EANS-News: Sunways: First quarter affected by weak demand

· Due to weak demand in the market and high inventory levels, sales
in the first quarter failed to meet projections
· Core markets in
Germany and Italy under pressure
· Manufacturing cooperation with
LDK Solar fully started

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Financial Figures/Balance Sheet/quarterly report/3-month report

Subtitle: · Due to weak demand in the market and high inventory
levels, sales in the first quarter failed to meet projections · Core
markets in Germany and Italy under pressure · Manufacturing
cooperation with LDK Solar fully started

Konstanz/Germany (euro adhoc) - 12 May 2011 - After the very
successful fiscal year 2010, Sunways AG, one of the leading providers
of solar technology (SWW:GR, SWWG.DE, ISIN DE0007332207) had to cope
with a difficult first quarter 2011. Sales in the period under review
markedly failed to meet management´s expectations in the three
segments solar cells, solar modules and in particular solar
inverters. In combination with partially declining selling prices,
this led to a negative operating result (EBIT).

In the first three months of the current year, consolidated sales
were reduced by half compared to the prior year quarter, from EUR
44.3 million to EUR 22.2 million. This was mainly due to the weak
demand in the market in combination with high inventory volumes at
various trade levels. After the turbulent market development in 2010,
which was also influenced by significant pull-forward effects,
wholesalers and installers had built up substantial inventories they
were unable to sell off during the first few months of the current
year. "There was a massive stagnation of sales", said Michael
Wilhelm, Chairman of the Management Board of Sunways AG.

Such stagnation was due to another reduction of feed-in tariffs for
solar power in Germany as of 1 January 2011 as well as to continuing
public debates about the alleged grid overload in the event of an
increased use of renewable energies which unsettled investors in
photovoltaic systems. In Italy, the most important foreign market of
Sunways AG, the months-long discussion about further developments in
the area of government subsidies also resulted in uncertainty on
the part of investors.

In the period under review, the changeover to the new business model
pursued together with business partner LDK Solar led to a significant
decline in sales in the solar cell segment. In connection with the
manufacturing cooperation with LDK Solar started in late 2010,
substantial amounts of solar cells were supplied to the Chinese
partner. Such shipments, which are not included in quarterly sales
but must be reflected in gross performance, accounted for a
substantial portion of the change in inventories in the amount of EUR
22.1 million reported in the period under review. "The production of
Sunways solar modules by LDK Solar is an important basis for our new
business model", explained Wilhelm, Chairman of Sunways´ Management
Board. Due to the more favorable cost structure, competitiveness in
the solar module segment will improve.

The weak demand at the beginning of the year and solar cell shipments
to LDK Solar are reflected in the balance sheet of Sunways AG in the
form of an increase in current assets: inventories doubled from EUR
31.3 million (31 December 2010) to EUR 64.2 million (31 March 2011).
Liquid funds, in contrast, decreased from EUR 13.8 million to EUR 3.9
million. In the wake of the rise in working capital, short-term
financial liabilities and trade payables also increased. The
shareholders´ equity of Sunways AG as of the end of the first quarter
amounted to EUR 65.6 million (31 December 2010: EUR 68.2 million).
This corresponds to a comfortable equity ratio of 47.8 percent.

In the light of sales and orders received in April, the Management
Board of Sunways AG on 4 May 2011 deliberately revised its sales
prognosis for the entire fiscal year. The Management Board does,
however, still adhere to the previously announced target margin: the
Company continues to expect an EBIT margin in the lower single-digit
percentage range for the entire fiscal year. "We will take all
necessary measures on the sales as well as on the cost side to
achieve our earnings target", declared Wilhelm.

With respect to the second quarter 2011, the Management Board
perceives first positive signs in the major markets. The Company
expects that the uncertainty prevailing in Italy, its most important
non-domestic market, will be overcome as a decision has been reached
on the further development of government subsidies. In Germany,
Sunways anticipates that the high supply volume will stimulate
end-consumer demand as improved rates of return are to be expected.
The next reduction of feed-in tariffs, which will take effect as of 1
July 2011, should provide additional impetus. Furthermore, Sunways
intends to enhance its international distribution channels through an
expansion of the OEM inverter business and to open up new markets and
customer groups.

The Management Board expects the positive trend to continue during
the remainder of the fiscal year. This view is also supported by the
results of market participant surveys showing that business
expectations have improved significantly for the months to come. The
most recent business climate index published by Bonn-based research
institute EUPD Research indicated that, after a generally very
negative first quarter, 56 percent of the installers, wholesalers and
manufacturers interviewed gave a positive prognosis and expected an
improvement in the economic situation during the next six months.

The business climate index for the photovoltaics industry determined
by EUPD represents the value added levels of the photovoltaics
industry with respect to production, distribution and installation.
The survey was held from 22 March to 6 April 2011.

Major key figures Q1/2011

Group Sales: EUR 22.2 million (Q1/2010: EUR 44.3 million) EBITDA: EUR
-1.9 million (Q1/2010: EUR 6.2 million) EBIT: EUR -3.5 million
(Q1/2010: EUR 4.7 million) Consolidated net loss/income: EUR -2.7
million (Q1/2010: EUR 2.1 million) Earnings per share: EUR -0.23 EUR
(Q1/2010: EUR 0.18EUR) Sales Germany: EUR 9.4 million (Q1/2010: EUR
37.2 million) Sales rest of Europe: EUR 12.8 million (Q1/2010: EUR
7.1 million) Number of employees (31 Mar 2011): 348 (31 Mar 2010:
313)

Solar cell segment
Sales: EUR 7.5 million (Q1/2010: EUR 21.7 million)
EBIT: EUR -0.8 million (Q1/2010: EUR 2.8 million)
Sales volume: 6.8 MWp (Q1/2010: 17.8 MWp)

Solar module segment
Sales: EUR 16.4 million (Q1/2010: EUR 18.7 million)
EBIT: EUR -1.1 million (Q1/2010: EUR 0.8 million)
Sales volume: 11.7 MWp (Q1/2010: 10.0 MWp)

Solar inverter segment
Sales: EUR 3.1 million (Q1/2010: EUR 9.1 million)
EBIT: EUR -1.6 million (Q1/2010: EUR 1.1 million)
Sales volume: 12.8 MWp (Q1/2010: 37.7 MWp)

Financial calendar 2011
2011/06/16 - Annual General Meeting
2011/08/11 - Interim report as of 30 June 2011 (Q2)
2011/11/14 - Interim report as of 30 September 2011 (Q3)

This press release is also available on 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 2010, Sunways AG with about 340 employees realised
sales of around EUR 220 million. The shares of Sunways AG are listed
at the Frankfurt Stock Exchange (SWW:GR, SWWG.DE, ISIN DE0007332207).
For further information, please visit www.sunways.eu/en.

end of announcement euro adhoc
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ots Originaltext: Sunways AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

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

Branche: Alternative energy
ISIN: DE0007332207
WKN: 733220
Index: CDAX, Prime All Share, Technology All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade