PNE AG — Investor Presentation 2017

Nov 15, 2017

PNE WIND

Capital Market Day Frankfurt, November 15, 2017

WE ARE A LEADING DEVELOPER OF WIND ENERGY PROJECTS…

• PNE WIND Group, consisting of the companies PNE WIND AG and WKN AG, is a leading wind farm developer located in Northern Germany >2,600 MW realised onshore

• Nr. 2 player in operations &

• Germany's most successful project developer with 8 Offshore projects sold totalling 2,852 MW

• > € 9bn Euros of investment done or initiated • Active in 13 countries

on 3 continents

… WITH A STRONG MARKET POSITION – NATIONALLY AND INTERNATIONALLY

WHO WE ARE

WE HAVE A DEDICATED & EXPERIENCED MANAGEMENT TEAM

• Seasoned wind energy pioneers with strong industry knowledge and large network

Markus Lesser

Chairman of the Board (CEO)

• CEO since May 2016
• COO 2011 2016
• Industry experience since 2000

• Sales, M&A, Procurement, Offshore, Human Resources, Communication

• CFO since April 2011

• Industry experience since 1999
• Finance and Accounting, Controlling, Risk Management, Legal

Kurt Stürken

Chief Operating Officer (COO)

• COO since September 2016
• Industry experience since 1995
• Project Development, Implementation, International Markets

WHAT WE DO

WE HAVE A SUCCESSFUL BUSINESS MODEL

WHAT WE ACHIEVED

WE GENERATED STRONG EARNINGS FROM 2011 – 2016…

Operating result (EBIT)

…WITH HIGH VOLATILITY ON AN ANNUAL BASIS

WE WANT TO INCREASE AND STABILISE RETURNS…

• By 2023, we target
• an EBIT increase of 30-50% compared to the average EBIT of the period 2011-2016
• accompanied by a significant reduction of volatility

…AND SUBSTANTIALLY REDUCE VOLATILITY IN THE FUTURE

Market changes create challenges… …as well

as huge opportunities!

MARKET & GROWTH DRIVERS

MARKETS ARE BECOMING MORE INTEGRATED…

Source: e/m/w 2017, PNE WIND AG

AUCTION SYSTEMS BECOME THE NORM…

Global overview of renewable energy auctions

Countries with auctions or renewable energy tenders in use or planned

• Onshore wind bids
• Solar PV bids

Challenges in the current market

• Regulatory uncertainties
• Auctions for grid connections and tariffs
• Growth (in MW) in established markets is stagnating, returns are decreasing

Source: Bloomberg New Energy Finance

MARKET & GROWTH DRIVERS

… AND ARE SIGNIFICANTLY IMPACTING PROJECT PRICING

• Increasing market competition, also between various technologies in the renewable energy sector
• Fast decreasing tariffs in auctions Solar PV is catching up
• Current price trends in tender markets partly anticipate future technological developments and cost reduction effects
• Larger projects require higher security deposits and greater need for pre-financing

Announced wind and solar PV auction prices by commissioning date

…BUT GROWTH DRIVERS ARE FULLY INTACT

ELECTRICITY PRICES WILL INCREASE

• Electricity prices will increase as nuclear power plants will go offline in Germany and France
• Prices of CO2 certificates will increase
• This will open up new business opportunities (e.g. project sold in Sweden relies solely on forecasted energy pricing)

Electricity prices Germany

MARKET & GROWTH DRIVERS

WHILE ESTABLISHED MARKETS ARE STAGNATING, GROWTH WILL BE MAINLY DRIVEN BY EMERGING MARKETS

• By 2020 more than 40 countries could each install >1GW of wind energy
• Diverse development stages in the different markets offer different risk / reward profiles
• Emerging Markets will experience a strong increase in energy demand due to growing populations und economies
• Ca. 7,200 GW are necessary by 2040 to meet increasing electricity demand and planned power plant shutdowns

GROWTH TREND OF RENEWABLE ENERGIES REMAINS UNBROKEN AND WILL CONTINUE IN THE FUTURE

• Wind and Solar PV will grow significantly and offer huge market potential in the short, mid and long term
• Will increasingly replace electricity generation from conventional energy sources

Global electricity production by generation type

OUR ANSWER TO THE MARKET CHANGES:

