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

condition, results of operations and continued existence of the Company. The success of these
acquisitions and participations, and the improvement of the Company’s market position, depends, in
part, on the integration into the Nordex Group of acquired companies. Even if the Company
investigates the financial and legal risks associated with target companies to be acquired, agrees price
adjustment clauses and receives adequate warranties from the sellers, there can be no assurance that
future occurrences would not result in specific acquisitions or equity interests losing their value
considerably or entirely. Such consequences could have material adverse effects on the business,
financial condition and results of operations of the Nordex Group.
Risk of Entry into New Markets
In the fiscal year 1999/2000, the Nordex Group generated approximately 44% of its revenue outside
Germany; the majority of this share was generated in Denmark, Egypt, the United States, China, Spain
and Portugal. The limited number of wind turbine facilities available in Germany requires the Company
to expand its business activities within and outside of Europe and to consider forming foreign
subsidiaries and sales alliances. As the Company develops its global operations, it faces numerous
challenges, including the burden and expense of complying with a wide variety of foreign laws and
regulatory requirements, potentially adverse tax consequences, tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, cultural and language differences, fluctuations
in currency exchange rates, increasingly complex legal product requirements and related liability issues.
If the Company does not appropriately anticipate changes and continue to adapt its practices to meet
these challenges, its growth could be impeded. If the Company’s entry into new markets were delayed
or even unsuccessful, this could materially adversely affect the business, financial condition and results
of operations of the Company.
Dependence on Senior Executives
The financial success of the Nordex Group is largely attributable to the efforts of the managing
directors of Nordex AG’s subsidiaries and the leadership of senior executives employed by Borsig
Energy GmbH. The future financial success of the Nordex Group depends on highly qualified managers
continuing to work for the Nordex Group and furthering its interests in the long term. If such managers
were to leave the Group, this could have a material adverse affect on the Group’s business, financial
condition and results of operation of the Group.
Recruiting and Employees
The successful attainment of the Nordex Group’s corporate goals is heavily dependent on its ability to
recruit, retain and train highly qualified employees, particularly in the areas of mechanical engineering,
electrical engineering and rotor blade development. Extremely important for Nordex’s continued
success are employees who, in addition to training in the above-mentioned areas, have experience in
designing and developing wind turbines. Suitable marketing and sales employees, who should generally
have a technical background and knowledge of the particulars of wind turbine construction, are equally
in demand. There is a risk that due to overall growth, particularly of the market for wind turbines, and
the resulting demand for suitably trained professionals, retaining an insufficient number of qualified
employees could become a barrier to growth for the Nordex Group and prevent it from reaching its
goals. This could materially adversely affect the business, financial condition and results of operations
of the Group.
Research and Development
The Nordex Group invests substantial resources in the development of its products. However, the Group
does not undertake its own research activities. The Group is further developing the mechanical and
electronic components of its wind turbines, in order to reduce the costs of producing electricity by
building larger, more powerful and thus more efficient turbines (see ‘‘Business—Research and
Development’’). Specifically, the Group plans to make significant investments in the coming fiscal years
in the development of a five megawatt offshore wind turbine. There can be no assurance that new
products and the further development of existing wind turbines will be technically successful, will not
experience delays, will not incur higher costs than originally expected, or will succeed on the market.
21