Company overview - aegps.com · PDF file3 AEG Power Solutions: Who we are? Power electronics company Turn around of traditional business acquired from Alcatel in 2005 Non-core Private

Company overviewEquity research analyst presentation

November 2009

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Disclaimer

This investor presentation has been prepared by Germany1 Acquisition Limited (“Germany1”) / AEG Power Solutions for information purposes only.

This presentation contains forward‐looking statements. The words “believe”, “expect”, “anticipate”, “intend” and “plan” and similar expressions identify forward‐looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding Germany1’s and/or AEG Power Solutions‘ financial position, business strategy, plans and objectives, are forward‐looking statements. Such forward‐looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward‐looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward‐looking statements. We caution you therefore that you should not rely on any of these forward‐looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward‐looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions. The forward‐looking statements in this document speak only as at the date of this presentation and Germany1 assumes no obligation to update such forward‐looking statements.

Certain information contained in this presentation is still in draft form and the contents of this presentation have not been legally verified. In particular, it should be noted that the financial information contained herein has not been audited.

No representation or warranty, express or implied, is given by or on behalf of the Germany1, AEG Power Solutions or any of such persons' directors, officers or employees or any other person as to the accuracy or completeness of the information or the opinions contained in this document and no liability is accepted for any such information or opinions.

Unless otherwise stated in this document, the information contained herein is based on Germany1's information and estimates. The information and opinions contained in this presentation are provided as at the date of this document and are subject to change without notice.

This presentation does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities to any person in any jurisdiction. This document is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.

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AEG Power Solutions: Who we are?

Power electronics companyTurn around of traditional business acquired from Alcatel in 2005

Non-corePrivate equity acquisition€200m revenue, not profitable

Focused on high growth, global industrial infrastructure marketsBy 2009, a profitable business with a bright futureMerged with Germany1 “SPAC” and became publicly listed on September 10, 2009Investing in solutions for new energy infrastructure

Energy grid reductions → smart grid, micro gridClean energy production → renewables (solar/wind)Energy savings → high efficiency

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AEG Power Solutions- A total solutions power electronics provider

1 A global leader in mission critical power electronic solutions serving both traditional industrial/infrastructure and high growth specialist renewable energy end markets

2 Total solutions provider, that optimises product development through modularization and building blocks, combined with full service offering

3

Strong customer relationships and large installed base4

Technology leader with world class engineering/R&D capabilities

5 World class management team with proven track record

6

Historical operational and financial improvements 7

Fully participating in the emerging renewable and alternative energy markets

AEG Power Solutions seeks to become a tier 1 power electronics company

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200820052002199819951947194519271887 ‐ 1917

History of growth and continuous improvement

(1) Formerly ‘3W Power Holding’

Alcatel ‘s Mergers & AcquisitionsOptimisation

&Repositioning

Acquisition of AEG SVS Power Supply Systems by SAFT Power Systems

Merger of SAFT Power Systems and Alcatel Converters

Foundation of Harmer & Simmons (Telecom Power, UK)

Foundation of SAFT Power Systems

Acquisition of Harmer & Simmonsby SAFT Power Systems Acquisition of SAFT Power 

Systems by Ripplewood from Alcatel

Foundation of AEG SVS Power Supply Systems

Rebranding SAFT Power Systems to AEG Power Solutions(1)

Foundation

2009

AEG Power Solutions(1) 

acquired by Germany 1 and listed on EURONEXT

AEG Power Solutions(1) 

acquired by Germany 1 and listed on EURONEXT

Investing in future growth & development of renewable energies

Foundation of

AEG (Germany)

Saft (Battery, France)

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World class team with proven track record

Gathering in-depth experience in power business

Mana

gem

ent

team

Bruce BrockCEO

Robert HuljakCSO

Kaivon MortazaviCOO

Dominique ManetVP Communication

Gladwyn de VidtsVP New Energy

Marios MichaelidesInterim CFO

Peter BonVP Protect Power

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Worldwide presenceDesign, Sales, AE, Manufacturing, FAT, Service

