2. Disclaimer
This document has been prepared by TerniEnergia solely for information purposes and for use in
presentations of the Group’s strategies and financials. The information contained herein has not been
independently verified. No representation or warranty, express or implied, is made as to, and no
reliance should be placed on, the fairness, accuracy, completeness or correctness of the information
or opinions contained herein. Neither the company, its advisors or representatives shall have any
liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this
document or its contents or otherwise arising in connection with this document.
The forward-looking information contained herein has been prepared on the basis of a number of
assumptions which may prove to be incorrect and, accordingly, actual results may vary. This
document does not constitute an offer or invitation to purchase or subscribe for any securities and no
part of it shall form the basis of or be relied upon in connection with any contract or commitment
whatsoever. The information herein may not be reproduced or published in whole or in part, for any
purpose, or distributed to any other party. These materials do not constitute or form a part of any offer
or solicitation to purchase or subscribe for securities.
11
3. Agenda
Investment highlights – Stefano Neri (CEO)
Market growth – Paolo Ricci (Executive Board
Member)
2010 Financial Highlights - Paolo Allegretti (CFO)
Development Strategy and 2011-2013 Plan –
Stefano Neri (CEO)
2
4. Investment Highlights
Flexible business model
Italian leading player as a supplier of photovoltaic systems and energy producer
in the fast growing PV market
Significant presence in the reference market with substantial growth potential
Experienced Management Team
Reliable and efficient operating and commercial model
Listed on STAR Italian Stock Exchange
Over delivered expectations
3
5. A solid track record
Successful historical growth and balanced diversification of the business in the
power generation activity:
Solid free cash flow generation
Gained market shares, consolidating leadership in PV market, exploiting new opportunities
of growth
Profitability levels confirmed by quarter to quarter growth trend
Revenues EBITDA
CAGR 2008-2010 > 146%
(Mln €) CAGR 2008-2010 > 77% (Mln €)
80
70 99.9
60
50
46.8
40
31.9
30
20
10
0
2008 2009 2010
4
6. Agenda
Investment highlights – Stefano Neri (CEO)
Market growth – Paolo Ricci (Executive Board
Member)
2010 Financial Highlights - Paolo Allegretti (CFO)
Development Strategy and 2011-2013 Plan –
Stefano Neri (CEO)
5
7. Our positioning in the PV market value chain
POWER
UPSTREAM MIDSTREAM DOWNSTREAM
GENERATION
INSTALLATION
SILICON WAFERS CELLS MODULES GENERATION
DISTRIBUTION
Players: Players: Players: Players:
► Producers of silicon ► Manufacturers of solar cells ► System integrators ► Producers of
and wafers ► Assemblers of modules Role: electricity from the
Market structure Main countries: the US, Germany, China and Japan ► The management of the conversion of the
► Global authorization demand sunlight
Market structure:
► Concentrated ► 40% of the manufacturers are not integrated ► The design of the PV
Business characteristics: plant
► 60% are integrated
► Huge barriers to entry ► Installation
Business characteristics:
Business characteristics:
► Capital intensive
► Strong relationships with
► High degree of automation
local authorities are key
► High working capital
needs
Hemlock, MEMC, TerniEnergia
Tokuyama, Wacker
Chemie, M. Setek
REC, Yingli Green Energy
Bosch Solar Energy, PV Crystalox, RWE Schott, Sanyo,
Sharp, Solarworld, First Solar, Evergreen Solar
Suntech, Solarfun, Kyocera
Kerself, Q Cells, Sunpower
Conergy, Solon, SolarFabrik, Solaria
Solar Energy Italia,
Enerpoint, Enerqos,
Phoenix Solar, Juwi,
OPDE Group, Enel si
Enel Green Power, Edison,
Sorgenia, Enipower,…
TerniEnergia presence Positioning in the Italian PV industry value chain 6
8. Our business model: a fully integrated player
EPC Turnkey Solutions Business Power Generation Business
Drafting & feasibility studies 50:50 Joint Ventures with highly
reputable partners
Authorization procedures
►Financing of projects guaranteed
PV panels purchase and installation
►Leveraging “turnkey” expertise of
Plant construction TerniEnergia
Plant operation and maintenance “Full Equity” started in 4Q 2010
Customer support
Build Operate and Transfer
Build, Operate and Transfer (“BOT”) of
