Nordex SE — Call Transcript 2017

May 11, 2017

Nordex SE Conference Call Q1 2017

Hamburg, 11 May 2017

• All financial figures within this presentation are unaudited.
• This presentation was produced in May 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 the sale of securities or an invitation to buy or otherwise acquire securities in the Federal Republic of Germany or any other jurisdiction. In particular it is not intended to be an offer, an investment recommendation or a solicitation of an offer to anyone in the U.S., Canada, Japan and Australia or any other jurisdiction. This presentation is confidential. Any reproduction or distribution of this presentation, in whole or in part, without Nordex SE's prior written consent is expressly prohibited.
• This presentation contains certain forward-looking statements relating to the business, financial performance and results of Nordex SE and/or the industry in which Nordex SE operates, these statements are generally identified by using phrases such "aim", "anticipate", "believe", "estimate", "expect", "forecast", "guidance", "intend", "objective", "plan", "predict", "project", and "will be" and similar expressions. Although we believe the expectations reflected in such forward-looking statements are based upon reliable assumptions, they are prepared as up-to-date and are subject to revision in the future. We undertake no responsibility to update any forward-looking statement. There is no assurance that our expectations will be attained or that any deviations may not be material. No representation or warranty can be given that the estimates, opinions or assumptions made in, or referenced by, this presentation will prove to be accurate.

Introduction of new CEO: José Luis Blanco

• CEO Nordex SE (since 4/2017)
• COO & deputy CEO Nordex SE (4/2016 3/2017)
• CEO Acciona Windpower (2012 3/2016)

• Various management positions at Gamesa Group (1993 – 2012)

• CSO Gamesa

• GM Gamesa Offshore
• CTO & CEO Made S.A.
• owned by Gamesa -
• Interim CEO Gamesa Solar
• COO Gamesa USA
• CEO Gamesa Eolica USA
• Several operational & executive positions

1	Introduction	José Luis Blanco
2	Markets, orders & installations	Patxi Landa
3	Financials	Christoph Burkhard
4	"30-by-18"	Christoph Burkhard
5	Product development	José Luis Blanco
6	Outlook	José Luis Blanco
7	Q&A	All Board members

Strategic and operating priorities

• Improving the efficiency and profitability of the company
• Continued improvement of COE
• Lean and efficient organization
• Focus on cost and CAPEX control
• Major investment in technology and supply chain development to grow market share in the medium/longterm

Priorities Key actions

• Reorganization (only 3 divisions)
• Adapt production capacity to demand
• Reduce structure costs ("30-by-18")
• Optimize supply chain in lead competitive countries
• Leveraging our existing global footprint

Our goal: offer best-in-class products while further reducing cost base in order to improve profitability

Q1/2017

• Revenues of EUR 648.4m
• EBITDA margin of 7.9%
• Service sales plus 57%
• "30-by-18" measures identified and in implementation phase
• Installations in GER at record level (158 MW)
• Major new order booked for delivery in 2017: 285 MW (USA)

Recent developments

• Major order received in April: 195 MW (BRA) "Lagoa do Barro"
• FIT-PPAs for two projects in India secured (177 MW)

2017 is developing according to plan

Short term uncertainty as markets transition towards auction systems

• General trend in European markets transitioning towards auction based systems
• Germany held first auction with results expected in May

• Short term uncertainty in Turkey as it transitions to auction based market mechanisms

• Strong US market demand driven by current PTC cycle

• New auctions to be held in the second half of the year in Mexico, Argentina and Chile
• Uncertainty remains short term in Brazil as it is unclear whether a new auction will take place this year

Europe America Rest of World

• India expected to grow and account for sustained volume, but transition to auctions creating uncertainty
• Achieved wind energy competitiveness fuels new markets into setting renewable energy targets

Markets, orders & installations

• Slow start of the year in European markets as expected
• 13% of the permitted projects (8.9 GW) in GER in 2016 are planned with NDX turbines
• Back-end loaded order intake expected for the year
• Orders from the US, Germany, Finland and France

Organic growth and AW turbines driver for service segment

*Adjusted after change in segment reporting

• Organic growth on Nordex platform of ~17%
• Service share increased to 11.4% of total sales

Markets, orders & installations

• Turbine order backlog distributed across Europe (EUR 982m), North America (EUR 366m), Latin America (EUR 526m) and RoW (EUR 114m)

• Distribution shows a well balanced geographical business footprint

• Service backlog increased by EUR 720m

• 13.6 GW under service

Markets, orders & installations

Income statement Q1 2017

in EUR m	Q1 2017	Q1 2016	Δ in %
Sales	648.4	637.0	1.8
Total revenues	663.6	639.7	3.7
Cost of materials	-471.4	-479.3	-1.7
Gross profit	192.2	160.4	19.8
Personnel costs	-81.8	-52.8	54.9
Other operating (expenses)/income	-59.2	-48.5	22.1
EBITDA	51.2	59.1	-13.4
Depreciation/amortization	-34.1	-14.2	140.1
EBIT	17.1	44.9	-61.9
Net profit	7.1	25.5	-72.2
Gross margin	29.0%	25.1%
EBITDA margin	7.9%	9.3%
EBIT margin w/o PPA	4.6%	n/a

