Nordex Se · XETR:NDX1
Nordex — FY2016 Earnings Presentation
38 slides from Nordex's earnings presentation, Mar 1, 2017
Slide 1: Nordex SE Preliminary Results 2016
Nordex SE Preliminary Results 2016 Frankfurt am Main, 1 March 2017
Slide 2: Disclaimer
Disclaimer All 2016 financial figures within this presentation are preliminary and unaudited. This presentation was produced in March 2017 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
Slide 3: Agenda
Agenda 1 Key highlights Lars Bondo Krogsgaard 2 Financials Christoph Burkhard 3 Installations and orders Patxi Landa 4 Market trends and developments Lars Bondo Krogsgaard 5 Outlook Lars Bondo Krogsgaard 6 Summary Lars Bondo Krogsgaard 7 Q&A Preliminary Results 2016 1 March 2017 3
Slide 4: Key highlights: 2016 delivered according to plan
1 Key highlights 2016 delivered according to plan. Measures being taken to address volume and price pressure in 2017 and 2018 2016 2017-2018 Financial performance in line with Pressure on volume guidance Revenues of EUR 3.4bn Increasing price pressure (guidance EUR 3.35bn) EBITDA margin 8.4% (guidan
Slide 5: Integration of Nordex and Acciona Windpower progressing well
1 Key highlights Integration of Nordex and Acciona Windpower progressing well Benefits of the merger Synergy benefits for 2016 of EUR 10m as planned Synergy benefits for 2017 expected to reach cumulative EUR 25–28m Significantly improved global market footprint Access to important US and high growth
Slide 6: Agenda
Agenda 1 Key highlights 2 Financials 3 Installations and orders 4 Market trends and developments 5 Pathway to 2018 6 Summary 7 Q&A Preliminary Results 2016 1 March 2017 6
Slide 7: Income statement FY 2016
2 Financials Income statement FY 2016 Comments in EUR m FY 2016 FY 2015 Δ in % Sales includes EUR 726m Sales 3,395.0 2,430.1 39.7 from AWP for 9 months Total revenues 3,395,4 2,416.1 40.5 Cost of materials -2,559.4 -1,879.8 36.2 Gross profit up by 55.9% Gross profit 836.0 536.3 55.9 mainly driven by
Slide 8: Income statement Q4 2016
2 Financials Income statement Q4 2016 Comments in EUR m Q4 2016 Q4 2015 Δ in % Sales increased by 63.9% Sales 1,055.5 644.0 63.9 Total revenues 1,034.7 646.2 60.1 Integration costs Cost of materials -770.4 -490.8 57.0 amount to EUR 5m Gross profit 264.3 155.4 70.1 Full year synergies of Personal cos
Slide 9: Service segment performing well in 2016
2 Financials Service segment performing well in 2016 Service sales (in EUR m) Comments +28% Organic growth on Nordex platform of 12% 271.6 +12% AW platform Q2-Q4 Order backlog increased from EUR 997m 212.0 to EUR 1,693m Service margin at 16% EBITDA Nordex platform FY 2015* FY 2016 *Adjusted after ch
Slide 10: Balance sheet FY 2016
2 Financials Balance sheet FY 2016 Comments in EUR m FY 2016 FY 2015 abs. Δ in % change Non-current assets increased mainly driven by Non-current assets 1,253.3 321.2 932.1 290.2 PPA effect on goodwill, capitalized R&D and sales Current assets 1,740.9 1,138.9 602.0 52.9 pipeline Total assets 2,994.2
Slide 11: Working capital development 2016
2 Financials Working capital development 2016 Changes in working capital 2016 (in EUR m) Working capital ratio (in % of sales*) 21 6.8 104 4.4 FY guidance <5 % 4.1 123 424 0.7 147 -1.2 -29 YE Receiva- Inven- Prepay- Pay- YE FY Q1 H1 9M FY 2015 bles tories ments ables 2016 2015 2016 2016 2016 2016 Hi
Slide 12: Cash flow statement FY 2016
2 Financials Cash flow statement FY 2016 Key figures cash flow statement Comments in EUR m FY 2016 FY 2015 Without the cash component** of the AWP Cash flow from 287.4 178.9 transaction, free cash flow of EUR 51.0m operating activities before net working Cash flow from investing activities w/o capit
Slide 13: Cash flow statement Q4 2016
2 Financials Cash flow statement Q4 2016 Key figures cash flow statement Comments in EUR m Q4 2016 Q4 2015 Free cash flow nearly tripled due mainly Cash flow from 178.9 49.6 to the high activity level combined with a operating activities positive change in working capital in before net working Decem
