Sunpower Inc. · NASDAQ:SPWR
Sunpower — Merger or Acquisition (November 2019)
44 slides from Sunpower's merger presentation, Nov 12, 2019
Slide 1: Separation / Investment Announcement
Separation / Investment Announcement November 11, 2019 © 2019 SunPower Corporation Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement © 2019 SunPower Corporation This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: (a) our expectations regarding pricing trends, demand, opportunitie
Slide 3: Summary of Strategic Announcement
Summary of Strategic Announcement Separate into two industry leading solar companies Creates two independent, pure play solar companies, facilitates TZS investment in Maxeon Solar SunPower– leading North American energy services provider Maxeon Solar Technologies – advanced solar panel technologies
Slide 4: Strategic Rationale: Creates Two Strategically Positioned, Pure-Play Companies
SunPower Maxeon Solar Technologies Strategic Rationale: Creates Two Strategically Positioned, Pure-Play Companies Global Solar Panel Business North America DG Energy Services TZS investment accelerates Maxeon-5, Maxeon-6 expansion Converting Maxeon-2 to Maxeon-5 - significant cost savings Increasing
Slide 5: Maxeon Solar Technologies Spin-Off and TZS Investment
Maxeon Solar Technologies Spin-Off and TZS Investment Spin-off of Maxeon Solar Technologies (“Maxeon Solar”) to SunPower shareholders Maxeon Solar to be headquartered in Singapore and listed on NASDAQ Distribution intended to be tax-free to SunPower shareholders Concurrent investment of $298 million
Slide 6: Existing SunPower Shareholders Will Receive New Shares in Maxeon Solar
Existing SunPower Shareholders Will Receive New Shares in Maxeon Solar New SunPower Maxeon Solar Technologies Current SPWR Shareholders Current SPWR Shareholders Including Total 100% 100% 71.152% 28.848% Pre-Transaction Post-Transaction* TZS * Based on current shareholdings
Slide 7: Maxeon Solar Technologies
SUNPOWER Maxeon Solar Technologies © 2019 SunPower Corporation
Slide 8: Maxeon Solar Technologies: Advanced solar technologies deployed at scale
Maxeon Solar Technologies Advanced solar technologies… deployed at scale.
Slide 9: The Past Years - SunPower Drives a New Industry
The Past 30 Years - SunPower Drives a New Industry SunPower 35-years of technology innovation Deployment to date ≈ 13 GW ~50/50 US vs. international Highest performance premium products Well-established channels to market Solar Industry Deployment to date > 600 GW 31% CAGR since 1990 70% of deployme
Slide 10: The Next Years - Maxeon Solar Technologies and The Solar Era
Source: BNEF New Energy Outlook 2018 and 2019 The Next 30 Years - Maxeon Solar Technologies and “The Solar Era” Cumulative deployment growth 10 – 12 x Broad global mix > 40% of global electricity capacity by 2050 High performance and low cost Upstream industry consolidation 630 GW Global Installed C
Slide 11: Maxeon Solar – Creating a Global Solar Industry Leader
Maxeon Solar Technologies Capital to accelerate scale-up of Maxeon 5 Strong access to low-cost Asia-based solar supply chain Strategic supply relationships - New SunPower, TZS Differentiated product platforms with compelling future roadmap Strong global channels and brand Strong support for SPWR sin
Slide 12: Diversified Global Reach and Portfolio
Diversified Global Reach and Portfolio 50% 50% 1 YTD 2019 DG PP MW by Product1 Outside N. America MW by Region2 2 Q3 2019 68% Global factory footprint – Asia, Europe, Mexico Diverse sales base Direct sales to 80+ countries, across 6 continents - exclusive supply to SunPower in US and Canada DG and P
Slide 13: Two Proprietary Technology Platforms - Different Market Segments
Residential & Small Com. Source: 2020 forecast: Company projections, Wood Mackenzie, IHS, RTS, SunWiz, PV InfoLink Large Commercial & Power Plant Power Plant Making the conventional, exceptional. Two Proprietary Technology Platforms - Different Market Segments Shingled cell technology Target Market
Slide 14: Ramping Capacity Across Both Product Platforms
Ramping Capacity Across Both Product Platforms Highest efficiency panel on market Expanding capacity at Fab 4 to 500 MW Technology end-of-life at Fab 3 Converting Maxeon-2 capacity to Maxeon-5 1.9 GW new Max 5 capacity at Fab 3 Max-5 Highest power residential solar panel 3 GW expansion of DZS JV SPW
