Q1 2017 Performance Update - Senvion...Note:Q1 2016 financials are adjusted for IPO related costs, interest on shareholder loans and PPA, Q1 2017 financials are adjusted for PPA effects

Q1 2017 Performance Update Investors and analysts presentation

Senvion S.A.

11th May 2017

Picture new turbines/ products/ flagship product

1

Disclaimer

This presentation (the “Presentation”) has been prepared by Senvion S.A. (“Senvion” and together with its subsidiaries, “we,” “us” or the “Group”)

solely for informational purposes and has not been independently verified, and no representation or warranty, express or implied, is made or given

by or on behalf of the Group. Senvion reserves the right to amend or replace this Presentation at any time. This Presentation is valid only as of its

date, and Senvion undertakes no obligation to update the information in this Presentation to reflect subsequent events or conditions. This

Presentation may not be redistributed or reproduced in whole or in part without the consent of Senvion. Any copyrights that may derive from this

Presentation shall remain the sole property of Senvion.

This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation or inducement to subscribe for,

underwrite or otherwise acquire, any securities of Senvion, nor should it or any part of it form the basis of, or be relied on in connection with, any

investment decision with respect to securities of Senvion or any other company.

Certain statements in this Presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks,

uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking

statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events

described herein. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not

limited to, future global economic conditions, changed market conditions affecting the wind industry, intense competition in the markets in which the

Group operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions

affecting the Group’s markets, and other factors beyond the control of the Group). Neither Senvion nor any of its respective directors, officers,

employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak of the date of this

Presentation. Statements contained in this Presentation regarding past trends or events should not be taken as a representation that such trends or

events will continue in the future. In particular, no statements in this Presentation should be construed as concrete guidance as to the results of

operations, cash-flows, balance sheet data or any non-financial metrics as of or for the financial year ending December 31, 2016 or any subsequent

financial period.

Certain financial data included in the presentation consists of “non-IFRS financial measures”. These non-IFRS financial measures may not be

comparable to similarly titled measures presented by other companies, nor should they be construed as an alternative to financial measures

determined in accordance with IFRS. You are cautioned not to place undue reliance on any non-IFRS financial measures and ratios included herein.

This Presentation does not constitute or contain any investment, legal, accounting, regulatory, taxation or other advice.

Due to rounding, numbers presented through out this and other documents may not add up precisely to the totals provided and percentages may not

precisely reflect the absolute figures.

2

Guidance 4

Agenda

Key highlights 1

Orders and installations 2

Financial results 3

Key takeaways 5

Key highlights

Senvion MM turbines in Scotland, UK

1

4

Revenues at €392mn, growth of 7.7% yoy

Adj. EBITDA of €21mn with a margin of 5.5%

Lower opex run rate already visible

Working capital at (0.2%) despite higher inventory in

anticipation of 300 MW Chile order

Firm order intake of €353mn, 31% higher yoy

Two orders from new markets – Czech Republic 26

MW and Ireland 11 MW

In addition, €300mn offshore order closed in May 2017

2MW product portfolio strengthened with 2.3M124 and

2.4M114 launches in India

35% interest savings achieved in recently completed

refinancing – annual savings of €14mn

Q1 2017 – Key highlights at a glance

Financial

highlights

Orders

Product

portfolio

Refinancing

5

Upgraded 2MW modular platform 2.xM – Larger rotors for the low wind low cost model

+4.0%

+3.6%

2MW platform expanded as announced in

strategy update presentation on March 17

Modular platform to deliver cost competitive,

reliable product variants

Climate technology allowing to achieve

constant yield at high temperatures (up to

+50°C)