grid connected PV plants
7
9. Reliable and efficient business model
PROJECT PV PLANT REMOTE
SITE MARKETI CONTROL
DEVELOP CONSTRU AND
IDENTIFICATION NG
MENT CTION MAINTENANCE
Site identification Marketing Project Plant construction Plant operation
development and maintenance
► Agricultural and ► Feasibility ► Preparation of
industrial sites studies ► Authorization the final design ► Monitoring,
acquisition for process emergency
► Contract ► Materials
PV project services,
management planning and
implementation ordinary and
and job order procurement
extraordinary
opening
► Construction and maintenance
installation Customer
► Grid connection assistance
TerniEnergia’s unique business model enables in particular to:
► Control the entire construction process
► Optimize resources with a careful and synergistic management of construction sites and workshop
► Exploit the efficiency of trained, qualified and specialized personnel
► Optimize plant construction and installation timing through the planned integration of the typical activities of the
different phases required
► Long term relationships with clients thanks to maintenance and customer assistance contracts (20 years)
TerniEnergia’s business model allows full control of the entire operating process
8
10. A new business plan: PV strategic guidelines
TerniEnergia’s
reaction in 1H2011
Previous plan • Strong focus on PV Industry
based on • Development of large plants in JV and •Strong focus on PV Industry
«Terzo Conto FE to increase the power generation •Development of large plants in
Energia» business JV and FE to increase the power
generation business
•All plants covered by “Salva
Alcoa” law connected to the grid
Cutting •28 photovoltaic plants of
incentives • Stop PV investments industrial size, for a cumulated
• Financial difficulties in planning new installed power capacity of 57.3
and legislation
plants MWp connected between July
vacatio and August
9
11. A new business plan: PV strategic guidelines
TerniEnergia’s
challenge to grow
New • Increases the incentive decalage
“Quarto • Introduces restrictions on large • Property management systems
Conto ground PV plants and an annual of the PV plants to maximize
installation cap revenues from incentived fees
Energia” and sale of produced energy
• Optimization of plant operation
and maintenance in order to
achieve revenues stability and
high margins
• Focus on reduction of production costs
• Expansion into foreign
Market and increasing installation quality, e.g.
countries, attraction strategy of
on roof top
changing foreign investor (e.g.
• Return of foreign and large utilities international PV panels
investments productors) and focus on
industrial roof top plants
• Acquiring stakes in Italian
companies in order to enforce
industrial activity and
diversifying energy efficiency
Competitive • Retreat of foreign investors business
framework • Overproduction of PV panels
10
12. A new business plan: Energy Efficiency guidelines
Market size limited but grew in the late 90's, to reach
€ 10 billion between the USA and EU in 2008
Hold strong growth over the next 10 years in Europe,
Market Overview even after approval of the Directive “Pacchetto Clima“
European market (EU-25) estimated at least € 75
billion for 2020, with expected growth of 10 times
between 2008 and 2020
11
13. A new business plan: Energy Efficiency guidelines
Accredited by the AEEG and the GME
investments in projects that generate energy
Energy Efficiency
efficiency for the customers
Experience
The energy savings generated by our projects amounted to
over 150 million kWh
Identification of intervention areas, verification of technical
feasibility and verification of the economic and financial
viability of the project
Our activities
Planning of the intervention, supply of materials, execution
and our proposal
of work - retrofitting and upgrading – plant testing
Management and maintenance of the facility, ensuring the
smooth functioning of the same
Industrial Energy Efficiency produces High Margins (over 30%)
12
14. A new business plan: Energy Efficiency guidelines
Contracts for Energy Spread or Energy Service with Public and Private
Lightning
projects Target: 34,000 LA in management by 2013, total investments of € 15 mln
In FTT Focus: Public illumination
Medium and large industrial groups and multi-facility in private lighting
ORC
Technologies: ORC (TerniEnergia), motors, inverter, others
Organic (es., actions on productivity lines, ecc.)