Slide 14: Total investments
2 Financials Total investments CAPEX* (in EUR m) Comments +36% Investments in 2016 largely consist of capitalized R&D and CAPEX for production 102.4 facilities 75.1 Increase compared to 2015 mainly driven 62.0 by construction of HQ extension (sale- 39.7 and-lease-back transaction planned in 2018) 35
Slide 15: Capital structure
2 Financials Capital structure Net debt* to EBITDA (xEBITDA) Equity ratio (in %) 0.8 0.9 1 0.0 32.5 32.1 0 32.0 31.5 -1 31.2 31.2 31.5 31.4 -1.4 -2 -1.8 0.0 FY Q1 H1 9M FY FY Q1 H1 9M FY 2015 2016 2016 2016 2016 2015 2016 2016 2016 2016 Leverage decreased to -0.02 in Q4 Solid equity ratio of 31.4% Y
Slide 16: Agenda
Agenda 1 Key highlights 2 Financials 3 Installations and orders 4 Market trends and developments 5 Outlook 6 Summary 7 Q&A Preliminary Results 2016 1 March 2017 16
Slide 17: Global market share increased from 5.8% to 9.3% in 2016
3 Installations and orders Global market share* increased from 5.8% to 9.3% in 2016 New installation record of 2.6 GW – up 55% vs 2015 Europe North America Increased market Small decrease in share to >14% installations +26% (+1.2ppt) -11% Strong growth 1,749 Strong performance 138 expected in 2017 1
Slide 18: Order intake of EUR 3.3bn with a balanced global distribution
3 Installations and orders Order intake of EUR 3.3bn with a balanced global distribution Order intake by quarters (in EUR m) Order intake by regions (in %) +34% 100% 1,133 3,302 2,471 AW 61% Q2-Q4 841 Europe 79% 787 NX 541 North America 17% 0% Latin America 10% 17% FY Q1 Q2 Q3 Q4 FY RoW 11% 5% 2015
Slide 19: Book-to-bill positive, turbine and service backlog at EUR 3.9bn
3 Installations and orders Postitive Book-to-bill, year end turbine and service backlog stands at EUR 3.9bn Order backlog turbines (EUR m) Order backlog service (EUR m) +34% +70% 2,233 1,693 AW +35% platform 1,668 -23% AW platform 997 Nordex Nordex platform platform YE 2015 YE 2016 YE 2015 YE 2016 T
Slide 20: COE programme running well, but will not fully compensate price pressure
3 Installations and orders COE programme running well, but will not fully compensate higher than anticipated price pressure Intensifying competition, prices for 2018 deliveries particularly under pressure 2017 2018 Price pressure expected COE programme will to increase significantly almost mitigate
Slide 21: Agenda
Agenda 1 Key highlights 2 Financials 3 Installations and orders 4 Market trends and developments 5 Outlook 6 Summary 7 Q&A Preliminary Results 2016 1 March 2017 21
Slide 22: The long-term trend for wind energy is positive
4 Market trends and developments The long-term trend for wind energy is positive, driven by several macro factors Drivers for wind energy Need for replacement of conventional Increasingly competitive LCOE power plants › Wind LCOE reduced by Capacities likely to require >50% over last 10 years, repla
Slide 23: Onshore wind installations
4 Market trends and developments Onshore wind installations New installations CAGR through 2020 (excl. PRC) Global onshore wind market 2016-2020 (GW) CAGR +3.7% 40 34.7 36.0 35 32.2 32.4 Stable overall growth, 31.1 30 but some volatility in 25 individual markets likely as countries transition to 20
Slide 24: Growth in new installations shifts towards emerging markets and the Americas
4 Market trends and developments Growth in new installations shifts away from mature European markets towards emerging markets and the Americas Onshore wind market in regions ’16-’20 (in GW) EUROPE: NORTH AMERICA LATAM REST OF WORLD Significant volume, but Growth driven by the Uncertainty in Brazil,
Slide 25: Service business growth expected to outpace turbine sales
4 Market trends and developments Service business growth expected to outpace growth in turbine sales, providing a recurring revenue and profit opportunity Wind turbine O&M Revenues 2017-2020* (bn EUR), Development of regional O&M markets Growth will be driven by continued MW +9.3% 11.1 additions and
