Declining prices forces SMA to lower 2018 forecasts, announce structural changes

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The German solar PV inverter manufacturer has said it will not achieve its sales and earnings targets this year, due to the fallout of China’s PV policy changes at the end of May, which have resulted in “enormous” excess module and inverter capacities in China, a “steep decline in prices in all markets and segments”, and postponed projects.

As such, guidance has been lowered from €900 million to €1 billion, to €800 million to €850 million. Structural changes will also be made, which are expected to impact SMA’s EBITDA, resulting in either a break-even, or slightly negative, figure, down from an earlier projected €90 million to €100 million.

These changes, expected to be adopted by the end of the year, are set to include “reduction of complexity in the areas of operations and technology, the outsourcing of activities and the global adjustment of administrative areas,” said CEO, Pierre-Pascal Urbon. He failed to provide more concrete details, including how many jobs are expected to be affected; and a spokesperson, responding to pv magazine, could not divulge any more information.

Urbon did say that in the long term, SMA will introduce product innovations to the world’s major PV markets in the coming months, and next year, “that will allow us to counter the increasing price pressure in the components business.” No further details were shared on either the products or markets. He continued, “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.”

On the back of this new strategy, the management board is optimistic it will see sales growth and a positive EBITDA in 2019.

At last week’s Renewable Energy India Expo 2018, SMA unveiled its latest central inverter, Sunny Central UP. At a capacity rating of 4.6 MW, the company says it is the world’s most powerful central inverter, and has made a 50% leap in power compared to the capacity of its previous top of the range central inverter. Meanwhile, today, it announced in the United States that it has begun shipping its TS4-R-F (Fire Safety) retrofit unit, a module-level power electronics (MLPE) solution that provides rapid shutdown only, in preparation for the new requirements for rooftop solar, which will come into force in 2019.

In the first half of 2018, meanwhile, SMA sold 4.3 GW of inverters – 500 MW more than in the first half of 2017. The company further reported that revenues closed at €394.6 million, marking a 3.5% increase. “SMA recorded a positive business performance in the first half of 2018, particularly in Asia and Europe,” said Urbon at the time. These regions were said to have had a significant impact on revenue growth.

The article was updated on 28.09.2018 to include the spokesperson’s response.