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Investor Presentation
SolarWorld AG
SolarWorld AG
Investor Relations
April 2017
Disclaimer
Investor Relations | April 2017
This presentation may contain forward-looking statements that are subject to risks and uncertainties, many of which relate to factors that are beyond SolarWorld’s control or its ability to precisely estimate, such as future market and economic development, supply and demand, the behavior of other market participants and the actions of government regulators. SolarWorld AG has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from the projected in the forward-looking estimates, forecasts and projections; financial performance may be better or worse than anticipated. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and SolarWorld AG does not undertake any duty to update the forward-looking statements, or publicly release any revisions to these forward-looking statements and the estimates and assumptions associated with them, except to the extent by applicable laws and regulations.
2
Agenda
Investor Relations | April 2017 3
SolarWorld investor presentation
Overview
Business model
Product portfolio
Current business situation
Market environment
Forecast
Stock and bonds
OVERVIEW
Investor Relations | April 2017 4
SolarWorld at a glance
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Location Headquarters in Bonn/Germany Production in Freiberg/Germany, Arnstadt/Germany and in Hillsboro/U.S. Sales offices in Germany, U.S., France, Italy, UK, South Africa, Singapore and Japan
Established/ IPO
Established in 1998 IPO in 1999 (Düsseldorf Stock Exchange) listed on the Prime Standard of the Frankfurt Stock Exchange since 2003
Market position
Global producer of high quality monocrystalline solar solutions with a strong brand Technologically leading manufacturer of PERC and bifacial modules worldwide Vertically integrated production in Germany and the U.S. Broad customer base in quality segment (B2B partner installer networks in Europe and the U.S.)
Nameplate capacities
600 MW ingots 600 MW wafers 1,500 MW cells 1,500 MW modules
Shipments
Employees 3,034 employees (as at December 31, 2016)
Shipments 2016: 1,375 MW Revenue 2016 : € 803m
U.S.: 50% Europe (w/o GER): 28%
Germany: 14% ROW: 8%
Management Board
6
Philipp Koecke (CFO) Chief Financial Officer
(since 2003) Accompanied organic growth and
M&A activities Implementation of financial
restructuring
Colette Rückert-Hennen (CIBPO) Chief IT, Brand and Personnel
Officer (since 2011) Initiated and implemented
restructuring measures in the organization
Increased brand strength with the REAL VALUE claim
Jürgen Stein (CPO) Chief Product Officer (since
2014), previously Head of Purchasing (from 2011-2014)
President of SolarWorld Americas Inc.
Strategic development of global purchasing
Longstanding experience in purchasing, particularly in Asia and the electric industry
Frank Henn (CSO) Chief Sales Officer (since 2004) Pushed forward internationalization
of sales Established international network of
installers and wholesalers
Dr.-Ing. E. h. Frank Asbeck (CEO) Founder and Chief Executive Officer
(since 1998) Over 20 years of corporate
experience in the solar industry Anchor shareholder, currently owns
20.85 percent of shares
Investor Relations | April 2017
Supervisory Board
7 Investor Relations | April 2017
Dr. Georg Gansen (Chairman)
attorney-at-law, corporate legal counsel at Deutsche Post AG
Dr. Khalid Klefeekh Al Hajri
chairman and CEO of Qatar Solar Technologies Q.S.C.
Daria Revina
Senior Business Support Specialist to the CEO at Qatar Solar Technologies Q.S.C.
