SolarWorld AG Investor Relations April 2016 Investor Presentation SolarWorld AG
Disclaimer This presentation may contain forward-looking statements that are subject to risks and uncertainties, many of which relate to factors that are beyond SolarWorld s control or its ability to precisely estimate, such as future market and economic development, supply and demand, the behavior of other market participants, the ability to successfully achieve anticipated synergies and the actions of government regulators. SolarWorld AG has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from the projected in the forward-looking estimates, forecasts and projections; financial performance may be better or worse than anticipated. Given these uncertainties, readers are cautioned not to place undue reliance on any forwardlooking statements. The information contained in this presentation is subject to change without notice and SolarWorld AG does not undertake any duty to update the forward-looking statements, or publicly release any revisions to these forward-looking statements and the estimates and assumptions associated with them, except to the extent by applicable laws and regulations. 2
SolarWorld investor presentation Agenda Overview Business model Product portfolio Current business situation Market environment Forecast Stock and bonds 3
OVERVIEW 4
SolarWorld at a glance Location Established/ IPO Market position Nameplate capacities Headquarters in Bonn/Germany Production in Freiberg/Germany, Arnstadt/Germany and in Hillsboro/U.S. Sales offices in Germany, U.S., France, Italy, UK, South Africa, Singapore and Japan Established in 1998 IPO in 1999 (Düsseldorf Stock Exchange) Global producer of quality crystalline solar solutions with a strong brand Leading manufacturer of PERC technology worldwide Vertically integrated production in Germany and the U.S. Broad customer base in quality segment (B2B partner installer networks in Europe and the U.S.) 1,500 MW ingots 1,000 MW wafers 1,500 MW cells 1,500 MW modules Shipments Shipments 2015: 1,159 MW + 33% vs 2014 U.S.: 47% Europe ex GER: 26% Germany: 19% ROW: 7% Employees 2,932 employees (as at Dec 31, 2015) 5
Key drivers Growth potential in the quality segment of global solar markets 2016 return to operating profitability Well positioned in all key growth markets (except China) Further cost-saving potential Integrated production across the value chain combined with broad international distribution network Growth Profitability Economies of scales and higher utilization rates R&D activities High brand awareness Trendsetter for quality solutions Technology leader in PERC Authentic focus on sustainability Last major Western solar panels manufacturer with production facilities in Germany and the U.S. Value Risk management Broad regional market diversification and wide customer base Group financed until 2019 Strategic investors Qatar Solar S.P.C. and CEO Frank Asbeck 6
Management Board Dr.-Ing. E. h. Frank Asbeck (CEO) Founder and Chief Executive Officer (since 1998) Over 20 years of corporate experience in the solar industry Anchor shareholder, currently owns about 20 percent of shares Philipp Koecke (CFO) Chief Financial Officer (since 2003) Accompanied organic growth and M&A activities Implementation of financial restructuring Frank Henn (CSO) Chief Sales Officer (since 2004) Pushed forward internationalization of sales Established international network of installers and wholesalers Colette Rückert-Hennen (CIBPO) Chief IT, Brand and Personnel Officer (since 2011) Initiated and implemented restructuring measures in the organization Increased brand strength with the REAL VALUE claim Jürgen Stein (CPO) Chief Product Officer (since 2014), previously Head of Purchasing (from 2011) Strategic development of global purchasing Longstanding experience in purchasing, particularly in Asia and the electric industry 7
Employee representatives Shareholder representatives Supervisory Board Dr. Georg Gansen (Chairman) attorney-at-law, corporate legal counsel at Deutsche Post AG Dr. Khalid Klefeekh Al Hajri chairman and CEO of Qatar Solar Technologies Q.S.C. Faisal M. Alsuwaidi president of R&D at Qatar Foundation for Education, Science and Community Development Heiner Eichermüller senior business consultant Dr. Andreas Pleßke attorney-at-law, member of the Management Board (CRO) Koenig & Bauer AG Jürgen Wild managing director of RAG-Stiftung Beteiligungsgesellschaft mbh Gerald Voigt (Deputy Chairman) district manager at trade union IG BCE, district Dresden/Chemnitz Albrecht Handke press and public relations and member of the works council of SolarWorld Industries Sachsen GmbH Wolfgang Lemb executive member of the Management Board of IG Metall Dr. Ute Mareck manager of technology and process at SolarWorld Industries Sachsen GmbH Alexander Richter member of the works council of SolarWorld Industries Sachsen GmbH and member of the group works council of SolarWorld AG Olaf Zirr team manager QHSE and deputy chairman of the works council of SolarWorld Industries Thüringen GmbH 8
