“SMA will also achieve a positive result in the current fiscal year. After a successful third quarter in 2016, we expect weaker business at year-end due to the significant increase in price pressure and numerous project delays in the EMEA and North American regions,” explained SMA Chief Executive Officer Pierre-Pascal Urbon. “SMA has reacted to changes in market conditions in good time. This year, we presented significantly cost-reduced product innovations and solutions to our customers at leading trade fairs in Europe and in the USA. Other innovations also resulting in a decrease in manufacturing costs are planned for the years to come. In the middle of the year, the Managing Board of SMA resolved the closure of the production sites in Denver, USA, and Cape Town, South Africa, at the end of 2016 in order to decrease the Group’s fixed costs and further increase flexibility. The positive effects of product innovations and restructuring activities are expected to be seen in earnings from 2017. With a high equity ratio of nearly 50% and net cash of more than €350 million, SMA is one of the most solid companies in the solar industry. Financial strength is of great importance in view of the market for major solar projects and the long-term service business.”
The new earnings forecast takes into account one-off effects from the consolidation of global production sites of a low double-digit million amount. Some of these one-time items are already included in the earnings for the third quarter. However, the positive impact on earnings from the disposal of SMA Railway Technology GmbH is no longer considered in the forecast. The Managing Board of SMA continues to anticipate the conclusion of an agreement for the disposal of the SMA Railway Technology GmbH subsidiary within the fourth quarter of 2016. Due to antitrust approval requirements, the transaction is now expected to be completed in the first quarter of 2017.
In the first nine months of 2016, SMA is expected to have generated sales of more than €715 million (Q1-Q3 2015: €699.2 million). The Utility business unit, which accounts for more than 40% of sales, was the main sales driver here. International business accounted for around 90% of sales in the first nine months of the fiscal year. The gross margin increased to around 25% year-on-year (Q1-Q3 2015: 19.4%) and EBIT rose to approximately €60 million (Q1-Q3 2015: €3.4 million). SMA generated high operating cash flows and thus increased net cash to more than €350 million as of September 30, 2015 (December 31, 2015: €285.6 million). As of September 30, 2016, the order backlog amounted to €588 million in total and was thus slightly lower than the level of the previous year (September 30, 2015: €629 million). Around €170 million thereof was attributable to the product business (September 30, 2015: €275 million). SMA will publish the quarterly statement January to September 2016 on November 10, 2016.
The SMA Group with sales of about €1 billion in 2015 is the global market leader for solar inverters, a key component of all PV plants, and offers innovative key technologies for future power supply structures. It is headquartered in Niestetal, near Kassel, Germany, and is represented in 20 countries. The Group employs more than 3,000 people worldwide. SMA has an extensive range of products, which offers the right inverters for all module types and plant sizes; for small residential systems as well as large-scale plants, grid-connected photovoltaic systems as well as off-grid and hybrid systems. Moreover, SMA offers system technology for various battery technologies and system sizes and collaborates with renowned battery manufacturers and companies from the automotive industry. The SMA technology is protected by about 700 patents and utility models worldwide. The range of services is supplemented by comprehensive services and operational management of large-scale PV power plants. Since 2008, the Group’s parent company, SMA Solar Technology AG, has been listed on the Prime Standard of the Frankfurt Stock Exchange (S92) and is currently the only company in the solar industry that is listed in the TecDAX index.
SMA Solar Technology AG
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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.