Nordex SE — Call Transcript 2014

May 14, 2014

Nordex SE Conference Call Q1 2014

• 1. Highlights Q1 2014 Dr. Jürgen Zeschky 2. Operational achievements along the value chain Dr. Jürgen Zeschky

• 4. Market update Dr. Jürgen Zeschky

• 3. Financials Bernard Schäferbarthold

• 5. Outlook 2014 Dr. Jürgen Zeschky
• 6. Appendix (Shareholder structure, financial calendar)

1. HIGHLIGHTS Q1 2014

• Very good start into 2014:
• Order intake +71 % yoy – best Q1 ever
• Sales + 64%
• EBIT-margin of 5%
• Working capital ratio reduced further to 1.0 %
• Positive free cash flow
• EIB loan of up to EUR 100 mn for R&D activities signed
• Raising guidance for 2014

Installations

• •Increase by 41% to 321.4 MW (Q1 2013: 228.3 MW)
• •81% installed in EMEA, 14% in APAC and 5 % in Americas
• •Installations in ten markets, including Turkey (60 MW), Germany (58 MW), Pakistan (45 MW) and Ireland (44 MW)

Service

• •Increase in sales up by 11.4% up EUR 34.3 mn (Q1 2013: EUR 30.8 mn)
• •Significant improvement in contract renewal rate to 72.2 % (rolling twelve months; previous period: 61.8%)

Production

• Further substantial increase in turbine and blade production
• •Turbine assembly: 320.5 MW (+36% yoy)
• •Blade production: 140 blades (+175% yoy)
• •Further progress in ramping up the BU Blades as lead factory

Order intake Q1 2014 vs 2013 (in EUR mn) Order intake Q1 2014 by region

• Order intake of EUR 561.7 mn Nordex´ best Q1 ever
• 91% from EMEA with Germany, France and UK as the main markets
• N117/2400 remains the bestseller with a share of 34% …
• … but Generation Delta accounts for 22% of new orders

Development of the firm order book Q1 2013 – FY 2013 – Q1 2014 (in EUR mn)

• Firm order book of EUR 1,416 mn (31.12.2013: EUR 1,259 mn) covers 2014 sales target fully
• EMEA currently accounts for 90% of the firm order book
• Conditional order book of EUR 806 mn high conversion rate firm orders in the last quarter

In EUR millions

	Q1 2014	Q1 2013	∆ in %
Sales	424.5	259.0	63.9
Total revenues	381.3	281.1	35.6
Cost of materials	(289.7)	(221.3)	30.9
Gross profit	91.6	59.8	53.2
Personnel costs	(38.6)	(34.7)	11.2
Other operating (expenses)/income	(22.5)	(17.9)	25.7
EBITDA	30.3	7.2	>100
Depreciation	(9.2)	(7.9)	(16,5)
EBIT	21.1	(0.6)	>100
Net financial result	(8.0)	(7.1)	(12.7)
EBT	13.1	(7.8)	>100
Tax	(4.0)	(0.6)	(>100)
Net profit (loss)	9.1	(8.4)	>100

Significant sales increase of >60% due to strong business in various focus markets

• EBIT-margin improvement up to 5% (EBIT/Sales) driven by scale effects
• Financial result affected by one off effects connected to the refinancing activities

Development of gross margin FY 2012 – FY 2013 – Q1 2014 (in %) Productivity per employee (in TEUR) 133 93 139 +5% +43% Q1 2014 (rolling) 2012 2013 +2.4pp +1.2pp Q1 2014 24.0 2013 22.6 2012 21.4

• Further improvement in gross margin up to 24% in Q1- quarterly fluctuation between 23% and 24% expected
• Significant increase in value added measured as productivity per employee (~EUR 139.000)

Key figures cash flow statement Q1 2014 Key figures cash flow statement Q1 2013

	in EUR mn		in EUR mn
Cash flow from operating activities	27.7	Cash flow from operating activities	-60.0
Cash flow from investing activities	-12.9	Cash flow from investing activities	-17.3
Free cash flow	14.8	Free cash flow	-77.3
Cash flow from financing activities	-2.1	Cash flow from financing activities	-2.1

• Positive operating cash inflow underlines strong business performance and the effectiveness of working capital management
• Lower investment activities yoy in Q1 but overall slightly higher CAPEX for 2014 expected main focus on R&D and BU Blade
• Positive free cash flow underscores the operational and financial progress made throughout the whole organisation

3. POSITIVE DEVELOPMENT OF INVENTORIES AND WORKING CAPITAL RATIO

Development of inventories (in EUR mn) and working capital ratio (in %) 2011 – Q1 2014

• Further reduction of the W/C-ratio down to 1.0% floor reached, some volatility around 5% expected for the upcoming quarters
• Inventories down by 31% due to more efficient supply chain management and sale of semifinished goods in Asia

