Canadian Solar Inc. · NASDAQ:CSIQ
Canadian Solar — Investor Presentation (June 2014)
26 slides from Canadian Solar's investor presentation, Jun 10, 2014
Slide 1: Investor Presentation
Investor Presentation June 10, 2014 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation has been prepared by Canadian Solar Inc. (the “Company”) solely to facilitate the understanding of the Company’s business model and growth strategy. The information contained in this presentation has not been independently verified. No representation, warranty
Slide 3: Company description
Company description A rapidly growing solar total solution Global Footprint footprint Operational provider with one of the largest global project development pipelines Founded in Ontario, 2001 Listed on NASDAQ (CSIQ) in 2006 Over 7,000 employees globally Presence in 20 countries / territorie
Slide 4: Well positioned project development business
Well positioned project development business Global project development business 4.4 GWDC total project 131 MW development pipeline (20 projects) delivered to end 1.2 GWDC users in 2013 Canada total contracted / Marquee customers late-stage project USA pipeline(1) China Short term Japan Mid term > 3
Slide 5: Leading PV module manufacturer
Leading PV module manufacturer Canadian Solar manufacturing capacity 3.0 GWDC (MWs) Capacity as of May 16, 2014 3,500 total module 3,000 3,000 Canada, manufacturing 2,500 2,100 2,400 500 MW 17% capacity including 2,000 1,500 1,600 1,500 China, 1,300 2,500 2.5 GW in China 1,500 MW 3,000 MW 1,000 800
Slide 6: Investment highlights
Investment highlights 1 Beneficiary of strong secular growth in the solar sector 2 Rapid growth in project development business 3 Leading vertically integrated PV manufacturer 4 Competitive cost structure 5 Global footprint with diversified and international customer base 6 Bankable brand with high
Slide 7: Levered to strong, positive demand growth globally
1 Levered to strong, positive demand growth globally Global PV module demand Key themes ’013-’15E (GW) CAGR 53.2 Decline in Europe more than offset by growth in Asia and ROW 31.2% U.S. 44.2 15.5 37.2 10.5 Grid parity in certain markets 41.4% 2.0 to drive future growth 2.0 24.0% 9.0 1.6 3.0 1.5 -6.1%
Slide 8: Project development business with diversified pipeline
2 Project development business with diversified pipeline Priority markets for utility-scale project development 4.4 GWDC total project development pipeline 1.2 GWDC Canada total contracted / late-stage project pipeline(1) USA China Japan > 3.2 GWDC total early-mid stage development pipeline(2) Short
Slide 9: Proven track record in monetizing utility-scale projects
2 Proven track record in monetizing utility-scale projects 2010 2011 2012 2013 2014 FiT/PPA granted or acquired 2010 2011 Jun 2012 2012 9 FiT # of # of # of projects projects: 1 projects: 11 projects: 20 granted in MWs: 8.5 MWs: 122 MWs: ~200 Ontario Forward sales Dec 2011 Mar 2012 Jun
Slide 10: Leading project developer in Canada
2 Leading project developer in Canada Ontario project location and status 1 New Liskeard 453 MWDC project backlog 23 in Ontario(1) Elliot Lake North Bay 102 MWDC 3 projects Ottawa 22 completed and 4 21 28 Cornwall 5 2 delivered to end Module manufacturing plant 20 28 7 buyers (2) Guelph, Ontario Owe
Slide 11: Leading project developer in Canada (cont'd)
2 Leading project developer in Canada (cont’d) Late stage projects in Canada Project COD timeline (2) Expected Canadian Solar Developed MWDC Status End Buyer (MWDC) COD 1 Liskeard 1, 3 and 4 42.0 In Construction 2014 Q3/Q4 TransCanada 298 (1) 2 William Rutley 13.9 Commercial Operation - TransCanada
Slide 12: United States utility-scale project pipeline
2 United States utility-scale project pipeline Total Solutions business – U.S. Projects Completed in 2013 MW DC State Status COD 151 MWDC 94 MWDC 1 NC Solar II LLC (Bethea) 2.5 NC Completed 2013-Q1 contracted / late- projects completed in 2 CES Sterling LLC 2.4 MA Completed 2013-Q3 stage project pip
Slide 13: Japan utility-scale solar project pipeline
2 Japan utility-scale solar project pipeline Total Solutions business – Japan FiT Expected 343 MWDC(1) 500 MWDC(1) Utility Scale Project Pipeline MW DC (JPY / kWh) COD (2) contracted / late- early-stage Project 1 44.5 40 2016 stage project pipeline assessment projects Project 2 29.8 36 2016 Project
