Company Presentation January 2009

Transcription

1 Company Presentation January 2009

2 Disclaimer The presentation is prepared by LDK Solar Co., Ltd. ( LDK Solar or the Company ) and is being presented solely for the purpose of corporate communication and general reference. The presentation is not intended as an offer to sell, or to solicit an offer to buy or form any basis of investment decision for any class of securities of the Company in any jurisdiction. All such information should not be used or relied on without professional advice. The presentation is a brief summary in nature and do not purport to be a complete description of the Company, its business, its current or historical operating results or its future prospects. This presentation contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. This presentation is provided without any warranty or representation of any kind, either expressed or implied. The Company specifically disclaims all responsibilities in respect of any use or reliance of any information, whether financial or otherwise, contained in this presentation. 2

3 Company Overview

4 LDK at a Glance Company Description Key Figures Leading manufacturer of multicrystalline solar wafers. Expanding annualized wafer production capacity from 420MW at the end of 2007 to 1.20 GW by the end of the third quarter of Currently forecasting 1.46GW by the end of 2008, 2.30 GW by end of 2009 and 3.20 GW by end of Constructing in-house polysilicon facilities, with expected production of 3,000-5,000 MT in Diversified customer base mainly consisting of top PV cell and module manufacturers. (US$'MMunless noted otherwise) 4Q07 1Q08 2Q08 3Q08 Annual Capacity (MW) ,200 Net Sales $192.8 $233.4 $441.7 $541.8 Growth(%) 21.4% 21.1% 89.2% 22.7% Gross Profit Margin(%) 30.1% 27.7% 25.4% 22.7% Operating Profit Margin(%) 24.2% 22.5% 22.7% 19.9% Net Income (2) Margin(%) 25.5% 21.3% 33.9% 16.3% EPS (Diluted) $0.44 $0.45 $1.29 $0.77 Silicon Ingot and Block Wafer 4 Note: 1 Net income is defined as the net income available to ordinary shareholders

5 Key Investment Highlights 1 Leading Wafer Manufacturer with Rapid Capacity Expansion 2 Cost Leader in Wafer Manufacturing Industry 3 Diversified Global Customer Base with a Strong Sales Backlog 4 Continuous R&D efforts on Technological and Product Innovation 5 Upside Potential from In-house Polysilicon Production 5

6 1 Leading Wafer Manufacturer with Rapid Capacity Expansion Wafer Capacity Expansion Plan (MW) (1) Wafer Plant 3,200 2,300 1,460 1, Q07A 1Q08A 2Q08A 3Q08A 2008A 2009E 2010E 6 Note: 1 Annualized wafer production capacity as of period/year end

7 2 Cost Leader in Wafer Manufacturing Industry Economies of Scale Cost reduction due to increase of production / capacity Wafer Thickness Reduction In-House Polysilicon Production 180-micron and 200-micron wafers in mass production Currently under construction and expected polysilicon production in 1Q09 Installed annual manufacturing capacity of 16,000MT by the end of 2009 Kerf Loss 120-micron wire thickness in trial production Yield Improvement Reduce wafer losses such as breakage Geographic Advantage Crucible Domestic Furnace China-based operation Close proximity to crucible producer Jiangxi Sinoma & polysilicon plants Crucible cost declining from 2Q08 Targeting 70% capacity from Jiangxi Sinoma by end of 4Q08 Exclusive partnership with JYT 800-KG loading furnace Lower CAPEX to ramp up 3.2 GW capacity in 2010 Slurry Recycling In-house slurry recycling system in place Wire Saw Use new model wire saw 7

8 R&D Roadmap Parameter 2007 Current Status Future Goals (2013) Ingot Weight 270kg 450kg 1,000kg Ingot Energy Consumption 9.2 kwh/kg 8.0 kwh/kg 6.0 kwh/kg Wafer Size 156X156 (mm 2 ) 156X156 (mm 2 ) 210X210 (mm 2 ) Wafer Thickness 220μm 180μm 120μm Kerf Loss 175μm 155μm 130μm Polysilicon Consumption 8-10 g/w 6-8 g/w 4-5 g/w Cell Efficiency (with Customers) 15.3% 15.8% 18.0% 8

