In the fiscal year 2014 , SMA Solar Technology AG (SMA/FWB: S92) recorded a sales decline of 13.6% to €805.4 million (2013: €932.5 million) primarily as a result of the market development. In Europe and China, demand for PV inverters fell last year due to a change in political conditions. The decline was not offset by the growth in North America. In 2014, the heavy price pressure continued in all markets and market segments. As measured by the volume of investment, global demand fell by 10% year on year to €3.9 billion (approximately 40 GW of newly installed power). With a share of approximately 20%, SMA defended its position as a global market leader in a dynamic and highly competitive market environment.
In 2014, the international share of sales increased to 76.0% (2013: 71.0%). The most important foreign markets were North America, Australia, Japan and Great Britain. Operating earnings (EBIT) were €-164.9 million (2013:
€-89.1 million). The EBIT margin was -20.5% (2013: -9.6%). The operating result includes provisions for the planned staff reduction, further one-time items, for example such as impairment, and the losses of Chinese subsidiary Zeversolar totaling €129.7 million. The operating result before provisions for the staff reduction is in line with the published forecast. The consolidated earnings amounted to €-179.3 million in the reporting period (2013: €-66.9 million).
“We are not satisfied with our business performance in 2014. Due to our high fixed costs, we were not able to respond to the significant decline in demand in Europe fast enough. Demand in Germany almost halved last year as a result of political decisions. For the current fiscal year, we are expecting a further decline in the installation of new PV systems in Germany. In addition, our result in 2014 was impacted by the losses of our Chinese subsidiary Zeversolar and considerable one-time items. We are planning extensive transformation measures to generate profits from sales of only €700 million. In this regard, SMA unfortunately needs to lay off approximately 1,600 employees (full-time positions) worldwide. In the scope of the severance program that ended on March 25, 2014, SMA was expected to be able to realize the staff reduction in a short period of time without involuntary layoffs. Currently, there is a gap of approx. 100 full-time-positions in Kassel/Niestetal in order to achieve the planned target for staff reduction. The fact that we will be able to realize the planned staff reduction without involuntary layoffs in a short period of time is a very good result. While the personnel adjustments are extremely painful for SMA, they are unfortunately necessary to return to profitability. With net cash of €225.4 million and an equity ratio of approximately 47%, we can finance the transformation from our own resources,” explained SMA Chief Executive Officer Pierre-Pascal Urbon. Especially the SMA workers council declared its will to find alternative solutions to involuntary layoffs for the remaining staff reduction.
For the first quarter of 2015, the SMA Managing Board is anticipating sales of €210 million to €230 million (Q1 2014: €176.3 million) and operating earnings (EBIT) of €-5 million to €-10 million. It is therefore expecting business performance to be more positive than in the same period of the previous year (Q1 2014: €-22.0 million). SMA will make a strong start to the second quarter with an order backlog of more than €150 million (excluding service business). The Managing Board therefore confirms the sales and earnings forecast for the current fiscal year and predicts sales of €730 million to €770 million. Given that the savings from the transformation measures currently being implemented will only be recognized in profit or loss from mid-2015 at the earliest, the SMA Managing Board is forecasting negative operating earnings (EBIT) of €-30 million to €-60 million for the current year. The SMA Managing Board expects to return to positive operating earnings (EBIT) in 2016.
The annual report for 2014 is available online at www.SMA.de/IR/FinancialReports.
This press release serves only as information and does not constitute an offer or invitation to subscribe for, acquire, hold or sell any securities of SMA Solar Technology AG (the “Company”) or any present or future subsidiary of the Company (together with the Company, the “SMA Group”) nor should it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.
This press release can contain future-oriented statements. Future-oriented statements are statements which do not describe facts of the past. They also include statements about our assumptions and expectations. These statements are based on plans, estimations and forecasts which the Managing Board of SMA Solar Technology AG (SMA or company) has available at this time. Future-oriented statements are therefore only valid on the day on which they are made. Future-oriented statements by nature contain risks and elements of uncertainty. Various known and unknown risks, uncertainties and other factors can lead to considerable differences between the actual results, the financial position, the development or the performance of the corporation and the estimates given here. These factors include those which SMA has discussed in published reports. These reports are available on the SMA website at www.SMA.de. The company accepts no obligation whatsoever to update these future-oriented statements or to adjust them to future events or developments.