Aerodynamically optimized rotor blade

design; four rotor sizes available

Towers with hub heights from 90 meters up to

120 meters

More product announcements in Senvion pipeline

Note: Improvement in annual energy production (AEP) at 6.5m/s

AEP improvement

New 2MW platform: significant AEP improvement

6

Issuance of New €400mn Green High Yield

Bond

New €400mn green senior secured high yield bond

priced at 3.875% on April 27, 2017 – Proceeds

used to repay existing bond

4x oversubscribed

The maturity will be 5.5 years until November 2022

with a 2 year non-call period

Refinancing completed on 5th May

Refinancing successfully completed in May 2017 Annual savings of €14mn

Transaction summary

42% lower interest rate

New interest rate at 3.875% v/s

6.625%

Maturity extended

From 2020 to 2022

Net 35% reduction in cash interest cost achieved

Amendment and extension of existing

bonding lines and credit facility

€825mn non fund based bonding lines and €125m

revolving credit facility extended to 2022

33% over subscription

16 leading international financial institutions

including some new key international relationship

banks such as BNP, Natixis and RBI

50 bps reduction in interest costs

across both LG facility and revolving

credit facility

Maturity extended to 2022

Markets and orders Strengthened international footprint

Senvion turbine installation in Canada

2

8

Recent industry developments Move towards auction continues

Americas

Canada

Alberta launches Renewable

Electricity Program with a target of 5

GW by 2030 through rolling auction

process

In Saskatchewan, SaskPower is

targeting 1.6 GW renewable power

between 2019-2030

Argentina

Government planning new tender in

2017 to reach 20% renewable power

supply by 2025

Chile

Government scales back tender size

as more clients contract power

directly with generators

1

2

3

EMEA

Germany

Results from first offshore tender is out

– 1.5 GW awarded with subsidy free bid

800 MW Onshore tender results to be

announced by 16th May

Spain

2 GW tender on 17th May

Installation by 2019

France

3 GW onshore wind tender with first

auction scheduled in Dec 2017

French wind lobbying for 2 GW floating

tender early next year

Winners of 3rd French Offshore tender

for c.1.2GW to be announced by Q3 17

4

5

6

Recent developments

Mature markets New markets

1

2

3

4

5

6

APAC

India

Government planning new 4 GW tender

after success of earlier 1 GW tender

Australia

ACT Government changed the

renewable energy target to 100% by

2020 to be achieved by reverse

auctions

7

8

7

8

Senvion ready with new and improved portfolio to compete in auctions

9

Note: Figures prior Dec 15 relate to Senvion GmbH

1. Net Firm orders are confirmed orders minus PoC revenues already booked.

2. Conditional orders are signed contracts where either building permit and/or grid connection and/or financing is missing.

1.6

1.8

1.9

1.7

1.7

1.6

1.4

1.5

2.01.7

2.3

2.1

1.8

1.8

1.7

1.5

1.3

1.3

Q1 15 3.7

Q2 15 3.7

Q3 15 3.4

Q4 15 3.4

Q1 16 3.6

Q2 16 3.5

Q3 16 3.4

Q4 16 3.0

Q1 17 2.9

Order book of €5.2bn Solid order book including large international orders

Net firm orders at €1.3bn

Order book (€bn) Q1 2017 split by geography

148

Offshore

Others

France

Canada

UK

Germany

Q1 17

1,318

12

265

356

274

263

1.5

1.8

1.9

2.0

2.1

2.1

2.2

2.3

2.3

5.6

5.6

5.4

5.4

5.6

5.2

5.3

Service orders Total order book Net firm orders1 Conditional orders2

5.5

€mn

5.2

Onshore

€1.04bn

10

Order intake Continues to be strong

Further order wins in Q2

Firm WTG order intake (€mn)1

Offshore order of 203 MW, to be installed by 2019

45 MW order in Belgium

Key orders in Q1

3x orders in Germany compared to Q1 CY16

151 MW order in UK with Banks Renewable

Orders in new markets – 37 MW

Czech Republic – 26 MW

Ireland 11 MW

In addition, 216 MW frame agreement signed in Portugal

122147 149

58

112114

73

11336

80

64 96

64

34

169

61

25

3954

459

353

10

+31%

269

21

Mar-16 Jun-16 Sep-16 Dec-16 Mar-17

16

284 292

Germany UK Others France Canada

Pipeline continues to be strong; forecasted €2bn firm order intake in CY17 on track

11

Business segment with

high growth potential and

attractive margins

Leading service tenor in

the industry with more than

10 years

– GW under service

growing by 12%, while

average contract tenors

growing by 7%

Service renewal rate at

>80%2 in December 2016

12.112.111.911.410.810.2

+12.1%

Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Dec-15

Continuously improving service business Improving KPIs

GW under service

Average duration of service contracts1 (years)

Note: 1. Only includes active contracts and does not include contracts not yet initiated; 2) Average renewal rate of service contracts for last 3 years based on semi-annual data.

