ersol – a German success story in Photovoltaics

ersol – a German success story in Photovoltaics
December 4, 2008
CONFIDENTIAL
Disclaimer
THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATION AND DISCUSSION PURPOSES ONLY AND IS NOT, AND
MAY NOT BE RELIED ON IN ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE OR AS AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY AN INTEREST IN THE VENTIZZ FUNDS OR ANY ENTITY OF THE VENTIZZ GROUP. THE
INFORMATION CONTAINED HEREIN MUST BE KEPT STRICTLY CONFIDENTIAL AND MAY NOT BE REPRODUCED OR
REDISTRIBUTED IN ANY FORMAT WITHOUT THE APPROVAL OF VENTIZZ CAPITAL PARTNERS ADVISORY AG OR VENTIZZ
PRIVATE EQUITY AG.
IN CONSIDERING ANY PERFORMANCE DATA CONTAINED HEREIN, YOU SHOULD BEAR IN MIND THAT PAST OR TARGETED
PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO ASSURANCE THAT THE VENTIZZ FUNDS OR
ANY FUTURE SPAC WILL ACHIEVE COMPARABLE RESULTS OR THAT TARGET RETURNS WILL BE MET IN THE FUTURE. IN
ADDITION, THERE CAN BE NO ASSURANCE THAT UNREALIZED INVESTMENTS WILL BE REALIZED AT THE VALUATIONS SHOWN
AS ACTUAL REALIZED RETURNS WILL DEPEND ON, AMONG OTHER FACTORS, FUTURE OPERATING RESULTS, THE VALUE OF
THE ASSETS AND MARKET CONDITIONS AT THE TIME OF DISPOSITION, ANY RELATED TRANSACTION COSTS, AND THE TIMING
AND MANNER OF SALE, ALL OF WHICH MAY DIFFER FROM THE ASSUMPTIONS ON WHICH THE VALUATIONS CONTAINED
HEREIN ARE BASED. ANY INTERNAL RATE OF RETURN (“IRR”) PRESENTED ON A “GROSS” BASIS DOES NOT REFLECT ANY
MANAGEMENT FEES, CARRIED INTEREST, TAXES AND ALLOCABLE EXPENSES BORNE BY INVESTORS, WHICH IN THE
AGGREGATE MAY BE SUBSTANTIAL. ALL IRR PRESENTED ARE ANNUALIZED AND CALCULATED ON THE BASIS OF MONTHLY
INVESTMENT INFLOWS AND OUTFLOWS. NOTHING CONTAINED HEREIN SHOULD BE DEEMED TO BE A PREDICTION OR
PROJECTION OF FUTURE PERFORMANCE OF THE VENTIZZ FUNDS OR ANY ENTITY OF THE VENTIZZ GROUP.
EXCEPT WHERE OTHERWISE INDICATED HEREIN, THE INFORMATION PROVIDED HEREIN IS BASED ON MATTERS AS THEY
EXIST AS OF THE DATE OF PREPARATION AND NOT AS OF ANY FUTURE DATE, AND WILL NOT BE UPDATED OR OTHERWISE
REVISED TO REFLECT INFORMATION THAT SUBSEQUENTLY MAY BECOME AVAILABLE, OR CIRCUMSTANCES EXISTING OR
CHANGES OCCURRING AFTER THE DATE HEREOF.
CERTAIN INFORMATION CONTAINED IN THIS PRESENTATION CONSTITUTES “FORWARD-LOOKING STATEMENTS,” WHICH CAN
BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “EXPECT,”
“ANTICIPATE,” “TARGET,” “PROJECT,” “ESTIMATE,” “INTEND,” “CONTINUE” OR “BELIEVE,” OR THE NEGATIVES THEREOF OR
OTHER VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY. DUE TO VARIOUS RISKS AND UNCERTAINTIES, ACTUAL
EVENTS OR RESULTS OR THE ACTUAL PERFORMANCE OF ANY OF THE VENTIZZ FUNDS MAY DIFFER MATERIALLY FROM
THOSE REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS.