Slide 15: The Next Generation of IBC Innovation: Maxeon
The Next Generation of IBC Innovation: Maxeon® 6 Improved Efficiency, Process, and Capex Fab3A Build Out PERC BSF (Fab4) Cell Efficiency In Development Source: Company produced values based on R&D results and forecasts Tool Capex Cost (c / W) Novel low cost metallization Radical process simplificati
Slide 16: Maxeon Solar Long-Term Financial Model
Maxeon Solar Long-Term Financial Model* Equity investment from TZS fuels build out of Maxeon 5 Twice the capacity with ½ the CapEx per watt - 50% lower cost per watt Momentum drives future Maxeon 6 growth World’s best efficiency with world-class CapEx costs P-Series JV with TZS enables differentiati
Slide 17: SunPower
SUNPOWER SunPower © 2019 SunPower Corporation
Slide 18: Re-introducing SunPower
Re-introducing SunPower A pure-play, DG energy services company leveraging the world’s best solar platform
Slide 19: SunPower Uniquely Positioned to Capitalize on Distributed Solar
New Home Builders Residential Dealers SunPower Uniquely Positioned to Capitalize on Distributed Solar Largest Residential/Small Commercial franchise >$1B annual revenue, 400-500MW >300k customers, >1.7-GW installed base, >40 states Commercial Dealers Large C&I Customers Residential and Commercial Ch
Slide 20: SunPower Primed for Success in Growing Industry
SunPower Primed for Success in Growing Industry Increasing demand in electrified world Solar economics surpassing all other sources Improved financing options of solar assets Storage adds resiliency, full availability Increasing customer control of energy use Digitization of everything Well position
Slide 21: Powerful Solar Energy Platform
Powerful Solar Energy Platform Customers Homeowners Businesses Homebuilders Installing Dealers Non-Installing Dealers Expanding platform drives higher margin and increased customer and dealer loyalty *Data as of November 11, 2019
Slide 22: Unmatched Residential and Commercial Dealer Network
Unmatched Residential and Commercial Dealer Network 45% Sold and installed by 32 branded Master Dealers Dealer Loyalty SPWR Competitor Cumulative Customers 317,000 72,000 Cumulative Residential MW Deployed >1.7GW 526MW Cumulative CVAR MW Deployed >800MW 0 Revenue Mix (cash,loan / lease) 67% / 33% 13
Slide 23: Commanding Position in New Homes
Commanding Position in New Homes SunPower is the solar of choice for top homebuilders—including storage in 2020 >50% New Homes Market Share 40,000+ New Homes Contracted Backlog 18 out of 20 Top CA Builders Under Contract 250+ Communities opened in 2019 *Data as of November 11, 2019 Information from
Slide 24: Commanding Position in C&I Solar and Storage
8 out of 10 Top corporate buyers are SunPower customers Commanding Position in C&I Solar and Storage >$500m of awards to date for projects to be completed 2020+ 65% repeat customers projects booked in 2017 & 2018 >30% storage attached with Helix intelligent software 172MW 9 sites in 4 states 65MW 11
Slide 25: Best in Class Residential & Commercial Storage Solutions
Best in Class Residential & Commercial Storage Solutions Proprietary Commercial Helix® Storage Solution 80% of projects booked in Q3 in CA included storage Extensive Storage Pipeline (30MW awards; 145MW pipeline) Opportunity to upsell across 1.5GW 35% attach rate and growing Proprietary Residential
Slide 26: SunPower Solar + Storage Platform Enables Services Model
SunPower Solar + Storage Platform Enables Services Model
Slide 27: Scalable SunStrong Platform
Scalable SunStrong Platform Captures retained value and refinancing upsides Access to capital with platform to rapidly scale services to new assets Maintain ownership of customer relationships Ability to sell additional products and energy services Independent, de-consolidated entity for SunPower1 S
Slide 28: SunPower Long-Term Financial Model
SunPower Long-Term Financial Model Well positioned for revenue growth Expanding channel footprint, new homes accelerating, adding storage Differentiated products, sales channels deliver a premium A-Series ramp, addition of storage and services improve margins Capex / asset light model improves cash
Slide 29: Unlocking the Value of the Platforms
