CONSOLIDATED INTERIM REPORT SOLARWORLD AG

Transcription

1 CONSOLIDATED INTERIM REPORT SOLARWORLD AG CONSOLIDATED INTERIM REPORT SOLARWORLD AG 2. QUARTER 2005 Sales and earnings at record levels Establishment of US sales subsidiary Further expansion of production WKN ISIN DE

2 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT SolarWorld-Group Comparison of Quarters SolarWorld AG ISIN (International Securities Identification Number) DE // WKN (Wertpapier-Kenn-Nummer, securities identification number) Regulated market/prime standard Highlights by quarters Amounts stated in t B Q Q4 Q1 Q2 Q2 First Half 2005 (Last year s reference period) First Half 2004 (Last year s reference period) Sales 53,370 55,764 57,908 78,712 55, ,620 90,799 EBITDA 13,553 17,599 17,733 22,550 11,256 40,283 18,195 EBIT 9,558 13,344 13,373 18,020 7,001 31,393 9,989 Group profit 5,307 7,774 7,431 11,064 3,559 18,495 5,033 Capital stock* Mio Mio Mio Mio Mio Mio Mio. shares/ shares/ shares/ shares/ shares/ shares/ shares/ imputed par imputed par imputed par imputed par imputed par imputed par imputed par value 1 u value 1 u value 1 u value 1 u value 1 u value 1 u value 1 u Investments 12.6 m u 17.0 m u 14.7 m u 10.5 m u 1.3 m u 25.2 m u 2.7 m u Equity capital 116, , , , , , ,507 Equity ratio 44 % 45 % 50 % 52 % 41 % 52 % 41 % Total assets 262, , , , , , ,791 No. of employees** Consolidated income statement Highlights by quarter * key date at the end of the quarter ** incl. trainees Amounts stated in t B Q3 Q4 Q1 Q2 Q2 (Last year s reference period) Sales revenues 53,370 55,764 57,908 78,712 55,411 Change in inventory - 6,189-2,995 9, ,015 of finished goods Other operating 1,974 4,205 2,686 3,867 2,611 income Cost of Materials - 21,704-23,003-37,809-44,478-30,591 Staff costs - 9,330-8,825-8,265-9,255-6,981 Depreciation/ - 3,995-4,255-4,360-4,430-4,255 amortization Other operating - 4,568-7,547-6,106-6,571-6,179 expenses Operating Result 9,558 13,344 13,373 18,020 7,001 Net financial income - 1, ,400-1,096-1,323 Earnings before taxes on income 8,458 12,579 11,973 16,924 5,678 Taxes on income - 3,151-4,805-4,542-5,860-2,119 Group profit 5,307 7,774 7,431 11,064 3,559

3 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR Message to shareholders and business associates Renewable energies point the way ahead. They have an enormous potential both in terms of the economy and ecology, employment and climate protection. Germany can be proud of the commitment shown to date in tapping this potential; we are currently at the top of the world league. This is a success story which has to continue, not least in the interest of future generations. Many people in this country are strongly aware of the importance of non-depletable sources of energy. Surveys have shown time and again that solar power meets with broad-based approval. In the economic arena, too, it has long since been realized that investments in clean energies are important and sustainable for economic reasons. Hence, Münchener Allianz, Germany s largest financial services provider, recently announced its intention to invest around half a billion euros in renewable energies. This decision was prompted by the results of a survey conducted by the group s insurance company in order to quantify the damage caused by climate change. According to that survey, the insurance sector will face a substantial cost increase year after year. The survey shows that the effects of climate change have already turned into reality. In addition, an expansion of sustainable energy generation will reduce our dependency on increasingly expensive fossil fuels supplied by crisis regions. The economic advantage of renewable energies is reemphasized every time prices reach a new all-time high at the international oil markets. Nuclear energy, on the other hand, will always carry that residual risk. The expansion of solar energy is the key business content of our group. In cooperation with Dipl.-Ing. Frank H. Asbeck, Chairman and CEO of SolarWorld AG our partners, e.g. those in the banking industry, we initiate new and comprehensive investments to boost the technological and economic development of the solar power sector. We can rely on our shareholders in this respect. They accompany us on this path and have been rewarded by the very good performance of our share in the capital market over the last two years. The photovoltaic market is growing steadily. In the second quarter, the output of all solar power plants installed in Germany exceeded the 1,000 megawatt threshold and thus the power output of a German medium-sized nuclear power plant. Renewable energies are uniquely placed to represent clean, sustainable energy generation geared to the future. Against the backdrop of overwhelming popular support, every political party aiming to assume power in Germany will have to clearly explain its position in terms of solar power as an option for the future prior to the elections, and will subsequently be gauged by that yardstick. After all, reason demands that the internationally recognized German way to establish renewable energies with their potential for climate protection, the economy and employment will have to remain part and parcel of any reasonable federal policy in the long run. Sincerely yours, Dipl.-Ing. Frank H. Asbeck Chairman and CEO of SolarWorld AG 3

