2011 annual results - todayir · 3 source：tm’s 2010 wind market report, gwe’s global wind...

2011 Annual Results

SZEx Stock Code: 002202 HKEx Stock Code: 2208

March 2012

1 1

Agenda

Business Performance

Financial Performance

Company Outlook

Industry Overview

Global Expansion

2 2

China Wind Industry – 2011 Overview Near-term downturn in domestic wind industry represents a

challenge for all and an opportunity for the strongest competitors

Industry Challenges Opportunities

Tighter Monetary

Policy

Higher Raw Materials

Costs

Slower Wind Farm

Approvals

Stricter Standards

Fierce Competition

Reduced availability of project financing, slower receivables collections, higher financing costs

Rare earths prices rose sharply in 1H11, fell in 2H11, but still remain relatively high

26.8 GW wind farms approved in 2011, 16-18 GW new approvals expected in 2012

New rules and regulations address wind turbine quality, grid connection, wind farm design, etc.

Average bidding price dropped 8% in 1H11, stabilized at RMB 3,750 per kW in early 2012

Central control supportive of healthy development of industry

Government placing a greater value on quality and safety

Developers and manufacturers with ample liquidity well-positioned to lead

Market supports premium pricing for superior products

Long-term supplier relationships mitigate supply chain risk

3 3

Source：BTM’s 2010 Wind Market Report, GWEC’s Global Wind Statistics 2011, National Energy Administration’s China Wind Energy Roadmap.

China Wind Outlook

China Annual Installed Capacity Forecast Cumulative Installed Capacity

• China’s National Energy Administration is expected to approve another 16-18 GW of wind farms in 2012, in addition to the 26.8 GW approved in mid-2011

• China connected approximately 16 GW of wind farms to the power grid in 2011, up from 13 GW in 2010

Forecast new installations in 2012 expected to be level with 2011

0

100

200

300

400

500

600

700

800

900

1,000

2030E = 400 GW

2050E = 1,000 GW

2020E = 200 GW

2.3

4.5

7.3

14.0

18.0 16-18

3.3

6.2

13.8

18.9 17.6

5.8 12.1

25.8

44.7

62.4

78-80

-30.0

-10.0

10.0

30.0

50.0

70.0

90.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2007 2008 2009 2010 2011 2012E

BTM Forecast

Actual Installations

Cumulative capacity

(GW)

4 4

Jun-104,612

Dec-103,950

Jun-113,615

Feb-123,755

Ju

n-1

0

Ju

l-1

0

Au

g-1

0

Se

p-1

0

Oct-

10

No

v-1

0

De

c-1

0

Ja

n-1

1

Fe

b-1

1

Ma

r-11

Ap

r-11

Ma

y-1

1

Ju

n-1

1

Ju

l-11

Au

g-1

1

Se

p-1

1

Oct-

11

No

v-1

1

De

c-1

1

Ja

n-1

2

Fe

b-1

2

Average

Goldwind

(RMB per kW)

Average Domestic Public Bidding Price

• Average domestic public bidding price has stabilized around RMB 3,750 per kW

• Goldwind’s average public bidding price was more than 3% above the market average from June 2010 – June 2011

• Since July 2011, Goldwind has commanded a ~5% premium over the market average bidding price

• Average public bidding price for 2011 decreased 16% vs. the average for 2010

• Goldwind’s ASP decreased 11% in 2011 vs. 2010

Note: Average domestic bidding price are for 1.5 MW units. Data include VAT and exclude a bid from a foreign manufacturer in January 2011. Source: Company estimates.

Superior Products → Premium Pricing Goldwind products command a premium due to superior

quality, performance, reliability and services

5 5

China’s Largest Wind Turbine OEM

2011 China Market Share

Source: CWEA, IHS-CERA, Data Insight – Global Wind Turbine Supply Market Share Evolution 2012.

Goldwind represented over 20% of China’s 2011 installations

• Goldwind became China’s largest supplier of wind turbine generators in 2011, up from second largest in 2010

• Our China market share increased slightly to 20.4% in 2011 from 19.7% in 2010

• According to IHS-CERA, Goldwind represented approximately 9% of global wind turbine deliveries in 2011 and 2010

We estimate that Goldwind was the second largest manufacturer of wind turbines in the world in 2011

Goldwind20.4%

Sinovel16.7%

United Power16.1%

Ming Yang6.7%

Dongfang Electric

5.4%

Xiangtan4.0%

Shanghai Electric

4.0%

Vestas3.8%

Creative3.5%

CSR2.6%

Other16.8%

6 6

Global Wind Outlook

Global Cumulative Installed Capacity Top 10 Markets in 2011

Source: BTM World Market Update 2010 and GWEC.