10.910.710.510.410.210.2

+6.9%

Mar-17 Dec-16 Sep-16 Jun-16 Mar-16 Dec-15

Service revenue (€mn)

72.672.865.565.472.666.1

Mar-16 Mar-17 Dec-16 Sep-16 Jun-16 Dec-15

12

Senvion installations Stable run rate

Installations (MW)

Stable quarterly

installations compared to

last year

Installations mainly driven

by Germany, UK and

Offshore projects

Similar installation cycle

expected in 2017

Q1 is usually the softest

quarter

373 324

275

485

218262

273

666

351

112

154

+1.0%

CY 16

1,762

0

CY 15

1,746

0

16

Annual Installation Quarterly installations

46

12049

7223

31

18

5649

+1.0%

Q1 17 Q1 16

241

4

243

12

Others (combined) Offshore UK France Australia Canada Germany

Financial results

Senvion Bald Hills Wind Farm in Australia

3

14

Key highlights Performance in line with last year

Note: Q1 2016 financials are adjusted for IPO related costs, interest on shareholder loans and PPA, Q1 2017 financials are adjusted for PPA effects

Q1 Revenues grew

by c.8%

Adj. EBITDA in line with

last year without FX

income of €5mn in Q1

CY16

Cash level of €327mn

Net debt level of €86mn,

due to inventory build up

in anticipation of 300 MW

Chile order installation in

H2 2017

Refinancing of high yield

bond complete – Annual

savings of €14mn

(€mn)

Adj.

Q1 CY16

Adj.

Q1 CY17

Revenue 364 392

Gross profits 122 123

Gross margin % 33.4% 31.5%

Adjusted EBITDA 27 21

Adjusted EBITDA % 7.5% 5.5%

Adjusted EBIT 14 5

Adjusted EBIT % 3.8% 1.2%

Adjusted PAT 1 1

Net working capital % (6.4%) (0.2%)

Cash on hand 439 327

Net Debt / (Cash) (25) 86

15

Revenue development

Onshore revenues (€mn)

227263(14%)

Onshore revenues breakdown (€mn)

Service revenues (€mn)

7373

0%

Offshore revenues (€mn)

91

29

+219%

Other revenues at €0.8mn & €1.8mn for Q1 2016 & Q1 2017 respectively

212241 22

10

0

6

Europe (€mn) Americas (€mn) Asia-Pacific (€mn)

Mainly due to lower revenues in

Other markets (Portugal)

Includes revenues from Canada Includes revenues from Australia

Q1 16 Q1 17 Q1 16 Q1 17 Q1 16 Q1 17

Q1 16 Q1 17 Q1 16 Q1 17 Q1 16 Q1 17

16

Additional key performance metrics Opex run rate reduction already visible

Material cost development (€mn)

Cost breakdown (€mn)

Higher gross margin due to higher

service revenues component

391352

1,6181,563

Q1 17

31.5%

Q1 16

33.4%

CY16

28.0%

PF Adj CY15

28.5%

Gross margin Adj. COGS

62 66 64 64 71

47 45 44 53 39

1820127

-6%

Q1 17

135

17

Q4 16 Q3 16

121

13

Q2 16

131

Q1 16

122

14

OPEX D&A Personnel

Note: Financials adjusted for PPA, offshore provisions, IPO related costs.

Senvion MOVE Forward

project is underway, first

effects of opex reduction

already visible

Fixed costs run rate likely to

reduce further by Q4

Employee costs also include

costs from Euros and

Kenersys acquisition

17

Breakup of total Capex and R&D Accretive capex investments to accelerate profitable growth

R&D expenditure (€mn)

3.1% 3.1%

Total intangible and tangible capex1 (€mn)

Higher Capex expected for full year

compared to 2016 due to new market

entries and new product

announcements

2.7% 1.4%

45 45

22 23

1311

6

19

PF adj CY15

67

Q1 17 Q1 16 CY16

68

18

7

Key R&D spending focused on

acceleration of 3.4M140, 3.6M140

development and new product

enhancements

Note: 1. Excluding capitalised R&D.