Heiner Eichermüller
senior business consultant
Dr. Andreas Pleßke
attorney-at-law
Jürgen Wild
managing director of RAG-Stiftung Beteiligungsgesellschaft mbH
Shar
eh
old
er
rep
rese
nta
tive
s
Gerald Voigt (Deputy Chairman)
district manager at trade union IG BCE, district Dresden/Chemnitz
Albrecht Handke
press and public relations and member of the works council of SolarWorld Industries Sachsen GmbH
Wolfgang Lemb
executive member of the Management Board of IG Metall
Dr. Ute Mareck
manager of technology and process at SolarWorld Industries Sachsen GmbH
Alexander Richter
member of the works council of SolarWorld Industries Sachsen GmbH and member of the group works council of SolarWorld AG
Olaf Zirr
team manager QHSE and deputy chairman of the works council of SolarWorld Industries Thüringen GmbH
Emp
loye
e r
ep
rese
nta
tive
s
SolarWorld locations worldwide
Investor Relations | April 2017 8
BUSINESS MODEL
Investor Relations | April 2017 9
Production of monocrystalline high-efficiency solar solutions only
Vertically integrated solar manufacturer across all steps of the value chain
Worldwide sales of high-quality solar energy solutions under strong brand
Lean product portfolio focused on PERC, bifacial and 5-busbar technology
SolarWorld business model
Investor Relations | April 2017 10
Business model
Close proximity to all relevant markets through local sales offices
Distribution through specialist and wholesale trade as well as through
installers as intermediaries to end-customers
B2B partner network (specialist partner networks) in Europe and the U.S.
Spread of risks across a wide customer base and various regions
International Distribution Network
Focusing of production
ARNSTADT
FREIBERG
HILLSBORO
Crystallization Cell production
Wafering Module production
Cell production Module production
Investor Relations | April 2017 11
Production capacities
Investor Relations | April 2017 12
600
600
1000
700
500
500 300
Ingot
Wafer
Cell
Module
Germany U.S. OEM
1,500 MW
1,500 MW
600 MW
600 MW
in MW
Germany
Germany
Germany
Germany
U.S.
U.S.
OEM
SolarWorld distribution structure
Investor Relations | April 2017
Wholesalers
Consumers
Installers Installers
Consumers
SolarWorld
commercial/utility residential/commercial
thre
e-t
ier
dis
trib
uti
on
13
two
-tie
r d
istr
ibu
tio
n
Further cost-saving potential
Investor Relations | April 2017 14
Technological focusing
• Focusing on high-efficiency products • PERC only • 5-busbar cells • Bifacial modules and systems
• Streamlining of product range
Procurement
• Optimization of purchasing conditions and renegotiation of supplier contracts
• Reduction of expenses through focusing on fewer product variants
Technological focusing
Procurement
Administrative structures
Optimized production processes
Further cost-saving potential
Investor Relations | April 2017 15
Optimized production processes
• Focusing of production steps at individual sites to develop the most competitive units
• Headcount reduction in manufacturing • Decrease of material use • Use of alternative more cost-effective
materials
Administrative structures
• Further standardization and optimization of distribution structures
• Headcount reduction • Reduction of administrative expenses
Technological focusing
Procurement
Administrative structures
Optimized production processes
PRODUCT PORTFOLIO
Investor Relations | April 2017 16
Investor Relations | April 2017 17
Comprehensive Product Range
Solar modules Mounting systems Inverters
System monitoring Energy management Services
SolarWorld Product Strategy and Portfolio
