(888) 657-6527 WW.RECsolar.com
Business Operating Plan
NORTHEASTT.R. LUDWIG
Senior Regional Sales ManagerNovember 2013
Executive Summary
• REC in the North East has had a bumpy road in 2013 with -36% growth in NJ market and slower than expected start in NY, expected to finish with 619kW.
• Reasons for underperformance are due to lack of leadership, uncoordinated go to market plan, poor product viability (NJ), and underperforming RSCs.
• 2014 will be a break out year for REC in the North East. Many of the key issues contributing to weak performance have been identified and solutions are in place.
Executive Summary Contd…
• The keys to improving regional performance are focusing on recruiting and training top talent into key positions, targeted marketing approach, take referrals to the next level, and operational efficiency of ISS, SOTP, OPS, and OS.
• Strong execution will be supported with additional marketing and advertising focused on target markets primarily in New York.
• By year end 2014, the North East Region will deliver $13M in topline revenue, and result in 3.6mW of orders.
Vision
Bringing Solar to the Mainstream!
PERSPECTIVE- NJ- P o o r P e r f o r m a n c e
-$676K, 181kW YTD on Plan of $1.5M-Forecast to be $857K, 231kW- 58% of Plan
-Market growth 25% YOY/REC Growth -36% (Current Share .5%) - R e a s o n s
- I n t e r n a l : -Focus: Not a Focus Market -Leadership: RSM Top-grading (Peter Awn) -Sales Talent: RSC Turnover, Just Nick-Poor Referral Business -Marketing: Nothing Other Than COSTCO-Product: SR Exited, NRG Flop, CPF Late Entry for REC -Pricing: Prohibitive Cost Structure*
- E x t e r n a l : M a c r o e c o n o m i c s -SREC Uncertainty-Lack of Utility Support (e.g. PSE&G Solar Loan)
- Ke y P l ay e r s-Vivint, RDI, SolarCity, Astrum, Trinity
PERSPECTIVE- NY-N e w M a r ke t E n t r y
-3/13 Go To Market, Stumbles on Marketing-$890K, 230kW YTD on Plan of $2.23M
-Forecast to be $1.31M, 388kW-58% of Plan- R e a s o n s / Fa c t o r s
- I n t e r n a l : -Focus: Long Island Detour to RONY (Rest of NY), Licensing-Leadership: Interim RSM (T.J. Slocum)-Sales Talent: Drop Team, New Hires -Marketing: Just COSTCO -Product: Strong SUNRUN Product, Due Diligence on CPF, TBD Cash Product, TBD Other Finance Partners-Pricing: Fine Tune Cost Structure
- E x t e r n a l : M a c r o e c o n o m i c s -L.I. rebates unpredictable and immature program-RONY incentives slow to process
- Ke y P l ay e r s-Astrum, SolarCity, RDI, Verrengo
PERSPECTIVE- 2013
Lead Source Orders %Purch Thru Costco
Costco 26 100%
Referral 14 35%
Purchase Leads 7 14%
Canvassing 3 33%
Other 3 33%
Total 53
RSC Ranking Orders
Nick Walsh 28
Sumner Komro (Drop team) 9
Susan Friedricks (Sept 2013) 7
Rob Sandberg (new hire, Oct 2013)
1
Dylan Pywell (new hire, Oct 2013)
0
PERSPECTIVE- 2013
NJ /NY Branch P&L Summary
Revs $2 .1M on p lan o f $3 .4M, -61% var iance Contains $1.2 in Regional Commercial COGS $2.04, GM 17%
COGS $2 .19 on p lan o f $1 .97 , -11% var iance Volume is issue, need scale
Gross Marg in : 25% on p lan o f 32%, -7% var iance
Volume issue in COGS cascades to GM SG&A : $650K on p lan o f $626K, +1 .8% var iance
Sales attrition, non performers Net P&L : -$114K on p lan o f $481K, $595K de l ta
Lack of sales NY start up expenses/NJ burdened
PERSPECTIVE- 2014
Reg iona l Out look For 2014
