Nordex Se · XETR:NDX1
Nordex — Investor Day (September 2016)
51 slides from Nordex's investor day presentation, Sep 28, 2016
Slide 1: Nordex SE Capital Markets Day 2016
Nordex SE Capital Markets Day 2016 Hamburg, 28 September 2016
Slide 2: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 2
Slide 3: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 3
Slide 4: The management team
The management team Lars Bondo José Luis Blanco Christoph Bernard Patxi Landa Krogsgaard COO, Burkhard Schäferbarthold CSO CEO Deputy CEO CFO from 1/9/2016 CFO until 30/9/2016 Chief Customer CEO Acciona CFO Siemens Wind Head of Finance Business Officer Nordex Windpower Power Offshore Nordex Developm
Slide 5: Our new CFO: Christoph Burkhard
Our new CFO: Christoph Burkhard Christoph Burkhard (52) New CFO as of September 2016 CFO Siemens Wind Power Offshore CFO Siemens Wind Power Onshore EMEA Various other positions at Siemens: Corporate Strategy Mobile Networks Division Siemens Financial Services BHF Bank (Frankfurt & Prague), EBRD (Rus
Slide 6: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 6
Slide 7: Great products, example: N131/3300 PH164
Great products, example: N131/3300 PH164 CHALLENGE Bickenbach II, Germany, first N131/3300 on 164m tower Generating value at very low wind sites 164m Steel Sections Pre-Cast Hybrid Tower SOLUTION 100 m Concrete Technology World’s tallest wind turbine capturing more wind through additional height 30m
Slide 8: Great products, example: concrete towers
Great products, example: concrete towers CHALLENGE The Ventika Wind Farm in Mexico, 84x AW116/3000 on 120m concrete towers Meet local content requirements and provide the lowest cost of energy in emerging markets SOLUTION Concrete towers manufactured locally in mobile factories at highly competitive
Slide 9: Great products, example: anti-icing system
Great products, example: anti-icing aystem CHALLENGE Nordex anti-icing system AIS Generating value at ON sites with moderate to severe icing conditions AIS OFF Guaranteed Performance SOLUTION An industry-leading Sold: 540 MW Anti Icing System, Tested, certified which improves and proven power genera
Slide 10: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 10
Slide 11: Strategic rationale for combining Nordex and Acciona Windpower remains valid
The strategic rationale for combining the businesses of Nordex and Acciona Windpower remains valid Minimal overlap, no cannibalization – a strong fit MARKET CUSTOMER PRODUCT TECHNOLOGY FOCUS FOCUS FOCUS FOCUS Large developers Emerging Projects without Concrete AWP and CREATING A Markets land constra
Slide 12: We have become one company with a fully integrated workforce
We have become one company with a fully integrated workforce Merger status 6 months after closing Combined Management Board New Supervisory Board Governance 10 out of 18 work streams closed Top management team blending experienced managers from Nordex and AWP respectively … Corporate functions Organ
Slide 13: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 13
Slide 14: 2016 guidance remains unchanged
2016 guidance remains unchanged 2016 H1 actual and full year guidance KPI 2016 H1 FY guidance Order intake (EUR bn) 1.33 >3.4 Sales (EUR bn) 1.48 3.35-3.45 EBITDA margin (in %) 9.2 8.3-8.7 Working capital ratio (in %) 4.4 <5 CAPEX (EUR mn) 37 80-90 Capital Markets Day 2016 28 Sept. 2016 14
Slide 15: Clarification around classification of orders after closing
Clarification around classification of orders after closing Post closing EUR 765 mn of AWP order backlog reclassified as conditional orders Firm order backlog development H1/2016 (EUR mn) 2.838 765 1.200 -769 789 2.047 165 46 423 693 604 366 1.638 1.354 OB Q1 ’16 Classified Revenues Order intake FX
Slide 16: Clarification around classification of orders after closing
