financial statements
as at 31 March 2013
* Previous year‘s figures adjusted; see notes ** Full Time Equivalent
Gross profit margin in percent 14.5 20.7
EBITDA EUR million – 11.7 – 7.6
EBITDA margin in percent – 9.6 – 7.7
EBIT EUR million – 15.0 – 11.5
EBIT margin in percent – 12.3 – 11.7
Income after taxes EUR million – 17.8 – 14.7
31 Mar 2013 31 Dec 2012
Total assets EUR million 243.4 241.6
Total equity EUR million – 96.3 – 76.6
Equity ratio in percent – 39.6 – 31.7
Q1 2013 Q1 2012
Cash flow from operating activities (total) EUR million – 7.7 6.2
Cash flow from investing activities (total) EUR million – 1.3 – 1.9
Cash flow from financing activities (total) EUR million – 2.6 – 4.7
Earnings per share from continuing operations * EUR – 0.11 – 0.09
Average number of no-par shares issued * 159,795,307 159,795,307
Number of employees FTE ** (as at 31.03.) 1,150 1,263
Germany 787 745
INTERIM GROUP MANAGEMENT REPORT
4 Global economic developments 4 Development of the industry 5 Assets, liabilities, cash flows, and
profit or loss
13 Events after the balance sheet date 13 Risk and opportunity report 14 Outlook
15 The Conergy share
IINTERIM CONSOLIDATED FINANCIAL STATEMENTS
18 Consolidated statement of comprehensive income 19 Consolidated balance sheet 20 Consolidated statement of cash flows 21 Consolidated statement of changes
in equity 22 Condensed notes
28 Review Report
FURTHER INFORMATION
29 Disclaimer, contact and imprint 30 Financial calendar
Interim Management Report
of the Group for the period
from 1 January to
31 March 2013
Global economic developments
According to the European Central Bank, economic momentum picked up in recent months, even though the economic recovery is occurring to varying degrees in different economic areas. The reason behind this development is the renewed improvement in financial market conditions worldwide. Moreover, survey indi-cators point to a further change for the better in the business climate.In the euro zone, the brakes were put on the pace of growth by ongoing government budget cutting and tightening of fiscal policies. According to estimates, the euro zone’s gross domestic product declined by 1.0 percent in the first quarter of 2013. Although this is an improvement from the fourth quarter of 2012 in which the GDP decreased by 2.3 percent, the region is still in recession all the same. With growth of 0.6 per-cent, Germany’s economy is the exception.
A different picture was presented by economic output in the United States, which continues to recover. After an increase of 0.4 percent in the fourth quarter of 2012, the country’s GDP was up 3.0 percent in the first quarter of 2013.
Japan was also able to boost its economic output again in the quarter under review. The economy there grew significantly more robustly than in the preceding quarter, expanding by 3.1 percent. The highest growth rate was again displayed by the Chinese economy. However, at growth of 7.7 percent this represented a slight decrease compared with the fourth quarter of 2012.
Development of the industry
After demand for solar power installations reached record levels in Germany again last year, the market saw a noticeable decline in the first quarter of 2013. New installations fell 57 percent below the figure for the prior-year quarter, with new installed output esti-mated at approximately 800 megawatts. The reason for this development is the announced adjustment of feed-in tariffs, which led to an upswing in the first
quarter of 2012 due to pull-forward effects. On the other hand, the construction of large-scale solar en-ergy projects was curtailed sharply in the middle of last year, which also affected construction activities in the first quarter of 2013.
With new installations totalling around 800 mega-watts, the market in Greece saw its highest growth to date. More than one-third of the total installed solar electricity capacity in Greece was installed in the first quarter of 2013. This is attributable to pull-forward effects in anticipation of deterioration in subsidies for photovoltaics in the second quarter of 2013. It is ex-pected that the Greek market will weaken in the com-ing quarters for this reason.
In Italy, the third largest market in Europe, demand was stable with new installations accounting for about 600 megawatts in the first quarter of 2013. The coun-try now has a total of 16.7 gigawatts of solar electricity capacity installed. The current law stipulates expira-tion of the subsidies when a certain capacity threshold is reached. In view of the current pace of installation, it is anticipated that subsidies in the form of feed-in tariffs will expire as early as the second quarter of 2013. However, demand will expected to remain at a high level due to what is known as “net metering.” In the Asia Pacific region, industry experts estimate that new installations in the first quarter of 2013 more than doubled compared with the first quarter of the previous year. More than 90 percent of the new instal-lations are in Australia, China, India and Japan, which holds the greatest share. China has been able to more than quadruple its installed capacity since the first quarter of 2012.
After the price of solar modules and their preproducts dropped sharply in past quarters, moderate stabilisa-tion was again seen for the first time in the first quarter of 2013. A decline of 3 percent meant that prices re-mained nearly at the level of the prior-year quarter. A similar trend was evident in solar cell prices, which al-so decreased by 3 percent on average. Solar wafers and silicon saw a somewhat steeper drop in price – by 6 percent and 5 percent, respectively. Compared to previous quarters, however, this situation eased again slightly for the first time.
Assets, liabilities, cash flows, and
profit or loss
Profit or loss
Income statement of the Conergy Group (short version) Q1 2013 2012Q1*
Shipments MWp 127.8 69.8
Sales EUR million 122.1 98.2
Gross profit EUR million 17.7 20.3
Gross profit margin percent 14.5 20.7
Earnings before interest, taxes, depreciation and
amortisation (EBITDA) EUR million – 11.7 – 7.6 Earnings before interest and
taxes (EBIT) EUR million – 15.0 – 11.5 Non-operating result EUR million – 2.8 – 3.2 Earnings before taxes (EBT) EUR million – 17.8 – 14.7
Income taxes EUR million 0.0 0.0
Income after taxes EUR million – 17.8 – 14.7 thereof attributable to
Shareholders of Conergy AG
(consolidated profit or loss) EUR million – 17.8 – 14.7 * Previous years’ figures adjusted; see notes
Sales
In the first quarter of 2013, many of the world’s PV markets still found themselves in a difficult situation marked by uncertainties and upheaval in the regulatory environment. Nonetheless, the volume of photovoltaic modules sold by the Conergy Group totalled 127.8 mega-watts in the first quarter of 2013. Conergy thus succeeded in increasing this volume by a strong 83.1 percent over the first quarter of 2012 (previous year: 69.8 mega-watts). This positive performance stemmed from the stepped-up development of new markets for export by the existing sales organisations as well as the increase in project volume. This also boosted the Conergy Group’s sales by EUR 23.9 million from EUR 98.2 million in the previous year to EUR 122.1 million in the first quarter of 2013. In contrast to volume, the sales figure was only 24.3 percent higher than in the previous year because of the continued sharp drop in the price of photovoltaic systems and all photovoltaic components in the course of the past financial year. In assessing this development, it should be noted that the first quarter is traditionally the weakest quarter of the year in the solar energy industry. Nonetheless, Conergy successfully exceeded the volume in the fourth quarter of 2012 (105.3 megawatts) by 22.5 megawatts in the first quarter of 2013. Despite the steep drop in prices, sales in the first quarter of 2013 totalled EUR 122.1 million, edging up over the figure for the fourth quarter of 2012, which was EUR 121.8 million.
