SMA enjoys strong Q1 sales growth, expands international footprint

Germany’s SMA Solar Technology – the global leader in inverter revenue for the past five years – has returned to growth in the first quarter of 2015 following a couple of troubled quarters at the tail-end of 2014.

The inverter manufacturer posted Q1 2015 sales of €226.3 million ($254.7 million), a 28% year-on-year increase (Q1 2014: €176.3 million) driven chiefly by SMA’s growth in the large-scale PV power plant sector.

Over the course of the reporting period, SMA shifted 1.7 GW of inverters, with the markets of North America, Japan, Australia and the U.K. proving profitable, and helping to grow SMA’s international portfolio significantly: 88% of the company’s revenue in Q1 came from international markets, up from 71.1% in Q1 2014.

Increased sales volumes, positive exchange rates and reduced fixed costs combined to improve considerably SMA’s EBITDA, which rose from €-2.5 million ($-2.81 million) in Q1 2014 to €13.4 million ($15 million) in the first quarter of this year.

SMA’s net cash level remained high, at €223.7 million ($251.8 million), and an equity ratio of 46.6% ensured that the company remained on a financially sound footing. The most extensive staff reduction in SMA’s history – with approximately 600 jobs lost – has largely been completed without involuntary layoffs, SMA confirmed, adding that sales guidance for the first half of the year is forecast between €400 million to €450 million.

"We are satisfied with the financial performance in the first quarter of 2015," said SMA CEO Pierre-Pascal Urbon. "With the sales generated and the order backlog at the end of the first quarter, we have already achieved more than 60% of our sales target for the year as a whole."

The CEO added that the earnings situation for SMA had developed more positively than planned, chiefly due to a reduction of fixed costs following the mass layoffs, and a favorable exchange rate that saw the euro shrink in value against many other leading currencies.

In implementing SMA’s transformation strategy, Urbon explained that the return to sustainable profitability is "a marathon, not a sprint", adding: "Which is why we will also continue systematically implementing the strategy presented at the start of the year."

For the current fiscal year, SMA’s managing board forecasts sales of €730 million to €770 million, with negative EBIT of between €-60 million to €-60 million for the year due to the savings generated by redundancies being recognized only from mid-2015 at the earliest. SMA expects to return to positive operating earnings in 2016, by which time the company may have lost its position as global leader in inverter revenue share, according to analysts IHS.