Solar Panel 02

REC Solar –

Bankability pack

2 © 2012 REC All rights reserved. Confidential

REC continuously climbs up in the top 10 ranking by

increasing module shipments and thus its market share

The M/S of the Top 10 players increased slightly to 47,3,% compared to 45,8% in Q4’11

1) Branded and OEM module shipments; 2) Total market: Q4’11: 7,4 GW, Q1’12: 6,5GW

Sources: IMS PV Modules, Cells, Wafers & Polysilicon - Supply & Demand - Quarterly - Q2'12 Edition

Quarterly MW Shipments1)

Ranking based on Q1’12 shipments

Market Share2) (%)

Q4 2011 Q1 2012

5,1%

8,3%

5,8%

7,1%

5,9%

3,5%

2,2%

2,8%

2,3%

3,0%

196

149

539

160

191

241

343

379

380

495

254

217

170

161

203

436

520

425

611

373

185

163

141

240

319

355

582

370

634

508Yingli

First Solar

Trina Solar

Suntech

Canadian Solar

Sharp

Sunpower

REC Group

Kyocera

LDK

Q1’12 Q3’11 Q4’11

8,3%

7,6%

5,8%

5,8%

5,3%

3,7%

2,9%

3,0%

2,5%

2,3%


As largest European player in modules, REC has

reached the scale for sustainable success

PV Module Supplier Shipments and Market Shares

1) Branded and OEM module shipments; 2) Total 2011: 27,6 GW

Sources: IMS Q4’2011 PV Modules tracker

Annual Shipments1) in 2011

MW

Market Share2) 2011

(%)

7,6%

7,1%

5,8%

5,5%

4,8%

4,2%

2,8%

3,1%

2,8%

2,3%

2,2% 594

630

761

766

844

REC Group

Kyocera

Jinko Solar

Sunpower

Hanwha SolarOne

Sharp 1,147

Canadian Solar 1,322

Trina Solar 1,512

Yingli 1,604

First Solar 1,953

Suntech 2,096


With the refinancing, REC is well positioned to weather a

challenging market environment

1)

Notes: 1) Based on nominal values of bonds. Does not include fair-value adjustments of bonds and upfront fees.

2) Based on NOK 1.3bn Private Placement, NOK 250m subscription in the Subsequent Offering of up to NOK 375m, expected transaction costs of NOK 0.1bn and bank facility of 2.0bn

0.0

Net debt

proforma

~3.6

Net pro-

ceeds

1.45

Net

debt Q1

5.0

Cash

1.9

REC

debt

0.5

1.5

2.0

1.0

5.0

NOKbn

7.0

6.0

4.0

3.0

6.5

5.5

4.5

3.5

2.5

Proforma Q1 2012 nominal net debt after

proposed refinancing 1) 2)

NOKbn

7.0

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Liquidity

Q1

proforma

3.7

Undrawn

bank debt

0.3

Net

proceeds

1.45

Cash Q1

reported

1.9

Proforma Q1 2012 liquidity after proposed

refinancing2)

Q1 drawn bank debt

of 1.7bn vs new bank

facility of NOK 2.0bn

Through this refinancing REC’s shareholders and lending banks shows continued strong support

REC significantly reduced its

net debt and increased its

liquidity

No debt maturities until 2014

New financing package is

well perceived within the

industry and investors:

“The company will now

have a very strong balance

sheet and liquidity position

to withstand the

challenging market

environment“ (Source: DNB

Bank)

”The company is, in our

view, well-positioned to

weather difficult market

conditions for several

years. We reiterate our

BUY recommendation.”

(Source: DNB Markets

Equity Research)


REC well positioned to weather challenging market

”REC reported better than expected Q2 results, driven by cost

improvements and high volumes. Polysilicon costs decreased even

further, and the Singapore plant is well on track to be in the black for

H2 2012. […]

The revised [refinancing] plan significantly bolsters the

company’s balance sheet.”

