EANS-Adhoc: centrotherm photovoltaics publishes preliminary results and announces extensive efficiency program and refocusing

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 segments 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 programs 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 programs 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.