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

The Company’s marketing is mainly through advertisements placed in professional industry journals,
attendance at national and international energy fairs such as the Hanover Fair, PowerGen, WindTech
Husum and PowerExpo as well as conferences and professional seminars (e.g. the AWEA and BWEA
conferences).
Logistics
The delivery and assembly of wind turbines can, at times, constitute a considerable logistical challenge
for the Nordex Group. A complete wind turbine (including tower and rotor blades) weighs up to 310
tonnes (N-80 with 80m tower). A single rotor blade from the Nordex N-80 weighs around 10 tonnes
and measures approximately 39m long; the nacelle weighs approximately 84 tonnes. Insofar as
technically possible and economically feasible, the wind turbines are, prior to delivery, broken down
into separate components that can be assembled quickly and cost-effectively at the construction site.
Separating the wind turbine into individual components is, however, subject to technical and economic
limitations.
These technical and economic constraints put high demands on the logistical operations of the Nordex
Group, particularly in terms of transport vehicles and the state of transport routes. These logistical
challenges can create considerable problems for the Nordex Group, above all in regions with less well
developed infrastructures. The Nordex Group therefore investigates technical feasibility before
accepting a contract. The costs of transport and assembly, which can total up to 10% of the order
volume, can make the delivery of wind turbines over a certain size substantially more expensive in
certain regions. The Company can partly reduce transport costs for the wind turbines by sourcing
components commonly available on the market, such as towers for the wind turbines, from local
suppliers.
Customers and Suppliers
The Nordex Group’s customers are mainly wind turbine operators, which include retail investment
funds, set up for the purpose of operating wind farms, and some publicly traded companies such as
Energiekontor AG and Plambeck Neue Energien AG, which exclusively or chiefly produce electricity
from renewable energies.
In fiscal year 1999/2000, the Nordex Group generated approximately 54% of its revenues
(approximately EUR 147 million) from its ten biggest customer, and the share of revenues
attributable to the biggest customer for that year was approximately 10.2%. The Nordex Group’s
biggest customers include in particular Prokon GmbH, Windpark Ihlewitz and Boreas Energie GmbH,
which together generated approximately 25% of the Group’s revenue in fiscal year 1999/2000, with
Prokon GmbH accounting for approximately 10.2%, Windpark Ihlewitz for approximately 7.6% and
Boreas Energie GmbH for approximately 7.2% of this revenue. In the fiscal year 1998/1999 the three
biggest customers (Energiekontor, Prokon and seeba) accounted for approximately 19.7% of the
Group’s revenue.
In the production of its wind turbines Nordex uses mainly standard components, which it purchases
from several different manufacturers or dealers. The Company pursues a strategy of having several
suppliers in order to have at least two suppliers for each component, thus reducing its dependence on
individual suppliers and allowing it to operate with a comparatively low level of resources.
For rotor blades, however, the Nordex Group faces a market situation that is quasi-monopolistic. The
Nordex Group primarily purchases its rotor blades from LM Glasfiber A/S, the market leader for rotor
blades, since this company, together with NOI Rotortechnik GmbH, meets the Company’s requirements
as to quality and financial soundness.
The Nordex Group follows an intelligent supply management system by which the majority of the
components are delivered just-in-time in order to avoid unnecessary warehousing costs, and which
combines the in-house manufacture of certain complex product parts and core components of its wind
turbines with the outsourcing of project-specific series production and the procurement of lower
margins components commonly available on the open market.
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