Nordex SE Company presentation

Classification: Strictly Confidential

Nordex SECompany presentationMay / June 2019


2

Disclaimer

May / June 2019Nordex SE | company presentation

All financial figures within this presentation are unaudited.

This presentation was produced in May 2019 by Nordex SE solely for use as a source of general information regarding the economic circumstances and status of Nordex SE. It does not constitute an offer for the sale of securities or an invitation to buy or otherwise acquire securities in the Federal Republic of Germany or any other jurisdiction. In particular it is not intended to be an offer, an investment recommendation or a solicitation of an offer to anyone in the U.S., Canada, Japan and Australia or any other jurisdiction. This presentation is confidential. Any reproduction or distribution of this presentation, in whole or in part, without Nordex SE’s prior written consent is expressly prohibited.

This presentation contains certain forward-looking statements relating to the business, financial performance and results of Nordex SE and/or the industry in which Nordex SE operates, these statements are generally identified by using phrases such “aim”, “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “guidance”, “intend”, “objective”, “plan”, “predict”, “project”, and “will be” and similar expressions. Although we believe the expectations reflected in such forward-looking statements are based upon reliable assumptions, they are prepared as up-to-date and are subject to revision in the future. We undertake no responsibility to update any forward-looking statement. There is no assurance that our expectations will be attained or that any deviations may not be material. No representation or warranty can be given that the estimates, opinions or assumptions made in, or referenced by, this presentation will prove to be accurate.


The Nordex Group – a pioneer in wind with more than 30 years of experience

3

Introduction

At a glance

› Global manufacturer of wind energy systems focused on turbines in the 2-5 MW class

› WTG variants for different wind and climate conditions, addressing the requirements of developed as well as emerging markets

› Production sites in Germany, Spain, Brazil, India and USA

› Headquarter in Hamburg; subsidiaries for sales and service in all core markets

› Listed company in the German TecDaxand SDAX

› Founded 1985 in Denmark, IPO in 2001

› Acquisition of Acciona Windpower (AWP) in 04/2016

› Main shareholder Acciona S.A. (29.9%)

› Revenues 2018: Around EUR 2.5bn

› Track record of more than 25 GW in over 40 countries

Nordex SE | company presentation May / June 2019


Strategic rationale for combining businesses of Nordex and AWP

4

TRULY

GLOBAL

BROAD CUSTOMER

BASE

DIFFERENT

PROJECTS

COMPLEMENTARY

TECHNOLOGIES

MARKET

FOCUS

CUSTOMER

FOCUS

PRODUCT

FOCUS

TECHNOLOGY

FOCUS

=

AW

PN

ord

ex

+

Emerging

Markets

Large developers

and

IPPs

Projects without

land constraints

Concrete

towers

EuropeSmall & medium-

sized customers

Complex and

land constrained

projects

Blades

+ + +

= = =

CREATING A

STRONGER

AND MORE

COMPETITIVE

COMPANY

Nordex SE | company presentation

Introduction

May / June 2019


Track record of installations reached over 25 GW

5

Introduction


Additional installations in 2018

Countries with Nordex installations

May / June 2019


Who we are – we have come a long way

Introduction

1985 1995 1999 2000 2001 2003

2000 2003 2005

2007 2008 2013 2014

Founding of Nordex in Denmark

First company worlwide to

produce a MW-class turbine

Installation of the 100th

Nordex turbine

FirstAW 60/1300

prototype

Completion of theworld´s first seriesmulti-MV turbine

Commencementof industrial rotorblade production

Installation of the 2000th

Nordex turbine

Opening of the wind turbine assemblyin Barásoain, Spain

Start of theseries productionof the AW 1500

Launchof Delta

generation

Launchof Gammageneration

Opening of aturbine facility in the Americas

Introduction of the

AW 3000

Industrial implementation in Brazil with the opening

of hub production plant

More than 2000 MW sold of the

AW3000 platform

Nordex and AccionaWindpower become

one company

2016

Opening first assembly plant

in India

Launch of 4 MW platform

Delta4000 product series

2010 2013 2016

2018

Launch N133/4.8

turbine

2018

First N149/4.0-4.5

and AW 140/3000 turbines

installed

2017

6Nordex SE | company presentation May / June 2019


7

Executive summary: Q1 2019 as expected

Executive summary

Q1 2019 results

Sales: EUR 398.9m

EBITDA margin: 0.8%

Working capital ratio: -1.5%

Q1 2019 sixth quarter in a row with around 1 GW order intake.