[%] Capex over sales

[%] R&D over sales Expensed

10

60

30

15

CY16 PF adj CY15 Q1 16 Q1 17

Capitalised

2.8% 3.7%

4.9% 4.9%

18

Net working capital Working capital continues to be in a low range

8.3%

12.1%

NWC1 % of trailing 12 months revenue Net working capital

160

213

(5)

Dec-16

(83)

Sep-16

(119)

Jun-16

(57)

Mar-16

(132)

Dec-15

(101)

Mar-15 Mar-14

12.1%

Mar 17

Net working capital1 evolution (€mn)

Efficient working capital

management

Working capital

consistently within

the guided range

Current working capital

includes ~€100mn of

inventory for Chilean

projects, representing

c.5% of the sales

(6.4%)

8.3%

(4.7%)

Senvion GmbH Senvion S.A.

Note: 1. Net working capital defined as current assets (adjusted for liquid funds and assets of disposal Group classified as held for sale) minus total current liabilities (adjusted

for provisions, liabilities of disposal Group classified as held for sale and short-term loans and current portion of long-term loans).

(6.4%) (5.8%)

(0.2%) (2.7%) (3.7%)

19

Net leverage of 0.4x, in line with our medium term target of <1x

Senvion S.A. Cash flow summary

Senvion

S.A.

Senvion

S.A.

Senvion

GmbH

Senvion

S.A.

(€mn, unaudited) Q1 CY16 Q1 CY17 CY15 CY16

Cash flows from operating activities 41 (79) 330 138

Cash flows from investing activities (19) (30) (257) (105)

Free Cash Flow 23 (109) 74 32

Cash flows from financing activities (2) (5) (6) (12)

Total Net Cash Flow 21 (114) 68 20

Guidance

Senvion MM turbine in France

4

21 Note: 1. Potential delays in the conversion of the 300 MW Chile order beyond couple of months may lead to a partial (or full) shift of revenues and corresponding EBITDA to

2018. The exact impact on financials can be ascertained once the order becomes firm.

Senvion 2017 guidance and 2019 targets Achieving profitable growth

2016 2017

2019

2019

Revenue

2019 targets 2016 2017 Guidance

Transition phase Growth phase

2016 2017

€2.21bn €2.0-2.1bn1 €2.6–2.7bn

Firm Order

intake

€1.3bn

€2.0bn+

Min 1.0x

On-shore Book to Bill

Adj. EBITDA

Margin

2016 2017

€206mn

9.3% ~8.0–8.5%1

~9.5%-10.5%

2019

(Absolute adj EBITDA)

2019 2016 2017

2016 2017

2019 2016 2017

Key takeaways

Âncora Wind Farm in Portugal

5

23

Key takeaways

Order intake growing with a very heavy pipeline for 2017

MOVE FORWARD – first effects already visible

Service business continues to excel

2MW platform expanded, more product variants in pipeline 2

Q1 performance in line with guidance 1

5

3

4

Appendix

MM tubines in France

25

Financial Calendar 2017

Event Date

Annual Results 2016 March 16, 2017

Q1 2017 results May 11, 2017

Annual General Meeting May 31, 2017

Q2 2017 results August 11, 2017

Q3 2017 results November 10, 2017

Financial calendar

Your Investor Relations Team:

Dhaval Vakil

Vice President – Capital Markets and M&A

Phone UK: +44 20 7034 7992

Mobile: +44 7788390185

Email: [email protected]

Anja Siehler

Sr. Manager Capital Markets

Phone Lux: +352 26 00 5285

Mobile: +49 152 21817093

Email: [email protected]

For general queries: [email protected]

26

Income statement Q1 2017 Bridge between reported and adjusted earnings

Income Statement

€mn Q1 CY17 Adjustments Adj. Q1 CY17

Revenue 392 392

Total performance 515 515

Material expenses (391) (391)

Gross profit 123 123

Gross margin % 31.5% 31.5%

Other operating income 9 9

Personnel expenses (71) (71)

Other operating expenses (39) (39)

FX gain/loss (0) (0)

EBITDA 21 21

EBITDA % 5.5% 5.5%

Depreciation & Amortisation (42) 26 (17)

EBIT (21) 5

EBIT% (5.3%) 1.2%

Extraordinary expenses (33) 33 0

Net interest (12) (12)

Taxes 16 (8) 8

Net Profit from continued ops (49) 1

PAT % (12.6%) 0.4%

Key adjustments

1

3

includes positive PPA

charge of €7.6mn

Includes provision for

restructuring expenses for

closing factories in

Germany

Includes PPA of €25.6mn

3

1

2

2

27

Income statement Senvion S.A. Senvion S.A. Senvion S.A.