Clarification around classification of orders after closing Conversion of conditional into firm orders is at a high rate Conditional order backlog development H1/2016 (EUR mn) EUR 2.3 bn 536 1.1 594 938 765 30 -452 182 127 284 597 325 412 654 1.2 Jan 1st ’16 Classified Weighting Conditional New cond
Slide 17: Staircase to achieve planned H2/2016 order intake
Staircase to achieve planned H2/2016 order intake A back-loaded year, planned order intake in H2/2016 (EUR bn) 2.1 >3.4 New orders 2016 H2 NX OI 1,0 Robust pipeline AWP OI 1,3 Q4 will be stronger than Q3 2,2 EUR 1.1 bn conversion of 1,1 0,8 conditional orders into firm 1.3 orders expected in H2 Orde
Slide 18: Working capital increase expected in Q3, then decrease in Q4
Working capital increase expected in Q3, then decrease in Q4 Working capital ratio (in % of sales) H1/2016 4.4 Outlook H2/2016 5 0.7 +5.6 -1.2 Q4/15 Q1/16 Q2/16 Q2/16 Q3/16e Q4/2016e Working capital ratio increased due to Further increase in Q3, decrease in Q4 • Higher share of big overseas projects
Slide 19: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 19
Slide 20: 2018 targets remain unchanged
2018 targets remain unchanged 2016 guidance and 2018 targets KPI 2016 guidance 2018 targets Sales (EUR bn) 3.35-3.45 4.2-4.5 EBITDA margin (in %) 8.3-8.7 >10 Working capital ratio (in %) <5 <5 Capital Markets Day 2016 28 Sept. 2016 20
Slide 21: Pathway to meet the 2018 EBITDA target
Overview : Pathway to meet the 2018 EBITDA target EBITDA „bridge“ 2016-2018 (in EUR mn) EBITDA target 2016 ≥ 280 1 Volume growth, turbines 40-60 2 Volume growth, service (incl. margin 20-30 improvement) 3 Price pressure / COE +/- 0 4 Merger synergies 60 5 Operational excellence 10-30 Non-recurring a
Slide 22: The market: long-term growth driven by economics rather than policy
The market: long-term growth driven by economics rather 1 than policy 2014-24: global onshore grid connected capacity, excl. PRC GW 2016: ~32 GW installations +3% -1% 35 2017: stagnation as Europe +9% & US drop (auctions, safe 30 harboring effects) 25 2018-2020: volumes increase 20 in US and emergin
Slide 23: The market: medium-term volume will swing towards US and emerging markets
The market: medium-term volume will swing towards US 1 and emerging markets 2014-2019: global onshore grid connected capacity, excl. PRC (3 year cum.) GW Europe -8% 35 32 North America Europe expected to slow 26 +15% 30 down Latin America Drop in 2017 6% 14 13 Total global installations Middle East
Slide 24: The market: Nordex well positioned
1 The market: Nordex well positioned TOP 10 volume markets 2017e-2019e TOP 10 growth markets (by % CAGR ) – excl. PRC (cum. GW) 2017e-2019e – ordered by cum. GW 26,9 Sweden 1.400 31% 9,6 9,6 Norway 28% 1.273 Spain 965 27% 6,6 Pakistan 749 41% Greece 730 29% Nordex Argentina 695 108% active 3,5 3,4 3
Slide 25: Nordex with wider footprint after acquisition of Acciona Windpower
The market: Nordex with wider footprint after acquisition of 1 Acciona Windpower Regional split Nordex vs. global volume mix (% based on MW installed) 100% 100% 100% 100% Market penetration 2015: 8% 4% 64%** 3% 19% 26% 28% NAM Market penetration 2016: 86%** 17% 12% LatAm “Europe heavy” sales volume
Slide 26: Reaching the 2018 revenue target
1 Reaching the 2018 revenue target Revenue bridge 2016 – 2018 (in EUR mn) 4,200 - Volume growth, Volume growth, 4,500 turbines service 350 3,350 – 3,450 Service: ~260 India: + EUR 90 mn US: Increase by 2018 GER: Increase market share to 10% 3,850 ~3,100 Increase market share 2 market share to 10% to
Slide 27: Volume growth, turbines: increase market share in Germany to >20%
Volume growth, turbines: increase market share in Germany 1A to >20% The market Sales enablers 2018 market drop not as significant as Track record – 3.6GW installed – market previously anticipated share improvement from 2011 3.5% to 2016 H1 17% -5% 3.772 4.000 3.750 3.600 Customer access - well esta
