welcome to oerlikon solar lazard alternative …...page 12 lazard alternative energy conference...

Welcome

to Oerlikon Solar Lazard Alternative Energy Conference

New York: June

3-4, 2009

Jeannine P. Sargent

CEO

This presentation is based on information currently available to management. The forward-looking statements contained herein

could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary

materially from those anticipated, expected or projected.

Disclaimer

Vorführender

Präsentationsnotizen

Chapter 1

Lazard Alternative Energy Conference

Agenda

1.

OC Oerlikon Overview

2.

Oerlikon Solar Segment Overview

3.

Solar Market

4.

Highlights 2008

5.

Business Snapshot 2009

6.

Focus on Cents per kWh

7.

Progress on the Path to Grid Parity

8.

Proven Thin-Film Manufacturing Solutions

enabling high performance

Vorführender


Chapter 1


Enabling

high technology

The Oerlikon group is one of the most innovative industrial groups in the world.

We

are

active

in various

markets

around

the

world, machine

and plant

engineering, solar technology, thin-film coating, vacuum systems, textile machines, drive systems and precision components.

With

over

18,000 employees

at 180

sites

in 37 countries, we

develop

solutions

for

leading

industry

applications

and future-

oriented

markets.

Vorführender


Emphasize individual key words with bold letters (Medium). A summary sentence at the end can be emphasized with Oerlikon red (Roman).


Six areas of high tech competencies Overview of 2008

OerlikonTextile

OerlikonDrive Systems

OerlikonAdvanced Technologies

OerlikonCoating

OerlikonSolar

OerlikonVacuum

# 1-2

1,690m

7,008

Market pos.

Sales CHF 08

Employees

(31.12.2008)

# 1

509m

2,892

# 1

598m

868

# 2

465m

1,583

# 1-4

1‘204m

5,080

# 1-4

284m

805

CHF 4.8 billion Sales

CHF 0.5 million EBITDA

CHF 274 million R&D investment / 6,700 living patents / 1,500 engineers

Total Group:

(FY 2007)

Oerlikon Solar Segment Overview

Vorführender


Chapter Slide as alternative to the agenda


566650

FY 07 FY 08

-13%

17.8% EBIT margin in FY 2008

Orders received

(in CHF m)

Sales

FY 08

266

FY 07

598

+125%

Delivering all projects on schedule and performance, 1st micromorph SOP

Manufacturing capacity expansion Europe, Flextronics partnership; pilot line Trubbach in operation

>100% sales growth despite customer project delay

amorph|HIGH PERFORMANCE lauhnced, master TÜV certification

Fundamental needs and benefits of PV unchanged, political winds favorable

Focus on new customers with financial strength, leverage TEL partnership to maintain 2008 order levels

Stay on R&D / technology roadmap

Adjust expansion pace to market conditions

EBIT

Business Development

Key Topics

Outlook / Priorities

Further strong market growth in 1HY08, financial crisis triggered temporary “stand-still” in new orders in 2HY08

Oerlikon Solar recognized technology leader in thin-film silicon, technology roadmap for 0.70$/Wp

Thin-film remains fastest growing PV market segment

63

EBIT

FY 07

107

FY 08

+70%

Three

consecutive

years

of profitable growth


Customer Support

Sales / Business Development

Strategic Sourcing

Oerlikon Solar Headquarters

Operations

Customer Support & Training

Advanced R&D / Pilot Line

Product Development

Sales

Sourcing Hub

Customer Support & Training

North America Europe Asia

Sales

A global footprint and growing


TEL and Oerlikon Solar join

forces

in Asia

Research EngineeringProduct design

Manu-

facturing

Sales & Marketing

InstallationAfter Sales

Services

TEL becomes

the

exclusive

representative

and installation

and service

provider

in parts

of Asia, Oceania

and Japan.


Oerlikon Solar’s

mission is to make solar power economically viable.


Thin-Film silicon continues to be the fastest growing sector of the PV market.