4 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT At a glance: 2. quarter 2005 Record sales and earnings consolidated net profit for the first half of 2005 matches consolidated net profit for the entire fiscal year 2004: With an increase in consolidated net profit to 18.5 (first half 2004: 5.0) million EUR and an increase in consolidated sales to (first half 2004: 90.8) million EUR, last year s positive trend continued, in line with a consistent cost management. 68 new jobs were created in the period under review. Establishment of a separate distribution subsidiary in the US internationalization of trading activities: With the formation of a distribution branch in California, the group initiates the expansion of its international business in North America. Key for cost-effective raw material supplies for the future securing the group s expansion plans: Joint Solar Silicon GmbH & Co KG one of the group s four strategic raw material pillars launches the crucial test phase with its first prototype plant for the generation of solar-grade silicon. Planned annual output by 2007: 800 tons of silicon. At the same time, the group secures its longterm procurement strategy by means of a 10-year framework agreement with silicon manufacturer Wacker GmbH. Continuation of expansion course new production site with self-generated efficient TCVP technology* for crystallization: With the commissioning of its largest ever production site at the Freiberg location, the group will expand its crystallization capacity by 40 MW to 160 MW in the current fiscal year. A further significant expansion of crystallization operations will be possible if additional furnaces are used. Political presence at the Freiberg location increase in group headcount meets with positive response: Saxony state premier Georg Milbradt (CDU), Saxony state secretary for trade and industry and labour affairs Thomas Jurk (SPD) and under-secretary of state Christoph Habermann (SPD) visited the SolarWorld Group s production site. The scheduled increase in capacity and employment by the end of 2006 underpins the group s economic significance for Saxony as a location for industry. Issuance of bonus shares doubling in capital stock to 12.7 million euros: Following the resolution by the Annual General Meeting to issue bonus shares at a ratio of 1:1 by converting part of the capital reserves, the allocation and thus the stock market quotation takes effect as of 20 June The capital market responds with a positive stock price trend. Leap into the top ten TecDAX companies honoring of development by capital market: Only six months after initial quotation in Deutsche Börse AG s technology index, the SolarWorld stock has firmly established itself among the top players, representing one of the top ten companies in terms of sales and market capitalization. Annual General Meeting resolves doubling of dividend dividend payment continuity for the fifth year in succession: In accordance with the proposal by the Board of Management and the Supervisory Board that shareholders be granted an appropriate participation in the successful business performance, the AGM held in May resolves payment of a dividend of 0.36 EUR per no-par value share. * Temperature Controlled Volume Process 4

5 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR I. Information on the share/annual general meeting Positive market mood continues in the second quarter In the second quarter of 2005, the sentiment in the international financial markets was very positive. Stock markets continued to record upward trends, showing even greater momentum than they did in the first quarter. This was partly attributable to the strong increase in corporate profits and rising profit forecasts. However, stock exchanges continued to be affected by the record levels of crude oil prices: crude oil prices were heading for 60 $/barrel. With the beginning of the summer holiday season, a worldwide increase in demand and scarce refinery resources, even the announcement of an increase in OPEC output volumes did not trigger any significant price effect. In the course of the second quarter, DAX exceeded the threshold of 4,600 points, rising to a new three-year high. The German stock index of leading shares closed at 4,568 points as per 30 June It rose by 5.5 per cent on its level at the end of the first quarter and by 7.6 per cent for the entire year. Leading European stocks showed a similar trend. EuroStoxx50 rose to 3,182 points, up 4.1 per cent on the first quarter and 7.8 per cent for the first half of the year. Shareholders interest in technology stocks rose notably. Compared with the opening quotation of the second quarter on 1 April, TecDAX grew by 4.2 per cent to 549 points an increase of 4.9 per cent for the year as a whole. German second-tier stocks grew most strongly. Hence, MDAX rose by 17.4 per cent to 6,322 points in the first half of the year, while SDAX grew by 20.9 per cent to 3,802 points. Increasing importance of sustainability Sustainability has continued to gain in importance in the financial markets. Thus, at the end of June financial services provider Allianz announced its intention to invest 500 million euros in renewable energies. According to the information provided by the financial services group itself, this investment project is due to climate change with its ever-increasing risks for the insurance sector. At the end of May 2005, the announcement made by the federal chancellor to propose new federal elections to be held in the autumn of 2005 resulted in a temporary volatility in share price movements in German solar stocks; however, shortly afterwards these share price movements came to a halt again. Investors initially made a critical assessment of Germany s future energy policy in the event of a change of government. However, for reasons related to climate protection and resource conservation, current levels of technological development and the employment effect, none of the leading politicians have announced that there will be any major change in the energy policy. SolarWorld stocks continue dynamic upward trend As in previous quarters shares from the solar industry sector are counted among the most successful stocks in the stock exchanges. In the second quarter, the SolarWorld stocks continued their dynamic performance, gaining 49.5 per cent as against the opening price as on 1 April and closing at a price of EUR (including the share price adjustment following the allocation of the bonus shares at a ratio of 1:1). Since the beginning of the year 2005, SolarWorld stocks have recorded a 118 per cent increase in value. 5

6 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT Development of the price of the SolarWorld-share 12 months in comparison with DAX, TecDAX and GEX Development on the international stock markets: relative development/percentage rate of increase SolarWorld AG % GEX % DAX % TecDAX - 5 % AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUNE Top ten in TecDAX Only five months after its initial quotation in TecDAX, the SolarWorld share has established itself in the top league of the technology share index: according to the ranking of Deutsche Börse AG, SolarWorld stocks were one of the top ten TecDAX stocks both in terms of sales and market capitalization. At the end of the quarter (as per 30 June 2005), SolarWord AG ranked seventh (market capitalization) and second (trading volume). In terms of the performance of its share, Solar- World AG has outperformed both TecDAX and the other established stock exchange indices several times over in the past twelve months. Annual General Meeting Dividend The Annual General Meeting (AGM) of Solar- World AG was held in Bonn on Wednesday, 25 May No countermotions were submitted. In accordance with the proposal by the Board of Management and Supervisory Board of Solar- World AG, the Annual General Meeting resolved that a dividend of 0.36 (previous year: 0.18) EUR per share be paid. The Annual General Meeting thus confirmed the company s consistent dividend policy, which provides for a continuous participation of shareholders in the company s profits. 6

