EANS-News: Sunways AG / Third quarter also affected by deterioration of prices and weak demand

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Earnings Forecast/9-month report

Subtitle: - Difficult conditions continue to prevail in the
photovoltaics market - Weak domestic demand partially offset by sales
in other EU markets - Sales and operating result continue to fall due
to declining prices

Konstanz/Germany (euro adhoc) - 14 November 2011 - The situation in
the European photovoltaics markets continues to be strained. The
recovery in demand expected by many experts failed to occur in the
third quarter. These factors also had an impact on the sales and
earnings development of Sunways AG (SWW:GR, SWWG.DE, ISIN
DE0007332207). Compared to the successful prior year quarter,
consolidated sales declined by EUR 35.0 million to EUR 23.3 million
(Q3/2010: EUR 58.3 million). Although the weak demand in the German
core market was partially offset by sales generated in the other
European markets, the continuously massive pressure on selling prices
for photovoltaic components due to worldwide excess capacities as
well as write-downs on inventories and provisions for impending
losses in the aggregate amount of EUR 6.3 million resulted in a
negative operating result (EBIT) of EUR -11.8 million Q3/2010: EUR
4.0 million).

Earnings development in the first nine months of the fiscal year 2011
was mainly due to the price-related decrease in gross margins. In
particular, realizable selling prices dropped by more than 30 percent
in the solar module segment. In addition, the ongoing public debate
over future subsidies for solar energy as well as the exacerbating
debt crisis in various European countries led to a continuous,
palpable buying restraint on the part of private consumers and
investors in Germany and abroad.

Successful international business due to internationalization
strategy In the third quarter 2011, Sunways generated sales in other
European countries in the amount of EUR 9.9 million (Q3/2010: EUR
16.8 million). Thus the percentage share of total consolidated sales
attributable to non-domestic European operations increased from 28.8
percent to 42.5 percent. The most important sales markets outside
Germany were again Italy and France, in particular with respect to
solar modules. The sales revenues of Sunways in France more than
tripled from the prior year quarter to EUR 2.0 million (Q2/2010: EUR
0.6 million), inter alia due to the distribution cooperation with
Wattsol S.A.R.L. In all, international sales so far generated in 2011
increased to EUR 42.3 million (9M/2010: EUR 36.9 million) which
corresponds to a 14.6 percent rise against the prior year. In the
opinion of Sunways, this development proves that the Company´s
internationalization strategy and the expansion of its distribution
activities in Southern Europe are successful.

Solar module sales volumes continue to experience a positive
development In the third quarter, Sunways recorded a sales volume of
11.4 megawatts peak in the solar module segment and generated
corresponding sales of EUR 14.0 million (Q3/2010: 11,3 megawatts
peak, EUR 19.6 million) while selling prices were reduced
drastically. Due to the dramatic deterioration of prices for solar
modules , sales and earnings in this segment continued to decline in
the first nine months of the current fiscal year although the sales
volume reported for that period increased by 19.8 percent against the
prior year period and production costs were reduced markedly. In the
solar inverter segment, the sales volume of 38.9 megawatts peaks
fell significantly behind the relevant figure for prior year quarter
of 68.0 megawatts peak. Sales revenues declined overproportionately
to EUR 7.3 million (Q3/2010: EUR 16.9 million).

The megawatt capacity sold in the solar cell segment also decreased
markedly and sales revenues dropped to EUR 12.1 million (Q3/2010: EUR
27.9 million). Short-time work has been introduced at the Arnstadt
plant in early September to adjust production capacities to the
current demand. Due to the rapid decline in prices for solar cells
and solar modules, the module production cooperation with LDK Solar
started in late 2010 had a negative impact on the operating result of
the solar module segment as realizable selling prices no longer
covered cost prices upon return of the solar modules. In 2011,
Sunways supplied the vast majority of its solar cells to LDK Solar
for the production of Sunways solar modules and thus accepted an
extended value added period for cost reduction reasons.

Outlook for 2011 In view of the ongoing difficult situation in the
European photovoltaics markets, Sunways anticipates a negative
operating result for the fourth quarter 2011. The negative
development of prices for photovoltaic products will result in a
significant decline in sales and earnings for the full fiscal year.
Based on the figures for the first three quarters and the prognoses
for the remaining weeks of the year, the Company expects to generate
sales revenues of EUR 100 to 120 million for the fiscal year 2011. A
negative operating result (EBIT) in the lower double-digit million
range is again to be expected for the fourth quarter.