• NJ- Moderate market growth expected: 7%- 900kW REC forecasted for 2014- Focus on targeted territory- 1.5% market share by end of 2014
• NY- Breakout growth year expected:114%- 2.6mW REC forecasted for 2014- Geotargeting via canvass- Referrals to the next level- 5.5% market share by end of2014
PERSPECTIVE- 2014
CA HI AZ CO NY NZ US0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
4.50%
0.20%
3.40%
11.10%
0.00%
1.00%
2.70%
4.5%
1.2%
2.9%
7.9%
1.8%
0.5%
2.8%
7.3%
2.7%3.0%
8.0%
5.5%
1.5%
4.0%
M A R K E T S H A R E 2 0 1 2 - 2 0 1 4
2012 MS
2013 MS
2014 MS
Pe
rc
en
ta
ge
(%
)
PERSPECTIVE- 2014
2012 2013 2014
REGION
Market REC Market Share Market REC Market Share Market GrowthREC
GrowthMarket REC Market Share Market Growth
REC Growth
CA 196 8.9 4.5% 343 15.3 4.5% 75% 72% 428 31.4 7.3% 25.0% 105.0%
HI 57 0.1 0.2% 90.1 1.1 1.2% 58% 955% 112 3.0 2.7% 24.0% 182.0%
AZ 62 2.1 3.4% 71.4 2.1 2.9% 15% -2% 71 2.2 3.0% -1.0% 3.0%
CO 18 2.0 11.1% 30 2.4 7.9% 67% 19% 27 2.1 8.0% -10.0% -10.0%
NY 15 0.0 0.0% 22 0.4 1.8% 47% - 47 2.6 5.5% 114.0% 537.0%
NJ 43 0.4 1.0% 54 0.3 0.5% 26% -36% 58 0.9 1.5% 7.0% 205.0%
US 494 13.5 2.7% 776 21.5 2.8% 57% 59% 1069 43.0 4.0% 38.0% 100.0%
2014 kW Forecast 4% 5% 6% 7% 8% 10% 11% 11% 11% 10% 9% 8% 100%$7,120,694 $8,757,855 $10,457,709 $11,776,876 $13,365,876 $16,135,894 $16,989,251 $17,363,644 $17,562,163 $15,495,234 13,741,929 $12,249,019 $161,015,271
Actual Actual Forecast 4% 6% 5% 8% 7% 8% 10% 11% 12% 12% 9% 8% 100%Branch J an Aug Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec To
New J ersey Total $s $3,243,600 $s $137,098 $162,180 $194,616 $227,052 $259,488 $291,924 $309,673 $358,192 $389,339 $355,796 $308,849 $267,724 $3,254,930New J ersey % of Bus 2% kW 38.08 45.05 54.06 63.07 72.08 81.09 86.02 99.5 108.15 99.11 83.57 74.37 904.15New J ersey kW 901 Sales Dist 4% 5% 6% 7% 8% 9% 10% 11% 12% 11% 9% 8% 100%New J ersey Avg ASP Rev $3.60 ASP $4.09 $4.25 $3.55 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60New J ersey ASP Check TRUE ASP Decline $ (0.16) $ (0.54) $ (0.05) $ - $ - $ - $ (0.05)New J ersey Total $s $10,244,370 $s $433,003 $512,219 $614,662 $717,106 $819,550 $9,921,993 $978,049 $1,131,288 $1,229,661 $1,126,881 $950,183 $845,560 $10,280,154New J ersey % of Bus 6% kW 114.25 135.15 162.18 189.21 216.24 243.27 258.06 298.49 324.45 297.33 250.71 223.1 2,712.44New J ersey kW 2,703 Sales Dist 4% 5% 6% 7% 8% 9% 10% 11% 12% 11% 9% 8% 100%New J ersey Avg ASP Rev 3.79 ASP $ - $3.87 $3.59 3.79 3.79 3.79 3.79 3.79 3.79 3.79 3.79 3.79 3.79 3.79 3.79 3.79New J ersey ASP Check TRUE ASP Decline $0.52 $ (0.20) $ - $ - $ - $ (0.20)
45050 2014
2013 Monthly Sales DistributionWaterfall Totals
PERSPECTIVE- 2014
REC SOLAR(SOP) BOP
People Process System
Sales and Marketing
Key Hires: SA, FMS, BD, RSM
Talent Sourcing
Training Recognition
Sales Process
Licensing Cash proposal tool
Design tool
Cross-Functional
Appointment feedback tool
Target demographic
Canvas Operations
From $1.5 MM to $13MM | From 100’s kW Sold to 3.6mW Sold
PERSPECTIVE
• Solid sales force• Roofing synergy• Home Depot dependent
•Innovative•Strong marketing
•Large sales force
• Financing in flux
• Targeted sales• Self financed• Speed• Poor execution
•Aggressive•Low cost•Self financed•Poor execution
Solarcity Vivint
RDIAstrum
Competition
(888) 657-6527 WW.RECsolar.com
Thank you!
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