FORWARD LOOKING STATEMENTS

Transcription

1 FINANCIAL UPDATE

2 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of These forward-looking statements include statements, among other things, concerning: effects on our financial statements and guidance resulting from certain module manufacturing changes and associated restructuring activities; our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs (including estimated future module collection and recycling costs), warranties, solar module technology and cost reduction roadmaps, restructuring, product reliability, investments in unconsolidated affiliates and capital expenditures; our ability to continue to reduce the cost per watt of our solar modules; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to expand manufacturing capacity worldwide; our ability to reduce the costs to construct PV solar power systems; research and development programs and our ability to improve the conversion efficiency of our solar modules; sales and marketing initiatives; and competition. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the matters discussed in Item 1A "Risk Factors," of our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. 2

3 2017 RECAP: STRATEGIC REPOSITIONING MODULES SYSTEMS SALES & DEVELOPMENT Series 4: Ramping down Series 5: Discontinued TetraSun: Discontinued Module Plus: Discontinued Structures: Internal Tracker and Fixed Tilt discontinued EPC: Capabilities right-sized to development portfolio OM: Exited Skytron (Europe) Module Sales: Reduced direct sales presence in markets serviced via partnerships Development: Re-focused on key markets Focused Resources & Capital on Series 6 Maintain EPC Capabilities Optimize Existing Ecosystem Global Module Sales, Maintain Development in Strategic Markets 3

4 2018 OUTLOOK

5 BALANCED BUSINESS MODEL PHILOSOPHY GROWTH Bookings Product Mix Shift Revenue Demand Generation CREATING SHAREHOLDER VALUE PROFITABILITY Cost per Watt Gross Margin OpEx per Watt EPS LIQUIDITY Cash from Operations Net Cash Position Working Capital 5

6 Bookings Shipments BOOKINGS TREND GWs x 1.7x Book-to-Bill Ratio 1.2x 0.5x 3.0x YTD * *As of Dec 1,

7 BOOKINGS VS EXPECTED CAPACITY 2018 to 2020 Capacity ~13.8GW dc Contracted Volume 7.7GW dc Mid/Late Stage 5.6GW dc 6,000 5,000 4,000 3,000 2,000 1,000 Expected 2017 Signed (not booked) Series 4 S4 Extension Series 6 Delivery Timing 2017 = ~0.2GW = ~7.5GW Pipeline Status Expected 2017 = ~1.1GW Signed = ~2.0GW *As of Dec 1,

8 TARGETED BUSINESS MIX GWs 6 Development EPC Module ~0.9GW ~1GW ~1GW

9 DEVELOPMENT CONTRACTED PORTFOLIO: 1.8GW DC 1 U.S., Japan, Australia, India OPPORTUNITY PIPELINE: Mid/late stage 1.8 GW DC Expected Revenue Recognition: 2018 Project Size (MW AC) PPA Offtaker % of Revenue Recognized 2 California Flats, CA 280 PG&E / Apple 68% Rosamond, CA 150 SCE 0% Willow Springs, CA 100 SCE 0% Australia 49 Energy Australia 0% India Projects Various 0% Japan 80 Various 0% Expected Revenue Recognition: Post 2018 Project Size (MW AC) PPA Offtaker 1 Includes portion of California Flats project already constructed. 2 - As of Sep 30, Portion of project sales expected in Marin Clean Energy Substantial Completion Sun Streams, AZ 150 SCE 2019 American Kings, CA 126 SCE 2020 Sunshine Valley, NV 100 SCE 2019 Little Bear, CA 40 MCE Japan 130 Various

10 TARGETED BUSINESS MIX GWs 6 Development EPC Module ~0.3GW ~0.9GW ~1GW ~1GW

11 TARGETED BUSINESS MIX GWs 6 Development EPC Module EPC, O&M Opportunity ~0.3GW ~0.9GW ~1GW ~1GW

12 GROSS MARGIN: MODULE BUSINESS Indicative / Not To Scale >20%** 15-20% ~12%* <12%* Competitor Reported GM % Freight, Warranty Competitor Adjusted GM % CpW Advantage Energy Yield Advantage BOS Penalty Series 4 GM % BOS Penalty Elimination CpW Reduction Series 6 GM % *Based on last twelve months competitors gross margins (includes CSIQ, HQCL, JASO, JKS, YGE) from public filings. ** FS gross margin excludes ramp penalty 12

13 70% 60% 50% 40% 30% 20% 10% 0% ecember 2017 GROSS MARGIN OUTLOOK Indicative / Not To Scale Contracted > 50% Series 6 > 20% Series % Incremental > 20% Contracted > 30% Incremental 10-30% 5-10% Module Development EPC O&M 13

14 OPEX: EFFECTIVE MANAGEMENT $m $/W R&D SG&A OpEx per Watt produced E 2018E - *2017 operating expense based on guidance mid-points. Excludes restructuring and plant start-up 14

