DGAP-News: 3W Power S.A. / AEG Power Solutions / Key word(s): Half Year Results 3W Power/AEG Power Solutions reports results for the second quarter of 2012 10.08.2012 / 07:00 =-------------------------------------------------------------------- August 10, 2012 (in EUR million) Q2 2012 Q2 2011 ? in % Q2 2012 Q1 2012 ? in % Orders 87.0 127.3 -31.7% 87.0 91.1 -4.5% Revenue 98.2 106.7 -8.0% 98.2 83.5 17.6% EBITDA 4.8 21.3 -77.5% 4.8 -2.8 - - - EBITDA margin 4.9% 20.0% 4.9% -3.4% (in EUR million) H1 2012 H1 2011 ? in % Orders 178.1 221.3 -19.5% Revenue 181.7 193.1 -5.9% EBITDA 2.0 23.6 -91.5% EBITDA margin 1.1% 12.2% - Economic and market conditions impact Q2 revenues and profitability as expected - Q2 2012 order intake of EUR87.0 million, 31.7% below Q2 2011, which was a particularly strong quarter in POC and Solar - Q2 2012 revenues of EUR98.2 million, 8% below Q2 2011 but 17.6% above Q1 2012 driven by strong Solar growth (up 27% year-on-year for Q2) - Q2 2012 EBITDA of EUR4.8 million compared to EUR-2.8 million in Q1 2012; EBITDA significantly below Q2 2011 performance, as Q2 2011 was a particularly strong quarter in POC - RES EBITDA margin for Q2 2012 of 19.6% reflecting positive contribution from POC and profitable Solar growth; key Solar frame contract also signed in July 2012 for a minimum of 170 MW by the end of 2013 - EES results impacted by continued weakness of converter business but significantly improved EBITDA expected in H2 2012 from higher revenues and continued focus on cost reduction initiatives - Agreement reached on the sale of EMED, the Company's solar installation in Puglia, Italy for total consideration (including debt assumption) of up to EUR 24.3m Luxembourg/ Zwanenburg, The Netherlands - August 10, 2012 - 3W Power, the holding company of AEG Power Solutions (AEG PS), today announced results for Q2 2012. At EUR87.0 million, order intake was down 31.7% year-on-year and down 4.5% compared to the prior quarter. The reduction is principally due to anticipated weak demand in the polysilicon market. Revenue in Q2 2012 was EUR98.2 million, down 8.0% compared to Q2 2011 (EUR106.7 million) but up 17.6% compared to the prior quarter, driven by a resumption in growth in Solar. EBITDA was positive again in Q2 2012 at EUR4.8 million, after one-time charges of EUR1.2 million. The economic environment remains challenging with many risk factors weighing on confidence no longer just in Western Europe but around the world. Fortunately our businesses are not uniformly affected. With growth coming from Solar, the RES business segment is expected to return to double-digit EBITDA margins in H2 2012. The EES business segment will have positive EBITDA margins for the remainder of the year. The company is systematically addressing its cost base to ensure profitability in a difficult trading environment. RES Business Segment (in EUR million) Q2 2012 Q2 2011 ? in % Q2 2012 Q1 2012 ? in % Orders 37.2 68.5 -45.7% 37.2 45.5 -18.2% Revenue 51.6 57.4 -10.0% 51.6 33.0 56.4% EBITDA 10.1 23.8 -57.6% 10.1 2.5 304.0% Orders of EUR37.2 million in Renewable Energy Solutions (RES) were low in Q2 down 45.7% year-on-year. The drop is the result of anticipated weak demand in the polysilicon market and delays in financing of certain customers' solar projects. Deliveries resumed however in Q2 with RES revenue up 56.4% compared to the prior quarter largely driven by the continued growth in areas outside of Western Europe in our Solar business. Revenue, at EUR51.6 million in Q2 2012, was down 10.0% compared to Q2 2011 revenue of EUR57.4 million with the increase in Solar revenue not sufficient to offset the weakness in POC. EBITDA for RES was EUR10.1 million compared to EUR23.8 million in Q2 2011 again a reflection of the drop in highly profitable POC revenues. For full year 2012, POC will have lower orders and revenue than in 2011. The drop in the spot market for polysilicon indicates an oversupply situation which we will continue to closely monitor over the next few quarters. It remains a strategic priority of RES to continue diversifying the Power Controller business beyond polysilicon applications. For the full year 2012, Solar orders and revenue are expected to exceed 2011. 'The signing of a major framework contract with Activ Solar in July 2012 and the growing pipeline of projects confirms the success of our solar strategy. Our approach is based on a product range with highly-efficient components for solar power plants, providing customers with a truly competitive solution', comments Horst. J. Kayser, CEO of 3W Power/ AEG Power Solutions. 