Nordex SE Fiscal 2011 and Outlook Frankfurt, April 2nd, 2012
AGENDA 1. Global Wind Market Development 2011 and Outlook B. Schäferbarthold 2. Order Intake B. Schäferbarthold 3. Financials 2011 B. Schäferbarthold 4. Outlook 2012 B. Schäferbarthold 5. New CEO B. Schäferbarthold 6. Initial Strategic Assessment Dr. J. Zeschky 7. Strategic Focus Dr. J. Zeschky 8. Summary Dr. J. Zeschky 2
MODERATE GROWTH OF 6% IN 2011 FOR THE WIND INDUSTRY AS A WHOLE Northern and Eastern markets stable Southern Europe weakening New MW installed: Market +4%; Nordex +9% New orders received: Wind industry -13%; Nordex +50% 1 Nordex: Slight market share improvement and significant outperformance in new orders received Notable increase in installations of 43% (yoy) due to expiry of cash grant in the US and emerging wind markets like Canada and Brazil A further 8.3 GW were under construction in the US at the end of 2011 up to 10 GW of new installations likely in 2012 Nordex: Doubling of sales and increased order intake by 38% Stronger focus on quality in China led to a minor market decrease of 5% to 18 GW still the biggest world market Major order from Pakistan (250 MW) Nordex: JV negotiations initiated to gain better access to Chinese market Source: GWEC, EWEA, AWEA, MAKE Consulting, Nordex 1) MAKE Consulting New orders received 2011 vs. 2010 3
OUTLOOK WIND ENERGY MARKET 2012 16: STABLE GROWTH AFTER US-INDUCED DIP IN 2013 Regional development Market highlights Forecast Global WTG installations to grow by 22% in 2012; CAGR 2011 2016: +7% 38 7 21 10 2010 41 9 21 10 2011 50 14 22 13 2012e +7% 52 48 11 8 25 26 13 13 55 12 27 14 57 13 28 15 2016e Americas Asia-Pac. Europe RoW Northern European demand stable Southern Europe held back by the credit crisis, but still slight growth mainly thanks to Turkey and France Eastern Europe with the highest dynamic in the region (CAGR +14%) USA will be the most volatile market due to the uncertain PTC situation extension expected by MAKE late in December 2012 Asian volume driven by China and - with a large gap India. Emerging markets catching up, Pakistan to be a TOP 3 market in Asia by 2014 RoW dominated by South Africa Offshore installations to account for ~8 % over the next 5 years but considerable uncertainty remains Source: 2010/ 2011 - GWEC; 2012-2016 - MAKE Consulting, March 2012 4
ORDER INTAKE INCREASED BY 84% IN Q1 2012 Development of firm order intake 2011 2012 in EUR mn 368 +84% 399 Others UK 284 GER 5% 14% 24% 154 186 FR 13% 23% 20% TR Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012p PL Promising start in 2012: Order intake 84% above Q1 2011 best first quarter in three years Diversified country presence without a significant exposure to weak countries of the Euro zone Orders from large utility customers (e.g. E.on) and major IPPs (e.g. Falck Renewables, Allianz, Eolia) 5
INCOME STATEMENT 2011 In EUR mn 2011 2010 Sales 920.8 972.0 Total revenues 927.0 1,007.9 Cost of materials (692.5) (748.2) Gross profit 234.5 259.7 Personnel costs (147.4) (119.4) Depreciation (27.8) (22.5) Other operating exp./inc. (89.0) (77.7) EBIT (29.7) 40.1 Exceptionals/non-recurring effects (19.4) n/a EBIT before exceptionals/non-rec. effects (10.3) n/a Net financial result (18.2) (7.3) EBT (47.9) 32.8 Tax (1.6) (11.6) Net profit (49.5) 21.2 Δ in % (5.3) (8.0) (7.4) (9.7) 23.5 23.6 14.5 (>100) n/a n/a (>100) (>100) (86.2) (>100) Sales decreased by 5% due to delayed and postponed projects in the amount of EUR 80 mn Positive EBIT in core European onshore business of EUR 4.1 mn Non-recurring items related to reorganisational costs and offshore R&D 6
CASH FLOW STATEMENT 2011 In EUR mn 2011 2010 Net profit (49.5) 21.2 Depreciation 28.2 22.5 Change in provisions (3.7) (4.8) Change in working capital (14.2) (34.0) Other cash inflow from operating activities (4.1) 5.8 Cash flow from operating activities (43.3) 20.3 Cash flow from investing activities (45.8) (58.7) Cash flow from financing activities 158.2 16.3 Change in liquidity from cash flows 69.1 (22.1) Liquidity beginning of period 141.1 159.9 Other 1.8 3.3 Liquidity end of period 212.0 141.1 Positive operating cash flow in HY2 of EUR 79.1 mn Clear investment focus on R&D and products (superior cost of energy solutions for IEC I and IEC II, comparable to N117/2400, customized applications) 7
KEY FIGURES BALANCE SHEET 2011 In EUR mn 2011 2010 2011 2010 Liquid funds 212.0 141.1 Current bank borrowings 76.2 30.3 Trade receivables and future receivables 260.1 269.5 Trade payables 109.7 177.7 Net inventories Other current assets 227.4 60.7 279.0 54.4 Others (esp. Bond) 407.5 Current liabilities 593.4 268.8 476.8 Current assets 760.2 744.0 Non-current bank borrowings 0 86.4 Deferred tax assets 40.7 32.9 Deferred tax liabilities 16.8 12.6 Other non-current assets 228.1 210.1 Other non-current liabilities 42.2 40.4 Non-current assets 268.8 243.0 Non-current liabilities 59.0 139.4 Shareholders equity 376.6 370.8 Total assets 1,029.0 987.0 Total assets 1,029.0 987.0 Liquid funds increased by 50% to EUR 212 mn due to capital measures in HY1 (bonds and capital increase) Equity ratio above 35% in line with German engineering sector 8