In the past year, Conergy was able to further improve the excellent international positioning of its sales or-ganisation. For this reason, the share of consolidated sales attributable to sales abroad was 88.5 percent in the reporting period, much higher than the prior- year figure of 70.5 percent. Sales outside Germany increased by EUR 38.9 million, or 56.2 percent, to EUR 108.1 million (previous year: EUR 69.2 million). In the first quarter of 2013, the most important foreign markets for the Conergy Group included the Thai mar-ket, which is served from Singapore and saw volumes triple. In addition, the sales organisation in Spain quadrupled its volume sold compared with the prior-year quarter, mostly thanks to expansion of its export business. Furthermore, Italy and Greece continued to be important foreign markets for Conergy in the first quarter of 2013. In Germany, sales declined by EUR 15.0 million, or 51.7 percent, from EUR 29.0 million in the previous year to EUR 14.0 million in the first quarter of 2013. In terms of volume, the figure in the first quarter of 2013 in Germany at 7.1 percent was, how-ever, only slightly below the prior-year quarter, however. The German market accounted for 11.5 percent of Conergy’s total sales in the period under review (previ-ous year: 29.5 percent).
Shipments Conergy Group per quartal in MWp
2013 2012 2013 2012 MWp Germany MWp International 2013 2012 2013 2012 18.2 66.1 27.2 82.9 22,1 105.7 23.8 46.0 127.8 69.8 110.1 84.3 105.3 Q1 Q2 Q3 Q4 18.9 86.4
Sales Conergy Group per quartal in EUR million
2013 2012 2013 2012
Sales Germany Sales International 2013 2012 2013 2012 30.7 77.3 50.4 95.1 14.0 108.1 29.0 69.2 122.1 98.2 145.5 108.0 121.8 Q1 Q2 Q3 Q4 20.1 101.7
Gross profit
The Conergy Group posted a gross profit of EUR 17.7 lion in the first quarter of 2013, compared to EUR 20.3 mil-lion in the previous year. The gross profit margin de-clined by 6.2 percentage points to 14.5 percent (previous year: 20.7 percent), mainly due to the approximately 40-percent drop in the price of photovoltaic modules in the course of the 2012 financial year and a still ex-tremely competitive market. For financial year 2012 as a whole, the gross profit margin was 14.5 percent, and thus the gross profit margin remained steady in the first quarter of 2013.
Earnings before interest, taxes, depreciation and amortisation (EBITDA)
In the first quarter of 2013, earnings before interest, taxes, depreciation and amortisation (EBITDA amounted to EUR – 11.7 million, down EUR 4.1 million from the prior-year quarter (EUR – 7.6 million).
The lower EBITDA compared with the first quarter of 2012 is mainly attributable to the absence of the posi-tive one-time effects included in the figure in the previ-ous year, in addition to the lower gross profit, which was driven by continued price and margin pressure. In the first quarter 2012, other operating income included in-come from the sale of voltwerk electronics GmbH to the Bosch Group in the amount of EUR 4.7 million. Moreover, other operating income reflects positive ef-fects of EUR 5.8 million from the reversal of provisions, which amounted to only EUR 1.2 million in the first quarter of 2013. Whereas write-downs of receivables reduced EBITDA by EUR 1.4 million in the previous year, this figure was only EUR 0.3 million in the first quarter of 2013. In the first quarter of 2013, net currency gains of EUR 2.0 million were recognised, whereas in the previous year net currency losses reduced the result by EUR 1.7 million. On the whole, additional cost-cutting reduced personnel expenses and other operating expenses further compared with the prior-year quarter.
Operating result (EBIT)
After accounting for amortisation and depreciation of intangible assets and property, plant and equipment of EUR 3.3 million (previous year: EUR 3.9 million), earnings before interest and taxes (EBIT) in the first quarter of 2013 amounted to EUR – 15.0 million (previ-ous year: EUR – 11.5 million).
Earnings before taxes (EBT)
As at 2012 the half-year financial statements, Conergy also reviewed the utilisation of its guarantee facilities granted under the syndicated loan agreement, among other things, in connection with the increased use of supplier loans. It was determined that these are now mainly used to provide security for supplier loans while in the past risks arising from the planning and implementation of projects were collateralised. On ac-count of the predominant financing function, the guar-antee fees of EUR 0.9 million recorded in the first quarter of 2013 were reported under “Non-operating expenses” rather than under “Other operating ex-penses”. The disclosure for the guarantee commission of EUR 0.8 million paid in the previous year was ad-justed accordingly with retroactive effect.
The non-operating result of the Conergy Group in the first quarter of 2013 was thus EUR – 2.8 million (previ-ous year: EUR – 3.2 million). Non-operating expenses of EUR – 2.9 million (previous year: EUR – 3.2 million) mainly arose from interest expense related to borrow-ings that comprise both interest payments and accrued interest. Taking into account this non-operating result, earnings before taxes (EBT) were EUR – 17.8 million (previous year: EUR – 14.7 million).
Income after taxes
As in the prior year, no income tax was incurred in the first quarter of 2013. Furthermore, no operations were shown as discontinued operations in the first quarter of 2012 or the first quarter of 2013. Income after taxes therefore totalled EUR – 17.8 million in the first quarter of 2013, down EUR 3.1 million from the prior-year figure (EUR – 14.7 million).
Earnings per share from continuing operations were EUR – 0.11 (previous year: EUR – 0.09).
Business development by segment Development of sales by segment
External sales by segment
EUR million Q1 2013 Q1 2012
Europe 78.1 64.7
Asia Pacific and Americas 44.0 33.5
Holding – –
Reconciliation – –
In the Europe segment, the first quarter of 2013 saw sales increase by EUR 13.4 million, or 20.7 percent, to EUR 78.1 million (previous year: EUR 64.7 million) des-pite prices being lower than in the previous year. Ad-justed for prices, sales generated by PV modules grew by 80.1 percent.
Major drivers of the year-on-year sales increase were the developments in Greece and Spain, where vol-umes more than doubled and quadrupled, respectively. Accordingly, sales in Greece rose by EUR 5.1 million to EUR 11.0 million in the first quarter of 2013 (previous year: EUR 5.9 million). In Spain, sales grew by EUR 4.2 million to EUR 10.0 million (previous year: EUR 5.8 million). The companies in the United Kingdom and France re-ported similarly satisfactory developments with sales of EUR 8.1 million and EUR 4.0 million, respectively, in the first quarter of 2013. In Germany, the volume of photovoltaic modules sold remained nearly constant compared with the previous year at 2.7 percent. It must be noted that the first quarter of 2012 was influenced by a short upswing in March resulting from the an-nouncement of an unplanned reduction in feed-in tariffs for solar energy. Sales in Germany in the first quarter of 2013 decreased by EUR 4.2 million to EUR 31.6 million (previous year: EUR 35.8 million). This also includes the export business of Conergy Deutschland GmbH and Mounting Systems GmbH.
In the Asia Pacific and Americas (APAM) region, sales also increased by EUR 10.5 million to EUR 44.0 million (previous year: EUR 33.5 million). Adjusted for price and currency effects, sales of photovoltaic modules here actually increased by 91.9 percent year-on-year. The positive trend is primarily attributable to the com-pany in Singapore, which was able to construct sever-al large-scsever-ale open field instsever-allations in the first quar-ter of 2013, and therefore reported sales growth of EUR 16.0 million to EUR 25.8 million (previous year: EUR 9.8 million). In Australia, the volume increased by a healthy 36.2 percent over the prior year, but at EUR 4.8 million, sales remain below the previous year’s level due to the sharp decline in prices in the past financial year (previous year: EUR 7.5 million). In the United States and Canada, sales in the first quarter 2013 edged down from the previous year’s lev-el at EUR 6.8 million (previous year EUR 8.8 million) and EUR 2.8 million (previous year: EUR 4.3 million), respectively. In the United States, this is mainly due to short-term weakness in demand due to regional changes in subsidies.