(€mn, unaudited) Adj. CY16 Adj. Q1 CY16 Adj. Q1 CY17

Revenues 2,210 364 392

Capitalized development expenses 45 11 13

Changes in finished goods and WIP 18 98 110

Total performance 2,237 472 515

Material expenses / services obtained (1,618) (351) (391)

Gross profit 619 122 123

Gross margin % 28.0% 33.4% 31.5%

Other operating income 33 9 9

Personnel expenses (256) (62) (71)

Other operating expenses (189) (47) (39)

Foreign exchange gain/loss (2) 5 (0)

Adj. EBITDA 206 27 21

Adj. EBITDA % 9.3% 7.5% 5.5%

Depreciation & Amortization (64) (14) (17)

Adj. EBIT 142 14 5

Adj. EBIT % 6.4% 3.8% 1.2%

Extraordinary expenses 0 0 0

Net interest (int cost – int income) (56) (14) (12)

Taxes (5) 2 8

Adj Net Profit from cont. operations 81 1 1

PAT % 3.7% 0.3% 0.4%

Senvion S.A. Income statement

28

Assets

(€mn) Mar-16 Dec -16 Mar-17

Liquid Funds 439 441 327

Current Assets (excluding liquid funds) 869 814 865

Receivables 188 257 213

Inventories 543 430 530

Others 138 128 122

Property, plant & equipment 193 222 226

Goodwill and other intangible assets 667 604 585

Other Non current assets 19 19 21

Total 2,188 2,101 2,023

Liabilities

(€mn) Mar-16 Dec-16 Mar-17

Loans (short term and long term) 15 15 12

Current liabilities (excluding provisions and short term loans) 1,001 897 871

Advance payments received 354 189 187

Trade payables 431 431 404

Gross amount due to customers for contract work as a liability 47 122 126

Others 169 155 154

Provisions 222 289 314

Other liabilities 566 566 548

Total equity capital 384 334 278

Total 2,188 2,101 2,023

Senvion S.A. Balance sheet

Note: Other liabilities include high yield bond

29

Senvion S.A. Cash flow summary

Senvion

S.A.

Senvion

S.A.

Senvion

S.A.

(€mn) CY16 Q1 CY16 Q1 CY17

Result before income taxes (89) (42) (65)

Adjustments for

Depreciation on property, plant and equipment, amortization of intangible assets and write-offs on

financial assets 167 39 42

Interest income (1) (1) (1)

Interest expenses 64 23 12

Increase/decrease in provisions 71 5 25

Profit/loss from sales of property, plant and equipment, intangible and other long-term assets 0 0

Change in working capital (23) 22 (86)

Interest received 1 1 1

Interest paid (40) (5) (4)

Income tax paid/received (12) (1) (3)

Cash flow from operating activities 138 41 (79)

Cash receipts from the sale of property, plant and equipment, intangible and other long-term assets 3 2 3

Cash payments for the purchase of intangible assets (50) (11) (14)

Cash payments from purchase of property, plant and equipment and other long-term assets (58) (10) (19)

Cash payments from loans granted to related parties 0 0 0

Loss of control in subsidiary from change in ownership interest 0 0 0

Cash flow from investing activities (105) (19) (30)

Acquisition of treasury shares (7) 0 (4)

Cash repayments of amounts borrowed (5) (2) (1)

Cash flow from financing activities (12) (2) (5)

Increase/decrease in cash and cash equivalents 20 21 (114)

Cash and cash equivalents at the beginning of the period 413 413 434

Cash and cash equivalents at the end of the period 434 434 320

Liquid funds 441 439 327

Short-term bank liabilities (8) (6) (7)

Cash and cash equivalents at the end of the period 434 434 320

30

Overview of PPA Adjustments

Expected yearly P&L effects1 (€mn)

Notes:

1. Including deferred tax impacts and is not the complete schedule; assumed group tax rate of 29.935% for calculations.

Source: Company information; Deloitte analysis.

75

65

28

28

27

Net PPA booked in CY17 (€mn)

18

Q1 17

Dec-17e

Dec-18e

Dec-19e

Dec-20e

Dec-16

CY17

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