7 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR In addition, the Annual General Meeting approved the creation of a new authorized capital of 2.1 million EUR by 31 December The approval of the authorized capital will serve as resolution concerning own funds, enabling the company to swiftly implement a capital measure by 2009 should a corresponding situation arise. The Board of Management is not planning to implement any further capital increase for the rest of the current year. Moreover, the Annual General Meeting resolved to provide a further authorization to issue convertible bonds and/or warrants and to create a contingent capital of up to 6.35 million EUR. Bonus shares capital increase from corporate funds The Annual General Meeting of SolarWorld AG resolved to issue bonus shares at a ratio of 1:1. Following registration of the resolution in the commercial register, the company s capital stock was doubled from 6,350,000 EUR to 12,700,000 EUR by means of converting part of the capital reserves. As at 31 December 2004, the company s capital reserves totaled million EUR. The new shares were allocated to shareholders in proportion to their interests in the previous capital stock so that one new no-par value bearer share was allocated for every old no-par value bearer share. The issuance of 6,350,000 new no-par value bearer shares resulted in a doubling of shares to 12,700,000 units. The shares were allocated to shareholders on the basis of their holdings of deposited shares as at the evening of Friday, 17 June The issuance of the bonus shares was free of charge for the shareholders. The new shares will carry dividend rights as of the beginning of the 2005 fiscal year, i.e. 1 January 2005, and will be traded under the same ISIN DE or WKN , respectively, as the old shares. Since the company s IPO in November 1999, its capital stock has thus increased more than fourfold. Road shows international investor conferences As before, the SolarWorld management successfully presented SolarWorld AG and its subsidiaries at road shows and at one-on-one meetings with international investors and analysts in the second quarter of The majority of meetings held in the second quarter of 2005 involved investors from the North American region. Capital stock/shareholders structure as at 30 June 2005 The company s capital stock currently totals 12.7 million EUR, divided into 12.7 million no-par value bearer shares with a nominal value of 1 EUR, following a capital increase from corporate funds. The new shares were allocated to the shareholders in proportion to their shares in the previous capital stock so that relative interests have not changed. Following registration of the capital increase from corporate funds in the commercial register in June 2005, interests broke down as follows as at 30 June 2005: Interest Asbeck family 27.6 % DWS Investment GmbH, 7.1 % Subsidiary of Deutsche Bank AG* FMR Corp.** 5.4 % Free float 59.9 % Total % * Communication by Deutsche Bank AG of 21 Feb pursuant to sections 21 ff WpHG (German Securities Trading Act) ** Communication by FMR Corp. of 16 May 2005 pursuant to sections 21 ff WpHG (German Securities Trading Act) 7

8 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT II. General economic development Overall economy in Germany growing more vigorously than expected In the first half of 2005 the German economy grew more vigorously than expected by experts. The German Institute of Economic Research (Deutsches Institut für Wirtschaftsforschung = DIW) is assuming a growth in the Gross Domestic Product of 0.9 per cent. According the Federal Statistical Office the growth rate in the first quarter amounted to 1.0 per cent. The statisticians say that this increase is exclusively promoted by the lively foreign trade. High exports compensated for the persistently weak internal economy. Consumer demand was also stifled by the high energy prices. Crude oil and gasoline again reached new historic record levels in the second quarter of the year. According to comments made by the US energy authority EIA these prices were the expression of the worldwide record demand for oil. Electricity prices at the spot market of the German electricity exchange EEX also skyrocketed marking new record levels in June. Industry situation Germany Solar power station output exceeds the 1,000 MW mark Against the background of continuously increasing prices for fossil energies and conventional electricity the demand for solar power generation in Germany again went up in the first half of According to the Solar Power Industry Association (UVS) the entire installed solar power station output in Germany exceeded the 1,000 Megawatt (MW) mark. This means that all solar power plants working in Germany already exceed the installed output of a medium-sized nuclear power station of the size of Brunsbüttel (800 MW). At the end of 2004 so the Federal Association of Solar Power Stations (BSi) says the installed output was still only 794 MW of electrical power in Germany. Thus, more than 200 MW of solar power have been newly connected to the national grid in the first six months of the year more than in the entire year 2003 (153 MW). Spain very dynamic market thanks to attractive feed-in conditions When looking at Europe it is especially the solar market in Spain which is conspicuous by its dynamic growth. Against the backdrop of an attractive feed-in compensation the number of installations is rising continuously. Since the spring of 2004 the operators of photovoltaic systems receive a compensation that is paid for the entire lifetime of a power plant. Financially the feed-in compensation depends on the annually re-calculated reference price for Spanish power (Tarifa Media de Referencia TMR). Plants up to an output of 100 kw receive 575 per cent of the TMR for the first 25 years in 2005 that amounts to some 42 Cent per kwh of solar power. At the end of the 25 years the system continues with 460 per cent until the end of the plant s lifetime. Unlike in Germany where the compensation is paid on the basis of the declining balance principle operators can even expect annual increases of their compensation payments. The TMR goes up annually in line with the expected rise in electricity prices and with it the compensation kinked to it. In 2005, for example, the feed-in price is 1.7 per cent above the previous year. For the moment, industry experts say, bureaucratic obstacles are still preventing a solar boom. The Spanish industry association Asociación de la Industria Fotovoltaica (ASIF) expects, however, that once further harmonization steps have been taken the market could grow to between 200 and 300 MW in one or two years time. In 2004 it was still 12 MW. For the year 2005 a total of 20 MW is forecast. 8

9 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR III. Business development of the group USA a market with high growth potential In conjunction with new future energy legislation (Energy Bill) in the USA a distinct strengthening of renewable energies is to be expected. Individual renewable sources like solar energy are to be supported as a compensation for the Bush Administration s energy policy focused on fossil energy. Numerous federal states, districts and cities have decided to start their own climate protection activities in response to the absence of a climate protection policy pursued by the Bush government. These include renewable energies. An energy policy particularly supportive of solar energy is pursued in California. Governor Schwarzenegger is going for a comprehensive program of installing solar systems in this economically strong state in order to reduce the dependence on conventional electricity. A 1- million solar roofs program is in an advanced state of political discussion. Because of its high solar radiation values California offers excellent conditions for the use of solar technology. Peak times of electricity consumption i.e. the use of air conditioning systems at the time of great heat coincide with the high availability of the sun as an energy source. In the medium term it is safe to assume that a high volume market for the use of photovoltaic technology will establish itself in the USA. In the eighties and early nineties of the last century the USA was the world s largest market for photovoltaic systems. 1. Sales and earnings development Group profits in first half match the result for the entire year 2004 SolarWorld AG has consistently continued the expansion of the operating business at all levels of the value chain in the second half of the year. From April through June 2005 group profits rose by more than 200 per cent over the previous year to 11.1 (second quarter 2004: 3.6) million EUR. In the first half of the year net profits accumulated to 18.5 (first half 2004: 5.0) million EUR. Group sales also climbed to record levels. In the second quarter they ran to 78.7 (second quarter 2004: 55.4) million EUR a plus of 42 per cent. From January through June the group s sales volume increased to (first half of 2004: 90.8) million EUR. The group-wide expansion of the business volume in conjunction with consistent cost management produced an increase in the second quarter earnings before interest, tax, depreciation and amortization (EBITDA) to 22.6 (second quarter 2004: 11.3) million EUR and in the first half to 40.3 (first half 2004: 18.2) million EUR. Earnings before interest and tax (EBIT) climbed from April through June to 18.0 (second quarter 2004: 7.0) million EUR and in the first half to 31.4 (first half 2004: 10.0) million EUR. Consolidated earnings of the SolarWorld Group before tax (EBT) rose in the second quarter 2005 to 16.9 (second quarter 2004: 5.7) million EUR and in the first half to 28.9 (first half 2004: 7.5) million EUR. Also in balance sheet terms the group again presented itself in good shape. As one of the major stability indicators the equity ratio reached 52 per cent as at 30 June The return on equity for the first six months of 9