Sales by country * in percent
Q1 2013 11% 10% 8% 6% 21% 9% 10% 14% 4% 7% Q1 2012 Germany
Exports from Germany Italy Australia Spain UK USA Singapore Greece Other 29% 11% 6% 9% 10% 11% 16% 7% 8% 6%
* Domicile of the respective company
Development of earnings by segment
In the Europe segment, EBITDA in the first quarter of 2013 amounted to EUR – 8.7 million compared with EUR – 2.1 million in the previous year. The drop in earn-ings by EUR 6.6 million is largely attributable to the * Previous years’ figures adjusted; see notes
Reconciliation of EBITDA to consolidated profit or loss
EUR million Q1 2013 Q1 2012 *
Europe – 8.7 – 2.1
Asia Pacific and Americas – 0.2 – 3.5
Holding – 2.8 – 2.1 Reconciliation 0.0 0.1 EBITDA – 11.7 – 7.6 Depreciation – 3.3 – 3.9 EBIT – 15.0 – 11.5 Non-operating result – 2.8 – 3.2
Earnings before taxes (EBT) – 17.8 – 14.7
Income taxes 0.0 0.0
fact that other operating income of EUR 11.4 million was mainly generated in the Europe segment in the previous year. In the first quarter of 2012, this resulted primarily from income from the sale of voltwerk electronics GmbH to the Bosch Group totalling EUR 4.7 million and the reversal of provisions. In the first quarter of 2013, however, operating costs were reduced further from the previous year’s level. As a result, personnel expenses in the reporting quarter declined by EUR 1.5 million to EUR 11.6 million (previous year: EUR 13.1 million) and other operating expenses decreased by EUR 5.0 million from EUR 15.1 million to EUR 10.1 million. In contrast, the gross profit margin was 13.5 percent in the first quarter of 2013, slipping 7.7 percentage points below that of the previous year (21.2 percent).
In the Asia Pacific and Americas segment, EBITDA at EUR – 0.2 million was almost in the black in the first quarter of 2013, which is a year-on-year improvement of EUR 3.3 million (previous year: EUR – 3.5 million). Here, personnel expenses also decreased slightly by EUR 0.3 million to EUR 3.3 million (previous year: EUR 3.6 million). Furthermore, the other operating expenses were reduced by EUR 0.5 million to EUR 6.5 million (previous year: EUR 7.0 million). How-ever, the persistent price pressure in the first quarter of 2013 also lowered the gross profit margin by 1.4 percentage points to 14.3 percent (previous year: 15.7 percent).
Employees and personnel expenses Employees by region
FTE 31 Mar 2013 31 Mar 2012
Europe 848 899
Asia Pacific and Americas 214 266
Holding 88 98
Reconciliation – –
Total number of employees 1,150 1,263 thereof salaried employees
(in percent) 66 67
thereof hourly workers
(in percent) 34 33
As at 31 March 2013, the Conergy Group had a total of 1,150 employees (all figures FTE), 113 employees fewer than as at 31 March 2012. Of these, 699 employees worked for the Group’s German subsidiaries, 363 em-ployees worked for the foreign subsidiaries, and 88 employees worked for the holding company. Of the 1,150 employees in the Conergy Group, 66 percent were salaried employees and 34 percent were hourly-paid workers as at 31 March 2013. The average num-ber of employees in the first quarter of 2013 was 1,150 (previous year: 1,362).
Personnel expenses of EUR 17.1 million were down EUR 1.9 million from the prior year (previous year: EUR 19.0 million).
The statement of cash flows describes the source and utilisation of the cash flows in the reporting period. Hence, it is central to the assessment of the changes in the Company’s financial position.
Cash outflows of EUR 7.7 million from operating activ-ities in the first quarter of 2013 contrast with cash in-flows of EUR 6.2 million in the first quarter of 2012. The development in the net cash flow from operating activ-ities arises mainly from the change in the working cap-ital. This resulted in cash inflows of EUR 21.8 million in the first quarter of 2012, whereas the first quarter of 2013 saw cash flows decline by EUR 17.4 million to EUR 4.4 million. Trade accounts receivable, which accrued due to the strong business performance in the first quarter of 2013, contributed EUR 18.2 million to this development (previous year: cash inflow of EUR 14.8 million). This was balanced out by further im-provements in cash flows from trade accounts paya-ble, which increased further in the first quarter of 2013 as against the comparable period in 2012, primarily due to changes in the supply strategy with various sup-pliers. The cash inflow from the change in trade ac-counts payable was EUR 21.2 million in the first quarter of 2013 (previous year: EUR 0.3 million), and additional
cash inflows arose from the reduction in inventories by EUR 1.4 million, which had been higher in the previous year at EUR 6.7 million.
The change in other net working capital and other non-cash items had an effect of EUR 2.9 million in the first quarter of 2013 (previous year: EUR – 4.1 million). This change in other net working capital and other non-cash items in the first quarter of 2013 is mainly attributable to adjusting the operating result to eliminate non-cash items such as depreciation and amortisation.
In the first quarter of 2013, EUR 1.3 million in net cash was used for investing activities (previous year: cash out-flow of EUR 1.9 million). A cash outout-flow of EUR 0.7 mil-lion resulted from investments in property, plant and equipment as well as intangible assets (previous year: cash outflow of EUR 1.3 million). The outflow of funds from financial assets relates to project development activities and amounted to EUR 0.7 million (previous year: cash outflow of EUR 0.6 million).
This gave rise to a cash inflow of EUR – 9.0 million before financing activities in the first quarter of 2013 (previous year: EUR 4.3 million).
Cash flows
* Previous years’ figures adjusted; see notes
Statement of cash flows of the Conergy Group (short version)
EUR million Q1 2013 Q1 2012 *
Operating result (EBIT) – 15.0 – 11.5
Change in working capital 4.4 21.8
Change in inventories 1.4 6.7
Change in trade accounts receivable – 18.2 14.8
Change in trade accounts payable 21.2 0.3
Change in other net assets / other non-cash items 2.9 – 4.1
Cash generated from operating activities (net cash flow) – 7.7 6.2
Net cash generated from investing activities – 1.3 – 1.9
Thereof
Cash outlfows for investments in property, plant and equipment, and intagible assets 0.0 0.0 Cash outflows for investments in property, plant and equipment, and intangible assets – 0.7 – 1.3
Cash receipts from the sale of subsidiaries – –
Change in non-current financial assets – 0.7 – 0.6
Interest received 0.1 0.0
Cash flow before financing activities (free cash flow) – 9.0 4.3
Net cash generated from financing activities – 2.6 – 4.7
Thereof
Capital contributions – –
Cash payments in connection with the acquisition of equity – –
Change in borrowings – 0.9 – 1.9
Cash outflows for retirements of debt – –
Interest paid and payments similar to interest – 1.7 – 2.8
The Conergy Group used EUR 2.6 million in net cash for financing activities in the first quarter of 2013 (pre-vious year: cash outflow of EUR 4.7 million). On the one hand, this cash outflow was the result of the change in borrowings, which decreased by EUR 0.9 million (previous year: cash outflow of EUR 1.9 million). In ad-dition, EUR 1.7 million in payments of interest and sim-ilar payments also resulted in an outflow of cash which had been EUR 1.1 million higher in the first quarter of 2012 at EUR 2.8 million.