Slide 14: China utility-scale solar project pipeline
2 China utility-scale solar project pipeline Total Solutions business – China 2014 -15 Late Stage Heilongjiang Province Project Feed In Tariff Opportunity 3 40 MW Jilin (MWDC) 7 30 MW 5 50 MW Liaoning RMB 1.0/kWh Inner 1 Jiangsu 30 MW Xinjiang 4 50 MW RMB 0.2/kWh (Prov.) 6 Mongolia Beijing 50 MW
Slide 15: A leading vertically integrated PV manufacturer
3 A leading vertically integrated PV manufacturer Canadian Solar manufacturing capacity growth (MWs) 3,500 Module capacity currently at 3,000 MW per year 3,000 3,000 Cell capacity expansion in Funning, Jiangsu Province, in JV 2,400 2,500 2,100 with GCL. Phase I targets net capacity increase of 6
Slide 16: All-in pure manufacturing cost in China
4 All-in pure manufacturing cost in China Polysilicon/Wafer* Cell* Module Total Q2 2011 $0.76/W $0.22/W $0.33/W $1.31/W Secure LT wafer supply agreement Reduce raw material Reduce cell to module at $0.20/W or less for up to 1GW purchase cost power loss Benefit from lower cost/usage Reduce
Slide 17: Global footprint with diversified customer base
5 Global footprint with diversified customer base Operational footprint > 6.0 GW cumulative modules sold to date Customers in over 70 countries with business subsidiaries in 20 countries Established projects business currently delivering services in 4 countries Sales office Manufacturing facility To
Slide 18: High-quality product portfolio
6 High-quality product portfolio Product portfolio International environmental & quality management standards Commercial and utility-scale ISO 9001:2008 Quality Management System QC080000:2005 HSPM Hazardous Substance MaxPower ELPS Process Management CS6X-P CS6P-MM CS6P-M CS6P-P ISO 14001 Envi
Slide 19: Bankable product with insurance backed warranty
6 Bankable product with insurance backed warranty Product workmanship and power output ….backed by an investment grade insurance policy performance…. Insurance policy matches Canadian Solar’s standard 10-year product workmanship warranty warranty terms 25-year power output performance guarante
Slide 20: Experienced Board and Senior Management
7 Experienced Board and Senior Management Name / Title Work Experience Dr. Shawn Qu Director & VP at Photowatt International S.A. Chairman, President & CEO (Director) Research scientist at Ontario Power Generation Corp. Michael Potter Corporate Vice President and CFO of Lattice Semiconductor C
Slide 21: Key levers of our strategy
Key levers of our strategy Differentiate Leverage CSI’s existing expertise to expand and monetize utility scale project Business opportunity (e.g. Canada, U.S., Japan, China) Model Expand residential system kits Maintain Low Manufacturing Continue to reduce manufacturing costs to remain compet
Slide 22: Income statement summary
Income statement summary Revenue - US$ million Gross Profit - US$ million 9.6% 7.0% 16.9% 19.5% 14.7% 1,899 276 1,654 1,295 182 101.3 520 90 68.6 466 2011 2012 2013 Q4 13 Q1 14 2011 2012 2013 Q4 13 Q1 14 Operating Income (Loss) - US$ million Net Income (Loss) - US$ million 0.4% -11.0% 7.9% 8.7% 5.7%
Slide 23: Operating expenses as % of revenue
Operating expenses as % of revenue Selling expenses General and administrative expenses (1) (2) 7.0% 5.0% 4.5% 4.5% 4.7% 5.3% 5.5% 5.3% 3.7% 3.2% 2011 2012 2013 Q4 13 Q1 14 2011 2012 2013 Q4 13 Q1 14 Research and development expenses Total operating expenses (1) (2) 1.0% 1.0% 13.0% 0.7% 10.8% 0.6% 0
Slide 24: Selected balance sheet and cash flow items
Selected balance sheet and cash flow items Cash and cash equivalents – US$ million Cash flow from operations – US$ million (1) 781 679 679 230 522 564 417 60 73 178 451 451 422 344 142 228 228 364 (148) (154) 2011 2012 2013 Q4 13 Q1 14 Cash Restricted Cash 2011 2012 2013 Q4 13 Q1 14 Total debt – US$
Slide 25: Guidance
Guidance Q1 2014 Q2 2014 FY2013 FY2014 YoY ∆% Module 600MW- 2.5GW – 500MW 1.9GW +37% shipments 630MW 2.7GW 560 Million to $2.7 Billion to Revenue $466 Million 1.6 Billion +75% 590 Million $2.9 Billion Gross margin 14.7% 17% – 19%(1) 16.9% NA NA Source: Earnings release issued on May 16, 2014 (1) Inc
Slide 26: Thank You!
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