Profitability in Q1 2019 affected by low sales volume resulting in lower overhead coverage.

Start series production of N149/4.0-4.5 of Delta4000 platform in Rostock.

First international orders for N149/4.0-4.5 turbines from Argentina and Australia.

Entering 5 MW class with third turbine type as Delta4000 platform derivative.

Key structural patterns for 2019 remain valid as presented with the FY-figures 2018.

Guidance for FY 2019 confirmed.



Nordex SE | company presentation 8

Market developments

AmericaEurope Rest of World

Markets and orders

Federal und State policiessupporting market activities in India.

South African round 5 expectedto take place in the comingmonths.

PTC cycle still in full swing in the US, with very high activity level expected in 2020.

Change of government in Mexicocreates uncertainties but marketsupported by corporate PPAs.

Colombia and Brazil expected to hold auctions still this year.

Draft National Energy and Climate Plans submitted to meet EU goal of 32% renewables by 2030.

Low installations in Q1 in Germany but permitting picking up.

Swedish and Finnish market with corporate PPAs.

Spain rushing to get the awarded 4 GW of wind into the ground before end of 2019.

Poland will hold another auction in 2019.

Activity in Ukraine for FIT projectsto be installed in 2019 & 2020.

May / June 2019


Solid start into the year – EUR 810m order intake in Q1 2019 (Q1 2018: EUR 820m)

ASP of EUR 0.78m/MW for Q1 2019

9

Order intake Q1 2019

Markets and orders

Order intake turbine* by regions (in %) Order intake turbine* (in MW)

Q1 2018 Q1 2019

1,0351,008

+3%

37%

15%

11%44%

52%41%

Q1 2018 Q1 2019

0%

0%

*Group segment „Projects“.

Europe

Latin America

North America

RoW

Australia, Argentina and Mexico largest single markets in the first quarter 2019

First orders from outside Europe (Argentina and Australia) for new turbine Delta4000



10

Service business continuously growing

Markets and orders

CommentsService sales (in EUR m)

Service sales share amounted to 21.9% of group sales in Q1 2019

Service EBIT margin* of 16.5% in Q1 2019

97.4% average availability of WTG underservice

Strong Service order backlog (EUR 2.2bn)

Q1 2018

87.4

Q1 2019

78.8

+11%


*Based on segment specific overhead allocation

May / June 2019


Turbine order backlog reflects strong order intake over the last quarters

Well balanced distribution on Nordex focus markets: Europe (49%), North America (8%), Latin America (25%), RoW (18%)


Combined order backlog increased to EUR 6.6bn in Q1 2019

Order backlog service (EUR m)Order backlog turbines (EUR m)

Over 7,600 wind turbines under service, corresponding to around 19.1 GW at the end of Q1 2019

Q1 2018 Q1 2019

2,710

4,414

+63%

Q1 2018 Q1 2019

2,218

1,930

+15%

Markets and orders

May / June 2019


12

Income statement Q1 2019

Financials

Comments

Q1 sales in line with expectations reflecting back-end loaded year

Gross margin of 35.7% impacted by favorable project mix and low volume

EBITDA margin within expectations for Q1 2019

PPA depreciation totaled EUR 6.8m in Q1 2019 (EUR 15.5m in Q1 2018)

in EUR m Q1 2019 Q1 2018 abs. change

Sales 398.9 487.9 -89.0

Total revenues 583.6 384.3 199.3

Cost of materials -441.1 -242.6 -198.5

Gross profit 142.5 141.7 0.8

Personnel costs -85.0 -79.6 -5.4

Other operating (expenses)/income

-54.2 -42.1 -12.1

EBITDA 3.3 20.0 -16.7

Depreciation/amortization -33.6 -36.5 2.9

EBIT -30.4 -16.5 -13.9

Net profit -35.0 -19.4 -15.6

Gross margin* 35.7% 29.0%

EBITDA margin 0.8% 4.1%

EBIT margin w/o PPA -5.9% -0.2%


*Gross profit in relation to sales.