Belecke, Germany Penang, Malaysia

Tours, France Beijing, China

Beijing

Penang

Belecke

Tours

CM 1 CM 3

CM 2 CM 4

Contract Manufacturing Partners

CM 2CM 1

CM 4

CM 3

Toronto Hainault

Zwanenburg

Dallas

Vitoria

Milan Bangalore

Singapore

Zwanenburg, NL Dallas, USA

Hainault, UK Toronto, Canada

Design, Sales, FAE / AE, FAT, ServiceVitoria, Spain Milan, Italy

Singapore, Singapore Bangalore, India

Sales, FAE / AE, AWT, FAT, Service

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AEG Power Solutions

Sales

Service

Finance

Technical

Operations Manufacturing / procurement shared as required, managed centrally

Common reporting, management and cash pooling

Maintenance, installation, monitoring and reporting

AEG Power Solutions

Shared technology / customization

GlobalGlobal Global

Communications New Energy SolutionsProtect Power

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Competence center

Product management

R&D

Production & process engineering

ServiceBu

ildin

g Bl

ocks

Out

sour

ced

mod

ules

Scalable and flexible business model

Vertical markets

Automobile

Furnace

Glass

Steel

PVC

Nuclear

Silicon

Highly scalable capability of providing mission critical power electronic solutions

Integrating fundamental building blocks to provide customized power electronic solutions

Standard & customized

solutionsCompetence

center

Systems integrationTestingControl module outsourcing

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Power controller total solution: Thyrobox VSC

The Thyrobox precisely controls the megawatts of energy required during the Siemens Process

Control Cabinet Power Cabinet Outer ring 1 Power Cabinet

Outer ring 2Power Cabinet

Inner ring

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Provide AC or DC power Without breakdowns Provide high quality of power

Temperature extreme, temperature cyclingShock, vibrations, earthquakeCorrosive applications (water, salt)Industrial environments (chemicals, particles) Voltage,

frequency independent

Voltage Independent

Voltage, frequency dependent

!

Corrosive Applications

Extreme Temperatures

Vibrations Industrial Environments

Communication Solutions Division Markets & ApplicationsMaximum reliability in harshest environments

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Highly reliable performance

Without reliability, the risks are significantDangerous process instabilityDamage to critical production Significant impact on productivityLife and health

Installed based 20,000+ systems Nearly 100% availability

20+ years lifePower backed up > 2 GW

Hot commissioning

Field proven reliability > 1 Mhr. MTBF(MTBF = Mean Time Between Failures)

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Expertise in industrial safety standards

Safety Standard Requirements

Commercial and Industrial Requirements

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Business overview

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Protect Power systems overviewOur traditional AC UPS and DC systems have provided reliable power electronic total solutions to back-up the utility power of strategic industrial applications at near-100% availability for over 60 years

AEG PS specializes in providing power electronics in harsh, non-controlled environments where power interruptions may cause:

Dangerous process instabilityDamage to expensive processing equipmentSignificant loss of production/time

Examples: Oil refineries or power generation plants that use chemical or steam processes; equipment for signaling, controls; and alternative sources for electrical driven functions

Oil Refineries Power Generation Oil & Gas Exploration

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Protect Power product range

Custom engineering & service provide total solution

Industrial Customized UPS

Industrial Chargers and DC Systems,Modular Industrial

Data & IT UPS

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Protect Power markets & applications-Oil & Gas & Petrochemical: exploration, platforms, marine transportation, pipelines, processing and storage facilities, Gas-to-liquid (“GTL”) facilities, Refineries, Chemical plants …

Customized solutions including UPS, industrial chargers & DC Systems, Turnkey projects and Service

-Power Generation transmission and distribution: nuclear power plants, fossil power plants, hydroelectric plants, transmission & distribution

Customized Solutions including UPS, industrial chargers & DC Systems, Turnkey projects and Service

-Transportation: Rail (Signaling, Safety, Communication), Highways (Reduction of accidents, Optimum efficiency, Safety), Airports (Safety, Communication)…

Customized Solutions including UPS, Protect MIP, Turnkey projects and Service

-Data & IT: Data centers,

Premium UPS and combination architectures solutions customized to requirements

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Communications overview

Communications is focused on providing global DC solutions and services to the communications infrastructure market. Also operates under the brand “Harmer & Simmons”Designs, manufactures, markets and services high reliability standard and customized total solutions (redundancy, battery and alternative energy back-up) to provide 100% availability Large installed base of approximately 50,000+ sites, predominantly in West Europe and North Africa

Over 60 years providing high quality communication solutionsReputation as a strong European market participant and now gaining in AsiaSignificant refurbishment opportunity

Expanding market presence in emerging geographic areasIntegration of alternative energy in addition to traditional battery backup systems

Mobile Switching

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Communications product range

Custom engineering & service provide total solution

Mini systems Compact systems Power supply

modulesHigh power

systems

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Communications markets & applications

-Central office (fixed lines) bulk power

Customized solutions including modular DC Systems, turnkey projects and Service Site survey, project management, installation & maintenance including site material such as batteries, air conditioning..