10 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT 2005 more than doubled to 10 per cent in comparison with the first half of The group has further advanced the internationalization of its solar business. The focus of the expanded foreign activities was on Spain as the second largest market in Europe and on the USA. In California SolarWorld AG established a subsidiary. The cooperation with the Chinese company Suntech Power Ltd. for the production under license of SolarWorld modules agreed upon in the first quarter of 2005 has also been successful making a positive sales and earnings contribution to the group. 2. Order situation At all stages of manufacturing the group continues to enjoy a very good order situation. The production volume of the current year has already been sold to customers under contract. For the products of the year 2006 the group has largely agreed contracts at the trade level. This makes for a very good order situation for all the companies within the group. 3. Development within the corporate divisions a) Silicon Broadly based procurement strategy new long-term contract with Wacker-Chemie GmbH The SolarWorld Group meets the need of supplying itself with raw materials by way of a broadly based procurement strategy. This includes the cooperation with long-term partners in the raw materials industry based on long-term supply contracts. In the period under review the group entered into such a contract ensuring future raw materials supplies. The group company Deutsche Solar AG made a 10-year master agreement on the supply of solar grade silicon with the silicon manufacturer Wacker-Chemie GmbH. The agreement starting in 2007 will run for a period of ten years and will thus secure an important component of the group s basic supply over the long term. Broadly based procurement strategy re-processing of secondary raw materials expanded on schedule The Solar Material division expanded the recycling and re-processing of secondary raw materials from the group s own wafer production as scheduled in the second half of the year. The plants for the recovery of solar grade silicon for use in the crystallization process are being fully utilized. The secondary raw materials make a notable contribution to the raw materials supply in wafer production. Broadly based procurement strategy joint venture producing the first volumes In the joint venture Joint Solar Silicon (JSSI) the group pursues the strategy of establishing a technologically innovative and economically promising procedure for raw material supply. During the period under review the first prototype for the production of silicon from silan was installed. The first test runs for the precipitation of silicon were successful and confirmed the expectations of the group. The first quantities of silicon were produced. Broadly based procurement strategy recycling making further headway Solar Material has further expanded the commercial recycling of solar silicon cells and has solicited new orders. The chemical process of over-etching used cells at the end of which as-good-as-new cells are generated is meeting with increasing interest on the part of customers and works at a high level of capacity utilization. The pilot plant for thermal recycling of spent silicon modules has gathered further operating experience which suggests that a commercially viable use is possible in principle. The implementation of a nation-wide recycling system requires a recovery system organized throughout the industry in order to anticipate any legislative and thus more expensive measures. In the second quarter the group submitted to the industry a Europe-wide voluntary recovery system. 10

11 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR The Solar Material division also documents its recycling activities in more vigorous public relations activities. The recycling business of the group has been operating under a new logo in the corporate context since the second quarter. b) Wafers Record volume produced and sold In the second quarter of 2005 Deutsche Solar AG has produced a new record volume of mono- and polycrystalline silicon wafers against the background of the continuing expansion. From April through June an output of 38 MW left the production facilities of the group s wafer subsidiary. Sales were thus some 33 per cent higher than in the same quarter in In the first six months of 2005 unit sales climbed by well over 36 per cent over the first half of 2004 to 73 MW. Money sales in the wafer business increased by more than 50 per cent to 76.6 million EUR. Deutsche Solar AG managed to pass higher expenditure for raw materials onto the market. New crystallization plant inaugurated In May 2005 the group inaugurated its so far largest production facility. The production building completed at the beginning of the year accommodates the in-house developed TCVP furnaces (Temperature Controlled Volume Process) for the crystallization of solar grade silicon. The first step was the installation of twelve furnaces by which the crystallization capacities of Deutsche Solar AG were increased by 40 MW to 160 MW. In the second quarter some of the furnaces were put into operation. The capital expenditure volume for this expansion amounts to 24 million EUR. The new production facility offers space on two levels to significantly increase crystallization capacity by adding more furnaces. Crystallization is the first step to making solar silicon wafers. In the crystallization furnaces solar silicon is melted at high temperatures and subsequently cooled down again. The precisely controlled cooling process produces crystallized silicon blocks which in downstream production steps are cut into columns and wafers. The core of the new TCVP technology developed by the SolarWorld Group is a specialized and efficient cooling of the solar silicon from a temperature of more than 1,400 degrees Centigrade. The new hall (DS 202) has a usable space of 5,600 square meters distributed over two production levels. For the new building some 860 tons of steel were used. Wafer expansion at existing sites completed Deutsche Solar AG increased its capacities in existing wafer production facilities from 120 MW to 160 MW by initiating some very specific optimization measures. In doing so it accompanied and indeed matched the expansion in crystallization as planned. c) Cells Production volume above previous year Deutsche Cell GmbH has been able to further increase the production volume of its cell factory in the second quarter of 2005 over the same period last years in spite of the ongoing expansion phase. Unit sales from April through June were 8 MW below the previous year since the company could still sell considerable quantities from its inventories which it had built up in the course of The expansion of production capacity from 30 to 60 MW was continued. Since individual suppliers failed to adhere to agreed completion dates for the expansion of the production line Deutsche Cell GmbH was not able to put the full production capacity of 60 MW into service in the period under review. As scheduled, Deutsche Cell GmbH expanded its product range by converting to the 6-inch format. As a consequence of increased production and continued capacity expansion Deutsche Cell GmbH significantly improved its result over the first quarter which was characterized by start-up costs. 11

