Nordex SE Capital Markets Day Introduction - Thomas Richterich Rostock, 13 October 2011
PROGRAMME NORDEX CAPITAL MARKETS DAY 08.00 08.30 Welcome & overview 08.30 09.30 09.30 09.45 Break 09.45 10.45 10.45 11.00 11.00 12.00 12.00 12.30 Lunch 12.30 13.30 13.30 14.00 Presentation Market development Presentation Production & efficiency Presentation Testing facility engineering Plant tour rotor blade production & testing facility Presentation Products & sales Transfer to turbine assembly facility in Rostock 14.00 15.00 Plant tour turbine assembly 15.00 15.30 Summary & leave-taking Thomas Richterich, CEO Nordex SE Morten B. Keller, CEO MAKE Consulting Dr. Marc Sielemann, COO Nordex SE Helmut Resing-Woermer, Head of test & prototype Nordex Energy GmbH Dr. Rolf Buetje, Head of rotor blade plant Nordex Energy GmbH Lars Bondo Krogsgaard, CSO Nordex SE Jens Martin Hoika, Head of Production Europe Nordex Energy GmbH Thomas Richterich, CEO Nordex SE 2
SHORT BIOGRAPHY Thomas Richterich (CEO Nordex SE) Studied business management 1990 1997 Head of Controlling, MAN Gutehoffnungshütte AG 1997 1999 Head of Controlling, Ferrostaal AG 1998 2000 Commercial Director, Ferrostaal Industrial Plant Services GmbH 2000 2002 Director and Head of Controlling, Babcock Borsig AG 2002 Commercial Director, Babcock Borsig Power GmbH 2002 2007 Chief Financial Officer, Nordex SE Since 2005 CEO, Nordex SE Morten B. Keller (CEO MAKE Consulting) Mr. Keller is co-founder of MAKE Consulting. He focuses on strategies, supply chain and commercial and financial aspects. Mr. Keller has held managerial positions within business development, marketing and communication at NEG Micon and Vestas Wind Systems, and has been Senior Renewable Energy Analyst at Nordea Bank. Dr. Marc Sielemann (COO Nordex SE) Studied engineering 1992 1998 Project Engineer/Research Assistant at the Institute of Production Engineering and Machine Tools, University of Hanover 1998 2003 Group Head MAN Nutzfahrzeuge 2003 2005 Head of Component Production, MAN Nutzfahrzeuge AG 2006 2007 Head of Commercial Vehicle Production Operations in Eastern Europe 2006 2009 Managing Director of MAN Nutzfahrzeuge AG / MAN Trucks Sp. z o.o., Poland Since 04/2009 COO, Nordex SE 3
SHORT BIOGRAPHY Helmut Resing-Woermer (Head of Test & Prototype Nordex Energy GmbH) Studied electrical engineering 1997 1999 Development Engineer, Nordex Energy GmbH 1999 2008 Head of Measurement Group, Nordex Energy GmbH Since 2008 Head of Test & Prototype Departement, Nordex Energy GmbH Dr. Rolf Buetje (Head of Rotor Blade Plant Nordex Energy Gmbh) Studied engineering 1992 2001 Various management positions at Airbus 2001 2007 Head of Corporate Research Center Germany, EADS 2007 2008 Head of Vertical Tail Production, Airbus Since 2009 Head of Rotor Blade Plant, Nordex Energy GmbH Lars Bondo Krogsgaard (CSO Nordex SE) Studied law, MBA 1986 1988 Shipping trainee, A.P. Moller/MAERSK 1993 1998 Lawyer, Bech Brunn 1998 2000 COO, Young & Rubicam Denmark Group 2000 2002 COO, Brandts Ventures 2002 2006 Vice President Renewables, DONG Energy 2006 2010 CEO Region EMEA, Siemens Wind Power Since 10/2010 CSO, Nordex SE 4
SHORT BIOGRAPHY Jens Martin Hoika (Head of Production Europe Nordex Energy GmbH) Studied mechanical engineering 1998 2001 Joining Technology Engineer, Bertrand Faure / Faurecia 2001 2002 Team Leader Joining Technology, Faurecia 2002 2006 Production Manager, Faurecia Unna 2006 2010 Head of Production Component Department, MAN Nutzfahrzeuge AG 2010 2011 Vice President Supply Chain Management, MAN Truck & Bus AG Since 2011 Head of Production Europe, Nordex Energy GmbH 5
KEY MESSAGES Dynamics of the wind business are changing Product differentiation becomes more and more important High quality is a key success factor, stronger focus on quality in China Smart medium-sized businesses have good prospects in this industry Clear focus Platform strategy Fast and flexible organisation 6
OUTLOOK WIND ENERGY MARKET Development new installed capacity 2010 2016 in GW Total volume 2011-2016: 69 GW Total volume 2011-2016: 152 GW Total volume 2011-2016: 86 GW Thereof globally offshore `11 -`16: 24 GW WTG installations will grow by 10 % (CAGR) between 2010 and 2016 Offshore will account for ~ 8 % of the expected market volume between 2011 and 2016 The US will be the most volatile market Source: MAKE Consulting, August 2011 7