The technology is well positioned to deliver competitive lowest cost per KWh.

Oerlikon Solar has become a leading player in Thin-Film PV.

All projects delivered on schedule and on performance.

Greater than 100% year on year revenue growth since 2006.

Technology roadmap on schedule for $ 0.70/Wp by end of 2010.

Proven ability to scale. World class sales, manufacturing and support partnerships with Flextronics and TEL.

Business Snapshot


Strong upstream position in the thin-film silicon PV value chain

Capital

equipment

Capital

equipment

End-to-end

solutions

End-to-end

solutions

Module

manufacturer

Module

manufacturer

BOS

suppliers

BOS

suppliers

EPC

integrator

EPC

integrator

Solar

farm

Solar

farm

Wholesale

utilities

Wholesale

utilities

Oerlikon Solar activities

End-to-end solutions: Provide customers with the entire scope of equipment and processes for thin-film silicon PV manufacturing

Tools:

Supply customers with all three critical tools in the thin-film silicon PV manufacturing process (TCO, LSS and PECVD)

Business services/ maintenance:

Offer additional services to ensure that customers are provided with manufacturing and maintenance support

Front-end production steps

–

deposition and laser patterning

Back-end production steps

–

automation, pre and post processing to prepare glass substrates and finish the modules

Solar Market

Vorführender




Drivers for new energy sources Fundamentals don’t change

Increased Energy Demand

Rising Costs

Diminishing Fossil Fuel Resources

Environmental Concerns and Regulations

National Security


Fast growing global energy demand Total electricity production mix

Source: EIA

World electricity production in 2006 was 19 million GWh

total.


Long term

global energy

supply

Source: solarwirtschaft.de

Forecast of the German Scientific Advisory Board


Growth in the PV market Thin-Film to grow faster than the rest of the solar market

Accumulated installed capacity

GWp

0

CAGR 2007-12

Thin-Film 83%

c-Si 33%

Total Market 41%

Source: Oerlikon Solar

Thin-Film expected to increase strongly in the next 5 years, gradually gaining market share.

Annual PV module demand

MWp

Source: Oerlikon Solar, Equity Research

CAGR 2007 –

1336%


Why thin-film instead of c-Si? Absolute lowest cost of electricity!

Much lower manufacturing cost than c-SiLower efficiency does result in slightly higher BOS costHowever, overall result is lowest cost of electricity

Better performance at higher operating temperaturesBetter performance in diffused light, wider range of incidence anglesBetter suited to building integrated applications

Higher margins in manufacturingHigher rates of return on investment for solar projects


* According to Oerlikon Solar estimates

*

Comparison of thin-film technologies Silicon based thin-film technologies have the highest

cost reduction potential

Technology Silicon-based CdTe CIS, CIGS, CIGSS

Amorphous silicon Amorphous silicon/μ-Si

Development status Volume production Start of volume production Volume production Start of volume production

Stabilized module efficiency 5% – 8% 8%-10% 8% – 11% 8% – 12%

Projected stabilized module efficiency in 2010 6% – 8% 10%-12% 9% – 11% 10% – 14%

Price €2.0/Wp €2.0/Wp €1.5/Wp €2.1/Wp

Projected price in 2010 €1.3/Wp €1.4/Wp €1.1/Wp €1.6/Wp

Projected available production capacity in 2010 480 MW 960 MW 1,440 MW 320 MW

Advantages Established production and field track record Stable efficiency Highest cost reduction potential Ideally suited for large scale applications

Lowest production cost per watt

First Solar with mass production

Attractive cell efficiencies in lab environment

Main issues Currently low module efficiency Safety/ toxicology Future Te availability

Process complexity and resultant reliability

Little volume production data

Players >35 players Limited players >25 players


Key policy market drivers and trends

Recent positive market developments worldwide.

