Q-CELLS AG. Capital Market Day 30 October 2007

Transcription

1 Q-CELLS AG 30 October 2007

2 Disclaimer This presentation has been prepared for information purposes only and all descriptions, examples and calculations are included in this presentation for illustration purposes only. This presentation does not constitute an offer, an invitation or a recommendation to purchase or sell securities issued by Q-Cells AG ( Q-Cells ). This presentation contains forward-looking statements. Forward-looking statements concern future circumstances, events and other circumstances that are not historical facts. Forwardlooking statements are indicated by the context, but may also be identified by the use of the words may, will, should, plans, intends, expects, predicts, anticipates believes, assumes, estimates, forecasts, potentially or continued and similar expressions. Such statements only reflect the current views of Q-Cells with respect to future events and they are subject to risks and uncertainties. The forward-looking statements are based on Q- Cell s current plans, estimates, projections, expectations and certain assumptions that may prove erroneous. Many factors could cause Q-Cell s actual development or results or performance to be materially different from the development or results described in the forward-looking statements. If any such factors or uncertainties were to materialize, or if underlying assumptions of Q-Cells were to prove incorrect, actual results may differ materially from those described in the forward-looking statements. The Company does not intend, and does not assume any obligation to update the forward-looking statements or any other information contained in this presentation. PAGE 2

3 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 3

4 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 4

5 Main Objectives of Today To cement and build a deeper understanding of what Q-Cells is about, where we are, our strategies going forward and general perspectives from a Capital Markets viewpoint Focal Points: - Core Business: strategy, growth, technology, mg-si - A few words concerning our announcement re. EverQ - Thin-Film Businesses: status and strategy going forward - Group development going forward and to try to answer all your information requirements (where we are able to and can, given that there are some legal/competitive aspects where we cannot + ) Our aim is maximum transparency for our Investors PAGE 5

6 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 6

7 The Energy Challenge Climate change Limited resources Environtmental pollution Strategic dependency PAGE 7 Rising energy demand Clean Energy a major opportunity for society and one of mankind s main challenges this century

8 Development of Energy Demand Annual energy consumption (EJ/a) Source: German Advisory Council on Global Change, Berlin 2003 Geothermal Other renewables Solar Thermal (Heat) Solar electricity (PV and solar thermal) Wind Biomass (mod.) Biomass (trad.) Hydroelectricity Nuclear Gas Coal Oil PAGE 8

9 PV-Ratio of worldwide Electricity Generation in 2020 Electricity generation in TWh* 26,025 TWh Key metrics 18,419 TWh Capacity building (~ TWh) PV-ratio of total electricity production in % Replacement (~ TWh) PV-ratio of electricity production of newly installed and replaced plants between 2007 and % PV-ratio of electricity production of newly installed and replaced plants in % *Assumption: growth of electricity production 2.5% p.a., average lifetime of plants 30 years, PV-growth between 30 40% p.a. from 2006 starting at 2 GWp PAGE 9

10 A small Pre-Condition for PV: Reach Competitiveness /kwh 1,0 0,8 Generating costs of PV electricity Germany: 900 h/a: 0.60 EUR/kWh Photovoltaics Utility Peak Power Bulk Power 0,6 0,4 0,2 Spain: 1800 h/a: 0.30 EUR/kWh Source: RWE Energie AG and RSS GmbH 0, PAGE 10

11 Sources of Cost Reduction: Core Business Areas Cost Reduction Potential in EUR/Wp Example: Multicrystalline System Module Cell Wafer Poly-Si 100% ~ 40-50% Today's Costs 2006 Cost Cost reduction potential ~ 50-60% Potential Cost 2010 is ambitious but do-able Scaling Getting bigger Reducing unit costs Invest ca. 19% ca. 25% Productivity Cost Input Yield Manufacturing excellence Standardisation etc ca. 54% Technology Driven Efficiency Thickness Kerf loss Longevity Etc. Main Driver: Technology/Time PAGE 11

