andritz hydro capital market day 2010,...

Capital Market Day 2010, AustriaANDRITZ HYDRO

2 ANDRITZ HYDRO – Friedrich Papst – Capital Market Day 2010, Austria

Business profile and historic development of the business area

Acquisitions and growth strategy

Market

Contents

▲ Francis turbine runner for Simon Bolivar (Guri II), Venezuela


Large Hydro:Whole range of electromechanical equipment for large new installations and large rehabilitations.

Compact Hydro:Entire production line and service spectrum for small and medium hydroelectric power plants with unit output < 30 MW.

Service & Rehab:Solutions, products, and services over the entire life cycle of hydropower plants.

Pumps:Pumps for water transportation, energy industry, and pulp and paper industry.

Turbo generators:Turbo generators for gas and steam turbines in the range of 15-350 MVA.

Business profileFive divisions/product groups


Long-term order intake development

1,150

593727 29 28 72

585

1,216

1,543

1,694

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 H12010

From a niche player to a global market leader

Order intake 2009 by region (%)

Acquisition ofVA TECH HYDRO

Acquisition of GE Hydro

Order intake 2000-H1 2010 (MEUR)


Long-term sales and earnings developmentSuccessful integration of VA TECH HYDRO and GE Hydro

4432292623

17.2

-0.4

19.8

10.38.7

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2001 2002 2003 2004-5.0

0.0

5.0

10.0

15.0

20.0

CAGR Sales 2000-2009: 58%

53

468

910

1,206

1,378

707

4.9

5.9 5.7

7.3 7.3

6.6

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2006 2007 2008 2009 H12010

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Sales (MEUR) EBITA margin (%)


Development in face of the crisis

392 377

243

531574

480

324 315

391

759

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010

Order intake (MEUR)

Solid development during global economic downturn


Doubling of business volume since 2006, increased profitability, and gain of world market share.

Receipt/finalization of important reference orders in all technology segments:> Largest Hydromatrix® order: 2 x 45 Hydromatrix® turbine generator units for Ashta: Energji Ashta,

Albania.> Most powerful and biggest Francis runners in the world: Successful installation of the first of five

Francis turbine runners at Guri II power station, Venezuela; the 770 MW Francis runners with a diameterof 7.3 m and a weight of 200 t are among the most powerful and biggest in the world.

> Most powerful bulb units worldwide: Supply of eight bulb-type turbines for Jirau, Energia Sustentáveldo Brasil.

> Largest contract in history: Ilisu – delivery of six units of turbines and generators, transformers, andpenstocks.

Further acquisitions to strengthen market position and expand into promising growth markets:> GE hydropower business: strengthening market share in South America.> Precision Machine: strengthening local manufacturing and service capacities for large turbines in North

America.> Hammerfest Strøm AS (33.3% stake): one of the world’s leading companies in power generation

from tidal currents occurring in coastal waters.

Research & development:Successful development of new series of superior pumping systems for pumping of medium consistency pulp.

Major strategic achievements during last three years


Important references

Customer:Energji Ashta: 50% Verbund Austria and50% EVN Austria.

Project:Ashta is located on the Drin river, down-stream of an existing cascade of three larger storage power plants. The total head of ~13 m will be utilized in two separate power plants, Ashta I and Astha II, which are connected by a canal along the river bed.

Start-up:2012e

Ashta, Albania

Scope of supply: Hydromatrix® turbines (Astha I: 45 units, total

capacity 20.6 MW; Ashta II: 45 units, total capacity 32.4 MW) and generators.

Draft tubes, gates, gantry cranes, intake trashrack. Control system, electrical equipment, switchyard.


Important references

Customer:DSI – Devlet Su Isleri, General Directorate of State Hydraulic Works.

Project:Design, supply, erection, and commissioning of:

Start-up:2015e

Ilisu, Turkey

Six turbines à 200 MW, governors, and valves.

Six generators à 224 MVA, excitation.