China / JapanRecent announced solar incentives via 'Tentative Solar Energy Photo-electricity Construction Application Finance Subsidy Fund' New program will pay up to 20 RMB/ watt (US$2.93) for projects of 50 kW and above Subsidies only for leading edge technology productsNo details yet on overall size, duration of the plan or installation goalsJapan added plan for solar panel subsidy in Q2 09

European UnionFeed-in tariff is primary market driver

Germany remains stable, though decline in tariff will require lower costsSpain limits MW’sEmerging FiT markets – Italy, Greece, France, Bulgaria, Czech Rep

European RE and PV targets –

reality or posturing?EPIA Goal – 12% PV electricity by 2020Germany Goal (BEE) – 47% RE (incl. 7% PV) by 2020

USAFederal tax benefitCurrent stimulus legislation

-

ITC liquidity, manufacturing tax credit, loan guarantees, large scale government procurement

Additional legislation expected -

National renewable energy requirements, carbon cap and trade system

State level policiesCalifornia

-

Renewable Portfolio Standard, expect feed-in tariff policy for 1-20MW projects

Florida, Texas, NY-

Incentives being debated


Thin-film silicon equipment market Oerlikon Solar has the largest installed base for thin-film

silicon PV

As of 12/08


Thin-film silicon end-to-end (moved-in)

Market size: €1,100 million

Thin-film silicon is the most well-developed technology and Oerlikon Solar is ideally placed to capitalize on its growth potential.

Total market size of thin-film silicon equipment

market


1'242

2'084 1'984

2'856

3'845

0500

1'0001'5002'0002'5003'0003'5004'0004'500

2007 2008 2009 2010 2011

33%39%€m

Vorführender


Source: left Sumeet Gupta, right Fachri Atamny

Highlights 2008

Vorführender




Highlights in 2008 What was achieved

Established as a recognized technology leaderManufacturing capacity expanded in Europe

Strategic manufacturing partnership with Flextronics

Strategic sales and service partnership with TEL

Expanded low cost sourcing supply chain in Asia

Expanded service operations base in Asia

Pilot line officially opened in Switzerland

More than 900,000 panels manufactured by our customers

Installed customer capacity increased to more than 350 MW


Highlights in 2008 Technology achievements

Launched:amorphIHIGH PERFORMANCE> 7% efficiency

Received: IEC master certification from TÜV

Achieved:Champion cell above 13% efficiencyfor Micromorph®


Highlights in 2008 New customers in production

Start of production at Sun Well (Taiwan)

Start of first Micromorph® production at Inventux (Germany)


The key for success and customer traction is the record of delivering fabs on schedule at unequalled performance levels.

Providing a unique value proposition and enabling our customers to achieve rapid and predictable entry into the thin-film silicon module production by providing the fastest time to market.

Critical performance characteristics of the installed production lines are guaranteed, giving our customers certainty of their investments.

Superior end-to-end fab support, encompassing equipment move-in, installation, testing as well as fab ramp-up and optimization.

30%

19%15%

14%

11%

11%

China

Taiwan

Spain

Germany

Switzerland

Greece

Breakdown

of Revenues

2008(based

on MW)

Customer base International customer base with strong traction due to

high value proposition

Vorführender


The Company will secure at least 400 MW of orders from customers in Europe and over 1.0 GW from customers in Asia and US over the next couple of years and as soon as the current financial situation improves. Several measures will help Oerlikon Solar’s management achieve these ambitious sales targets, among these are focused customer management, improved market presence and brand awareness as well as continuous execution of the Company’s technology roadmap.