Unlocking the Value of the Platforms
Slide 30: Opportunity to Unlock Shareholder Value
Opportunity to Unlock Shareholder Value Significant Uplift Potential Current SPWR Market Cap $ [1.3]bn1 Maxeon Solar Value Implied by TZS Investment Potential Upside New SunPower Implied Market Capitalization Potential Upside Maxeon Solar Spin will facilitate TZS investment, expected to unlock unrea
Slide 31: Significant Embedded Value Based on Relative Valuation
LTM Residential MW2 267 122 221 403 Cash/Loan % of LTM MW Deployed 75 % 26 % 15 % 16 % LTM Commercial MW 175 None None None LTM MW (Total) 442 122 221 403 2020E EBITDA Estimate3 $ 65 – 85mm $ 58mm $(1)mm $ 39mm 1 Based on SPWR enterprise value (SPWR Market Cap of $1.2B, and YE 2019 net debt estimate
Slide 32: Summary Financials
Summary Financials New SunPower Maxeon Solar 2019PF 2020PF Target Model 2019PF 2020PF Target Model $1.0 – $1.2 $1.0 – $1.2 10% – 20% growth $1.0 – $1.2 $1.2 – $1.4 10% – 20% growth 10% – 12% 9% – 12% > 15% 11% – 13% 14% – 17% >20% $75 – $85 $65 – $85 - $25 – $35 $65 – $85 - 6% – 8% 6% – 8% > 10% 2%
Slide 33: 2020 New SPWR Margin Drivers
2020 New SPWR Margin Drivers 2019 2020 2020 RR Helix storage pipeline attach rates 30% >40% >50% Equinox attach rates 0% 5%-10% Up to 25% New Homes deployment (MW) >30 >50 >70 A series deployment (MW) Up to 100 >150 >250 Better cost of capital lease loan + lease loan/Lease/C&I System cost (% of 2018
Slide 34: Balance sheet
Balance sheet New SunPower Maxeon Solar New debt facility at spin Legacy liabilities Existing 2021/2023 convertible debt $50 million legacy SPWR cash TZS Equity investment of $298 million New revolver at spin All other legacy cash remains with SPWR Repayment of $100 million note from Maxeon Solar $5
Slide 35: Summary
Summary Creates two independently focused, pure-play solar companies TZS investment accelerates ramp of industry leading Maxeon-5 technology to scale Drives long term margin expansion through focused approach to each core business #1 in market share in North American DG – expanding storage / service
Slide 36: Appendix
SUNPOWER Appendix © 2019 SunPower Corporation
Slide 37: Additional Information
Additional Information Proforma disclosure: Management has provided in this presentation forecasted [Non-GAAP] metrics of Maxeon Solar and New SunPower on a pro forma basis giving effect to the spin-off as if it had occurred on December 31, 2018. The pro forma measures generally reflect the allocati
Slide 38: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures. Th
Slide 39: Non-GAAP Adjustments Based on IFRS
Non-GAAP Adjustments Based on IFRS The company’s non-GAAP results include adjustments under International Financial Reporting Standards (“IFRS”) that are consistent with the adjustments made in connection with the company’s internal reporting process as part of its status as a consolidated subsidiar
Slide 40: Other Non-GAAP Adjustments
Other Non-GAAP Adjustments Business process improvement costs: During our quarter ended June 30, 2019, the company initiated a project to improve its manufacturing and related processes to improve gross margin in coming years and engaged third party experts to consult on business process improvement
Slide 41: Other Non-GAAP Adjustments (cont.)
Other Non-GAAP Adjustments (cont.) Stock-based compensation: Stock-based compensation relates primarily to the company’s equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict. Management believes that this adjustment
Slide 42: Other Non-GAAP Adjustments (cont.)
Other Non-GAAP Adjustments (cont.) Restructuring expenses: The company incurs restructuring expenses related to reorganization plans aimed towards realigning resources consistent with the company’s global strategy and improving its overall operating efficiency and cost structure. Restructuring charg
Slide 43: GAAP and Non-GAAP Reconciliation
GAAP and Non-GAAP Reconciliation Adjustment relates to cost of above-market cost of polysilicon, including the effect on product costs, as well as, loss on direct sales to third parties Adjustments made to align IFRS, the accounting framework followed by our majority stockholder, TOTAL S.A. Adjustme
Slide 44: Separation / Investment Announcement
Separation / Investment Announcement November 11, 2019 © 2019 SunPower Corporation