PRESS RELEASE: 3W Power Holdings S.A. / AEG Power Solutions : 3W Power/AEG Power Solutions Ends Difficult Transition Year 2010 with Strong Revenue Improvement and Continued Momentum in Order Growth in Q4
DGAP-News: 3W Power Holdings S.A. / AEG Power Solutions / Key word(s): Final Results 3W Power Holdings S.A. / AEG Power Solutions : 3W Power/AEG Power Solutions Ends Difficult Transition Year 2010 with Strong Revenue Improvement and Continued Momentum in Order Growth in Q4 31.03.2011 / 08:00 =-------------------------------------------------------------------- 3W Power/AEG Power Solutions Ends Difficult Transition Year 2010 with Strong Revenue Improvement and Continued Momentum in Order Growth in Q4 - 2010 orders increased 76% to EUR371.1 million (EUR211.2 million) - Sales for 2010 reached EUR306.0 million (EUR407.3 million) down 25% - Positive normalized EBITDA of EUR8.0 million (EUR86.0 million) - Strong Q4 with EUR127.7 million (EUR46.9 million) orders and sales of EUR94.9 million (EUR89.1 million) - Management strongly committed to execute Agenda 2012 which will drive operational improvement and profitability in 2011 Luxembourg / Zwanenburg, The Netherlands - March 31, 2011 - 3W Power Holdings S.A. (WKN A0Q5SX / ISIN GG00B39QCR01 / Ticker Euronext: 3WP, Ticker Deutsche Börse Frankfurt: 3W9), the holding company of AEG Power Solutions (AEG PS), a global player in premium power electronics, today announced its financial results for the full business year ended December 31, 2010. Business Year 2010 The group ended a difficult transition year in 2010 with strong revenue improvement in Q4 and continued momentum in order growth. As previously indicated sales were down 25% at EUR306.0 million (EUR407.3 million). Orders however were up 76% at EUR371.1 million (EUR211.2 million). Normalized EBITDA as expected was positive at EUR8.0 million (EUR86.0 million) a decline of 91%. Adjusted EBIT was -EUR0.5 million (EUR80.6 million) a decline of 101%. Adjusted net income was -EUR4.0 million (EUR50.1 million) a decline of 108%. Sales declined mainly in the Renewable Energies Solutions (RES) segment by 47% to EUR110.2 million (EUR209.6 million) due to significantly reduced demand in the power controllers market for polysilicon manufacturing. The power Protect solutions to industrial and telecommunications customers in the Energy Efficiency Solutions (EES) segment was stable in sales at EUR195.8 million (EUR197.7 million) a change of only -1%. Orders for the year rebounded strongly in both segments: 13% growth in EES to EUR208.2 million (EUR184.2 million) and 503% growth in RES to EUR162.9 million (EUR27.0 million). Orders consecutively grew in each quarter of 2010 a trend that is expected to continue into Q1 2011. Profitability differs materially in the two segments. Normalized EBITDA in RES was EUR22.0 million (EUR96.0 million), significantly down due to the strong sales volume loss, but still returned 20% of sales. Normalized EBITDA in EES was EUR0.4 million (EUR0.0 million) demonstrating a structural lack of profitability in this segment, which is the focus of operational improvement initiatives in the context of Agenda 2012. Agenda 2012 was launched in August 2010 as a comprehensive strategic and operational improvement program aimed at a swift return to profitable growth. Agenda 2012 targets revenues of above EUR400 million in 2011 and above EUR500 million in 2012 with an EBITDA margin of 13% to 15%. Financial results in 2010 are deeply impacted by one-off charges in connection with Agenda 2012. The normalized EBITDA of EUR8.0 million (EUR86.0 million) was net of one-time charges of EUR31.9 million consisting of inventory and other working capital provisions totalling EUR12.9 million, restructuring charges totalling EUR18.8 million and others totalling EUR0.2 million. Therefore, reported