THE INFORMATION CONTAINED IN THIS PRESENTATION HAS ALSO BEEN OBTAINED FROM SOURCES OUTSIDE OF THE
VENTIZZ FUNDS. WHILE SUCH INFORMATION IS BELIEVED TO BE RELIABLE FOR THE PURPOSES USED HEREIN, NEITHER
VENTIZZ CAPITAL PARTNERS ADVISORY AG OR VENTIZZ PRIVATE EQUITY AG NOR ANY OF ITS AFFILIATES OR PARTNERS,
MEMBERS OR EMPLOYEES ASSUME ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
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Table of Contents
• Ventizz Capital Partners at a Glance
• Case Study – ersol Solar Energy AG
2
Ventizz Capital Partners at a Glance
• The leading private equity investor in the Germanspeaking markets for expansion financing and mid-cap
technology buyouts
• Originally established in Düsseldorf in 2000
• Funds currently located in Jersey and Delaware with
advisory entities in St. Gallen (Headquarter) and
Düsseldorf
• 29 investments since inception
• Three highly successful IPO’s with ersol, SAF and
PV Crystalox and several trade sales
• Demonstrated superior investment performance
throughout all fund generations
3
Development of Ventizz Capital Partners
Key Figures of our Portfolio
Capital under Management* (m €)
640
675
€ 133 m
EBITDA
€ 626 m
Revenues
150
190
3,060 Employees
100
10
20
30
30
19 Portfolio Companies
2000
2001
2002
2003
2004
2005
2006
2007
2008
* Effective as of year-end; including all fund closings throughout the resp. calendar year
as of June 30th, 2008
4
Investments within Target Sectors
High Value-Added
Engineering
Renewable
Energy Related
Manufacturing
Information and
Communication
Technologies
5%
30%
Medical
Technology
15%
50%
5
Unique Middle Market Investment Profile
Development Stage
Differentiation
„ Established companies
typically with revenues from
€10 to €200 million
„ Positive Cash Flow
„ High value-added product
driven by application of
proven industrial technology
„ Companies at key point in
growth path
„ Proprietary or patented
technology
„ Stable management teams in
need of support to exploit
growth opportunities
„ Unique niche / sustainable
competitive advantage
„ Profitable with substantial
growth opportunities
f Product Extension
f Geography
f Add-on Acquisition / Consolidations
Controlling Stakes in
Applied Technology
Growth Businesses
„ #1, #2, #3 in the sector
„ Significant global presence /
revenues
Industries
„ High Value-Added Engineering
„ Renewable Energy Related
Manufacturing
„ Information and
Communication Technologies
„ Medical Technology
Geographies
„ Headquarter or main part of
operations primarily in
f
Germany
f
Switzerland
f
Austria
and adjacent markets
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Table of Contents
• Ventizz Capital Partners at a Glance
• Case Study – ersol Solar Energy AG
7
What is Photovoltaics?
Sun
Silicon
Ingots
Sand
Wafers
Solar Cells
Electricity
Modules
Systems
Source: ersol Solar Energy AG
8
Compelling Growth of the Solar Sector
Module production in GWp
22
19,6
20
18
15,9
15,1
16
14
12
10,8
10,2
10
8,7
8
7,0
6,0
6
1,8
4
2
4,0
1,8
1,3
0,8 1,2
1,0
1,7 1,7
2,5
2,6
1,9
2,3
3,4
3,6
5,3
5,2
4,3
2,5
2,2
0
2004
2005
2006
Photon International, Photon Consulting,
Mar 2007
Feb 2007
2007
EPIA expectations
Feb 2008
2008E
2009E
LBBW,
Feb 2008
2010E
Commerzbank,
Feb 2008
Source: ersol Solar Energy AG
Comments
• Solar sector has shown CAGR of 37% over the past 5 years
• Governments will extend subsidies to develop alternative/ renewable energy sources and reduce greenhouse
gas emission
• Estimates see solar sector growing with 40-90% p.a. until 2010 and at least 20% CAGR(1) through 2020
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ersol Group as of today
Key Facts
• One of the leading
integrated solar energy
companies
• Headquartered in
Erfurt, Germany
Recycling of silicon scrap
from molten waste, defective
goods, by-products and
waste products from the
semiconductor and solar
industry, as well as waste
from the ersol’s in-house
ingot production
Production of monocrystalline ingots and wafers
for in-house ersol solar cells
production as well as
external customers
Production of mono- and
