- 2020 is the year of transformation from a supplier of production equipment to a technologically leading manufacturer of solar cells and solar modules
- Due to the realignment, sales from the old business model declined to CHF 90.5 million, resulting in an EBITDA of CHF -44.6 million and an annual result of CHF -64.5 million
- The balance sheet structure was stabilized by the capital increase in 2020. The equity ratio is 87.5%, with a net cash position of CHF 139.7 million
- Both cell and module factories are planned to open on schedule at the end of May
- High customer interest - the first framework agreements have been signed with major customers
- The renowned creative agency Jung von Matt is developing a new premium brand strategy for Meyer Burger as a producer of highly efficient solar modules
- The build-up of a new sales and marketing organization is on track
- The market entry in the USA/Americas is accelerated, starting already in 2021. Ardes Johnson is appointed as President, Meyer Burger America, and Director Sales USA/Americas
At the Extraordinary General Meeting in July 2020, shareholders approved an ordinary capital increase with gross proceeds of CHF 165 million, giving the green light for the realignment of Meyer Burger. The Board of Directors and the Executive Board announced plans to start production in the second quarter of 2021 with an annual capacity of 400 MW each of solar cells and solar modules.
Today the company is on track with all the projects necessary for the successful implementation. The cell factory and the module factory are planned to open on schedule at the end of May. In Bitterfeld-Wolfen, Meyer Burger will use its most advanced production machinery to manufacture highly efficient solar cells. In Freiberg, the largest and most modern module assembly plant in Europe will start operating, equipped with highly automated module production lines. 'For the first time in the history of the solar industry, we have an underlying technology that delivers the highest performance and offers competitive manufacturing costs at the same time. Therefore, it is our ambition to become the European leader and a global player in the manufacturing of highly efficient cells and modules, targeting Gigawatt scale midterm,' says CEO Gunter Erfurt.
Recruiting for new sites and strategic realignment progressing
Recruitment of the required staff is ongoing. For the first phase, Meyer Burger requires more than 300 new employees for all areas - far more than thousand applications have been received up to now. An adjustment of the workforce in Hohenstein-Ernstthal by 61 employees is needed. All employees were offered a transfer to Meyer Burger's new sites. Fortunately, a large number of employees at the current Hohenstein-Ernstthal location are willing to relocate to the new sites. Some employees do not wish to accept this offer and will therefore leave the company. A social plan including a reconciliation of interests is currently being negotiated with the local works council. The required measures are within the scope of the amounts set aside. The legally required public notifications will be made soon.
The development of the business in 2020 reflects the ongoing strategic realignment. Order intake, sales, and margins still refer to Meyer Burger's prior business as an equipment manufacturer. Sales declined to CHF 90.5 million. In addition, divestments led to a further income of CHF 15.6 million. A gross profit margin of CHF 37.9 million or 41.8% was achieved. However, the operating costs in the past year of transformation were no longer in line with sales, resulting in an EBITDA of CHF -44.6 million. Regular depreciation, specific value adjustments on assets no longer in use, the financial result, and a loss from investments in associated companies contributed to the annual result of CHF -64.5 million.
Solid balance sheet
The balance sheet structure was stabilized by the capital increase; it forms a solid foundation for the transformation. The equity ratio at the end of the year is 87.5%. Net debt is now strongly positive due to the repayment of the convertible bond of CHF 26.8 million and the disposal of the outstanding mortgage. Meyer Burger has no significant outstanding debt financing for the period, which may change again in the context of expanding the new business model. Cash and cash equivalents stood at CHF 139.7 million.
At the end of 2020, Meyer Burger reported reduced net working capital of CHF 48.9 million, reflecting the decline in production and sales activities. Due to initial investments in the cell and module factories, tangible assets increased to CHF 38.1 million.