May / June 2019


13

Balance sheet Q1 2019

Financials

Comments

Cash position of EUR 531m at the end of Q1 2019

Balance sheet prolongation in Q1 2019 due to increased activity level

Increase in current assets and liabilities due to working capital

in EUR m 31.03.19 31.12.18 abs. change

Δ in %

Non-current assets 1,364.6 1,277.6 87.0 6.8

Current assets 1,966.6 1,781.0 215.6 12.1

Total assets 3,361.1 3,058.5 302.6 9.9

Equity 662.9 697.3 -34.4 -4.9

Non-current liabilities 891.1 822.9 68.2 8.3

Current liabilities 1,807.0 1,538.3 268.7 17.5

Equity and total liabilities

3,361.1 3,058.5 302.6 9.9

Net debt* 110.3 32.5

Working capital ratio** -1.5% -3.8%

Equity ratio 19.7% 22.8%

*Cash and cash equivalents less bank borrowings and bond.**Based on last twelve months sales (31.12.2018: actual sales figures).



14

Working capital development in Q1 2019

Financials

Increase in working capital mainly driven by preparation for high installations in H2 2019

Working capital development (in EUR m)*Working capital ratio (in % of sales)

Working capital increase in Q1 2019 reflecting preparation for high activity level in second half year

FY guidance 2019 < 2%

Q1 2019

Q12018

Q22018

Q32018

5.8

Q42018

4.85.4

-3.8

-1.5*

-94

-37

192

Prepay-ments

Inven-tories

Receiva-bles

Q4 2018

294

Pay-ables

Q1 2019

3

42

* Based on last twelve months sales.

May / June 2019Nordex SE | company presentation


15

Cash flow statement Q1 2019

Financials

Comments

in EUR m Q1 2019 Q1 2018

Cash flow from operating activities before net working capital

3.2 -14.6

Cash flow from changes in WC

-57.9 -51.0

Cash flow from operating activities

-54.7 -65.6

Cash flow from investing activities

-21.6 -18.8

Free cash flow -76.3 -84.3

Cash flow from financing activities

-2.4 142.3

Change in cash and cash equivalents*

-78.8 58.0


*Including FX effects.

Cash flow from changes in WC (EUR -57.9m) impacted by higher business activities

Cash flow from operating activities driven by working capital development

Cash flow from investing activities in line with expectations not reflecting additional order intake momentum in the course of this year

Total cash of EUR 531m at the end of Q1 2019 compared to EUR 510m in Q1 2018

May / June 2019


16

Total investments in Q1 2019

Financials

Comments CAPEX (in EUR m)


7.0

12.6

Q1 2018 Q1 2019

15.8

6.2

19.622.0

12.2%

Property, plant, equipment

Intangible assets

Investments in Q1 2019 mainly comprised

• Investments in tooling and equipment in Spain

• Ramping up new production facility in India and Mexico

• Investments in product development

Decrease in intangible assets due to lower level of development costs compared to prior-year quarter

May / June 2019


17

Capital structure Q1 2019

Financials

Leverage ratio impacted by an increase in working capital

Equity ratio (in %)Net debt*/EBITDA**

Equity ratio decreased due to an increase in total assets leading to a balance sheet prolongation

0

25

30

35

19.7

Q3 2018

24.2

Q12018

23.1

Q22018

23.7 22.8

Q42018

Q1 2019

-1

0

1

21.4

Q4 2018

Q1 2019

0.9

Q1 2018

Q2 2018

1.8

0.3

Q3 2018

1.3

*Cash and cash equivalents less bank borrowings and bond.** Last twelve months.



18

Operations in Q1 2019

ProductionInstallations (MW)

347

698

Q1 2018 Q1 2019

+101%

Output turbines of 214 units in Q1 2019: 81 GER, 93 ESP, 8 BRA, 32 IND

Inhouse blade production of 300 units in Q1 2019: 84 GER, 216 ESP

Turbine assembly (MW)

Operations and technology

180

300

Q1 2018 Q1 2019

+67%

Blade production (#)

Total installations of 84 WTGs in 8 countries in Q1 2019: 36% Europe and 64% Latin America

Project execution will significantly increase in H2 2019 in order to secure revenues in FY 2019

261

Q1 2018 Q1 2019

523

-50%



d

19

Delta4000 ramp-up is gaining speed due to high market demand

149m rotor

105m to 164m hub heights

>4MW rating

Utilization of merger synergies

Suitable in core low-to-medium wind speed sites

Nordex is delivering Delta4000 product series as planned and promised to the market