'Utilizing our existing global footprint to tap solar growth is another very important part of our strategy. Eastern European countries and India fueled our solar growth in 2011.' Orders from growth regions such as Eastern Europe, India, Southern Africa and the USA are expected to offset and over-compensate expected market contractions in Western Europe. On August 7, the Group signed a Sales Purchase Agreement with Solar21 to sell EMED, a 5.75MW solar installation in Puglia, Italy for a total consideration of up to EUR24.3 million including the assumption of EUR17.4 million of debt. Jeffrey Casper, newly appointed CFO of 3W Power/ AEG Power Solutions, states: 'We are very pleased to have signed the agreement in difficult market conditions. Our exit from the farms further streamlines our business portfolio and solidifies our balance sheet. The original purpose of the farms was to highlight AEG PS's capabilities in launching its Solar business. The sale of the farms represents a successful conclusion to this endeavor and is expected to close by the end of October.' EES Business Segment (in EUR million) Q2 2012 Q2 2011 ? in % Q2 2012 Q1 2012 ? in % Orders 49.8 58.8 -15.3% 49.8 45.6 9.2% Revenue 46.6 49.3 -5.5% 46.6 50.5 -7.7% EBITDA (0.7) 2.5 - - - (0.7) (0.8) 12.5% In Energy Efficiency Solutions (EES) order intake for Q2 was up 9.2% compared to the prior quarter but down 15.3% year-over-year due to lower CVT and DCT order intake. The CVT business continued to decline year-on-year while DCT was lower due to high order intake from a particular customer in 2011. Revenue was EUR46.6 million in Q2 2012, down 5.5% compared to the prior year performance (Q2 2011: EUR49.3 million). Orders in DCT are expected to recover in Q3 and Q4 and revenues are expected to reach previous year levels. EBITDA for EES in Q2 2012 was EUR-0.7 million compared to EUR2.5 million in Q2 2011 and EUR-0.8 million in Q1 2012. Whilst CVT and DCT continue to be challenging businesses, the company's UPS activities within EMS are resilient even in difficult economic conditions. The second half of 2012 is expected to be materially stronger than in H1 and above previous year levels. A continuous effort to reduce costs and improve structural profitability in EES will remain in focus for EES' future development. Outlook 'We continue to focus on our strategy for profitable growth', said Horst J. Kayser. 'We are well diversified and excellently positioned both technologically and regionally to capture emerging opportunities in the renewable markets, especially the growing global solar markets and the trend towards electrical energy storage and smart grid solutions.' 3W Power expects 2012 revenue and normalized EBITDA margin to be at the lower end of previous guidance. The expectation is based on margin improvements in the EES business segment and an improving sales pipeline in RES for the second half of 2012, but material downside risks persist. =- End of Announcement - Characters: c. 7,200 About 3W Power/AEG Power Solutions: 3W Power S.A. (WKN A0Q5SX / ISIN GG00B39QCR01), based in Luxembourg, is the holding company of AEG Power Solutions Group. The Group is headquartered in Zwanenburg in the Netherlands. The shares of 3W Power are admitted to trading on Frankfurt Stock Exchange (ticker symbol: 3W9). AEG Power Solutions Group is a global provider of power electronic systems and solutions for all industrial power supplies and offers one of the most comprehensive product and service portfolios in the area of power conversion and power controlling. The two complementary operating business units Renewable Energy Solutions (RES) and Energy Efficiency Solutions (EES) are serving customers worldwide. The RES product and service portfolio consists of systems and solutions for solar power plants like solar inverter, monitoring and control systems as well as power controller. The EES product and service portfolio includes high performance uninterruptable power supplies (USPs), industrial power controller and DC-converter. Thanks to its distinctive expertise, bridging both AC and DC power technologies and spanning the worlds of both conventional and renewable energy, the company creates innovative solutions for smart grids. AEG PS' footprint is global including 17 subsidiaries and competence centers around the world, employing 1,700 employees. For more information go to: www.aegps.com This communication does not constitute an offer or the solicitation of an offer to buy, sell or exchange any securities of 3W Power. This communication contains forward-looking statements which include, inter alia, statements expressing our expectations, intentions, projections,
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