Rankine Cycle
Engineering Achievements "turnkey" for the redevelopment of lighting systems for other energy
efficiency
EPC Target: 23,000 LA in management by 2013;
13
15. Agenda
Investment highlights – Stefano Neri (CEO)
Market growth – Paolo Ricci (Executive Board
Member)
2010 Financial Highlights - Paolo Allegretti (CFO)
Development Strategy and 2011-2013 Plan –
Stefano Neri (CEO)
14
16. Historical evolution of installed capacity (MWp)
5%
33%
FE (MWp)
JV (MWp)
62% EPC (MWp)
FE (MWp) 10,40
Total installed Plants 242
JV (MWp) 61,20
Total installed Power (MWp) 187,00
EPC (MWp) 115,40
Source: Company information, as at 1° September 2011
15
17. Sound financial structure with outstanding growth track record
Revenues EBITDA Net income
+900%
14,6
9,0
9%
99,9
8%
7,3
3,7
46,8
31,8
1,7%
2,3 1,7%
10,0 0,8 0,2 0,5
2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010
Double-digit organic growth with margins of industry best in class
16
Source: Company information
18. Sound financial structure with outstanding growth track record
Revenues EBITDA Net income
16,2 9,9
116,4
13,6
5,9
5,4
7,6 4,6
3,6
36,3 8,9
5,9
20,6
1,2
2,8
1H 2009 1H 2010 1H 2011 1H 2009 1H 2010 1H 2011 1H 2009 1H 2010 1H 2011
Double-digit organic growth with margins of industry best in class
17
20. Sound financial structure with outstanding growth track record
Net debt (€m) and net debt / EQUITY(x) NWC (€m) and NWC / Sales (%)
Net 2,7 5.7 36 NWC 12.4 23,2 39
debt
51,5
1,2x
22,2
11,0
0,2x 0,2x
(8,3)
(19,6)
(16,4)
2009 2010 1H 2011
Financial Indebtness Cash and CashEquivqlents
NFP/Equity
19
21. Focus on joint ventures
JVs – Sales and EBITDA (€ ‘000) Comments
19.8 49,3 According to IFRS, JVs are not included in the
consolidated EBITDA nor in the net debt of TerniEnergia
13.3 27,4
JV business model: 15% equity (shared ½ by JV’s
10.604
partners) – 85% debt
84,2% 60 plants completed as of June 30, 2011
Fatturato Ebitda
Ebitda margin Total capacity: 61,2 MWp in operation (40 in 2011)
8.932
JVs consolidated net debt: €197.9m as of June 30, 2011
of wich €9.9m of cash
► Approx. 50% long term debts (18/20 years)
4.112 ► Approx. 80-90% swapped at a fixed rate in order to
stabilise cash-flows
42,7%
The EBITDA margin is typically affected by the time
gap between the installation phase (when most of the
operating costs are incurred) and the grid connection
(when the plant start generating revenues)
1.756 At regime, it is expected that EBITDA margin could
range between 80-90% according to the electricity
production results
2009 2010
Cumulated installed capacity MWp Cumulated operating MWp
20
Source: Company information
22. 2012- 2013 Plan: EBITDA and Revenues
EBITDA and REVENUES TREND
(Euro ML)
CAGR 2012-2013 = 8%
100 93
Target 2012E-2013E
90 86
80
2012E
70
• Revenues: 86 Euro Mln
60
50 • EBITDA: 16 Euro Mln
CAGR 2012-2013 = 12%
40
30
18 2013E
20 16
• Revenues: 93 Euro Mln
10
0 • EBITDA: 18 Euro Mln
EBITDA Revenues
2012 E 2013 E
2012 E: 18%
EBITDA Margin
2013 E: 19%
21
23. 2012- 2013 Plan: Capex targeted
Capex Targeted 2012-2013
(ML euro)
CAGR 2012-2013 = 8%
12,0
11,5
10,9
11,0
10,0
2012 2013
Total targeted Capex for JV and Energy Efficiency Business
D/E 2013: 1.0
22
24. Agenda
Investment highlights – Stefano Neri (CEO)
Market growth – Paolo Ricci (Executive Board
Member)
2010 Financial Highlights - Paolo Allegretti (CFO)
Development Strategy and 2011-2013 Plan –