Strong near-term growth anticipated in

global wind power industry

Country MW Percent

China 18,000 44%

USA 6,810 17%

India 3,019 7%

Germany 2,086 5%

UK 1,293 3%

Canada 1,267 3%

Spain 1,050 3%

Italy 950 2%

France 830 2%

Sweden 763 2%

Top ten subtotal 36,068 87%

Rest of the world 5,168 13%

2011 global installations 41,236 100%

110 134

155 178

219

257

308

364

12 26

45

63

81

103

125

150

122 160

200 241

299

360

432

514

2008 2009 2010 2011 2012E 2013E 2014E 2015E

Rest of world

China

(GW)

7 7

Our Markets Cover 65% of Demand

Sources: Historical installations: GWEC Global Wind Statistics 2011, Forecasts: BTM World Market Update 2010.

China is the largest wind market in the world

LEGEND 2011 Installations (% of total) Cumulative capacity (% of total) 2012 forecast (% of total) Local Goldwind Office

Europe 10.3 GW (25%) 96.6 GW (41%) 16.2 GW (30%)

Africa & Middle East 0.03 GW (<1%) 1.1 GW (<1%) 0.7 GW (<1%)

Asia Ex. China

3.3 GW (8%) 19.7 GW (8%) 4.4 GW (8%)

China 17.6 GW (44%) 62.7 GW (26%) 18.0 GW (33%)

Pacific Region

0.3 GW (<1%) 2.9 GW (1%) 0.9 GW (1%)

Latin America & Caribbean

1.2 GW (3%) 3.2 GW (1%) 1.3 GW (2%)

North America

8.1 GW (20%) 52.2 GW (22%) 10.3 GW (19%)

8 8

Agenda



Company Outlook

Industry Overview

Global Expansion

9 9 Source: Company filings.

Sales Affected by Stricter Regulations

Realized Wind Turbine Sales

• Sales volumes decreased to 3,106 MW in 2011 from 4,007 MW in 2010

• Goldwind delivered another 377 MW to Tianrun in 2011 (internal sales)

• 2011 sales included 224 MW of larger capacity units, including 87 units of 2.5 MW and two units of 3.0 MW

Major Domestic Customers

Longyuan Datang Jingneng Guohua Huaneng Huadian Three Gorges Guangdong Nuclear China Power

Slower sales in 2011 reflects stricter regulatory environment, which will

support the long-term sustainable development of the industry

854 444 154

519 1,592

3,851

2,882

3 >

224

1,373

2,036

4,007

3,106

2008 2009 2010 2011

MW sold

2.5 MW & 3.0 MW

1.5 MW

750 kW

(MW)


Contracted Backlog Up 42% in 2011

Wind Turbine Order Backlog • The order backlog under final contract

increased 42% to 3,931 MW as of 31 Dec. 2011, up from 2,765 MW as of 31 Dec. 2010

• Successful bids awaiting final contract decreased to 2,397 MW as of 31 Dec. 2011 from 3,816 MW as of 31 Dec. 2010

• Reduction in successful bids awaiting final contract reflects an increase in signed contracts and executed projects. No projects were cancelled in 2011.

Goldwind’s backlog of sales under final contracts increased substantially

2,765

3,931

3,8162,397

6,5806,327

31 Dec 2010 31 Dec 2011

Total backlog

Successfully bid

Under final contract

(MW)

11 11

Product Optimization → Best Value

Source: Company data. Note: Technical availability reflects the time wind turbine generators are available to generate power.

Our R&D team never stops working to make a great wind turbine design even better

DDPM Key Advantages

1) High reliability

2) High efficiency

3) Low O&M costs

4) Grid-friendly

Technical availability of Goldwind’s 1.5 MW unit

94.3%

98.1% 98.2%98.9%

2008 2009 2010 2011

Goldwind has optimized its direct-drive permanent magnet design to further improve reliability, enhance power output, conserve materials, and minimize transportation and operating & maintenance costs.

