Nordex SE

Lars Bondo Krogsgaard - Chief Executive Officer Christoph Burkhard - Chief Financial Officer José Luis Blanco - Chief Operating Officer and Deputy Chief Executive Officer

David Vos - Barclays Phuc Nguyen - Citigroup Arash Roshan Zamir - Warburg Research Gurpreet Gujral - Macquarie Pinaki Das - Bank of America Merrill Lynch Sean McLoughlin - HSBC Sebastian Growe - Commerzbank AG Klaus Kegel - New Credit Alok Katre - Societe Generale

Thanks a lot. This is indeed Lars Bondo Krogsgaard, the CEO of Nordex.

And I would like to welcome you to today’s Q3 Results from our Headquarter here in Hamburg in Germany. I think I’m really pleased today to introduce our new CFO to you Christoph Burkhard.

He has joined us on 1 September. Some of you had the opportunity to meet Christoph at our Capital Markets Day in Hamburg.

First off, I myself will present the charts for today and together with José Luis Blanco, our Chief Operating Officer. And we will be answering your questions at the end of the presentation.

A look at today’s agenda, we will first take look at the key messages of today’s call, before we turn to the operating performance of the company during the first nine months of the year. Then Christoph takes you through the financials for the period, where after I will conclude with comments on some relevant market developments and give you outlook guidance for the year.

At the end of today’s call you will as always have the opportunity to ask questions. I have a feeling there might be some interest in regards of use on the outcome of the U.S.

Presidential Election. Before we go into details, I’d like to highlight these key messages.

We had good order intake momentum in the third quarter and ending a total of €840 billion of new orders and projects across eight markets with Germany and Finland being the biggest market source in Q3. Our year is, we have been talking about this as before, quite backend-loaded in order intake this year and we plan some fairly high jump in Q4 where we want to close around €1.2 billion of order intake debts of course.

Changing not at least because we have recently seen some projects moving out of 2016 but we have a good pipeline and expect to close the year in style by converting approximately 600 million of conditional order intake in some orders and closing 600 million of new deals that we currently negotiate with FFO [ph], maintain the order intake guidance at greater €3.4 billion. Although we maintain full year order intake guidance has affected some of our planned orders intake, escalate and that this will have an effect on the 2016 top-line.

We now think that our revenues will come in at the lower end of the guidance range of €3.35 billion to €3.45 billion, in other words we believe that revenues will land at €3.35 billion. The top-line move also bodes a little bit of fresh on the EBITDA margin and so we have decided to conclude that the margin, the EBITDA margin for the year will land at the lower end of the 8.3% to 8.7% bandwidth that we have previously communicated so about 8.3%.

A few comments on some things that are not mentioned on the slide and we’ll come back to them in the later part of the presentation. As indicated during the Capital Markets Day, we expected that Q3 working capital would be above our year target for the KPI.

And it was indeed at 6.8% at the end of September. Christoph will come back to it and explain it but we expected we will be able to close the year just below a 5% of on-guidance.

Capital expenditures, we have a technicality in the first half, we’ll also talk about the later. We have increased our projected capital expenditure from a range of €80 million to €90 million, to €100 million to include expenditure on the extensions that we’re currently building in connection with third quarter.

It is a technicality in terms of sale and respective that we’re doing. The 2018 planned expense and it’s not affected by today.

As already mentioned, we closed 840 million of new orders in the third quarter of 2016, 30% of the order intake was the Acciona Windpower platform AW3000 machine whilst the remaining orders was spread on Gamma and Delta machines. Total turbine orders were up 10% versus the same period last year, when comparing Nordex on a standalone basis, it deserves to mention that 2015 numbers is equivalent period were boosted in the first half by big orders from Uruguay and South Africa.

The order intake in the third quarter was characterized by a strong performance in Germany and Finland as I already mentioned, we had roughly 350 million orders coming out of those two markets. We’re seeing the effects of the Acciona Windpower acquisition in terms of the composition of the order intake, we’re seeing more business out of the Americas as they contributed first nine months of the year around 25% of the order intake versus 13% or so last year.

Q3 bought some good projects and although of the size that was not necessarily the norm in the old Nordex that before we filed decision we closed the big team, in May Q2 for Acciona Energia. We strengthened our position in Latin America with a market entry in Peru, where we closed 42-unit deal.

And we were very pleased to see that business continues in the very important Turkish markets, where we closed a deal with our repeat customer EXIM of about €100 million. Through the improved order intake in the third quarter, the book-to-bill is back a 1 and we expect to drive the book-to-bill slightly above 1 and realization of the order plan for the remaining year.

We are seeing the effects of the Acciona Windpower acquisition also on the backlog of course, not at least in terms of a swing to more business in America which now represent about 30% of the backlog which in total amounts to just under €2.1 billion as per today. On the operational side, installations grew by 35% versus the first nine months of 2016 we installed turbines in 13 countries.

Our main markets were Germany followed by Turkey and Brazil, and in short steps after that we had a good run in U.K. and Uruguay we’re building a large project right now in Mexico and in Ireland.

After a period of low utilization in our Spanish facilities we have been restarting the production we’re currently running at a rhythm of two turbines per week, that’s significant increase in activity versus the second quarter. And [indiscernible] we have done a lot to become more efficient and we have been able to increase output further to six turbines per week.

In India, in our new facility in Chennai, we’re seeing the first turbines coming off the line to support hopefully a good development on our Indian business. On the blades, on the blade production we are seeing this year, you may remember that we had affected in broad stock closed part of the last year due to the extension project that we were doing in order to be able to manufacture the new long 65.5 per meter blade to the effort not surprising that we’re seeing an up-tick in activity levels there.

Year-on-year Nordex on a standalone basis, we offer at 40% in terms of activity level. We are also now doing more in terms of production in our blade facility in [indiscernible], in Northern Spain, where we increased output by 58% quarter-on-quarter in line with the projects that we after execute.

Service revenues; grew by 28% to €189 million versus 2015 and, is expected to contribute more than €250 million to the 2016 top line. Availability levels grew up slightly quarter-on-quarter and at essentially 97.4%.

If I have to comment in the context, we were slightly higher for the same period last year and so the small drop is that we have had as other players in the industry issues with lifts in many of our turbines due to a component problem that did cost quite a bit on the availability but we made it normal and I expect we’ll be able to improve things forward. The rate of renewal of service contract is somewhat lower than last year there is no reason for concern in this account.

And the renewal rate is a function of the total number of turbine contract divided by the total - the total number of turbine contracts renewed divided by the total number of contract expires. We do not really have a lot of contract that expire, one reason being, an important being that our contracts have been decreasing the loan.

And the second reason that we don’t see reason for concern is that the contracts that were not renewed were to significant decrease. Service arrangements where did not really have a deep desire, we’re quite low.