(Håkon Levy, DNB Markets, 19/07/2012)

” Still making money in the industry shake-out […]

We believe REC has a good enough cost position, first of all within

REC Silicon, to be among the companies that could survive the

current shake-out or being acquired in the coming consolidation.

The company has improved its balance sheet, giving it more

financial headroom, and is well set to remain among the profit

making Tier 1 players in the PV solar industry.”

(Truls Kolsrud Engene, SEB Enskilda, 19/07/2012)

”REC surprised positively […]

Faster than expected cost reductions, a small loss

in the wafer division and slightly higher module

prices explain the positive deviation. […]

This impressive given the tough conditions both

externally and internally.”

(Preben Rasch-Olsen, Carnegie, 20/07/2012)

“REC has been exposed to the woes of the solar

sector, […] and has been quick to act. […]

The financial restructuring should leave REC with a

secure financial footing, cost-leading silicon

activities in the US, and low-cost integrated

downstream production in Singapore, all of which

we believe should be able to generate material

EBITDA margins.

(Jason Channell, Citi Research, 13/07/2012)

” Key highlights of the quarter [Q2’12] are the lower

costs than expected in Poly of $12/kg and module

cash costs to €71cts/w which come as positive

surprises.”

(Jean-Francois Meymandi, UBS, 19/07/2012)

Sources: DNB Markets, 19/07/2012; SEB Enskilda, 19/07/2012; Citi Research, 13/07/2012; Carnegie, 20/07/2012; UBS 19/07/2012

REC Market Intelligence


REC is among the leaders in the solar sector in terms

of market capitalization

2147

7496111

138

184

230262268

357368

1.021

Yingli REC

Market Capitalization by Company

In EUR million (as of 30. July 2012)

Note: GCL Poly is excluded from the Market cap sample due to its power business, which can not be separated

Exchange rates 30.07.2012: USD/EUR 0,81155; NOK/EUR 0,13422

Source: Bloomberg; Company websites

http://localizedusa.com/logos/sunpower-logo.jpg


In revenue generation, REC is holding a leading

position as well

406

704713861

1.047

1.363 1.470

1.549 1.660 1.674 1.714

1.890 1.986

2.259

Note: GCL Poly revenues include only its Solar business (poly + wafer revenues)

2011 avg. exchange rates: USD/EUR 0,7178; HKD/EUR 0,0921; NOK/EUR 0,1282

Source: Bloomberg; Company websites

Total Revenues 2011 by Company

In EUR million



Industry restructuring is currently in progress

Examples for recent bankruptcies, market exits and business model changes

April 2012: FirstSolar

pulls out of Germany,

and scales back its

operations in Malaysia

April 2012: , Q-Cells

SE filed for

bankruptcy

2012 2011

August 2011: Evergreen ,

Solyndra vand SpectraWatt

filed for insolvency

February 2012: Shut

down of Wafer and

Cell operations by

Conergy

Feb.-March 2012:

Shut down of Wafer

and Cell operations in

Germany by Schott

Solar

December 2011: BP

Solar pulls out of solar

operations

April 2012: SunPower

closed its Philippine

solar factory to cut

costs

March 2012: Hanwha

slides into losses in

Q4 2011 and

announces strategic

shift into downstream

December 2011:

Solon announces

insolvency

May 2012:Sovello and

Inventux file for

bankruptcy

June 2012:

Solarwatt and

Konarka file for

insolvency protection

June 2012:

Schott Solar

announces surprise

exit from c-Si

manufacturing



Margin 19% -185% -43% -96% 3% Margin 35% 26% 12% 6% 21%

REC Group - Financial highlights

EBITDA Revenues

NOK million

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Q1’

12

2,138

Q4’

11

2,865

Q3’

11

3,001

Q2’

11

3,391

Q1’

11

4,109

455

178

370

871

NOK million

1,500

1,400

1,300

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0

Q1’

12

Q4’

11

Q3’

11

Q2’

11

Q1’

