Acquisition of MADE

Acquisition of MADE
June 2003
2
Agenda
Transaction’s Details
Strategic Rationale
Conclusion
3
Agenda
Transaction’s Details
Transaction’s Details
Terms of the Agreement
Gamesa and Endesa have reached an agreement for the purchase
of Endesa’s WTG manufacturing division, Made. The main
conditions are the following:
Acquisition of Made:
Equity Value:
EUR 25 MM
Enterprise Value: EUR 119 MM
Current Financial debt for EUR 94 MM is extraordinary due to
working capital needs and we estimate to be reduced by year end
to EUR 40 MM.
Made’s Backlog:
Made has contracts with Endesa and other companies to supply
WTG equivalent to 1,300 MW.
Made will have a First Right of Refusal for further 300 MW of WTG
The Agreement includes the acquisition of 100% of Made’s shares with
a backlog to supply 1,190 MW of WTG to Endesa and other companies.
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5
Agenda
Strategic Rationale
Strategic Rationale
Endesa, a Strong Partner
Significant backlog. Endesa will buy 890 MW of WTG to MADE
Possibility to grow. First Right of Refusal for further 300 MW
Huge Growth Potential in Europe and the LatAm Market (Endesa is
very well positioned in Italy, France, Brazil and Chile)
Access to third party companies related to Endesa.
Gamesa starts a new relationship with Spain’s tier 1 “Utility”
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Strategic Rationale
Sinergies. Margin Improvement
Margin Improvement
Cost Improvements
Product Range Rationalisation
20%
9%
Increased supplies volume
Modular Vertical Integration
EBITDA m g
Net Incom es / Sales
applied to Made
MADE
Gam esa Eólica
Gamesa expects to improve the company’s margins substantially
Strategic Rationale
Sinergies. Capex, Overheads & Others
Made runs a Nacelle assembly facility in Spain avoiding required
capex of Gamesa Eólica
Improved Sunk Cost absorption due to bigger scale
Increased R&D team. Experience in WTG integral design
Experience in Solar Thermal Energy
Made’s structure will complement Gamesa increasing its value
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Strategic Rationale
A Bigger Player
Historical WTG Manufacturer Rankings
Yearly Installation (MW)
Vestas
Enercon
Gamesa + MADE
Neg Micon
Gamesa
GE Wind
Bonus
Nordex
MADE
Repower
Other
Total
2001
1648
1036
926
874
735
865
593
461
191
133
539
7075
2002
1605
1334
1171
1033
924
638
509
504
247
223
419
7436
2002 World Market Shares
Repower
3%
Nordex
7%
Other
6%
Vestas
21%
Bonus
7%
GE Wind
9%
Enercon
18%
Neg Micon
14%
Made + Gamesa
15%
The new company ranks top 3 in the world market.
Source:
Source: BTM WMU March 20003
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Strategic Rationale
Accretion Dilution Analysis
2003(*)
2004
2005
2006
2007
MW Sold
150
300
350
400
400
Min EBITDA mg
8%
11%
18%
18%
18%
Min ROS
3%
5%
8%
8%
8%
MW installed and Minimum Margins
Accretion Dilution Analysis
500
20%
€ 0,25
18%
400
16%
€ 0,20
14%
300
12%
€ 0,15
10%
200
8%
6%
100
4%
2%
0
0%
2003
2004
MW
2005
EBITDA m g >
2006
2007
Net Incom e / Sales >
€ 0,10
€ 0,05
€ 0,00
2002
2003
2004
2005
Inc Gam esa EPS
The transaction is value enhancing from an EPS perspective.
(*) Only H2 2003 is accountable for Gamesa
2006
2007
11
Agenda
Conclusion
Conclusion
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Value Creation and Visibility Improvement
Relationship with Endesa. Gamesa opens a big new relationship / customer.
Improved Backlog. Gamesa increases its backlog by 25%
Fair Value. Gamesa has paid a fair value for the Company.
Sinergies. The margin differential and the existence of Spanish facilities Increase
Value for Gamesa.
EPS Enhancing. All the above leads to an EPS enhancing transaction
Value Creation and Visibility Improvement