12 Sources of Cost Reduction: Thin-Film Businesses Cost Reduction Potentials Thin-Film Today s Module pricing Grid Parity < 1 EUR/ Wp "Prototype Line" (small scale < 10 MWp) Plant 25 MWp Factory > 100 MWp PAGE 12

13 PV Competitiveness: Example 2006 EXAMPLE: CALIFORNIA - ELECTRICITY TARIFFS OF PRIVATE CUSTOMERS Principle: high usage high costs electricity prices vary during the day US c/kwh EXAMPLE 1 SAN FRANCISCO EXAMPLE 2 SACRAMENTO PV Cost Average displaced cost 7,500 15,000 7,500 15,000 consumption p.a. med. large med. large private consumer High electricity use/ tariff PV TODAY already competitive Medium electricity use/ tariff PV TOMORROW will become competitive PAGE 13

14 (in GWp) cells produced Photovoltaic Market Development 0.8 Actual Figures Photon International (2007e) Update Photon Solar Annual 2006 (Photon) LBBW (August 2007) CLSA Sunscreen II EPIA Growth (Dec) 1.2 CAGR: 46% e 2008e 2009e 2010e 4.0e Q-Cells estimates: - Supply side will tend to the upper end of the analyst estimates - Demand side will follow as a function of price (high demand elasticity to price)? Range in Estimates: Low demand forecastability but estimates constantly rising Lower End: Subsidised Market logic Upper End: Demand = Supply logic Favourable development with expected growth rates of 22 60% p. a. generally foreseen. Up to now in a supply constrained world, a CAGR of 46% has been achieved. We expect acceleration of this as more supply comes on-line. PAGE 14

15 International Solar Initiatives (Examples) International solar initiatives support Q-Cells objective to grow globally. PAGE 15

16 Globalisation and Diversification of Customer Base Trends H Export Ratio 36.8% 53.3% 57.6% Customer Base Contracted Sales (in MWp) 1,022 2,363 3,523 PAGE 16

17 Globalisation and Diversification of Customer Base Sales (in EURm) Export Trends Spain +82% EU (excl. Germany and Spain) +49% +70% 50 RoW 0 H H Export Germany Sales in EURm H H PAGE 17

18 Short- to mid-term Market Trends: Transitioning to Grid Parity in Key Markets? 2007/2008: 2009: 2010: - Firm markets dominated by German (EEG effect)/spanish/south EU and increasing US demand (although limited due to USD pricing levels) - Supply/Demand balance likely to remain tight well into EU markets and increasingly USA as demand drivers, plus additional new markets in RoW - Supply/demand balance normalising from mid 2009 as new capacity comes on stream and is brought into new markets with different economic pricing points - USA likely to play a leading role, with demand being increasingly driven in many OECD and other markets by at or near to retail grid parity economics? - Supply markets normalised. but balanced supply/demand situation PAGE 18

19 EEG Changes - Germany Current status of EEG (German feed in tariff) discussion: (Proposal of the Ministry of Environment/Ministry of Economics) Annual degresion Year Status Assessment : Roof top system (up to 30 kwp) 0.49 EUR 5% (0.47 EUR) 7% EUR (?) EUR = 9.1% (0.42 EUR) 7% (0.40 EUR) 8% (0.36 EUR) Ground mounted system 0.38 EUR 6.5% (0.35 EUR) 7% EUR (?) = 9.8% (0.32 EUR) 7% (0.30 EUR) 8% (0.27 EUR) 1) The jury is still out, but expect a quick clarification (cabinet draft due Dec 5) 2) Expect end 2008 run on systems if trends from the past are applicable 3) Ground mounted systems in Germany becoming increasingly unprofitable PAGE 19

20 Spain - New Tariff Structure in Discussion Cap of 315 MWp reached at the end of September 2007 (85% of 371 MWp) Launch of 12 month grace period All already approved solar projects will get the existing feed in tariff Expected Volume moving to Spain in 2007 >400 MWp (some estimates are even higher) Current state of discussion for new tariff structure Cap might be lifted to 1.2 GWp, thereof 200 MWp for roof-top installations and 1 GWp for ground installations Feed in tariffs might be lowered to 0.33 EUR EUR per kwh for roof-top systems and 0.31 EUR per kwh for ground applications Introduction of 5% degression rate Spanish market should also be strong in 2008 PAGE 20

