EANS-News: Sunways closes difficult 2011 fiscal year

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annual report/annual result/Financial Figures/Balance Sheet

Subtitle: - Sales in the fiscal year total € 116.2 million - Demand,
deterioration of prices and non-recurrent expenses had a negative
impact on sales revenues and operating result - New perspectives in
international growth markets with the LDK Solar Group as majority
shareholder

Konstanz (euro adhoc) - 23 July 2012 - Sunways AG (SWW:GR, SWWG.DE,
ISIN DE0007332207) generated consolidated sales of EUR 116.2 million
in the fiscal year 2011 (2010: EUR 222.7 million). This slump in
sales of about 50 percent compared to the prior year was due to
shifts in demand in the target markets over large parts of the year
as well as dramatic price declines for components of photovoltaic
systems, in particular solar modules (by up to 40 percent within
twelve months). The company incurred an operating loss (EBIT) for the
fiscal year 2011 in the amount of EUR 66.1 million (2010: EUR +15.0
million).

"2011 was an extremely difficult year for the entire German solar
industry, a fact which is also clearly reflected in our financial
statements," says Michael Wilhelm, Chairman of the Management Board
of Sunways AG. "Non-recurrent expenses in the context of the
transaction with the LDK Solar Group also had a negative impact on
the operating result of Sunways. However, we have won a strategic
investor for the future who will open up new growth prospects for our
company."

In addition, there were non-recurrent and extraordinary expenses in
connection with provisions for anticipated losses under wafer
purchase contracts (Deutsche Solar) and various agreements relating
to the supply of inverters as well as provisions for warranties and
impairments of fixed assets. The operating result of Sunways AG in
the fourth quarter was strongly affected by expenses totaling
approximately EUR 44.0 million, approximately EUR 34.0 million
thereof in the form of transaction-related and other non-recurrent
effects. In the fiscal year 2011, Sunways reported a consolidated net
loss of EUR 62.1 million (2010: consolidated net income of EUR 9.3
million). This corresponds to earnings per share of EUR -5.35 (2010:
EUR 0.80).

International sales have a stabilizing effect Sunways was again able
to markedly increase its export rate against the prior year. A total
of 45.4 percent of consolidated sales were generated abroad (2010:
29.2 percent); in absolute terms, this corresponds to sales revenues
of EUR 52.7 million (2010: EUR 65.2 million). Thus the relevant sales
revenues experienced a slight decline, but all in all the
internationalization of distribution activities had a significant
stabilizing effect on the Sunways Group's business volume.

Declining sales revenues despite record level of solar module sales
volumes Solar module sales volumes rose again after the weak first
quarter: with a sales volume of 22.1 megawatts peak, the fourth
quarter was even the strongest quarter so far in the company's
history. Overall, solar modules with a capacity of 66.8 megawatts
peak were sold in 2011 (2010: 54 megawatts peak) - this corresponds
to a 23.7 percent growth over the prior year. However, despite the
record level of sales volumes, sales revenues declined to EUR 81.3
million due to the dramatic deterioration of prices for solar modules
(2010: EUR 96,0 million). Sales revenues in the solar inverter
segment aggregated to only EUR 27.5 million (2010: 46,6 million)
which corresponds to a decline by 41 percent. Similar to the
development of sales volumes in the solar module segment, inverter
sales volumes were at their weakest in the first quarter 2011 but
recovered in the course of the year.

LDK Solar as strategic investor In the context of a capital increase
resolved on 31 December 2011 and recorded in the commercial register
on 23 February 2012, LDK Solar Germany Holding GmbH became the major
individual shareholder of Sunways AG. On 13 February 2012, the German
subsidiary of the LDK Solar Group submitted a voluntary public
takeover offer to all Sunways shareholders. Upon expiration of the
acceptance period on 12 April 2012, LDK Solar Germany Holding GmbH
held approximately 70.88 percent of the share capital.

LDK Solar Co., Ltd. (LDK:US, LDK.N, ISIN US50183L1070) is among the
ten largest photovoltaic companies worldwide in terms of sales
revenues. Being the largest fully integrated producer in the world of
silicon, wafers, solar cells and solar modules, LDK Solar has
supplied raw materials to Sunways AG for many years and cooperates
with the company in the production of Sunways solar modules since
2010.

Management Board member Roland Burkhardt resigned Roland Burkhardt,
Management Board member Technology, Research and Development, left
Sunways AG of his own volition upon expiration of his employment
contract as of 31 March 2012. His responsibilities were divided
between two existing Management Board divisions. Research and
development activities with respect to solar inverters as well as
quality assurance were assigned to the area of responsibility of
Michael Wilhelm, Chairman of the Management Board. Management Board
member Jörg von Strom is now also in charge of research and
development activities relating to solar cells and modules.

