Nordex AG Nordex AG Conference Call Q1/2009 May 22, 2009 Nordex AG Conference Call Q1 2008 Nordex AG Conference Call FY 2008 April 21, 2009 May 26, 2008 Page 1
Overview Promising start to 2009 Sales +17% yoy in Q1; 20% of full-year sales target achieved Cost savings measures have already begun to take effect Cautiously optimistic outlook for 2009 Significant uptick in order intake in March Economic stimulus packages expected to make an impact over the course of 2009 Sales expected to climb over EUR 1.2 billion in 2009; profitability will remain positive, but below level of 2008 Increase in working capital will be reversed Solid balance sheet Nordex will benefit from strong industry growth from 2010 onwards Favourable government policies and economic stimulus packages will lead to substantial growth from 2010 onwards Particularly strong prospects in USA and China Full impact of investment in new structures and efficiency improvements Page 2
Strong political support for future electricity generation by renewable sources The US market: Target 2012: 10% renewables Target 2025: 25 % renewables New installed MW (America) 9,476 7,270 9,900 USD 112 bn green stimulus package (USD 40 billion earmarked for clean energy) Production Tax Credit (PTC) extended to 2012 New investment tax credit (option to elect in lieu of PTC) currently 30% based on cost of projects Treasury Grant Program (option to elect in lieu of ITC) for projects US utility companies have recently announced their intention to invest significantly in renewable electricity 2008 2009e 2010e Source: MAKE; HSBC Page 3
Strong political support for future electricity generation by renewable sources The Chinese market: Target 2012: 30,000 MW WTG Target 2020: 15% renewables New installed MW (Asia) 8,711 10,300 11,870 USD 585 billion stimulus package (8% of which is intended for the environment) China is poised to become the biggest growth market for wind-power generating capacity in 2009 The NDRC* target for wind energy in 2010 20 GW on the grid > 12 GW in 2009/2010 State Grid Corporation of China plans to invest over CNY1 trillion (approx. EUR 100 billion) in the construction of power grids within the next two to three years 2008 2009e 2010e Source: MAKE, BTM, HSBC * National Development and Reform Comission Page 4
Strong political support for future electricity generation by renewable sources The European market: Target 2020: 20% renewables New installed MW (Europe) 10,310 9,171 8,170 USD 54 billion green stimulus package (6% renewable, 68% energy efficiency) EU Target of 20% renewable electricity agreed for 2020 Germany: Coming into force of renewable energy act (EEG) as at 1 st January 2009 > higher feed-in tariff for onshore/offshore, technology bonus The UK intends to expand the proportion of renewable electricity to 10% by 2010 and to 15% by 2020 2008 2009e 2010e Source: MAKE, HSBC Page 5
Global demand forecast 2009e 2013e New MW 60,000 Americas Europe Asia RoW 50,000 40,000 30,000 20,000 27,532 174 8,711 25,890 10,300 190 32,200 11,870 350 38,680 13,430 11,730 400 44,900 15,000 14,700 450 51,230 16,870 16,510 600 10,000 9,171 9,476 8,130 7,270 10,080 9,900 13,120 14,750 17,250 2008 2009e 2010e 2011e 2012e 2013e Source: MAKE Consulting Page 6
2009 Preparing for further growth Suppliers Setup of international supply chain Flexible purchase coordination Customers Strengthening of customer relationships in US market Building relationship with utilities & IPPs Products Launch of new 2.5 MW class platform Launch of new 1.5 MW class platform Intensive product development Structures & Processes Preparing for an international organisation Reduction in project lead time Page 7
Capital spending 2009: Partial CAPEX postponements, but no cancellations planned Extension of the rotor blade production facility Total budget: ~ EUR 100 million Location: Rostock, Germany Completion: 2009 Set up of nacelle and rotor blade production facility Total budget: EUR 80 million Location: Jonesboro, USA Completion: 2010/2011 Nordex is going to invest some EUR 70 million in 2009 to reach its mid-term growth targets Page 8
Q1/2009 overview Strong growth in sales Substantial expenditure in people and structures Cost-cutting impact already visible in q-o-q comparison Increase in working capital will be reversed in H2/2009 Strong balance sheet Page 9
Development of sales Q1/2009 0.5 Q1/2008 Q1/2009 Total: 233.3 Total:199.3 16.2 28.3 19.1 + 17% 198.1 Europe America Asia 170.5 198.1 Total sales increase by 17% to EUR 233.3 million in Q1/2009 thanks to positive performance in Europe (+16.2%) and USA (>100%) Nordex well on track to reach its sales forecast for 2009: Q1 sales share 2009e: 19.4% Q1 sales share 2008: 17.5% All figures in EUR million Page 10
Development output in Q1/2009 261.5 210 +25% Output in turbine production climbed by 25% (sales + 17%) Decrease in rotor blade production reflects build-up of inventory ahead of production changeover this year 123-13% 107 31.5 16 31.5 21 Q1/2008 Q1/2009 WTG China Rotor Page 11
