Market Forecast Nordex Outlook

nordexonline

Market Forecast Nordex Outlook

page 1

Fiscal 2005 and Outlook 2006

Press & Analysts`

Conference

Frankfurt

April 5, 2006

We´ve got the power.


page 2

Content

1

2

3

4

Market Development

Business Performance in 2005

Market Forecast

Nordex Outlook

5 Appendix


page 3

Highlights on Markets in 2005

• Increase of new MW installed by 40% to 11,407 MW (2004: 8,154 MW)

Nordex new MW installed rose by 60%

• Shortages of core components since summer (e.g. gearboxes, rotor shafts)

• Price increase in fossil fuels more than exeeded higher wind turbine costs

• Europe lost dominance in wind power

• Huge growth has appeared from Asia and North America

• Major demand for MW-class


page 4

Price development of fossil fuels

in %

180

160

140

120

100

80

Q1/2004 Q2/2004 Q3/2004 Q4/2004 Q1/2005 Q2/2005 Q3/2005

Hard Coal (GER) Oil (OECD basket) Gas (GER)

Source: OECD, BAFA, VDEW

Increasing prices of fossil fuels have made wind more competitive


page 5

Spot Market Price in 2005 (EEX)

Euro/MWh

250,00

200,00

150,00

100,00

50,00

0,00

01.01.2005

15.01.2005

29.01.2005

12.02.2005

26.02.2005

12.03.2005

26.03.2005

09.04.2005

Peakload

Baseload

23.04.2005

07.05.2005

21.05.2005

04.06.2005

18.06.2005

02.07.2005

16.07.2005

30.07.2005

13.08.2005

27.08.2005

EEG max. remuneration (85.9 EUR/MWh)

EEG basic remuneration (53.9 EUR/MWh) Source: EEX

Market power price was considerably in excess of the EEG tariff

10.09.2005

24.09.2005

08.10.2005

22.10.2005

05.11.2005

19.11.2005

03.12.2005

17.12.2005

31.12.2005


page 6

Market Development in 2005

12,000

10,000

8,000

6,000

4,000

2,000

Source: BTM 2006

(new installed capacity in MW)

World Market Nordex

+40%

2002 2003 2004 2005 2002 2003 2004 2005

600

500

400

300

200

100

Nordex has growing faster than the market

7% 3% 2% 3%

+60%

1-5/05


page 7

Development of Competitors in 2005

Performed

better than

the market

Performed

poorer than

the market

Source: BTM 2006

GE

Suzlon

Nordex

Repower

Siemens

Enercon

Vestas

Ecotécnia

Mitsubishi

Gamesa

World Market

in %

(by new installed capacity 2005 vs. 2004)

0 20 40 60 80 100 120 140


page 8

Growth by Region in 2005

12,000

10,000

8,000

6,000

4,000

2,000

8,154 MW

+ 40%

+ 422%

+ 63%

+ 54%

- 3%

- 13%

11,407 MW

North America

India & China

Rest Europe

Rest World

Spain

Germany

2004 2005

Europe lost dominance, huge growth in new markets

Source: GWEC2006


page 9

Market Drivers in 2005 and 2006

MW installed in 2005

Average project size

Owners

Drivers:

Feed-in tariffs

RPS

(obligation systems)

Tax incentives

Write-off

mechanisms

Need for electricity

Source: MAKE 2006

Germany

1808

small

Private

X

X

low

Spain

1684

large

Utilities/IPP

X

low

USA

2431

large

Utilities/IPP

X

X

medium

India

1255

medium

Private

X

X

high

China

502

medium

Utilities/IPP

high


page 10

Technological Trend

Average size of

installed WTG in 2005

2,200 MW

1,200 MW

200 MW

0%

India

Germany

USA

UK

China

Spain

15% 30%

Growth in size per WTG between 2003 and 2005

• Trend to even bigger turbines is slowing down in mature markets

• New approaches (e.g. life cycle concept) gaining importance

Source: BTM 2006


page 11

Content

1

2

3

4

Market Development

Business Performance in 2005

Market Forecast

Nordex Outlook

5 Appendix


page 12

Highlights

• Financial restructuring completed in June 2005:

Equity ratio 27.4 % (as of 12/31/05)

• 2005: Order intake + 67 %

• Turnaround achieved

• Fiscal 2005: EBIT (before one-off items) 0.3 EUR million

• Q4/2005: EBIT (before one-off items) 9.4 EUR million

Net profit 6.4 EUR million

• Net cash flow 10.1 EUR million


page 13

Order Intake 2005 above Budget

in mn. Euro

400,0

300,0

200,0

100,0

0,0

Q1:

35 mn. €

Q1-2:

158 mn. €

Q1-3:

280 mn. €

Feb Mar Apr May June July Aug Sept Oct. Nov Dec

2005 Budget alt 2004

Q1-4:

395 mn. €

236 mn. €

+ 67%


page 14

Revenues / EBIT (before one-offs)

per Month in 2005

Revenues

70

60

50

40

30

20

10

12,0

12,9

10,9

14,3

41,9

13,7

19,4

27,1

23,9

35,9

35,1

62,7

0

28.02. 30.04. 30.06. 31.08. 31.10. 31.12.