SolarWorld AG - Chronic 2016 Return to operating profitability 2014 Successful closing of the financial restructuring process; takeover of Bosch s solar cell and module production facility in Arnstadt, Germany 2013 Need for financial restructuring as a result of the solar industry crisis 2010 Establishment of a joint venture with Qatari partners to produce poly-silicon 2009 Passing the billion-euro revenue mark; development of an international brand awareness 2008 Start of production at new U.S. integrated facility in Hillsboro, U.S. 2006 Takeover of the Shell Group s crystalline solar activities with production in the U.S. and distribution in the U.S., Singapore and South Africa; start of internationalization 2003 Admission of the stock to the regulated market of the Frankfurt Stock Exchange; listing in the Prime Standard segment 2000 Takeover of the Bayer Group s wafer production facility in Freiberg, Germany First step into becoming a vertically integrated solar manufacturer 1999 IPO open market at the Dusseldorf Stock Exchange Start of own manufacturing through acquisition of Swedish module manufacturer Gällivare Photovoltaik (GPV) 1998 Founding of SolarWorld AG in Bonn 9
SolarWorld locations worldwide 10
BUSINESS MODEL 11
SolarWorld business model Business model Production of high quality crystalline solar energy solutions Vertically integrated solar manufacturer across all steps of the value chain Worldwide sales of solar modules and systems Sales of solar wafers and cells to solar industry International Distribution Network Close proximity to all relevant markets through local sales offices Distribution through specialist and wholesale trade as well as through installers as intermediaries to end-customers B2B partner network (specialist partner networks) in Europe and the U.S. Spread of risks across a wide customer base 12
Production capacities in MW Freiberg Arnstadt Hillsboro Module 650 200 100 550 1,500 MW Freiberg Arnstadt Hillsboro Cell 370 700 430 1,500 MW Freiberg Wafer 1000 1,000 MW Freiberg Arnstadt Hillsboro Ingot 250 500 500 250 1,500 MW multicrystalline monocrystalline Freiberg (Germany) Freiberg reserve Arnstadt (Germany) Arnstadt expansion Hillsboro (U.S.) Hillsboro expansion 13
three-tier distribution two-tier distribution SolarWorld distribution structure SolarWorld Wholesalers Installers Installers Consumer Consumer residential/commercial commercial/utility 14
PRODUCT PORTFOLIO 15
SolarWorld product portfolio Solar wafers & cells Modules Solar kits Storage solutions Energy Management Turnkey projects 16
SolarWorld bifacial modules Product benefits Up to 25 % more yield with innovative bifacial technology Higher returns with shorter amortization time Extremely long lifespan through the use of glass on the front and rear sides of the module 30-year linear performance guarantee at least 86.85 % output after 30 years 17
SolarWorld energy management and storage High-performance, reliable and safe lithiumiron phosphate battery Fits every solar power system, regardless of size and can be added to existing PV systems Modularly expandable storage capacity (2-10kWh) 10,000 charge and discharge cycles (= a service life of about 20 years) Eligible for KfW-funding program Very easy installation (plug and play) 10 year product warranty Energy management system for smart energy distribution of solar power at home Easy installation in the house fuse box Intuitive operation by MyHome App Enables increase of self-consumption lower electricity costs Dynamic yield forecast and recommendations 18
CURRENT BUSINESS SITUATION 19
Shipments and revenue development Y-o-Y + 33% 1,159 873 573 + 33% 763 2014 2015 Shipments in MW Revenue in m 20
Development of shipments by quarter Shipments in MW 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 2015 modules & kits 849 202 238 315 353 1,108 wafers & cells 24 8 8 13 22 51 Total shipments in MW 1159 873 210 246 328 375 21
Shipment breakdown by region Modules and kits shipped in MW 1,108 64 849 +31% RoW 6% 114 546 U.S. 49% 351 Europe ex GER 27% 303 Germany 18% 264 119 195 2014 2015 22
SolarWorld group indicators Selected financial indicators in m 2014 2015 Total shipments (in MW) 873 1,159 Revenue 573.4 763.5 EBITDA 1.6* 40.8 EBIT -43.8* -4.2 Group net result 464.2** -33.3 Equity 238.7 208.9 Equity ratio 26.1% 24.0% Net indebtedness 272.8 217.2 Cash and cash equivalents 177.1 188.6 *Adjusted for badwill Bosch ( 136.5 million) and impairment losses due to silicon contract renegotiations ( 30.3 million); including these one-off effects, EBITDA in 2014 amounted to 107.8 million and EBIT to 62.4 million. ** Including one-off effects mentioned above and restructuring profit ( 555.7m) 23
Other operating income & expenses -176 m 103 m 45 Others Reversal of provision & liabilities Grants for research & development Reversal accrued investment grants Gains from currency translation 13 22 8 5 26 Others Outside staff expenses Selling expenses Maintenances expenses Legal & consultant fees Marketing expenses Travel expenses Losses currency translation 25 20 17 10 7 5 19 Income other trade business 29 Expenses other trade business 28 Other operating income Other operating expenses 24