Key figures P+L Q1/2009 In mn Q1/2009 Q1/2008 in % Sales 233.3 199.3 17.1 Total revenues 245.1 231.3 6.0 Costs of materials (193.4) (186.4) 3.8 Gross profit 51.7 44.9 15.1 Personnel costs (26.0) (17.0) 52.9 Depreciation (5.1) (3.9) 30.8 Other op. exp. / inc. (20.3) (17.4) 16.7 EBIT 0.3 6.6 (95.5) Net financial result (1.4) 0.8 -- EBT (1.1) 7.4 -- Tax 1.6 (1.7) -- Net profit 0.5 5.7 (91.2) Page 12
Fixed costs declining as a result of cost-cutting measures Total: EUR 65.1mn - 21% Total: EUR 51.4mn 36.7 20.3 3.6 5.1 24.8 26.0 Q4/2008 Q1/2009 Net other operating expenses Depreciation Personnel All figures in EUR million Page 13
Monthly average additions to headcount Q1/2009 vs. 2008 51 49 50 36 18 Q1/2008 Q2/2008 Q3/2008 Q4/2008 Q1/2009 Most of the necessary hiring took place in 2008 Added headcount in Q1/2009 focused on important areas as Central Engineering, the European service and maintenance operations and in the US Page 14
Key figures balance sheet Q1/2009 In EUR mn Q1/2009 2008 In EUR mn Q1/2009 2008 Liquid funds 62.6 111.7 Trade payables 121.9 132.6 Trade receivables and future receivables 108.0 103.4 Provisions 28.5 44.0 Net inventories 405.6 372.2 Prepayments received 175.3 176.6 Other current assets 88.8 82.2 Other current liabilities 139.3 109.7 Current assets 665.0 669.5 Current liabilities 465.0 462.9 Non-current assets 133.0 129.0 Non-current liabilities 34.5 34.0 Deferred tax assets 54.7 55.8 Deferred tax liabilities 30.0 33.0 Shareholders equity 323.2 324.4 Total Assets 852.7 854.3 Total liabilities and equity 852.7 854.3 Page 15
Development inventories and working capital 372.2 405.6 289.1 318.1 340.8 221.6 231.8 20% 15% 157.2 165.4 Target corridor 10% 5% Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 2009e Inventories WC including reservation fee (WC to total revenues) Purchasing was adjusted to the reduced requirements for the current year in order to reduce inventories in the second half of 2009 All figures in EUR million Page 16
Cash flow statement Q1/2009 In mn Q1/2009 Q1/2008 Net profit/loss 0.5 5.7 Depreciation 5.1 3.9 Change in provisions (14.8) 0.7 Change in inventories (33.4) (57.3) Change in trade receivables and other assets (9.4) (56.7) Change in trade payables and other liabilities (7.6) 73.9 Change in deferred taxes (2.0) 1.5 Cash flow from operating activities (61.6) (28.3) Cash flow from investing activities (10.8) (13.0) Cash flow from financing activities 23.3 5.5 Change in liquidity from cash flows (49.1) (35.8) Liquidity beginning of period 111.7 212.2 Liquidity end of period 62.6 176.4 Page 17
EUR m 120 Order intake since January 2007 New orders (12 month rolling average) 100 80 60 40 Growth Effect of the financial crisis Recovery? 20 2007 EUR 1,221 mn 2008 EUR 876 mn Uptick in order intake in March 2009 2009e > EUR 876 mn we are cautiously optimistic for the rest of the year Page 18
Order Backlog in EUR mn as of Q1/2009 3,044 2,220 824-7% + 4% 2,909 Total order backlog at high level, 2,056 853 even in current financial market turmoil Growing momentum in order intake over the course of Q1/2009 noticed Around 90% of the sales target for 2009 already secured by Q1 sales results and firm order backlog as of March 31, 2009 Dec 31, 2008 Q1/2009 Conditional orders Firm orders Page 19
Outlook 2009 Sales growth to more than EUR 1.2 billion expected (covered by firm order backlog amounting to EUR 853 million and expected order intake) Fixed costs expected to remain at the same level as in Q1/2009 This means that the operating margin will be lower than in 2008 Positive net profit expected, albeit lower than in 2008 Increase in working capital to be reversed; working capital ratio expected unchanged at 15-20% of total revenues at the end of the year Investments of around EUR 70 million will lead to negative cash flow Net liquidity will remain positive Page 20
Conclusion Wind energy has massive long-term growth potential Nordex is investing in people, processes and capacity Some uptick in demand seen in March; industry to benefit from global economic stimulus packages Confirming guidance: sales over EUR 1.2 billion, and positive net profit Full impact of demand growth and efficiency improvements in 2010 Page 21
Appendix Page 22
Shareholder Structure of Nordex Free float (47.6 %) SKion / momentum capital / Klatten (21.8 %) HSH Nordbank (2.1 %) CMP (14.4 %) CJ Holding A/S* (3.5 %) Goldman Sachs (10.6 %) * Controlling company of Nordvest A/S On the basis of 66.845 mn shares, as of May 2009 Page 23
Contact & Disclaimer Nordex AG Bornbarch 2 22848 Norderstedt Germany www.nordex-online.com Ralf Peters Head of Corporate Communications Phone: +49 (0)40/300 30 1522 Fax: +49 (0)40/300 38 1333 email: rpeters@nordex-online.com 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 AG is unable to give a guarantee that the actual financial results of the company will not differ from any forecasts or guidance given. Page 24