3W-POWER

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, announced today its results for Q2 2015.

Group results

(in € million)		Q2 2015		Q2 2014		Δ in %		Q2 2015		Q1 2015		Δ in %
Order backlog		87.6		104.0		-15.8%		87.6		88.0		-0.6%
Orders		43.6		54.4		-19.9%		43.6		43.4		0.4%
Revenue		45.7		52.7		-13.2%		45.7		38.4		19.2%
Book to Bill		0.95		1.03		-7.7%		0.95		1.13		-15.8%
EBITDA		(1.4)		(9.2)		84.9%		(1.4)		(3.4)		59.2%
EBITDA margin		-3.0%		-17.4%				-3.0%		-8.9%
Normalized EBITDA		(0.9)		(5.4)		83.9%		(0.9)		(3.7)		76.6%
Normalized EBITDA margin		-1.9%		-10.3%				-1.9%		-9.7%

Industrial Products and Services (IPS) ¹

(in € million)		Q2 2015		Q2 2014		Δ in %		Q2 2015		Q1 2015		Δ in %
Order backlog		87.6		97.0		-9.7%		87.6		88.0		-0.5%
Orders		43.6		52.0		-16.2%		43.6		43.4		0.4%
Revenue		45.7		50.3		-9.0%		45.7		38.4		19.2%
Book to Bill		0.95		1.03		-7.7%		0.95		1.13		-15.8%
EBITDA		(1.3)		(3.0)		55.1%		(1.3)		(1.4)		4.3%
EBITDA margin		-2.9%		-5.8%				-2.9%		-3.7%
Normalized EBITDA		0.2		(1.9)		na		0.2		(2.7)		na
Normalized EBITDA margin		0.5%		-3.7%				0.5%		-7.0%

¹For the IPS segment, 2015 orders and revenue numbers correspond to those of the Group, historical numbers of Q1 2014 and Q2 2014 have been adjusted by adding the previous reportable RES and EES segments, adjusted for the operating results of discontinued operations (sale of Skytron and India).

Unallocated

(in € million)		Q2 2015		Q2 2014		Δ in %		Q2 2015		Q1 2015		Δ in %
EBITDA		(0.0)		(5.3)		99.2%		(0.0)		(2.0)		na
Normalized EBITDA		(1.1)		(2.8)		60.9%		(1.1)		(1.1)		0.0%

Geographical allocation

(in € million)		Q2 2015		Q2 2014		Δ in %		Q2 2015		Q1 2015		Δ in %
Orders
Europe excl. Germany		14.5		17.0		-14.7%		14.5		24.7		-40.1%
Germany		11.0		14.5		-24.1%		11.0		9.0		22.2%
Asia		10.4		10.3		1.0%		10.4		7.8		33.3%
Africa/Middle East		7.0		8.8		-20.5%		7.0		1.2
Rest of the world		0.7		1.4		-50.0%		0.7		0.7		0.0%
Total orders		43.6		52.0		-16.2%		43.6		43.4		0.4%
thereof products		27.6		38.7		-28.7%		27.6		29.7		-7.1%
thereof services		15.9		13.4		18.7%		15.9		13.7		16.1%
(in € million)		Q2 2015		Q2 2014		Δ in %		Q2 2015		Q1 2015		Δ in %
Revenue
Europe excl. Germany		16.4		20.7		-20.8%		16.4		14.6		12.3%
Germany		11.5		11.2		2.7%		11.5		10.1		13.9%
Asia		10.4		11.0		-5.5%		10.4		5.9		76.3%
Africa/Middle East		6.7		5.7		17.5%		6.7		6.3		6.3%
Rest of the world		0.7		1.7		-58.8%		0.7		1.5		-53.3%
Total revenue		45.7		50.3		-9.0%		45.7		38.4		19.2%
thereof products		32.3		38.1		-15.2%		32.3		26.5		21.9%
thereof services		13.4		12.2		9.8%		13.4		11.9		12.6%

Orders for IPS in Q2 2015 were € 43.6 million, a decrease of 16.2% compared to Q2 2014 (€ 52.0 million), and an increase of 0.4% compared to Q1 2015 (€43.4 million). Orders in comparison to the prior year are affected by an effort by the company to focus on areas of profitable growth over historical loss making volume, the structural shift in the changes to the Oil & Gas markets and large project wins in transportation in 2014. Order intake for June 2015 of € 17.3 million was particularly strong.

