Ratos Ab Class A · OMXSTO:RATO_A

Ratos Ab Class A — Investor Day (February 2010)

24 slides from Ratos Ab Class A's investor day presentation, February 2010

  1. Slide 1: Wind power industry

    Wind power industry Ratos capital market day February 2010 February 2010 JPe/JAR 1

  2. Slide 2: Ratos exposure to wind power industry

    Ratos exposure to wind power industry  5% of sales direct to wind power industry * Note: sales taking Ratos’s holding into account February 2010 JPe/JAR 2

  3. Slide 3: Wind power industry's value chain

    Wind power industry’s value chain Material Component Turbine Wind power Wind power suppliers suppliers manufacturers planners operators  Steel  Gear boxes  Development  Planning  Operation  Composites  Blades  Assembly  Construction  Sales  Etc.  (Parts of) tower  Bearings  Etc. Partly

  4. Slide 4: Wind power market 2008

    Wind power market 2008 Share of newly installed capacity 2008 100% Others7% Repower 3% Nordex 4% Asia 32% Goldwind 4% Acciona 5% 80% Sinovel 5% Siemens 5% Suzlon 7% 60% Enercon 12% Europe 34% Gamesa 12% 40% GE Wind 18% 20% North and South America 35% Vestas 20% 0% Per geographic area Per turbine man

  5. Slide 5: The economics of wind power: high investment costs

    The economics of wind power: high investment costs… Example of breakdown of investment c. SEK 25m per wind turbine (2 MW) 100% Other 4% Land rent4% Foundation7% 80% Grid connection10% Other 43% 60% Gear box 13% 40% Turbine 75% Wings (blades) 22% 20% Tower22% 0% Investment cost Turbine component Sour

  6. Slide 6: ...and low running costs

    …and low running costs Example cost structure European wind farm 100% 100% 85% 80% 60% -15% 50% -35% 40% 20% 0% Source: Macquire Research May 2009; EWEA “The Economics of Wind Energy” March 2009 Note: Generalised example of typical wind farm in Europe, taking subsidies into account. February 2010 JP

  7. Slide 7: Factors that affect an investment calculation

    Factors that affect an investment calculation  Capacity utilisation (wind force/security)  Cost and lifetime of turbine  Size of turbines and wind farm (economies of scale)  Demand for electricity and electricity price  Access to and structure of subsidies  Availability of and cost of financin

  8. Slide 8: Growth driven by a number of favourable factors...

    Growth driven by a number of favourable factors...  Structurally rising demand for electricity/energy  Renewable energy high on the agenda  Political promises/targets  Subsidies  Competitiveness of wind energy rising continuously  Increased interest from major energy companies  Good access to

  9. Slide 9: ...which generated strong historical growth...

    …which generated strong historical growth… Annual newly installed capacity (MW) 30 000 25 000 Growth p.a. 2005- 08: 34%* 20 000 15 000 Growth p.a. 2000- 05: 21%* Growth p.a. 1995- 10 000 2000: 28%* 5 000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Macquarie invest

  10. Slide 10: ...although periodically with high volatility

    …although periodically with high volatility Annual growth of newly installed capacity (per cent) 80% 75% 70% 66% 60% 50% 51% 52% 40% 42% 37% 30% 30% 32% 20% 22% 15% 15% 10% 6% 0% 0% -2% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 -10% Source: Macquire investment research Fe

  11. Slide 11: Development 2009

    Development 2009 CAGR CAGR (05-08) (08-09) Newly installed capacity (MW) 29,520 34% 8% 30 000 27,358 Asia 51% 41% 19,960 20 000 14,821 11,344 South and North America 52% -9% 10 000 Europe 14% -6% 0 2005 2006 2007 2008 2009 F  Positive growth of newly installed capacity globally – although with majo

