Canadian Solar Inc. · NASDAQ:CSIQ

Canadian Solar — Investor Presentation (July 2012)

28 slides from Canadian Solar's investor presentation, Jul 5, 2012

  1. Slide 1: Investor Presentation: The Super Highway to Grid Parity

    The Super Highway to Grid Parity Investor Presentation July 5, 2012

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement • This Thi presentation t ti h has b been prepared d by b Canadian C di S l Solar I Inc. (th “Company”) (the “C ”) solely l l to t facilitate f ilit t the th understanding of the Company’s business model and growth strategy. The information contained in this presentation has no

  3. Slide 3: Company Description

    Company Description A Canadian company with global reach • Founded in Ontario, 2001 • Listed on NASDAQ (CSIQ) in 2006 • Over 10,000 employees globally • Offices Offi in i 16 countries/territories i / i i • 8 wholly owned manufacturing subsidiaries • Over 260,000 SQM of total facility space One of th

  4. Slide 4: Industry Ranking by Estimated Module Shipments

    Industry Ranking by Estimated Module Shipments 2008 2009 2010 2011 Q4 - 2011 1st First Solar First Solar Suntech Suntech Suntech 2nd Suntech Suntech First Solar First Solar Canadian Solar 3rd Sharp Sharp Sharp Yingli Trina 4th Kyocera Yingli Yingli Trina First Solar 5th Yingli SunPower Trina Canadia

  5. Slide 5: Investment Highlights

    Investment Highlights • Demand for modules grew at 63.9% annual rate in the past 3-yrs to an Large and Growing estimated 26.8GW in 2011 and is expected to reach 40-45GW by 2015 • Growth drivers include: retail grid-parity, concern for the environment, energy Market Opportunity security, move away fr

  6. Slide 6: Global Solar PV Module Demand

    Global Solar PV Module Demand Global PV Module Demand - GW Key Drivers Near Term Forecast Past: 6,850% p.a.  Government 50.4 incentives 47.0  Lower ASPs 42.1 Future: 39 2 39.2 33.1 Retail grid parity 30.1 Increasing demand for 27.4 30.1 electricity in developing countries 19.6 Energy security 

  7. Slide 7: Retail Grid-parity Dynamics in Selected Markets

    Retail Grid-parity Dynamics in Selected Markets Levelized Cost of Solar Energy $0.40 ROUGH ESTIMATES Italy $0.30 Wh Germany Japan Retail Electricity Price $/kW Chil Chile Belgium Portugal System Costt $/Wp Spain UK $0.20 Mexico Brazil France Gujarat California $3.5 Australia Malaysia Israel South Te

  8. Slide 8: Large Scale, Global Footprint and Growing Market Share

    Large Scale, Global Footprint and Growing Market Share 2008* Americas Canadian Solar Module Shipments - MW 4.6% Asia and Others 5.9% 2500 Guidance 1,800-2,000 2000 Europe 89.5% 1500 1,323 First Quarter 2012* 1000 803 Asia and Americas Others 45.1% 500 12.3% 310 83 168 Europe 0 42.6% 2007 2008 2009 2

  9. Slide 9: Strong Bankable Brand Supported by Extensive Marketing

    Strong Bankable Brand Supported by Extensive Marketing Brand Attributes High Visibility Sponsorships Global scale and track record of success supplying Germany: Hockey and Football modules to major projects across the globe Highest international quality standards certifications • DIN ENISO 9001: 200

  10. Slide 10: Focused Growth Strategy

    Focused Growth Strategy Reduce R d • Reduce R d manufacturing f t i costs t to t remain i competitive titi Manufacturing  Entered into long-term strategic partnership for wafers  Target all-in manufacturing cost at $0.55-$0.60/watt by end of Q4 2012 Cost Expand Right • Target 10% global market sha

  11. Slide 11: All-in Manufacturing Cost Reduction Roadmap

    All-in Manufacturing Cost Reduction Roadmap Polysilicon/Wafer Cell Module Total Q2 2011 $0.76/W $0.22/W $0.33/W $1.31/W • Secure LT wafer supply agreement at • Reduce raw material • Reduce cell to $0.25/W or less for up to 1GW purchase cost module power loss • Benefit from lower cost/usage of silico

  12. Slide 12: Capacity Expansion Plan: 2.0GW+ of Desired Capacity

    Capacity Expansion Plan: 2.0GW+ of “Desired” Capacity Desired Capacity = Differentiated Products with Industry Leading Cost Structure Ingot / Wafers Cells Modules Capacity in Q4 2011 300/200 MW 1,500 MW 2,050 MW Capacity by 2012-13 ~2,000 MW* ~2,100 MW ~2,300 MW  Ingot/wafer capacity of ~2,000 MW*

  13. Slide 13: Technology Differentiators: Cell Efficiency Roadmap

    Technology Differentiators: Cell Efficiency Roadmap Cell lines can be converted to ELPS technology starting in Q4 2011 22.0 Hetero-junction 21.5 (Lab-stage) 21 0 21.0 20.5 20.0 Mono-crystalline 19.5 ELPS 19.0 Multi-crystalline 18.5 18.0 17.5 17.0 2011 2012 2013 17.5% to %19.0% 18.5% to %19.5% >20.0%

  14. Slide 14: Technology Differentiators: ELPS and ESE

    Technology Differentiators: ELPS and ESE Efficient Long-term Photovoltaic Solution (ELPS) Enhanced Selective Emitter (ESE) Mono Multi Fingers on front side P-type Si Connecting Hole Aluminum Base Positive Point Contacts Negative Point Contacts  ELPS is a Metal Wrap Through (MWT) technology, whereby