21 California. Not too far from Retail Grid Parity Assumptions: - Energy production p.a. 1,700 kwh/kwp - Duration 20 years - Size 10 kwp - Degradation p.a. 0.35% - Cost of capital 7% Total system costs (in USD per kwp) 4,000 5,000 6,000 7,000 Cost of produced energy (in USD per kwh) With current peak household electricity prices of up to USD 0.37 grid parity is reachable in the next years PAGE 21

22 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 22

23 Group Organisation Wafer-Based Technology Core Business Thin-Film Business String Ribbon technology Joint Venture with Evergreen Solar and REC 17.18% Strategic partner and main supplier Technology leader in polycrystalline silicon production 33.3% 33% Low-concentration PV technology No. 1 independent cell player and No. 2 worldwide Poly- and monocrystalline solar cells Next generation highefficiency cell concepts in development Fixed Substrates (Glass) Cadmium telluride technology BRILLIANT 234. Micromorph silicon technology CIGS technology Crystalline silicon on glass Flexible Substrates 93% 100% 67.5% 21.71% 51% Amorphous silicon on plastic foil ( flexcell ) Leader in core business with a strong focus on new technologies PAGE 23

24 Main Strategic Priorities and Levers Main strategic levers Plant and capacity expansion Growth strategy Feedstock security for growth High value-added products/brands Customer base expansion, diversification and internationalisation Product development Technology improvements Cost reduction strategy Productivity Scale economies Other (e.g. manufacturing value-add, Globalisation) The overriding strategy is to rapidly drive down costs and expand quickly PAGE 24

25 Strategies by Business Area Q-Cells: Rapid profitable growth; cost reduction; technology driven Development of global footprint parallel to Thalheim Developing Group capabilities (HR; Processes etc.) Wafer-Based Technology Core Business Thin-Film Business Strategic stake holding Expansion IPO possible Validation of pilot line Expansion IPO potential Growth Cost reduction Rapid evolutionary improvement for standard product lines Development and commercialisation of next generation cell technologies Forward path: - Potentially core business of tomorrow - Potentially part float (IPO) - Other Validation of pilot lines Rapid expansion Technology development PAGE 25

26 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 26

27 Growth Core Business 2000 Supply? X Risk weighted sum X 4? Contracted and secured in MWp 1000? 964 1,126 Additional potential availabilities (weighted) Potential in deal pipeline 0 Production e 2009e 2010e Production capacity (at year s end) * Of which Elkem option in 2010 approx. 1,600 mt ** Source: Q2 report PAGE 27

28 Plant and Capacity Expansion (Core Business) Capacity Development e* *Basis Q6L 1000 Capacities at the end of 2007: 1, Nominal capacity: 645 MWp/ Production capacity: 516 MWp Line V ( H1 2008): Nominal capacity: 300 MWp/ Production capacity: 240 MWp Line VI (2008/early 2009): 645 (in MWp) Nominal capacity: 375 MWp/ Production capacity: 300 MWp (concept in optimisation) ? e Nominal capacity Production capacity Production 2008/early 2009 Accelerated expansion of line V (+60 MWp) and line VI (+60 MWp) PAGE 28

29 Metallurgical Silicon: Some Results See page 29 Intensive Testing Programme Trial programmes to evaluate and develop the use of mg-si for standard cells Trials with 3 materials; further development/ optimisation in progress Evaluation of 2-3 materials Summary of results: 2 sources can be used at % mg-si - Cell efficiency more or less equal to control sample - Yield loss at ingot approx. 2% at 100 % mix - Some process and product changes: manageable Some other sources can be used at mix rates of <20% with little impact on cell quality Some other sources cannot be economically used long-term For monos all sources show too high degradation for now PAGE 29