Product optimization delivers the lowest cost per kWh and the best value to our customers.

Optimization Goals

1. Maximize reliability

2. Maximize power output

3. Conserve materials

4. Minimize maintenance

5. Reduce transport costs

12 12

Built for Challenging Environments China’s Diverse Environments Have Inspired Innovative Technical

Solutions Suitable for International Markets

3,565

1,583 1,398

1,198

925 754 738

482 423 368 324 258 155

509

51 57 131

(MW)

Goldwind’s Year-End 2011 Global Cumulative Installed Capacity

Goldwind Domestic Cumulative Capacity = 12,679 MW

Goldwind Int’l Cumulative Capacity = 239 MW


Product Segmentation Drives Sales Specialized products designed for challenging environments drive China sales and give Goldwind a competitive advantage in the global market

Product Type China Sales Global Sales

Low temperature Heilongjiang, Liaoning, Jilin, Inner Mongolia, Xinjiang, Hebei, Gansu, Ningxia

USA

High temperature Jiangxi, Hainan Ethiopia, Pakistan

High altitude Yunnan, Guangxi, Guizhou, Qinghai Ecuador, Chile

Low wind speed Beijing, Hebei, Shanxi Cyprus

Coastal/intertidal Jiangsu, Jiangxi, Shandong

Offshore Jiangsu, Liaoning

Goldwind has been recognized for the second year in a row as one of MIT Technology Review’s 50 Most Innovative Companies

for developing turbines for challenging environments

14 14

Global Leader in Wind Power Services Goldwind provides customers with comprehensive wind power

solutions, including wind evaluation, EPC, O&M, and monitoring

Pre-Construction

Wind evaluation

WTG selection

Wind farm design

Project Construction

Site preparation

EPC contracting

Logistics

Post-Construction

Wind farm O&M

Spare parts support

Information services

SCADA and Energy Mgmt System

• Goldwind has developed expertise in EPC through 5 years of domestic wind farm development

• Goldwind now provides EPC for global projects such as Ecuador and Ethiopia

• EPC revenues exceeded RMB 250 million in 2011

• Goldwind provided pre-construction consulting service for approximately 5.0 GW of projects in 2011, including 1.5 GW in foreign markets, and 3.5 GW in China

EPC Contracting Wind Farm Design

• SCADA: Goldwind had 4,798 units (5,274 MW) of wind turbines connected to the SCADA system as of year-end 2011, up 45% from 3,313 units (3,275 MW) as of year-end 2010

• Energy Management System: Goldwind is currently providing EMS to 61 wind farms

• EMS has generated revenues of over RMB 48 mm to date

15 15

Wind Farms Drive Growth & Profitability

• Goldwind owned 572 MW of attributable wind capacity as of year-end 2011

• Another 558 MW of attributable wind farm capacity was under construction

• Profit diversification: Non-manufacturing revenues represented 24% of segment gross profits & gains in 2011, up from 14% in 2010

Wind Farm Capacity Segment Gross Profit & WF Sales

Source: Company filings.

Wind farm development is an important source of diversified revenues

624

1,074

1,338

417513

572

2010/12/31 2011/06/30 2011/12/31

Total Installed Capacity

Attributable Installed Capacity

(MW)

85% 86%76%

2%> 1%>4%>

<2% <3%<3%

11% 10%17%

2009 2010 2011

WTG Sales Wind power services

Wind farm development Gain on sale of wind farms

16 16

Agenda



Company Outlook

Industry Overview

Global Expansion

17 17

International Sales Gain Momentum

Goldwind International Deliveries

• International deliveries jumped to 220.5 MW in 2011 from just 9.0 MW in 2010 and 2009

• In 2011, Goldwind delivered two major projects: Ethiopia’s Adama (51.0 MW) and the United States’ Shady Oaks (109.5 MW)

Goldwind’s Key Markets

• Year-end 2011 int’l backlog = 130.5 MW

• 90.5 MW of international contracts announced since year-end 2011

• In addition, 268.5 MW of successful bids accepted since year-end 2011

Source: Company filings. Note: International sales includes internal sales to international projects and sales by majority-owned subsidiary Vensys.