Considerable market potential
Solar energy is a steadily growing global market and, in the long term, the most inexpensive of all renewable forms of electricity generation - as well as necessary to mitigate climate change. Meyer Burger's high-performance products help to achieve higher energy output and make better use of scarce available land and rooftop areas compared to the photovoltaic products available on the market.
The European Green Deal, the election of Joe Biden as President of the USA, and the realignment of the economy after the Corona pandemic are a global boon to the solar industry. It was therefore not unexpected that the public sector pledged up to 22.5 million euros so far for the development of the company's environmentally friendly solar cell production - 15 million euros of environmental aid alone came from the state of Saxony-Anhalt and the Federal Republic of Germany.
In line with the outlook given last year, Meyer Burger plans to increase annual capacity to 1.4 GW of cell and 0.8 GW of module production in 2022 by raising a total of at least CHF 180 million of debt by the latest beginning of 2022. On this basis, Meyer Burger expects annual sales of CHF400 - CHF 450 million and an EBITDA margin of 25% - 30% in 2023.
Initial focus on the residential and small commercial rooftop segment
At the moment, Meyer Burger is preparing the market entry into the initially targeted residential and small commercial rooftop segment. In a first period, the company will focus on the large European PV markets, starting with Germany, Switzerland and Austria. In addition, the company will actively market its modules in the Benelux countries, Italy, France, UK, Poland, and the Nordic countries. 'We are receiving very positive feedback on our premium product strategy. With a high-performance, high-quality and innovative module made in Germany, we are meeting what the market demands today. We are optimistic to quickly gain a significant market share in the premium rooftop segment,' says Moritz Borgmann, Managing Director of Meyer Burger Industries.
Meyer Burger will sell its products primarily through wholesale channels. The first framework agreements have been signed with major European distributors. The products are expected to be launched in collaboration with the distribution partners in April. The premium market positioning will be supported by a redesign of the Meyer Burger brand, which is unveiled at today's annual results press conference, and a digital marketing campaign supported by the renowned creative agency Jung von Matt.
At the same time, Meyer Burger is building up a completely new sales and marketing organization. Key hires have been made for the leadership positions and experienced solar sales professionals have already been recruited across our target countries.
Accelerated market entry in the USA/Americas and new President for U.S. business
Meyer Burger considers the market environment in the USA as favorable and has received indications that its high-performance product of European origin will be in high demand. Therefore, the market entry in the USA, which was originally planned for 2022, has been accelerated, with first sales expected already in the second half of 2021. To execute the strategy, Meyer Burger has recently appointed Ardes Johnson as President, Meyer Burger Americas, responsible for Sales in the USA/Americas. Mr. Johnson is a highly experienced and well-connected sales professional who knows the energy sector and in particular, the solar business in the USA. Among others, he served as Director of Sales at Tesla and Vice President Sales at SolarWorld USA. In his role, he will be responsible for building sales structures for solar modules across the Americas, with a primary focus on the US business initially. As in Europe, Meyer Burger targets the residential and small commercial market segment first but is already preparing its later entry into the utility-scale segment.
Change in the Board of Directors.
At its ordinary meeting on 10 March, Urs Fähndrich informed the Board of Directors that he will not stand for re-election at the upcoming Annual General Meeting on 4 May 2021 for personal reasons. In the last quarter of 2020, he has largely reduced his share positions in Meyer Burger Technology Ltd.
Urs Fähndrich was elected to the Board of Directors at the 2020 Annual General Meeting as a representative of Elysium Capital Ltd and the Teutonia Opportunity Fund to bring in the shareholders' perspective. The Board of Directors would like to thank Urs Fähndrich for his contribution to the company's transformation. The Board of Directors will propose a new member to the General Meeting in due course.
The annual report 2020 is available on the website: www.meyerburger.com/en/investor-relations/financial-reports
An audio webcast in German will take place today at 10.00 a.m. CET. Please use the following link to register: Webcast
An audio webcast in English will take place today at 2.00 p.m. CET. Please use the following link to register: Webcast