IREX MONITOR The renewables think tank                                         IREX MONITOR                               ...
IREX MONITOR The renewables think tank                    The challenges of the RES sector                           Europ...
IREX MONITOR The renewables think tank     The renewable energy industry worldwide     The Top 50 players: the key to unde...
IREX MONITOR The renewables think tank     The renewable energy industry worldwide is     The strategies of the 50 leading...
IREX MONITOR The renewables think tank                          The top 50 players’ major deals          Performance of th...
IREX MONITOR The renewables think tank              The Top 50 deals: main RES segments                   572 major operat...
IREX MONITOR The renewables think tank               Where are the top players investing …Europe          45% of the opera...
IREX MONITOR The renewables think tank                                         The players Most active players in terms of...
IREX MONITOR The renewables think tank                  Type of operations done by the Top 50     The construction of new ...
IREX MONITOR The renewables think tank                          The top 50 players’ major deals          Performance of th...
IREX MONITOR The renewables think tank     Financial performance, a double-sided picture                              doub...
IREX MONITOR The renewables think tank     Financial performance, a double-sided picture                              doub...
IREX MONITOR The renewables think tank                             The photovoltaic industry                       PV segm...
IREX MONITOR The renewables think tank                                         The wind industry                          ...
IREX MONITOR The renewables think tank                            Power generation segment         Utilities and pure rene...
IREX MONITOR The renewables think tank                        Size is a competitive advantage         The Top 50 index out...
IREX MONITOR The renewables think tank                          The top 50 players’ major deals          Performance of th...
IREX MONITOR The renewables think tank                          A challenging environment...  Companies are       p       ...
IREX MONITOR The renewables think tank                       Restructuring and Consolidation         RESTRUCTURING: the pr...
IREX MONITOR The renewables think tank                                         Globalisation  ALL THE PLAYERS ARE FOLLOWIN...
IREX MONITOR The renewables think tank                                 The integration strategies         ARE COMMON TO SU...
IREX MONITOR The renewables think tank                                   Innovation strategies  The Top 50 maintened R&D ...
IREX MONITOR The renewables think tank© Copyright Althesys 2012. All rights reserved.It is forbidden to reproduce any part...
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The strategies of 50 leading companies in the global renewable industry - Alessandro Marangoni, Althesys

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The strategies of 50 leading companies in the global renewable industry - Alessandro Marangoni, Althesys

  1. 1. IREX MONITOR The renewables think tank IREX MONITOR The renewables think tank The strategies of the 50 leading companies in the global renewable industry Alessandro Marangoni The global renewable energy industry: companies’ strategy and market trends Roma, October 9th 2012 1
  2. 2. IREX MONITOR The renewables think tank The challenges of the RES sector European p sovereign SECTOR STILL VIBRANT debt crisis  $ 257 billion of investments Decline in  Emerging countries selling prices are gaining ground Reductions-cuts of subsidies  In estment in solar energ Investment energy Consolidation exceeded those in wind of the industry US caught up with China Overcapacity pyright Althesys 2012. Crisis technology s manufacturers Globalisation Gl b li ti © Cop 2
  3. 3. IREX MONITOR The renewables think tank The renewable energy industry worldwide The Top 50 players: the key to understanding is trends in the sector as a whole a complex scenario The largest in RES industry (Revenue/MW installed) global competitive The most international arena (% revenue outside domestic market) 20 PV pyright Althesys 2012. • 33 technology companies gy 8 Wind s 5 Solar + Wind 12 Utilities • 17 power generation companies p g p © Cop 5 Pure Renewable 3