If we look at the service order, backlog, we are consolidating here I believe for the first time the Acciona Windpower turbines into the backlog. And what you can see is that the total service order backlog amounts to €1.6 billion.

Now we have a total more than 12 gigawatts on the contract right now. So we have good basis to continue developing that significant part of our business.

And with that remark, I would like to hand over to Christoph who can then make his first presentation of the financial numbers.

Thank you, Lars. Yes, good afternoon ladies and gentlemen.

My name is Christoph Burkhard and I’m the new CFO of Nordex Acciona. And as Lars mentioned I already had the pleasure to meet some of you personally at our Capital Market Day in Hamburg in September.

And I’m pleased to walk you through our financials now. And my intention is actually not go through line-item by line-item but rather focus on the most important items.

And I would like to start with revenues. At the end of September 2016, we had reached of €2.34 billion in sales compared to a €1.786 billion a year ago and this number translates into a 31% overall and 10.6% organic growth.

And this is in line with our expectations. Revenue largely was driven by growth in Germany and other European countries such as U.K.

and Ireland as well as in emerging markets including Brazil and Europe wide. And as Lars already mentioned earlier, we do expect quite a backend-loaded here.

And we are narrowing our revenue guidance from the range €3.35 billion to €3.45 billion to low end and to the €3.35 billion and with these narrow revenue guidance lies in delays in some projects in the U.S., India and in Turkey which we expect to shift into ‘17. Now the narrowing of the revenue forecast to the lower end of the range and the higher proportion of emerging market projects in countries like Brazil and India in Q4 that also led us to narrow our guidance for EBITDA from the range 8.3% to 8.7% to the lower end of the range and to the 8.3% With this I would like to move to Slide 13 and this slide is mainly about the development of the working capital.

The increase of the working capital ratio in Q3 to 6.8% compared to the 4.4% end of June that reflects firstly several large payments outstanding in the Americas, especially in Brazil and Uruguay, and secondly driven by preproduction, production of components for the mentioned anticipated Safe Harbor contracts in the U.S. And we previously indicated that while our target remains below 5, we might finish the year at around 2% working capital ratio.

And we meanwhile have become more skeptical about our chances to receive the payments, some bigger payments from Latin America before year-end. And therefore we expect to be our working capital ratio now just below 5% at year-end.

Now how does that translate into our free cash flow expectations for full year? Well, the working capital ratio that I’ve just explained that will translate into a reduced double-digit negative free cash flow number if you deduct the acquisition cash component here.

So we are going from 3-digit to negative 2-digit free cash flow number, this is the expectation. And then referring to what Lars has already mentioned around the capital expenditures that we’ve increased to €100 million.

As mentioned, this is the expansion of our headquarters where we validate our deals that are partially still in separate locations. The deals will structure an impact in 2017 and what I can already mention is the investors’ interest is very high.

With that, I would like to move to page 14, and the balance sheet. And obviously the balance sheet has changed quite significantly as a result of the acquisition of Acciona Windpower.

The increase in working capital as well as the capital increase is of course reflected there. But the balance sheet as such remains another strong point of our company.

And despite the increase in financial debt, our balance sheet remains very solid with an equity ratio of 32% and is well structured on the debt side. And our debt financing comprises promissory bond in the amount of €550 million with a remaining maturity of about four years.

And EIBL European Investment Bank Loan of approximately €90 million with a current maturity of seven years and then our syndicated currency facility of total €1.2 billion. And of the €1.2 billion, €665 million have not yet been drawn.

And this facility has a remaining maturity of about 4.5 years. And with that we consider ourselves fully financed and able to fund growth over the next years towards 2021.

And Lars with that, I would like to hand back to you.

Okay. And now move on to Slide 15, to give you an update on the business that we’re conducting in the U.S.

and Germany, obviously some very important source. I think one thing would and should be of particular interest to your end, Safe Harbor deals are progressing.

Most of you are deep into the substance of the wind industry, for those of you who may not know the Safe Harbor deals are deals that essentially secure business volume for a four-year period provided that their constructions and projects is, commencing in 2016 or that binding non-refundable down-payment towards specific commitments are made before the year end. We’ve had good momentum on Safe Harbor negotiations since our Capital Markets Day, and I think we can say that we are a little more optimistic on the volume that we’ll be able to get out of those deals.

Right now, the volume that we negotiate gives us good reason to believe that we will close volume that is €2.5 billion total. And of course what you have to think about here that number is that the way things work is that we have 5% down-payments on these projects and that the additional volume of income in subsequent years.

We’re seeing demand for both the Nordex brand and the Acciona Windpower brand and we are happy about that. We are negotiating contracts with good costs and some of them are repeat cost of ours, so we believe that these things are progressing well.

And in addition to the Safe Harbors deals we expect to close on “real” U.S. order in the fourth quarter of the year.

There is a significant degree of interest right now in the industry around the possible consequences of the presidential election, are preliminary view, in super-shot terms is we do not see consequences in the short to mid-term and I’m happy to elaborate a little on that afterwards if you have questions in that direction. In Germany we’re seeing a high level of activity we expect, the entry to write-off levels in 2016 so above 4 kilowatts.

And we also expect that 2017 will be a fairly strong year. Right now our forecast terms, I believe just 4 gigawatts but we do see potential that it could be more.

And in our company, we expect order intake that exceeds €1 billion. Some of you who follow the German market they know that there are some discussions in terms of the extent to which volume can be placed in areas that are subject great restrictions under the future auction scheme, high exposure to opt these projects is fairly limited and will not hit us hard.

We’re seeing building permits coming along well in 2016, that’s a premise for firm order intake this year. So, we’re of course following that closely but so far we feel and believe that things are well.

A few update on development in some other markets and there isn’t too much to update on really this time. But perhaps a few notes from our side that on things that we think are interesting.

In the U.K. we are increasingly involved in discussions with corporate customers to potentially make a power purchase agreements or rather our customers are in contact with those.

And I think it’s interesting that we might see a market developing outside of the old renewal supplication scheme. So there is fantastic wind resource in the U.K.

and it makes a lot of institute to wind energy for that reason alone. Let’s see what happens but I think it’s an interesting and new development in a market that has been significant in recent years and which we expect that would go down in coming years due to the disappearance of the renewable supplication certificate scheme.

In France, which is a big market for us and important market, we are happy to see what the French government confirms. It’s mid-term ambition to extend renewable entity in the market not at least because we see a gap between the way things are going and the level that France would actively meet to achieve where they to meet their targets.

We hope of course that that will trigger additional business in Nordex. In Argentina, I think that’s an interesting market to talk about, we have seen the first round of auctions volume went ahead of us and I think without disclosing too much I can say that we’re in caution spirit.

