EANS-News: Extensive restructuring and realignment of the Sunways Group
14.12.2012 – 17:21
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- Subtitle: - Reduction of standard solar cell production capacities and increased focus on specialist solar cells (BIPV, automotive) - Adjustment of business model in the area of solar modules and inverters - Consistent utilization of synergies with LDK Solar Company Information/Layoffs & Downsizing/Restructuring & Recapitalisations Konstanz (euro adhoc) - 14 December 2012 - The market environment for the German solar manufacturing industry changed drastically in the past few years. Market prices for photovoltaic components decline continuously. Against this background and in view of Sunways AG's (SWW:GR, SWWG.DE, ISIN DE0007332207) difficult economic situation, the Management Board, with the consent of the Supervisory Board, passed a resolution on the Group's extensive restructuring and realignment. The business model with respect to solar modules and inverters will be adapted. Standard solar cell production capacities at Sunways Production GmbH will be reduced, simultaneously activities will concentrate on specialist solar cells for the automotive sector and building-integrated photovoltaics (BIPV). The utilization of synergies with the LDK Solar Group, the company's majority shareholder, will be consistently expanded. The envisaged changes will inevitably involve staff reductions across all functional areas and locations of the Group. The resulting total cost reductions will have a positive effect on the earnings development of Sunways and thus support the company's funding efforts. "The business model of Sunways will be supplemented by 'increased services - reduced production activities' and 'intensified application development - reduced basic research'. Thus the Sunways brand will continue to stand for leading technology and innovation and our position as a provider of innovative products and customer-oriented solutions will be secured", says Michael Wilhelm, Chairman of the Management Board of photovoltaics specialist Sunways, in view of the company's announced realignment and restructuring. "We will continue to strengthen our distribution activities and intensify our international sales efforts. The initiated close consultation with LDK Solar will enable us to push forward the necessary market entries for the Sunways brand. In addition, the expanded business model will give us the chance to develop new customer segments and cooperation opportunities". Numerous manufacturers worldwide are currently subject to economic strains and do not generate profits. The market prices for solar products and thus the net earnings margins generated by companies declined drastically in the past two years - e.g. the prices for solar modules dropped by more than 50 percent, the prices for solar cells by up to 60 percent. On the market side, this was mainly due to global excess capacities but also to uncertain political framework conditions with respect to renewable energies that are changing at ever decreasing intervals in many countries. The Sunways Group's economic situation increasingly deteriorated in the past quarters. Due to continuous losses, the reported equity capital was reduced drastically. In view of continuously declining prices, which cannot be offset on the cost of materials side, the current situation is not expected to improve in the short term. "We need to make money again", Michael Wilhelm summarizes the situation. "Our employees are aware of this and everybody knows that there is a long and hard road ahead of us. But I also know that our management, employees and works councils are convinced that we will jointly lead Sunways back to the road to success." In the context of a capital increase, the LDK Solar Group acquired a stake in Sunways AG as a strategic investor at the end of last year. "We have a majority shareholder that clearly supports Sunways and has proved this again and again over the past months", emphasizes Michael Wilhelm. This important commitment as well as the active cooperation in the distribution area and assistance with respect to the initiation of potential other strategic partnerships are of fundamental importance to the successful restructuring of Sunways. The Management Board's resolution on an extensive realignment of the Sunways Group comprises the following elements: Until further notice, no solar cells for standard modules are to be produced at Sunways Production GmbH in Arnstadt; production activities will be limited to solar cells for specialist applications, such as e.g. building-integrated photovoltaics. The corresponding reduction of production capacities will involve an adjustment of the number of staff, also in supporting functions. At the same time, Sunways Production GmbH is to take on the function of production and service center for Sunways solar inverters and of service provider for solar modules. The Arnstadt workforce of currently 120 is expected to be reduced by about 50 percent. In the inverter production segment, Sunways will in the future focus on market and customer specific product adaptations ("customizing); the in-house development and production of devices will become less important while the development of holistic solutions (energy storage, energy management) will continue. Furthermore, the cooperation of the Sunways Group's corporate and distribution divisions with its partner LDK Solar is to be intensified in the future, thus creating additional synergies for both sides. In this context and to accommodate the current environment, the Management Board decided to also reduce the number of staff at Sunways AG. From today's point of view, the total number of jobs within the Sunways Group of 265 may be reduced by about 40 percent. In view of the envisaged measures, the Management Board will immediately enter into talks with the works councils at the Konstanz and Arnstadt plants. This press release and pictures are available on http://www.sunways.eu/en and http://www.presseportal.de/pm/57666/sunways-ag. Forward-looking statements This press release contains statements relating to the future business development of Sunways AG that are based on management assumptions and estimates made at the time of publication. Should the assumptions underlying the prognoses fail to be fulfilled, actual events may vary substantially from forward-looking statements. Uncertainties include changes in the political, legal, economic and business environment, exchange and interest rate fluctuations as well as the behaviour of competitors and other market participants. Sunways does not intend and is not under any obligation to update forward-looking statements on an ongoing basis as these are exclusively based on the circumstances prevailing as of the date of publication. About Sunways Sunways AG, Konstanz/Germany, stands for consistent use of solar energy to secure long-term energy supply of man in an efficient and sustainable manner. Sunways offers technological competence, performance and highest quality - from single components to complete solar systems. Since its foundation in 1993, Sunways AG evolved into a technology leader in the photovoltaics industry serving international markets. With silicon-based solar cells, inverters, solar modules and solar systems, the company offers all components required for high-yield photovoltaic power generation. With photovoltaic solutions tailored to customers' needs (transparent and coloured solar cells, building- integrated photovoltaic installations), Sunways turns exceptional ideas into reality. Sunways Production GmbH in Arnstadt/Germany is a subsidiary of Sunways AG; in addition, the group has own branch offices in Barcelone/Spain and Bologna/Italy. In 2011, Sunways AG with about 330 employees realised sales of around EUR 115 million. The shares of Sunways AG are listed at the Frankfurt Stock Exchange (SWW:GR, SWWG.DE, ISIN DE0007332207). LDK Solar Group, one of the ten largest photovoltaics companies in the world in terms of sales revenues, holds a majority stake in Sunways since 2012. For further information, please visit http://www.sunways.eu/en. About LDK Solar LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer of photovoltaic products. LDK Solar manufactures e.g. polysilicon, mono and multicrystalline wafers, solar cells, and solar modules. LDK Solar's headquarters and principal manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. For more information about LDK Solar and its products, please visit http://www.ldksolar.com. Further inquiry note: Dr. Harald F. Schäfer Head Corporate Communications and Investor Relations Tel.: +49 (0)7531 996 77-415 E-Mail: communications@sunways.de end of announcement euro adhoc -------------------------------------------------------------------------------- company: Sunways AG Macairestr. 3 - 5 D-78467 Konstanz phone: +49 (0)7531 99677 0 FAX: +49 (0)7531 99677 10 mail: info@sunways.de WWW: http://www.sunways.eu/de sector: Alternative energy ISIN: DE0007332207 indexes: CDAX, Technology All Share, General All Share stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart, regulated dealing/general standard: Frankfurt language: English