  4. 4. IREX MONITOR The renewables think tank The renewable energy industry worldwide is The strategies of the 50 leading companies in the g g p global renewable industry a complex scenario The t t i Th strategies of the 50 l di companies i th f th leading i in the global renewable industry The top 50 players’ major deals Performance of the renewable energy industry pyright Althesys 2012. s Strategic trends and future perspectives © Cop 4
  5. 5. IREX MONITOR The renewables think tank The top 50 players’ major deals Performance of the renewable energy industry Strategic trends and future perspectives pyright Althesys 2012. © Cop s 5
  6. 6. IREX MONITOR The renewables think tank The Top 50 deals: main RES segments 572 major operations done by the Top 50 $ 69 3 billi = 27% of th world’s i 69.3 billion f the ld’ investments and 63 171 MW t t d 63.171 RES segments by number of operations pyright Althesys 2012. s  Wind onshore and PV leaders  Offshore wind: 9,048 MW of plants operational or in construction in 2011  Biomass/WTE more local  CSP: 11.7% of the total amounted invested 11 7% © Cop  Development of the solar combined cycle 6
  7. 7. IREX MONITOR The renewables think tank Where are the top players investing …Europe 45% of the operations Offshore wind: 34% of the MW Eastern European co ntries E ropean countries: new key marketsEmerging markets g g Growing share: 19.4% Huge potential for wind in India - BrazilChina pyright Althesys 2012. Leader in wind: 18 GW of new capacity, s but l b t low di l disclosure of major players f j l Growing solar sector: 2.2 GW of power installed and 2.7 GW of deals closed by © Cop the Top 50 in the home market 7
  8. 8. IREX MONITOR The renewables think tank The players Most active players in terms of number of operations: 39.5% technology providers 26.5% pure renewable 20.8% utilities Key trends  Business development in power generation is the main way: 55.2% MW pyright Althesys 2012.  The expansion of equipments’ manufacturing capacity is the 2nd: 17.8% p q p g p y s  Vertical and horizontal Integration: 12.8%  Increasing importance of geographical and market diversification © Cop 8.1% 3.7% 8
  9. 9. IREX MONITOR The renewables think tank Type of operations done by the Top 50 The construction of new power plants was the dominant type of operation 250 37.9% 200 27.8% 150 100 13.7%% 50 6.3% 5.9% 4.2% 3.7% 0.5% 0 New Plant TK Plant Supply  Collaboration       Joint Venture Acquisition Merger Disposal pyright Althesys 2012. Agreements Partnership s  Corporate finance operations: 16.9%  M&A: 35% of the corporate finance operation p p © Cop 9
  10. 10. IREX MONITOR The renewables think tank The top 50 players’ major deals Performance of the renewable energy industry Strategic trends and future perspectives pyright Althesys 2012. © Cop s 10
  11. 11. IREX MONITOR The renewables think tank Financial performance, a double-sided picture double- European financial crisis Overcapacity General poor financial Increased 6.2 (P T ) 6 2 GW (Pv-Top) results of RES industry lt f i d t competition titi Cuts in subsidies Technology providers ... pyright Althesys 2012. s ... l t a lot of money! lost l t f ! © Cop 11
  12. 12. IREX MONITOR The renewables think tank Financial performance, a double-sided picture double- Utilities & Pure Renewable ... %Var.  Pure   Utilities  Total  2011‐2010  Renewable  Revenue  33.5%  0.2%  21.7%  EBITDA  125.0%  14.0%  95.4%  EBIT  32.1%  14.0%  27.0%  Net income  18.3%  5.3%  13.1%  ... profited of subsidies and falling tech costs pyright Althesys 2012. s  Utilities stronger than Pure renewables, paying the friction of take-off  Utilities already restructuring in the past  Increase of revenue for utilities, mainly outside Europe utilities © Cop 12
  13. 13. IREX MONITOR The renewables think tank The photovoltaic industry PV segment suffered the most during 2011  Drop by 60% in ASP for PV ˃ decline in manufacturing costs  Revised subsidies in key markets Market cap  Chi Chinese companies’ d i ’ dumping prices ... i i decreased by 68.1% Western companies: EBIT - 586.6% Chinese companies: EBIT - 167.3% pyright Althesys 2012. s Bankruptcies of renowned solar PV companies © Cop 13