Goldwind has pursued a successful strategy of globalization

through localization

9.0 9.0

220.5

2009 2010 2011

International SalesAfrica

Europe

Americas

(MW)

131

51 57

17841

100

122

50

Australia North America

Africa South America

Europe Asia Ex. China

(MW)

Delivered

Backlog

18 18

Goldwind Goes Global: USA

Project: Shady Oaks

Capacity: 109.5 MW

Location: Illinois

Developer: Goldwind Tianrun

Owner: Goldwind Tianrun

Unit Type: 68 units of 82m/1.5 MW

3 units of 100m/2.5 MW

O&M: Goldwind

Project Lifetime: +20 years

Goldwind has established a successful footprint in mature markets such as the US. Shady Oaks will enable Goldwind to establish a bankable operating record.

19 19

Goldwind Goes Global: Ecuador Goldwind made its first step into the South American market in Ecuador

Project: Villonaco

Capacity: 16.5 MW

Location: Ecuador

Developer: Ecuador Electricity Corp.

Owner: Ecuador Electricity Corp.

Unit Type:11 units of high altitude

70m/1.5 MW units

O&M: Goldwind


20 20

Goldwind Goes Global : Chile The Negrete and Ckani projects mark Goldwind’s second and third projects with global developer Mainstream Renewable Power (the first was Shady Oaks in the USA)

Project: Negrete Ckani

Capacity: 34.5 MW 70.5 MW

Location: Northern Chile Central Chile

Developer: Mainstream Renewable Power Mainstream Renewable Power

Owner: Mainstream Renewable Power 50-50 JV with Mainstream

Unit Type: Low wind speed 87m 1.5 MW units High altitude 87m 1.5 MW units

O&M: Goldwind Goldwind

Project Lifetime: +20 years +20 years

21 21

Goldwind Goes Global: Ethiopia

Project: Adama

Capacity: 51.0 MW

Location: Ethiopia

Developer: HydroChina

Owner: HydroChina

Financing: CDB

Unit Type: 77m 1.5 MW units

O&M: Goldwind


Goldwind will continue to collaborate with major infrastructure developers on international projects, accelerating our global expansion

22 22

Agenda



Company Outlook

Industry Overview

Global Expansion

23 23

Notes: Financial data are reported in IFRS. Source: Company filings.

Annual Financial Results

Revenues Gross Profit and Gross Margin

• Revenues decreased 27% to RMB 12,756 mm in 2011 from RMB 17,745 mm in 2010

• Average selling price of the 1.5 MW unit (including VAT) decreased 11% to RMB 4,405 per kW in 2011 from RMB 4,940 per kW in 2010

• Gross margin of 16% remained in-line with our full-year guidance of 15-20%

1,521

2,758

4,021

2,057

23.7%25.9%

23.0%

16.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008 2009 2010 2011

(RMB in millions)

Lower revenues reflect a decrease in volumes and a lower average selling price

6,417

10,667

17,475

12,756

2008 2009 2010 2011

(RMB in millions)

24 24

Notes: Financial data are reported in IFRS. Net profit is net profit attributable to ordinary owners. Source: Company filings.

Profitability and Margins

EBITDA Net Profit

EBIT EPS

0.40

0.78

0.99

0.23

2008 2009 2010 2011

(RMB)

1,265

2,101

3,084

1,319

19.7% 19.7%17.6%

10.3%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008 2009 2010 2011

(RMB in millions)

1,189

2,053

2,917

1,122

18.5% 19.3%16.7%

8.8%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008 2009 2010 2011

(RMB in millions)

Margins and profitability negatively impacted by lower ASP

906

1,746

2,290

607

14.1%16.4%

13.1%

4.8%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2008 2009 2010 2011

(RMB in millions)

25 25

Receivables by Customer

Source: Company estimates. Note: Accounts have been consolidated by parent company. Total receivables includes gross trade receivables and retention money receivables.

Top 5 Receivables Outstanding

Customers with Top 5 Largest Receivables Due to Goldwind:

A: State-Owned Diversified Power Producer B: State-Owned Diversified Power Producer C: State-Owned “Big 5” Power Producer D: State-Owned Diversified Power Producer E: State-Owned “Big 5” Power Producer

Outstanding receivables are due from a large number of diversified customers, including state-owned enterprises with strong liquidity and access to capital

6,545

546

644

787

881

1,191

31 Dec 2011

(RMB mm)

Customer A

Customer B

Customer C

Customer D

Customer E

OtherCustomers

38% of totaltrade

receivables

10,595

26 26

Ample Pro Forma Liquidity

Source: Company filings and estimates.