Liquidity development in the first quarter of 2013 in EUR million
7.3
0 5 10 15 20
EBIT
Changes W/C
Cash flow from investing activities Cash flow from financing activities Liquidity (31.03.2013) 2.6 4.4 15.0
Other net assets / Other
non-cash items 2.9
Liquidity
(01.01.2013) 18.9
1.3
Cash and cash equivalents and net liabilities Net liabilities
EUR million 31 Mar 2013 31 Mar 2012 31 Dec 2012
Non-current borrowings 81.3 87.8 81.3
Current borrowings 54.1 51.8 55.0
Borrowings 135.4 139.6 136.3
Cash and cash equivalents 7.3 23.4 18.9
Conergy Group 128.1 116.2 117.4
As a result, the net change in cash and cash equivalents in the first quarter of 2013 was thus EUR – 11.6 million (previous year: EUR – 0.4 million).
The Conergy Group had cash and cash equivalents of EUR 7.3 million as at 31 March 2013 (31 December 2012: EUR 18.9 million).
As at 31 March 2013, borrowings amounted to EUR 135.4 million, compared to EUR 136.3 million at the close of the 2012 financial year. Borrowings in the first quarter of 2013 thus decreased by EUR 0.9 million compared to the 2012 balance sheet date. The Group’s net liabilities as at 31 March 2013 were EUR 128.1 million (31 December 2012: EUR 117.4 million).
Development of net liabilities (in EUR millions)
117.4 124.6 111.7 128.1 0 30.06.2012 30.09.2012 31.12.2012 31.03.2013 50 100 150 116.2 31.03.2012
The new syndicated loan agreement (2011 Syndicated Loan Agreement) took effect after the capital increase was recorded in the Commercial Register appropriate for Conergy AG on 21 July 2011, replacing the 2007 Syndicated Loan Agreement for the purpose of en-suring adequate liquidity. Conergy AG and Conergy SolarModule GmbH & Co. KG acting as borrowers, as well as other significant companies of the Conergy Group acting as guarantors, and ten banks led by Commerzbank International S.A., Luxembourg, closed this new loan agreement for a current volume of EUR 261.5 million on 8 July 2011.
Of the three-tranche 2011 Syndicated Loan Agree-ment, Tranche A in the amount of EUR 70.2 million will serve to fund liabilities existing under the 2007 Syndi-cated Loan Agreement; Tranche B provides a revolving facility of EUR 50.0 million and covers the Conergy Group’s working capital requirements as well as other defined operating purposes; Tranche C in the amount of EUR 141.3 million finally serves to fund existing guarantees and cover additional guarantees as re-quired. Whilst all tranches are due and must be repaid in full four years from initial drawdown, revolving loans utilised under Tranche B must either be repaid at the end of the respective interest period or allocated to a new interest period without having been repaid and newly granted; they may then be used until one month prior to final maturity.
For the particulars of the new loan agreement (2011 Syndicated Loan Agreement), please see the descrip-tion of its terms and condidescrip-tions in the “Risk and oppor-tunity report” of the 2012 annual report.
Assets and liabilities
Consolidated balance sheet of the Conergy Group
EUR million 31 Mar 2013 31 Mar 2012 31 Dec 2012
Non-current assets
Goodwill – – –
Intangible assets 1.8 3.5 1.8
Property, plant and equipment 72.3 79.0 74.8
Financial assets 1.4 1.6 1.5
Other assets 0.7 0.9 0.8
Deferred tax assets 0.7 3.0 0.7
76.9 88.0 79.6
Current assets
Inventories 59.2 88.4 61.3
Trade accounts receivable 80.7 67.1 62.6
Financial assets 5.1 9.1 4.4
Other assets 14.2 37.0 14.8
Cash and cash equivalents 7.3 23.4 18.9
166.5 225.0 162.0 Total assets 243.4 313.0 241.6 Equity – 96.3 6.9 – 76.6 Non-current liabilities Provisions 25.1 36.4 25.3 Borrowings 81.3 87.8 81.3 Other liabilities 2.0 1.8 1.3
Deferred tax liabilities 0.0 0.0 0.0
108.4 126.0 107.9
Current liabilities
Provisions 7.3 14.5 7.3
Borrowings 54.1 51.8 55.0
Trade accounts payable 151.4 88.7 130.2
Other liabilities 18.1 23.3 17.4
Current income tax liabilities 0.4 1.8 0.4
231.3 180.1 210.3
Total equity and liabilities 243.4 313.0 241.6
Total assets
The total assets of the Conergy Group as at 31 March 2013 amounted to EUR 243.4 million, up EUR 1.8 mil-lion from the end of the 2012 financial year (31 Decem-ber 2012: EUR 241.6 million).
Non-current assets
Non-current assets declined marginally by EUR 2.7 mil-lion to EUR 76.9 milmil-lion compared to the end of the previous year (31 December 2012: EUR 79.6 million). In part, this stemmed from the decrease in property, plant and equipment by EUR 2.5 million to EUR 72.3 million (31 December 2012: EUR 74.8 million), due essentially to depreciation.
Current assets
Current assets as at 31 March 2013 increased by a total of EUR 4.5 million to EUR 166.5 million (31 Decem-ber 2012: EUR 162.0 million). This was largely the re-sult of the increase in trade accounts receivable by EUR 18.1 million to EUR 80.7 million (31 December 2012: EUR 62.6 million) on account of the positive develop-ment of business in the first quarter of 2013 whereas cash and cash equivalents decreased by EUR 11.6 million to EUR 7.3 million (31 December 2012: EUR 18.9 mil-lion). Compared with 31 December 2012, inventories decreased slightly by EUR 2.1 million to EUR 59.2 million as at 31 March 2013 (31 December 2012: EUR 61.3 million).
Equity
The Conergy Group’s consolidated equity according to IFRS as at 31 March 2013 decreased by EUR 19.7 million to EUR – 96.3 million (31 December 2012: EUR – 76.6 mil-lion). This was mainly due to the consolidated net loss of EUR – 17.8 million in the first quarter of 2013.
Non-current liabilities
Non-current liabilities as at 31 March 2013 were EUR 108.4 million, up only marginally by EUR 0.5 mil-lion compared to the end of the 2012 reporting period (31 December 2012: EUR 107.9 million).
Current liabilities
Current liabilities as at 31 March 2013 were EUR 231.3 mil-lion (31 December 2012: EUR 210.3 milmil-lion), which is an increase of EUR 21.0 million compared to the end of the 2012 financial year. This change is mainly due to the in-crease in trade accounts payable by EUR 21.2 million to EUR 151.4 million (31 December 2012: EUR 130.2 mil-lion). In contrast to this borrowings were reduced by EUR 0.9 million to EUR 54.1 million (31 December 2012: EUR 55.0 million).
Events after the reporting period
As at 30 April 2013, Conergy AG entered into a settle-ment agreesettle-ment with six former Managesettle-ment Board members and the former D&O insurer concerning pos-sible breaches of duty asserted by the Company against the former Management Board members. Conergy AG is expected to receive a settlement pay-ment of EUR 6.3 million from the agreepay-ment. The valid-ity of this settlement agreement is contingent upon the approval of the next Conergy AG Annual General Meeting.Furthermore, Conergy AG entered into settlement agreements in this context with the parties of the test case (Musterverfahren) regarding the profit warning dated 25 October 2007. The payments in favour of the investor plaintiffs shall be settled using part of the set-tlement payment to be paid to Conergy AG. The validity of the settlement agreements with the parties in the test case depends on the validity of the settlement agree-ment with the form er Manageagree-ment Board members and the D&O insurer.