Stefano Neri (CEO)
23
25. A new business plan: development guidelines
“A strong reaction to changes in PV regulatory and incentives”
Advanced approach in the new industrial energy
efficiency business in 2011 since now. Business no
policy driven
Starting abroad PV industrial activity through first EPC
contract with a subsidiary of an european major utility
PV activities as EPC Turnkey and JV providers: target
capacity over 120 MWp in 2012-2013 (PV modules
partially included)
Profitability in power generation business through JV
and Full equity plants guaranteed for 20 years
Keep unchanged the dividend value
24
28. Highly skilled management team
Highly experienced management with deep industry knowledge on board since the creation of TerniEnergia
Well connected in Italian PV business
Running a young, dynamic and skilled organization to deliver strong results
Stefano Neri – Chairman and CEO of TerniEnergia
Born in Terni on 14 September 1959
Degree in Law at “La Sapienza” University in Rome
Certified attorney since 1985, specialized in administrative law, authors of several papers in the field
Experienced and reliable management team
1998-2000: vice president at “Interpark Servizi per l’Ecologia S.r.l.” (Group Falck)
Founder of T.E.R.N.I. Research, from September 2006 is chairman of TerniEnergia BoD
Paolo Ricci – Executive Director – Business Development
Born in Terni on 15 July 1940
Degree in Electric Engineering at “La Sapienza” University in Rome
1978-2000: several managerial roles at Enel S.p.A. before becoming head of Transmission sector division
2000-2005: responsible for the engineering and the management of “Rete Elettrica Nazionale” plants at
TERNA S.p.A.
From 2007 is a member of TerniEnergia BoD, and chairman of the BoD of Solar Energy S.r.l., Energia
Alternativa S.r.l., Energie S.r.l. and Foto Solare Settima S.r.l. JV
Fabrizio Venturi – Executive Director – Chief Operating Officer
Born in Terni on 14 February 1964
Degree in Sociology at “La Sapienza” in Rome
1990-2007: CEO at Venturi S.p.A., a company operating in the realization of electric industrial plants.
From August 2007 is a member of TerniEnergia Board of Directors
Paolo Allegretti – Chief Financial Officer and Investor Relator
Born in Terni on 6 July 1971
Degree in Business Administration at “La Sapienza” University in Rome
2002-2008: head of the internal control and financial controller at Keryos S.p.A.
From October 2009 is CFO at TerniEnergia, after being head of the Planning & Control department from
2008 and head of Internal Control from 2009 27
27
29. “Quarto Conto Energia”
Deadline extention to enter in the third feed in tariff (August 31th, 2011 instead of
June 30th, 2011);
Fixing, only for the big PV Plants, of a cap, for each year until 2016, in MWp and in
sum of money to provide FIT. Follow the table:
june 2011 - First Second First First Half Second Second First Second First Second Total
december Half Half 2012 Half 2013 Half 2014 Half 2014 Half Half 2015 Half Half 2016
2011 2012 2013 2015 2016
Cost CAP
300 150 130 240 240 200 200 155 155 80 80 1.930
€/mio
General
level of 1.200 770 720 1.115 1.225 1.130 1.300 1.140 1.340 1.040 1.480 12.460
MWp
The establishment of a FIT application register to run a ranking which is previously
established based on the progress of the PV Plant installation booked;
28