Investor Presentation Nordex AG. May 2006

Transcription

1 Investor Presentation Nordex AG May 2006

2 Disclaimer This document is made by Nordex AG solely for use at the presentation held to you by Nordex AG in April/May, It is furnished to you solely for your information, should not be treated as giving investment advice and may not be copied, distributed or otherwise made available to any other person by any recipient. The facts and information contained herein are as up to date as is reasonably possible and is subject to revision in the future. Neither Nordex AG nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation. Neither Nordex AG nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. Whilst all reasonable care has been taken to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Nordex AG. Any opinions expressed in this document are subject to change without notice and neither Nordex AG nor any other person is under any obligation to update or keep current the information contained herein. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Nordex AG as being accurate. This presentation contains forward-looking statements, which involve risks and uncertainties. These statements may be identified by words such as expectation or target or forecast and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. No obligation is assumed to update any forward-looking statements. This presentation does not constitute an offer or invitation to subscribe for, or purchase, any shares of Nordex AG and neither this document nor anything contained herein shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This document is not an offer for sale of securities. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Nordex AG does not intend to register any securities in the United States or to conduct any public offering of securities in the United States. Page 2

3 Nordex Management Team Thomas Richterich CEO / CFO Dr. Hansjörg Müller COO Carsten Pedersen Board Member Head of Sales Previous positions with MAN, Ferrostaal and Babcock Borsig CFO since 2002, CEO since 2005 Previous positions with Siemens and Roland Berger Since 2004 Nordex board member for Operations Managing Director of Nordex Energy GmbH since 1987 and Board Member of Nordex Responsible for Sales, since 2001 Page 3

4 Nordex at a Glance Headquarter: Norderstedt, Germany Founded in 1985 in Denmark Establishment of production operations in Germany (1992) and China (1998) IPO in 2001 Global manufacturer of wind energy systems with a focus on turbines in the MW class Installed Base by Geography Other Europe 30% America 2% Africa 4% Asia 20% Installed Base by Segment Small WTG (<750 kw) 6% Germany 44% 2005 Sales of 309m 721 employees Main production sites in Rostock (Germany) and Baoding (China) MW Class ( MW) 43% Mainstream ( MW) 51% Total Base (as of Mar-2006): 2,738 Page 4

5 Investment Highlights Attractive fast growing end-markets Well positioned for strong growth Technology leader Well-positioned across the value chain Positioned in high-growth product segments International expansion Successful completion of turnaround Momentum generation & further upside potential Strong management team with proven track record Page 5

6 Attractive Fast Growing End-Markets: Growing Importance of Wind Energy Total Installed GW CAGR : 28.6% CAGR 2006E 2015E: 15.8% 2.4% 1.9% 2.1% 1.6% 1.4% 1.2% 1.1% 0.9% % 0.1% 0.2% 0.2% 0.3% 0.3% 0.4% 0.5% 0.6% 0.7% % 2.9% CAGR % 13% 53% 17% 29% 17% 24% 16% % 11% % Increase Europe The Americas Asia-Pacific RoW Wind Pow ers' Share of Total Pow er Market Source: BTM Page 6

7 Attractive Fast Growing End-Markets: Key Growth Drivers Demand for wind energy driven by renewables regulations, price competitiveness of wind energy and strong worldwide energy demand Growing Energy Consumption Rising Energy Costs World demand for primary energy increased by over 4% in 2004, world petrol demand by 1.5% in 2005 Economic growth in 2006 expected to support oil demand further (+2.2% vs in volume terms) IEA estimates worldwide energy demand may double from 2002 to 2030 Oil price more than tripled since 2001, reaching all-time high in spring 2006 with in excess of US$70/barrel Market forward curve for oil swaps implies prices at a level of US$70-75 for next three years Generation Cost in /MWh Photovoltaic Solar Thermal Conv. Gas/Oil CC Biomass Advanced Gas/Oil CC Wind Favourable Regulatory Environment Kyoto protocol supports renewable energy to help countries achieve their targets Regulatory outlook worldwide positive: PTC in US extended until end of 2007; widely expected to be extended again Supportive new renewable energy law in China European Parliament reiterates position on renewable energy targets (20% by 2020) IGCC - Coal Geothermal Conv. Hydro Advanced Nuclear /MWh Source: Goldman Sachs Commodity Research, Bundesverband Wind Energie, Merrill Lynch Commodities Research Page 7

