3W Power/AEG Power Solutions reports full year 2016 financial results

18-05-2017 , Luxembourg / Zwanenburg, The Netherlands

- Year-end orders Euro 172.7m, same level as last year on a like-for-like basis

- Revenue of Euro 165.1m, same level as last year on a like-for-like basis

- Cash Position Euro 14.9 m at the end of 2016

- Normalized EBITDA improves for the full year and in Q4 2016

- Protective shield proceedings in Germany governs IFRS accounting policies since November 22, 2017 the start of the procedure

 

      

  • Year-end orders Euro 172.7m, same level as last year on a like-for-like basis
  • Revenue of Euro 165.1m, same level as last year on a like-for-like basis
  • Cash Position Euro 14.9 m at the end of 2016
  • Normalized EBITDA improves for the full year and in Q4 2016
  • Protective shield proceedings in Germany governs IFRS accounting policies since November 22, 2017 the start of the procedure    

   
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 its results for Q4 2016 and fiscal year 2016. The “unaudited pro forma” figures include full consolidation of AEG PS GmbH for 2016 and “reported” figures include consolidation of AEG PS GmbH till November 22, 2016.  In accordance with IFRS, the audited financial statements show the Germany GmbH subsidiary as deconsolidated due to the protective shield process.  As of May 2, 2017, this process is complete and therefore, the company is showing results on a fully consolidated and consistent basis to prior years.                 

 

Group results                        

 
December 31 (unaudited pro forma)*

December 31 (reported)* (in Euro million)

(in Euro million)

12M 2016

12M 2015

Δ in %

12M 2016

12M 2015

Δ in %

Order backlog

86.6

83.3

4.0

88.1

83.3

5.7

Orders

172.7

178.6

-3.3

168.6

178.6

-5.6

Revenue

165.1

177.4

-6.9

157.8

177.4

-11.1

Book to Bill

1.05

1.01

3.9

1.07

1.01

6.1

EBITDA

(1.1)

(9.8)

88.9

(0.8)

(9.8)

91.9

EBITDA margin

-0.7%

-5.6%

 

-0.5%

-5.6%

 

Normalized EBITDA

(2.9)

(4.1)

29.1

(2.5)

(4.1)

38.8

Normalized EBITDA margin

-1.8%

-2.3%

 

-1.6%

-2.3%

 

  * “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.

 

Group results (unaudited pro forma)*  

(in Euro million)

Q4 2016

Q4 2015

Δ in %

Q4 2016

Q3 2016

Δ in %

Order backlog

86.6

83.3

4.0

86.6

94.1

-7.9

Orders

38.4

41.4

-7.2

38.4

39.6

-3.2

Revenue

46.1

51.1

-9.8

46.1

39.3

17.2

Book to Bill

0.83

0.81

2.9

0.83

1.01

-17.4

EBITDA

(0.6)

(2.5)

75.5

(0.6)

(1.6)

61.4

EBITDA margin

-1.3%

-4.8%

 

-1.3%

-4.0%

 

Normalized EBITDA

1.4

0.5

 

1.4

(0.6)

 

Normalized EBITDA margin

3.0%

0.9%

 

3.0%

-1.5%

 

* “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.  

   

Group results (reported)*    

(in Euro million)

Q4 2016

Q4 2015

Δ in %

Q4 2016

Q3 2016

Δ in %

Order backlog

88.1

83.3

5.7

88.1

94.1

-6.4

Orders

34.3

41.4

-17.1

34.3

39.6

-13.4

Revenue

38.7

51.1

-24.1

38.7

39.3

-1.4

Book to Bill

0.89

0.81

9.3

0.89

1.01

-12.2

EBITDA

(0.3)

(2.5)

87.4

(0.3)

(1.6)

80.2

EBITDA margin

-0.8%

-4.8%

 

-0.8%

-4.0%

 

Normalized EBITDA

1.8

0.5

 

1.8

(0.6)

 

Normalized EBITDA margin

4.6%

0.9%

 

4.6%

-1.5%

 

* “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.  

