Meyer Burger launches transformation programme to safeguard long-term profitability

Press Release

Thun, 16 October 2018

Meyer Burger launches transformation programme to safeguard long-term profitability

  • Repositioning standard PV business solutions to Asia, mainly China
  • Continued strategic focus on further developing Heterojunction, SWCT™ and next step cell/module technologies
  • Increased robustness against market volatility by substantial reduction of net earnings breakeven point

Meyer Burger Technology Ltd (SIX Swiss Exchange: MBTN) today launched a transformation programme and structural changes to further increase customer proximity, optimise its global production footprint and existing fixed cost base and improve the company’s robustness against market volatilities.

Hans Brändle, CEO of Meyer Burger said: “Meyer Burger successfully returned to profitability in the first half of 2018. However the same period also showed substantial market volatility in terms of customer demand for our photovoltaic products and solutions. We have initiated an ambitious transformation programme that will enable Meyer Burger to become leaner and more focussed. Our strategic priorities remain Heterojunction, SmartWire Connection Technology as well as next generation cell/module technologies.”

Repositioning standard PV business solutions to Asia

As the manufacturing industry for PV wafers, cells and modules is predominantly located in Asia, Meyer Burger will also move a significant part of its global sales and services functions for the standard PV business solutions from Europe to Asia, largely to China. The company is also evaluating further outsourcing or co-operation partnership models for its standard PV products in order to bring its mainstream business closer to its customers and localise design and manufacturing to reduce costs and safeguard margins. At the same time, the global production footprint will be optimised. With these moves, Meyer Burger’s future PV business activities will be mainly concentrated in Hohenstein-Ernstthal (Germany) and Wuxi-Shanghai (China). The company will rightsize its headquarter structure accordingly.

Strategic priorities: Heterojunction, SWCT™ and next generation cell/module technologies

Meyer Burger will concentrate its strategic focus in PV mainly on Heterojunction, SmartWire Connection Technology (SWCT™) and on promising next generation cell/module technologies, such as tandem cells that use different types of stacked cells. We have registered increased customer interest in these technologies. In particular, enquiries from prospects outside of China have gained momentum. However, as the market environment remains uncertain, the timing of order entries continues to be difficult to predict.

Refocussing Resarch & Development activities

Meyer Burger has spent on average about CHF 50 million per annum in Research & Development over the past few years. The company will strengthen its PV technology and engineering competence in Asia to further increase R&D customer proximity. As a result of the repositioning of its standard PV business, the reinforced focus on cell/modul technologies and a concentration of future R&D activities on most promising products, Meyer Burger expects savings in annual R&D expenses in an amount of approximately CHF 10 million.

General & Administrative functions across the Group will be further streamlined to provide additional savings in operating expenses.

Measures to result in reallocation and reduction in workforce

The realignment and relocation of different functions and a more effective organisational structure will result in an overall reduction of about 100 employees (FTE) or 9% of the workforce compared to the expected number of employees of around 1,100 (after discontinuation of the manufacturing activities in Thun as announced on 2 November 2017). All personnel measures will be implemented in a manner as socially responsible as possible. Changes in the Executive Board and the Board of Directors are also planned as part of the transformation programme to reflect the adjustments and future size of the company.

Once this transformation programme has been fully executed, Meyer Burger expects a positive EBITDA impact of about CHF 25 million on an annual basis as of fiscal year 2021. Three quarters of these measures are planned to be implemented by end of 2019. The execution of this additional programme will result in one-time cash related expenses of about CHF 11 million for personnel and product transfers and in personnel costs, of which CHF 4 million will be charged to the financial year 2018. Upon completion of the transformation programme, Meyer Burger expects its breakeven level at net earnings to be reached with a net sales volume of about CHF 250 million.

Conference call

As an additional service, we offered a conference call regarding our transformation programme for all English-speaking stakeholders including media, analysts and investors.

Please click on this link to listen to the recording of the English language conference call. The link will remain available for three months until 16 January 2019.

Contacts:

Ingrid Carstensen

Head of Corporate Communications

Phone: +41 (0)33 221 28 34

ingrid.carstensen@meyerburger.com

Stefan Diepenbrock

Senior Corporate Communications Manager

Phone: +41 (0)33 221 27 85

stefan.diepenbrock@meyerburger.com

THIS PRESS RELEASE IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND SHOULD NOT BE DISTRIBUTED TO U.S. PERSONS OR PUBLICATIONS WITH A GENERAL CIRCULATION IN THE UNITED STATES. THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR, EXCHANGE OR PURCHASE ANY SECURITIES. IN ADDITION, THE SECURITIES OF MEYER BURGER TECHNOLOGY LTD HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO U.S. PERSONS ABSENT REGISTRATION UNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE UNITED STATES SECURITIES LAWS.

 

This press release may contain “forward-looking statements”, such as guidance, expectations, plans, intentions, or strategies regarding the future. These forward-looking statements are subject to risks and uncertainties. The reader is cautioned that actual future results may differ from those expressed in or implied by the statements, which constitute projections of possible developments. All forward-looking statements included in this press release are based on data available to Meyer Burger Technology Ltd as of the date that this press release is published. The company does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.