Investor Relations | April 2017 18
Product strategy and unique selling points
provider of comprehensive solar solutions
manufacturer of high-performance modules with
exceptional durability
verified and reliable product quality
particular aesthetics
high availability due to reduced number of products
SolarWorld focuses on high-efficiency technology such as PERC and 5 busbar cells to offer a
clear and uncomplicated high-performance module portfolio
PERC 5 busbars
Bifacial glass-glass modules
72-cell modules
Monofacial glass-film modules
Focused Module Portfolio
Investor Relations | April 2017 19
PERC modules 280-300 W
Sunmodule Plus mono
Sunmodule Plus mono black
Sunmodule Bisun protect
Bifacial modules 280-290 W
Sunmodule Bisun protect clear
Sunmodule XL mono
72-cell modules 340-350 W
Investor Relations | April 2017 20
Product innovation: Bifacial module with white grid structure
White grid structure increases front side power output by
reflecting the light in the area between the cells directly back
into the cell
Despite the white coating, the reflected light can penetrate the
rear side of the cell undisturbed to achieve the bifacial surplus
Particularly long lifespan through the use of glass on the front
and rear sides of the module
30-year linear performance guarantee – at least 86.85 % output
after 30 years
Product benefits New Sunmodule Bisun Protect
New bifacial module with special white coating on the inside of the back glass
MARKET ENVIRONMENT
Investor Relations | April 2017 21
105
96
90
86
85
101
96
91
83
79
2021e
2020e
2019e
2018e
2017e IHS
GTM Research
Development of annual global PV installations
Investor Relations | April 2017 22
Source: IHS PV Demand Market Tracker Q1 2017, April 2017; GTM Research Global Solar Demand Monitor, April 2017
Global new installations in GW
CAGR 2016–2021e
+ 5.3% + 6.0%
U.S. market development
Investor Relations | April 2017 23
U.S. total +2.3%
residential +2.5%
commercial +2.0%
utility +2.3%
CAGR 2016–2021e
2017e 2018e 2019e 2020e 2021e
Utility Commercial Residential
17.4 16.5
12.9 12.2
17.9
Expected U.S. demand in GW
Source: IHS PV Demand Market Tracker Q1 2017, April 2017
58% 56%
60% 66%
71%
22% 21%
19%
17% 15%
20% 22%
21%
16% 14%
European market development
Investor Relations | April 2017 24
2017e 2018e 2019e 2020e 2021e
Rest of Europe Turkey Netherlands
Italy France Germany
Source: IHS PV Demand Market Tracker Q1 2017, April 2017
Expected demand in Europe by region in GW CAGR 2016–2021e
9.6
11.1 11.7
13.1
8.3
Germany + 9%
France + 15%
Italy + 12%
Netherlands + 0.4%
Turkey + 5%
Europe total + 10%
European market development
Investor Relations | April 2017 25
2017e 2018e 2019e 2020e 2021e
Utility Commercial Residential
Source: IHS PV Demand Market Tracker Q1 2017, April 2017
Expected demand in Europe by segment in GW
CAGR 2016–2021e
9.6
11.1 11.7
13.1
8.3
Residential + 10%
Commercial + 15%
Utility + 7%
24% 24% 26% 26% 25%
55% 55%
54% 54% 55%
20%
21%
19% 19%
19%
CURRENT BUSINESS SITUATION
Investor Relations | April 2017 26
Shipments and revenue development Y-o-Y
Investor Relations | April 2017 27
1159
1,027
763 803
2015 2016
Shipments in MW Revenue in m€
+ 19 %
+ 5 %
Development of shipments by quarter
Investor Relations | April 2017 28
Shipments in MW
2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016
modules & systems 1,108 333 338 331 334 1,336
wafers & cells 51 7 4 14 14 39
1,159
340 342 345 348
1,375
Total shipments in MW
Shipment breakdown by region
Investor Relations | April 2017 29
196 181
303 376
546
667
64
112
2015 2016
RoW
U.S.