8 Well Positioned for Strong Growth: Technology Leader Nordex track record of technological innovation Current R&D Initiatives Production of the world s largest series wind turbine (250 kw) Construction of the world s first series MW wind turbine Completion of the world s first series of 80m class 2.5 MW wind turbine Installation of 1 st Nordex offshore turbine Launch of serial production of 90m class 2.5 MW wind turbine New drive train concept with differential gearbox (N90/2500) Upgrade yaw system Upgrade pitch system New platform generation Modular tower concept incl. standardized mounting parts (S70 & N90) Advanced control system (reduced-load operation) Redesign of rotor blade NR45 (until maturity phase) Adoption to international grid codes Development of 100m class turbine Page 8

9 Well Positioned for Strong Growth: Well Positioned Across the Value Chain Project development marketing financing Wind farm system planning Technical realisation Wind farm operation Service and maintenance Market leader in France (high margin potential) Development of first commercially financed project in China Micrositing of 100% of signed projects to review customer layout Supporting customers (codevelopment) to receive necessary approvals and to optimize the park layout Core business: WTG assembly, production of selected components, installation on site, initial operation Additional service offering: increasing demand due to new wind farm investors, which are only interested in stable cash flow 2200 turbines are currently under Nordex service Full service contract offering up to 9+3 years duration Page 9

10 Well Positioned for Strong Growth: Positioned in High-Growth Product Segments Nordex is growing faster than the market and has established a proven technological position in the MW turbine class Newly installed MW p.a. 12,000 CAGR: 12.2% 11,203 CAGR by MW class NM 10,000 8,000 7,057 7,417 8,305 8, % 6,000 4, % 2, A 2002A 2003A 2004A 2005A < > 2500 (35.2)% MW-Class ( kw) is by far the fastest growing segment and will be the market mainstream in the next 5 years Page 10

11 Nordex Has Grown Faster Than the Market Leading to Recovery of Market Share Market Growth in 2005 Nordex World Market Share Recovery in 2005 GE 120% 7% 3% 2% 3% Market Share Suzlon 117% Nordex Repower Siemens Enercon Vestas Ecotécnia 30% 24% 17% 15% 12% 60% Nordex Newly Installed Capacity in MW % H Mitsubishi Gamesa 0% 9% World Market Growth 40% 70 1H Source: BTM 2006 Page 11

12 Well Positioned for Strong Growth: International Expansion As of Mar-2006 Nordex has installed 1,543 turbines outside Germany (56% of total installed base) and is further expanding its international operations. Country Activity China: Foundation of rotor blade production (4,000 sqm) for N60/1,300 kw in spring 2005 Foundation of production JV for S70/77 (1,500 kw) in spring 2006 Foundation of rotor blade production for S70/77 planned for 2006 USA: Market re-entry in 2006/7 France: Upgrading capacities for project development 17 new projects developed, construction expected in 2006/7 (total capacity: ~240 MW) UK: Successful re-entry achieved in 2006 (first major orders signed) Italy: Successful entry achieved in 2006 (first major order signed) Page 12

13 Successful Completion of Turnaround Monthly Performance Since 2005 Revenues (in m) EBITDA (in m) May-2005 Financial Restructuring Completed 62.7 May-2005 Financial Restructuring Completed % % 7.4% 1.0% 6.1% 6.1% % 7.9% 5.1% 5.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar (0.9)(0.9) (6.6)% (0.9) (6.3)% (6.3)% (1.6) (1.5) (15.8)% (10.5)% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar EBITDA Margin Page 13