  14. 14. IREX MONITOR The renewables think tank The wind industry Average 41.1% drop in operating income CHINESE COMPANIES WESTERN COMPANIES  Three largest wind companies: EBITDA down 29.3% over 2010 25.2% drop in revenue Technological leadership  New installations: 930 MW lower than in 2010 pyright Althesys 2012. s  Cooling government support  Market close to maturity  Financial troubles, difficult to  E t of foreign players in the © Cop Entry f f i l i th carry out large plant projects domestic market 14
  15. 15. IREX MONITOR The renewables think tank Power generation segment Utilities and pure renewable outperformed the overall sector Market cap slipped just 2% Sample of 5 utilities S l f tiliti with a full mix of sources: EBITDA of the RES segment 62.7% 62 7% EBITDA of the group overall pyright Althesys 2012. performance: 19.4% s  RES less volatile than Oil&Gas, subject to geopolitical risk  For utilities operating both in renewable and in traditional generation the © Cop RES segment exceeded the performance of the company overall 15
  16. 16. IREX MONITOR The renewables think tank Size is a competitive advantage The Top 50 index outperformed the other green indexes Global players better than small-mid cap  Economies of scale  Vertical integration  Diversified geographic g g p portfolio pyright Althesys 2012.  Mix of sources © Cop s 16
  17. 17. IREX MONITOR The renewables think tank The top 50 players’ major deals Performance of the renewable energy industry Strategic trends and future perspectives pyright Althesys 2012. © Cop s 17
  18. 18. IREX MONITOR The renewables think tank A challenging environment... Companies are p RES industry is y New markets & reorganizying changing quickly opportunities their business are rising INTERNATIONALIZATION INTEGRATION pyright Althesys 2012. s INNOVATION RESTRUCTRING - M&A © Cop 18
  19. 19. IREX MONITOR The renewables think tank Restructuring and Consolidation RESTRUCTURING: the priority to manage the overcapacity and to stop price falling No further drop in the technology price is expected in the near future ? Financial pressure + competition are driving CONSOLIDATION i the upstream PV, wind and power generation segments in th t PV i d d ti t pyright Althesys 2012. s Companies are likely to continue acquiring market share through M&A operations to survive © Cop 19
  20. 20. IREX MONITOR The renewables think tank Globalisation ALL THE PLAYERS ARE FOLLOWING INTERNATIONALIZATION STRATEGIES Windy-sunny regions with strong economic Decrease in technology price gy p growth are profitable also without subsidies  Target of investments from developed g p Emerging countries economies  Home to world class competitors Delocalisation of the production into PV market pyright Althesys 2012. emerging and low-cost regions s Western companies are entering Asian WIND market © Cop market easier than Chi k t i th Chinese enter E t Europe 20
  21. 21. IREX MONITOR The renewables think tank The integration strategies ARE COMMON TO SURVIVE THE CONSOLIDATION OF THE MARKET Equipment & Development, Plant Power O&M + VALUE CHAIN Raw material components construction, EPC generation services URE RENW Wind WIND CONSTRCUTORS TIES UTILITIES PU PV PV MANUFACTURERS CES Hydro SOURC UTILIT Biomass WTE pyright Althesys 2012. s CSP Geother In the future the distinction between traditional energy and renewable will ffade © Cop Marine 21
  22. 22. IREX MONITOR The renewables think tank Innovation strategies The Top 50 maintened R&D spending even during the hardest time in 2011  Western companies: 2% of their revenue in R&D˃ Chinese companies NEW TECHNOLOGY WILL GAIN GROUND IN THE FUTURE OFFSHORE WIND GEOTHERMAL HYBRID CSP pyright Althesys 2012. s MORE INVESTMENT WILL FOCUS ON INTEGRATING RES INTO © Cop POWER SYSTEM: STORAGE AND SMART GRID WILL BE THE KEY 22
  23. 23. IREX MONITOR The renewables think tank© Copyright Althesys 2012. All rights reserved.It is forbidden to reproduce any part of this document, in whole or in part, in any form or by any means,without prior written consent from Althesys Strategic Consultants. alessandro.marangoni@althesys.com g @ y Via Larga, 31 - 20122 Milano Phone: +39 02 5831.9401 - Fax: +39 02 5830.1281 www.althesys.com www althesys com 23

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