30 Metallurgical Silicon: It s coming See Page 30 Activities in the market* Increasing confidence on a technological level Approx. 20 players active in this field High scalability of plants (>10,000 MT); shorter lead times than poly-si Attractive cost structures (USD 10-30/kg?) Strong potential for the development of many 10,000 MT mg-si production facilitites in the coming years First contracts for supply mg-si announced (some successfully, some unsuccessfully) PAGE 30 * Source: Solar Annual 2007

31 Going to the next Levels in commercial Cell Technology: The R&D Programme Major investment in world See Page 31 leading R&D facilities in completion Reiner Lemoine Research Center 45 EURm Invest Commercial pilot scale under clean room conditions for next generation cell advancements Module development line for new technological concepts R&D Program 2008/2009 Focus 1: Radical Metallisation Innovation New process for back side contact retrofitable for standard cell concepts with efficiency potential 0.5% Focus 2: Quebec 21% mono-based back-contact cell and module concept Focus 3: High Efficiency Multi High efficiency multicrystalline back contacted cell and module concept Objective: Start of market introductions 2008/2009 PAGE 31

32 Cost Reduction Potentials at the Cell Level 1 70 µm decrease in thickness leads to approx % increase in wafer output or 10-15% cost reduction 2 Cell Thickness Reduction Higher Cell Efficiency Cell Thickness Reduction µm µm µm 200 µm 180 µm 160 µm 120 µm 1% increase in cell efficiency leads to approx. 7% cost reduction at all levels of value chain 2003 H H H Start Q In trial/ Q In lab. 3 Cost degression due to increase of production 4 Economies of Scale Other (cell production) Increase in throughput, breakage reduction, increasing rate of A-cells, increase in uptimes Production average 2002 (1) Typical production average today (1) Running test results & best cells (1) Potential due to R&D (1) Cell Efficiency Potential 14.3% % (3) % 18% 5 In-house Wafering 50 MWp in 2008, >240 MWp in 2009 Lab results (2) (1) Polycrystalline cells (2) Monocrystalline cells (3) Process and material dependent 21% Improvements in technology offer significant cost saving potential PAGE 32

33 In-house Wafering Wafering Concept Integrated wafer and cell factory (line V) with maximum synergies Processing of mc- and mg-silicon Production of wafers down to 120 µm thickness Cooperation with innovative partners Continuing close strategic partnerships with wafer suppliers Make-or-Buy decision to cost effectively process large additional Si availabilities Timetable First machines already installed in test line Ramp-up first expansion stage in spring 2008 Production: 50 MWp in 2008, >240 MWp in 2009 Decision on further expansion based in H EBIT margin improvement of ~1 percentage point in 2009 in core business PAGE 33

34 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 34

35 EverQ : Roadmap Growth path supported by silicon contracts Capacity in MWp 0 ~32 x6 ~100 ~180 ~600 ~300-Current Si 350 contracts ~ New Si contract + Technology move to Quad/ new processes Announcement last week Based on progress to date and expected development needs Fab 3: 80 MWp (Capex ~150 EURm) to build in 2008 Strong additional expansion to 600 MWp (until 2012) Transition of EverQ into independent global company -> Marketing & Sales -> Own technology compentence -> Own brand IPO planned PAGE 35

36 Wafer-Based Technologies: EverQ Q-Cells shareholding: 33.3% (REC 33.3%, Evergreen Solar 33.3%) String-Ribbon-Technology Low silicon usage Fully integrated production (wafers, cells, modules) Fab 1+2: 100 MWp Fab 1: Profitable operation, debottlenecking with new processes Fab 2: in Ramp Fab 3: 80 MWp (capex ~150 EURm) until beginning of 2009 Capacity expansion to 600 MWp until 2012 PAGE 36

37 Wafer-Based Technologies: Solaria Corporation Q-Cells shareholding: 33% Low-concentration PV technology (2-3x) Enables production of two to three times the number of modules from the same amount of silicon Pilot line (2.5 MWp) in test phase Production line with 25 MWp until H Supply contract with Q-Cells for up to 1.35 GWp solar cells until 2018 enables Solaria to produce solar modules of about 2.7 GWp PAGE 37