12 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT d) Modules Start of construction of new module factory In the second quarter the SolarWorld Group started the construction of the new module factory at its integrated production location in Freiberg. The production will have a capacity of 50 MW by the end of This will boost the manufacturing potential at the Solar Factory GmbH subsidiary to 80 MW. Like the first module factory at Freiberg the new plant will also work on the basis of full automation. In technology terms it is the further development of the successful production line that has been in full operation since the end of The required technology was developed by the group itself in cooperation with the plant manufacturer. Total module sales grow by more than 30 per cent to 10.4 MW in second quarter The SolarWorld Group continued to increase production and shipments from its two module factories in Freiberg and Gällivare in the second quarter. In comparison with the second quarter of 2004 unit sales of the module factories went up by 33 per cent to 10.5 MW. In the first half of the year combined module sales of the group ran to 20.4 MW a plus of more than 40 per cent over the first half of the previous year. Capacity expansion on schedule Both module factories further promoted the internal expansion of their capacities in the reporting period. Solar Factory GmbH improved its production potential in the existing factory according to plan by installing new stringers. The stringers are designed to solder the solar cells to one another. Solar Factory GmbH produces 200 to 230 Watt modules using 6-inch cells. Gällivare PhotoVoltaic AB (GPV), Sweden, has upgraded all its machines in the second quarter to increase capacities to 32 MW and has put this upgrade into operation. The Swedish module company is responsible within the group for the production of modules with 5-inch cells. In addition, GPV also produces the product innovation of the group launched in the second quarter: a module with a power output of 140 Watt that is smaller than the Solar Factory product based on 6-inch cells. GPV strengthens market leadership in Scandinavia The GPV modules mainly go into the trading business of the group. The remainder is marketed by the company itself in the Scandinavian market. In comparison with the first half of 2004 GPV has doubled its sales in Northern Europe in the first half of The sales volume was in the region of several 100 Kilowatt. This has helped GPV strengthen its market leadership in Scandinavia. e) Trading Business volume significantly increased SolarWorld AG has further developed the trading business in the second quarter. Sales from the trading activities climbed in the first half of 2005 by some 70 per cent in comparison with the previous year to 78 million EUR. In the months of April through June a continuously increasing volume could be shipped to customers. The background to this reliable delivery is the sound planning of the company which places customer satisfaction at the focus of its activities. The major guiding principle of management in this context is to create sustainable customer confidence by way of a forward-looking and, if necessary, conservative planning regarding product availability and delivery dates. Sizeable new business concluded for 2006 As a result of the company s broadly-based and successful exhibition presence at the 20th European Photovoltaic Solar Energy Conference and Exhibition in Barcelona in early June as well as the INTERSOLAR in Freiburg at the end of June SolarWorld AG has secured some sizeable new orders for the coming fiscal year Also when concluding these businesses the positive effects of the group s reliable trading policy became obvious. Customers 12

13 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR rewarded the high level of reliability of Solar- World AG by expressing the wish to contract for increasing volumes. Systems business strengthened: new inverter, new module, optimized racks SolarWorld AG has further expanded the high margin systems business. Thus, the group has been offering its own inverter since the second quarter under the brand name Sunplug. This solar component which converts DC into AC current is made for SolarWorld AG by the Danish company Powerlynx a spin-off of the Danfoss Group, the leading European frequency inverter, in the form of an OEM cooperation. The inverters have been precisely adjusted to the sophisticated solar equipment of the group. In this way SolarWorld AG can take a direct influence on the most ideal technological solution for its all-in-one systems. Furthermore, the construction kit business has been upgraded by the optimization of the racks. What is more, to broaden its product range the group has developed a new module in the compact class which it presented for the first time at INTERSOLAR. The 140-Watt module built by GPV on the basis of the 6-inch cell technology increases the choice for installers and fitters. customers said that quality played a very great role in their decision to buy a certain product. Also important to customers according to the study was the fact that environmentally compatible recycling of the modules is assured and no toxic pollutants are involved in the production process. The group meets the customers demands for ecological quality by developing an industry-wide recycling concept as well as by focusing on the clean raw material of silicon. Foreign business expanded subsidiary in USA established In the trading business SolarWorld AG consistently broadened its foreign activities in the second quarter. To prepare for the start of an operating business in North America the sales office and subsidiary SolarWorld California Inc. in San Diego was founded. Two staff members were working in the US subsidiary on the due date of 30 June. In Spain our business presence was also strengthened. To this end the company has hired a Spanish sales expert. The businesses initiated already in the first quarter of 2005 were continued. The company has been continuously supplying construction kits and modules to Spain. In its focus on complete solar systems Solar- World AG sees a distinct competitive advantage vis-à-vis the big players in the market. Because with the strategy of offering everything from a single source the company has a USP feature that is very positively received in the market. Continued focus on quality In the first half of 2005 SolarWorld AG continued to underline its positioning as the quality leader. That the group met a high level of acceptance is shown by a market research study commissioned by the company on the occasion of INTERSOLAR. The by far most important reason that respondents gave for their purchasing decision was quality. 95 per cent of 4. Research & Development optimizing raw materials supply The group has consistently continued its activities in the areas of Research and Development. In the innovative silicon technology Solar- World AG has taken up trial operations and successfully produced the first quantities of solar grade silicon via the joint venture Joint Solar Silicon GmbH & Co KG. Another example of the success of the group s own R&D is the completion of the projects to develop extra thin wafers of 240 µm and 210 µm. In the process polycrystalline wafers with the dimensions 156 mm x 156 mm x 240 µm 13