Financial result/repayments 2015 Interest Expenses banks Interest Expenses Qatar Interest Expenses others Expenses at equity Others Total Repayments 1-4 -1-13 -24-31 -41 25
Balance Sheet December 31, 2015 Assets in m in m Equity & Liabilities 869 869 Non-current assets 367 Shareholders equity 209 Equity ratio 24% Current liabilities 214 Inventories 172 Non-current liabilities Other current assets Cash 141 446 377 m debt 189 26
Short- and long-term financial liabilities 407 m 30 49 Bonds Notes Qatar Bank loans/others 349 m 142 186 6 m 22 m Dec 31, 2015 Repayment Feb 2016 Repayment April 2016 Repayment 2019 27
Working Capital m 300 200 100 0 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Inventories without advanced payments Working Capital Net trade accounts receivable/payable 28
Investments 2015 18 m 12 m 14 m module/ cell 51 m technology investments cell/ wafer SAP 4 m cell/ wafer 3 m SolarWorld Group SolarWorld Industries Thüringen SolarWorld America America SolarWorld Industries Sachsen Others 29
MARKET ENVIRONMENT 30
Development of annual global PV installations New installations in GW +18.7% CAGR 2015e 2020e 139 59 64 78 95 113 2015e 2016e 2017e 2018e 2019e 2020e Source: GTM Research, Jan 2016 31
U.S. market development Expected U.S. demand in GW 6.4 1.1 1.2 7.3 1.2 1.7 4.1 4.4 9.2 1.5 9.6 1.7 2.1 2.4 5.6 5.5 9.0 10.7 10.8 10.1 2.7 2.8 2.3 2.0 3.4 3.6 3.6 2.9 4.1 4.4 4.4 4.4 CAGR 2014 2020 U.S. total +7.8% residential +14.3% commercial +17.0% utility +1.0% 2014 2015e 2016e 2017e 2018e 2019e 2020e 2021e Utility Commercial Residential Source: Bloomberg New Energy Finance Q1 2016 PV Market Outlook, Feb 2016 32
European market development 20 Expected demand in Europe in GW 15 +19% CAGR high scenario 10 +11% CAGR medium scenario 5 flat low scenario 0 2014 2015e 2016e 2017e 2018e 2019e historical installations low scenario medium scenario high scenario Source: Solar Power Europe, Global Market Outlook 2015-2019, June 2015 Key PV markets in Europe: Germany France UK Italy 33
FORECAST 2016 34
SolarWorld Milestones 2016 Shipments increase by more than 20% vs. 2015 Revenue increase by more than 20% vs. 2015 EBIT positive EBIT in lower double-digit million range 35
Further cost-saving potential Technological innovations Technological innovations Procurement Upgrade to PERC technology at all production sites launch of several bifacial module lines Implementation of 5-busbar-cells Procurement Distribution structures Optimized production processes Optimization of purchasing conditions and renegotiation of supplier contracts 36
Further cost-saving potential Production processes Technological innovations Procurement Increase of production capacities and higher utilization rates Reduction of material use Use of alternative more cost-effective materials, e.g. diamond wire for wafer sawing Distribution structures Distribution structures Optimized production processes Further internationalization and standardization of distribution structures (e.g. by SAP) 37
STOCK AND BONDS 38
The SolarWorld stock MASTER DATA Share class ISIN Ordinary bearer shares DE000A1YCMM2 SHAREHOLDERS STRUCTURE Token Market segment Transparency level SWVK Regulated market of the Frankfurt Stock Exchange Prime Standard 50,15% 29,00% Capital stock 14,896,000.00 Number of shares 14,896,000 Indices DAX International Mid 100, Prime All Share, Technology All Share, CDAX, ÖkoDAX 20,85% Qatar Solar S.P.C. Dr.-Ing. E. h. Frank Asbeck Free float 39
The SolarWorld bonds I BOND SOLARWORLD FRN IS. 2014/2019 SERIES 1116 ISIN Trading venue DE000A1YDDX6 Frankfurt Stock Exchange Issue date February 24, 2014 Issue volume 139,386 notes First quotation date March 5, 2014 Term 5 years Maturity date February 24, 2019 Actual nominal value per note 321.51 (as of April 12, 2016) Interest Variable interest rate minimum 7% Calculated as 3-months-EURIBOR (min. 1% p.a.) + 6% margin p.a. Coupon date Quarterly, payable at the end of the calendar quarter 40
The SolarWorld bonds II BOND SOLARWORLD FRN IS. 2014/2019 SERIES 1017 ISIN Trading venue DE000A1YCN14 Frankfurt Stock Exchange Issue date February 24, 2014 Issue volume 387.055 notes First quotation date March 5, 2014 Term 5 years Maturity date February 24, 2019 Actual nominal value per note 330.54 (as of April 12, 2016) Interest Variable interest rate minimum 7% Calculated as 3-months-EURIBOR (min. 1% p.a.) + 6% margin p.a. Coupon date Quarterly, payable at the end of the calendar quarter 41
Contact Investor Relations Romy Acosta Head of investor relations Tel.: +49 228/55920-476 E-Mail: romy.acosta@solarworld.com +49 228 55920-470 +49 228 55920-9470 placement@solarworld.com http://www.solarworld.de/en/investor-relations Andrea Hoffmann Institutional investors & analysts Tel.: +49 228/55920-470 E-Mail: andrea.hoffmann@solarworld.com 42
! THANK YOU FOR YOUR ATTENTION 43