Europe ex GER
Germany
Modules and systems shipped in MW
8%
50%
28%
14%
1,108
1,337
+ 33 %
SolarWorld group indicators
Investor Relations | April 2017
Selected financial indicators in m€
2015 2016
Total shipments 1,159 MW 1,375 MW
Revenue 763.5 803.1
EBITDA 40.8 -25.8
EBIT -4.2 -98.8
Group net result -33.3 -91.9
Equity* 208.9 121.8
Equity ratio* 24.0% 17.7%
Net indebtedness* 217.2 302.4
Cash and cash equivalents* 188.6 88.1
30
* as at December 31, respectively
Balance Sheet as at December 31, 2016
88
102
186
311
Equity & Liabilities Assets
Inventories
Other current assets
Cash
Non-current liabilities
371
194
122
687
in m€ in m€
31
687
Current liabilities
Shareholders‘ equity Non-current assets
Investor Relations | April 2017
Equity Ratio 17.7%
32
Cash Development 2016
m€
0
50
100
150
200
Jan 01, 2016 Inventory(WC)
Repayments Investments(net)
Operatingresult
Interest Others Dec 31, 2016
Investor Relations | April 2017
189
-33
-36
-10
-16
-15 +9 88
Working Capital Development q-o-q
176 183 178
231
178
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Inventories without advanced payments Net trade accounts receivable/payable
Working Capital
Working Capital in m€
33 Investor Relations | April 2017
Hemlock ./. SolarWorld Industries Sachsen GmbH
34
SolarWorld Industries Sachsen Freiberg, Germany
LONG-TERM DELIVERY CONTRACT &
SolarWorld Americas Inc. Hillsboro, Oregon
• SolarWorld Industries Sachsen
holds no assets in the U.S. • U.S. subsidiary is a separate legal
entity with no contracts with HSC • „corporate veil“ shields U.S.
subsidiary
COURT CASE
• Enforcement not possible without ZPO recognition
• EU trust law needs to be assessed during recognition
• Contracts contain clauses that infringe EU anti trust law
• SolarWorld continues to assess risks as low
Investor Relations | April 2017
U.S. Germany
STOCK AND BONDS
Investor Relations | April 2017 35
The SolarWorld stock
Investor Relations | April 2017
MASTER DATA
Share class Ordinary bearer shares
ISIN DE000A1YCMM2
Token SWVK
Market segment Regulated market of the Frankfurt Stock Exchange
Transparency level Prime Standard
Capital stock € 14,896,000.00
Number of shares 14,896,000
Indices DAX International Mid 100, Prime All Share, Technology All Share, CDAX, ÖkoDAX
36
29,00%
20,85%
50,15%
SHAREHOLDERS‘ STRUCTURE
Qatar Solar S.P.C.
Dr.-Ing. E. h. Frank Asbeck
Free float
The SolarWorld bonds I
Investor Relations | April 2017 37
BOND SOLARWORLD FRN IS. 2014/2019 SERIES 1116
ISIN DE000A1YDDX6
Trading venue Frankfurt Stock Exchange
Issue date February 24, 2014
Issue volume 139,386 notes
First quotation date March 5, 2014
Term 5 years
Maturity date February 24, 2019
Actual nominal value per note € 339.71 (as at March 31, 2017)
Interest Variable interest rate – minimum 7% Calculated as 3-months-EURIBOR (min. 1% p.a.) + 6% margin p.a.
Coupon date Quarterly, payable at the end of the calendar quarter
The SolarWorld bonds II
Investor Relations | April 2017 38
BOND SOLARWORLD FRN IS. 2014/2019 SERIES 1017
ISIN DE000A1YCN14
Trading venue Frankfurt Stock Exchange
Issue date February 24, 2014
Issue volume 387,055 notes
First quotation date March 5, 2014
Term 5 years
Maturity date February 24, 2019
Actual nominal value per note € 349.26 (as at March 31, 2017)
Interest Variable interest rate – minimum 7% Calculated as 3-months-EURIBOR (min. 1% p.a.) + 6% margin p.a.
Coupon date Quarterly, payable at the end of the calendar quarter
Investor Relations
+49 228 55920-470
+49 228 55920-9470
placement@solarworld.com
http://www.solarworld.de/en/investor-relations
Contact
Investor Relations | April 2017 39
Romy Acosta Head of investor relations
Tel.: +49 228/55920-476 E-Mail: romy.acosta@solarworld.com Andrea Hoffmann Institutional investors & analysts
Tel.: +49 228/55920-472 E-Mail: andrea.hoffmann@solarworld.com
! THANK YOU FOR YOUR ATTENTION
Investor Relations | April 2017 40
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