Risk and opportunity report
As an internationally operating company, the Conergy Group is exposed to numerous risks and opportuni-ties. Detailed information regarding the risks and op-portunities of Conergy was provided in the combined management report for the 2012 financial year, which was published on 28 March 2013. Unless noted other-wise below, in the first quarter of the 2013 financial year basically no material changes relative to the risks and opportunities described in the combined manage-ment report as at 31 December 2012 have occurred. Nevertheless, we cannot preclude that changes will occur in the future. Accordingly, any existing uncer-tainties in that respect naturally harbour a number of risks and rewards, some of which are beyond the di-rect control of Conergy, that could have a substantial impact on the Company’s profit or loss, cash flows and assets and liabilities. In particular, these factors include those mentioned in the risk and opportunity report of the combined management report for the 2012 financial year. The published 2012 consolidated financial statements are available on the website of Conergy AG www.conergy-group.com under Investor Relations/News and Publications/Financial reports. As at 30 April 2013, Conergy AG entered into a settle-ment agreesettle-ment with six former Managesettle-ment Board members and the former D&O insurer concerning pos-sible breaches of duty asserted by the Company against the former Management Board members. Conergy AG is expected to receive a settlement pay-ment of EUR 6.3 million from the agreepay-ment. The valid-ity of this settlement agreement is contingent upon the approval of the next Conergy AG Annual General Meeting.
Furthermore, Conergy AG entered into settlement agreements in this context with the parties of the test case (Musterverfahren) regarding the profit warning dated 25 October 2007. The payments in favour of the investor plaintiffs shall be settled using part of the set-tlement payment to be paid to Conergy AG. The valid-ity of the settlement agreements with the parties in the test case depends on the validity of the settlement agreement with the former Management Board mem-bers and the D&O insurer.
None of the going-concern risks listed in the 2012 fi-nancial year management report that are more likely than not to occur are discernible at this time. Hence, the Management Board assumes that the Company will continue as a going concern. According to Conergy’s
planning and taking into account EUR 261.5 million in current credit lines and guarantees under the 2011 Syndicated Loan Agreement, which has a term until July 2015, the Conergy Group’s liquidity is basically ensured in both the short and medium term through cash inflows from operating activities. The Company’s liquidity cover remains very thin and depends solely on earnings from operating activities. In addition, Conergy is active on the global photovoltaic market in an ex-tremely dynamic environment with an ever-changing playing field. This is also demonstrated by the investi-gation recently launched by the European Commis-sion into the possibility of imposing anti-dumping du-ties on imports of solar panels and their key components originating in China, where the scope and consequences for the photovoltaic sector and/or the Company cannot yet be estimated.
Even though Conergy enjoys an excellent strategic pos-itioning and is well established on the most important photovoltaic markets, dips in demand caused by fac-tors outside or inside the Company cannot be ruled out. Considerable shortfalls in expected sales and earnings as well as in expected cash inflows from op-erating activities would impact Conergy’s profit or loss, cash flows and assets and liabilities and under-mine or even destroy Conergy’s solvency. In this case, the currently existing threat to its existence as a going concern could become a reality, if and to the extent that it is impossible to offset the lack of operating cash flows through other actions, especially cash infusions from shareholders and outside lenders. The Manage-ment Board cannot judge at this time whether the shareholders or outside lenders would be willing to do so.
Outlook
Economic development
After a slowdown in economic momentum in 2012, the International Monetary Fund (IMF) believes that growth will pick up again in 2013. On the whole, it is anticipated that the global economy will grow by 3.3 percent – following 3.2 percent in the previous year. The picture in the individual regions varies considerably. Whereas the emerging and developing countries continue to be the major economic engine with an expected growth rate of 5.3 percent, the industrialised countries lag far behind with growth of 1.2 percent. Here, it is expected that the United States and Japan will see above-average expansion at rates of 1.6 percent and 1.9 percent, respectively, while the euro zone will continue to be mired in recession. With economic out-put down 0.3 percent, the results of the sovereign debt
and banking crisis continue to be palpable. The German economy alone is the exception with slight growth in the gross domestic product (GDP) by 0.6 percent.
Among the emerging and developing countries, China’s economy sees by far the strongest pace of growth at 8.0 percent. According to the IMF, India’s economic output is also predicted to expand more robustly than in the previous year with growth of 5.7 percent. After an increase of 3.0 percent in 2012, Latin America’s economy is also projected to grow, this time by 3.4 per-cent. This also applies to southern Africa, where the GDP growth is likely to hit 5.6 percent in 2013 after 4.8 percent in the previous year.
Development of the industry
Experts believe that demand for solar power installa-tions will reach a new high with newly installed capacity of up to 35 gigawatts in 2013. In contrast to previous years, the growth will largely be driven by markets out-side of Europe. Whereas until recently Europe still accounted for more than half of newly installed solar power capacity worldwide, this percentage will shift in favour of North America and particularly Asia in the coming years. A decline in demand is expected above all in the established European markets such as Germany and Italy, which is often attributable to dete-rioration in the political will to subsidise solar energy. In contrast, many governments in Asia are stepping up their efforts to increase the share of energy accounted for by renewable energies. For example, China, one of the largest manufacturing countries, has set the goal of attaining market growth of 10 gigawatts in 2013. Japan and India are also expected to continue unabated in expanding their use of solar energy. The same is also true for the United States, where demand is expected to nearly double.
After solar module prices fell sharply over the past two years, prices are expected to recover in 2013. While we still expect supply to exceed demand, we assume that prices will stabilise or even increase slightly espe-cially in Europe given the sharp drop in prices at the close of 2012.
Furthermore, a decision by the Council of Europe in favour of introducing punitive tariffs on solar modules and components from China could impact the future development of prices and volumes: In early March 2013, the EU issued a Regulation stipulating that imports from China must be presented to the customs au-thorities. As the investigation proceeds, a decision will
be reached by the beginning of June 2013 on whether provisional punitive tariffs will be imposed in the European Union. At the present time, however, it is im-possible to forecast the outcome of this investigation, which specific regulatory measures will be involved and their effects on competition in the photovoltaic in-dustry in Europe and markets outside Europe.
Conergy’s expected performance
Conergy AG confirms its guidance for the 2013 finan-cial year as provided on 28 March 2013 with the publi-cation of the annual financial statements for the 2012 financial year. According to this, sales are expected to rise again in the current financial year for the first time. Assuming a recovery of prices, sales of between EUR 700 and EUR 800 million are likely to be generated on the strength of higher module sales, which means that the Management Board is slightly adjusting its sales forecast of EUR 650 to EUR 750 million which it published at the start of the year. Increasing the large-scale project business in Asia, North America and the new export markets such as in Eastern Europe will contribute to this development in particular.
The Management Board continues to expect that the Company’s strategic realignment is essentially com-pleted and that earnings before interest, taxes, depre-ciation and amortisation (EBITDA) will improve again as sales rise. Planning therefore continues to assume slightly positive EBITDA for the current financial year. The Company will also focus on generating positive cash flows from operating activities. Reducing vertical integration has significantly lowered the Conergy’s funding requirements recently. The Company there-fore assumes that its activities will be largely financed through its cash flows from operating activities.