  15. Slide 15: Business Model Differentiator: Solutions Business (PV+)

    Business Model Differentiator: Solutions Business (PV+) D Deepening i Customer C t R Relationships l ti hi tot Capture C t Additi Additionall Margin M i - % off R Revenue >40% >25% ~10% 2011 2012 2013  System and Solution business represented ~10% of revenue in 2011  Expect to build and sell 9 sol

  16. Slide 16: Business Model Differentiator: Solutions Business (PV+)

    Business Model Differentiator: Solutions Business (PV+) 1 Liskeard 1, 3 and 4 10 MW AC 2 William Rutley 10 MW AC 3 Alfred 10 MW AC 4 Mississippi Mills 10 MW AC 5 Burritts Rapids 7 MW AC 23 6 Brockville 1 10 MW AC 7 Brockville 2 9 MW AC 8 Foto Light LP 10 MW AC 9 Illumination LP 10 MW AC 10 Little Cr

  17. Slide 17: Experienced Management Team and Board

    Experienced Management Team and Board International Background + Extensive Industry Experience Name / Title Working Experience Dr. Shawn Qu (Xiaohua)  Director & VP, Photowatt International S.A. Chairman, President & CEO (Director)  Research scientist, Ontario Power Generation Corp. Michael G. Pot

  18. Slide 18: Selected Projects: Utility Scale in Canada

    Selected Projects: Utility Scale in Canada Thunder Th d Bay, B Ontario O t i Canada C d Napanee, Ontario Canada CSI Role: 8.5 MW DC EPC Solution and O&M CSI Role: 10.5 MW DC EPC Solution and O&M Provider Provider Owner: SkyPower LTD (TBA) Owner: SkyPower LTD (FLII) Construction Finance: Minsheng g B

  19. Slide 19: Selected Projects: Utility Scale in Canada

    Selected Projects: Utility Scale in Canada Thunder Bay, Bay Ontario Canada Stone Mills, Mills Ontario Canada CSI Role: 10.8 MW DC EPC Solution and O&M CSI Role: 11.2 MW DC Developer and O&M Provider Provider Owner: SkyPower LTD (FWFN) Owner: Canadian Solar (CS1) Construction Finance: Minsheng Bank C

  20. Slide 20: Selected Projects: World's Largest Solar Power Cluster

    Selected Projects: World’s Largest Solar Power Cluster Location Brandenburg, Germany Module Type CS6P S t System Si Size 166MWp Completion September 2011 Note: Canadian Solar supplied 148 MW of the system’s total 166 MW. 19

  21. Slide 21: Selected Projects: U.S. Roof-mounted Airport Solar System

    Selected Projects: U.S. Roof-mounted Airport Solar System Location San José, USA Module Type CS5P System y Size 1.12MWp p Completion p June 2010 20

  22. Slide 22: Financial Highlights

    Fi Financial i l Highlights Hi hli ht

  23. Slide 23: Key Performance Indicators

    Key Performance Indicators R Revenue - US$ million illi G Gross Profit P fit - US$ million illi 12.4% 15.3% 9.6% 8.7% 7.7% 1,898.9 228.8 1,495.5 182.3 631.0 78.1 474.1 325.8 41.4 25.1 2009 2010 2011 4Q11 1Q12 2009 2010 2011 4Q 11 1Q 12 Operating Income (Loss) - US$ million Net Income (Loss) - US$ mi

  24. Slide 24: Key Performance Indicators: Operating Leverage

    Key Performance Indicators Operating Leverage 2009 2010 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Selling 3.5% 3.2% 3.7% 2.8% 3.5% 3.7% 4.4% 6.2% G&A 7.3% 3.6% 4.5% 3.8% 3.5% 3.2% 7.8% 4.7% 0.5% 0.5% 1.0% 0.5% 1.0% 1.6% 1.1% 0.9% R&D Operating Expense 11.3% 7.3% 9.2% 7.1% 8.0% 8.5% 13.3% 11.8% 23

  25. Slide 25: Summary Balance Sheet

    Summary Balance Sheet US$ million March 31, 2012 December, 2011 Cash, Equivalents and Restricted Cash 625.2 522.3 Accounts Receivable 250.6 292.2 Inventories 389.9 296.6 Other Current Assets 140.9 184.5 Total Current Assets 1,406.6 1,295.6 Property, Plant and Equipment 507.0 510.1 Other Non-current

  26. Slide 26: Financial Condition: Net Debt to Equity Vs. Peers

    Financial Condition: Net Debt to Equity Vs. Peers Net Debt – Q1 2012 ($ million) 1,645.6 1,599.8 390.2 326.9 325.1 CSIQ TSL HSOL YGE STP Net Debt to Equity – Q1 2012 199.2% 149.7% 71.4% 35.0% 51.4% CSIQ TSL HSOL YGE STP

  27. Slide 27: Outlook and Guidance

    Outlook and Guidance Fourth Quarter and Full Year Guidance Q2 2012 2012* FY 2012 2012* Shipments 430MW - 450MW 1,800–2,000MW Gross Margin 8% to 10% NA * Company Press Release, May 10, 2012 26

  28. Slide 28: Investment Summary

    Investment Summary 10 Year Operating Hi t History with ith Large Scale L S l and d Strong Bankable Global Footprint Brand Commitment to Expanding Market Building Share Shareholder Value Strong R&D St Track Record of Driving Prudent Financial Breakthrough Management Product Releases 27

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