- Incoming orders increased by 15% to CHF 308.5 million
- Order intake represents the highest volume in any half-year period since 2011
- Net sales reached CHF 212.3 million
- EBITDA was CHF 6.9 million
- Redemption of CHF 130 million 5% straight bond led to contraction of balance sheet total, positively impacting equity ratio which reached 43.4%
- Organisational alignments within the Executive Board for CTO and COO positions
- Outlook 2017 confirmed with net sales of about CHF 440-460 million and EBITDA of about CHF 30-45 million for fiscal year 2017
Several technology trends seen in the market, such as the shift from slurry based to diamond wire based cutting, the move to upgrade cell production with PERC applications to enhance cell efficiency, cell and module bifaciality and further increases in solar module efficiency show that the PV industry is in a technology-buy-cycle which Meyer Burger believes will continue for the time being.
The order backlog amounted to CHF 339.1 million as at 30 June 2017 (31.12.2016 CHF 244.5 million) and provides a strong backlog for the second half of 2017 and into fiscal year 2018. The book-to-bill ratio stood at 1.45 for the first half of 2017 (H1 2016 ratio of 1.23).
Net sales reached CHF 212.3 million and were 2.5% lower compared to the previous year period (H1 2016 CHF 217.8 million). Negative currency effects impacted net sales by about CHF 2.6 million or -1.2% in the first half of 2017. With the strong order backlog and substantial deliveries / customer acceptances scheduled by year-end 2017, the company expects a stronger second half year in net sales.
Operating income after costs of products and services amounted to CHF 98.2 million (H1 2016 CHF 107.2 million), with a margin of 46.3% for the first half of 2017 (H1 2016 49.2%). The operating income was burdened by several items, such as exceptional warranty provisions for an update / exchange of solar modules produced in the years 2008-2009, value adjustments on inventory in connection with streamlining the product portfolio, and negative currency effects on trade receivables and customer prepayments, for a total amount of CHF -11.4 million. Without these adverse effects, the margin would have been 51.2%, whereas for the first half of 2016 the normalised margin was at 48.3%.
Operating expenses: Meyer Burger completed its cost reduction initiatives in conjunction with its structural programme by the end of June 2017. However, the company continues to optimise its cost structures through various ongoing measures. In total over 260 employment contracts were terminated within the scope of the structural programme and further measures taken in the first half of 2017 (such as discontinuation of wire production at DMT, closure of the Minhang manufacturing site) resulting in a reduction of 243 FTE as of 30 June 2017 and 261 FTE in total as per 30 September 2017.
Due to the strong order intake and the high order backlog, the number of temporary employees was increased during the first half of 2017 from 80 as of year-end 2016 to 213 as of the end of June 2017, in order to handle the higher production volumes. As of 30 June 2017, Meyer Burger employed 1,303 FTE and 213 temporary staff compared to 1,547 FTE and 189 temporary employees as of 30 June 2016.
Personnel expenses declined by CHF 5.5 million or 7% compared to the previous year and amounted to CHF 69.4 million (H1 2016 CHF 74.9 million), proving that Meyer Burger succeeded in flexibilising its organisation and significantly reducing its fixed cost base. The financial effects of all the cost measures initiated and executed so far will also positively impact the second half of 2017. Other operating expenses were CHF 21.9 million (H1 2016 CHF 26.1 million), representing a decline of 16% compared to the previous year period.
EBITDA increased to CHF 6.9 million in the first half of 2017 (H1 2016 CHF 6.2 million). Without the adverse effects mentioned above, EBITDA on an adjusted basis amounts to CHF 18.4 million (EBITDA margin 8.6%). With the higher net sales and a number of cost reduction measures becoming fully effective in the second part of the year, Meyer Burger expects a substantially higher EBITDA contribution with an estimated EBITDA margin of >11% for the second half of 2017.
The result at EBIT level amounted to CHF -8.8 million (H1 2016 CHF -20.8 million). Scheduled depreciation and amortisation came to a total of CHF 15.8 million (H1 2016 CHF 27.0 million).
The financial result, net, was CHF -7.4 million (H1 2016 CHF -7.9 million). The extraordinary result was CHF -0.6 million and reflects costs in conjunction with the discontinuation of the diamond wire production at Diamond Materials Tech (DMT). Taxes for the first half of 2017 amounted to a tax expense of CHF 0.2 million (H1 2016 tax income of CHF 3.2 million). The tax expense in the first half of 2017 results from current income taxes and changes in deferred tax assets and liabilities.