38 Wafer-Based Technologies: REC Renewable Energy Corporation Q-Cells shareholding: 17.18% (84,956,767 shares) World s largest manufacturer of polycrystalline silicon and silicon wafers for the production of solar cells Strategic and long-term partner Accounting at equity (income from associated companies shown after EBIT) Book value: 1,070 EURm Market value: ~2,900 EURm (end of October) PAGE 38

39 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 39

40 Thin-Film Strategy Some Thoughts Thin-Film Applications proven processes and early in their commercial development have high technological and competitive potential have very low cost potentials and break-evens can be very profitable business areas and require investment start up costs time to bring to meaningful commercialisation Current target: MWp in 2010 in order to have OPPORTUNITY TO CREATE SOME STRONG BUSINESS OR EVEN POTENTIAL BLOCKBUSTERS PAGE 40

41 Evaluation of Technologies Strategic Thinking 2004 Forecast of System Costs in Consequences Total system cost 100% 80% 60% 40% 20% 0% x mc-si? Current cost of wafer based-si system TF-Si on glass Required reduction TF-Si on flexible PV electricity cost in Southern Europe < 20 c/kwh CIGS CdTe Si-wafer-based technologies still have a large potential for cost reductions Large bandwidth of attainable system costs for thin films as well as Si-wafer based PV no clear winner The thin film technologies might reach system costs below those of Si-wafer based technologies Only the best players with the best technologies will reach competitiveness Investment criteria: Cost, commercial potential and near-term commercialisation PAGE 41

42 Technology - Strategy Focus on main technologies with higher commercial potential in the coming years Crystalline Silicon Thin Film High Concentr. Flexible Organic Others Poly Mono String Ribbon Low concentr. CSG µ-si a-si CdTe CIGS Ga AS Q-Cells: Unique Technology-Portfolio PAGE 42

43 Thin-Film Technologies: Potentials CIGS Micromorph CdTe Best Independent laboratory results (cell) 19% 12% 16% Best own (micro-) cell results 16% 12% 14-15% Short-/mid-term module target* 10-12% 8-9% 7-10% Current best own modules** 12% 7.5% ~x% (only 2 months into tests) Break-even for 25 MWp factory* / ** % 7.5% ~6% * Aperture area ** Assuming normal expected throughputs, uptimes, yields in stable, operating conditions; break-even points move downwards with scaling up PAGE 43

44 Strategy: Thin-Film Technologies Strategic Considerations High probability to reach Grid Parity fast Mid-term cost reduction potential <1 EUR/Wp Each of our technology platforms has the potential to become an extremely attractive business Thin-film portfolio strategy: different solutions for different applications (power, BIPV, consumer) PAGE 44

45 Thin-Film Technologies: General Assumptions Pricing: - World market price for crystalline silicon modules as benchmark - Discount for higher Balance of system costs EUR/Wp 4 3 System price 2 1 Module costs BOS Production costs: - Target for each technology: <1 EUR/Wp PAGE 45

46 Strategy: Thin-Film Technologies Laboratory <1 MWp Pilot factory MWp Scaling Up > MWp per unit BRILLIANT 234. Almost ready to rumble Early Pilot Production Under Construction Under construction Prolonged Test production Decisions to be taken by end 2007/ 2008 based upon operational results PAGE 46

47 Thin-Film Growth Potentials: Early Guidance Business Ownership Pilot line in MWp Next Expansion Decision likely Expected Development Brilliant 100% ~25 Next months Production volume (according to ownership weighting) Calyxo 93% ~25 Next months Solibro 67.5% ~25-30 H2 2008? ~25-50 CSG 21.7% ~ / Flexcell 51% ~5 25 MWp expansion started Next step expansion end of 2008? Indicative margin expectations for optimised production lines (excl. additional ramp-up costs in 2009/2010) EBITDA ~35-40% EBIT ~20-25% PAGE 47

48 Thin-Film Technologies: Applications Crystalline Silicon CdTe CIGS µ-si Flexcell PAGE 48

49 Thin-Film Technologies: Subsidiaries Calyxo Current Status Q-Cells shareholding: 93% (up to now 100%) Cadmium-Telluride thin-film technology Atmospheric Vapor Deposition (no vacuum) -> low capex and high throughput Pilot line with ~25 MW under construction (until Q1 2008) First test modules from pilot line since August 2007 PAGE 49

