Slide 1: Array Technologies 3Q 2021 Earnings Call
Array Technologies 3Q 2021 Earnings Call November 11, 2021 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements and Other Information This presentation contains forw ard-looking st atements, as the term is used within federal securities laws. All statements other than those of historical fact which appear in this presentation, including (without limitation) statements reg
Slide 3: Q3-2021 Earnings Call – Agenda
Q3-2021 Earnings Call – Agenda Topic Presenter 1 Business Update Jim Fusaro, Chief Executive Officer 2 Results and Outlook Nipul Patel, Chief Financial Officer 3 STI Acquisition Brad Forth, Chairman Nipul Patel, Chief Financial Officer 3
Slide 4: Business Update
Business Update Jim Fusaro q FOLLOW THE SUN. J FOLLOW THE LEADER.
Slide 5: Q3 2021 Business Update
Q3 2021 Business Update Short-Term Challenges • Panel availability and continued logistics challenges causing customers to delay project starts and our freight costs to rise Persist, but are Transitory • Customers and suppliers are adjusting to the new environment and normalization is in sight sta
Slide 6: Strong Growth Continues, Driven by Increasing Demand and Market Share Gains
Strong Growth Continues, Driven by Increasing Demand and Market Share Gains Revenues ($mm) Order Book ($mm)(1) Key Takeaways ► Significant revenue growth despite continued $192.1 $1,421 headwinds in commodities and logistics 1H Investments in U.S. supply chain $416 paying dividends with greater co
Slide 7: We Have Turned the Corner on Margins
We Have Turned the Corner on Margins Gross Margin (%) Key Takeaways High Teens to ► Q3-2021 was last quarter where majority of shipments were orders Low Twenties placed prior to the changes to our quoting and procurement processes 17.8% Mid to High Teens ► Margins should improve steadily as “new” or
Slide 8: Financial Update
Financial Update Nipul Patel 8
Slide 9: Q3 2021 Financial Results
Q3 2021 Financial Results Q3 Snapshot Y/Y Comparison Three Months Ended ► Revenue up 37.7% due to orderbook conversion, increased demand for September 30, solar trackers and market share gains ($ in millions, except EPS Data) 2021 2020 Y/Y Revenue $192.1 $139.5 +$52.6 ► Gross profit down 14.4% due t
Slide 10: 2021 Outlook
2021 Outlook Change in the Macro Environment Impact on Solar Market Impact on Array Since Last Quarter ► Shipping costs have continued to increase ► Project starts being delayed from 2021 to ► Projects have continued to shift out in 2022, driven by higher fuel costs and tightening 2022 for a variety
Slide 11: Acquisition of STI Norland
Acquisition of STI Norland Brad Forth | Nipul Patel 11
Slide 12: STI Norland Overview
STI Norland Overview Company Description Key Figures(2) ► Leading European manufacturer of trackers LTM Revenues ($mm) $213 Founded in 1996; began supplying trackers in 2002 Over 12 GW of trackers shipped or awarded LTM Gross Margin (%) 30% ► Headquartered in Pamplona, Spain with manufacturing f
Slide 13: Key Transaction Benefits
Key Transaction Benefits Establishes Array as Global Leader • Creates largest solar tracker company in the world with leading positions in the United States, LatAm and Europe Makes Array a Leader in Brazil • STI Norland is the leading provider of trackers in Brazil and significantly larger than the
Slide 14: Creating the Global Leader
Creating the Global Leader Array STI Combined Company ► U.S. leader ► LatAm leader / Top 5 in Europe ► Global leader ► 30+ GW shipped ► 12 GW shipped or awarded ► 42+ GW shipped or awarded – equivalent to 23% of the installed utility-scale capacity in ► Lowest lifetime cost system ► Low upfront cost
Slide 15: STI Competitive Position
STI Competitive Position Region/Country Ranking(1) Selected Customers • Acciona Brazil #1 • AES • Canadian Solar • EDP Spain Top 3 • Elecnor • Engie • Iberdrola Other Latin America Top 3 • Patria • Perfin U.S. Limited Presence • Solarpack (Almost no overlap with Array) • WEG Array and STI Norland ar
Slide 16: STI Norland Financial Snapshot
STI Norland Financial Snapshot Revenues (€MM) Adjusted EBITDA (€MM) Geographic Mix(2) Sellers get € 255.0 maximum earnout(1) ≥€ 60.8 € 199.8 € 225.0 € 42.5 ≤€ 47.0 Sellers get Other Brazil no earnout International 61% 39% € 104.7 € 13.1 2019 2020 2021 2019 2020 2021 % Growth 91% 10%+ % Margin 13% 21
Slide 17: Brazil Solar Market
Brazil Solar Market Overview Generation Capacity by Type (GWdc) ► Large and growing economy (213M population, $1.9T GDP) +61% +34% 111 GW 179 GW 240 GW ► Generation capacity projected to grow 34% over the next 10 years to support growing demand for electricity(1) Compares with 23% for the U.S.(1)
Slide 18: Brazil Near-Term Growth Opportunity
Brazil Near-Term Growth Opportunity Market Dynamics Brazil Solar Installations (GWdc) Implies $1+ Billion of Tracker Demand(1) ► Market historically driven by government energy auctions ► Recently transitioned to private PPAs driven by strong demand from 5.0 4.8 industrial customers seeking to reduc
Slide 19: Transaction Overview
Transaction Overview • €570 million “headline” enterprise value Purchase Price • Adjusted for cash, debt, working capital and certain other items to determine the purchase price • Approximately €351 million ($407 million(1)) at closing Cash Consideration • Up to an additional €55 million payable in
Slide 20: Pro Forma Capitalization and Share Count
Pro Forma Capitalization and Share Count ($ in millions, except shares outstanding) As of September 30, 2021 Array STI (1) Transaction Financing Pro Forma Cash $116.4 $32.7(2) – $149.1 Total Debt(3) 327.9 40.8 325.0 693.7 Series A Preferred Stock(3) 350.0 – 100.0 450.0 To Sellers: 13.9 Common Shares
Slide 21: Appendix
Appendix TecuNoLoarts FOLLOW THE SUN. FOLLOW THE LEADER. 21
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) Adjusted EBITDA Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net income (loss) $ (31.0) $ (7.2) $ (28.2) $ 68.8 Preferred dividendsand accretion 5.5 — 5.5 — Interest expense, net 13.1 0.7 28.8 8.3 Other expense, n
Slide 23: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions) Adjusted Net Income Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net income (loss) $ (31.0) $ (7.2) $ (28.2) $ 68.8 Accretion of Series A Preferred 2.7 — 2.7 — Amortization of intangibles 5.9 6.3 17.6 18.9 Amo