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

The repeated occurrence of technical problems could adversely affect the profitability of planned wind
farms as well as Nordex AG’s market position, due to the resulting deterioration of the Company’s
reputation. For this reason, there can be no assurance that technical and physical risks will not have an
adverse effect on the business, financial condition and results of operations of the Nordex Group.
Dependence on Outside Suppliers
The Company has established strategic relationships with a number of suppliers in order to concentrate
its efforts on its core competencies. As a result, the Nordex Group is substantially dependent on the
timely deliveries of high-quality components by outside suppliers. If the Group’s orders increase,
deliveries by suppliers to the Nordex Group could be delayed, which would result in the Group being
unable to complete the orders on time. Accordingly, the business, financial condition and results of
operations of the Company could be materially adversely affected.
Furthermore, the Company’s ability to provide products may be adversely affected by capacity
constraints and defective components from outside suppliers. The Group is generally unable to switch
outside suppliers immediately, because some components are custom developed and produced by
suppliers for the Group. Although the Company pursues a strategy of maintaining at least two to three
outside suppliers for each component, the market is dominated by just a few suppliers, particularly for
rotor blades. Only two rotor blade manufacturers currently meet the Nordex Group’s delivery and
quality requirements, so the Company is in the process of setting up in-house rotor blade
manufacturing operations at its Nordex Rotor GmbH subsidiary. However, there is a risk that the
Nordex Group may still have to depend on these few rotor blade manufacturers. A possible price
increase resulting from the fact that the number of manufacturers is limited, or a shortage of the highquality
rotor blades required by Nordex, could materially adversely affect the business, financial
condition and results of operations of the Company.
Establishment of In-House Production of Rotor Blades
The Nordex Group did not begin setting up in-house production of rotor blades, through Nordex Rotor
GmbH, until early 2000, and as a result, the Company has limited experience in this area. There can be
no assurance that new production facilities will not continue to require substantial financial and
human resources, or that producing rotor blades in-house will not cost more than purchasing such
blades from outside suppliers. Greater independence from individual suppliers will temporarily impact
the Company’s resources. This is because, while the Company will have to maintain its in-house
production of rotor blades to reduce its dependence on the few global rotor blade manufacturers, it will
also especially have to develop the product expertise the Company considers necessary for megawatt
rotor blades. If it were necessary for the Company to manufacture small series of rotor blades under
unprofitable conditions for a longer period than anticipated, this would materially adversely affect the
business, financial condition and results of operations of the Company.
Move to a New Production Site
Nordex Rotor GmbH aims to move its production activities to new assembly plants in Fall 2001. The
Company will carefully plan this move with Nordex Rotor GmbH. However, there can be no assurance
that this move will not result in production stoppages or a temporary reduction in production capacity.
In addition, there can be no assurance that there will be no initial technical and/or organizational
problems with the production of rotor blades at the new production facility. This could reduce
production capacity, increase production costs and produce defects. Such problems could have a
material adverse effect on the business, financial condition and results of operations of the Company.
Risks Inherent in Future Acquisitions of Companies and Equity Interests, and their Integration
into the Nordex Group
The Company plans to acquire additional complementary companies or equity interests, and to grow
organically, in order to strengthen its position in the German and international markets. A portion of
the proceeds of the Offering is expected to be used for this purpose. Although Nordex AG will perform
due diligence on potential targets with the care required by prudent business policy, acquisitions carry
a significant business risk which could have material adverse effects on the business, financial
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