 

On an unaudited pro forma basis (comprises full year of Germany operations included) AEG Power Solutions finished fiscal year 2016 with Euro 172.7 million in orders and Euro 165.1 million in revenue. Compared to 2015, orders were slightly down 3.3% (2015: Euro 178.6 million) and revenue was down 6.9% (2015: Euro 177.4 million). On a reported basis (includes consolidation of AEG PS GmbH till November 22, 2016) AEG Power Solutions finished fiscal year 2016 with Euro 168.6 million in orders and Euro 157.8 million in revenue. Compared to 2015, orders were slightly down 5.6% (2015: Euro 178.6 million) and revenue was down 11.1% (2015: Euro 177.4 million).    

     
The Group has a stable order backlog in 2016 reaching €86.6 million, up 4.0% up compared to 2015 (12M 2015: Euro 83.3 million) on an unaudited pro forma basis. The backlog is diversified and generally healthy which should help revenue generation in 2017. On an unaudited pro forma basis, full year 2016 EBITDA of Euro -1.1 million was up 88.9% over 2015 EBITDA of Euro -9.8 million. 2016 Normalized EBITDA, which is EBITDA adjusted for one-time transactions was Euro -2.9 million, up 29.1% compared to Euro -4.1 million in 2015. On a reported basis full year 2016 EBITDA of Euro -0.8 million was up 91.9% over 2015 EBITDA of Euro -9.8 million. 2016 Normalized EBITDA, which is EBITDA adjusted for one-time transactions was Euro -2.5 million, up 38.8% compared to Euro -4.1 million in 2015.   On a unaudited pro forma basis, revenue for Q4 2016 was Euro 46.1 million with a normalized EBITDA of Euro 1.4 million compared to revenue Q4 2015 of Euro 51.1 million with a normalized EBITDA of Euro 0.5 million. The year-end book-to-bill ratio was 1.05 for the Group in 2016. On a reported basis, revenue for Q4 2016 was Euro 38.7 million with a normalized EBITDA of Euro 1.8 million compared to revenue Q4 2015 of Euro 51.1 million with a normalized EBITDA of Euro 0.5 million. The year-end book-to-bill ratio was 1.07 for the Group in 2016.                    

 

 

Industrial Products and Services (IPS)     

                                                      

 
December 31 (unaudited pro forma)*

December 31 (reported)* (in Euro million)

(in Euro million)

12M 2016

12M 2015

Δ in %

12M 2016

12M 2015

Δ in %

Order backlog

86.6

83.3

4.0

88.1

83.3

5.7

Orders

172.7

178.6

-3.3

168.6

178.6

-5.6

Revenue

165.1

177.4

-6.9

157.8

177.4

-11.1

Book to Bill

1.05

1.01

3.9

1.07

1.01

6.1

EBITDA

3.6

(7.1)

 

3.8

(7.1)

 

EBITDA margin

2.2%

-4.0%

 

2.4%

-4.0%

 

Normalized EBITDA

1.1

(0.5)

 

1.4

(0.5)

 

Normalized EBITDA margin

0.7%

-0.3%

 

0.9%

-0.3%

 

* “Unaudited Pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.  

 

Industrial Products and Services (IPS) (unaudited pro forma)*                  
  

(in Euro million)

Q4 2016

Q4 2015

Δ in %

Q4 2016

Q3 2016

Δ in %

Order backlog

86.6

83.3

4.0

86.6

94.1

-7.9

Orders

38.4

41.4

-7.2

38.4

39.6

-3.2

Revenue

46.1

51.1

-9.8

46.1

39.3

17.2

Book to Bill

0.83

0.81

2.9

0.83

1.01

-17.4

EBITDA

1.0

(2.6)

 

1.0

(0.4)

 

EBITDA margin

2.1%

-5.2%

 

2.1%

-0.9%

 

Normalized EBITDA

2.4

1.0

 

2.4

0.4

 

Normalized EBITDA margin

5.1%

2.0%

 

5.1%

1.0%

 

* “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.