"Sunways strongly focuses on restoring and securing the Company´s
profitability on a sustainable basis. The objective is to minimize
any further negative effects on our earnings and liquidity position.
All measures already initiated to reduce costs and ensure liquidity
will be further intensified. Additional projects relating to a review
and potential adjustment of the business model have already been
started", says Michael Wilhelm, Chairman of the Management Board of
Sunways.

Q3/2011 key figures Group Sales revenues: EUR 23.3 million (Q3/2010:
EUR 58.3 million) EBITDA: EUR -10.2 million (Q3/2010: EUR 5.6
million) EBIT: EUR -11.8 million (Q3/2010: EUR 4.0 million)
Consolidated net income/loss: EUR -8.7 million (Q3/2010: EUR 2.7
million) Earnings per share: EUR -0.75 (Q3/2010: EUR 0.24) Sales
revenues Germany: EUR 13.4 million (Q3/2010: EUR 41.4 million) Sales
revenues rest of Europe: EUR 9.9 million (Q3/2010: EUR 16.8 million)
Employees (30/09/2011): 343 (30/09/2010: 333) Solar cell segment
Sales revenues: EUR 12.1 million (Q3/2010: EUR 27.9 million) EBIT:
EUR -4.0 million (Q3/2010: EUR 2.1 million) Sales volume: 12.1 MWp
(Q3/2010: 24.5 MWp) Solar module segment Sales revenues: EUR 14.0
million (Q3/2010: EUR 19.6 million) EBIT: EUR -5.9 million (Q3/2010:
EUR -1.5 million) Sales volume: 11.4 MWp (Q3/2010: 11.3 MWp) Solar
inverter segment Sales revenues: EUR 7.3 million (Q3/2010: EUR 16.9
million) EBIT: EUR -1.9 million (Q3/2010: EUR 3.4 million) Sales
volume: 38.9 MWp (Q3/2010: 68.0 MWp)

9M/2011 key figures Group Sales revenues: EUR 84.2 million (9M/2010:
EUR 167.2 million) EBITDA: EUR -16.7 million (9M/2010: EUR 18.4
million) EBIT: EUR -21.6 million (9M/2010: EUR 13.7 million)
Consolidated net income/loss: EUR -11.1 million (9M/2010: EUR 8.3
million) Earnings per share: EUR -0.96 (9M/2010: EUR 0.72) Sales
revenues Germany: EUR 42.0 million (9M/2010: EUR 130.3 million) Sales
revenues rest of Europe: EUR 42.3 million (9M/2010: EUR 31.0 million)
Solar cell segment Sales revenues: EUR 46.1 million (9M/2010: EUR
80.8 million) EBIT: EUR -6.9 million (9M/2010: EUR 9.1 million) Sales
volume: 45.9 MWp (9M/2010: 73.0 MWp) Solar module segment Sales
revenues: EUR 59.5 million (9M/2010: EUR 68.0 million) EBIT: EUR
-10.5 million (9M/2010: EUR 0.0 million) Sales volume: 44.8 MWp
(9M/2010: 37.4 MWp) Solar inverter segment Sales revenues: EUR 18.4
million (9M/2010: EUR 35.8 million) EBIT: EUR -4.2 million (9M/2010:
EUR 4.6 million) Sales volume: 89.7 MWp (9M/2010: 145.0 MWp)

Financial calender 2012
21/02/2012 - Preliminary sales 2011
30/03/2012 - Annual Report 2011 (FY 2011)
15/05/2012 - Interim report as of 31/03/2012 (Q1)
14/08/2012 - Interim report as of 30/06/2012 (Q2)
13/11/2012 - Interim report as of 30/09/2012 (Q3)

Further inquiry note:
Dr. Harald F. Schaefer
Head Corporate Communications and Investor Relations
Tel.: +49 (0)7531 996 77-415
E-Mail: communications@sunways.de

end of announcement euro adhoc
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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.de
sector: Alternative energy
ISIN: DE0007332207
indexes: CDAX, Prime All Share, Technology All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, München
language: English