Wind Turbines Sector

Wind Turbines Sector

Analysts :

Hanya BELRHITI : SuzlonEmine DRISS : Gamesa

Youssouf HARRAKI : NordexDylan SOALHAT : Vestas

Lara VILLEUNEUVE : Goldwind

Financial AnalysisSKEMA Business School Paris

2012-2013

Share Price Evolution 2008-2013

Sources : Yahoo Finance, Reuters.com

-94,10%

-94,46 %

-92,58 %

-69,45 %

-86,01 %

Wind Energy VS Gas

Source : US Energy Information Administration

Carbon Price History

Sector Production Overcapacity

Source : Bloomberg New Energy Finance

Governments Involvement

• Production Tax Credit (USA)

• Offshore wind farms development in Europe : €3.5 Bn worth

• China’s National Energy Administration (NEA) stated an installation target for wind of 18GW in 2013

Market share Repartition

Sources : Companies Annual Report 2012, Global Wind Energy Council (GWEC)

BUY

Share Price Evolution (DKK)

EUR Million 31.12.2011 31.12.2012

Revenue 5 836 7 216(+23.6%)

EBITDA 305 299

EBITDA Margin 5.2% 4.1%

Depreciation & Amortization (343) (469)

EBIT (60) (697)

EBIT Margin (1.0%) (9.7%)

Net Income (166) (963)

Key Financial Data

Outlook 2013

Forecasts

EUR Million 2012 2013 2014 2015

Revenue 7 216 5 500 6 500 7000

EBITDA 299 330 600 700

EBITDA Margin 4.1% 6% 9.23% 10%

Depreciation & Amortization

(469) (350) (350) (350)

EBIT (697) (20) 250 350

EBIT Margin (9.7%) (0.3%) 3.4% 5%

Net Income (963) (90) 250 300

Recommendation: Buy

Nordex Share price Evolution from 2008 to 2013

Source: www. Reuters.com

EUR Million 31.12.2011 31.12.2012

Revenue 921 1043(+13.2%)

EBITDA -2 -34

EBITDA Margin -0.2% -3.3%

Depreciation & Amortization -28 -29

EBIT -30 -63

EBIT Margin -3.3% -6%

Net Income -48 -59

Financial Statement Overview

Nordex Forecats for 2013-2014

EUR Million 2012 2013 2014

Revenue 1043 1077(+3.3%)

1140(+5.8%)

EBITDA -34 61 69

EBITDA Margin -3.3% 5.6% 6%

Depreciation & Amortization -29 -29 -27

EBIT -63 31 42

EBIT Margin -6% 2.9% 3.7%

Net Income -59 12 17

Forecasts’ Explanation

• Nordex announced 1.27 bn of new orders in 2012 vs 1.11 bn of new orders in 2011 (+14%).

• Half of these new orders were registered in the last quarter of 2012: 628 M € of Order Intake in Q4 of 2012.

• Increase of U.S. and Chinese orders, areas where Nordex’s market share is low.

• Net cash at the end of 2012 is 50 M € vs 19 M € in 2011, a difference due to the strong positive Cash Flow in Q4 of 2012 resulting from the increase of new orders in the last quarter of 2012.

These facts explains the positive forecasts for 2013 and 2014.

CURRENT PRICE: INR 13.69TARGET PRICE: INR 9RECOMMENDATION: SELL

Suzlon Share Price Evolutionsince 2008

Source: www.reuters.com

Suzlon Financial OverviewINR Million 31.03.2011 31.03.2012

Revenue 178 791 210 824(+17,91%)

EBITDA 10 472 18 212

EBITDA Margin 5,85% 8,64%

Depreciation & Amortization (6 574) (6 612)

Operating Profit/EBIT 3 898 11 600

EBIT Margin 2,18% 5,50%

Net Loss (13 239) (4 785)

Suzlon Forecats: 2013/2015

INR Million 31.03.2013 31.03.2014 31.03.2015

Revenue 191 000(-9,4%)

273 000 295 000

EBITDA (10 000) 23 000 29 000

Operational Margin - 5,23%* 8,42% 9,83%

Depreciation & Amortization (7400) (7400) (7400)

Operating Profit/EBIT (17 000) 15 000 22 000

EBIT Margin - 8,9% 5,49% 7,45%

Net Loss (38 000) (3 000) 3 000

*dilution effect

Suzlon Overview

Significant equity dilution due to Corporate Debt Restructuring terms (CDR)

More dilution likely from FCCB (foreign currency convertible bonds) restructuring

Risk to USD650m forex loan repayments Forecasts are below consensus

Recommandation : BUYTarget Price : 3,5 €Actual Price : 2,38 €

Evolution of Stock price 2008-2013

Source : Reuters.com

Key figures 2011-2012EUR million 2011 2012

Revenue 3033 2844

EBITDA 598 453

EBITDA Margin 19,3% 17,7%

Depreciation and Amortization - -

EBIT 131 (-631)

EBIT margin 4,32% -22,18%

Net Income 51 (-659)

Source : Gamesa Annual Reports

Restructuration Plan

• Financial deleveraging : Reduction of Net working capital in Wind Turbines and Wind Farms.

• Reduction in personal : 1215 employees.• Closure of facilities : 24 facilities.• Reduction of R&D.

ForecastsEUR million 2013 2014 2015

Revenues 2000 2400 2700

EBITDA 350 420 472,5

EBITDA margin 17,5 % 17,5 % 17,5 %

EBIT 80 144 216

EBIT margin 4 % 6 % 8 %

Net Income 32 57,6 86,4

Key figures

• Over 15 years experience in the wind industry

• Over 13 GW of power installed worldwide in June 2012

• Over 11,000 windturbines installed worldwide in June 2012

• Over €1,6 bn revenue in 2011

• Two public listed stock exchange (Shenzen and Hong Kong)

• Second largest wind turbines provider worldwide in 2011 (1st in China)

Market shares

Source: Goldwind Investors Relations

Profits : For a long term growth

Source: Goldwind Investors Relations

International Activities

Research and Development

Products

Projections

201313 202 482

201415 378 766

201516 874 898

YearExpected Turnover Expected Net Profit