 

Industrial Products and Services (IPS) (reported)*

(in Euro million)

Q4 2016

Q4 2015

Δ in %

Q4 2016

Q3 2016

Δ in %

Order backlog

88.1

83.3

5.7

88.1

94.1

-6.4

Orders

34.3

41.4

-17.1

34.3

39.6

-13.4

Revenue

38.7

51.1

-24.1

38.7

39.3

-1.4

Book to Bill

0.89

0.81

9.3

0.89

1.01

-12.2

EBITDA

1.2

(2.6)

 

1.2

(0.4)

 

EBITDA margin

3.1%

-5.2%

 

3.1%

-0.9%

 

Normalized EBITDA

2.7

1.0

 

2.7

0.4

 

Normalized EBITDA margin

6.9%

2.0%

 

6.9%

1.0%

 

* “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.

 

On an unaudited pro forma basis, IPS finished fiscal year 2016 with Euro 172.7 million in orders and Euro 165.1 million in revenue. Compared to 2015, orders were slightly down 3.3% (2015: Euro 178.6 million) and revenue was down 6.9% (2015: Euro 177.4 million). On a reported basis, IPS finished fiscal year 2016 with Euro 168.6 million in orders and Euro 157.8 million in revenue. Compared to 2015, orders were down 5.6% (2015: Euro 178.6 million) and revenue was down 11.1% (2015: Euro 177.4 million).  


The unaudited pro forma EBITDA for IPS was positive at Euro 3.6 million (Normalized EBITDA was Euro 1.1 million), compared to EBITDA of Euro -7.1 million (Normalized EBITDA Euro -0.5 million) for 2015. On an unaudited reported basis, EBITDA for IPS turned also positive at Euro 3.8 million (Normalized EBITDA was Euro 1.4 million), compared to EBITDA of Euro -7.1 million (Normalized EBITDA Euro 0.5 million) for 2015.

 

Orders by geographical area (Annual and quarterly comparison) (unaudited pro forma)*                                  

(in Euro million)

12M 2016

12M 2015

Δ in %

Q4 2016

Q4 2015

Δ in %

Orders

 

 

 

 

 

 

Europe excl. Germany

77.5

69.3

11.8

16.6

13.0

27.5

Germany

37.6

41.2

-8.7

8.6

10.3

-16.2

Asia

32.4

37.1

-12.7

7.2

9.0

-19.7

Africa/Middle East

21.2

26.1

-18.8

5.4

6.8

-20.0

Rest of the world

4.0

4.9

-18.4

0.5

2.3

-77.3

Order total

172.7

178.6

-3.3

38.4

41.4

-7.2

Of which Products

118.2

122.0

-3.1

26.5

28.4

-6.6

Of which Services

54.5

56.6

-3.7

11.9

13.0

-8.7

 

 

 

 

 

 

 

(like-for-like)

Of which Products

117.9

118.7

-0.7%

26.5

27.4

-3.3%

Of which Services

53.9

51.2

5.3%

11.9

11.9

0.0%

 

* “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till    November 22, 2016.  

 

Orders by geographical area (Annual and quarterly comparison) (reported)*

 

(in Euro million)

12M 2016

12M 2015

Δ in %

Q4 2016

Q4 2015

Δ in %

Orders

 

 

 

 

 

 

Europe excl. Germany

76.8

69.3

10.8

15.9

13.0

22.1

Germany

34.6

41.2

16.0

5.6

10.3

-46.0

Asia

32.4

37.1

-12.7

7.2

9.0

-19.8

Africa/Middle East

21.0

26.1

-19.5

5.2

6.8

-23.8

Rest of the world

4.0

4.9

-18.4

0.5

2.3

-78.6

Order total

168.8

178.6

-5.5

34.3

41.4

-17.1

Of which Products

116.2

122.0

-4.8

24.3

28.4

-14.3

Of which Services

52.6

56.6

-7.1

10.0

13.0

-23.1

* “Unaudited pro forma” includes full consolidation of AEG PS GmbH for 2016; “reported” includes consolidation of AEG PS GmbH till November 22, 2016.