9 3 Diversified Global Customer Base with a Strong Sales Backlog Germany France Belgium China Netherlands Canada Japan Korea U.S. Italy Greece Silcio S.A. Greek India Taiwan 9

10 3 Diversified Global Customer Base with a Strong Sales Backlog Recently Signed Contracts November 14, year contract for 435 MW, commencing in 2009 October 20, year contract for 70 MW, commencing in 2009 October 17, 2008 US-based leading supplier 3-year contract for 90 MW over 3-year, commencing in 2009 September 12, year processing service agreement to process minimum of 20,000 MT upgraded metallurgical grade (UMG) solar-grade silicon September 5, year contract for 750 MW, commencing in 2009 September 3, year contract for 550 MW, commencing in 2009 August 29, year contract for 440 MW, commencing in 2009 August 13, year contract for 300 MW, commencing in 2009 July 16, year contract for 400 MW, commencing in 2009 June 30, 2008 June 13, 2008 May 5, 2008 April 4, 2008 April 2, 2008 Solar PV Corporation / Silcio S.A. Greek 10-year supply contract for 800 MW, commencing in 2009 Follow-on to 3 year contract signed in Oct year supply contract for 70 MW, commencing in year supply contract for 540 MW, commencing in and 6-year contracts for an aggregate of less than 100 MW, both commencing in year supply contract for more than 640 MW, commencing in mid

11 3 Diversified Global Customer Base with a Strong Sales Backlog Backlog (in MW) (1) 10,920 1,702 1, E 2010E E Strong customer demand from China, rest of Asia, Europe, and N. America Secured long term contracts, ranging from 5 to 10 years Backlog more than 14GW through 2018, with down payments from customers, plus 6GW of wafer processing order Customer demand strongly supports our manufacturing capacity expansion Note (1): As of Nov.15, 2008, based on signed contracts. 11

12 4 Continuous R&D efforts on Technological and Product Innovation Dedicated R&D efforts to secure cost competitive leadership Dedicated R&D team Production process enhancement Cooperation with Jiaotong University Locally-produced quality consumables and supplemental equipment Cooperation with Nanchang University Producing lower-cost consumables Improvement of manufacturing process Solidification purification process Ingot size Wafer thickness Polysilicon kerf loss Recycling of silicon material Use of domestic material 12

13 4 Continuous R&D efforts on Technological and Product Innovation Terra Wafers Standard Mono-Wafers Aurora wafers Bright Wafers Standard Multi-Wafers Nova Wafers Anticipated Cell Efficiency Terra Wafers: N-type Mono-wafers for high-efficiency cells Aurora Wafers: Mono-crystalline wafers with innovative casting process Bright Wafers: Multi-crystalline wafers with improved quality Nova Wafers: Multi-crystalline wafers with UMG silicon 13

14 5 Upside Potential from In-house Polysilicon Production Status Update 1,000 MT polysilicon plant is currently in production, expected to ramp up to full designed capacity in mid ,000 MT polysilicon plant construction remains on schedule, production expected to commence in 2Q09 Plan to produce an aggregate 3,000-5,000 MT of polysilicon in 2009 Announced Partnerships Management and Engineers EPCM Equipment Hired a senior team of 8 polysilicon engineers from China, Europe and USA Built a team of over 200 engineers and researchers TCS Gas Recovery 14

15 LDK 1,000 MT/Y Polysilicon Plant Update Jan. 5th, 2009

16 1,000 MT Poly Plant Construction Update

17 1,000 MT Poly Plant Construction Update

18 1,000 MT Poly Plant Construction Update TCS Purification and Off Gas Recovery System

19 1,000 MT Poly Plant Construction Update

20 1,000 MT Poly Plant Construction Update Fire water pump station Process control room Compressed air 20 Cooling water pump station Off-gas recovery system Hydrogen System

21 1,000 MT Poly Plant Construction Update TCS Storage Tanks CVD Reactors (1) TCS Distillation & CDI/OGR TCS Distillation (Nightscape) 21 Switchgear control room Switchgear Station CVD Reactors (2)

