SMA suffers 36% sales drop in 2013


Sales revenues for Germany's SMA Solar Technology AG fell by 36.3% in 2013 as a major PV market decline across Europe shredded the company’s bottom line.

Although the inverter giants managed to shift 5.4 GW of PV inverters over the course of the last fiscal year – thus defending its position as global market leader – the numbers paled into comparison with 2012, when 7.2 GW of inverters were shipped.

Figures from SMA's financial report for 2013 reveal that total sales last year were €932.5 million, down from €1.5 billion in 2012, while earnings before interest and taxes (EBIT) fell to negative €89.1 million from €102 million the year previously.

Yet despite such undeniably shaky figures, SMA appears to have ridden out the global storm better than many of its peers. Although its global share of the inverter market declined by 17% according to IHS figures, SMA was able ot diversify slightly, pivoting reliance away from Europe and growing its international inverter market to 71%, up from just 56% in 2012. SMA's total assets contracted by just 5% to €1.26 billion last year, indicating that the company remains on a financially sound footing and is able to absorb such losses – even if they are unprecedented.

"For the first time in the company's history, we had to post a high annual net loss due to the dramatic decline in the European market," said SMA CEO Pierre-Pascal Urbon. "Despite this difficult situation, the SMA Managing Board has not reduced investments in technology development. Expenditure on development of future products was again at more than €100 million.

"By this, we defend our position as a technological market leader in a highly competitive market. We have also raised our global presence through new companies abroad and with the acquisition of the Chinese inverter manufacturer Zeversolar."

Urbon went on to state that SMA intends to build a strategic partnership with Danfoss, and hopes to enjoy a more positive fiscal performance in 2014, based on the "strategic foundation for sustainable financial improvements" the company has laid.

Looking ahead, SMA says that it expects to achieve sales of between €170-€200 million for Q1 2014 (down slightly from Q1 2013, which generated €212 million), yet is unduly concerned by this apparent decline, citing "project business" as mitigating circumstances. For the entire fiscal year, however, SMA estimates sales revenues to hit somewhere between €1 billion and €1.3 billion, which would indicate a steady upturn in fortunes year-on-year.

Such a best-case-scenario is, according to SMA, reliant on a stable regulatory environment, particularly in Europe, throughout the duration of 2014.

Speaking with pv magazine in January, Urbon confidently predicted that SMA would stroll along the path to profitability this year, despite the challenges that global growth in the Chinese and Japanese markets will pose.

IHS urges cost reduction

Commenting on SMA's financial reports, analysts IHS have suggested that the company focus on cost reductions and international expansion if it wishes to remain global market leader, adding a warning that Europe's inverter market slump has paved the way for China and Japan to account for 35% of inverter revenues in 2014.

"SMA currently has a very minor position in these markets," said IHS senior solar analyst, Cormac Gilligan. "In order to remain the number one supplier, it is critical for SMA that it delivers on its promise of cost reduction and expansion into China, Japan and other emerging markets.

"Many of its plans in this area are tied to its recent M&A activitiy. However, Zeversolar remains a loss-making asset, and although its newly formed relationship with Danfoss will enable savings through greater component purchasing power, further cost reductions through technological improvements are unlikely to be significantly improved by the merge."

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