14 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT and mono-crystalline wafers with the dimensions 125 mm x 125 mm x 210 µm were developed. In comparison with the standard of one year ago the thickness of the wafers was reduced by more than 25 per cent. In the course of the second half of the year both formats will be included in our production and will contribute to a further reduction of the silicon requirements per wafer. Another research project to produce even thinner wafers has been initiated. All told, the group was working on a total of 14 research projects in the area of pre-production research along the entire production chain in the second quarter. Expenditure for the entire R&D area in the second quarter amounted to some one million EUR, while investments in projects and technical facilities ran to about 120,000 EUR. 5. Capital expenditure Investments in fixed assets added up to 25.2 million EUR for the entire group in the second quarter. Thus the group invested more than 38 million EUR in the first half of the year. 6. Finances and assets In the second quarter of 2005 the Annual General Meeting of SolarWorld AG approved a capital increase from corporate funds. By converting part of the capital reserves of the company the capital stock was doubled from 6,350,000 EUR to 12,700,000 EUR and the transaction was recorded in the commercial register on 7 June As a result of this measure the number of stocks of SolarWorld AG has doubled to 12.7 million units. The liquid funds consisting of securities as well as cash and cash equivalents amounted to 62.2 million EUR. Looking at the first half of the year 2005 the capital and financial situation of SolarWorld AG could be further strengthened. Thus, through the placement of 575,000 shares from a capital increase the company could register an influx of capital to the tune of 43 million EUR. The securities were sold to institutional investors at a stock price of EUR subject to the exclusion of the subscription right. From the placement of the bearer bond with an annual interest rate of 7 per cent and a maturity of 2 May 2011 issued in 2004 SolarWorld AG received proceeds of more than 7.3 million EUR until 30 June Procurement With its integrated structure the group hedges against the possible fluctuations in the procurement of necessary input products. In a forwardlooking manner the group has already covered its raw material needs for wafer production. In module production the procurement situation has been put on a broader base through agreements with partners in the cell industry. The trading segment also expands its procurement channels by way of agreements with external partners. The agreement with the Chinese Suntech Power company on the production under license of modules from SolarWorld input products also contributed to putting the supply situation on a sound footing. The supply of all components for the construction kit business has also been secured by the group while the supply of inverters has been tied more closely to the group s own structures through the placement of an OEM order. The equity ratio as at 30 June 2005 improved by 2 percentage points over the first quarter of 2005 to 52 per cent. 14

15 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR 8. Human Resources The expansion of the business activities of the SolarWorld Group again caused a large number of new people being recruited in the second quarter. In the first six months of 2005 the company gained 68 new employees. All told, 684 women and men were working for the group on 30 June In the last 12 months the company has thus created 125 new jobs. There were no personnel changes on the Management and Supervisory Boards in the course of the second quarter As at 30 June 2005 As at 30 June 2004 Change over comparable due date of previous year +/- SolarWorld AG, Bonn Deutsche Solar AG, Freiberg Deutsche Cell GmbH, Freiberg Solar Factory GmbH, Freiberg GPV, Sweden Total * * incl. trainees IV. Supplementary report SolarWorld provides equipment for Germany s largest tracking solar power station Visit by Dr. Guido Westerwelle at the production location Simultaneously with the visit by the FDP chairman Dr. Guido Westerwelle in early August 2005 at the Freiberg production location the ground breaking took place for Germany s largest tracking solar power station the technical equipment for which will be supplied by the SolarWorld Group. The core of this modern tracking technology is that a solar plant is made to track the position of the sun as a result of which the power yield can be increased by 30 per cent in comparison with conventional plants. The 600 Kilowatt tracking plant will be designed in the form of an employee participation program: Financial participation offers group employees the possibility of directly profiting from the earnings of one of the technically most advanced solar power stations. Share of FMR Corp. voting rights increased from 5.4 to 9.96 per cent As communicated in the information received on 3 August 2005 pursuant to 21ff WpHG (German securities trading act) the share of voting rights held by FMR Corp. increased to 9.96 per cent after the end of the reporting period. Thus, the free float now amounts to some 55 per cent. 15

16 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT V. Outlook on the current fiscal year General background conditions General background conditions Overall economy Moderate growth of the overall economy The leading economic institutes are expecting some moderate growth for the full year of 2005 which like before will be supported by the export business. A significant stimulation of the consumer climate continues to be doubtful. Consumer spending is also dampened in the medium term by high energy prices. According to expert opinions a decline of the high prices at the international crude oil markets is hardly on the cards in As far as electricity and gas prices are concerned there is very little to suggest that their price situation will relax either. The Institute for Economic Research (Institut für Wirtschaftsforschung = IfW) at the University of Kiel expects a growth rate of 0.7 per cent in the GDP in Germany for the full year. In the Euro region the scientists expect a growth rate of 1.2 per cent. The most vigorous growth rate is still displayed by the economy in the USA. The IfW sees the GDP there growing by 3.4 per cent for the full year. The solar industry Solar industry continuing expansion sensible government policy also to be expected in future The German solar industry will encounter a high demand in the second half of 2005 which will exceed the supply. For the entire year the BSi expects an increase of more than 400 MW a record volume for the German photovoltaic market. In addition it is safe to assume that the solar market will continue to develop positively even after a possible change of government after the elections. In the event of the current opposition parties in the German parliament being elected into government a market decline is not to be expected in the short term. Leading politicians of the CDU have announced in the run-up to the elections that the successful law on renewable energies (Erneuerbare-Energien- Gesetz = EEG) will not be amended until In that year a routine review of the feed-in compensation will be due anyway according to 20 EEG. Unscheduled adjustments would involve considerable legislative efforts and would in addition meet with very little agreement on the part of the general population who have always commented positively on renewable energies in surveys and explicitly welcome their public funding. The CDU also paid tribute to the positive effects that the clean energy technologies have on the creation of qualified jobs in the domestic market. On this issue one should be able to expect a responsible government policy in the future irrespective of the political majorities of the day. In the past the CDU had always supported the expansion of renewable energies, be it during the introduction of the first law on the feed-in of renewable energy into the public grid in the nineties, be it the approval of the preliminary laws on photovoltaic energy in Some CDU-governed Federal States also pushed ahead the development of solar energy in the past. This is shown, for example, by the establishment of new solar centers in the new Federal States (Saxony, Saxony-Anhalt and Thuringia). Yet, it is necessary for the CDU to make clear before the elections how they propose to design the funding of solar energy in the event of their election victory. The population has a right to know this. In addition to Germany other photovoltaic markets will also show a robust development. Experts expect, for example, that in 2005 Spain will see a solar growth of more than 60 per cent to 20 MW. In the USA a significant upswing can also be expected. However, the factor limiting growth in all markets is the relative scarcity of the raw material silicon. 16