22 15,000 MT Poly Plant Construction Update LDK 15,000 MT/Y Polysilicon Plant Update Jan. 5th, 2009

23 December 3rd. update

24 December 3 rd. update

25 15,000 MT Poly Plant Construction Update Project achieved 10,007,517 safe effort hours without a Lost Work Day Case as of November 6, 2008 Work is progressing at site 7 days/wk and 12 hours/day with some extended time. Reactor Line 1 - Two 36-rod reactors installed, transformers ready for installation - Pipe rack main header progress of 90% - Branch lines for two 36-rod reactors fabricated - Bus bars being installed around the two 36-rod reactors - Architectural and HVAC work in progress - Building lighting and power installation on-going Reactors Lines 2 & 3 - Structural concrete work complete. Building ready for equipment installation - On-going erection of structural steel and Architectural work in progress 25

26 15,000 MT Poly Plant Construction Update Product Handling Building - Work continuing on interior Architectural works - Main headers for Line 1 installed - On-going installation of switchgear and MCCs at electrical room - On-going installation of diamond wire cutting machine - Completed mechanical installation of elevator, waiting on power for testing - Installed air coolers for Lines 1, 2 and 3 - Continuing with erection of external panels - Ongoing building lighting and power installation Converter Building - Building ready to receive the Converters - Installed main headers for Line 1 - Installation of grating on the operating floor completed - Installation of air coolers on top of the building in progress - Transformer rooms are ready for equipment installation - On-going installation of bus bars for the first Converter - On-going installation of electrical equipment 26

27 15,000 MT Poly Plant Construction Update OGR Line 1 - Civil work is complete - Structural steel installation is continuing in all process structures - Six hydrogen compressors installed - Equipment has been installed in the Refrigeration Building - Pipe Rack structural steel installation completed - Piping installation initiated in all process areas OGR Lines 2 and 3 - On-going erection of delivered equipment - Structural steel erection in progress TCS Line 1 - Civil works completed. Architectural work in Control Building complete - Steel Structure is 80%, pipe rack piping is 70% - Equipment installation is 25%, including largest columns - Erection of steel structure for the FBR s is in progress - Fabrication of two oil tanks completed; fabrication of two spheres is 90% 27

28 15,000 MT Poly Plant Construction Update TCS Line 2 - Civil works 65% complete, architectural work is 70% complete TCS Line 3 - Civil works are 90% complete, architectural work is 75% complete - Steel structure installation for main pipe rack started Reactor Cooling Tower - Civil, structural and architectural work along with installation of fans, motors and internals is complete - Piping installation is in progress - Foundations ready for pump installation Main Cooling Tower - Civil, structural and architectural work is complete and installation of fans, motors and internals is in progress - Piping installation is in progress - Foundations ready for pump installation 28

29 15,000 MT Poly Plant Construction Update Waste Water Treatment - Tank welding is in progress - The two story WWT building is nearing completion Vent Treatment and Emergency Vent Treatment - Foundations for equipment installation completed and awaiting release of the Ceilcote equipment from customs - Construction of two aboveground concrete tanks is in progress Laboratory - Construction of the building is well underway and the building will be ready by mid-december Diesel Fuel Tanks - Both tanks have been painted - Curbs around the tanks have been completed 29 Plant Water System - The plant water tank has been hydrotested - The building housing the pumps and filters is complete - The plant water pumps have been installed and foundations for filters are complete

30 15,000 MT Poly Plant Construction Update Fire Water System - Both the Firewater Tanks have been hydrotested and painted - The Firewater Pump House is complete and the firewater pumps are currently being installed Boiler House - All five boilers have been installed and piping installation is well underway - The Boiler House building is complete - Installation of the pumps, deaerators and other pertinent equipment is well underway Instrument/Plant Air System - The building is complete - All equipment has been installed and piping installation is nearing completion Demineralized Water System - The building is complete - The equipment installation is well underway Electrical/MCC Building - The building is complete and some of the electrical equipment has been installed 30