31.01. 31.03. 31.05. 31.07. 30.09. 30.11.

7

6

5

4

3

2

1

0

-1

-2

-3

-4

EBIT (before one-offs)

-2,6

-2,3

-2,2

-2,4

-1,9

2,2

-0,8

0,2

0,7 1,2 2,2

28.02. 30.04. 30.06. 31.08. 31.10. 31.12.

31.01. 31.03. 31.05. 31.07. 30.09. 30.11.

6,0


page 15

Income Statement (IFRS)

EUR mn

Sales

Total Revenues

Cost of materials

as a percentage of total revenues

Personnel costs

as a percentage of total revenues

Depreciation/amortization

as a percentage of total revenues

Other operating income/expenses

as a percentage of total revenues

EBIT (before one-off items)

One-off items

Financial result

Tax

Net income / loss

10/01/2003-

09/30/2004

221.6

218.8

- 173.3

79.2%

- 34.5

15.8%

- 12.1

5.5%

- 24.0

11.0%

- 25.5

- 2.5

- 5.1

- 0.4

- 33.5

01/01/2005-

12/31/2005

309.0

319.4

- 251.3

78.6%

- 34.1

10.7%

- 11.7

3.7%

- 22.1

6.9%

0.3

- 5.4

- 3.0

- 0.1

- 8.2

87.4

100.6

78.0

- 0.4

-0.4

- 1.9

25.8

- 2.9

2.1

0.3

25.3


39.4%

46.0%

45.0%

- 1.3%

- 3,3%

- 7.9%

101.2%

- 116.0%

41.4%

75.4%


page 16

Balance Sheet (IFRS)

EUR mn

Assets Shareholders‘ equity and liabilities

Fixed assets

Current assets

Net inventories

Receivables

and other assets

Liquid funds

Others

TOTAL

12/31/2004 12/31/2005 12/31/2004 12/31/2005

54.2

108.2

47.5

51.3

9.4

24.0

186.4

55.4

150.0

71.1

59.4

19.5

26.0

231.4

Shareholder‘s equity

Provisions

Liabilities

Banks

Trade payables

Other liabilities

Others

TOTAL

2.5

62.1

116.6

37.6

39.8

39.2

5.2

186.4

63.5

55.8

105.2

7.1

64.1

34.0

6.9

231.4


page 17

Cash Flow (IFRS)

EUR mn

Net income / loss

Depreciation

Change in provisions

Change in inventories

Change in trade receivables and other assets

Change in trade payables and other liabilities

Other changes from operating activities

Cash flow from operating activities

Cash flow from investing activities

Cash flow from financing activities

Change in liquidity

10/01/2003-

09/30/2004

-33.5

12.2

- 4.6

41.8

- 6.6

- 8.6

0,1

0.8

- 3.3

-0.4

- 2.9

01/01/2005-

12/31/2005

-8.2

11.7

- 6.3

- 23.5

- 12.6

18.6

- 0.3

- 20.6

- 8.6

39.0

9.9


page 18

Working Capital Management in 2005

Total Revenues (million EUR)

140

120

100

80

60

40

20

7.3% 7.1%

Q4/2004

(12/31/04)

Q1/2005

(03/31/05)

16.8%

Q2/2005

(06/30/05)

13.3%

Q3/2005

(09/30/05)

14.5%

Q4/2005

(12/31/05)

35%

30

25

20

15

10

5

working capital quota (%)


page 19

Content

1

2

3

4

Market Development

Business Performance in 2005

Market Forecast

Nordex Outlook

5 Appendix


page 20

Highlights

• Continuing growth path expected (CAGR until 2010: 16%)

• Increasing importance of Americas and Asia

• MW Class will be the fastest growing turbine segment

Nordex: recovering market shares


page 21

Forecast by Region

new installed MW per Jahr

35000

30000

25000

20000

15000

10000

5000

0

87%

20%

23%

56%

CAGR:

16%

23%

20%

53%

CAGR:

7-8%

2000 2005 2010e 2015e

Europe Americas Asia/Pacific RoW

Increasing set-up in America and Asia necessary

29%

28%

38%

Source: BTM 2006


page 22

Market initiatives in China

Target:

Recovery of market share

Measures:

Set-up of regional JV and framework

agreements to secure order flow

Efficient cost structures through local

production and local procurement

Reinforcement of management und

service structures

2000-2002: 44%

2005: 3%

• Province Ningxia (2005; 200 MW)

• Rotor blade production 1.3 MW (2005)

• Rotor blade production 1.5 MW (2006p)

• Assembly shop Ningxia (2006e)

• Procurement department in China (2006)

• New management team established


page 23

Other Market Initiatives

Target France:

Recovery of market share

Measures:

Own project development activities

securing order pipeline

Established business model /

standardized products and projects

Target UK:

Recovery of market share

Measures:

Optimized products, suitable for UK

strong wind sites

Reinforcement of local organisation

Initiatives for USA and India in preparation

2005: 9%

2006: >25%

• 2005: 180 million EUR

• 2006: 180MW under development

• N90 wind farms under local project

management

2005: 0%

2006: 10%

• N80; N90/2500 LS/HS (launch 2005)

• Strengthen UK based management team


page 24

Content

1

2

3

4

Market Development

Business Performance in 2005

Market Forecast

5 Appendix

Nordex Outlook


page 25

Enhance Profitability

EBIT Improvement Program 2008

Target: Sustainable improvement of profitability

by continued optimization process

Measures: Main areas of action

• Product optimization

• Service performance

• Sourcing strategy

Implementation: • Kick-off in March 2005

• 90% of measures defined (12/31/05)

⇒ completion expected in first half 2006

• 17% of measures implemented (12/31/05)

⇒ completion expected for end of 2007


page 26

Order Intake 2006 above Budget

in mn. Euro

450

400

350

300

250

200

150

100

50

0

2006

Q1/2006:

263 mn. €

Q1:

35 mn. €

2005

Q1-2:

158 mn. €

Q1-3:

280 mn. €

Q1-4:

395 mn. €

Jan Feb Mar Apr May June July Aug Sept Oct. Nov Dec


page 27

Enhanced Outlook 2006

2006e (old) 2006e (new)

Order Intake > 450 mn € ≥600 mn €

(Y-on-Y) +14% +50%

Revenues > 400 mn € ≥460 mn €

(Y-on-Y) 30% +50%

EBIT Margin 2.5% ≥3.0%

• Projected revenue secured by firm and unconditional orders

• Revenues in 2006 driven by manufacturing flow

• Firm, unconditional and conditional orders (> 1 bn. EUR)

secure workload until end of 2007

• Budget for 2007 and 2008 is currently under review


page 28

Opportunities and Limitations of Growth

1. Markets

2. Core components

3. Product development

capabilities

4. Production

capacities

5. Management

& organisation

6. Financial

capabilities

OPPORTUNITIES LIMITATIONS

• Recovery of market share,

target > 5%

• International supply

• „2-3 supplier strategy“

• Solid 2.5 MW technology

• Scaling up to 4.0 MW

• Europe: expandable to

750/400 MW

• Asia: expandable to

250/300 MW

• Restructuring completed

• Basis for further

improvements

• Set-up for business

volume of 500 mn. EUR

• New set-up in 1-2 markets/year

• Cautious towards offshore

• Production capacity

gear boxes and blades

• Above 4.0 MW completely

new design required

• North America

• Further investments in

Europe and Asia

• Max. growth path +50% p.a.

• Working capital requirements

• Investment requirements


page 29

Content

1

2

3

4

Market Development

Business Performance in 2005

Market Forecast

Nordex Outlook

5 Appendix


page 30

Shareholders‘ structure

Nordvest A/S

4,81%

Morgan Stanley

4,82%

HSH Nordbank

5,02%

Freefloat

21,35%

HypoVereinsbank

5,69%

Goldman Sachs

23,06%

CMP

35,24%


page 31

Financial Calendar

• Annual general meeting in Rostock May 15, 2006

• Report on the first quarter of 2006 May 30, 2006

• Report on the first half of 2006 August 25, 2006

• Report on the third quarter of 2006 November 23, 2006

• Report on fiscal 2006 April 26, 2007


page 32

Contact

Nordex AG

Bornbarch 2

22848 Norderstedt

Germany

www.nordex-online.com

Ralf Peters

Head of Corporate

Communication/Investor Relations

Phone: +49 (0)40/500 98 522

Fax: +49 (0)40/500 98 333

eMail: rpeters@nordex-online.com


page 33

Disclaimer

The targeted goals in this document reflect forward looking statements

which are based solely on estimates and not on predictable risks.

Should the estimates with regard to the successful integration of

acquisitions and the future internal growth of the company not to be

realized or if other unpredictable risks should arise, it cannot be ruled out

that the actual financial results of the company will differ substantially from

the targeted goals as laid out in this document.

In this respect Nordex AG is unable to give a guarantee that the actual

financial results of the company may not differ from those as shown herein.

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