Some of those hoping to be able to the Argentinean market eventually the next round in terms of Argentina will come in November so this month. And then of course on 4 November, as Paris Accord came into force, whilst we’re not seeing the effects of the Paris Accord in projects, at this point in time we do believe that it will serve the renewable energy well and hence also benefit us in the long-term.

A look at the order intake for the remainder of the year; the year is, we have said a couple of times, backend-loaded. We maintain however our full-year targets, of an order intake that is greater than €3.4 billion that’s challenging but it’s doable.

And the way we want to do it is by closing €1.2 billion of orders in the fourth quarter, in line with our previous statements and assessments we expect at about €700 million will be coming from the Nordex platform and €0.5 billion Acciona platform so that at the end of the year we will have split on the two platforms of approximately 60% with Nordex and the remainder with Acciona Windpower platform. The new orders will be I mentioned that in the very beginning of my presentation here today will be in part orders that are converted from our conditional order backlog which by the way at the end of the period stands at €960 million, and the remainder of the contracts will come from new orders that we are currently negotiating.

Our pipeline as a whole is robust. We are seeing a few things slip out.

One thing that happened to us was that two South African deals that we had anticipated in the fourth quarter, they will now due to the decisions of the Department of Energy in South Africa, not go ahead immediately, they will come but not at the point in time where we originally expected. The Department of Energy needs to give a green light for Acciona to sign power purchase agreements and until that happens the contracts won’t be closed.

I think it’s fair to say that we have a significant piece of work to do and that our sales people will likely be working between Christmas and New Year but we have done that before. And we are in good shape to get things in place.

We do see quite a competitive market right now that has to be said we are seeing volumes coming down somewhat in the next year due to the Safe Harbor structure of the market where there is a lot of focus on getting these deals close to safeguard project volumes over the next four years. We’re also seeing the global volume come down a little bit as well as the introduction of auction.

So I think we are watching a little bit the way in which prices are developing right now. Let’s see, but it’s certainly is a market where you need to be on your toes to win business.

With that, I would like to finish off by summarizing our guidance for the year. We maintain our order intake guidance as previously stated at the rate of €3.4 billion.

Again we had a business moving out of 2016 into 2017 but we expect to be able to compensate that with other business and we have some good effects from Safe Harbor volume. Sales, is guided now at €3.5 billion, the reasons were mentioned by Christoph earlier on EBITDA.

And we narrowed the guidance to 8.3% and a working capital we maintained at lower than 5%, we expected them to decrease the working capital at the end of the first month new order intake for the remainder of the year and Christoph also explained the reasons why we are increasing guidance on capital expenditure. The note on merger cost today stands, as previously communicated at €20 million.

Finally I’d like to mention that Christoph will be in London in December to meet with investors, so perhaps some of you will get a chance to meet with him there. Our investor relations staff will also be in Zurich in late November at and an investor conference in London on 30 November.

Thank you for listening. And we’re now to answer the questions you may have.

Operator, please go ahead. We are ready to take questions.

Yes, good afternoon gentlemen, thanks for taking my questions. On the PTC, can we just clarify a little bit what the negotiated safe harbor volume exactly means?

What I mean to say is, of the 2.5 gigawatt that you mentioned here on the slide, what is the commercial risk to those order or those projects converting into orders? Are you still toe-to-toe with some of the other OEMs in the U.S.

there or have you crossed that line already? And the next question, is then, have you any idea of when you actually sign these orders?

And then on the volume itself 2.5 gigawatts, if I do quick math based on the slide of your Capital Markets Day presentation, your ambitions would require you to get to around 3.3 gigawatts of projects over the 2020 timeframe to maintain that 10% over 10 gigawatt market. So how do we think about that 2.5 gigawatt number in light of the 3.3 gigawatt?

David thanks for the question. Let me start by answering the last question that you had.

The 3.3 gigawatt, I’m not sure about the number but I assume that the correct deal what we want to do is to gain 10% market share thereabout in the U.S. market.

We do not expect that all volumes will come from Safe Harbor deals. We do expect that there is a market outside of the Safe Harbor volumes, so it will have to a combination of the Safe Harbor business that we should grow now and future deals.

When will we sign deals? I mean sales, so that’s only in the answer to be specific and accurate on that is difficult.

But we expect to close deals in November and in December. And then extent that we can and the cost that allows us then we may also decide to announce some of those deals.

As far as competition, go ahead, David, did you have a comment?

Continue please.

Okay. And in terms of competition, there is always competition in the U.S.

market but we are in quite advanced negotiations with a number of costs on us towards closing this volume. I think I’m not sure whether you asked specifically but at least implicitly I think it was an element in your question when we spoke about Safe Harbor volume at our Capital Markets Day, I think we mentioned that the fact about which you need to multiple the Safe Harbor contracts that we chose is about 15, so you can do backwards calculation in terms of the €2.5 billion divided by 15.

And then you will see the approximate volume that we feel comfortable about right now in terms of safe harbor. Not all of that, there Christoph is much more into the details than I am but not all of that will convert into turnover.

This year there will be…

This period of four or five, I think 105 days, there will be little effect.

Yes, exactly. Okay that is clear.

Then if you allow me to ask you a question on how do we think about 2017 profits at this juncture I would really appreciate it. I know that maybe not the custom to talking about that.

But I would just like to have your sense on, how do we model this for next year? And I wonder whether we’re missing or I’m missing something?

So, if I take the guidance that you issued today I get to an EBITDA level of around €280 million. In order to get to next year, what do, we take into account in the bridge, I can think of integration costs have drop-out that will be about €20 million reversal of the issue in Uruguay would lead to another I’d call it 7 or so.

Then we have another quarter of Acciona, maybe that’s €20 million or €25 million, early synergies €15 million, then we have the FX issue that we’ve dealt with this year and the loss making contracts in India for example, maybe we can pencil that in at about €10 million. And then we have the revenue shift from the announcement today right, so the €100 million that moves from ‘16 into ‘17, if I put that on an average 8% margin, that’s another €8 million.

Do that sum and I get to about €360 million to €365 million or so? Is that logic complete, are the numbers broadly correct or am I missing something would be the question sir.

I think David I didn’t want to impolite and interrupt you. But the way we look at ‘17 is that we are in the process of budgeting the year.

We have a rhythm for communication of our numbers and that is that we will communicate our opinion in 2017 when we talk to you in connection with the preliminary numbers probably in late February or March next year.

Yes, I understand that, but, okay, let’s move away from the numbers as such then. But do the components of the bridge at least line up or am I missing something in the constituent parts of the thinking I just laid out?

I think it is difficult to comment on principles without getting specific at a level that we don’t want to see before we have a full overview of the budget for 2017.

Okay, fair enough. I’ll leave it at those questions for now and maybe I’ll have another opportunity at the end of the call.