The Conergy share
Stock markets worldwide performed satisfactorily on the whole in the first quarter of this year. In the United States especially, the easing brought by avoidance of the fiscal cliff, continuation of the Fed’s bond-buying programme and promising economic data triggered a sharp gain of 11.3 percent on the Dow Jones Index. Japan’s stock market also continued its upswing due to the expansive monetary policy of the government, climbing 19.3 percent in the first three months. The MSCI World also grew by 7.2 percent.
In contrast, the brakes were put on European stock markets by ongoing concern about the sovereign debt and banking crisis. Although the DAX initially rose sharply until mid-March 2013 and reached a new five-year high of 8,058 points on 14 March 2013, concerns about the Cyprus bailout package led to renewed un-certainty among stock market participants. By the end of the reporting period, the index fell again to 7,795 points, which represents a gain of 2.4 percent compared with the start of the year.
The indexes covering small and medium-sized com-panies performed considerably better. For instance, the TecDAX gained 12.5 percent, while the MDAX was up 11.8 percent. The ÖkoDAX’s performance was also positive. The index, which specialises in the perform-ance of the ten most liquid renewable energy compa-nies in Germany, grew 5.7 percent.
Conergy AG’s share price was up disproportionately to this development – by 32.1 percent in the first quarter of 2013. In addition to improved sentiment for solar en-ergy companies overall, this also reflects news about an end to the sharp drop in prices. However, the volatil-ity of solar energy company shares remains high.
100 120 160
140
Development of the Conergy share in the first quarter of 2013 (indexed; 100 = XETRA opening price on 2 January 2013)
Conergy TecDAX ÖkoDAX
January February March
80
Key figures for the Conergy share Q1 2013
Nominal capital EUR 159,795,307
Number of shares (as at 31 Mar) shares 159,795,307
Market capitalisation (as at 31 Mar) * EUR 59,124,264 Closing share price (as at 31 Mar) * EUR 0.37
High * EUR 0.40
Low * EUR 0.28
Daily average trading volume* shares 578,382
* Xetra
Share: no-par value share
Securities Identification Number A1KRCK
International Securities Identification Number (ISIN) DE000A1KRCK4
Stock exchange symbol CGYK
Stock exchanges Xetra
Frankfurt/Main Stuttgart Düsseldorf Hamburg Munich Hanover Berlin-Bremen
Hamburg, Germany, 3 May 2013 Conergy AG
Condensed interim consolidated financial statements
as at 31 March 2013
Contents
IINTERIM CONSOLIDATED FINANCIAL STATEMENTS 18 Consolidated statement of comprehensive income 19 Consolidated balance sheet 20 Consolidated statement of cash flows 21 Consolidated statement of changesin equity 22 Condensed notes
28 Review Report
FURTHER INFORMATION
29 Disclaimer, contact and imprint 30 Financial calendar
Consolidated statement of comprehensive income of the Conergy Group
* Previous years’ figures adjusted owing to IAS 8; see notes ** Corresponds to earnings from ordinary activities
*** Corresponds to the sum of income after taxes and changes in value recognised in equity
EUR million Q1 2013 Q1 2012 *
Sales 122.1 98.2
Changes in inventories of finished goods and work in progress – 0.9 – 2.0
Cost of materials – 103.5 – 75.9
Gross profit 17.7 20.3
Personnel expenses – 17.1 – 19.0
Other own work capitalised 0.0 0.0
Other operating income 4.4 12.5
Other operating expenses – 16.7 – 21.4
Earnings before interest, taxes, depreciation and amortisation (EBITDA) – 11.7 – 7.6
Depreciation, amortisation and impairment losses – 3.3 – 3.9
Earnings before interest and taxes (EBIT) – 15.0 – 11.5
Non-operating income 0.1 0.0
Non-operating expenses – 2.9 – 3.2
Non-operating result – 2.8 – 3.2
Earnings before taxes (EBT) ** – 17.8 – 14.7
Income taxes 0.0 0.0
Income after taxes – 17.8 – 14.7
Changes in value recognised in equity
Exchange differences from the translation of foreign subsidiaries – 1.9 0.7
Comprehensive income *** – 19.7 – 14.0
Income after taxes – 17.8 – 14.7
Thereof attributable to
Shareholders of Conergy AG (consolidated profit or loss) – 17.8 – 14.7
Comprehensive income/loss *** – 19.7 – 14.0
Thereof attributable to
Shareholders of Conergy AG – 19.7 – 14.0
Earnings per share (in EUR)
Basic – 0.11 – 0.09
Consolidated balance sheet of the Conergy Group
EUR million 31 Mar 2013 31 Mar 2012 31 Dec 2012
Non-current assets
Goodwill – – –
Intangible assets 1.8 3.5 1.8
Property, plant and equipment 72.3 79.0 74.8
Financial assets 1.4 1.6 1.5
Other assets 0.7 0.9 0.8
Deferred tax assets 0.7 3.0 0.7
76.9 88.0 79.6
Current assets
Inventories 59.2 88.4 61.3
Trade accounts receivable 80.7 67.1 62.6
Financial assets 5.1 9.1 4.4
Other assets 14.2 37.0 14.8
Cash and cash equivalents 7.3 23.4 18.9
166.5 225.0 162.0
Total assets 243.4 313.0 241.6
Equity attributable to the shareholders of Conergy AG
Capital stock 159.8 159.8 159.8 Capital reserves 8.0 8.0 8.0 Other reserves –264.1 –160.9 –244.4 Total equity –96.3 6.9 –76.6 Non-current liabilities Provisions 25.1 36.4 25.3 Borrowings 81.3 87.8 81.3 Other liabilities 2.0 1.8 1.3
Deferred tax liabilities 0.0 0.0 0.0
108.4 126.0 107.9
Current liabilities
Provisions 7.3 14.5 7.3
Borrowings 54.1 51.8 55.0
Trade accounts payable 151.4 88.7 130.2
Other liabilities 18.1 23.3 17.4
Current income tax liabilities 0.4 1.8 0.4
231.3 180.1 210.3
Consolidated statement of cash flows of the Conergy Group
EUR million Q1 2013 Q1 2012 *
Operating result from continuing operations (EBIT) – 15.0 – 11.5
Depreciation and amortisation 3.3 3.9
Change in non-current provisions – 0.5 – 2.7
Gains (–)/ losses (+) from disposal of fixed assets 0.0 0.0
Increase (–)/ decrease (+) in inventories 1.4 6.7
Increase (–)/ decrease (+) in trade receivables – 18.2 14.8
Increase (–)/ decrease (+) in trade payables 21.2 0.3
Change in other net assets / Other non-cash items 0.1 – 4.9
Income taxes paid (–)/ received (+) 0.0 – 0.4
Net cash generated from investing activities (Net cashflow) – 7.7 6.2
Cash inflows from sales of property, plant, equipment and other assets 0.0 0.0
Cash outflows for investments in property, plant and equipment and intangible assets – 0.7 – 1.3
Cash receipts from the sale of subsidiaries – –
Change in non-current financial assets – 0.7 – 0.6
Interest received 0.1 0.0
Net cash generated from investing activities – 1.3 – 1.9
Cash flow before financing activities – 9.0 4.3
Capital contributions – –
Cash payments in connection with the acquisition of equity – –
Change in borrowings – 0.9 – 1.9
Cash outflows for retirements of debt – –
Interest paid – 1.7 – 2.8
Net cash generated from financing activities – 2.6 – 4.7
Change in cash from operating activities (total) – 11.6 – 0.4
Cash and cash equivalents as at 01.01. 18.9 23.8
Change from exchange rate changes 0.0 0.0
Cash and cash equivalents as at 31.03. 7.3 23.4
Consolidated statement of changes in equity of the Conergy Group
Equity attributable to the shareholders of Conergy AG Other reserves
Changes in value recognised directly
in equity
EUR million Capital stock reservesCapital Retained earnings Currency changes Total equity
As at 01 Jan 2012 159.8 8.0 – 144.5 – 2.4 20.9
Non-owner changes in capital
Earnings after taxes – 14.7 – 14.7
Gains and losses recognised in equity 0.7 0.7
Comprehensive
income/loss – 14.7 0.7 – 14.0
Owner-based change in capital
As at 31 Mar 2012 159.8 8.0 – 159.2 – 1.7 6.9
As at 01 Jan 2013 159.8 8.0 – 243.5 – 0.9 – 76.6
Non-owner changes in capital
Earnings after taxes – 17.8 – 17.8
