centrotherm photovoltaics publishes preliminary results and announces extensive efficiency program and refocusing

Blaubeuren, 06.03.2012

  • Revenue up 11.9 % to EUR 698.5 million
  • EBIT operating loss of EUR 19.8 million
  • "ct focus" efficiency program launched to reduce costs and further adjust capacities
  • Business refocusing: strategic concentration on crystalline silicon along photovoltaic value chain

centrotherm photovoltaics AG, Blaubeuren, continued to report growth in the 2011 financial year, which was a difficult year for the solar sector: revenue generated by the globally leading provider of technology and equipment to the photovoltaic sector grew by 11.9 % to EUR 698.5 million according to preliminary figures (previous year: EUR 624.2 million). Earnings before interest, tax, depreciation and amortization (EBITDA) fell from EUR 101.3 million to EUR 10.2 million in the 2011 reporting period. The company reported a EUR 19.8 million operating loss at the earnings before interest and tax (EBIT) level (previous year: EUR 75.4 million profit). Continued tensions within the sector, in particular, tangibly affected the 2011 earnings trend. One-offs amounting to a loss off EUR 75.0 million arose from adjustments to individual large-scale projects, and a weak third- and fourth-quarter operating profit and corresponding adjustments, which reflected market trends. Due to the surprisingly drastic deterioration in market and financial circumstances, the Group failed to achieve its guidance for the 2011 financial year of EUR 710 million of consolidated revenue, and a slightly positive EBIT margin.

Segment trends

In the Solar Cell & Module segment, revenue was up from EUR 404.5 million in the previous year to EUR 607.9 million in 2011, thereby running counter to a generally difficult trend in the sector. The strained market situation, particularly in the fourth quarter of 2011, resulted in the postponement and cancellation of some projects, and necessitated a revaluation of inventories, which fed through to a fall in segment earnings to EUR 71.9 million (previous year: EUR 91.6 million). In the Silicon & Wafer segment, revenue stood at EUR 57.9 million (previous year: EUR 201.7 million), and EBIT reported a loss of EUR 70.3 million (previous year: EUR 21.2 million profit). This segment's business trend was primarily affected by the tense sector situation, and the polysilicon price fall. Given the extremly worsening of the market and financial situation, the Management Board was prompted to apply adjustments to individual large-scale projects in Asia in the third quarter, which exerted a considerably negative impact on segment operating earnings.

In the Thin Film Module segment, the company reported EUR 32.7 million of revenue (previous year: EUR 18.0 million) – predominantly from the wholly-owned FHR Anlagenbau subsidiary. EBIT improved to a EUR 21.4 million loss, in line with expectations (previous year: EUR 37.4 million loss).

Sector environment affects order trends

The financial year elapsed was characterized by ongoing uncertainty on financial markets, the difficult photovoltaic sector market environment, and customers' continued reluctance to invest. Correspondingly, centrotherm photovoltaics reported EUR 423.4 million as its total new order intake in the 2011 financial year. The Solar Cell & Module segment generated 90 % of these orders. The order book position stood at EUR 423.0 million as of December 31, 2011, of which EUR 234.6 million was attributable to the Solar Cell & Module segment, EUR 176.1 million to the Silicon & Wafer segment, and EUR 12.3 million to orders generated in the Thin Film Module segment.

"ct focus" efficiency program launched

The Management Board has responded to the continued tensions on the market, and has launched its "ct focus" efficiency program, which will run alongside costs and sales initiatives that are already in place. The program's declared objective is to grow profitably and sustainably with a streamlined and efficient organizational structure, and a strategic focus on crystalline silicon along the photovoltaic value chain. This program's first step will entail a significant reduction of costs, and an adjustment to Group personnel capacities. The company aims to achieve around EUR 22 million of cost savings per year by the end of 2013. Along with a refocusing on business entailing production systems and technologies to manufacture crystalline solar cells and modules, and the production of high-purity silicon, a further significant component of the program will be the expansion of the Semiconductors & Microelectronics area. The Management Board has decided in this connection to close the Thin Film Module segment at the Blaubeuren site and to transfer some areas to Asia. This move will bundle resources, and create a unit that is closely geared to the market. An extensive sales campaign conducted by all segments will complete the "ct focus" package of measures.

---- End of the ad hoc announcement ----

Supplementary information to the ad hoc announcement:

"The course of our business the past 2011 financial year shows that we were unable to decouple from the difficult sector environment, despite our excellent market position and technological strength," commented Dr. Thomas Riegler, CFO of centrotherm photovoltaics AG. “We are still in a turbulent market environment characterized by moderate order intake. This requires us to flexibly adjust our organization capacities in order to maintain our future competitiveness."

