OFFERING MEMORANDUM Global Offering of up to ... - Nordex

Risk Factors
Prospective investors should carefully consider the specific risk factors set forth below, in
addition to the other information contained in this Offering Memorandum, before making a
decision to purchase Offered Shares in the Offering.
Risks Related to the Company
Reorganization of the Nordex Group
The Nordex Group has only existed in its current legal form for a short time. After the formation of
Nordex AG on August 25, 2000, several companies from the wind energy systems division of the
Balcke-Dürr Group were merged into the Group with the aim of consolidating the Balcke-Dürr Group’s
wind energy activities under the centralized management of Nordex AG as a holding company.
Accordingly, Nordex Automation GmbH’s business activities that were not related to wind energy were
spun-off to a Babcock Borsig Group company by way of a transfer of net assets. The Nordex Group,
therefore, has no historical financial data as a consolidated group, and its IAS Pro Forma Consolidated
Financial Statements are therefore only of limited value for comparisons.
The new corporate structure, which was necessary in order to integrate the merged companies under
the centralized management of Nordex AG, including company-wide internal and external planning,
financial control and reporting systems, is still being established. As is commonly the case with young,
high-growth companies, this effort will require a high level of human and financial resources. There
can be no assurance that the rapid integration of these companies will succeed or will have the desired
effect over the long term. If this effort were to be unsuccessful or delayed, the business, financial
condition and results of operations of the Nordex Group could be materially adversely affected.
Holding Structure and Profit and Loss Transfer Agreements
The Nordex Group in its current corporate structure was recently formed from the merger of several of
the Group’s affiliates (see ‘‘General Information on the Company—Formation, Development and
Reorganization of the Group Structure’’). Nordex AG, which was formed in August 2000, currently
functions solely as a holding company. The Company’s assets, therefore, currently consist primarily of
interests in its operating subsidiaries. As a result, Nordex AG is principally dependent on the receipt of
dividends and distributions from its operating subsidiaries to cover its operating and other expenses
and, if necessary, to pay dividends and distributions to its shareholders. For this reason, Nordex AG has
concluded profit transfer and, in some cases, control agreements with its five directly held subsidiaries.
In addition, Nordex AG has also undertaken to cover possible losses incurred by its subsidiaries, which
could lead to a reduction in Nordex AG’s net profits available for distribution as dividends. As a result of
these arrangements, if the dividends and distributions Nordex AG receives from its subsidiaries are
lower than anticipated, this could have a material adverse effect on Nordex AG’s business, financial
condition and results of operations.
Organizational Structure, Accounting, Management of Growth
Because the Nordex Group was created very recently, the management and organizational structure of
the Group is still being established. The Chairman of Nordex AG’s Management Board, Dr. Dietmar
Kestner, the Chief Financial Officer Rudolf Schulz, and the Vice-President for Sales, Carsten Pedersen,
who has been active in the wind energy sector since the mid-1980s, have only been employed by
Nordex AG since the end of 2000.
In addition, due to the reporting requirements necessitated by the Offering, the Company’s financial
and accounting systems will be subject to increased demands in the future, as the Company complies
with International Accounting Standards. The Group’s accounting and bookkeeping systems, its
reporting systems and the cost accounting data on which these systems are based do not yet
completely meet these increased demands (see ‘‘Management’s Discussion and Analysis of Financial
Condition and Results of Operations – First Quarter of Fiscal Year 2000/2001’’). Because the Nordex
Group was not restructured until the end of 2000, it has so far only been able to adapt certain of its
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