14 Momentum Generation: Continuously Increasing Order Intake Order Intake Above Budget in 2005 and 1Q 2006 Q1-4: 395m Order Intake by Region in 1Q-2006 Asia 1% Germany 16% Q1/2006: 263m Q1-2: 158m Q1-3: 280m +67% Rest of Europe 83% Total: 263m Order Intake by Product in 1Q N60/N62 4% Sub-MW 0% S70/S77 12% 50 0 Q1: 35m Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec N80/N90 84% Total: 263m Page 14

15 Further Upside Potential EBIT Improvement Plan EBIT Improvement Plan EBIT Improvement Plan Targets Operative restructuring completed in Mar-2005 Subsequently EBIT Improvement Plan launched with a focus on 2-3% 1.5-2% ~10% Service Performance Procurement & Logistics Technology 1.5-2% Aim of the plan is to enable Nordex to achieve an attractive sustainable level of profitability in order to reduce the exposure to external influences, e.g. change of market demand, supply situation, raw material pricing etc. 2% 2% Post Restructuring Service Performance Procurement & Logistics Technology Others Target Page 15

16 Increase of EBIT Margin Expected Due to Implementation of Improvement Plan Examples of Measures Cumulative Sustainable Cost Savings Development of lighter tower for weak wind sites Steps of implementation: (in m) 70.0 Specification Prototyping Certification Implementation in series production 38.6 Duration: approx. 18 months New supplier for casting parts in China Steps of implementation: Pre-selection Qualification Certification Audit Duration: approx. 18 months May-2005 Sep-2005 Dec-2005 Mar-2006 Dec-2006E Dec-2007E Proven track record in implementation of extensive plans Page 16

17 Further Upside Potential: Enhanced Outlook E (old) 2006E (new) Order Intake > 450m 600m (Y-on-Y) +14% +50% Revenues > 400m 460m (Y-on-Y) 30% +50% EBIT Margin 2.5% 3.0% Projected revenues secured by order volume: 100% of 2006 revenues secured by unconditional orders Unconditional and conditional orders (> 1bn) secure workload until end of 2007 Mid-term annual growth target of 50% Page 17

18 Opportunities for and Limitations of Growth Beyond Plan Opportunities 1. Markets Recovery of market share, target > 5% 2. Core components International supply 2-3 supplier strategy Limitations New set-up in 1-2 markets p.a. Cautious towards offshore Production capacity gear boxes and blades 3. Product development capabilities 4. Production capacities 5. Management & organisation 6. Financial capabilities Solid 2.5 MW technology Scaling up to 4.0 MW Europe: expandable to 750 (turbines) / 400 (blades) MW Asia: expandable to 250 (turbines) / 300 (blades) MW Restructuring completed Basis for further improvements Set-up for business volume with a target of m Above 4.0 MW completely new design required North America Further investments in Europe and Asia Max. growth path +50% p.a. Working capital requirements Investment requirements Page 18

19 Investment Highlights Attractive fast growing end-markets Well positioned for strong growth Technology leader Well-positioned across the value chain Positioned in high-growth product segments International expansion Successful completion of turnaround Momentum generation & further upside potential Strong management team with proven track record Page 19

20 Appendix Page 20

21 Price Development of Fossil Fuels in % Q1/2004 Q2/2004 Q3/2004 Q4/2004 Q1/2005 Q2/2005 Q3/2005 Q4/2005 Q1/2006 Steam Coal ARA $/MT Natural Gas $/MMBTU Crude Oil WTI Spot U$/BBL Increasing prices of fossil fuels have made wind more competitive Source: ARA, WTI, Datastream Page 21

22 Spot Market Price in 2005 (EEX) Euro/MWh Jan-2005 Feb-2005 Mar-2005 Apr-2005 May-2005 Jun-2005 Jul-2005 Aug-2005 Sep-2005 Oct-2005 Nov-2005 Dec-2005 Peakload Baseload EEG max. remuneration (85.9 EUR/MWh) EEG basic remuneration (53.9 EUR/MWh) Market power price was considerably in excess of the EEG tariff Source: EEX Page 22