50 Thin-Film Technologies: Subsidiaries Calyxo New Structure Merge of Calyxo with development partner Solar Fields Solar Fields: 7% of Calyxo plus payment of 5 $m Calyxo: IP rights/assets/contracts Advantages: Closer cooperation with Solar Fields Accelerated development of Calyxo Expansion of development center in US Exclusive proprietary basis PAGE 50

51 Thin-Film Technologies: Subsidiaries Calyxo Perspectives Lowest potential production costs among thin-film technologies (comparable to other companies) Best efficiency in lab: 16% Efficiency own dot cells: 14% Efficiency: short-term target 7%, mid-term 10% Decision on next line end of 2007/beginning of 2008 (units of ca. 60 MWp per single step) Next step (60 MWp) could be decided mid 2008 Capex: 1 EUR/Wp Employees end of 2008: ~120 PAGE 51

52 Thin-Film Technologies: Subsidiaries Brilliant 234. Current Status BRILLIANT 234. Q-Cells shareholding: 100% Micromorph silicon thin-film technology (amorphous and microcrystalline silicon) Q-Cells in-house development in cooperation with Applied Materials and Juelich Research Centre First test modules from pilot line (8 MWp) since August 2007 Expansion to 25 MWp until Q PAGE 52

53 Thin-Film Technologies: Subsidiaries Brilliant 234. Perspectives BRILLIANT 234. Best efficiency in lab: 12% Efficiency : short-term target: 8%, mid-term target 10% Capex EUR/Wp Employees end of 2008: ~220 PAGE 53

54 Thin-Film Technologies: Joint Ventures Solibro Current Status Q-Cells shareholding: 67.5% Joint Venture with Solibro AB (Sweden) Copper Indium Gallium Diselenide (CIGS) thin-film technology Proprietary IP: Co-evaporation of CIGS Construction of first pilot line (25-30 MWp) started PAGE 54

55 Thin-Film Technologies: Joint Ventures Solibro Perspectives First products from pilot line (25-30 MWp) mid 2008 Highest efficiency potential among thin-film technologies Best efficiency cells: 19% Best efficiency mini modules: 16% Efficiency: today 10% (12% aperture area), first line: 12% Capex 2 EUR/Wp Employees end of 2008: ~160 PAGE 55

56 Thin-Film Technologies: Subsidiaries VHF-Technologies Current Status Q-Cells shareholding: 51% Flexible thin-film modules (amorphous silicon onto plastic substrates) Multi-pass PECVD Business area: Consumer products, roof applications and building integrated PV First modules from test line produced and delivered Test line 2 MWp operating, additional 5 MWp prototype line in place in 2007 (Switzerland) Construction of next expansion step (25 MWp) started (Switzerland) PAGE 56

57 Thin-Film Technologies: Subsidiaries VHF-Technologies Perspectives Low weight Ramp-up of next line (25 MWp) in H Efficiency: start ~5% (amorphous silicon) going to 8% (micromorph silicon) Break-even at ~4.5% Capex 1.5 EUR/Wp Employees end of 2008: ~80 PAGE 57

58 Thin-Film Technologies: Minorty Shareholdings CSG Solar Q-Cells shareholding: 21.71% (others: REC, APAX and Good Energies) Crystalline Silicon on Glass Module factory with ~25 MWp nominal capacity near Q-Cells Currently delays in ramp-up due to instable new equipment Decision on next line after completion of next development step (efficiency) Previous COO of Q-Cells Thomas Schmidt as new acting COO Aim to get EBITDA positive 08, Breakeven thereafter PAGE 58

59 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 59

60 General Group Development: Positioning and Driving (for) the Future Group capabilities Management skills and execution strength Financing strength Strategic development Wafer-based technologies Core Business Thin-Film Businesses R&D core competence R&D Center/cluster Strong synergies/capabilities Solar Valley Thalheim Worldwide largest manufacturing & development cluster Next global manufacturing centres Developing a parallel 2 nd manufacturing cluster Business areastrategies as discussed New business development opportunities PAGE 60