multicrystalline solar cells
• Founded 1997 and
listed since 2005
Trading with solar cells
• Revenues of € 215 M as
of September 30, 2008
• Market capitalization
of € 1.2 BN as of
September 30, 2008
Production of thin-film solar
modules
• 1.176 employees as of
September 30, 2008
(1)
Production of solar modules
*
Source: ersol Solar Energy AG
10
Company Milestones until Exit of Ventizz Capital Fund II
ƒ Dr. Beneking
joins ersol as
Managing
Director
ƒ Production
capacity of 9
MWp
established
1997 2000
ƒ ersol Solarstrom
GmbH & Co. KG
established by
five private
individuals
2001
ƒ Break-even
(sales: €37.6 M,
EBIT: €3.4 M, net
income: €1.8 M)
ƒ aimex-solar established
ƒ Ventizz Capital Fund II
LP becomes
shareholder of ersol
ƒ Production capacity
expanded to 25 MWp
2004
ƒ ersol becomes
“Aktiengesellschaft”
(joint-stock corporation)
ƒ Dr. Beneking joins
management board
2005
ƒ Module production with
Chinese joint-venture
SESE begins
ƒ Entry into US market with
PowerLight contract
ƒ Capacity expansion of
wafer, solar cell and thinfilm totaling €200 M
ƒ Acquisition of Silicon
Recycling Inc. (SRS)
2006
ƒ JV with Chinese SESE
ƒ Acquisition of ASi to establish
ingot/ wafer business
ƒ Ventizz Capital Fund II LP
becomes majority shareholder
ƒ IPO of ersol AG on September
30, 2005 and inclusion in
TecDAX in December 2005
ƒ Production capacity for solar cells
reaches 60 MWp
2007
ƒ Ventizz Capital Fund III LP
and Ventizz Capital Fund IV
LP acquire a minority stake
of nearly 50% in ersol Thin
Film for €48 M
ƒ ersol Thin Film signs
cooperative agreement with
SCHOTT Solar
ƒ Agreement between
Ventizz and Bosch
regarding sale of majority
in ersol
2008
ƒ Thin-film module production site inaugurated
ƒ ersol raises €56 M cash through capital
increase
ƒ Largest cell sales contract with Solon valued at
more than €1 Bn
ƒ Largest silicon supply agreement with Hemlock
Semiconductor Corporation implying a
production volume of 1.8 GWp over 10 years
ƒ New cell production plant inaugurated in
Arnstadt, Germany with a current production
capacity of 100 MWp
Source: ersol Solar Energy AG
11
Evolution of ersol’s Value Chain from 2004…
Polysilicon
Ingot
Monocryst.
Cells
Modules
Wafer
From a pure play solar cell manufacturer…….
Source: ersol Solar Energy AG
12
…. to ersol’s Value Chain as of today
Polysilicon
Monocryst.
Ingot
Cells
Modules
Wafer
….to an integrated photovoltaics group
Source: ersol Solar Energy AG
13
ersol’s Production Facilities
Germany
Arnstadt
Wafer Fab
Capacity (MWp):
Erfurt
Cell Fab 1
Cell Fab 2
120
Capacity (MWp):
US
100
Capacity (MWp):
Camarillo
Thin Film Fab 1
80
Capacity (MWp):
Silicon
40
Capacity (MWp):
Start of production: 2002
Start of production: 2007
Start of production: 1999
Start of production: 2008
Start of production:
Products
Products
Products
Products
Products
ƒ Wafer
ƒ Monocrystalline cells
ƒ Monocrystalline cells
ƒ Thin-film modules
ƒ Silicon recycling
ƒ Multicrystalline cells
ƒ Multicrystalline cells
25
1996
Source: ersol Solar Energy AG
14
Leading Technology: Evolution of crystalline Products
Monocrystalline
Multicrystaliline
100mm2
1999
1.10Wp
125mm2
150mm2
156mm2
156mm23BB
210mm²3BB
2000
2003
2004
2006
2007
2.46Wp
3.47Wp
3.75Wp
4.04 Wp *
7.35 Wp
*… the world’s most powerful crystalline silicon cell (Watts per piece) in series
production (according to our knowledge)
Source: ersol Solar Energy AG
15
ersol’s financial Development from 2002 – 2008
Ventizz II as majority shareholder
1
1
„ 1
1
CAGR 2004 – 2008:
Sales 70.8 %
EBIT 120.0%
1
1
1
1. Maximum of Market Guidance
Strong growth in key financials achieved in the past and
estimated for the future
16
ersol was elected as “Deal of the Year 2008”
17
Investors in Applied Technology Buy Outs
German Advisory Office:
VENTIZZ Capital Partners Advisory AG
Graf-Adolf-Strasse 18
D-40212 Duesseldorf
Germany
Tel. +49-211-862-869-0
Fax +49-211-862-869-77
Swiss Advisory Office:
VENTIZZ Private Equity AG
Vadianstrasse 59
CH-9000 Sankt Gallen
Switzerland
Tel. +41-71-226-880-0
Fax +41-71-226-880-1
www.ventizz.com
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