Transformators, switch gears380 kV and 154 kV, overhead lines.

Cranes. Automation. Mechanical and electrical

secondary equipment.


Jirau, Brazil:Eight bulb turbines (the most powerful worldwide), generators, and 28 voltage regulators.

Lower Mattagami, Canada:Design and installation of three propellerturbines and generators.

Boyabat, Turkey:Turbines, generators, and automation.

Sogamoso, Colombia:Francis turbines.

Kindaruma, Kenya: Rehabilitation of two existing turbinegenerator units, installation of a third24 MW turbine.

Navizence, Switzerland:Total upgrade and modernization.

Major orders 2009/2010

▲ Hydropower plant Kipling, Lower Mattagami, Canada


Research & developmentMain focus on future market needs

Pump turbines to back up wind and solar power.

Variable speed solutions for decentralized power production and grid stabilization.

Matrix turbines to utilize the hydropower potential in existing irrigation dams in rivers.

Hydraulic design that enables complete coating of blade channels as protection against sand abrasion (India).

Flow simulations for yield optimization.

Simulation of a pump turbine (photoabove) and a Pelton turbine (photo

below) for improving the smooth runningproperties of turbine runners, both at low

partial load and at overload ►




Market

Contents

Vertical line shaft pumps for a power

station in Belgium ►


ANDRITZ Precision Machine

Product/service:Mechanical service shop forrefurbishment of large turbinerunners.

Fit to existing portfolio:Complementing existing service portfolio; close to North American customers.

Location:Idaho, USA

Acquired in:Q1 2010

Sales:~ 5 MEUR/a

Employees:~ 60

Complementing refurbishment capacities for large turbines

▲ Refurbishment of a turbine bearing


Hammerfest Strøm

Product/service:Tidal current turbines.

Fit to existing portfolio:Further complement productportfolio by entering a stronggrowing new market.

Locations:> Hammerfest, Norway> Glasgow, UK

Acquired in:August 2010 (33.3% stake);Co-shareholders: Iberdrola, Statoil

Employees:~ 15

Entry in tidal current power generation market

Tidal current turbine HS 1000 (1 MW) that will be installed at

the European Marine Energy Centre (EMEC) and is

expected to be fully operatedin H2 2011 ►


Growth strategy

Maintain EBITA margin by ≥ 7% and keep growing market share.

Focus on technological leadership.

Strengthen global set-up and support localization process.

Regional balanced project portfolio.

Grow globally in service business via further localization.

Further extension of automation services.

Expand Compact Hydro business in Central America and South East Asia; evaluate M&A opportunities forcomplementary growth in the smaller sized Compact Hydro business.

Evaluate M&A opportunities for further growth, e.g. in Compact Hydro or in the pumps business.

Increase product range in the turbo generator area; benefit from market opportunities in India and South East Asia.

Strengthen global position while maintaining profitability




Market

Contents

▲ Generator


Expectations for next 12 months and main market drivers

High order backlog of more than 3 bn. EUR provides solid sales and earnings visibility.

Overall unchanged good project activity to continue in all ANDRITZ HYDRO relevant regions.

Solid demand for modernizations and upgrades in Europe and North America due to high age of installed base.

Several new hydropower projects in emerging markets (especially South America and Asia).

China announced to expand its hydropower capacity by 50% by 2015.

Good development for Compact Hydro expected.

Pumps: growth potential for pumps for power generation and water transport, as well as pumps for the pulp and paper industries.

Expectations for next twelve months

Economic growth in emerging markets: strong population growth, especially in India, China, and Brazil, leads to strong rise in electricity demand .

Climate change: investments mainly in developed countries.

Kyoto Protocol awareness supports investments in CO2 free renewables.

Main market drivers

Solid market conditions to continue


Certain statements contained in this presentation constitute ‛forward-looking statements.’ These statements, which contain the words ‛believe’, ‛intend’, ‛expect’ and words of similar meaning, reflect management’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially.

As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.

According to IFRS.

Disclaimer

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