Letter to the Shareholders

Ladies and Gentlemen,

Today we can look back on one of the most successful years in the history of our Company. In the period under review Nordex outgrew the market for the third year in succession. Average annual revenue growth has stood at around 51 percent since 2004. In the year under revue sales increased to EUR 747 million with our business increasingly moving abroad. Exports contributed almost 90 per cent. This involved considerable effort in setting up corporate structures in the new growth markets. This was the case, for example, in China, where Nordex has established two new factories. Today a good 400 employees work for the Group in the Far East. And we have also considerably enlarged our teams in the UK and Italy, where we have gained a market share of 34 and 14 percent, respectively.

However, we do not measure success by sales growth alone. A key factor for me is that we must also improve the profitability. And in this we have been successful. For instance, in fiscal 2007 we improved our operating profit by 142 percent to more than EUR 40 million and increased return on sales from 3.2 to 5.4 percent. Here we were helped by the situation on the market, in which we concentrated on the more profitable projects. On the other hand, Nordex was able to realize economies of scale.

In my view, the low level of capital employed to finance this strong growth in operations is particularly gratifying. The so-called working capitalThe capital used during the implementation phase of an order ratio remained steady at the low level of 2.3 percent. This is principally due to large advance payments for orders for short-term delivery. In addition to this, Nordex received some EUR 121 million in reservation feesFees for providing production time windows for projects to be delivered. for master contracts over the next few years. This meant that net liquidity increased to EUR 212 million. The large amount of cash in hand also reflects the increase in capital successfully concluded in July, where we realized issue net proceeds of some EUR 74 million.

This means that we are ideally equipped to grow profitably this year, too. The benchmark remains “plus 50%”. The projects for this are secured by our order backlog of almost EUR 3 billion until the end of 2009. However, it is difficult to give a precise projection because of uncertainties surrounding final building permits for some projects. Our sales target for 2008 is between EUR 1.2 and 1.0 billion. Depending on whether we reach the upper or lower end of this bandwidth, we anticipate return on sales of between six and eight percent.

For 2011 management is sticking with its target margin of nine to twelve per cent and a sales level of between EUR 2.5 and 4.0 billion. With this growth outlook in mind, in January 2008 we launched the expansion of our factories in Rostock. This will be followed by new buildings and extensions in China and the United States. By 2011 we plan to approximately quadruple our capacity to 4,500 MW per annum and push further into the new growth regions of North America and China.

Sincerely
yours,


Thomas Richterich
Chief Executive Officer