11

1,449

EBIT

Margin Q1: 21%

-288-98 59202

772

NOK million

1,000

500

0

-500

-1,000

-1,500

-2,000

-2,500

-3,000

-6,000

-6,500

Q1’

12

Q4’

11

-2,738

Q3’

11

-1,282

Q2’

11

-6,260

Q1’

11

Margin Q1: 3%

EBIT before

impairment


Chinese balance sheets

coming under increased

scrutiny

In general, the higher the

ratio, the greater the

company's liquidity

Suntech, Jinko, Yingli,

and Canadian under most

stress

Low ratio implies potential

need to raise additional

capital and restructuring

of debt, or “forgiveness”

of part of credit from

Chinese banks as cash

flow prospects in 2012

are weak

REC shows the highest balance sheet strength among

its c-Si peers, well above the average level

0,87

1,57

0,70

0,47

0,75

1,29

0,75

1,07

1,98

Note: Quick ratio (or liquidity ratio) = (near-liquid assets ÷ short-term liabilities); A company with a Quick Ratio of less than 1 cannot currently pay back its

current liabilities; In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).

Source: Greentech Media, Q1 2012 Insight call

Quick ratio (Liquidity ratio) by company

In Q1 2012

1,97

Ø 1,05



REC continuous to show a healthy debt/equity ratio

Leading solar industry players are increasing their D/E ratio,

REC shows a healthy ratio with 0,50 in Q4 2011 and 0,51 in Q1 2012 compared to the majority of industry peers,

2,7

1,11,21,11,21,20,80,9

0,50,5

6,7

3,4

2,62,8

2,12,01,6

1,40,90,9

7,7

3,5

2,8

2,12,12,01,81,6

1,00,9

Debt / Equity Ratio* comparison REC peers

Quarterly

* Calculation incl. bonds payable, notes payable and convertibles as part of debt

Source: Company statements

0,5 0,5 0,4

Q1 2012 Q4 2011 Q4 2010

Debt/equity ratios are for most players on the high side, whereas REC displays a healthy balance

ESTIMATES; BASED ON PUBLIC DATA




REC Group is continuously reducing its net debt

.

553605682

839934

-41%

Q1 ’12 Q4 ’11 Q3 ’11 Q2 ’11 Q1 ’11

Net debt levels of the top solar producers are rising Q-o-Q

Net Debt level development of the Top Solar Manufacturers

In EUR million

Note: EUR/USD exchange rate of 1,41 in 4Q10, 1,35 in 4Q11

Source: Company reports

REC reduced net debt level continuously

over five quarters

REC Group - Net debt development

In EUR million

-139

3037138

447317

891

666738

104252

171288

686

JA

Solar

Sunpower Trina

1.013

2.680

Jinko

2.049

1.273

Solar-

world

Suntech Yingli Renesola Canadian

Q4 2010

Q4 2011


REC Silicon –Cash production costs of $13/Kg

FBR production is the lowest cost in the industry

FBR cash production cost of 12.5 USD/kg

FBR production target of 15,000 MT in 2012,

40 percent above design capacity

2012 total production target up 1,000 MT to

21,500 MT

23

14

-13%

-39%

Q4’12

Target

23

12.5

7

3

Q1’12

23

12.5

7

3

Q4’11

26

8

4

Q3’10

42

16

4

Cash production cost

Depreciation

SG&A and R&D Silicon – FBR

USD/kg

Polysilicon supply curve as of April 2012

USD/kg - variable cost including SG&A = cash cost

Notes: 1) Assumes thin film supply of approximately 2,5 GW, 6,25 g/watt per module. Semiconductor demand at 28.000 MT

Source: Citi Investment Research and Analysis, 21.02.2012; Bloomberg New Energy Finance

“REC’s cash cost targets for silicon imply

a healthy EBITDA margin and would currently place REC as the

lowest cost producer in the industry” (Citi Group, Feb 2012)

EXTERNAL ANALYSIS

Date post:	24-Mar-2016
Category:	Documents
Upload:	expo-aviation
View:	246 times
Download:	3 times

Solar Panel 02

Documents