Slide 28: Volume growth, turbines: increase market share in US to 10%
Volume growth, turbines: increase market share in US to 1B 10% The market Sales enablers Stable >8GW market for the forseeable Track record and broad service network – future 2.2GW installed and regionally well spread service operation 9.300 8.602 8.400 7.500 PTC will boost the market above 8 GW Ins
Slide 29: Volume growth, turbines: increase market share in India to 10%
Volume growth, turbines: increase market share in India to 1C 10% The market Sales enablers World‘s 3rd largest market - stable 3-4 GW Solid pipeline – 1 GW development volume p.a. pipeline earmarked for AWP turbines 3.800 3.600 3.300 Nordex passed high market entry barrier Installed MW 2.604 Post O
Slide 30: First AWP turbines manufactured in India, mobile concrete tower plant running
First AWP wind turbines manufactured in India, mobile 1C concrete tower plant running Chennai plant in September 2016 Mobile tower factory at Bannur project Capital Markets Day 2016 28 Sept. 2016 30
Slide 31: Pathway to meet the 2018 EBITDA target
Overview: pathway to meet the 2018 EBITDA target EBITDA „bridge“ 2016-2018 (in EUR mn) EBITDA target 2016 ≥ 280 1 Volume growth, turbines 40-60 2 Volume growth, service (incl. margin 20-30 improvement) 3 Price pressure / COE +/- 0 4 Merger synergies 60 5 Operational excellence 10-30 Non-recurring an
Slide 32: Volume growth – increase service revenues by EUR 90 mn
2 Volume growth – increase service revenues by EUR 90 mn Service business expected to deliver EUR 350 mn revenues by 2018 and an EBITDA improvement of EUR 20-30 mn Service revenues (EUR mn) Growth & profitability levers Organic service growth as a + 35% result of new unit sales Additional after-sale
Slide 33: Additional after-sales, examples of current products
2 Additional after-sales, examples of current products Vortex Generators for blades Improved power production at medium-wind speeds when turbines are not producing at full Trailing Edge capacity Serrations Average increase in annual Reduced sound energy production of approx. emissions 1.5% Xtended P
Slide 34: Pathway to meet the 2018 EBITDA target
Overview: pathway to meet the 2018 EBITDA target EBITDA „bridge“ 2016-2018 (in EUR mn) EBITDA target 2016 ≥ 280 1 Volume growth, turbines 40-60 2 Volume growth, service (incl. margin 20-30 improvement) 3 Price pressure / COE +/- 0 4 Merger synergies 60 5 Operational excellence 10-30 Non-recurring an
Slide 35: Addressing price pressure, ensuring competitiveness: the COE programme
Adressing price pressure, ensuring competitiveness: 3 the COE programme Terminology The tool: our COE programme CAPEX+OPEXLife One COE programme running per platform LCOE= AEPLife 280 experts directly involved Levers >900 active measures to reduce COE Yield CAPEX OPEX LCOE Value up Cost Cost LCOE no
Slide 36: Our COE programme
3 Our COE programme Examples of COE initiatives Flexible moulds for Re-design nacelle cover Reducing gearbox cost variable blade lengths Change design from Same mould for three Higher tip speeds create round to square different turbine types less torque Reduce number of parts Lower CAPEX Smaller gea
Slide 37: Competitive products for any environment
3 Competitive products for any environment Capacity constrained markets Land constrained markets … … Emerging markets, USA Europe 1.5-3MW >3MW COE driven COE & Technology driven AW3000 Delta generation Specific product solutions for market with Beating market leader in the heart of Texas significant
Slide 38: The product portfolio