17 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR The company Consistent continuation of the group-wide course of expansion SolarWorld AG will again continue its course of expansion in all parts of the value chain in the second quarter. The group will thus have new capacities operationally available in the second half. In addition, the company will initiate further expansion projects. Due to its integration along the entire value chain the company is in a position to clearly outperform the overall market in terms of growth. The foreign business will also pick up speed in the second half of the year. a) Silicon The question of raw materials supply will again be at the focus in the second half of The expansion of re-processing and internal recycling is due in order to accompany the growth of Deutsche Solar AG. The topic of Recycling in the Solar Industry will also be consistently pursued by the Solar Material division. The object is the establishment of an efficient collection and re-utilization system for the entire industry so that an environmentally compatible solution can be offered to deal with the expected volume of solar recycling material. For the technological further development of the process of precipitating silicon from silan the first pilot reactor will go into service in the third quarter another step towards building up an independent silicon production. b) Wafers Deutsche Solar AG will further push ahead silicon wafer production. In the process the company will be able to make full use for the first time of the new capacities in crystallization and in the existing wafer factory. Production and sales will therefore continue to go up. For the full year the wafer subsidiary expects a total annual production volume of 150 MW a plus of 25 per cent over With the start of construction of the second wafer factory Deutsche Solar AG will initiate the next growth phase in the second half of the year. c) Cells Deutsche Cell will complete the expansion of capacity to 60 MW in the second half of the year and will subsequently be able to increase the manufacturing volume of its high quality solar cells significantly fully utilizing its production potential. The operating result of the cell subsidiary will increase substantially against this background. The plans for the further expansion of capacities of the solar cell producer will be continued as scheduled. d) Modules Solar Factory GmbH will probably complete the building for its second module factory in the second half of Until the end of 2006 new production capacities of 50 MW will be created there. Existing production will also be optimized and expanded. A new laminator will contribute to further increasing capacities. At the Swedish subsidiary Gällivare PhotoVoltaic AB (GPV) the new capacities will be available in the second half of The module subsidiary expects a production increase of 50 per cent over e) Trading The trading business will continue to develop very dynamically in the second half of the year. The volumes expected in 2005 have been completely contracted for and will be shipped to customers just in time. The company will continue the dialog with customers for new businesses in The foreign business will also continue to grow. The second half of the year will see both the establishment of the new Spanish subsidiary 17

18 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT and the start of the operational business in the USA. All in all, sales will clearly exceed the level of the previous year. SolarWorld AG will thus again be able to grow more vigorously than the market. Outlook on the current fiscal year Corporate situation Corporate situation Outlook 2005: forecast sure to be reached Against the background of achievements so far the Management Board of SolarWorld AG shows every confidence of easily attaining the forecast for the full year. In comparison the Fiscal Year 2004 sales and earnings will each be increased by 40 per cent. Group sales will thus go up to more than 280 million EUR and net profits to more than 25 million EUR. This means, the group will clearly outperform the overall market. VI. Risks of future developments In the course of the second quarter of 2005 no significant changes occurred in the risks described in detail in the 2004 Annual Report under the heading Risk Report. 18

19 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR VII. Consolidated Interim Report of the SolarWorld AG Consolidated income statement for he First Half t E t E 1. Sales revenue 136,620 90, Change in inventory of finished goods 9,594-5, Other operating income 6,553 4, Cost of materials -82,287-48, Staff costs -17,520-12, Depreciation and amortization -8,890-8, Other operating expenses -12,677-10,591 Operating result 31,393 9, Net financial income -2,496-2,491 Profit before tax from ordinary activities 28,897 7, Taxes on income -10,402-2, Group net profit 18,495 5,033 Earnings per share a) Net profit (in t i) 18,495 5,033 b) Weighted average number of shares in circulation (in 1,000) 7,355 5,775 c) Earnings per share (in e)

20 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT Consolidated income statement for 2. Quarter t E t E 1. Sales revenue 78,712 55, Change in inventory of finished goods 275-3, Other operating income 3,867 2, Cost of materials -44,478-30, Staff costs -9,255-6, Depreciation and amortization -4,530-4, Other operating expenses -6,571-6,179 Operating result 18,020 7, Net financial income -1,096-1,323 Profit before tax from ordinary activities 16,924 5, Taxes on income -5,860-2, Group net profit 11,064 3,559 Earnings per share a) Net profit (in t i) 11,064 3,559 b) Weighted average number of shares in circulation (in 1,000) 8,819 5,775 c) Earnings per share (in e)

21 21 ASSETS t E t E A. Noncurrent assets 200, ,955 I. Intangible assets 34,817 34,845 II. Property, plant and equipment 162, ,786 III. Financial assets carried at equity 1, IV. Deferred taxes 1,671 3,717 B. Current assets 152,539 91,334 I. Inventories 60,726 46,746 II. Trade accounts receivable 25,192 12,957 III. Tax receivables IV. Other receivables and assets 3,307 3,600 V. Marketable securities 5,219 0 VI. Liquid funds 56,996 27,036 VII. Prepaid expenses , ,289 LIABILITIES t E t E A. Shareholders Equity 183, ,488 I. Subscribed capital 12,700 5,775 II. Capital reserve 136, ,592 III. Translation reserve IV. Accumulated profit 34,363 18,154 B. Noncurrent liabilities 96,546 83,285 I. Noncurrent borrowings 37,637 41,737 II. Investment grants charged to subsequent accounting year 47,385 33,725 III. Other noncurrent liabilities 4,650 0 IV. Other noncurrent provisions V. Deferred taxes 6,874 7,623 C. Current liabilities 72,843 68,516 I. Shortterm borrowings 31,791 25,326 II. Trade accounts payable 13,819 14,289 III. Tax payables 7,824 8,148 IV. Current provisions 7,780 11,634 V. Deferred income VI. Other current liabilities 11,538 8, , ,289 Consolidated balance sheet as of 30 June 2005 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR

22 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT Consolidated cash flow statement for the First Half t E t E Net profit before taxes 28,897 7,498 + Depreciation and amortization 8,890 8,060 + Net interest income 2,218 2,332 + Result from valuation at equity /- Loss/income on disposal of nuncurrent assets Proceeds from investment grants 16,591 3,965 - Release of special items for investment grants -2,915-2,263 = Subtotal 53,964 19,751 -/+ Increase/decrease in inventories -13,980 11,252 -/+ Increase/decrease in other Net Working Capital -14,490-6,129 = Cashflow generated from operations 25,494 24,874 +/- Taxes reimbursed/paid -10,272 2,508 = Cashflow from operating activities 15,222 27,382 - Cash outflow for investments in noncurrent assets -25,238-3,267 + Proceeds from the divestment of noncurrent assets = Cashflow from investment activities -25,209-3,205 +/- Borrowing/repayments of financial credits -6,531-12,319 - Interest paid -2,466-1,497 + Proceeds from addition to equity 43, Disbursements due to dividends distributions -2,286-1,040 = Cashflow from financing activities 31,842-14,856 Net change in cash and cash equivalents 21,855 9,321 +/- Effects of exchange rate movements Cash and cash equivalents at start of period 26,902 11,324 = Cash and cash equivalents at end of period 48,760 20,638 22

23 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR Consolidated statement of changes in noncurrent assets (in t x ) Subscribed Capital Translation Accumulated Total capital reserve reserve results Balance as at , , , ,543 Differences from currency translation Group profit 5,033 5,033 Dividends paid -1,040-1,040 Balance as at , , , ,507 Balance as at , , , ,488 Issue of subscribed capital 6,925 6,925 Agio 36,200 36,200 Differences from currency translation Group profit 18,495 18,495 Dividends paid -2,286-2,286 Balance as at , , , ,549 23

24 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT Notes to the consolidated interim statement 1. Reporting in line with the International Financial Reporting Standards (IFRS) According to Article 4 of Regulation (EU) No. 1606/2002 of the European Parliament and the Council of 19 July 2002 relating to the application of international accounting standards SolarWorld AG is required to apply the international accounting standards adopted pursuant to Articles 2, 3 and 6 of the above-mentioned regulation. Accordingly, this interim report for the period ending 30 June 2005 was prepared in line with IAS 34. The present consolidated interim accounts have not been subjected to an audit. 2. Accounting, valuation and reporting methods In drawing up the interim accounts and preparing the comparative figures for the previous year the same consolidation principles as well as accounting and valuation methods as used for the 2004 consolidated accounts were employed as a matter of principle. A detailed description of these methods is contained in the annex to the 2004 Annual Report. This can also be downloaded from the Internet under 3. Group of consolidated companies In addition to SolarWorld AG this consolidated interim report covers the following subsidiaries: Gällivare PhotoVoltaic AB, Gällivare, Sweden, Deutsche Solar AG, Freiberg/ Saxony Solar Factory GmbH, Freiberg/ Saxony Deutsche Cell GmbH, Freiberg/ Saxony SolarWorld California Inc, San Diego/USA (CA) The stake held by SolarWorld AG in each case amounted to 100 % (previous year: 100 %) on the due date. 4. Important post reporting period developments There were no developments of special importance after 30 June For the first time the sales revenues amounting to 1,532,000 EUR include sales based on the application of the Percentage of Completion method in line with IAS 11. By the same token the trade receivables carried include such receivables as were determined by the use of the same method. A partial profit of 190,000 was realized. The previous year s method of reporting other operating expenditure and material expenses was adjusted to the form of reporting adopted in the consolidated accounts for Fiscal Year

25 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR Information on business segments for the First Half 2005 (all amounts stated in million euros) Wafer Cell Module Trade Eliminations Consolidated Sales External sales Intersegment sales Total sales Result Segment result Unallocated income 0 Unallocated expenses -1 Earnings before interest a. tax (EBIT) 31 Interest paid -3 Interest received 1 Income taxes -11 Net profit for the period 18 Information on business segments for the First Half 2005 (all amounts stated in million euros) Wafer Cell Module Trade Eliminations Consolidated Sales External sales Intersegment sales Total sales Result Segment result Unallocated income 0 Unallocated expenses -1 Earnings before interest a. tax (EBIT) 10 Interest paid -3 Interest received 0 Income taxes -2 Net profit for the period 5 25

26 CORPORATE INDICATORS MESSAGE AT A GLANCE I. INFORMATION ON THE SHARE II. GENERAL ECONOMIC DEVELOPMENT VIII. Financial calendar 2005 april to december The 2004 Annual Report was published on 17 March On the occasion of the publication of the annual financial statements the annual business press conference and the analysts conference took place in Bonn. On 13 May 2005 the consolidated interim report of SolarWorld AG for the first quarter of 2005 was published. The Annual General Meeting of SolarWorld AG took place on 25 May 2005 at the International Congress Center Bundeshaus, Wasserwerk in Bonn. The Annual Report as well as the quarterly reports can be downloaded as pdf files from the Internet under or ordered directly from the company s Investor Relations Department. 12. August 2005 Consolidated Interim Report SolarWorld AG 2nd Quarter 2005 on SolarWorld Homepage 22. August 2005 Consolidated Interim Report SolarWorld AG 2nd Quarter 2005 ( ) as print version 14. November 2005 Consolidated Interim Report SolarWorld AG 3rd Quarter 2005 on SolarWorld Homepage 24. November 2005 Consolidated Interim Report SolarWorld AG 3rd Quarter 2005 ( ) as print version 26

27 III. BUSINESS DEVELOPMENT GROUP IV. SUPPLEMENTARY REPORT V. OUTLOOK VI. RISKS VII. INTERIM ACCOUNTS VIII. FINANCIAL CALENDAR Published by: SolarWorld AG, Kurt-Schumacher-Straße 12-14, Bonn/ Germany Contact: Investor Relations Department tel.: Internet: (Stocks) (Products) The full version of the present consolidated interim report for the 2. Quarter of 2005 ending on 30 June 2005 is also available in German. Both documents can be downloaded from the Internet under as pdf files or ordered directly from SolarWorld AG, Investor Relations Department, Kurt-Schumacher-Straße 12-14, Bonn, tel ; fax: or via under:

28 SolarWorld AG Kurt-Schumacher-Straße 12-14,D Bonn Tel.: , Fax: Design: Kreativ Konzept, Bonn [