Solar customers Market players

Vorführender


Schott – 30MW KAI 1200 Inventux – 30MW aSi-uc delivered 2008 CMC SunWell – 30MW aSi delivered 2008 (announced expansion) Ersol – 30MW „turnkey –delivery 2007 E-ton – Auria – 30MW aSi-uc - delivery 2008 Pramac – 30MW aSi-uc – delivery 2008 Zeiss – purchase from Mechatronics (casing) All others – customers of Exitech (lasers)

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Solar customers Our customers

Vorführender


Schott – 30MW KAI 1200 Inventux – 30MW aSi-uc delivered 2008 CMC SunWell – 30MW aSi delivered 2008 (announced expansion) Ersol – 30MW „turnkey –delivery 2007 E-ton – Auria – 30MW aSi-uc - delivery 2008 Pramac – 30MW aSi-uc – delivery 2008 Zeiss – purchase from Mechatronics (casing) All others – customers of Exitech (lasers)


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Operational silicon thin-film fields

3.4 MWp

a-Si

installation (Zahna, Germany)39,000 thin-film modules & 747 trackersStart of operation: 19 February 2009System integrator: AC Energy GmbH & Co. KG Capex: approx. €11 million

1.3 MWp

a-Si

installation


Cooperation with Schott Solar on thin-film silicon development

40MWp equipment contract with Schott Solar

Start of first micromorph®production at Inventux

Champion cell with above 13% efficiency for micromorph®

First micromorph® end-to-end production line contract

Sun Well ramps first Asian line

Contracts for end-to-end solutions

VHF PECVD deposition technology

Oerlikon displays first functional 1.4 m2 a-Simodule

Light trapping by TCO & intermediate reflector

PV lab at IMT by Prof Arvind Shah

Sun Well SOP on Asian line

Inventux achieves record efficiency with micromorph®120W (>9% efficiency)

Recorded full size module performance of 151W (>11% efficiency)

Micromorph® solar cell (tandem amorphous, microcrystalline)

First R&D equipment delivered to Schott Solar

15 years of R&D experience and industrial mass production since 2005

Oerlikon founds own R&D lab and enters thin-film silicon PV

� Oerlikon presents first micromorp®

tandem module ~125W

First 40MWp front end line contract with Ersol

Technology

program

Technology

program GlobalizationGlobalizationCommercializationCommercializationConcept

and product

Concept

and product

1986 1989 1995 2003 2004 2005 2007 2008 2009

Business Snapshot 2009

Vorführender




Business snapshot Short term challenge, long term opportunity

Order targets were being met. Demonstrated technical leadership with highest performance.All projects delivered on time.All projects meeting performance promises.

In the first half of 2008 Oerlikon Solar established a strong market position.

New orders delayed due to the inability for customers to get financing.

And then…

the financial crisis hit!

Expect 6 to 9 months before growth returns.

Customers build plants today for markets in 2010.Fundamental need and benefits of PV have not changed. Political winds are favorable.


Priority

one Focus on customers

Keep existing customers satisfied by continuing to deliver on time and at or above performance.

Focus on new customers with state or balance sheet funded projects.

Enhance Customer Service Program.


Priority two Full speed on research and development

Stay on our technology roadmap.

New upgraded products stay on schedule.

$0.70/Wp (Grid Parity) offered by end of 2010.

Vorführender


On-track to receive TüV Certification for micromorph process in Q2/2009


Priority tree Operational efficiency

Cost reduction

-

headcount reduction

-

overhead trimmed

-

simplified organizational structure

-

short-time work and holiday reductions extended

Delay non-priority programs

Manufacturing, production and assembly activity will be scaled back temporarily

Strict cash management

-

Manage supplier’s obligations

Vorführender


CapEx: we will continue to grow our R&D investment year over year and make predent investmens in R&D cap ex to execture on our R&D roadmap to grid parity.