CHALLENGING MARKET ENVIRONMENT Build-up of capacities has led to ongoing pressure on turbine prices ASPs down 20% from peak in 2009 Wind asset financing back at high level of Q2-2009 Low level of orders in US, but many projects expected in H2-2011 Strong growth in China; situation in Europe has improved US power prices halved, PPAs improving but still at low level Positive order activity in onshore projects in Northern and Central-Eastern Europe First projects by Chinese OEMs in US and Europe, but only possible with Chinese financing 8
Cost (EUR) NORDEX IS ON A GOOD WAY TO FURTHER REDUCE COSTS OF ENERGY Two strategic levers to reduce Cost of Wind Energy (CoE) 1. Cost down Reduce WTG and OMS cost Increased energy yield (+ 17%) Cost reduction N-ergize (- 15%) Cost of Energy 2. Performance up Increase Energy yield Performance 9
THE ANSWER: CUTTING THE COST OF WIND ENERGY WHICH IS WHAT NORDEX IS DOING Additional measures: Structural costs Already implemented: Europe 2011 Nordex 2010 N-ergize 15 % cost reduction 2012 Optimisation EUR 190 mn EUR 140 mn Increased energy yield by up to 17 % Full financial impact in 2012 10
PRODUCT DEVELOPMENT WITH A DUAL FOCUS: COST REDUCTION AND PERFORMANCE INCREASE Head mass per MW [t/mw] Future light cost reduction -25% Tomorrow 4 MW Onshore 6 MW Offshore Today heavy 2.5 MW Gamma 1.5 MW Beta +20% Update 1.5 MW N117/2.4 MW 2,000 3,000 4,000 5,000 Swept area per MW [m²/mw] "performance increase 11
PRODUCT DEVELOPMENT PROGRAMME Key differentiator: Energy efficiency Further Development of the 2.5 MW platform Differentiators - Energy efficiency Qualifiers - Full grid integration Must have - High reliability 4 MW Onshore turbine Based on its high quality products and a full grid integration programme Nordex is taking the next step to differentiate itself from its competitors Nordex product development programme will significantly increase energy efficiency The new products are designed to be best in class 6 MW Offshore turbine 12
REALIGNMENT OF GLOBAL REACH Nordex USA Top 5 player and state-of-theart production facility Excellent access to utility companies and project development pipelines of vital importance Nordex China Partnership with domestic player with full access to market Negotiation with some shortlisted companies Nordex Offshore Looking for a partner with related and complementary expertise and strong balance sheet Going forward Nordex seeks to strengthen distribution and customer access through strategic partnerships outside Europe and in offshore business 13
NORDEX EUROPE Subsidiaries Production facility in Rostock, Germany Headquarters located in Hamburg, Germany Uppsala Rostock Nacelle and blade production Start of production in Rostock: Nacelle: 1999 Dublin Kolding Manchester Paris Warsaw Blade: 2001 Max. production capacity 2,500 MW/year approx. 400 employees in production Porto Barcelona Rome Istanbul Hamburg Headquarters 14
NORDEX USA First installation in the US in 1996 Nordex USA HQ established 2008 in Chicago Start of production 10/2010 Production capacity Jonesboro (AR) 750 MW/year No. 4 in new orders placed in 2010 200 employees 15
NORDEX CHINA The 1 st N90/2500kW turbine in China was installed in Dec., 2010, at CEPRI s testing base in Zhangbei, Hebei. Beijing Headquarters 100 % subsidiary - Established in 2008 - All central functions for Nordex China - Employees: 124 Yinchuan Turbine assembly 60 % JV - Established in 2005 - Assembly of nacelles - Employees: 99 Dongying Blade production 100 % subsidiary - Established in 2006 - Production of rotor blades - Employees: 179 16
10 KEY MEASURES TO INCREASE COMPETITIVENESS Core Challenges for Nordex Key Measures to strengthen our Business Model Market Approach Business Segments Products Structure/ Organization 1. Sales: Strong European base with focused market approach 4. Leverage own project development for order intake baseline 7. Launch products with superior energy yield and performance 9. Clear Management structure reflecting challenges & new business targets 2. Asia: Joint Venture 3. Americas: Continue market penetration 5. Enhance Service business 6. Market entry offshore (JV) 8. Continue successful path to further drive WTG cost down 10.Reduce cost structure to safeguard company value 17