EBITDA totalled -EUR23.9 million (EUR76.8 million). Reported EBIT totalled -EUR126.6 million (EUR23.7 million) including depreciation of EUR8.5 million, amortisation of intangibles on acquisition (PPA) of EUR33.0 million, above mentioned one-off charges of EUR31.9 million, impairment and accelerated amortisation of intangibles on acquisition of EUR46.6 million and goodwill impairment of EUR14.6 million. Including EUR8.5 million of depreciation an adjusted EBIT of -EUR0.5 million (EUR80.6 million) corresponds to the normalized EBITDA of EUR8.0 million (EUR86.0 million). Net income was -EUR83.9 million (-EUR8.8 million) including a positive change in value of warrants of EUR24.6 million and a positive tax benefit of EUR20.2 million relative to the reported EBIT of -EUR126.6 million. Adjusted for above mentioned one-offs and impairments adjusted net income for the group for 2010 was -EUR4.0 million (EUR50.1 million). Q4 was a particularly strong quarter in both orders and sales. Orders totalled EUR127.7 million (EUR46.9 million) up 172%. Q4 was the first quarter in 2010 to show a return to growth in sales over the previous year. Sales revenues totalled EUR94.9 million (EUR89.1 million) up 6%, and were up 35 % compared to Q3 2010 (EUR70.1 million). Normalized EBITDA in Q4 was EUR3.3 million or 3.5% of sales (EUR9.2 million). Q4 was a strong quarter for both segments. Orders for EES totalled EUR51.1 million (EUR41.2 million) up 24% and for RES totalled EUR76.6 million (EUR5.7 million) up more than 13 times (1,244%). Sales for EES totalled EUR60.2 million (EUR57.5 million) a 5% increase and for RES totalled EUR34.7 million (EUR31.6 million) a 10% increase. After successfully issuing a bond in November 2010, the Group realized net proceeds of EUR96.8 million which supports the long-term growth objectives and business improvement initiatives as part of Agenda 2012. A further milestone followed in December 2010, with the Group's successful listing on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange. The Group's RES segment combines the power controller business as well as solutions for the solar industry. Order intake totalled EUR162.9 million, an increase of 503% (EUR27.0 million). This was attributable to excellent order intake for solar inverters, the inclusion of skytron and growth in both polysilicon and other power controller applications. In contrast, sales declined by 47% to EUR110.2 million (EUR209.6 million) and adjusted EBIT fell by 79% to EUR20.0 million (EUR94.4 million). The fall in revenue was due to lower polysilicon sales although this was partially offset by better performance in other solar activities including a contribution from skytron. Notable operational successes in the year included the win of a major PV contract for utility scale solar equipment with a 260 MW capacity and the signing of a EUR36.0 million contract for the delivery of Thyrobox(TM) M power supply systems announced in December 2010. The EES segment includes the production and distribution of highly reliable electricity supply systems for the oil and gas, transportation, energy generation, electricity transmission and distribution, data and information technology industries and other industries as well as telecommunication solutions. Orders in 2010 totalled EUR208.2 million, a growth of 13% (EUR184.2 million). Sales remained comparatively stable at EUR195.8 million (EUR197.7 million), a decline of 1%, and adjusted EBIT totalled -EUR4.1 million (-EUR3.7 million). The revenue development was affected by slower than expected order intake in the first half of the year for Energy Management Systems (EMS) as a result of which EMS sales were marginally lower than in 2009. Sales of Telecom products remained weak throughout 2010 and were 7% lower than in 2009. Converters recorded higher