31 15,000 MT Poly Plant Construction Update 31 Nitrogen Receiving and Storage System - Equipment has been installed and piping installation is in progress Nitrogen Generation System - Structural concrete work is in progress 10kV Switchgear Building - The building is essentially complete - PSB equipment installation is well underway Control Building - Building is essentially complete - Architectural work is in progress including HVAC, fire protection, etc. - Control room ready to receive DCS / SIS equipment Pipe Racks - Erection of all major pipe racks has been completed - Installation of piping in the pipe racks is in progress Tank Farm - Installation of the field fabricated tank and spheres is underway - All civil work has been completed U/G Firewater System - The entire underground firewater systems is in progress

32 15,000 MT Poly Plant Construction Update Emergency Generators - The foundations for the emergency generators are in progress. HVAC Chiller Building - Structural steel erection for the HVAC Chiller building is nearing completion. Maintenance Building - Work on the maintenance building is in progress. Pipe fabrication - In full swings at the two site fabrication shops of both teaming contractors. Chemical Cleaning - Contractor mobilized onsite and is responsible for cleaning all appropriate equipment and piping. Chemical cleaning of equipment and piping is underway. Turnover Preparations - Fluor providing orientation/training to LDK personnel for work processes to be used for LDK acceptance of facility. Weekly coordination meetings continuing. 32

33 Financial Overview

34 Wafer Shipment and ASP Trend Wafer Sales Volume (MW) Average Selling Price (US$ / Watt) CQGR of 28.2% from 4Q07 to 3Q Q07 1Q08 2Q08 3Q08 1H07 1H08 OEM Wafer Sales Growth 4Q07 1Q08 2Q08 3Q08 1H07 1H08 34

35 Financial Performance Total Revenue (US$ MM) Gross Profit (US$ MM) % 27.7% 25.4% % Q07 1Q08 2Q08 3Q08 Operating Profit (US$ MM) 4Q07 1Q08 2Q08 3Q08 Gross Profit Gross Profit Margin Net Income (1) (US$ MM) % % % 22.7% 19.9% 26.2% % % 4Q07 1Q08 2Q08 3Q08 Operating Profit Operating Profit 4Q07 1Q08 2Q08 3Q08 Net Income Net Income Margin 35 Note(1): Net income is defined as the net income available to ordinary shareholders

36 Top Customers by Revenue for 3Q08 By Geography By Customer North America 4% #1 26% Europe 42% Mainland China 29% Other 44% #2 11% #3 8% Asia Pacific ex- Mainland China 25% #5 5% #4 6% 36

37 Balance Sheet LDK Solar Co., Ltd. Unaudited Condensed Consolidated Balance Sheet Information (In US$ 000) 9/30/2008 6/30/2008 3/31/2008 Assets Cash and cash equivalents 347,762 83,742 93,705 Pledged bank deposits (1) 164, , ,106 Inventories 709, , ,995 Prepayments to suppliers (1) 316, , ,864 Property, plant and equipment, net 1,138, , ,078 Deposits for property, plant and equipments 301, , ,725 Total assets 3,181,217 2,427,851 1,853,106 Total debt (2) 1,011, , ,728 Leverage ratio (3) 50.3% 55.6% 31.1% Advance payments from customers (1) 777, , ,402 Total shareholders' equity 999, , ,779 Total liabilities and shareholders' equity 3,181,217 2,427,851 1,853,106 (1) (2) (3) Include both current and non-current portions Total debt includes short-term and long-term interest-bearing borrowings Total debt / (total debt + total shareholders equity) 37

38 Financial Guidance (Updated on Jan.5 th 09) 4Q Wafer Capacity 1.46GW 2.30 GW Wafer Shipment 245 MW 255 MW 1.57 GW 1.67 GW Revenue $425 M - $435 M $2.3 B - $2.5 B Gross Margin 10% - 13% 22% - 27% 38

39 Our Growth Strategy Expand wafer production capacity to meet customer demand Broaden geographic presence and strengthen customer relationships Improve R&D to reduce manufacturing costs, improve production yield and pursue technological innovation Develop in-house polysilicon manufacturing capabilities Consider selective alliances and acquisitions Secure polysilicon feedstock supply from third party vendors 39