61 Overview Solar Valley Q-Cells today Area: approx. 77 hectare Number of companies (today): 9 Number of employees until 2010 (in total): > 5,000 PAGE 61

62 PAGE 62 Q-Cells: The Next Step

63 Preparing further global Reach and Growth Platforms Solibro MDC Thalheim Calyxo MDC Solaria VHF MDC + Factory Tokyo Rep. Office Hangzhou Office Further development of Q-Cells global footprint underway Customer/Market closeness Hongkong Rep. Office Manufacturing cost benefits - USD natural hedge - Factor costs vs. productivity CSG Research Facilities - Fiscal optimisation - Qualified Resources MDC: Manufacturing Development Centre PAGE 63

64 Strategy: Summary Disproportionately high growth Growth Strong feedstock supply New technologies Cost Reduction beyond Grid Parity Cost Next cell generations Potentials of Thin-Film PAGE 64

65 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 65

66 Outlook 2007 Convertible (major shareholder Immo Ströher) of 4.33m shares Placement on 20 April 2006 Automatic exchange notice on 26 September 2007 Delivery of shares to holders of convertible on 15 October 2007 Short term operational disruptions at REC Negligible influence on production Supply situation continues to be sufficient and good Confirmation of Guidance for 2007 (Sales: >800 EURm; net income: ~163 EURm +/- put options REC H2) PAGE 66

67 Outlook 2008 Guidance 2008: Core business REC (income at equity, PPA, put options) New technologies Intensive ramp up of new technologies leads to start up costs in 2008 PAGE 67

68 Outlook 2008 Effective tax rate of 23-24% (before ~30%) from 2008 onwards, due to New tax legislation in Germany Low trade tax in Bitterfeld-Wolfen (collection rate 200%) Guidance 2008: Sales target: >1,000 EURm Net income margin: approx. 14% (before: approx. 13%) New Guidance 2008 after completion of planning and approval from supervisory board at the end of 2008/beginning of 2009 PAGE 68

69 Outlook 2009 Guidance 2009: Core business REC (income at equity, PPA, put options) New technologies Additional turnover from new technologies In house wafering: EBIT margin improvement of ~1 percentage point in core business Sales target: >1,400 EURm New Guidance 2009 after completion of planning and approval from supervisory board at the end of 2008 / beginning of 2009 PAGE 69

70 Building a strong solar R&D cluster Solar Valley Thalheim Reiner Lemoine Center for Research and Development (flexible pilot line) at the end of 2007 Increase of Q-Cells R&D staff to more than 200 until end of 2007 Additional R&D departments at subsidiaries Education & training center will open at the end of 2007 Q-Cells Academy PAGE 70

71 Building a strong solar R&D cluster Solar cluster Saxony-Anhalt Close cooperation with Halle-Wittenberg University Q-Cells is preferred partner Endowment professorship with Halle University donated, master course Photovoltaics will start in 2008 Additional Fraunhofer Research Center for Silicon-Photovoltaics in Halle Max Planck Institute of Microstructure Physics in Halle Q-Cells has preferred access to students and graduates PAGE 71

72 Q-Cells: The Next Step Central warehouse Flexible pilot line Education & training centre PAGE 72

73 Overview Solar Valley Q-Cells today Area: approx. 77 hectare Number of companies (today): 9 Number of employees until 2010 (in total): > 5,000 PAGE 73

74 Discussion Agenda 1. Welcome, Introduction and Today s Objectives 09:45-09:50 2. The Photovoltaic Market Our Expectations 09:50-10:05 3. The Company 10:05-10:45 Core Cell Business C-Si Wafer Based Technologies/Investments The Thin-Film Businesses General Group Development 4. Outlook 10:45-11:00 5. Discussion 11:00-11:45 PAGE 74

75 Q-CELLS AG Investor Relations OT Thalheim Guardianstraße Bitterfeld-Wolfen Germany TEL +49 (0) FAX +49 (0) MAIL WEB