revenues which helped offset the fall in EMS and Telecom. Europe remained the most important market for the Group, contributing 62% to sales in the reporting period. Asia was accountable for 23% while the Americas provided 15%. The Group comprises eight production plants as well as ten design, sales and / or service offices which are located around the globe. Growth expectations for 2011 rest specifically on emerging growth regions like Eastern Europe and Asia (i.e. India, China and South East Asia). Outlook 2011 Following the increased order intake throughout 2010 and the particularly strong performance of orders and sales in Q4 2010, the Group expects a significant improvement of its business performance in 2011 and the period thereafter. Agenda 2012 is well underway, setting operating and financial goals for the two operating segments. One-time restructuring costs incurred in 2010 will not affect the Group going forward. Objectives for the near term are to increase market positions in growth segments and geographies, develop greater emphasis on service within the traditional installed footprint and to enhance profitability through continued operational improvement. Q1 2011 will be a seasonally weaker quarter which is typical. Sales are expected however to be significantly above Q1 2010, greater than 20% in EES, and greater than 80%-100% in RES. Although sales in Q1 2011 will be lower than in Q4 2010, normalized EBITDA is expected to remain break even or slightly positive. For the full year 2011 expected growth in EES is expected to be 5%-10%, 80-100% for RES. The group confirms its forecast of above EUR400 million sales for 2011 and more than EUR500 million for 2012 based on the strong order and sales growth momentum and the operational improvements from the Agenda 2012. Profitability will materially improve, on its way to achieve normalized EBITDA 13% to 15% targeted for 2012. Group key figures in EUR million <pre> Actual Pro-forma % Actual Pro- % Q4 2010 Q4 20091 Ch- 2010 forma Ch- ange 20091 ange Backlog 179.4 179.7 - 179.4 179.7 - Orders 127.7 46.9 172% 371.1 211.2 76% Revenue 94.9 89.1 6% 306.0 407.3 (25 %)
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PRESS RELEASE: 3W Power Holdings S.A. / AEG Power -2-
Book to Bill 1.35 0.53 1.21 0.52 Normalized EBITDA2 3.3 9.2 (64 8.0 86.0 (91 %) %) % of revenue 3% 7% 3% 21% EBITDA (24.4) 6.1 (50 (23.9) 76.8 (13 0%) 1%) % of revenue (26%) 4% 8% 19% Regular amortisation of (7.7) (6.6) (33.0) (47.7) intangibles on acquisition (PPA)2 Adjusted EBIT2 (0.1) 7.7 (10 (0.5) 80.6 (10 1%) 1%) % of revenue 0% 1% 0% 8% One-time charges2 (86.3) (3.1) (93.1) (9.2) Reported EBIT2 (94.1) (2.0) 460 (126. 23.7 (63 5% 6) 5%) Net Financial income/ (0.4) 19.6 22.6 (17.5) (expense) Of which effect of change - 20.2 24.6 (15.2) in value of warrants3 Tax benefit/(expense) 14.5 (15.5) 20.2 (14.9) Net income3 (80.0) 2.1 (39 (83.9) (8.8) 853% 10%) Adjusted net income3 (0.3) (10.2) (98 (4.0) 50.1 (10 %) 8%) EPS (EUR) (1.68) (1.78) Adjusted EPS (EUR)3 (0.01) (0.10) Operating Cash Flow (19.3) n/a (21.6) n/a Free Cash Flow4 (23.6) n/a (50.1) n/a Capital Expenditures 4.3 2.7 59% 28.5 10.0 185% Working capital5 31.6 41.6 (24 31.6 41.6 (24 %) %) Cash 122.6 58.0 111% 122.6 58.0 111% </pre> Key figures RES division in EUR million <pre> Actual Q4 Pro-forma Q4 % Actual Pro-forma % 2010 20091 Change 2010 20091 Change Backlog 106.1 105.0 1% 106.1 105.1 1% Orders 76.6 5.7 1244% 162.9 27.0 503% Sales 34.7 31.6 10% 110.2 209.6 (47%) Adjusted 4.7 9.8 (52%) 20.0 94.4 (79%) EBIT EBIT (30.3) 4.9 (718%) (34.5) 59.3 (158%) Normalized 5.5 10.2 (46%) 22.0 96.0 (77%) EBITDA EBITDA (1.5) 10.2 (115%) 15.2 96.0 (84%) </pre> Key figures EES division in EUR million <pre> Actual Q4 Pro-forma Q4 % Actual Pro-forma % 2010 20091 Change 2010 20091 Change Backlog 73.3 74.7 (2%) 73.3 