Gains and losses recognised in equity – 1.9 – 1.9
Comprehensive
income/loss – 17.8 – 1.9 – 19.7
Owner-based change in capital
Condensed notes to the consolidated financial statements
of the Conergy Group
Reportable segments
* Previous years’ figures adjusted owing to IAS 8; see notes ** Full Time Equivalent
Segments Europe Asia Pacific & Americas Holding * Reconciliation Conergy Group *
EUR million Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012
External sales 78.1 64.7 44.0 33.5 – – – – 122.1 98.2
Intersegment sales 5.8 5.1 0.4 0.0 – – – 6.2 – 5.1 – –
Segment sales (total) 83.9 69.8 44.4 33.5 – – – 6.2 – 5.1 122.1 98.2
Other operating income 1.7 11.4 3.2 1.7 2.7 4.5 – 3.2 – 5.1 4.4 12.5
EBITDA – 8.7 – 2.1 – 0.2 – 3.5 – 2.8 – 2.1 0.0 0.1 – 11.7 – 7.6
Depreciation/amortisation – 2.8 – 3.1 – 0.3 – 0.2 – 0.2 – 0.6 – – – 3.3 – 3.9
Thereof impairment losses 0.0 0.0 – – – – – – 0.0 0.0
EBIT – 11.4 – 5.2 – 0.6 – 3.7 – 3.1 – 2.7 0.1 0.1 – 15.0 – 11.5
Segment investments – 0.3 – 0.9 – 0.1 – 0.4 – 0.3 0.0 – – – 0.7 – 1.3
Employees FTE ** (as at 31 Mar) 848 899 214 266 88 98 – – 1,150 1,263
Notes to the condensed interim
consolidated financial statements as
at 31 March 2013
Accounting policies
Conergy AG (“Conergy” or “the Company”) is a listed cor-poration domiciled in Germany. These condensed interim consolidated financial statements cover Conergy AG and its subsidiaries. Conergy prepares its condensed interim consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) pub-lished by the International Financial Reporting Standards Board (IASB) and its interpretations as applicable in the European Union (EU).
Interim consolidated financial statements
The management believes that these condensed inter-im consolidated financial statements, which were re-viewed by an auditor in accordance with the German Securities Trading Act (WpHG), present a true and fair view of the Company’s development of business in the reporting periods. All amounts, including those related to the previous year, are stated in millions of euros (EUR million) unless indicated otherwise. All figures were commercially rounded to one decimal place. These condensed interim consolidated financial state-ments as at 31 March 2013 were prepared in accord-ance with International Accounting Standard (IAS) 34, Interim Financial Reporting, and should be read in the
context of the consolidated financial statements pub-lished by the Company for the 2012 financial year as well as the interim management report of the Group as at 31 March 2013. In principle, the interim consolidated financial statements are prepared based on the same accounting policies that were applicable for the 2012 financial year. An exception to this principle are the standards and interpretations that were applied for the first time as at 1 January 2013 (see “New and amended standards that were applied for the first time”). As at 2012 the half-year financial statements, the Company also reviewed the utilisation of its guarantee facilities granted under the syndicated loan agreement, among other things, in connection with the increased use of supplier loans. It was determined that these are now mainly used to provide security for supplier loans while in the past risks arising from development were collat-eralised. On account of the predominant financing function, the guarantee fees of EUR 0.9 million recorded in the first quarter of 2013 were reported under “Non-operating expenses” rather than under “Other operat-ing expenses”. The disclosure for the guarantee com-mission of EUR 0.8 million paid in the previous year was adjusted accordingly with retroactive effect. The Management Board released the condensed interim consolidated financial statements for the first quarter of 2013 by resolution dated 3 May 2013.
New and amended standards that were applied for the first time
| IAS 12 (Amendment), Recovery of Underlying Assets (1 January 2013)
Under IAS 12, the measurement of deferred tax as-sets or liabilities recognised on temporary differences related to assets is contingent on whether or not the Company expects to realise the carrying amount by a disposal of the asset or its ongoing use. The amendments give rise to an exception from the fun-damental principles of IAS 12 for investment prop-erty that is measured as investment propprop-erty using the fair value model in IAS 40. The exception entails including the rebuttable presumption that the carry-ing amount is usually recovered on disposal. This amendment did not affect the Group’s assets, liabil-ities, cash flows and profit or loss because the Com-pany does not own any investment property. | IFRS 13, Fair Value Measurement (1 January 2013) Given the adoption of IFRS 13, the IFRSs now
con-tain uniform guidance on determining fair values. IFRS 13 must be applied to financial instruments as well as to non-financial assets and liabilities meas-ured at the fair value. In addition, IFRS 13 also pro-vides for additional disclosures on the determination of fair values. For instance, the disclosures on the fair value hierarchies, which so far have applied only to financial instruments, must now also be applied to the fair values of non-financial assets and liabili-ties. Initial application of this standard does not have a significant effect on the Conergy Group’s assets, liabilities, cash flows and profit or loss be-cause the Conergy Group does not have any mate-rial financial instruments or non-financial assets and liabilities measured at fair value.
| IAS 1 (Amendment) Presentation of Items of Other Comprehensive Income (1 July 2012) The amendment of the standard prescribes
present-ing the elements of other comprehensive income in future broken down by those that will be reclassified to the period’s profit or loss at a later date and those that will not be reclassified in subsequent periods. The taxes attributable to the individual items must be allocated accordingly. As it is purely a presentation standard, first-time application of IAS 1 does not af-fect the Company’s assets, liabilities, cash flows and profit or loss.
| IFRS 7 (Amendment) – Disclosures Offsetting Financial Assets and Financial Liabilities (1 January 2013)
What is new in IFRS 7 are the disclosure obligations in connection with certain netting arrangements such as the gross amount of the affected financial assets and financial liabilities prior to netting and the amount of the financial assets and financial liabili-ties that are the purpose of netting arrangements without any netting having been performed in the balance sheet. Since these amendments mainly concern additional disclosures in the notes, they do not affect the assets, liabilities, cash flows and profit or loss of the Conergy Group.
| Various amendments as part of the 2009– 2011 Annual Improvements cycle (1 January 2013) The amendments approved in May 2012 as part of
the annual improvements project provide for changes to five standards in all and relate to:
− Clarification that an entity that has stopped apply-ing IFRSs may choose to reapply IFRS 1 plus the corresponding simplifications in order to resume reporting under IFRSs (IFRS 1);
− Recognition of borrowing costs relating to qualify-ing assets before and after the date of transition to IFRSs (IFRS 1).
− Clarification of the presentation of comparative in-formation, especially in connection with the open-ing balance sheet for the comparative period that must be presented when an entity changes its accounting policies making retrospective restate-ments or reclassifications (IAS 1).