Thank you so much.

Hi, guys, thanks for taking my question. I have a couple of them.

First one is on India. At the CMD you penciled in 100 to 150 megawatts for India in ‘17.

Can you elaborate whether that’s in your order backlog at the moment or are you taking that in as order intake in Q4? And then my second question on the U.S., also on your CMD you had ambitions to deliver 400 to 500 megawatts next year in ‘17, is that then a non-PTC order or couple of non-PTC orders?

And I assume you’re negotiating them at the moment already. So is this in your conditional backlog at the moment and maybe you can provide us with an update of the negotiations of the couple of orders at the moment?

And then one question no Brazil, your gross margin was down by quite a bit in the quarter, something like 200 basis points against the first half of the year. Is this purely due to the Brazilian FX, I realize you’re executing more projects in Brazil at the moment on the AWP side.

And if it’s not just the Brazil, if it’s not just Brazilian FX, can you quantify how much the Brazilian FX that’s impacted your cross margin? And then lastly, you mentioned in your presentation €960 million of conditional order backlog.

Can you give us a gross number for that?

I do not have a gross number on the conditional order backlog, but on, a normal circumstances it should be about double the amount that we have as net backlog. As far as the U.S.

volume is concerned we still have it as our plan to, we still have it as a plan to install about 500 megawatts in the U.S. markets.

And I believe, José Luis Blanco, our Chief Operating Officer can answer the question in terms of India.

Hi, India we are in about negotiations. So depending of the finalization of those negotiations it might happen that the orders close beginning of next year.

So, we are still on time to execute the majority of the volume within the calendar year.

Did that answer your question?

Yes, and then the question on the Brazilian FX, whether the 200 basis points and gross margin was purely to do with the Brazilian FX?

Christoph, can you answer that?

Yes. On the Brazilian FX effect, it is already getting in there because you remember that I have explained that our total EBITDA margin is also developing a little bit towards the 8.3% due to other Brazilian projects.

And there you do see as well the Brazilian FX effect. I think as I’ve commented already previously on the FX that we will not repeat that.

However, you do see those effects in the current project. And therefore I would support your argumentation here, your analysis.

So, you see a normalization I mean fourth quarter it is 200 basis points drag and it goes away?

That is correct, that is absolutely correct.

Okay. That’s very clear.

Thanks guys.

Yes, good afternoon gentlemen. Thanks for taking my question.

I have a couple on your order intake you mentioned that you want to achieve €1.2 billion of new orders in Q4. And I just wanted to figure out what, are the potential average-size of those orders just to get a feeling what could be the impact that one of those orders shifts into 2017?

And then also, I was actually counting on those projects in South Africa to come true in Q4 now you mentioned those projects will shift into next year. So, which orders from which region actually are going to offset the shift of the South African order, because obviously you stick to y our order intake guidance so there must be some new orders, maybe these two first on the order intake?

Excellent, that’s of course a fair question. I hope that the financial analyst community is happy that we’re able to find some back-up projects as things move into another year.

We expect that we will be doing some business out of South America. That should assist us to get at least part of the way and then we had a small buffer in the plan that we were running with.

As far as the average size of the projects are concerned I can’t give you a specific average, it’s a real mix because, if you look at fuels in Germany, they’re of course smaller from the average size. And I believe we will be doing in the fourth quarter, that we will be doing around €300 million or so on Germany volumes spread over many projects.

So arguably with I guess your perspective of rather low probability of failure. And of course we get issues on the very tail-end of the year with the billing permits which we don’t see currently.

We also have about €150 million or so coming out of European markets on fairly small projects. And then we have some bigger deals, I mean, in South America we have the Safe Harbor volume that I alluded to before and we have the business in South America that we expect to get in, more specific, I don’t think I need to be.

Okay, understood. Maybe then just on orders you expect to win in the U.S., you mentioned on one of your slides that you still expect one order come true in Q4.

Is there anything else from the U.S. you expect in your €1.2 billion order intake for Q4?

We expect now the Safe Harbor volume and we expect one significant dollar in the U.S. market for the remainder of the year.

And you don’t want to give us a total number of how much this will total to?

It will be in the €350 million range or so.

Okay, understood. Then maybe again taking a longer term view, with the new President Trump or the President elected Trump, why do you expect a limited impact from the Trump presidency on your mid-term growth prospects because obviously, apparently it seems to like the wind energy in general and he wants to reduce the corporate rates in the U.S.

from currently 35% to 15%. I guess this will be only attainable if he scraps investment tax credits.

So what exactly makes this so relaxed about his presidency?

This is obviously not a platform to make political statements. But it seems to me that Mr.

Trump was angry about many things during the year in the campaign. But if we look at things in practical terms, then yes, it has affects.

Trump was the Republican presidential candidate and the Republican Party supports wind energy. So the PTC scheme as republican support that means it enjoys support from both the democrats and republicans.

Any change to the PTC will have to go through Congress. We have seen key republicans during the election campaign voicing the support for the PTC scheme and that includes prominent members of the finance committee, we see limited risk that something will happen there.

There is another aspect which I think is very important. America actually benefits a lot from wind energy the industry is a big employer with almost 100,000 jobs including jobs in domestic manufacturing.

And it’s also worthwhile to mention that and this is based on research done by the American Wind Energy Association that almost 90% of wind farms in the U.S. market are in Republic and health congressional district, creating jobs in parts of America where people are stocking.

We do not see much risk on the Safe Harbor order as we simply can’t imagine that Trump who comes into office in 2017 will retroactively start to fiddle with the PTC Safe Harbor schemes. So in our predictions we do not see a significant risk of short to mid-term effect.

I think that in the longer term, of course there are some things that could potentially have effect and two main ones from our perspective are possible lowering say in the guide to target sales force in the Paris Accord, so you could imagine that the U.S. which is not subject to binding targets on the Paris Accord would kind of tune down its effort to help the fight against global warming and climate change.

And also we do see risk long-term that Trump may challenge the clean power plan of the environmental protection agency, that’s a plan that is intended to reduce greenhouse gas emissions by 30% or so over the next 25 years. And we could imagine that he would fiddle with it.

But as far as the kind of short to mid-term business, and by that as we mean through 2020, we see limited risk. And I think this is also if you’ve been starting to do what other OEMs and other companies have been seeing over the last year, this is also a little bit mirrored in their incomes.

Okay, understood. So, the negative impact market came from 2020 when repeals executive order on the clean power plant but you don’t expect any negative impact until 2020 then?

I think what we’re seeing, the clean power plant I think potentially by changing top management in the environmental protection agency, I think it could change tile there. But the fact of the matter that the plan doesn’t really grip before you get to the early 2020 and in that sense we do not see a significant effect on our business.