Project update

Customer Technology Type Contract

Signed

Move-In

On-TimeSOP

On-TimeMW

Bosch/Ersol Amorphous Equipment 40

Schüco Amorphous Equipment R&D

Schott Amorphous Equipment 40

CSG Amorphous Equipment 20

Sun Well Amorphous End-to-End 50

Inventux Micromorph® Equipment 30

HelioSphera Micromorph® End-to-End 30

Tianwei Amorphous End-to-End 46

Auria

Solar Micromorph® End-to-End 60

Pramac Micromorph® End-to-End 30

Sun Well (2) Micromorph® End-to-End 60

Sun Well (3) Micromorph® End-to-End 120

Gadir Amorphous End-to-End 40

Chint Micromorph® Equipment 40

Total more than 600 MW


Highlights in 2009 What has been achieved so far

BREAKING NEWS !Oerlikon Solar receives

Micromorph®

Master Certificate by TÜV Rheinland

Sun Well 40 MW production level reached one month ahead schedule

Joint forces with TEL for sales and customer support in parts of Asia, Oceania and Japan

Oerlikon Solar Receives Micromorph®

Master Certificate

New record Micromorph® module with 151 Watt performance and over 11% efficiency (initial)

Oerlikon Solar KAI 1200 PECECVD system wins the Cell Award 2009 in the category “Best technical product for thin-film module manufacturing” shortlistedagainst AMAT’s Sunfab!

Focus on cents

per kWh Panel price

is

not

the

whole

story

Vorführender




Module cost of ownership calculation

Material Cost

Gas, glass, lamination, foil, consumables, etc.

Investment Cost

Equipment, line automation, back-end, etc.

Labor CostOperators, technicians, management, etc.

ThroughputGlasses per hour

Yield% sellable modules

Uptime% of production availability

Power EfficiencyModule driven by conversion

+

+

x

xMoney

Material Cost

Investment Cost Labor Cost

ThroughputYield UptimePowerWp

Calculation

1

x

=


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0($/W)

1.51

0.65

2.16

1.72

3.88

Module Cost

Module Margin

Module Price

BOS Price

System Price

Inverters

Mechanical

ElectricalLand

Current cost structures –

9% efficiency Roadmap to end of 2010 –

10% efficiency

Ownership Cost (NPV)+

Cost of Electricity

$0.16/kWh=

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0.70

0.30

1.00

1.28

2.28

Module Cost

Module Margin

Module Price

BOS Price

System Price

Inverters

Mechanical

ElectricalLand

Ownership Cost (NPV)

+Cost of

Electricity $0.09/kWh

=

Grid ParityGrid Parity

Assumptions:

10 MW project in California

ITC & Accelerated Depreciation

58% Equity@12%, 42% Debt@7%

Grid Parity approx: $0.12/kWh

Assumptions:



58% Equity@12%, 42% Debt@7%


Price development along PV value chainOerlikon Solar Micromorph®

Panel

Assumptions:



58% Equity@12%, 42% Debt@7%


Assumptions:



58% Equity@12%, 42% Debt@7%


Vorführender


Model costs along the entire PV value chain. Takes into consideration the effect of subsidies, tax structure, capital structure and the discounted value of the investments. Left Chart LCOE modeling with cost structure of current 125W panel. Here the production is calculated back from module ASP using 30% GM. Right Chart LCOE modeling with our roadmap cost structure in 2012 i.e. for the equipment contracted end of 2010 or 1h 2011 Panel Watt 135W


0

20

40

60

80

100

Maintenance2008 Material

cost Capex

and others

Efficiency Labor 2010

% Cost

$ 1.50/Wp $ 0.70/Wp

Cost of ownership development to grid parity Oerlikon Solar Thin-Film, Micromorph®

Roadmap

Vorführender


Let me summarize the different cost reduction drivers and put them into perspective. In 2008, the total cost of ownership for micromorph amounted to $1.5/Wp. Through the reduction of material costs, increased output, higher efficiency and uptimes we target to achieve $0.7/Wp by end of 2010. As you can see from the chart, the majority of the cost savings will be contributed by lower material costs and higher throughout, who both account for c. 20% of overall savings