-Access (fixed lines)

Customized Solutions including modular DC Systems, turnkey projects and Service Site survey, project management, installation & maintenance

-Mobile

Customized Solutions including modular DC Systems, stand alone or embedded solutions, project management and service

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New Energy Solutions overview

Power electronics solutions for the markets in clean, renewable and sustainable energy

Products include highly reliable power controllers modules, solar inverters and systems, power control for LED lighting, inverters for wind turbines and smart power supplies and conversion solutions Includes optimized AC power control systems for the production of polysilicon, where precise power control, power efficiency/energy saving and conversion is mission critical

Applies AEG’s advanced power R&D capabilities and resources in developing state of the art renewable energy total solutions

Solar solutions Polysilicon

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New Energy Solutions product range

Custom engineering & service provide total solution

Power Controllers modules and

systems

Solar inverters and systems

Rectifiers and inverters for wind

turbines and transportation

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New Energy Solutions markets & applications

-Customized rugged solutions for wind turbines- LED systems

Wind turbine power electronics ,high efficient AC and DC power supplies and converters

-Solar farms-Complete building integrated PV solutions-Stand-alone or grid connected supply

Solar inverters and solar systems

-Primary industrial applications: melting, heating, electrolysis, arc furnaces, high precision & high energy efficiency requirements-Glass, Polysilicon, Pure gases-Lighting controls

Power Controllers modules and systems

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Financials

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Consolidated income statement (3,4)

1 Source: Audited consolidated accounts of AEG group2 Unaudited3 All financial information presented relates to the AEG Group only and excludes Germany 1 Acquisition Ltd (G1).4 All financial information presented excludes the impact of acquisition accounting relating to the purchase of AEG by G1.

(€ in millions)YE Dec, 2007(1)

YE Dec, 2008(1)

8 mths Aug 2009(2)

Continuing operationsRevenues 218.2 342.8 278.5Cost of sales (169.8) (227.5) (163.5)

Gross profit 48.5 115.4 115.1

Selling, general and administrative expenses (42.0) (54.0) (36.6)Research and development costs (4.4) (6.7) (5.3)Other operating income 0.0 3.2 0.0Other operating expenses (2.1) (2.3) (0.8)

Operating profit/(loss)before financing costs (0.1) 55.7 72.4

Financial expense, net (4.3) (3.8) (1.6)

Profit/(Loss) before taxes (4.4) 51.8 70.8

Income taxes 3.3 (15.9) (24.0)

Profit/(loss) from continuing operations (1.1) 35.9 46.8

Profit (Loss) from discontinued operations (2.3) (9.7) (7.7)

Profit/(loss) for the period (3.4) 26.2 39.1

Depreciation/Amortization - continuing operations 3.2 3.6 3.1

EBITDA - continuing operations 3.1 59.3 75.5

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Consolidated balance sheet(3,4)

1 Source: Audited consolidated accounts of AEG group2 Unaudited3 All financial information presented relates to the AEG Group only and excludes Germany 1 Acquisition Ltd (G1).4 All financial information presented excludes the impact of acquisition accounting relating to the purchase of AEG by G1.

(€ in millions)YE Dec, 2007(1)

YE Dec, 2008(1)

8 mths Aug 2009(2)

Intangible assets, net 6.1 7.4 10.8

Property, plant and equipment 30.5 31.5 33.5Depreciation (6.8) (7.5) (9.3)Fixed assets, net 23.7 24.0 24.3

Other non current financial assets 1.3 1.4 1.6Deferred tax assets 9.8 4.9 4.8Total non current assets 40.9 37.6 41.4

Inventories, net 41.2 62.7 66.4Trade receivables, net 80.3 97.4 66.3Advances and progress payments 1.2 4.9 9.4Other current assets 4.4 6.3 3.8Current income taxes 3.2 4.9 2.0Other Current Financial assets 0.0 0.0 5.0Cash and cash equivalents 27.3 54.6 56.6Assets classified as held for sale 0.0 22.0 14.6Total current assets 157.6 252.8 223.9