Revenue for IPS in Q2 2015 of € 45.7 million decreased by 9.0% compared to Q2 2014 (€ 50.3 million), an increase of 19.2% compared to Q1 2015 (€ 38.4 million). The revenue for Q2 2015 includes revenue recognition of projects that were delayed from Q4 2014 and Q1 2015. The company is focused on building up opportunities in its core industrial markets as it strengthens its vertical market focus both organizationally and with new product developments. Recent additions of key personnel in services and Data & IT underscore the commitment to invest in areas that will lead to improved profit generation. Q1 2015 was impacted by the cancellation of key contracts in the Middle East areas exposed to political turmoil.

EBITDA for IPS in Q2 2015 of - €1.3 million was up 55.1 % versus Q2 2014 (-€ 3.0 million) and up 4.3% versus Q1 2015 (-€ 1.4 million). Normalized EBITDA in Q2 2015 was up 111.2 % to € 0.2 million compared to -€ 1.9 million in Q2 2014 and up 107.8 % versus -€ 2.7 million in Q1 2015 million. Lower operating expenses and improved gross margins are showing that the efforts in the past 18 months are yielding positive results.

Marine, power generation and transportation are areas that continue to develop nicely. Energy storage is a promising future growth area. The separate disclosure of service-related orders and revenue underscores management’s objective to shape the various service activities throughout the Group into a more unified and coordinated business activity. Services contribute to the defined growth objectives and will play an increasing part in the profit development of the Group. Services allow the Group to develop the installed customer base and present opportunities to offer a full set of products, especially post completion of large project transactions.

The Group is in the midst of a difficult business transformation and development path that requires continued effort to overcome obstacles and foster the structural improvements necessary to create a sustained and profitable business. This includes the transformation of a previously uncompetitive structure into a customer-facing, lean and flexible organization. Efforts to improve processes and core performance will enable the Group to achieve further cost improvements with expected annual savings of c. €10.0 million to be achieved in the next three quarters. This will involve further headcount reduction of approximately150 people.

The Group’s cash position on June 30, 2015 was € 23.4 million at the end of Q2; € 2.4 million lower than at the end of March 2015. Consistent with the desire to transition the company from a traditional product centric organization to a lean, efficient solutions oriented organization that is flexible and focused on end customer markets, the Company will reduce headcount in markets of low growth and selectively invest in capabilities where the opportunities are the most prescient.

To support the growth and development of new opportunities including investments focused on customer facing activities in sales and services and areas of growth in Africa, Asia and North America the Company has entered on August 12, 2015 into an agreement with key shareholders to issue a € 14.0 million convertible bond. The bond is a five-year non-mandatory convertible at .60 euro cents with an annual coupon of 5.5%. The Convertible is subordinated to the € 50.0 million senior secured bond payable in 2019. The convertible bond is underwritten by € 10.9 million commitments and is conditional upon the changes to the terms and conditions of the Company’s € 50.0 million bond. The Common bond holder representative is fully supportive and the largest bond holders representing 26% of the bonds have entered into an agreement in support of the necessary amendment. The necessary bondholder meetings will be called immediately and the process is expected to be completed within the next eight weeks.

Outlook

For full fiscal year 2015, the Group expects an uptake in orders and sales in the second half of the year and to achieve revenue at a level of € 180.0 million. The Company will focus on revenue that contributes to profitability. The medium-term goal remains to achieve top-line growth in the mid-single digits and an EBITDA margin of 5% to 10%.

Jeffrey Casper, CEO, concludes: “The combination of reduced fixed costs, better business processes and improved personnel is expected to result in continuous improvements over the next months. Q2 2015 is an improvement to a challenging Q1 2015. The priority remains to develop and implement a customer-facing organization that is proactive, receptive to input and adaptive to the Company’s changing commercial environments. We will continue to develop our organization to realize the immense opportunities present in our business. We have come so far in a very short period of time. We are not there. However, with persistent effort, we can achieve a very successful and sustainably profitable business”.

About 3W Power/AEG Power Solutions:

3W Power S.A. (WKN A114Z9 / ISIN LU1072910919), 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: 3W9K).

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150812006310/en/

Contact:

Hillermann Consulting
Investor Relations for AEG Power Solutions
Christian Hillermann, +49 40 320 279 10
investors@aegps.com