3W Power S.A. / AEG Power Solutions
3W Power/AEG Power Solutions reports preliminary results for Q2 2014
3W Power S.A. / AEG Power Solutions / Key word(s): Preliminary Results/Half Year Results August 11, 2014 3W Power/AEG Power Solutions reports preliminary results for Q2 2014
Luxembourg/ Zwanenburg, The Netherlands – August 11, 2014. 3W Power S.A. (ISIN LU1072910919, 3W9K), the holding company of AEG Power Solutions Group, a global provider of UPS systems and power electronic solutions for industrial, commercial, renewable and distributed energy markets, today announced preliminary results for Q2 2014. Group results for Q2 2014 EBITDA came to -EUR 9.2 million (Normalized EBITDA (excludes capital gains and restructuring costs): -EUR 5.4 million), an improvement of 11.1% from Q2 2013 EBITDA of -EUR 10.3 million (Q2 2013 Normalized EBITDA: -EUR 8.6 million). The negative result reflects low Renewable Energy Solutions (RES) revenue and provisions for certain renegotiated payment conditions with suppliers, relatively high one time inventory and bad debt reserves and provisions. Positively, the quarter just reflects the first savings gained from restructuring and reductions in the overall operating expenses. The sales of both skytron and the Group’s affiliate in Bangalore, India were closed on July 3 and July 31, 2014 respectively. “Both disposals represent milestones in the operational reorganization process of the Group as we refocus our scope and efforts on our core businesses and markets”, explains Jeffrey Casper, Chief Restructuring Officer of AEG Power Solutions. “The Company does not intend to make further major divestments but is now under way to make the difficult transition to tackling the deep rooted inefficiencies in the core businesses which have been underperforming and undermanaged for a long time.” The Group has taken serious measures to reduce its global and corporate cost basis but will need to take further measures in Q3 and Q4. Selling, general and administrative expenses for the first half-year were reduced by EUR 7.8 million (including EUR 2.5 million one-time professional fees) while gross R&D expenses were reduced by EUR 3.8 million. After layoffs and divestitures, total headcount will be reduced to significantly below 1,000 by year-end 2014 compared to 1,521 at year-end 2013. The financial restructuring that was approved by bondholders and shareholders will reduce the financial obligations of the Group by more than EUR 50 million. The change of the conditions of the new EUR 50 million bond to be issued on or about August 26, 2014 in exchange of the old EUR 100 million bond will lower the interest charges and extend the maturity of the bond to August 29, 2019. The combination of asset sales, closing of affiliates, reduction in fixed operating expenses and lower interest through restructuring of the Group’s financial commitments are all intended to bring the remaining core activities of the Group into a sound financial position. As at June 30, 2014, the Group maintained EUR 23.9 million in cash and cash equivalents. Renewable Energy Solutions (RES)
Orders in RES were EUR 9.9 million in Q2 2014, down 37.0% year-on-year (Q2 2013: EUR 15.7 million). This decrease was expected and driven by the difficult market environment in Solar, the effect of closing down the Dallas operation and the sale of our Berlin (skytron) and Indian and South Africa operations. The order intake in POC was affected by the sale of the POC module business to Advanced Energy Industries. RES order backlog was EUR 16.7 million in Q2 2014, up 1.0% year-on-year (Q2 2013: EUR 16.5 million). RES revenue was EUR 9.4 million in Q2 2014, down 46.6% compared to the previous year (Q2 2013: EUR 17.7 million) as a result of the drop in Solar and POC revenue. RES EBITDA in Q2 2014 was -EUR 4.5 million (Normalized EBITDA: -EUR 4.0 million), from EBITDA in Q2 2013 of -EUR 5.3 million (Q2 2013 Normalized EBITDA: -EUR 5.3 million). Lower volume, a change in the product mix and the high level of operational expenses led to the drop in EBITDA. Energy Efficiency Solutions (EES)
Orders in EES were EUR 44.5 million in Q2 2014, down 5.8% year-on-year (Q2 2013: EUR 47.2 million). The order backlog stood at EUR 87.3 million in Q2 2014, up 13.0% year-on-year (Q2 2013: EUR 77.3 million). EES had a strong order intake in Industrial Power Solutions. AEG Power Solutions is perceived as a reliable solutions provider to the variety of our international customers in these markets. The Company experienced growth in Asia, Europe and the Middle East. Revenue was EUR 43.3 million in Q2 2014, up 17.2% compared to the prior year (Q2 2013: EUR 36.9 million), following the high order intake in Industrial Power Solutions during the first quarter of 2014. The resulting EES backlog at June 30, 2014 predicts a solid revenue development also for the next quarter. EES EBITDA in Q2 2014 was EUR 0.6 million (Normalized EBITDA: EUR 1.3 million), up from -EUR 0.7 million in Q2 2013 (Q2 2013 Normalized EBITDA: -EUR 0.5 million). Outlook During the next few months, it is imperative that the Company is able to gain access to the necessary trade credit and improve its working capital situation. The Company must fully restore confidence of customers and suppliers and counter act tactics by competition to weaken our position and avoid the erosion caused when companies experience financial distress. Although having a much clearer view compared to the beginning of the restructuring the ability to provide a reliable forecast is still extremely challenging. The Company now expects revenue for 2014 to be in the range of EUR 190 – 210 million and a negative Normalized EBITDA. The medium term goal remains to have top line growth in mid-single digits and an EBITDA margin of 5-10%. Dr. Dirk Wolfertz, Chairman of the Board of Directors comments, “While we have made a lot of progress in our restructuring efforts in a very short time, both operationally and financially, restoring confidence with our business partners remains of utmost importance to us in further solidifying our core end markets.” Jeffrey Casper, CRO of AEG Power Solutions added, “In doing that, reaching base competitive business with sustainable profitability will remain key priorities for the Company.” — End of Announcement — Characters: c. 8,100 About 3W Power/AEG Power Solutions: 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. For further information, please contact: Katja Buerkle Christian Hillermann 11.08.2014 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP 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 S.A. / AEG Power Solutions | |
19, rue Eugène Ruppert | ||
L-2453 Luxembourg | ||
Grand Duchy of Luxembourg | ||
Phone: | +31 20 4077 863 | |
Fax: | +31 20 4077 875 | |
E-mail: | michael.julian@aegps.com | |
Internet: | www.aegps.com | |
ISIN: | LU1072910919, DE000A1A29T7, | |
WKN: | A114Z9 , A1A29T, | |
Listed: | Regulierter Markt in Frankfurt (General Standard); Freiverkehr in Berlin, Berlin – Tradegate Exchange, München | |
End of News | DGAP News-Service |
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