OUTLOOK 2012 BACK TO BLACK EBIT Bridge 2011 2012 in EUR mn ~10-30 ~-20 ~20 ~35-40 -10 EBIT 2011 Cost measures Price pressure Scale/ Volume EBIT target 2012 Expected price-pressure partly compensated by n-ergize -programme; remaining effect estimated at EUR 20 mn Additional upside potential may arise if JV negotiation in China is completed successfully 9
GUIDANCE 2012 Nordex expects a stable level of new orders EUR 1 1.1 bn Serial production N117/2400, flexible solutions for the Gamma Generation (e.g. hybrid towers up to 140 m; anti icing) Increase in business volume ~ EUR 1-1.1 bn Sound order book of ~EUR 700m at the beginning of 2012 Strong order intake in Q1 (+84% to EUR 284 mn) Back to black EBIT-margin of 1-3% Cost cutting and efficiency programme (full impact in 2012) as well as scale effects will mitigate the ongoing price pressure and support profitability Gross profit margin of ~21% Positive operating cash flow and decrease of the working capital quota to ~20% CAPEX of around EUR 70mn budgeted for 2012 Investment focus R&D, engineering test facilities 10
BOARD LED BY NEW CEO, DR. JÜRGEN ZESCHKY Dr. Jürgen Zeschky Previously Executive Vice President of Voith Turbo in Heidenheim, Germany between 2003-2012 A highly profitable hidden champion which makes drive systems used in a broad range of industries 1991-2003: Director Operations Mannesmann Demag, incl. 6 years in US Clear management focus on strategy & products Remaining board members focused on Customers (CCO), Operations (COO) and Finance (CFO) Nordex Management Board team (from left to right): Dr. Marc Sielemann (COO), Dr. Jürgen Zeschky (CEO), Lars Bondo Krogsgaard (CCO), Bernard Schäferbarthold (CFO) 11
INITIAL STRATEGICAL ASSESSMENT Strengths Major challenges Strong position in core European onshore market Best-in-class product for IEC III development pipeline targeting IEC I and IEC II Flexible organisation ensures customized solutions Quality products with high availability Unsatisfactory margins Difficult access to Chinese market for foreign OEMs Expected weakness of US market in 2013 Management capacity overstretched by various strategic initiatives Need for a focused strategy! 12
A MORE FOCUSED STATEGY Our biggest market and our main opportunity Europe Stable regulatory environment in Northern and Central Europe Nordex offers attractive low cost of energy packages Opportunities in selected markets outside the EU Americas Accounts for 1/5 of our business 2011 Expect tough market in 2013 Target: Stay break even Winning specific projects in the US Contribution from our own project development Focus on key projects in other parts of the Americas Intelligent capacity utilization Huge market but difficult to access... China...and no compelling business case Negotiations with potential JV partner are a big priority 13
A MORE FOCUSED STATEGY Challenges: Delays (due to grid issues and shortages in financing) put pressure on earnings Technological innovation needed to develop cost competitive power systems (CoE) High start-up costs due to long time to market OFFSHORE Offshore is not yet a volume market Nordex strategy: Focus on established business segments with a better visibility Reallocation of engineering capabilities to onshore development focus resources Reduction of development risks 14
A MORE FOCUSED STATEGY Challenges: Constant reduction in cost of energy (CoE) to cover pricing pressure Shorten time to market Innovation and customization PRODUCTS Nordex priorities: Further reduction of CoE by 20% until 2015 Reduce development lead times by focus on onshore Serial start of N117, developing IEC 1 and 2 versions of the platform incl. adapted features (e.g. towers) 15
NORDEX STRATEGY: GOALS AND TARGETS 2013 2011 Preparing the ground Reorganisation and cost reduction Strong order book Development of N117/2400 2012 Back to black and profitability OI: EUR 1-1.1 bn Sales: EUR 1-1.1 bn EBIT: 1-3% Further growth generated by a clear focus on profitable onshore business and R&D-capabilities 16
MY GOALS FOR 2012 1. Finding good solutions for the offshore project and our business in China 2. Development of a clear strategic profile 3. Efficient implementation of strategy 17
SHAREHOLDER STRUCTURE OF NORDEX SE REMAINS STABLE SKion/momentum capital 24.99% Freefloat 75.01% On the basis of 73.529 mn shares, as of March 2012 18
Contact Ralf Peters Head of Corporate Communications Phone: +49 (0)40 30030 1522 Fax: +49 (0)40 30030 1333 email: rpeters@nordex-online.com Nordex SE Langenhorner Chaussee 600, 22419 Hamburg, Germany www.nordex-online.com 19
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. 20