74.7 (2%) Orders 51.1 41.2 24% 208.2 184.2 13% Sales 60.2 57.5 5% 195.8 197.7 (1%) Adjusted 1.4 1.2 17% (4.1) (3.7) (11%) EBIT EBIT (53.8) (3.5) (1437 (67.5) (25.2)6 (168%) %) Normalized 2.4 2.3 4% 0.4 0.0 Na EBITDA EBITDA (14.6) (0.8) (1725 (16.6) (9.2)6 80% %) </pre> Footnotes 1 The unaudited consolidated Pro-forma statement of income of 3W Power Holdings S.A. (the 'Company') for the year ended 31 December 2009 (the 'Pro-forma Financial Information') has been prepared for illustrative purposes only. The Pro-forma Financial Information presents the Company's results for the year ended 31 December 2009 under the assumption that the acquisition of AEG PS by the Company that actually occurred on 10 September 2009 had already occurred as at 1 January 2009. The Pro-forma Financial Information shows adjustments to the audited consolidated financial information of the Company for the year ended December 31, 2009 to: (i) include the impact of the consolidated income of AEG Power Solutions B.V. for the period from January 1, 2009 to 10 September 2010; (ii) include the impact of amortization expenses as a result of the increase in goodwill and other intangible assets as a result of purchase price adjustments for the entire year 2009; (iii) include the adjustment for interest income of the consolidated income of the Company for the year ended December 31, 2009 that would not have accrued had the cash component of the purchase price for the indirect acquisition of all shares in AEG Power Solutions B.V. already been made as at January 1, 2009. Due to its nature, the Proforma Financial Information addresses a hypothetical situation and, therefore, does not represent the Company's actual results. The Proforma Financial Information was prepared using the Company's accounting policies. It is based on information that was prepared in accordance with IFRS as adopted by the EU and has been prepared and based on the Company's audited financial statements for the year ended December 31, 2009, adjusted as described in the Notes to the Pro-forma Financial Information. The Pro-forma Financial Information should be read in conjunction with the notes, as well as with the Company's audited financial statements as at and for the year ended December 31, 2009 and the related notes. 2 Normalized EBITDA and Adjusted EBIT Normalized EBITDA is EBITDA adjusted by removing the effects of one-time charges. Adjusted EBIT also excludes one-time charges. It differs from reported EBIT in that it also excludes all impairment and amortization charges on the goodwill and intangibles on the acquisition of AEG PS. The table below show the derivation of normalized EBITDA and adjusted EBIT and their relationship to reported EBIT: <pre> In EUR million Actual Pro-forma Actual Pro- Q4 2010 Q4 20091 2010 forma 20091 EBITDA (24.4) 6.2 (23.9) 76.8 One-time charges eliminated Working capital provisions 7.5 - 12.9 - Restructuring 16.7 3.1 18.8 9.2 Professional, consulting, and 3.5 - 5.8 - other costs One-time income - - (5.6) - Total one-time charges (net) 27.7 3.1 31.9 9.2 Normalized EBITDA 3.3 9.3 8.0 86.0 Depreciation and amortization (3.4) (1.6) (8.5) (5.4) (excluding amortization of intangibles on acquisition) Adjusted EBIT (0.1) 7.7 (0.5) 80.6 Regular amortization of (7.7) (6.6) (33.0) (47.7) intangibles on acquisition (PPA)a Impairment and accelerated (44.0) - (46.6) - amortization of intangibles on acquisitionb Goodwill impairmentb (14.6) - (14.6) - One-time charges (see above) (27.7) (3.1) (31.9) (9.2) Reported EBIT (94.1) (2.0) (126. 