We are developing into a Clean Energy Solution Provider

STRATEGY

WE CAPITALIZE ON OUR CORE COMPETENCIES…

Strategic Portfolio

• Build-up of an onshore project portfolio of ca. 200 MW in Europe by end of 2020
• Optimization and sale partially or completely
• Acquisition of existing wind farms over 15 years old for repowering and acquisition of already well developed projects

Project development

• Will remain core business
• Significant volume increase above 400 MW p.a. across various technologies in the mid term
• International markets will drive growth
• Combination of new technologies and markets creates huge market potential

Services

• Grow O&M business to >2200 MW under operational management
• Start smart energy supply management
• Expand consulting solutions and deliver everything necessary around operation and optimization for wind farms

… TO OPEN UP FURTHER ELEMENTS OF THE VALUE CHAIN

WE WILL DRIVE DOWN COSTS…

• 1. Economies of Scale
• Increase development output to 400 MW p.a. across all technologies
• Increase Strategic Portfolio size to 200MW
• Increase MW under operational management to >2,200
• 1. Cost Reductions
• e.g. through cooperations with wind turbine manufacturers
• DEVEX
• CAPEX
• OPEX
• 1. Higher Energy Output
• More efficient wind turbines

Reduction of Project costs Reduction of Overhead costs

• Reduction of personnel costs
• Reduction of other expenses
• Procurement synergies
• Strengthening of core processes
• New IT solutions to improve efficiency and communication

…AND INVEST TO INCREASE OUR COMPETITIVENESS

Smart Capital Allocation Investment

• Optimisation of financing structure
• € 25m <4% for wind farm equity
• € 25-50m additional growth financing
• Reduction of overall financing costs by 50% targeted, resulting in savings of € >4m
• Increase of recurring revenue basis, leading to improved credit terms
• Higher margin potential in emerging markets, especially with government funding and loans (EKF, KfW, Hermes, EIB, Weltbank, IPEX etc.)
• Partnering / Cooperations with partners who guarantee low refinancing costs

Investment of € 10m p.a. on average for:

• Acquisitions of companies at attractive multiples before synergies
• Acquisition of project rights to expand the pipeline
• Investment in high potentials and experts in markets and technologies
• Investment in additional (regional) offices and equipment

Additional Investment:

• Acquisition of projects as a basis for repowering
• Participation in citizen wind energy projects

WE ARE LEVERAGING OUR EXPERTISE INTO NEW TECHNOLOGIES

New:

• Photovoltaic requires project development competencies similar to wind energy, but has shorter development times
• Power-to-Gas hydrogen as alternative for the electricity market
• Storage
• Renewable Energy Power Plants / Standalone Systems

Implementation:

• Invest in or partner with companies in the PV, battery or energy storage industry

WE ARE INCREASING OUR FOOTPRINT INTO NEW MARKETS

• Germany
• France
• Sweden
• USA, etc.

New:

• Increase penetration in existing markets e.g. France O&M and PV, Wind Offshore international: e.g. USA
• Additional new Emerging Markets:
• Panama, Iran, etc.
• Investment criteria:
• High energy demand
• Stable political environment
• Cooperation with established partners

Implementation:

Project development in new markets with our system "SMART DEVELOPMENT" primarily within our Hamburg Team

• Integrated approach with all necessary skills in one team
• Optimisation of market entry and exit Fast-in-Fast-Out-Strategy
• Shortening times until project sale
• Reducing pre-investments

WE WILL REFINE POWER GENERATION – NEW OPERATIONS

Currently: Electricity Production:

• During the portfolio build up and/or after sale

New:

Smart Energy Supply Management to optimise returns

• Organisation of electricity sale for own portfolio as well as for third parties
• Optimisation of energy sales prices through sale of bigger portions (actual 1,500 MW under operational management)
• Electricity and gas marketing, also with PPA (Power Purchase Agreement)

Implementation:

• Acquisition and development of additional in-house capacities
• Cooperations
• Strategic acquisitions

WE GENERATE ATTRACTIVE MARGINS WITH NEW SERVICES

• management
• Repowering
• O&M
• Offshore services

New:

Expansion of the service portfolio:

• Engineering of "Hybrid Power Plants" clean energy projects involving different technologies (wind energy, PV and / or storage)
• Optimisation of wind farms ("Optimize Package")
• Expansion of investments in transformer stations
• Expansion of operational management
• Additional offers of financial services
• Engineering services
• Expansion of citizen participation models

