The Managing Board of SMA Solar Technology AG (SMA/FWB: S92) is adjusting its sales and earnings guidance for the current fiscal year. The SMA Managing Board expects sales of between €800 million and €850 million for 2018 (previously: €900 million to €1,000 million). The background for this is a further sharp fall in prices and project postponements as a result of the market downturn in China. The Managing Board is announcing structural adjustments to SMA. Corresponding measures are to be established by the end of the year. These will incur one-off costs that will negatively affect SMA’s earnings. The Managing Board is therefore expecting break-even to slightly negative EBITDA (after one-off effects from restructuring) for 2018 (previously: EBITDA of €90 million to €110 million). The SMA Managing Board is anticipating sales growth and positive EBITDA for 2019.
“The massive and unexpected reduction of the PV expansion targets by the Chinese government has led to enormous excess capacity in module and inverter production in China. As a result, Chinese manufacturers are putting increasing pressure on international markets,” explained SMA CEO Pierre-Pascal Urbon. “This has once again exacerbated the already steep decline in prices in all markets and segments. In recent weeks, we have seen that project developers and investors are increasingly delaying the implementation of PV projects in the coming year in anticipation of even lower prices. Against this backdrop, SMA is currently recording incoming orders below our expectations.”
In order to quickly return SMA to profitability under the changed conditions, the Managing Board has decided to adjust the company’s structures. “We will be introducing product innovations in the major photovoltaic markets in the coming months and into 2019 that will allow us to counter the increasing price pressure in the components business. Our expertise in the field of energy management and the integration of battery storage systems is making a decisive contribution in penetrating the higher-margin systems and services business in the long term. In the medium term, we will also be making structural adjustments to be able to react even more flexibly to market-specific changes,” said Pierre-Pascal Urbon. “The planned measures are to be adopted by the end of the year. They concern issues such as the reduction of complexity in the areas of operations and technology, the outsourcing of activities and the global adjustment of administrative areas. Due to the strength of its balance sheet and its experience in the consistent implementation of restructuring measures, SMA is well equipped to benefit from the expected market consolidation and to quickly return to profitability.”
Disclaimer:
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.
“The massive and unexpected reduction of the PV expansion targets by the Chinese government has led to enormous excess capacity in module and inverter production in China. As a result, Chinese manufacturers are putting increasing pressure on international markets,” explained SMA CEO Pierre-Pascal Urbon. “This has once again exacerbated the already steep decline in prices in all markets and segments. In recent weeks, we have seen that project developers and investors are increasingly delaying the implementation of PV projects in the coming year in anticipation of even lower prices. Against this backdrop, SMA is currently recording incoming orders below our expectations.”
In order to quickly return SMA to profitability under the changed conditions, the Managing Board has decided to adjust the company’s structures. “We will be introducing product innovations in the major photovoltaic markets in the coming months and into 2019 that will allow us to counter the increasing price pressure in the components business. Our expertise in the field of energy management and the integration of battery storage systems is making a decisive contribution in penetrating the higher-margin systems and services business in the long term. In the medium term, we will also be making structural adjustments to be able to react even more flexibly to market-specific changes,” said Pierre-Pascal Urbon. “The planned measures are to be adopted by the end of the year. They concern issues such as the reduction of complexity in the areas of operations and technology, the outsourcing of activities and the global adjustment of administrative areas. Due to the strength of its balance sheet and its experience in the consistent implementation of restructuring measures, SMA is well equipped to benefit from the expected market consolidation and to quickly return to profitability.”
Disclaimer:
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.