Comments

• Sales according to plan
• Good project margins due to favourable project mix
• Depreciation includes EUR 12.5m from PPA
• Tax rate stands at 34.9%

3 Financials

Balance sheet Q1 2017

in EUR m	31.3.17	31.12.16	abs. change	Δ in %
Non-current assets	1,277.9	1,275.1	2.8	0.2
Current assets	1,594.2	1,719.1	-124,9	-7.3
Total assets	2,872.1	2,994.2	-122.1	-4.1
Shareholders´ equity	948.8	940.0	8.3	0.9
Non-current liabilities	812.1	812.0	0.1	0.0
Current liabilities	1,111.2	1,242.2	-131.0	-10.5
Total liabilities	2,872.1	2,994.2	-122.1	-4.1
Net debt*	176.3	-6.2
Working capital ratio**	8.4%	4.1%
Equity ratio	33.0%	31.4%

Comments

• Increase in inventories catering for higher activity level expected in summer
• Current liabilities decreased due to lower customer prepayments

*Cash and cash equivalents less bank borrowings and bond **Based on full year AWP sales (Q1/2016: EUR 187.8m)

Financials

Working capital development Q1 2017

Changes in working capital Q1 2017 (in EUR m)

Increased working capital as per plan due to higher inventories and reduced prepayments

Working capital ratio (in % of sales*)

Working capital ratio expected to peak in Q2 and to decline in second half 2017

*Based on full year AWP sales (Q1/2016: EUR 187.8m)

Cash flow statement Q1 2017

Key figures cash flow statement Comments

in EUR m	Q1 2017	Q1 2016
Cash flow from operating activities before net working capital	-4.0	21.7
Cash flow from changes in WC	-139.5	-48.3
Cash flow from operating activities	-143.5	-26.6
Cash flow from investing activities	-35.5	-14.3
Free cash flow	-179.0	-40.9
Cash flow from financing activities	10.3	46.9
Change in cash and cash equivalents*	-168.7	6.0

Free cash flow reflecting working capital development

Cash flow from financing activities reflecting utilization of local working capital facility in Brazil and quarterly instalments of EIB loan

*Including FX effects

Financials

Total investments Q1 2017

CAPEX (in EUR m) Comments +136% Q1 2017 11.3 35.7 Q1 2016 15.1 24.4 5.4 9.7 Intangible assets Property, plant, equipment Increase in property, plant, equipment mainly driven by: • Activity increase on AW platform (production equipment) • Blade moulds Delta generation • SSP acquisition • Indian blade production to support global volume Increased intangible assets related to development of new WTG for land constrained markets

Financials

• Leverage increase to 0.6 in Q1 reflects higher net debt position
• Solid equity ratio of 33.0% at the end of Q1 2017

*Cash and cash equivalents less bank borrowings and bond ** Last twelve months

"30-by-18"

"30-by-18" cost reduction programme to support long-term profitability

Programme is progressing well

No overlap or double-counting with ongoing COE activities and factory utilization adjustments

Product development in land-constrained markets (Delta platform)

Product development

Product development in grid-constrained markets (AW platform)

Outlook

Guidance 2017 confirmed

	2017e
Sales Sales	EUR 3.1-3.3bn 3.1 - 3.3 bn
EBITDA margin	7.8–8.2%*
W/C ratio	5.0–7.0%
CAPEX	approx. EUR 150m
*Excluding costs related to "30-by-18" programme
Guidance 2018	published in Q1 2018

Outlook

Medium/long-term strategy

Goals

Levers

		Increasing Nordex global market share

Improving profitability of the company

• Strong global customer base
• Global top player in the industry
• Global market & operations footprint
• Competent & committed team to execute the plan

Measures supporting the strategy

• Adapt capacity to demand short-term
• Improve efficiency ("30-by-18")
• Increase lead competitive countries leveraging on suppliers optimizing CAPEX
• Investing in products & technology
• Continuous COE reduction by high single digit percentage every year
• Mid term market share improvement
• Mid term profitability improvement

José Luis Blanco CEO

• CEO Acciona Windpower
• Various Senior Management & Chief Officer positions at Gamesa

Christoph Burkhard CFO

Patxi Landa CSO

• CFO Siemens Wind Power Offshore
• Various other positions at Siemens

• BHF Bank, EBRD

• Business Development Director and Executive Committee member at Acciona Windpower

• Various Chief Officer Positions at Acciona

Date	Event
11 May	Interim statement Q1 2017
30 May	Annual General Meeting (Rostock)
3 August	Interim report H1 2017
14 November	Interim statement Q3 2017

Together on the same course

Ralf Peters (Head of Corporate Communications)

Tobias Vossberg 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-online.com