The net result came to CHF -17.0 million (H1 2016 CHF -25.6 million). The net result per share was CHF -0.03 (H1 2016 CHF -0.08). On an adjusted basis without the adverse effects mentioned, net result would have amounted to CHF -5.6 million in the first half of 2017.
5% straight bond redeemed:On the maturity date of 24 May 2017, Meyer Burger redeemed the CHF 130 million 5% straight bond at nominal value. Going forward, the repayment will reduce interest expenses on an annualized basis by CHF 6.5 million.
Balance sheet: The redemption of the straight bond also led to a contraction of the balance sheet total, thereby positively impacting the equity ratio. The balance sheet total was CHF 493.9 million as at 30 June 2017 (31.12.2016 CHF 629.9 million). Cash and cash equivalents declined with the repayment of the bond and stood at CHF 117.2 million. Inventories were CHF 103.4 million, property, plant and equipment CHF 97.4 million, intangible assets CHF 34.5 million and deferred tax assets CHF 73.0 million.
Total liabilities amounted to CHF 279.5 million of which trade payables were CHF 32.0 million, customer prepayments CHF 70.4 million, provisions CHF 13.4 million and financial liabilities CHF 121.8 million. Equity amounted to CHF 214.4 million (31.12.2016 CHF 234.4 million). The equity ratio as of 30 June 2017 was 43.4% (31.12.2016 37.2%).
Cash flow from operating activities was again positive with CHF +3.5 million (H1 2016 CHF +15.4 million). The difference in the operating cash flow compared to the previous year period is mainly due to changes in net working capital.
Cash flow from investing activities was CHF +1.4 million (H1 2016 CHF -2.9 million) and included the sale of securities (CHF 3 million of straight bonds held at year-end 2016) and normal conservative investments in non-current assets.
Cash flow from financing activities amounted to CHF -134.2 million (H1 2016 CHF -0.5 million) mainly due to the repayment of the 5% straight bond in May 2017.
Organisational alignments within the Executive Board
Dr Gunter Erfurt, Chief Operating Officer (COO) has been appointed new Chief Technology Officer (CTO). Dr Dirk Habermann, Chief Innovation Officer will step down from the Executive Board and will become General Manager of the Dutch entity for Specialised Technologies, and head special projects regarding new technologies within the Group. Daniel Lippuner (48), a Swiss citizen and former Group Chief Executive Officer at Saurer Group in Shanghai, China, and Wattwil, Switzerland, will take over the role as Chief Operating Officer. The changes will be effective as of 1 September 2017. As of that date, the Executive Board consists of Dr Hans Brändle (CEO), Michel Hirschi (CFO), Michael Escher (CCO), Dr Gunter Erfurt (CTO) and Daniel Lippuner (COO).
Based on the strong incoming orders, high order backlog and with substantial deliveries / customer acceptances scheduled for November and December 2017, Meyer Burger confirms its previous outlook for 2017 of a similar net sales level compared to the previous year. Based on the planned customer acceptances, Meyer Burger expects net sales of about CHF 440-460 million and EBITDA of about CHF 30-45 million for fiscal year 2017.
Curriculum Vitae Daniel Lippuner
Bachelor in Economics and Business Administration from the St. Gallen University of Applied Sciences
Daniel Lippuner has been project leader at Meyer Burger Technology Ltd for its structural programme since February 2017. From 2013 to 2015, he headed the Saurer Group in Shanghai, China, and Wattwil, Switzerland, as Group Chief Executive Officer. He took over this position after posts in finance, sales and marketing as well as in general management with OC Oerlikon, Hilti AG and Rieter Automotive (today Autoneum).
Daniel Lippuner is a member of the Board of Directors of SIX Swiss Exchange listed Bossard Holding AG, Zug, and of Amsler Tex AG, Aesch ZH.
The Half-Year Report 2017 and the investors‘ presentation for the half-year results are available for download on the company website // http://r.newsbox.ch/d10/sh/rd176920/p13066/c14626/www.meyerburger.com www.meyerburger.com under – Investor Relations – Financial Reports & Publications.
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