 m/s 6 m/s 7 m/s 8 m/s 9 m/s 10 m/s 11 m/s 12 m/s In European markets, sound power levels are crucial for permittability Delta turbines keep sound power levels stable per windclass Various sound power operation modes available for optimization. Capital Markets Day 2013 Frankfurt M. Nordex SE

64 DESIGNED FOR RELIABILITY Evolutionary optimization of subsystems Fast and safe control infrastructure Advanced slip ring Optimized cooling Capital Markets Day 2013 Frankfurt M. Nordex SE

65 IMPROVED SERVICE & HSE FRIENDLINESS Protected hub access Safe & ergonomic hub & nacelle layout Annual service interval Yaw n-1 concept Capital Markets Day 2013 Frankfurt M. Nordex SE

66 PROVEN TECHNOLOGY AT THE NEXT STAGE OF EVOLUTION Increased: Annual Energy Production Improved: Serviceability & HSE Friendliness Designed: for Reliability Generation Delta Lower Cost of Energy for medium wind sites - N117/3000 and strong wind sites - N100/3300 Capital Markets Day 2013 Frankfurt M. Nordex SE

67 ALLIANZ, GOOGLE & O2 TRUST N117/3000 N117/3000 wind energy for Google s Finnish data center [10 yr power purchasing agreement] 72 MW Maevaara Project Location: Northern Sweden Turbines: 24 x N117/3000-R120-CCV-AIS Installation: Summer 2014 Project Development: One of the largest project developers in Sweden with >2GW pipeline. O2 is going to operate the Turbines. Investment & Financing: German insurance giant Allianz Group with > 1,5 bn EUR invested in renewables via Allianz Capital Partners is to own and finance the turbines Capital Markets Day 2013 Frankfurt M. Nordex SE

68 KEEPING OUR PROMISES Generation Delta officially launched at EWEA in Vienna in February 2013 First installations and certificates in June 2013 Serial delivery in January 2014 Capital Markets Day 2013 Frankfurt M. Nordex SE

69 MILESTONES ARE ON TRACK OR AHEAD OF TIME June 2013 IEC Design Evaluation (DECS) DIBt Typenprüfung First three turbines installed January 2014 Start of serial deliveries Up to 8 turbines installed in 2013 On time Capital Markets Day 2013 Frankfurt M. Nordex SE

70 FIRST DELTA TURBINES INSTALLED in Janneby, Northern Germany N117/3000-R91 N100/3300-R100 Capital Markets Day 2013 Frankfurt M. Nordex SE

71 THIRD TURBINE IN THE FIELD in Hovsoere, Denmark N100/3300-R75 Capital Markets Day 2013 Frankfurt M. Nordex SE

72 SUCCESSFUL PRODUCT DEVELOPMENT THANKS TO ROBUST PRODUCT EVOLUTION PROCESS Interdisciplinary simultaneous engineering process: all departments on deck from day one Repeatedly proven during developments of N117/2400 and Generation Delta Meeting time line targets with first turbine installations and certificates Basis for all future developments schematic Improved adherence to time plans is not a product of chance! Capital Markets Day 2013 Frankfurt M. Nordex SE

73 N117/3000 HIGHLY COMPETITIVE IN WIND CLASS IEC2A SCENARIO: MODERATE WIND 8,0 M/S ON 120M HUB HEIGHT N100/2500-R % Net Annual Energy Production [MWh p.a., k=2.0] N117/3000-R Boosting AEP significantly Full load hours [MWh p.a./mw] % Driving up efficiency to highly competitive level 0% Sound power level [db(a), max Lwa] 106,0 106,0 Keeping sound power stable at competitive level Capital Markets Day 2013 Frankfurt M. Nordex SE

74 FOCUS IN PRODUCT DEVELOPMENT GOING FORWARD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 NXT-8.1 Ramp-up DELTA NXT-8.1 NXT-6 NXT-8.2 Extension Generation DELTA NXT-8.2 NXT-GEN Innovations on the way to grid parity Tech Boost NXT-GEN Roadmap to secure highly competitive portfolio across wind classes & consistently drive onshore wind cost of energy to grid parity Capital Markets Day 2013 Frankfurt M. Nordex SE

75 DRIVING ONSHORE WIND COST OF ENERGY DOWN /MWh 110 LCOE [ /MWh] 100 LCOE 90 [ /MWh] Light wind IEC3a Moderate wind IEC2a Strong wind IEC1a Target Corridor Grid Parity Hydro (>10 MW) Onshore Wind CCGT Coal Offshore Wind Solar / PV Source: IEA-RETD, July Range of LCOE in Europe. USD/EUR=1,32. Source: Nordex internal calculations Onshore wind is best cost of energy renewable with buildout potential today Nordex on track to drive onshore wind CoE down across wind classes Capital Markets Day 2013 Frankfurt M. Nordex SE

76 FIND OUT MORE IN OUR ONLINE SHOWROOM Capital Markets Day 2013 Frankfurt M. Nordex SE

77 AGENDA 1. Overview and strategy update Dr. Jürgen Zeschky 2. Financials Bernard Schäferbarthold 3. Market Update Lars Bondo Krogsgaard 4. Germany and the current EEG discussion Thorsten Herdan (VDMA) 5. Product development and Generation Delta Jan Hagen 6. Panel Discussion Nordex Board Andreas Ufer (KfW IPEX) Andrew Garrad (GL) Moderation Eize de Vries (WP Monthly) Capital Markets Day 2013 Frankfurt M. Nordex SE

78 PANEL DISCUSSION Andrew Garrad Andreas Ufer Dr. Jürgen Zeschky Bernard Schäferbarthold Lars Bondo Krogsgaard Moderator: Eize de Vries On the way to grid parity with evolutionary product strategy Capital Markets Day 2013 Frankfurt M. Nordex SE

79 DISCLAIMER The targeted goals in this document reflect forward looking statements which are based solely on estimates and not on predictable risks. Should the estimates with regard to the successful integration of acquisitions and the future internal growth of the company not to be realized or if other unpredictable risks should arise, it cannot be ruled out that the actual financial results of the company will differ substantially from the targeted goals as laid out in this document. In this respect Nordex SE is unable to give a guarantee that the actual financial results of the company will not differ from any forecasts or guidance given. Capital Markets Day 2013 Nordex SE Frankfurt September 17,