Okay, understood. Maybe just one follow-up then in general, looking at the current share price levels, are you worried about your hostile takeover or is this nothing you’re worried about at the moment?

We worry about the business and running the business, it is sometimes strange and difficult to understand the way that share prices move. And the business is the main focus that we have in our daily work here.

Okay, understood. Thank you very much.

You’re welcome.

Hi guys, yes. I’m slightly confused by the choice of the word negotiated on slide 15.

So I just wanted to clarify what do you mean by this? So the Safe Harbor volume of 2.5 gigawatts, should we assume the deposits for these deals are in your backlog as of the end of the third quarter or not?

Could you confirm that please?

Sorry, if there is confusion about the wording here. What we meant was that what has happened since our Capital Markets day is that we have been negotiating Safe Harbor deals, none of those are closed now, and none of those are reflected in the Q3 numbers so let me make that crystal clear.

Okay?

Okay. Yes, that’s a big difference right.

Yes.

So, another question, let’s just say, assume you have a 10% deposit on these orders, I know you said 5% earlier on. Does anything comes through 250 megawatts, is that part of your conditional backlog, the €960 million, €940 million that you mentioned earlier in the call?

The way that works is that if you take a project, a Safe Harbor project with a total project value of €100 billion then 5% of that would need to be paid. That does not necessarily translate into a €100 million order but it does translate into a €5 million fixed order, and specific customers that the customer can’t run away from.

And I think, now thinking back, I think I actually missed the opportunity to answer a question that was already asked before. The €5 million that we would get does not give us absolute certainty that we will get the €100 million order eventually.

But it is of course a strong indication that the business will go in our direction eventually. These things are not done individual basis, but there are customers out there investing significant, even 5% is a lot of money on big infrastructure projects.

And we are positive if you will about the prospect of eventually landing those deals.

And maybe it’s Christoph here, if I might compliment last statement just to avoid any kind of misunderstanding here. This has been translated in that way of our working capital outlook in the sense that those 5% order entry that we will be able to recognize by the year-end due to the mechanics one-to-one translate into cash because this is simply the condition of Safe Harbor.

And at the same time, the revenue, as we have mentioned earlier is not tally one to one and landing in ‘16 because the transfer of risk topic related to that basically is working over the following 105 days in 2017. And that’s why you can’t take order entry equals, cash equals revenue, you can only say order entry will equal cash but not revenue, the revenue portion will be smaller.

Okay, fine, thank you. My second question is around the conversion of your conditional backlog to farm, you mentioned €600 million is what you’re hoping to convert out of that €960 million.

How does that compare from a ratio point of view with your previous few quarters?

I would have to check that what the specific conversion is. I think the deal is quite a bit from quarter-to-quarter but perhaps we can see before the call ends and give that to you.

What I’m trying to ask is, assuming two thirds of your conditional backlog converting to farm, is that assumption, an aggressive assumption, is it conservative, I mean, that’s all I’m trying to find out?

Not something that is aggressive that’s for sure. And we are seeing a fairly high progress.

From our perspective it is something that credibility to the order intake because we are basically farm progressed on the conditional orders, activity as always didn’t stuff missing in order to take the order front resumed. And we have just checked the number, just for that we have just checked the number for the last quarter, and there we had a conversion of 40%.

Is that for the full nine months? Okay, for the full year?

Okay, no, yes good. I hope that answers your question.

So, 40% in the last nine months or 40% in the last quarter?

I think what was meant was that we have a conversion of - we have a conversion of around 50% for the year, for the fourth quarter.

Okay. And my final question is just again on that slide, on the German side, you mentioned a likely G-rush in 2017.

Can you quantify that, can you give some more color as to what you mean by our rush there?

Yes, we mean it in this specific context actually of ourselves but also generally in the markets. The way the German market works right now is as far as projects has building permits prior to the 31, December 2016 they can still build under the current EET scheme.

So if you feed entire system through 2018 I believe. There is a progression in the feeding tariff level over the coming period so customers generally speaking have an interest in getting projects finished off sooner rather than later.

For us and this is something that we have not a make, secret out of so I don’t have a problem in repeating that. For us the situation is that we expect to install about 250 units this year in the German market and we expect to increase that number in 2017 to about 300 units.

That’s the plan we’re working for. And that’s of course a significant thing for us too, to continue having a big volume in the German market kind of on the reach of the auction systems working.

I hope that answers the question?

It does slightly. But is that a change now to the stance you had at the CMD where I think you alluded to some of this overlap to go into 2018, here you don’t mention 2018 and so you don’t now believe that it will be overlapped into 2018 and this is all likely to be realized in 2017 ahead of the feeding tariff reductions on a month by month basis?

No, no, we’re not really changing our opinion, the opinion that we passed on at the Capital Markets Day. And the point we were making was that in our projections and I mean the point we were making at the Capital Markets Day was that in our projections the German market was slightly lower than the projections we were seeing coming out, market analysts are coming from the market analysts into the perfect make we normally rely on.

So what we presented during the Capital Markets Day was 3 gigawatts but then kind of with this delta to what we’re getting from the analyst right now, up to 3.6 gigawatts. And we’re not really seeing any change in that.

But we are seeing, what we are seeing is perhaps a couple of hundred more of megawatts on top of the, I believe we said 3.7 or so gigawatts in 2017. So we do see the potential for good year in general.

And we do see certainly the potential for very good year for Nordex in the German market next year.

Okay, thank you for answer, thank you.

You’re welcome.

Hi, good afternoon gentlemen. Many thanks for taking my questions.

I guess people have asked a lot of questions I have a few too. The first one is I think there was some new flow around the German Economy Minister blocking a climate action plan in Germany over concerns by mining unions.

Any color on that if you can provide us would be great? Does it mean anything for sort of when you develop in Germany over time?

That’s my first question. Secondly, just I think you mentioned something on FCF if I missed it, could you give us again sort of what you meant or what you forecast for full year FCF for this year?

Then the third question is around the U.S., could you give us any color on pricing trends? And also if you do get the 2.5 gigawatts or 3 gigawatts of volumes that you’re expecting, what happens to the manufacturing outlook for you for the U.S?

And finally, this is the final question I promise. Yesterday there was an offshore auction in Denmark with €50 auction price.

And I asked you that question last time around as well. Do you see a risk for onshore win because offshore is becoming so cheap now?

Thank you.

Okay. Let me just start by commenting that despite the discussion in Germany, we do not see any risk whatsoever that the German Energy transition in a key vendor of the Germany policy in terms of climate change will change.

So, that’ clear. And then in terms of offshore pricing, now I’m getting into trouble here because every time I meet you guys, I keep saying that offshore will never get pricing down.

And I did also now, I didn’t see the specific numbers but I did hear that they were extremely low. The fact is however that on-shore pricing is still lower and we will continue to drive the cost of energy down.