23 The Nordex Group s Restructuring Concept was based on Five Core Elements 1 2 Focus on attractive core markets Concentration on foreign growth markets Improved marketing efficiency Regaining technical position in upper market segment Elimination of existing deficiencies and lowering production costs Priority: N80/N90 5 Harnessing liquidity potential by reducing working capital Creation of a reasonable cost structure to regain competitiveness Elements of restructuring at Nordex Group 3 Elimination of previous organizational shortcomings Pragmatic approach to optimize business processes with immediate activities Avoidance of inventory losses and guarantee expenditure 4 Radical cost-cutting by means of operative and structural measures Creation of a reasonable cost structure to regain competitiveness Page 23

24 2005 Recapitalisation and Current Shareholder Structure of Nordex Recapitalisation Completed in May 2005 Current Shareholder Structure Share Capital Reverse split 10 : 1 Cash Capital Increase Debt-to- Equity Swap 41.6m Capital increase with pre-emptive rights for existing shareholders All shares from rights not taken up by existing shareholders purchased by CMP and Goldman Sachs Reduction in bank liabilities of 28m Issue of 12m new shares Nordvest 4.8% Morgan Stanley 4.8% Freefloat 21.4% CMP 35.2% Credit Facilities Renewal for a further four years in the existing credit facilities 60 million in additional credit facilities HSH Nordbank 5.0% HypoVereinsbank 5.7% Goldman Sachs 23.1% Page 24

25 Product Overview Type Capacity Regulation Certification Nordex N60 1,300kW stall GL1/GL2 Nordex S70/77 1,500kW pitch GL2/IEC 3a Nordex N80 2,500kW pitch IEC 1a Nordex N90 2,300kW pitch GL2 Nordex N90 2,500kW pitch IEC 1b (HS) IEC 2a (LS) Page 25

26 Production Facilities NR-34/37 NR-40/ blades/year 180 blades/year 8-10 WTG MWclass/week Yinchuan: S70/77 JV 2 WTG 600 kwclass/week 99 blades/year Page 26

27 Income Statement (IFRS) m Sales 01-Oct Sep Jan Dec % Total Revenues % Cost of materials as a percentage of total revenues (173.3) 79.2% (251.3) 78.6% % Personnel costs as a percentage of total revenues (34.5) 15.8% (34.1) 10.7% (0.4) (1.3)% Depreciation/amortisation as a percentage of total revenues (12.1) 5.5% (11.7) 3.7% (0.4) (3.3)% Other operating income/expenses as a percentage of total revenues (24.0) 11.0% (22.1) 6.9% (1.9) (7.9)% EBIT (operational) (25.5) % One-off items (2.5) (5.4) (2.9) (116.0)% Financial result (5.1) (3.0) % Tax Net income/loss (33.5) (8.2) % Page 27

28 Balance Sheet (IFRS) m 31-Dec Dec Dec Dec-2005 Fixed assets Shareholder s equity Current assets Provisions Net inventories Receivables and other assets Liquid funds Liabilities Banks Trade payables Other liabilities Other assets Others Total Assets Total liabilities and equity Page 28

29 Cash Flow Statement (IFRS) m Net income/loss Depreciation Change in provisions Change in inventories Change in trade receivables and other assets Change in trade payables and other liabilities Other changes from operating activities Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Change in liquidity 01-Oct Sep-2004 (33.5) 12.2 (4.6) 41.8 (6.6) (8.6) (3.3) (0.4) (2.9) 01-Jan Dec-2005 (8.2) 11.7 (6.3) (23.5) (12.6) 18.6 (0.3) (20.6) (8.6) Page 29

30 Contact Nordex AG Ralf Peters Bornbarch Norderstedt Germany Head of Corporate Communication/ Investor Relations Phone: +49 (0)40/ Fax: +49 (0)40/ rpeters@nordex-online.com Page 30

31 Financial Calendar Annual general meeting in Rostock May 15, 2006 Report on the first quarter of 2006 May 30, 2006 Report on the first half of 2006 August 25, 2006 Report on the third quarter of 2006 November 23, 2006 Report on fiscal 2006 April 26, 2007 Page 31