− Classification of spare parts and servicing equip-ment as property, plant and equipequip-ment (IAS 16). − Clarification that the tax effect of a distribution to
holders of equity instruments should be accounted for in accordance with IAS 12, Income Taxes (IAS 12). − Amendment of the interim financial reporting of seg-ment information in accordance with IFRS 8 (IFRS 8). Since the amendments relate only to a small number of items, first-time adoption of these amendments does not have a material effect on the presentation of the Conergy Group’s assets, liabilities, cash flows and profit or loss.
The exchange rates of important currencies rela-tive to the euro are as follows:
31 Mar 2013 31 Mar 2012 31 Dec 2012 1 EUR Closing rates/Average exchange rates
USD (USA) 1.28 / 1.32 1.34 / 1.31 1.32 / 1.28 AUD (Australia) 1.23 / 1.27 1.28 / 1.24 1.27 / 1.24 SGD (Singapore) 1.59 / 1.63 1.68 / 1.66 1.61 / 1.61 GBP (UK) 0.85 / 0.85 0.83 / 0.83 0.82 / 0.81 THB (Thailand) 37.42 / 39.36 41.18 / 40.63 40.35 / 39.93
Changes in the consolidated group
Companies included in the consolidated financial statements
As was the case at 31 December 2012, the consolidated financial statements comprise six domestic and 16 foreign subsidiaries in addition to Conergy AG as the parent company.
2013 2012
Number of fully
consolidated subsidiaries Germany Abroad Total Total
As at 1 Jan 6 16 22 24
Additions – – – 1
Disposals – – – 4
Additions/disposals from change in the
consolidated Group – – – 1
As at 31 Mar 2013/
31 Dec 2012 6 16 22 22
Ten subsidiaries were not included in the consolidated financial statements for reasons of materiality. The number of existing intermediate holding companies for project companies decreased as a result of mergers in the first quarter of 2013:
2013 2012
Number of intermediate
holding companies Germany Abroad Total Total
As at 1 Jan 2 3 5 6
Additions – – – –
Disposals – 2 2 1
As at 31 Mar 2013/
31 Dec 2012 2 1 3 5
Project companies that serve as intermediate holding companies are not consolidated given their insignifi-cance to the Conergy Group’s assets, liabilities, cash
flows, and profit or loss. Operating project companies are generally consolidated as soon as construction begins.
The number of existing project companies developed as follows during the first quarter of 2013:
2013 2012
Number of project
companies Germany Abroad Total Total
As at 1 Jan 6 19 25 49 Additions – – – 1 Disposals – 14 14 25 As at 31 Mar 2013/ 31 Dec 2012 6 5 11 25 Thereof fully consolidated 1 – 1 1
The number of project companies decreased by 14 during the first quarter of 2013 compared to the close of the 2012 financial year. Of this, eleven disposals were due to mergers in Spain and three disposals were due to mergers in Italy.
One of the eleven project companies was consolidated as at 31 March 2013. The remaining project companies were not consolidated given their overall insignificance to the assets, liabilities, cash flows and profit or loss of the Conergy Group.
Estimates and assumptions
In preparing the interim consolidated financial state-ments, estimates and assumptions have to be made. These influence the disclosed amounts of assets, lia-bilities and contingent lialia-bilities as at the reporting date and the income and expense amounts disclosed for the reporting period. Actual results may deviate from these estimates.
Reportable segments
Segment reporting is based on the organisational structure of the Conergy Group in the 2013 financial year. The individual organisational units are allocated to the operating segments solely according to eco-nomic criteria, irrespective of their ownership struc-ture under German corporate law.
The segment structure corresponds to the internal control and reporting systems applicable in the 2013 financial year. Segment reporting comprises two re-gional segments and one central segment (“Holding” segment). All modules, mounting systems and module
frames that are sourced and produced for the European market and sold there are reported under the Europe segment. The Europe segment also includes central procurement, logistics, supply chain management and quality management. The modules, mounting systems and module frames manufactured for and sold in the Asian and American markets are reported under the segment entitled “Asia Pacific and Americas (APAM)”. The Holding segment mainly comprises Corporate Legal, Corporate Human Resources & Compliance, Corporate Business Development, Corporate Accounting & Controlling, Corporate Communications, Investor Rela-tions as well as Corporate IT & Processes. In addition, Momentum Renewables GmbH and Conergy Real Estate GmbH & Co. KG will be reported in this segment. The “Reconciliation” column is shown separately. During reconciliation, intra-Group business transactions are eliminated and income and expenses not directly at-tributable to the segments are disclosed.
In its function as the Company’s chief operating deci-sion maker, the Management Board is not given any information on segment assets. Given the absence of internal reporting, there are no disclosures on segment assets in respect of reportable segments.
The accounting standards applied to segment report-ing correspond to those applied for Conergy as a whole. The number of employees corresponds to the number of full-time employees. Part-time employees are taken into account on a pro rata basis in accord-ance with their contractual working hours.
The following table contains the reconciliation of the reporting segments’ earnings before interest, taxes, depreciation and amortisation (EBITDA) to the Group’s earnings before taxes:
Reconciliation of the segment result
EUR million Q1 2013 Q1 2012
Europe – 8.7 – 2.1
Asia Pacific and Americas – 0.2 – 3.5
Holding* – 2.8 – 2.1
Reconciliation 0.0 0.1
Earnings before interest, taxes, depreciation and amortisation
(EBITDA)* – 11.7 – 7.6
Depreciation, amortisation
and impairment losses – 3.3 – 3.9
Operating result (EBIT)* – 15.0 – 11.5
Non-operating result – 2.8 – 3.2
Earnings before taxes (EBT) – 17.8 – 14.7
* Previous years’ figures adjusted owing to IAS 8; see notes
The segment table solely shows the Company’s con-tinuing operations.
Other operating income
The other operating income is comprised of the following:
EUR million Q1 2013 Q1 2012
Currency changes 2.2 0.0
Income from the reversal of
provisions 1.2 5.8
Write-up from receivables 0.1 0.3
Cash receipts from the sale of
subsidiaries 0.0 4.7
Other operating income 0.9 1.7
4.4 12.5
In the previous year, the other operating income re-sulted primarily from income from the sale of voltwerk electronics GmbH to the Bosch Group totalling EUR 4.7 million and the reversal of provisions.
Other operating expenses
The other operating expenses are comprised of the following:
* Previous years’ figures adjusted owing to IAS 8; see notes
EUR million Q1 2013 Q1 2012
Distribution costs
(incl. transportation costs) – 4.3 – 4.2 Usage fees and
maintenance costs – 2.6 – 2.8
Rental and lease expenses – 2.3 – 2.6
Legal and consulting expenses – 2.2 – 3.2 Third-party services
(incl. temporary staff) – 1.1 – 1.1
Warranty costs – 1.1 – 0.9
Impairment of receivables – 0.3 – 1.4
Currency changes – 0.2 – 1.7
Other operating expenses – 2.6 – 3.5
– 16.7 – 21.4
Usage fees and maintenance expenses decreased slightly year on year by EUR 0.2 million, from EUR 2.8 mil-lion to EUR 2.6 milmil-lion. Expenses for legal and consult-ing costs were also reduced by EUR 1.0 million com-pared to the previous year, from EUR 3.2 million to EUR 2.2 million.
The increase in warranty costs by EUR 0.2 million from EUR 0.9 million to EUR 1.1 million is primarily due to the higher business volume in the first quarter of 2013 as compared to the previous year.