Cash and Total Debt

• Pro forma for an offering of RMB 3 billion of corporate bonds due 2015, liquidity totaled approximately RMB 27 billion (including RMB 10 billion of cash and 17 billion of unused bank capacity)

• Net debt = RMB 445 MM

Pro forma for an offering of RMB 3 billion of corporate bonds due 2015, Goldwind had ample liquidity of approximately RMB 27 billion

4,459

9,324 7,597

9,797

2,624 2,967

8,042 7,242

3,000

2009 2010 2011 Pro Forma

Cash

Bank Debt

Corporate Bonds due 2015

(RMB mm)

27 27

Agenda



Company Outlook

Industry Overview

Global Expansion

28 28

Industry Outlook

Global Wind Outlook:

• Globally, the wind industry is recognized for advancing energy

technology, supporting economic growth and creating jobs.

• As nations face economic turmoil, energy shortages, and

environmental problems, many are placing a higher value on

wind power because it can address all three issues at once.

2012 Outlook:

• In China, the wind industry has entered a period of adjustment:

slower growth, fierce competition, focus on quality & reliability.

• The industry may continue to be negatively affected by tight

monetary policy and high materials costs in the near term.

• On a positive note, market is headed toward a stage of healthy,

sustainable, long-term development.

29 29

Near-Term Strategies

• Expand market:

• Deploy effective marketing to increase market share and support price

premium;

• Enhance wind farm operations and pursue additional wind farm sales;

• Accelerate international expansion;

• Pursue new opportunities in smart-grid technologies, power storage,

desalination, wind-solar installations, distributed wind technologies.

• Cost controls:

• Strengthen control systems for costs, receivables and inventory

management;

• Link effective controls to performance based evaluations;

• Optimize electronic controls system;

• Optimize service model and transportation management.

• Improve our wind farm services standards:

• Optimize control systems to help customers maximize power output;

• Optimize spare parts sales channels to enhance profitability;

• Enhance services business innovation to enhance overall services

profitability.

• Accelerate R&D and innovation:

• Speed up development of product series and new product development;

• Production differentiation through specialized technology solutions;

• Continue to optimize DDPM technology.

• Pursue third-party certifications.


Key Competitive Advantages What sets Goldwind above the rest

• Quality, reliability & performance • Organic R&D capabilities • Turnkey wind power solutions • Strong domestic recognition • Expanding global footprint • Effective cost controls


R&D: New Product Development What’s Next – Hybrid and Large Capacity Wind Turbines

• Developed additional prototypes of 3.0 MW hybrid in 2011 • Currently engaged in testing and optimization • Hybrid has potential to reduce costs, while taking advantage of full

power converter, fewer parts than traditional gearbox design

• Prototype of 6.0 MW DDPM wind turbine anticipated in 2012 • Prototype components have been manufactured. Testing and

optimization progressing smoothly.

• Installed two 3.0 DDPM prototypes as one of China’s first wind-solar energy storage project in cooperation with the NDRC, the Ministry of Science and Technology, State Grid, and the Ministry of Finance

• Commenced development of 10.0 MW wind turbine

• Developed solar power inverters based on converter expertise

32 32

Expanding Global Footprint

Source: Company filings. Charts are not drawn to scale.

Europe

Africa

Australia

South America

North America

Asia Ex. China

China

Goldwind’s Active Markets Cover Six Continents

Delivered

Backlog

MW of Deliveries & Backlog

57

50

178

+12,000

+6,000

122

131

41

51

100

2011 Annual Results

SZEx Stock Code: 002202

HKEx Stock Code: 2208

March 2012

34 34 34

Corporate Information

Goldwind Headquarters

8 Bo Xing Yi Rd. Economic & Technological Development Zone, Beijing 100176 Website : www.goldwind.cn Email : [email protected]

Corporate Contacts

Ms. Jinru Ma Vice President and Secretary of the Board Ms. Kathryn Tsibulsky, CFA Investor Relations Manager [email protected] Tel. + 86-10-6751-1888 x. 1022

2011 annual results - todayir · 3 source：tm’s 2010 wind market report, gwe’s global wind...

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