1000

800

600

400

200

0

Cap

acity

MWp Fab

nominal capacity

Amorph Micromorph Tandem

2006 2007 2008 2009 2010 2011 2012

Module effiency

Path to grid parity Oerlikon Solar leading technology

Grid Parity0.7$/Wp

CoO CapEx

0

0.5

1

1.5

2

2.5

3

3.5

4

2006 2007 2008 2009 2010 2011

$/W

p

Proven

Thin-Film Manufacturing

Solutions

Vorführender




Thin-Film Solar Modules Cell Structure Manufacturing

Amorph

Thin-Film solar cell basics

Thin-

Film


Cell Cross Sections

Micromorph®

process technology

a-Si

AmorphSingle Junction

a-Si

μc-Si

Micromorph®

Tandem Junction

Spectral Cell Sensitivity

Near IR

a-SiTop Cell

μc-Si Bottom

Cell

Micromorph®

Tandem Junction

AmorphMicromorph Tandem

Micromorph®

technology delivers up to 50% more power.

Vorführender


While growth forecasts for the PV market and the thin-film segment give reasonable reference points for assessing growth prospects, the actual growth of the thin-film equipment market is partially decoupled. Key drivers of the thin-film equipment market have been identified as being the following: Rapid growth of the solar thin-film PV sector: Forecasted production capacity expansion in the sector is driving demand for new production lines Ramp-up of capacities and lead-time for investments: Ramp-up of production lines usually takes approximately 6 months with significant output improvements in the following 6 months. Consequently the ‘nominal’ output of a production line will usually be achieved only 12 months after start of production. The forecasted PV market size therefore has to be put in relation to FY average capacity rather than FYe installed capacity Continued focus on production cost reductions: Triggering demand for state-of-the-art production lines and consequently replacement and upgrade of current production lines Pricing: The envisaged decline in cost per Wp is due to increased investments in R&D which will subsequently lead to higher efficiency rates Productivity gains: Installation of state-of-the-art production lines will increase reliability and optimize production processes


Line Automation

Contacted Tested Device Encapsulation-Lamination

Back-End

Contact White Reflector

Edge Isolation

Flasher Cross Contact

Lami- nation

Junction Box

Flasher

PartnerOerlikon Solar

Front-End

VocClean CleanTCO FC Laser PECVD Laser TCO BC Laser

MetrologyOerlikon provides end-to-end (E2E) production solutions…


…and all critical components for module production…

Used for patterning

Subdivide the continuous thin-film layer into individual cells and create serial connections between them

Laser Scribers (LSS) Define Cells

Applies the photovoltaic thin-films which convert light into electrical energy

Capacity to produce both amorphous solar modules and micromorph solar modules

PECVD (KAI) Deposit PV Material

Allows applying transparent conducting front and back contacts

Base electrode (cathode) is deposited followed by the application of the anode

LPCVD (TCO) Deposit contacts


…with demonstrated rapid ramp-up

First 25,000 panels Second 25,000 panels Third

25,000 panels

Module power distribution ramps

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47

Weeks since SOP

FAB - A FAB - B

200% improvement of production levels at week 21

Ramp-up phase

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47Weeks after SOP

FAB - B FAB - A

• Target yields achieved after four weeks

• Yield much stable compared to earlier project

Ramp-up yield


On track to achieve grid parity by 2010.

Prove solutions for high volume thin-film silicon solar module production with more than 700’000 produced panels.

Thin-film is the fastest growing PV segment, creating

a USD 45 billion total solar market opportunity by 2012

Short term challenges, long term opportunities Solutions for a solar powered world

Oerlikon Solar on track to offer grid parity solutions by the end of 2010

Proven manufacturing solutions

More than 900,000 panels already produced


Calendar and contact details

Media and analyst conference on semi-annual results 2009, SIX Zurich

August 27, 2009

Key figures for the third quarter 2009October 22, 2009

Corporate Investor Relations

Frank Heffter

T: +41 58 360 96 22

Roland Bischofberger

T: +41 58 360 97 14

F: +41 58 360 91 93

[email protected]

www.oerlikon.com/ir

Contact details

mailto:[email protected]

Thank you for your attention.

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