23.7 6) </pre> a Regular amortization of intangibles on acquisition refers to the planned amortization of intangible assets identified on the purchase price allocation (PPA) for the acquisition of AEG PS on September 10, 2009. It excludes amortization and impairment charges designated as one-time in the table above. b Charges for impairment and accelerated amortization of goodwill and intangibles on acquisition of AEG PS. Additional to the regular amortization in a above. Summary of one-time items <pre> In EUR million Actual Pro-forma Actual Pro-forma Q4 2010 Q4 20091 2010 20091 Working capital provisions 7.5 - 12.9 - Restructuring 16.7 3.1 18.8 9.2 Professional, consulting, and 3.5 - 5.8 - other costs One-time income - - (5.6) - Sub-total 27.7 3.1 31.9 9.2 Impairment and accelerated 44.0 - 46.6 - amortization of intangibles on acquisition Goodwill impairment 14.6 - 14.6 - Total one-time 86.3 3.1 93.1 9.2 </pre> 3 Adjusted net income and adjusted EPS Adjusted net income excludes the effect of change in value of warrants, the regular and accelerated amortization and impairment of goodwill and intangibles on acquisition and the effects of one-charges. It is derived from the reported net income as shown below: <pre> In EUR million Actual Pro-forma Actual Pro- Q4 2010 Q4 20091 2010 forma 20091 Reported net (loss)/ income (80.0) 2.1 (83.9) (8.8) One-time charges eliminated Working capital provisions 7.5 - 12.9 - Restructuring 16.7 3.1 18.8 9.2 Professional, consulting, and 3.5 - 5.8 - other costs One-time income - - (5.6) - Total one-time charges (net) 27.7 3.1 31.9 9.2 Impairment and accelerated 44.0 - 46.6 - amortization of intangibles on
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PRESS RELEASE: 3W Power Holdings S.A. / AEG Power -3-
acquisition Goodwill impairment 14.6 - 14.6 - Regular amortization of 7.7 6.6 33.0 47.7 intangibles on acquisition Change in value of warrants - (20.2) (24.6) 15.2 Estimated tax effects of all (14.3) (1.8) (21.6) (13.2) items above Adjusted net (loss)/income (0.3) (10.2) (4.0) 50.1 </pre> Adjusted EPS is calculated from the adjusted net income attributable to ordinary shareholders of the company and weighted average number of shares in issue during the period. 4 Free cash flow is operating cash flow less cash used in investing activities. 5 Working capital Includes inventory, trade and other receivables (excluding income taxes recoverable), prepayments, trade and other payables and deferred income. 6 In our announcement of third quarter results, restructuring charges for 2009 were not allocated to segments but were instead shown as unallocated. In our 4th quarter announcement and in the 2010 annual financial statements, where possible, restructuring charges have been allocated to the segment to which they relate. Therefore the following table shows the reconciliation of the EES EBIT and EBITDA for the year to the EBIT/EBITDA reported in our third quarter announcement to the full year EBIT/EBITDA for EES reported above. <pre> EUR million EBIT EBITDA Q3 YTD 2009 Pro-forma EES EBIT/EBITDA as reported in (15.6) (1.0) Q3 Allocated restructuring charges (6.1) (6.0) Revised Q3 EES EBIT/EBITDA (21.7) (7.0) Q4 2009 EES EBIT/EBITDA (3.5) (2.2) 2009 full year pro-forma EES reported above (25.2) (9.2) </pre><pre> Segment operating income and EBIT reconciliation for full year to December 31, 2010 </pre><pre> In EUR million RES EES Unallocat Total ed Operating income 9.8 (4.0) (2.0) 3.8 Capitalised R&D (net of amortisation) 3.3 (0.5) - 2.8 Restructuring - (16.5) (2.3) (18.8) Central overheads - - (18.5) (18.5) Amortization, impairment and other (47.6) (46.5) (1.8) (95.9) charges Reported EBIT (34.5) (67.5) (24.6) (126.6) One-time charges Working capital provisions 12.4 0.5 - 12.9 Restructuring - 16.5 2.3 18.8 Professional, consulting, and other - - 5.8 5.8 costs One-time income (5.6) - - (5.6) Impairment and accelerated 25.1 36.1 - 61.2 amortization Regular amortization 22.6 10.4 - 33.0 Adjusted EBIT 20.0 (4.0) (16.5) (0.5) </pre> For more detailed information please visit the website www.aegps.com to read the annual report. 