Interim Management Statement
November 19, 2013
3W Power/AEG Power Solutions
Reports Interim Management Statement
for the Period Q3 2013
(in € million) Q3 2013 Q3 2012 ∆ in % Q3 2013 Q2 2013 ∆ in % Order backlog 104.0 139.3 -25.4 104.0 96.8 7.4 Orders 58.0 91.8 -36.8 58.0 66.1 -12.2 Revenue 53.9 84.7 -36.4 53.9 57.9 -7.0 EBITDA (11.6) 8.4 (11.6) (11.6) EBITDA margin -21.5% 10.0% -21.5% -20.0%
(in € million) YTD Q3 2013 YTD Q3 2012 ∆ in % Order backlog 104.0 139.3 -25.4
Orders 184.2 269.9 -31.8
Revenue 206.2 266.4 -22.6
EBITDA (16.4) 10.5
EBITDA margin -8.0% 3.9%
Historical numbers have been represented to reflect the change in classification of the telecom converter business (CVT/LED). It is now included in the reported financials.
Luxembourg/Zwanenburg, The Netherlands – November 19, 2013 – 3W Power SA (Prime
Standard, ISIN LU0953526265, 3W9), the holding company of AEG Power Solutions B.V., a leading global provider of power electronic systems and solutions for industrial power supplies and renewable energies, today reports its interim management statement for Q3 2013, providing unaudited operating results for Q3 2013. Order intake in Q3 2013 was €58.0 million (Solar €9.7 million, POC €4.3 million and EES €44.1 million), down 36.8% year-on-year (Q3 2012:
€91.8 million) and down 12.2% compared to the prior quarter (Q2 2013: €66.1 million). Order backlog in Q3 2013 was €104.0 million (Solar €12.1 million, POC €4.9 million and EES €87.0 million), down 25.4% year-on-year (Q3 2012: €139.3 million), but up by 7.4% compared to the prior quarter (Q2 2013: €96.8 million).
2/5 Revenue in Q3 2013 was €53.9 million (Solar €7.8 million, POC €4.6 million and EES €41.4
million), down 36.4% compared to Q3 2012 (€84.7 million) and down 7.0% compared to the prior quarter (Q2 2013: €57.9 million). The expected decline was due to low order intake during Q2 2013, primarily in Solar and POC. Revenue as of end of October 2013 totaled €227.0 million.
The market for large project orders in Solar remains difficult. Industry consolidation, a continued reduction in inverter prices and stretched payment terms/customer financing requirements pose challenges for AEG Power Solutions. Also, POC presently is not expecting to show a recovery until the end of 2014 to the middle of 2015. As such, Power Controller revenue in support of polysilicon manufacturing is likely to remain near zero over the near term and then return, at a low level in late 2015. AEG Power Solutions continues to apply its industry leading technology into other
expanding industrial and energy management markets. Orders and revenue for Industrial Power Solutions continue to grow as planned as a result of our focus on the expanding Oil and Gas markets.
EBITDA in Q3 2013 was €(11.6) million including restructuring expenses of €3.3 million. This corresponds to EBITDA of €8.4 million (including restructuring expenses of €3.0 million) in Q3 2012 and €(11.6) million in Q2 2013. The decrease in EBITDA was mainly due to lower volumes in Solar and POC.
At the end of Q3 2013, the cash position of the Company was €28.9 million, down €20.6 million from €49.5 million at the end of Q2 2013 and its gross accounts receivable balance was €70.5 million. The Company’s large Solar customer represents 21.3% of the Group’s gross trade receivable balance as of September 30, 2013. For September 30, the total gross trade receivable for this customer was €15.0 million with a bad debt provision of €8.5 million. Following receipt of €4.0 million from the customer in October, the gross receivable due from the customer has been reduced to €11.0 million. At the end of October 2013, the cash position of the Company was €32.4 million and its gross accounts receivable balance was €66.1 million.
Despite the Group’s higher cash balance as of October 31, 2013 versus September 30, 2013, the Company’s liquidity position remains under pressure and there is currently limited access to credit. While AEG PS is positioned to serve the opportunities of the future, the outlook for the Group remains challenging especially with respect to cash flow generation. Failure to improve the liquidity position and cash flow of the business could threaten the Company’s ability to continue as a going concern. For 2013, AEG Power Solutions expects overall sales volumes to fall below €285 million on lower Solar and POC revenues and Normalized EBITDA to be negative. EES is expected to be slightly below last year’s revenue with negative EBITDA.
