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

Risks Inherent in the Market and Competition
Competition and Market Acceptance
The wind turbine business varies greatly depending on the region, but is highly competitive in certain
markets. The key factors defining this competition are the capacity, reliability and quality of products,
technological edge over the competition, price, the ability to fulfill local market requirements and the
scope and quality of maintenance and training services. Some of the current or potential competitors
of the Nordex Group have access to greater financial, technical, human, marketing, purchasing and
other resources. These competitors could react more quickly to new or emerging technologies or to
changes in customer requirements, or invest more resources in product development and sales, or
deliver competitive products more rapidly or at a lower price than the Nordex Group (see
‘‘Business—Competition’’). In addition, competitors could form alliances through equity investments or
cooperation deals, thus making their offerings more attractive and intensifying the competition
further. Such competition could lead to a decline in prices, reduced sales revenue and profit margins,
and a decline in the Company’s market share, which could have material adverse effects on the Nordex
Group and its business, financial condition and results of operations.
The level of demand for the Company’s products continues to be dependent on among other things,
the development of the market for wind turbines, the performance of services and the type of power
generation used to satisfy demand for electricity. A key factor for the success of power generation from
wind energy is the cost at which the electricity can be produced and the scope of financial support for
this type of power generation (see ‘‘—Legal Risks—Governmental Regulation’’). There can be no
assurance that such costs can be kept low, or that there will be continued financial support for this
power generation. Discontinued support could have material adverse effects on the Company’s
business, financial condition and results of operations.
Technological Change
There is a trend in the Company’s markets toward larger and more powerful wind turbines, increased
efficiency and ease of maintenance, and the continuing technical development of wind turbines. The
further development of products featuring new technologies by Nordex or its competitors could cause
the Group’s existing products to be regarded as outdated and unsaleable. The future success of the
Nordex Group will depend on its ability to continually and quickly develop and launch new and
improved products, which are also in step with technological developments and new standards, and
meet the constantly increasing requirements of its customers. Due to uncertainty in assessing future
technological developments, it is uncertain whether such products will be successful. A substantial
delay in launching new products could significantly impact the ultimate success of a product and other
related products, and also impede the further sale of predecessor products. There can be no assurance
that the Nordex Group will succeed in launching timely, new products, that the new products launched
will be accepted to any significant degree in their respective markets, or that such acceptance will
endure. Each of these circumstances could have material adverse effects on the business, financial
condition and results of operations of the Nordex Group.
Internationalization and Foreign Exchange Factors
The Nordex Group already generates a portion of its revenue and earnings in markets outside the
European Union’s Economic and Monetary Union, particularly in Denmark (approximately 39% of
foreign revenue) in China (approximately 25%) and in the United States (approximately 14%). The
subsidiaries active in foreign markets and the Chinese equity interest held by Nordex Energy GmbH
have not yet been consolidated either because they were of minor importance or because Nordex did
not exercise the level of control specified by the principle of control according to IAS 27. The Nordex
Group generally minimizes risks from exchange rate fluctuations through applicable rate hedging
transactions. In the past, the Company’s receivables and liabilities in foreign currencies were
inconsequential. Declining exchange rates for relevant foreign currencies could, however, affect the
financial condition and results of operations adversely in the future, if the planned expansion of the
Company’s business abroad leads to a corresponding increase in receivables and liabilities denominated
in foreign currencies, and if the rate hedging transactions do not completely cover the risk in question.
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