Total assets 198.5 290.5 265.3

(€ in millions)YE Dec, 2007(1)

YE Dec, 2008(1)

8 mths Aug 2009(2)

Stockholders’ equity 17.4 43.8 82.6

Pension and retirement obligations 22.2 20.0 19.9Other long-term debt 16.0 0.7 0.7Deferred tax liabilities 3.6 3.1 3.3Total non-current liabilities 41.8 23.8 23.9

Provisions 10.6 10.0 10.6Current portion of long-term debt 0.5 15.4 0.0Short term debt 32.6 12.3 8.9Customers’ deposits and advances 21.1 74.4 37.6Trade payables and related accounts 47.6 56.2 31.4Current income tax liabilities 1.1 13.0 24.2Other current liabilities 25.9 24.8 32.5Liabilities classified as held for sale 0.0 16.7 13.5Total current liabilities 139.4 222.9 158.8

Total liabilities and stockholders’equity 198.5 290.5 265.3

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Consolidated cash flows(3,4)

1 Source: Audited consolidated accounts of AEG group2 Unaudited3 All financial information presented relates to the AEG Group only and excludes Germany 1 Acquisition Ltd (G1).4 All financial information presented excludes the impact of acquisition accounting relating to the purchase of AEG by G1.

(€ in millions)YE Dec, 2007(1)

YE Dec, 2008(1)

8 mths Aug 2009(2)

Operating cashflow - continuing operations 3.0 67.8 49.2Operating cashflow - discontinued operations 5.0 (8.0) (2.2)Net interest paid (1.9) (1.1) (0.5)Tax recovered/(paid) 2.3 (1.9) (13.0)Investing activities - continuing operations (2.7) (10.0) (3.1)Investing activities - discontinued operations (2.3) (1.3) (0.2)Recapitalisation of discontinued operations 0.0 (4.9) 0.0Loan to G1 0.0 0.0 (5.0)Increase/(decrease) in debt 13.5 (10.9) (23.9)Exchange rate effects (0.8) (0.4) 0.0

Net increase/(decrease) in cash 16.1 29.3 1.5

Cash and cash equivalents at beginning of year 11.2 27.3 54.6

Transferred to assets held for resale 0.0 (2.0) 0.5

Cash and cash equivalents at end of year 27.3 54.6 56.6

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Summary of key figures

360.4 

608.3 

136.7 

0.0 

100.0 

200.0 

300.0 

400.0 

500.0 

600.0 

700.0 

2007 2008 2009

€m

Orders

218.2 

342.8 

278.5 

0.0 

50.0 

100.0 

150.0 

200.0 

250.0 

300.0 

350.0 

400.0 

2007 2008 2009

€m

Sales

‐0.1 

55.7 

72.4 

‐10.0 

0.0 

10.0 

20.0 

30.0 

40.0 

50.0 

60.0 

70.0 

80.0 

2007 2008 2009

€m

EBIT

€m 2009 2010+ Total81.3 151.7 233.0

Order backlog deliverable in:

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Strategic growth and development

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Future of the world’s electrical energy network

ChallengeMeet the increasing energy demandReplacement of the aging energy network infrastructureDevelopment of clean and sustainable energy

VisionTransition from today’s central generation to a distributed energy network

RequirementsRealization of the smart grid…first step: smart metersCommercial adoption of clean renewable energy generationClean energy storageNew energy conversion devices (power electronics)

Higher efficiencyMicro-grid implementationControls, monitoring, communications equipment

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Development of “Smart Grid” and distributed power generation

AEG Power Solutions

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Grid parity

Within the near future PV energy can become competitive against conventionally generatedenergy

Blue lines: bulk power price for heavy consumers

Red lines: Standard household tariff

Green lines: PV generations costs depending on solar radiation

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MV

2*500 kW

MV

2*500 kW

MV

2*500 kW

V kW Hz cos phi

Arbeitstation

Utility Operator: - U, P, Q, f

System Operator: - Performance - Reporting - Monitoring

MV - MediumVoltage gr id:10 / 20 / 33 kV

New PV250: Solar power plant

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Conclusion

“Its all about power”The world’s supply of power cannot meet the public demandSolutions are coming

Clean renewable energySolar, wind, hydro

Increased efficiency-reduced consumptionSmart grid

Power electronics is the enabling technology for a greener, cleaner and more efficient energy solution