Implementation:

• Build up of additional know-how across all technologies
• Acquisition of and investment in service providers
• Purchase and operate existing wind farms as basis for repowering

SCALE UP MILESTONES

2017

• Start of ramp-up phase
• Structures / People / Processes
• Implement Smart Development Team Hamburg
• Start build-up of 200MW portfolio

2018

• Completion of ramp-up phase
• First new products/services available
• First revenues with new products and services
• Partnering • Impovement Financing
• struchture

2019

• Development of project pipeline in the 1st new market
• 1 st PV project in development
• Provide additional services and expand consulting solutions
• Expansion of Offshore Development

2020

• Sale of 200MW portfolio share
• Completion and sale of 1st developed project in new markets
• 1 st PPA (Power Purchase Agreement) in foreign markets
• Market entrance 2 nd market
• Sale of 1st Hybrid project

• Finalisation of SCALE UP

2023

• Add further new products/services
• Product range of different Hybrid Power Plants is in place
• Start the build-up of next portfolio
• Market entrance 3 rd market
• Identify remaining white spots in regions, value chain and products

We have the will and the skill to implement the strategy!

MAJOR DEALS IN RECENT YEARS

2012	2012-15	2014	2015	2016-17	2017
OFFSHORE	ONSHORE	ONSHORE	ONSHORE	ONSHORE	OFFSHORE
Pipeline deal	Various Project sales	Turkey Pipeline deal	UK Pipeline deal	Wind farm portfolio	ATLANTIS I
DONG	INVESTORS	STEAG	BROOKFIELD	Allianz	Vattenfall [Jan 17]
Gode Wind ~ 924 MW • Payments of €134m received • Up to €24m due as milestone payments B. Riffgrund ~ 760 MW	• KGAL • CEE • CHORUS • ALLIANZ • ENBW • ENEL • JOHN LAING	JV for 230 MW of projects • Projects being prepared for tenders	PNE WIND UK ~ 1,200 MW of projects • GBP 40m upfront payment • Up to GBP 63m in milestones possible till 2021	142.5 MW of projects • Enterprise value (EV) > €330m • Sales price in 2016 €103m for 80% • Subsequent sales price of €21m in 2017 and increase of EV to > €360m through optimiza tion of financing	Atlantis I ~584 MW • Low double digit € m payment • Further milestone payments expected

WE CONSISTENTLY DELIVERED ON OUR TARGETS…

Operating result (EBIT)

GUIDANCE	GOAL	ACHIEVED
2011 – 2013	€ 60 – 72m	€ 64m
2014 – 2016	€ 110 – 130m	€ 110m
2017	€ 17 – 23m (old: 0 – 15m)	€ 23.7m after 9M

… AND WE HAVE JUST INCREASED OUR 2017 GUIDANCE!

KEY TAKEAWAYS

• Strong global demand for renewable energy accelerates growth
• Markets are changing the new strategy is tailored to address the significantly changing market conditions, generates new margin potential and reduces the volatility of earnings
• We want to be a Clean Energy Solution Provider in future
• Investment in new technologies PV, Storage, Power-to-Gas, in new markets, additional services know-how and processes
• High cash position, secured financing and strong project pipeline back up the implementation of the strategy
• Great experience and know-how exist in the company
• Shareholder Value is central to all activities

BOTTOM LINE: WE WANT TO MAXIMISE THE VALUE FOR OUR SHAREHOLDERS

This presentation is for information purposes only and does not constitute a public offer or invitation to subscribe for or purchase any securities of PNE WIND AG and neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. This presentation is being furnished to you solely for your information and may not be reproduced or redistributed to any other person in whole or in part.

All information contained herein has been carefully prepared. Nevertheless, we do not guarantee its accuracy or completeness.

The information contained in this presentation is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the company's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements as a result of, among others, factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable Securities Laws.

CONTACT

Rainer Heinsohn

Head of Communication Tel: +49 (0) 47 21 – 7 18 - 453 Fax: +49 (0) 47 21 – 7 18 - 373 E-mail: rainer.heinsohn@pnewind.com

Christopher Rodler

Head of Investor Relations Tel: +49 (0) 47 21 – 7 18 - 454 Fax: +49 (0) 47 21 – 7 18 - 373 E-mail: christopher.rodler@pnewind.com