We are not seeing at this point in time any risk that offshore in the greater scheme of things will be anything else than a niche segments in the industry. Then you asked about U.S.

pricing, and as I said, we are seeing a really competitive market out there. During which we wanted to address pricing is by driving the cost of energy down faster than price pressure is developing.

We are seeing a very competitive U.S. market.

And we of course trying and ensure through cost saving measures that we can stay competitive rather to cross the energy improvement pressures we can stay competitive. You asked a good question in terms of manufacturing outlook, we do not currently see any need to restart the facility that we have in the U.S.

which is currently not closed, we have a factory that in principle we could open up within eight or 10 months. But we don’t see a need for that but we have the options was things to develop in that direction.

For example is Donald Trump decided that it would be a good thing if things are manufactured in the Americas. And Christoph you can take the…

Yes, the improvement on cash flows. Yes, let’s take that on the basis of specific numbers.

I suppose you’re interested to know looking at the end of September free cash flow number of 499 and we basically take out the cash components to come to a free cash flow number without this special effect. Then we look at minus 166 and I impose you would like to get an indication what could be a potential number at the end.

Do I understand you correctly?

Yes, I’m just looking for like what is the full-year ‘16 free cash flow guidance if then, if you have any?

Yes, let me explain my thinking behind my outlook here. So, if I now take the number that I’ve just mentioned the minus 166 and I do a projection of how does the working capital assumption of just below 5% translate into changes in this position.

Then I think I would definitely feel comfortable as we stated in the presentation that we get into the double-digit million reach so lower than €100 million negative. But at the same time the guidance of just below €5 million would not bring us into let’s say carry forward all round feel.

So I expect we’ve been translating the working capital ratio of just below €5 million and improve the cash flow that we somehow in the double-digit minus millions maybe something half way between €100 million and zero. That is my take as per today.

Great. Thank you so much.

I just wanted to follow-up on the offshore question. So you mentioned that you think onshore wind is still more effective or cheaper than offshore.

But do you think onshore wind can compete at €50 in Europe, but that’s where the auction price might go right?

€50 that’s a pretty good price, even I have to admit that. I’m not sure that that’s going to be the norm in offshore projects.

And I think you also need to look at the total costs involved in the project, our structure is there in terms of additional costs on grid and all that. Now you have to know my new colleague Christoph Burkhard is post…

Surprised?

Yes, well, as you can imagine I was somewhat close to those numbers and I can only tell you that at least and this is my now my personal opinion and having left offshore business. The recent decline in costs here is something that is still very, very hard for me to understand how that should translate in somewhat still viable business case.

I have - really encourage you to see that. I mean, we saw those incredible prices already after the auctions in the Netherlands and I can’t really, based on my knowledge and those are heavy long-term investments.

I’m still struggling to see how this will materialize. But yes, that’s my personal opinion.

Do you think you should review your position because you are among the top 4 turbine manufacturers outside of China, you’re relatively big now? So, do you think you want to be left out from the offshore game completely?

We would be, with all-do-respect completely not if we tried to enter the offshore segment at this point in time. It is a niche industry, relatively small market I mean it’s populated by Siemens investors MHI and Key now, and we are U.S.

bound Germans and Spanish people they try to do a good business onshore. We have more than enough to do in that field.

And that’s where the growth is going to be. The real growth is going to be in the future.

And if you look at the existing capacities being built out there for production, and you look at what Lars has also mentioned previously, just it is niche market and will stay in niche markets I can’t see that this is a sweet spot honestly.

Okay. Thank you so much.

Yes, good afternoon everybody. Questions regarding Q3 figures, you’ve mentioned some issues with supplier which will burden 2016 with €5 million to €10 million.

How much of this amount did we see in Q3 and what can we expect in the last quarter of the year?

Yes, we saw in Q3 I think €6.6 million to be very precise. And we will see for the remaining quarter the delta to €10 million, so €3.4 million.

Okay. And regarding integration costs in Q3 just to get a clean number for this quarter?

Yes, we had end of Q2 we were talking about €6 million. In Q2 we have recognized €9 million, so, year-to-date €15 million and the remainder of the year, €5 million and so we stick €20 million.

Okay. So you confirm that the €20 million integration costs will be for the entire year?

And I was a bit surprised by the high tax rate in the third quarter, nearly 50%. What can we expect for the whole year in 2016?

As you might know I mean, the final tax rate is always very much dependent on our year-end closing valuations of the accruals. So usually you do see higher tax rates throughout the year.

And our Q1 tax rate is that we will towards the end of the year coming towards the 30% again.

30%, okay. And then, last one, just regarding the two projects you postponed in South Africa, perhaps you can remind me of the size of these projects?

That was business volume, €250 million to €260 million range I think in total.

In total €260 million?

Thereabouts, yes. Don’t kill me on the number but in those dimensions.

Okay, perfect. Yes, thanks a lot.

I just want to add one thing here, we had the question in terms of conversion of orders and what is normal. And just to give you a picture of the dimensions for the full second half of the year, we expect a conversion of somewhere between 40% and 50%.

So the 50% is that we mentioned is specifically in regards to the fourth quarter, it’s not out of normal level. So, tallies with past experience, just to make that clear.

Thank you. Three questions from me.

Just to go back to your comment on offshore, you mentioned you’ll see the real growth in onshore. How do I square the circle here, you showed us onshore x-China figures that were growing 3% globally to 2018 and then showing a negative CAGR to 2024?

My second question is on service margin, which is absent from the Q3 report I believe. Could you comment on the margin here and when can we expect to see you reporting on service margins again?

Thirdly, U.K. market outside the rock scheme, I mean, how realistic opportunity, we’ve heard some of the U.K.

utilities talking about this. How are you looking at this opportunity, what is your sense of the potential volumes in the U.K.

and how quickly this might come around? Thank you.

You caught me on the foothold there Sean, when I spoke about onshore and offshore activities, lowering rather than growth because you’re of course right. The volume will not grow as fast on the onshore business as the much smaller offshore business volume will, the significant part of the volume and we’re talking well over 90% will be in onshore.

As far as the question on service margins, we do not report that specifically in regard to the third quarter. We just said last year and we will do that in connection with the full-year number.

So we’ll spot your item then. And then to your question in terms of kind of this new, potentially new market in the U.K.

I think it’s very difficult for us to quantify it. But what I can say is that there are serious customers looking into this and that factors like the need for power that the U.K.

will inevitably have. And the good wind resource net debt is an element in those discussions.

But precisely where that is going to land, we can’t say that at this point in time. But I think it’s an interesting development and I think it’s also somehow testament to the fact that we’ve been able in this industry to drive the cost of energy down at a significant rate.