On October 29, 2013, the Company announced that it had retained external financial and legal advisors to review the Company’s business plan, liquidity situation and future earnings. In light of current trading and based on the expert advice, the Company is reviewing its current capital structure in order to decide whether any adjustments are required.
As part of this review and in order to establish a solid basis going forward, the Company intends to engage in discussions with the holders of its €100 million corporate bond (ISIN DE000A1A29T7, 3W9A) on November 25, 2013 in Frankfurt am Main, Germany. The agenda points to be discussed and voted on at the meeting are 1) the appointment of a common representative to represent the bondholders and 2) providing a mandate to the common representative to
renegotiate the terms and conditions of the coupon payment of €9.25 million becoming due and payable on December 1, 2013. Subsequently the Company intends to enter into discussions with the common representative about a restructuring of the bond. Details for the meeting are available on the investor relations section of the Company’s website, www.aegps.com.
In addition to the envisaged bondholder process, the Company is pursuing several alternatives and solutions to potentially monetize noncore assets and is in discussions with lending banks to provide additional financing.
Commencing with this interim management statement, the Group has changed its quarterly public reporting policy in line with applicable Luxembourg and German securities law. The Group’s new policy is to publish interim management statements for the quarterly periods ending March 31 and September 30 of the fiscal year and full Condensed Consolidated Interim Financial Statements for the semi-annual period ending June 30 of the fiscal year.
4/5
Key segment figures
Solar System Solutions – Solar
(in € million) Q3 2013 Q3 2012 ∆ in % Q3 2013 Q2 2013 ∆ in % Order backlog 12.1 31.0 -61.1 12.1 10.4 16.3
Orders 9.7 38.1 -74.5 9.7 10.1 -4.0
Revenue 7.8 29.0 -73.0 7.8 12.5 -37.6
Power Controller Solutions – POC
(in € million) Q3 2013 Q3 2012 ∆ in % Q3 2013 Q2 2013 ∆ in % Order backlog 4.9 23.5 -79.1 4.9 6.1 -19.7
Orders 4.3 4.0 7.5 4.3 5.6 -23.3
Revenue 4.6 13.3 -65.4 4.6 5.2 -11.6
Energy Efficiency Solutions – EES
(in € million) Q3 2013 Q3 2012 ∆ in % Q3 2013 Q2 2013 ∆ in % Order backlog 87.0 84.9 2.5 87.0 80.3 8.3
Orders 44.1 49.7 -11.4 44.1 50.4 -12.6
Revenue 41.4 42.4 -2.3 41.4 40.2 3.0
Historical numbers have been represented to reflect the change in classification of the telecom converter business (CVT/LED). It is now included in the reported financials.
-- End of Announcement --
Characters: c.7,000
About 3W Power/AEG Power Solutions:
3W Power S.A. (WKN A1W2L4 / ISIN LU0953526265), 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 (AEG PS) Group is a global provider of power electronics systems and solutions for all industrial power requirements offering one of the most comprehensive product and service portfolios in the area of power conversion and power control. Two complementary operating business segments, Renewable Energy Solutions (RES) and Energy Efficiency Solutions (EES) serve customers worldwide. The RES product and service portfolio consists of systems and solutions for solar power plants, such as solar inverters, monitoring and control systems as well as power controllers for a wide range of industrial applications such as polysilicon, energy storage, sapphire and glass. The EES
product and service portfolio includes high-performance uninterruptable power supplies (UPSs), industrial chargers, and DC systems.
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’ global footprint includes 22 subsidiaries, offices and competence centers around the world with 1,600 employees.
For more information, visit 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, 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.
For further information, please contact:
Katja Buerkle
Investor Relations & Financial Communications AEG Power Solutions
Tel.: +31 20 4077 854 Mobile: +31 6 1095 9019 Email: [email protected]
Christian Hillermann Hillermann Consulting
IR consultancy of AEG Power Solutions Tel.: +49 40 320 279 10 Mobile: +49 173 5379660