Slide 26: Agenda
Agenda 1 Key highlights 2 Financials 3 Installations and orders 4 Market trends and developments 5 Outlook 6 Summary 7 Q&A Preliminary Results 2016 1 March 2017 26
Slide 27: 2017 guidance
5 Outlook 2017 guidance 2017e Market driven revenue drop and delayed Indian Sales EUR3.1 - 3.3 bn 3.1-3.3bn business 2017 EBITDA margin reflecting volume effect EBITDA 7.8–8.2% 7.8 – 8.2% and price pressure vs. 2016. 2017 EBITDA margin* margin margin supported by solid German business and merger syn
Slide 28: Adjustment of 2018 revenue and profitability target
5 Outlook Adjustment of 2018 revenue and profitability target Market driven and internal factors trigger adjustment of 2018 targets Revenues: EUR 3.4-3.6bn EBITDA margin Market driven Internal factors EUR EUR factors >4.2bn 3.4- 3.6bn 1 2 3 4 stable vs. 2017 Former Volume Price Delayed Turbine for N
Slide 29: Improving long-term profitability and competitiveness
5 Outlook Improving long-term profitability and competitiveness New measures are now being taken to strengthen the company New measures to improve Current core activities profitability Continue growing the wind Continue growing attractive Introduce “30-BY-18” cost turbine business service business r
Slide 30: 30-by-18: Cost reduction programme
5 Outlook 30-by-18: Cost reduction programme to decrease overhead costs by EUR 30m in 2018 The four identified areas of overhead cost reduction SGA & Project Sales & Project Corporate Sourcing Management Engineering Functions EUR 30m cost reduction potential compared to 2017; 0.8% EBITDA potential T
Slide 31: Reorganization of the business towards a more efficient set-up
5 Outlook Reorganization of the business towards a more powerful and efficient set-up The reorganization completes the integration process Three full-value-chain divisions Reduced complexity Lean and efficient top Fewer P&Ls and reduced management matrix interference Reduction of executive committee
Slide 32: Agenda
Agenda 1 Key highlights 2 Financials 3 Installations and orders 4 Market trends and developments 5 Outlook 6 Summary 7 Q&A Preliminary Results 2016 1 March 2017 32
Slide 33: Challenging times, but a good foundation
6 Summary Challenging times, but a good foundation Nordex, a strong company Growing market share Target to become a Strong market footprint Top-5-Player achieved Global player with one of the best market footprints in the industry 1 - Vestas 2 - GE Proven technology & 3 - Enercon track record 4 - Ga
Slide 34: Summary
Summary 2016 was delivered according to plan Reduced revenue expectations for 2017 and 2018… …but we expect stable margins in both years Our focus will be on Growing market share Improving profitability through scale, growth in high-margin activities and operational excellence measures Furthermore,
Slide 35: Time for your questions
Time for your questions Preliminary Results 2016 1 March 2017 35
Slide 36: Financial calendar 2017
Appendix Financial calendar 2017 Date Event 1 March Publication of Preliminary Results 2016 and Outlook 2017 – Frankfurt 30 March Publication of Annual Report 2016 11 May Interim statement Q1 2017 30 May Annual General Meeting (Rostock) 3 August Interim report H1 2017 14 November Interim statement Q
Slide 37: The management team
Appendix The management team – Creating a global leader in the wind industry Lars Bondo José Luis Blanco Christoph Patxi Landa Krogsgaard COO, Deputy Burkhard CSO CEO CEO CFO Chief Customer CEO Acciona CFO Siemens Business Officer Nordex Windpower Wind Power Development CEO EMEA Various Sen. Offshor
Slide 38: Together on the same course
Together on the same course Ralf Peters (Head of Corporate Communications) Ingo Middelmenne Rolf Becker (Investor Relations) (Investor Relations) Nordex SE Langenhorner Chaussee 600 22419 Hamburg Germany Tel: +49-40-30030-1000 Fax: +49-40-30030-1333 Email: info@nordex-online.com Web: www.nordex-onli