  12. Slide 12: 2009: "Dent" in the curve

    2009: “Dent” in the curve s  Financial crisis – Financing – Recession – reduced demand for energy – Price falls for alternative energy sources  Dilemma with subsidies – timing effects  Asia (China) not affected – Less dependent on bank financing – Very clear political directives February 2010 JPe

  13. Slide 13: Global consumption of electricity – 2009 first year of falling demand since WWII?

    Global consumption of electricity – 2009 first year of falling demand since WWII? Source: EIA database (via RBS wind analysis report) February2010 JPe/JAR 13

  14. Slide 14: 2010 and beyond

    2010 and beyond  “Consensus” expects annual growth of c. 15% (2009-2015), driven by: – Increased energy consumption – Expressed national targets on proportion of renewable energy – Increased demand for “green energy” – Government subsidies – Continuous development of wind power competitiveness Febr

  15. Slide 15: Market forecast 2010-2014

    Market forecast 2010-2014 CAGR CAGR CAGR Newly installed capacity (MW) (05-08) (08-09) (08-09) 60 000 34% 8% 14% Asia 51% 41% 11% 40 000 South and 52% -9% 15% North America 20 000 Europe 14% -6% 18% 0 2005 2006 2007 2008 2009 F 2010 F 2011 F 2012 F 2013 F 2014 F Source: MAKE Consulting september 200

  16. Slide 16: Higher growth for offshore wind power

    Higher growth for offshore wind power – although still a small proportion of the global market Offshore windpower as proportion of total installed wind capacity for the year 25%  Strong growth forecast 20% 20% – CAGR 40-50% 15% Europe – From 1% to 7% of annual installed 10% 7% capacity globally, bu

  17. Slide 17: Wind power and its competitiveness

    Wind power and its competitiveness From Vattenfall’s CSR Report2008 Production cost EUR/MW 100 ~85 80 ~70 ~70 50-85 ~65 60 ~50 40 20 0 Wind Hydro Bioenergy Nuclear Coal Natural gas (onshore) Source: Vattenfall’s CSR Report 2008 February 2010 JPe/JAR 17

  18. Slide 18: Wind power technology is developing continuously

    Wind power technology is developing continuously Average turbine size Europe (MW)  Cost per produced MW -30% since 1995 2,0 1,6  Continued technological 1,2 development expected 0,8 0,4 0,0 1990 1995 2000 2005 2008 February 2010 JPe/JAR 18

  19. Slide 19: Subsidies

    Subsidies  Different models exist, mainly: 1. Investment subsidies 2. Tax deductions 3. Guaranteed selling price 4. Electricity certificates  Levels and types of subsidies vary (substantially) between countries/regions February 2010 JPe/JAR 19

  20. Slide 20: Ratos and wind power

    Ratos and wind power February 2010 JPe/JAR 20

  21. Slide 21:  Steel  Composites  Etc.

    Material Component Turbine Wind power Wind power suppliers suppliers manufacturers planners operators  Steel  Gear boxes  Development  Planning  Operation  Composites  Blades  Assembly  Construction  Sales  Etc.  (Parts of) tower  Bearings  Etc. Partly integrated Partly integrated Part

  22. Slide 22: Share of sales 2009

    Hub Share of sales 2009 100% Other RoW North Bearing house America 75% + Lifting equipment & site management 50% Wind power Europe Base 25% frame 0% Main shaft Industry Geography  Wind 98% of sales  Mainly exposure to Europe geographically Tower- and (c. 90% of sales) baseflanges February 2010 JPe

  23. Slide 23: Share of sales 2009

    Share of sales 2009 100% Transport Aerospace Industry North and South America Marine 75% Europe 50% Wind power 25% Asia 0% Spinner Nacell Wings Application Geography  Wind power c. 70% of sales 2009  Major sales to wind power industry in Asia (China) februari 2010 JPe/JAR 23

  24. Slide 24: Summary and questions

    Summary and questions February 2010 JPe/JAR 24

Ratos — Investor Day (February 2010) on 6ix