First prototype in operationDelta4000 product seriesSeries start already in Q1 2019


10/30/2018Technology Insight - Deep Dive Delta4000 Technology 6

4.5MW

Actual powerGenerator speed

Installed & commissioned in Sept. 2018

Performance as expected (4.5MW max. rating)

First prototype of it’s class in market

First orders signed, strong interest in Germany, Northern Europe, Australia, South and North America

High market demand for New product

All certificates obtained according to time plan

Already awarded:



N149/5.X – Key facts


N149/5.X

proven Delta4000 product series“Staged Approach” philosophy

149m rotor

>5MW ratingIEC S class

up to IEC A

suitable in core low-to-medium wind speed sites

104.8 dB(A) @ 5.5 MW + numerous sound modes

Standard design lifetime of 20 years

lifetime extension up to 25 years

utilizing site potential

Nacelle dimensions remain unchanged to N149/4.0-4.5

proven blade of N149/4.0-4.5

WTG design purely focused on lowest

possible COE


only 5 MW+ WTG based on proven platform

20

first contracts already signed

up to 164m hub heights

site-specific towers

May / June 2019



Strong track record in COE reduction

Yield

Turbine performance increase and performance over lifetime

Capex

All turbine components, product related processes

OPEX

Service and O&M over lifetime

Integrated product and supply chain evolution will further drive COE program after 2018

A

B

C

2015 Basis

2016 2017 2018

(~10%)

(9%)A

B

C

(>25%)

COE achievements 2015-2018


(9%)

25% COE target 2015-2018 has already been overachieved by delivering COE reduction

COE target in the future will be high single digit annually

May / June 2019


Strategy roadmap further strengthens our competitive position

Strategy


Global market

presence

COE optimized product portfolio

Supply chain

transforma-tion

Operational cost

efficiencies

Service business

1 2 3 4 5

Global | COE Leader | Sustainable

OI increase by 73% to 4.75 GW across all regions

New blade plants in Mexico and India for glo-bal demand

Positive Free cash flow; W/C-ratio improved

We are:

We focus on:

We deliver:

Leading global onshore wind turbine supplier

Speed | COE | Flexibility

Strong renewal rate of service contracts

Strong demand for Delta4000 platform globally

May / June 2019


Guidance for 2019 confirmed


Working capital ratio: <2%

Sales: EUR 3.2-3.5bn

EBITDA margin: 3.0-5.0%

CAPEX: approx. EUR 120m*

Guidance

* Depending on order intake momentum for Delta4000 in the course of 2019.

May / June 2019


Key structural patterns in 2019

Back-ended installation and hence revenue recognition - low H1 revenues versus very strong H2 revenues expected

Dense execution activities in Q3 and Q4

Demanding working capital management

Steep manufacturing ramp-up towards 100% utilization rate in H2

24Nordex SE | company presentation

Key structural patterns

1

2

4

3

May / June 2019


Key takeaways

Global footprint pays out: strong performance despite volatile market environment

1

Accelerating transformation of supply chain to best cost countries2

Strong working capital management and free cash flow generation 4

Successful introduction of new technology (Delta4000) triggering already significant orders with key customers globally 3

25Nordex SE | company presentation

Key takeaways

May / June 2019


26

Financial calendar 2019

2019 Event

26 March Publication of Annual Report 2018

14 May Interim statement Q1 2019

4 June Annual General Meeting (Rostock)

14 August Interim report H1 2019

13 November Interim statement Q3 2019



The management team

27

José Luis Blanco

CEO

CEO AccionaWindpower

Various senior management & Chief Officer positions at Gamesa

Patxi Landa

CSO

Business development director and Executive Committee member at Acciona Windpower

Various Chief Officer Positions at Acciona

Christoph Burkhard

CFO

CFO Siemens Wind Power Offshore

Various other positions at Siemens

BHF Bank, EBRD



IF YOU HAVE ANY QUESTIONS PLEASE

CONTACT THE INVESTOR RELATIONS TEAM:

Felix Zander

Tobias Vossberg

Rolf Becker

Nordex SE

Langenhorner Chaussee 600

22419 Hamburg

Germany

Phone: +49-40-30030-1000

Email: [email protected]

Web: www.nordex-online.com

Contact details

28Nordex SE | company presentation May / June 2019

Documents

Nordex SE Company presentation