Super, that’s clear. If I could follow-up on the service margin, can we assume that it’s a comparable rate to previous, comparable margin however?

Yes we can assume that.

Thank you.

Yes, good afternoon gentlemen, three questions from my side. The first one is on working capital, Christoph you highlighted that there will be positive impact on working capital from the cash in on the U.S.

PTC orders. In this regard, could you comment to what extent you’re below 5% working capital quote target at the end of the year includes these PTC orders?

Or to put it differently, how confident are you to sign off the entire 2.5 gigawatts volume that you’ve been talking about before? And secondly, more margin related one and obviously on services.

Last year you in the past mentioned couple of times that the service business was not as profitable as desired yet. Not at least because you’re hiring new stuff in order to simply beef up the business.

Can you remind us of when you think this will be digested, this kind of step-up of the expanding on new personal hiring and when margins will then normalize? And then finally, I would like to hear your comments on the current pricing overall?

And with that in mind, what’s your assessment of the project margins in the order backlog and how are these compared to like-for-like excluding M-synergies compared to 2016 margin levels? Thank you very much.

Okay. Let me start with the working capital question.

We apply here a consistent few in a sense that our expectations on the order entry side is of course consistent with our few on the working capital side. And therefore the Safe Harbor related payments are taking, already taken into consideration.

They are in the working capital guidance included.

Obviously when you take this multiple of 15 times, as Lars you mentioned that when David asked the question on U.S. PTC orders, that would obviously take us to about €160 million to €170 million, so that would make dramatic difference obviously to the current working capital level of about €200 million.

So if we could really use this multiple and for that reason I would be just curious really your, thoughts on the working capital and where you see it and what’s the impact then from potential PTC orders?

So, just to be clear, Sebastian, that portion, the cash portion is in the projection, in the guidance. It is in.

For the entire part, so that means to really expect the total 2.5 gigawatts to be converted?

No, we cannot say that presently. We cannot say with absolute certainty that the Safe Harbor orders that we will conclude that they convert into revenues at a later point in time.

And that was the point I was trying to make before when there was another question. The down-payments that we get, if you will the down payments that we get in terms of the Safe Harbor deals that gives us in our view a highlight that these will eventually become revenues at a later point in time.

But we can’t be certain about that. But of course the cash effect of those deals, the safe harbor deals will have to be felt in 2016 because that’s part of the internal revenue service regulations that deals will need to be post in this year in order for the Safe Harbor or the PTC mechanism to function or the high PTC tariff to function over the next four years.

I mostly think we should have a separate discussion on this one. So, maybe we can move on to the services question and what the margin trajectory is there?

Yes, we’re still, I can’t give you specific information on that. We’re still in a fairly rapid growth phase in terms of the service business right now.

There are some, inefficiencies in that we are trying to improve the way we work in the service business also in terms better at gathering from the turbines so that we can run them more efficiently. But to give you a specific date in terms of when things will improve there, I can’t give you that specifically.

Then you asked about pricing?

On the services one, and then just ask one quick follow-up just to give us a sense of the margin delta between what you have on mind in a perfect world and where your desired status and where you currently are? So just get a sense of the discrepancies in terms of the margin profile there?

I think that it’s my understanding that we would be about 3 percentage points away from a level that we feel is acceptable for immature and in good shape service business.

Okay, thank you. And then on backlog?

Then you asked on pricing Sebastian was your question specific to the U.S. market or was it more a general question?

More in general I think obviously from what you said and that should normally bode well for prices in Germany, maybe you can just comment across the board or for the most important regions what do you see there?

Yes, I think in Germany, I think it’s fair to say that we’re seeing fairly stable, I think fairly stable prices. But we are also now seeing that preparations towards the first auction projects are indicating price pressure that we have not seen in German market that effect.

And we will have to adapt to that. We are seeing in some markets before they shift into auction systems that they even interest and on a good interest of turbine manufacturers to get order intake now.

And we believe that that also has some effect on prices in the sense that there is pressure. And what I can certainly say is that the old notion of 2% to 3% price reductions we have, we’re not seeing that right now, we’re seeing generally speaking more pressure in that.

As you know, the way that we address that is that the cost of energy reduction measures that we run in the company and that we have communicated that we want to continue at a rate of, at an improvement rate of about 6% per annum that’s how we try to alleviate the price pressure in the market. But it is getting very competitive out there.

And finally on the overall margin quality of the backlog compared to 2016 execution margin?

I can’t give you, specific orders I believe it’s about the same.

Okay, perfect. Thank you.

And Sebastian, I’ll try, its Christoph here. Let me try and if that doesn’t work then we take it offline anyway.

I think I understand what you’re getting at. But please correct me if I’m wrong here.

I think you have now calculated the full Safe Harbor cash impact related to the order entry portion. And you have basically put it now on top and you say you should actually be getting your, you should actually become even better in working capital.

Is that the direction? Hello

Okay. Yes we’re ready to take the next question.

Hi guys, thanks for taking my follow-up. I have a couple of them.

The first one is on the conversion. I heard from earlier you said your conversion is 50% in Q4.

So if you convert €600 million in Q4, is your cross conditional backlog at €1.2 billion, is that the correct number or did I misunderstand something?

No, you can’t do the calculation like that because of course you have conditional orders coming in. The specific volume that we have in conditional orders this quarter, I can’t give you that.

Livestock and things does appear that constantly new deals coming in.

Okay. So and then the second question is on Turkey.

I saw overnight that TPI reported and they were talking about a relationship in Turkey and your expanded capacity that were displayed. Do you see more volumes coming through in Turkey and what’s driving this?

Well, the driver for volume in Turkey is the need for power. So there is a significant need for power and there is a plan to increase the element of renewable energy in that.

We have a very strong position in the Turkish markets, we have seen been strong there. And that’s the reason why we chose to manufacture our radar turbine blades be manufactured there by TPI.

This year we expect that our market trend in Turkey in terms of installations will be greater than 25% and I believe that makes us the market leader in the market. And of course I would think we cannot talk about Turkey without talking about the consequences of the phase military crew.

And for good reasons this is something we’ve been monitoring with some interest what happened in the wake of that. And what we’re happy to see now is that things are apparently getting moving again and we hope of course that that’s the last thing good.

Okay. And then my final question is on the order intake, maybe an update on that, I mean, you have a target to reach €1.2 billion for Q4 without going into the specific regions and specific context, I realized you can’t, how much have you done so far in the quarter?

We don’t comment on that. Frankly speaking, I don’t know the specific numbers which are reported for November which will be reported at the end of the month.

But we are in good shape. We believe to get the €1.2 billion in that we need to close in the quarter.

Okay, sure. Thank you.

Hi guys. I think it was Step who asked question about working capital that you partially started answering Christoph.