3W Power Holdings S.A. =- End of Announcement-- About 3W Power/AEG Power Solutions 3W Power Holdings S.A. is the holding company of AEG Power Solutions Group. Shares and Warrants in the company are admitted to trading on NYSE Euronext, Amsterdam (ticker symbol: 3WP and 3WPW, respectively). Additionally, the shares are traded on the Frankfurt Stock Exchange (ticker symbol: 3W9) AEG Power Solutions is a world provider of innovative premium power solutions. Backed by more than a century of innovation and customer service, AEG Power Solutions offers a full-range of highly reliable, cost effective solutions, from power conversion modules, solar inverters and solutions to high reliability UPS systems, industrial chargers and DC systems. System solutions from AEG PS are designed to interface with the electrical power grid and to offer power solutions for mission-critical applications in harsh environments, such as utility-scale renewable energy plants, polysilicon manufacturing process, power plants, offshore oil rigs or chemical refineries. AEG Power Solutions activities consist of two complementary operating segments: Renewable Energy Solutions, gathering power controller systems and solar solutions and Energy Efficiency Solutions, dedicated to all infrastructure applications. Thanks to its distinctive expertise, bridging both AC and DC power technologies and spanning the worlds of both conventional and renewable energy, the company is uniquely positioned to benefit long-term from emerging demand for intelligent micro-energy grids. 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, estimates, and assumptions. These forward-looking statements are based on the reasonable evaluation and opinion of the management but are subject to risks and uncertainties which are beyond the control of 3W Power and, as a general rule, difficult to predict. The management and the company cannot and do not, under any circumstances, guarantee future results or performance of 3W Power and the actual results of 3W Power may materially differ from the information expressed or implied in the forward-looking statements. As a result, investors are cautioned against relying on the forward-looking statements contained herein as a basis for their investment decisions regarding 3W Power. 3W Power undertakes no obligation to update or revise any forward-looking statement contained herein. Financial calendar 18 May 2011 Q1 2011 results 19 May 2011 Annual General Meeting, Luxembourg 11 August 2011 Q2 2011 results 29 - 31 August 2011 SCC_ Small Cap Conference, DVFA, Frankfurt /Main (Germany) 16 November 2011 Q3 2011 results 21 - 23 November 2011 German Equity Forum, Deutsche Börse, Frankfurt/Main (Germany) For more information: Media Relations Claire Pairault: T: + 33 (0)6 19 60 91 64 M: + 33 (0)1 55 51 10 76 E: claire.pairault@aegps.com Oliver Thompson Burson-Marsteller T: +49 (0)69 2 38 09 68 E: oliver.thompson@bm.com Investor Relations Jeffrey Casper M: +31(0) 61 09 75 830 E: jeffrey.casper@aegps.com Christian Hillermann Hillermann Consulting T: +49 (0)40 32 02 79 10 E: office@hillermann-consulting.de End of Corporate News =-------------------------------------------------------------------- 31.03.2011 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de =-------------------------------------------------------------------- Language: English Company: 3W Power Holdings S.A. / AEG Power Solutions Weerenweg 29 1161 AH Zwanenburg Niederlande Phone: +31 20 4077 800 Fax: +31 20 4077 801 E-mail: claire.pairault@aegps.com Internet: www.aegps.com ISIN: GG00B39QCR01 WKN: A0Q5SX Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, München, Stuttgart End of News DGAP News-Service =-------------------------------------------------------------------- 117753 31.03.2011
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