 

Revenue by geographical area (Annual and quarterly comparison) (unaudited pro forma)*                                  

(in Euro million)

12M 2016

12M 2015

Δ in %

Q4 2016

Q4 2015

 Δ in %

Revenue

 

 

 

 

 

 

Europe excl. Germany

67.8

64.8

4.6

20.8

18.0

15.7

Germany

35.2

45.4

-22.5

9.0

13.0

-30.9

Asia

34.3

33.4

2.7

8.7

10.2

-15.1

Africa/Middle East

23.0

29.0

-20.7

5.8

8.1

-28.3

Rest of the world

4.8

4.8

0

1.8

1.8

-0.5

Revenue total

165.1

177.4

-6.9

46.1

51.1

-9.8

Of which Products

115.5

123.0

-6.1

32.0

35.6

-10.1

Of which Services

49.6

54.4

-8.8

14.1

15.5

-9.3

(like-for-like)

Of which Products

115.4

119.7

-3.6%

32.0

34.2

-6.4%

Of which Services

49.3

49.1

0.4%

14.1

14.0

0.7%

 

Revenue by geographical area (Annual and quarterly comparison) (reported)*                                  

(in Euro million)

12M 2016

12M 2015

Δ in %

Q4 2016

Q4 2015

 Δ in %

Revenue

 

 

 

 

 

 

Europe excl. Germany

66.1

64.8

2.0

19.1

18.0

6.3

Germany

30.8

45.4

-32.2

4.6

13.0

-64.8

Asia

34.0

33.4

1.8

8.3

10.2

-18.6

Africa/Middle East

22.8

29.0

-21.4

5.6

8.1

-30.3

Rest of the world

4.1

4.8

-14.6

1.1

1.8

-39.1

Revenue total

157.8

177.4

-11.1

38.7

51.1

-24.2

Of which Products

111.6

123.0

-9.3

28.1

35.6

-21.1

Of which Services

46.2

54.4

-15.1

10.7

15.5

-31.3

 

 

Order recognition in the last quarter was affected by continued weakness in capital investment in Oil & Gas markets. The Middle East decreased 18.8% on an unaudited pro forma basis and 19.5% on a reported basis compared to 2015.  Because AEG PS is very late in the investment cycle, the full impacts of the shift in Oil & Gas investment 24+ months ago, now shows in the financial results.   The Group’s cash position was Euro 14.9 million as at 31 December 2016.  

   
The company took two key steps to strengthen the position of 3W Power. In February 2016, the company successfully sold two non-core assets, namely Fluxpower GmbH and Primetech s.r.l. This sale enabled 3W Power to repurchase € 4.7 million of debt and to eliminate further non core activities.  

    
In November, the Board of 3W Power S.A. filed for protective shield and debtor-in-possession proceedings for its loss-making subsidiary AEG Power Solutions GmbH, Warstein-Belecke, Germany. The protective shield proceedings enabled the undertaking of additional restructuring measures. These measures further streamlined the subsidiary’s operations, increased its profitability, and restructured certain long term liabilities. On May 2, 2017, after achieving all the objectives, the protective shield proceeding closed and the process concluded. The business activities at AEG Power Solutions and the German subsidiary continued to operate throughout.   

   
The company has improved its profitability year on year since this process of reorganization began in 2014.  The Group continues the process of changing its structure from a product driven model towards a business focused on markets, customers and the services they require. The company remains focused on sustainably profitable activities in critical infrastructure for both Industrial and Data & IT, and at promising activities in new emerging areas of energy storage and grid management. Despite challenging market conditions and continued weakness in Oil & Gas, the company benefits from good diversification both in terms of product offering and geographic reach which contributes to a certain stability.  

 

Outlook  

Further improvement in profitability is expected in 2017. The company is lean, most business activities are now core to the company’s strategy, and the priority is now to grow.  Execution focused on order fulfillment and improvements in quality and customer satisfaction will be key to achieving success.  


DOWNLOADS

3W Power / AEG PS Annual Report 2016

3W Power / AEG PS Annual Report 2016

Download

3W Power/AEG Power Solutions reports full year 2016 financial results

3W Power/AEG Power Solutions reports full year 2016 financial results

Download


Your Contacts


Christian Hillermann
Hillermann Consulting - Investor Relations

+49 (0)40 32 02 79 10
office@hillermann-consulting.de

This communication does not constitute an offer or the solicitation of an offer to buy, sell or exchange sany 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.