Hopefully I think I was on to the same kind of logic, if the PTC cash comes in and maybe even some of the PTC components that you’ve reproduced and go out. It does seem to suggest that the rest of the businesses, working capital has got a little bit worse.

Is that the right notion there?

Yes. David, our main concern is really about the level of payment and therefore it is really very much about the payment topic, the level of payments that we will receive by year-end and looking still substantial payments that are out there and that are delayed.

And that is the major concern here.

Right. So, places in South America that are driving it rather than some of the other things, okay.

Yes.

Right. Then Lars if I may you mentioned earlier I think something about orders in the U.S.

in the future between 2017 and 2020 that are not in the PTC framework. That is a novel concept to me.

Would you mind elaborating a little bit on that?

No, that was not what I said, certainly not that. What I meant was that there will be business outside of the Safe Harbor deals.

So even though we have been, you mentioned I believe the 3.3 gigawatts or something that we had in the plan in order to realize our targets over the coming four years. And we expect that some of that volume will be covered by the Safe Harbor deals that we’re doing right now which will be under the high PTC tariffs in 2016.

And we expect that some of those deals will be under the PTC is seeking but a digressed version in some of the later years. And I know that there is a 20% digression on the value on the monetized value of the PTC, every 1 January; the idea being that the U.S.

wants to get rid of tech support for wind turbines.

Yes, I get that, it’s just my understanding that you’ve been given a seven-month lead time as a developer there wasn’t really any need to go 40% to 80% versus on the PTC if you could have just got your act together so to speak before the end of the year, then you’re in the 100% and you’re happy?

Yes, that’s correct. But there will also be orders in subsequent years that we’re not self-existing Safe Harbor volumes.

This is José Luis Blanco, let me clarify that our different customers with different sales strategies, some of them are the ones that we are dealing are more conservative. I know this they take a different Safe Harbor strategy to Safe Harbor for instance service station or Civil War.

So, they stay without the need in their assessment to commit for wind turbines. So there is a market left in the U.S.

for us to tackle in the future, on top of the one that we’re trying to secure.

Yes, okay, that’s clear now, physical construction. Okay.

Thank you so much.

Hi, Klaus Kegel, just a question about the German market. You said that you expected a solid order intake here in ‘16 and that you expected installations will go up in ‘17 and that makes a lot of sense.

But could you talk about the expected order intake in Germany in ‘17, do you have any thoughts about that, would it be equally strong as ‘16 or will it go down or what kind of thoughts do you have for the time being?

You guys are trying to trick us into talking about ‘17 I can give you a little bit of depth to that issue, which is also an issue that we discussed at our Capital Markets Day. We do expect the volumes in Germany are going to go down in 2018 and’19 as the new auction scheme is introduced.

One important reason being, that the German government has in principle stressed its desire to not build more than 2.8 gigawatts of onshore installations per year, so we will come down from the current level. The question is how fast we will get to that level?

And I think what we’re speculating is that perhaps 2018 will be a little bit better than we thought originally so that volume would not be 2.8 gigawatts or 3 gigawatts which I think was our original projection for the higher number. And that’s also reflected in the analysis that you see by make for example.

France, order intake in Germany next year will inevitably go down then there will be a smaller business comfort. But we expect that even in the falling market we’ll be able to increase our position that’s one of the central elements of our plan to achieve our 2018 targets.

Okay. Thank you very much.

You’re welcome.

Hi, thanks for taking my questions. Just two on the Safe Harbor side.

Did I understand correctly that you were sort of already producing some components for the anticipated Safe Harbor deals? And if that’s true then that would be a bit of a change from the previous policy of really not producing any components of turbines until the deals are firmed up.

I understand there 105 strict rule and that could be driving, but just from a perspective of how much of the 3.5 gigawatts are you sort of preparing for from a component supply perspective? I mean, just to see the risk of working capital and components if those get or comfortable?

So that’s question number one.

Okay, the line was very bad but I think I understood your questions. And just to make that clear, just making clear, we are not pre-producing components for 2.5 gigawatts of installations that would lead us to having a slight working capital, this were beyond the ones that we were demonstrating in the presentation here.

What we’re talking about is the Safe Harbor contracts that represent 5% of the total volume. And in order to safeguard, again in order to make sure that our customers can tap the high US$0.023 PTC tariffs for 2016, we need to make sure that there is a binding contract with us for the delivery of specific components prior to the 1st of April 2017, the contract around that needs to be closed in 2016, so before the 31 December.

Now what needs to be physically manufactured is the 5% not the full project value, just to make that clear. So in terms of the working capital effect that this has is that there will be some manufacturing going on in this year to secure these deals but there will also be some activity going on in 2017 because components don’t need to be there until the end of March 2017.

You say that that’s the part of previous decisions on working capital and you are exactly right. We have made a very deliberate decision to kick-off some work to ensure that we had components, to ensure important business for Nordex in the next four years from now.

I hope that answers.

Yes, that pretty much answers. I mean, I wasn’t expecting these for the entire 2.5 gigawatt but that answers the question.

Just from a perspective, I mean, let’s say 5% of the negotiated 2.5 how much of the Safe Harbor contracts that you’re negotiating, do you, how much of the component production is related to contracts that you are pretty much so close to closing already. How much of this is dependent on contracts that led the commit to December or something?

I’m just trying to assess if you really need to start producing for the entire 5% of the 2.5 gigawatt already or can you not push out some of that production - component production into towards the end of December or even into Jan/Feb because [indiscernible] of the Safe Harbor deals that you closed and with the close it on 15 December, you could still deliver components sometime in March. So would you need to prove them and let’s say today?

Yes the thing is a lot of the things that we produce involve components that have lead times that are not necessarily just 14 days or three months. So that’s something that needs to be factored in.

But I think just for the purpose of the call here, I think you can assume that about half of the stuff we’re talking about will be manufactured this year and the remainder will be manufactured in 2017.

Right. Thanks.

That’s absolutely clear. And the other question is just from Acciona Windpower, if I back out of the third quarter sales performance was, then I get to something like €185 million of sales for the third quarter.

And that compares to roughly €200 million that was reported for 3Q ‘15 and of course on the previous one. I just wanted to know, and this is not of course big line, but it’s not the first quarter?

I have to say you’re breaking up it’s very, very difficult to understand what you’re saying. I don’t know whether you could get close to the phone?

Is this better?

It’s kind of an electronic beeping sound whenever you say anything and it’s very, very difficult to follow. You’re also welcome to take it offline.

Maybe we’ll take it offline.

Okay. Thank you.

Good. Operator, I don’t know whether there are more questions.

Okay. Then I would like to thank you for your participation in the Q3 results call.

And thank you for the time. And now, we’ll go and watch [indiscernible] interest of course.

Thank you for today. Thank you.

Thank you. Bye-bye.