15 OPEX: EFFECTIVE MANAGEMENT $m $/W R&D SG&A OpEx per Watt produced E 2018E - *2017 and 2018 operating expense based on guidance mid-points. Excludes restructuring and plant start-up 15

16 PRIORITY LIQUIDITY: APPROACH 1 Working Capital Capacity Expansion & Other CAPEX Project Development and Construction M&A 5 Capital return 16

17 ecember 2017 CAPACITY EXPANSION: SERIES 6 CAPEX 2020 Year End Announced Series 6 Capacity GW 600 ~$650M ~$450M ~$150M - $250M ~$50M - $100M

18 2,000 1,500 1, ecember 2017 PROJECT DEVELOPMENT AND CONSTRUCTION $1.9 B $1.7 B ~50% reduction in Project Assets and PV Systems on balance sheet ~65% reduction, net of project debt ~65% Lower BOS and module costs-per-watt reduce balance sheet exposure $0.9 B $0.6 B Leveraging project level debt to offset cash spend and mitigate currency risk in international markets Recycling capital faster by selling projects pre-cod Q Q Project Assets + PV Systems Project Assets + PV Systems, Net of Project Debt 18

19 PRIORITY LIQUIDITY: APPROACH 1 Working Capital Capacity Expansion & Other CAPEX Project Development and Construction M&A 5 Capital return 19

20 Net (Debt)/Cash in $ millions NET CASH: 2016 ANALYST DAY 3,000 Net Cash Position 2,000 1,000 0 (1,000) (2,000) (3,000) FSLR SunPower JA Solar Net Debt Position Hanwha Q Cells Trina Solar Jinko Solar Canadian Solar Yingli Solar SunEdison Source: Net cash/debt based on Photon Consulting estimates as of Dec

21 Net (Debt)/Cash in $ millions Private Defaulted Bankrupt NET CASH: CURRENT 3,000 Net Cash Position 2,000 1,000 0 (1,000) (2,000) (3,000) Net Interest Income (Exp) FSLR SunPower JA Solar Net Debt Position Hanwha Q Cells Trina Solar Jinko Solar Canadian Solar Yingli Solar SunEdison $5M ($81M) ($47M) ($43M) N/A ($51M) ($98M) ($95M) N/A Source: Net cash/debt based on Q3 17 public filings. Jinko Solar, Yingli Solar based on Q2 17 filings. Net interest expense is last 12 months as reported in company filings. 21

22 2018 GUIDANCE

23 2018 GUIDANCE: CONTEXT TAX REFORM: Guidance based on existing tax law 201 TRADE CASE: Outcome remains uncertain Limited potential impact to 2018 guidance 8POINT3 SALE: Sale process ongoing Guidance assumes no change in ownership RESTRUCTURING: Limited 2018 restructuring expense (~$10M) ACCOUNTING: Updated segment reporting 23

24 2018 GUIDANCE: ASSUMPTIONS AS OF DECEMBER 5, 2017 PRODUCTION CAPACITY: ~2.9GW dc (1.9 GW Series 4, 1 GW Series 6) VOLUME SOLD: ~2.8GW dc (1.6 GW module, 0.9 GW development, 0.3 GW EPC) REVENUE MIX: 20% - 25% module 75% - 80% systems DEVELOPMENT SALES: US: California Flats (2 nd phase), Rosamond, Willow Springs International: Japan, India & Australia projects SERIES 6 EXPANSION: Ramp Penalty (COGS): Approximately $60M Plant Start-Up (OPEX): Approximately $110M 24

25 2018 GUIDANCE: AS OF DECEMBER 5, GAAP Guidance Net Sales $2.3B to $2.5B Gross Margin (%) 22% to 23% Operating Expenses $400M to $410M Operating Income 1 $110M to $170M Earnings Per Share 1 $1.25 to $1.75 Net Cash Balance 2 $1.6B to $1.8B Operating Cash Flow $100M to $200M Capital Expenditures $650M to $750M Shipments 2.7GW to 2.8GW ~$60M of ramp penalty included in COGS ~$110M of plant start-up included in OpEx SERIES 6 1 Includes approximately $10M of restructuring related charges. 2 - Cash and marketable securities less expected debt at the end of

26 ecember 2017 SERIES 6: 5.4GW PRODUCTION CAPACITY BY YEAR END Capex ($M) ~$450 ~$650 $150 $250 $50 $100 ADDITIONAL COGS & OPEX ASSOCIATED WITH SERIES 6 EXPANSION ~$170 M Ramp penalty (COGS) 60 Start-up expense (OpEx) ~$50 M ~$50 M ~$50 M

27 SUMMARY 2018 OUTLOOK Focus on differentiated technology and differentiated business model Strong bookings and pipeline anchoring announced capacity expansion Business mix of ~1GW development, selective 3rd party EPC, module only growth OpEx discipline leveraging fixed cost base 2018 GUIDANCE EPS midpoint guidance of $1.50/share Includes ~$170M Series 6 ramp and start up costs Maintaining strong balance sheet and liquidity throughout Series 6 transition 27

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