Transfer to the General Standard trading segment of the Frankfurt
Stock Exchange On 26 June 2012, the Supervisory Board of Sunways AG
approved a Management Board resolution on a transfer of the listing
of the Sunways shares from the Prime Standard to the General Standard
trading segment of the Frankfurt Stock Exchange. This change in
trading segment serves to reduce the additional expenses in
connection with a listing in the Prime Standard. The decision to
revoke the admission to the Prime Standard was published by Deutsche
Börse on the internet on 11 July 2012. Thus such revocation will take
effect as of the end of 11 October 2012. Trading of the Sunways
shares in the General Standard will commence on 12 October 2012.

Premature termination of long-term supply contracts On 18 July 2012,
the Management Board of Sunways AG entered into an agreement with
Deutsche Solar GmbH on the modification and premature termination of
two long-term wafer purchase contracts. Under this agreement, Sunways
waived the remaining amount of about EUR 7.5 million of a prepayment
already made. At the same time, the parties agreed to modify the
existing agreements, which provided for wafer shipments until the end
of 2018 or 2017, to the effect that Sunways has to purchase a total
wafer volume of approximately 60 megawatts in 2012 and 2013. If the
renegotiated purchase commitments have been met in full by 31
December 2013, both contracts will be terminated by mutual agreement
as of that date.

Due to this agreement and the negative development of market prices
since the beginning of 2012, provisions for anticipated losses in a
total amount of approx. EUR 4.6 million were reported through profit
and loss in the 2011 financial statements with respect to this
contract modification. This agreement constitutes an advantage for
Sunways AG compared to a continuation of the contracts on the
initially agreed terms and conditions. "We are convinced that the
conclusion of the amendment agreement is in the economic interest of
Sunways since its positive effects in the medium and long term will
markedly exceed its short-term negative effects," says Michael
Wilhelm.

The balance sheet effects of the amendment agreement with Deutsche
Solar GmbH as well as other losses incurred over recent months
resulted in a loss equal to more than half of the share capital of
Sunways AG.

Outlook for 2012 "The situation in the global photovoltaics markets
will not be alleviated in the current year. 2012 is a year of
transition for Sunways and the main goal is to stabilize the
development of sales volumes and sales revenues, to improve earnings
and to realize first visible successes in the context of our
cooperation with LDK Solar," says Michael Wilhelm, Chairman of the
Management Board.

In recent months, there were materials bottlenecks relating to module
production in China. Thus the availability of Sunways solar modules
was limited in the first two quarters of the current year. As a
result of such shortages, Sunways was also unable to fully utilize
its solar cell production capacities which had an adverse impact on
gross profit. On the other hand, sales volumes of Sunways solar
inverters increased markedly. As a result of the decline in sales
prices, gross profit nevertheless dropped from the prior year figure.
Due to the pressure on margins in all segments that continued in the
first half of 2012, the operating result generated by the Sunways
Group in the first two quarters was negative.

Against the background of the takeover of a majority stake in Sunways
and current business developments, Sunways was able to reach an
agreement with its lending banks on reduced credit facilities that
will run until September 2013. "In addition, LDK Solar supported the
funding activities of Sunways through various instruments," explains
Michael Wilhelm. In addition to the waiver of a claim relating to a
long-term liability, adequate payment terms were agreed with respect
to all goods and services sourced from China. Furthermore, Sunways
has received a letter of support from LDK Solar that will expire on
31 August 2014.

Key figures

Group
Sales revenues: EUR 116.2 million (2010: EUR 222.7 million)
EBIT: EUR -66.1 million (2010: EUR 15.0 million)
Consolidated net loss: EUR -62.1 million (2010: EUR 9.3 million)
Earnings per share: EUR -5.35 million (2010: EUR 0.80 million)
Number of employees (31 Dec 2011): 332 (2010: 344)

Solar cell segment Sales revenues: EUR 60.2 million (2010: EUR 108.7
million) EBIT: EUR -42.6 million (2010: EUR 11.2 million) Solar cell
sales volume: 64.9 megawatts peak (2010: 97.8 megawatts peak)

Solar module segment Sales revenues: EUR 81.3 million (2010: EUR 96.0
million) EBIT: EUR -13.7 million (2010: EUR -1.7 million) Solar
module sales volume: 66.8 megawatts peak (2010: 54 megawatts peak)

Solar inverter segment Sales revenues: EUR 27.5 million (2010: EUR
46.6 million) EBIT: EUR -9.8 million (2010: EUR 5.5 million) Solar
inverter sales volume: 139.3 megawatts peak (2010: 191.1 megawatts
peak)

This press release is also available on http://www.sunways.eu/en.

The annual financial report is available at http://www.sunways.eu/en/
company/investor-relations/financial-reports/annual-reports/

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).
For further information, please visit http://www.sunways.eu/en.

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