3 The product portfolio Sales Release 2014 and before 2015 2016 2017 Strategy AW3000 AW125/3000 AW125/3150 to be specialize on announced capacity AW132/3000 soon constrained projects NX Delta N117/3000 N117/3600 to be specialize on announced land soon constrained N131/3000 N131/3300 N131/3600 projec
Slide 39: Harvesting the benefits of joint R&D
3 Harvesting the benefits of joint R&D TOWERS BLADES TOOLS TECHNOLOG CONTROLS SUPPLIERS Y & DESIGN STANDARDS Tower portfolio New blade Control strategies Supplier base Serrations geometries Proven AWP Utilizing Exchange on Harmonizing Serrations for tower combined control & load supplier base AW pla
Slide 40: Pathway to meet the 2018 EBITDA target
Overview: pathway to meet the 2018 EBITDA target EBITDA „bridge“ 2016-2018 (in EUR mn) EBITDA target 2016 ≥ 280 1 Volume growth, turbines 40-60 2 Volume growth, service (incl. margin 20-30 improvement) 3 Price pressure / COE +/- 0 4 Merger synergies 60 5 Operational excellence 10-30 Non-recurring an
Slide 41: Merger synergies fully on track
4 Merger synergies fully on track Pre-closing synergy targets EBITDA impact in EUR mn* Update on synergies 95 6 Work on synergies realization started Admin 8 immediately after closing R&D 2016 synergies will reach the target 59 37 Purchasing In 2017 synergies expected to reach EUR 25-28 mn 26 45 Sal
Slide 42: Merger synergies examples
4 Merger synergies fully on track Merger synergies examples Sales Purchasing Example: sale of 200+ Example: volume MW project with AWP bundling (castings, technology to a Nordex forgings) customer On track to generate EUR 95 mn R&D Admin synergies Example: applying Example: consolidation in 2019 Nor
Slide 43: Pathway to meet the 2018 EBITDA target
Overview: pathway to meet the 2018 EBITDA target EBITDA „bridge“ 2016-2018 (in EUR mn) EBITDA target 2016 ≥ 280 1 Volume growth, turbines 40-60 2 Volume growth, service (incl. margin 20-30 improvement) 3 Price pressure / COE +/- 0 4 Merger synergies 60 5 Operational excellence 10-30 Non-recurring an
Slide 44: Potential for profitability improvement through operational excellence
Potential for profitability improvement through 5 operational excellence Quality issues cost more than EUR 40 Operational excellence aims at mn over last 18 months EUR 10-30 mn EBITDA improvement Supplier ramp-up for N117 Blade ramp-up of N131 Cable assembly process Quality control of bolts EUR 10-3
Slide 45: Agenda
Agenda I The management team II Products III Status of merger transition IV Update on FY 2016: confirming guidance V Pathway to 2018 VI Wrap-up and key take-aways Capital Markets Day 2016 28 Sept. 2016 45
Slide 46: Summary: pathway to meet the 2018 EBITDA target
Summary: pathway to meet the 2018 EBITDA target EBITDA „bridge“ 2016-2018 (in EUR mn) EBITDA target 2016 ≥ 280 Volume growth, turbines 40-60 Volume growth, service (incl. margin 20-30 improvement) Price pressure / COE +/- 0 Merger synergies 60 Operational excellence 10-30 Non-recurring and merger co
Slide 47: Key take-aways: all elements for success in place
Key take-aways: all elements for success in place The integration process is Our 2016 guidance is We have a clear plan to fully on track confirmed achieve our 2018 targets Nordex and AWP operate A back-loaded order year, Top -line and EBITDA as one company but robust pipeline to growth through more
Slide 48: Any questions?
Any questions? Capital Markets Day 2016 28 Sept. 2016 48
Slide 49: Thanks for joining today's CMD
Thanks for joining today’s CMD 49
Slide 50: Disclaimer
Disclaimer This presentation was produced in September 2016 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
Slide 51: Together on the same course
Together on the same course Ralf Peters (Head of Corporate Communications) Rolf Becker (Investor Relations) Nordex SE Langenhorner Chaussee 600 22419 Hamburg Germany Tel: +49-40-30030-1000 Fax: +49-40-30030-1333 Email: [email protected] Web: www.nordex-online.com