Measures in the "ct focus" efficiency program:
  • Cost reduction and capacity adjustment

centrotherm photovoltaics has reported dynamic growth over recent years, and has created capacities accordingly. As a logical and consistent step, these capacities are to be further adjusted to match current market requirements. We reduced the massive buildup of overtime hours and vacation that we acquired during the boom phase, and we launched short-time working in the production area, for example. In addition, personnel adjustments are to be implemented with the aim of significantly reducing costs across the entire Group. Around 400 jobs are to be cut by mid-2012 from the 1,928 Group employees worldwide (status as of December 31, 2011).

  • Reorganization and refocusing

As part of the internal reorganization, process adjustments and more streamlined management structures within individual Group companies will allow synergies to be tapped, and the entire organization to be optimized. The refocusing entails centrotherm photovoltaics' future activities being concentrated on the traditionally stronger business of Solar Cell & Module, including Semiconductors and Microelectronics, as well as Silicon & Wafer. This area will include the further development of new production technologies and procedures, and an ongoing improvement of existing technologies and production systems. The Group's refocusing in its Thin Film Module segment has already started successfully with the conclusion of the CIGS project in Taiwan.


  • Large-scale project business and integrated factories as strategic cornerstone

The large-scale project business comprises a combined offering of engineering, technology and production systems to build silicon factories and integrated factories that range from silicon through to the solar module. This business is an important sales-driver, and will form an important strategic cornerstone as part of the future corporate organization. With the founding of centrotherm power solutions GmbH in Vienna, centrotherm photovoltaics has expanded its engineering expertise in the project business to include many years of specialist knowledge in large-scale plant construction.

Particularly in its Silicon & Wafer segment, centrotherm photovoltaics has successfully concluded several projects over recent months, thereby qualifying for further orders. Two customer projects were brought to a successful conclusion at the start of the 2012 financial year. Advanced discussions are currently being conducted with customers for further projects in North Africa, the Middle East and Asia.

  • "Sales Push"

The Management Board is assuming that future growth opportunities will arise from the solar sector's structural shift. The so-called "Sales Push" initiative was launched in order to tap these potentials, and to continue to achieve rapid sales successes. These measures include the cross-segment management of key customers and core markets, a strategic evaluation of current and future customer requirements, a strengthening of customer loyalty activities, and the further tapping of certain customer segments such as state companies and major industrial conglomerates.

  • MENA growth region in focus

Sales activities in the MENA region (Middle East and North Africa) were bolstered considerably in 2011. Along with the traditionally strong Asian business, centrotherm photovoltaics' already good market position is to be further expanded in this growth region in the future. The Middle East and North Africa are witnessing growing interest in renewable energy sources, with the aim of creating domestic industries. The MENA countries possess favorable energy supplies, allowing them to competitively cover the energy-intensive production steps along the photovoltaic value chain: starting with metallurgical silicon, the raw material to produce polysilicon, and moving through to polysilicon production, and the manufacturing of ingots and wafers. The political will to create local jobs is supporting and driving this strategy. With its range of products and services, centrotherm photovoltaics is optimally positioned to benefit from future investments in the MENA region.

Summary and outlook

Robert M. Hartung, CEO of centrotherm photovoltaics, drew the following summary: "The 2011 business year posed major challenges for us. We failed to achieve the targets we set ourselves as a result of the surprising deterioration in the market and financial circumstances, particularly during the last few weeks of the year. I am nevertheless pleased that we won new orders against the sector trend in our traditionally strong Solar Cell & Module business, and that we grew our revenue by 50 percent in this segment. We have positioned ourselves very well for the future in strategic terms with our focus on our core competencies, a strong large-scale project business and by directing our sales efforts towards the MENA countries. We believe that photovoltaics is quite clearly on a medium- and long-term growth path due to rising energy demand worldwide, and the turnaround in energy policy that has started. We aim to benefit from this with a streamlined and efficient organization."

Note: The above figures are still subject to a final audit by the company's auditor. The finalized figures and 2011 annual report will be published on March 27, 2012.

About centrotherm photovoltaics AG

centrotherm photovoltaics AG, which is based at Blaubeuren, Germany, is the world's leading technology and equipment provider for the photovoltaics sector. The company equips well-known solar companies and new sector entrants with turnkey production lines and single equipment to manufacture silicon, ingots and bricks, crystalline solar cells and modules, and thin film modules. As a consequence, the Group possesses a broad and well-founded technological basis, as well as key equipment at practically all steps of the photovoltaics value chain. centrotherm photovoltaics guarantees its customers important performance parameters such as production capacity, efficiencies, and completion deadlines. The Group employs around 1,900 staff, and operates globally in Europe, Asia and the USA. The company is listed in the TecDAX index on the Frankfurt Stock Exchange.

centrotherm photovoltaics AG
Johannes-Schmid-Strasse 8
89143 Blaubeuren
Internet: www.centrotherm.de
Admitted to the Regulated Market/Prime Standard, Frankfurt Securities Exchange
Corporate domicile: Germany


Saskia Feil
Senior Manager Investor & Public Relations
Tel: +49 7344 918-8890

Dr. Torsten Knödler
Manager Public Relations
Tel: +49 7344 918-8898