In EUR millions

	31.3.2014	FY 2013		31.3.2014	FY 2013
Liquid funds	344.7	333.0	Current bank borrowings	8.4	8.4
Trade receivables and future receivables	251.2	214.0	Trade payables	169.6	190.3
Net inventories	181.2	263.9	Other current liabilities	374.5	386.5
Other current assets	92.4	88.6
Current Assets	869.5	899.5	Current liabilities	552.5	585.2
Property, plant, equipment	118.1	117.4	Non-current bank borrowings	14.8	16.9
Capitalized R&D expenses	97.7	94.3	Bond1	158.2	155.6
Deferred tax assets	53.4	50,9	Deferred tax liabilities	36.4	32,9
Other non-current assets	29.0	29.3	Other non-current liabilities.	32.4	32.7
Non-current assets	298,2	291,9	Non-current liabilities	241.8	238,1
			Shareholders' equity	373.4	368.1
Total assets	1,167.7	1,191.4	Total liabilities	1,167.7	1,191.4

• Balance sheet remains very stable:
• Net-Liquidity increased to EUR 151.7 mn (FY 2013: EUR 140.1 mn)
• Equity ratio slightly increased to 32.0 % (FY 2013: 30.9 %)
• EIB loan of up to EUR 100 mn signed in April

4. STEADY DEMAND GROWTH SUPPORTS THE IMPLEMENTATION OF THE STRATEGY

Regional development (New installations in GW) Market overview

Sources: GWEC; AWEA; MAKE Consulting Q1 2014 Forecast March 2014

• Global growth of ~9 % CAGR
• EMEA: market potential >12 GW p.a. highest growth rates in African markets; Nordex focus markets stable overall (7-8 GW p.a.) with signs of weakness in EMEA East but growth in parts of EMEA South (TR, RSA, FR) and stable volumes in EMEA North and Germany
• APAC: China the largest wind market; growth markets Pakistan, Vietnam, Thailand and the Philippines bringing forward increase in renewable capacity
• America: Significant increase in the US (>10 GW under construction) in 2014; strong growth in LatAm
• Onshore turbines will remain dominant technology in the medium term – grid parity at an increasing number of locations due to more efficient turbines

4. GERMANY WILL REMAIN A VOLUME MARKET IN THE MEDIUM TERM, DESPITE THE EEG REFORM

• EEG amendment passed the first two steps of the legislation process
• Expansion corridor (~2,500 MW p.a. plus repowering projects) and revised remuneration scheme (starting price of EUR 8.9 ct/kWh for at least five years depending on the site quality; overall duration of 20 yrs) still attractive for investors
• First "Post 2014"-projects under negotiation

Sources: DEWI; GWEC; BMWi; Nx Research

Conference Call Q1 2014| Nordex SE | May 15, 2014

Strong momentum in order intake is still intact

Main success factors:

• Focus on right markets: growing economies (Turkey), stable legal framework (Germany), growth potential (RSA)
• Competitive products: one of the most efficient product portfolio for on-shore sites (N117/2400, Delta Generation)
• Successful niche strategy implemented: strong focus on smaller/midsized costumers
• Complex service offering: turn-key, long-term service contracts, project development

5. OUTLOOK 2014

Very promising start into the new year – strong order intake from various markets (Germany, Finland, France, Netherlands, UK), increase in sales, improvement in profitability

	Previous	NEW
Order intake	EUR 1.4 – 1.6 bn	EUR 1.5 – 1.7 bn
Sales	EUR 1.4 – 1.5 bn	EUR 1.5 – 1.6 bn
EBIT margin	3.5 – 4.5 %	4.0 – 5.0 %
Operating cash flow	Positive	Positive
Working capital ratio	<5%	<5%
Investment	Slight increase	~ EUR 80 mn

5. OUTLOOK 2014 AND BEYOND

• We expect to reach our targets one year earlier than planned
• Going forward we will focus on moderate growth and higher profitability
• This means further strengthening of:
• Sales & service
• R&D and efficient products
• Efficiency and processes

There is still a lot of potential to improve in these key areas

Definition of the midterm strategy and targets over summer

TIME FOR YOUR QUESTIONS

Based on 80.882.447 shares, as of May 2014

As of May 2014

Date	Event
14 May	Analyst call Q1 2014
3 June	Annual General Meeting (Rostock)
11-13 June	Deutsche Bank GSAC 2014 (Berlin)
13 August	Analyst call H1 2014
24 September	Capital Markets Day / Evening Event during the WindEnergy fair (Hamburg)
25 September	Macquarie Alternative Energy Conference (London)
13 November	Analyst call Q3 2014

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 SE is unable to give a guarantee that the actual financial results of the company will not differ from any forecasts or guidance given.

THANK YOU FOR YOUR ATTENTION.

Nordex SE Langenhorner Chaussee 600, 22419 Hamburg, Germany Phone: +49 (0)40 30030 1000 Fax: +49 (0)40 30030 1333 eMail: info@nordex-online.com investor-relations@nordex-online.com

NDX1

ISIN: DE000A0D6554 WKN: A0D655

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