SMA Solar’s market share falls from over 40% in 2010 to just 25% in 2012

SMA Solar’s market share, sales, margins and workforce fall in 2012

SMA Solar’s market share has plummeted from over 40% in 2010 to only 25% in 2012.
SMA Solar’s market share has plummeted from over 40% in 2010 to only 25% in 2012.

An increasingly competitive marketplace continues to erode SMA Solar Technology’s once dominant position in the PV inverter market.

Despite the continued global growth in PV installations, SMA Solar’s market share has plummeted from over 40% in 2010 to only 25% in 2012. Based on 2013 guidance of sales of between €900 million and €1.3 billion, further market share losses are expected.

SMA Solar’s claimed 25% market share of the PV inverter market for 2012 is based on the company’s estimates that global installations reached 31GW, equating to 7.75GW of PV inverter shipments.

However analysts NPD Solarbuzz recently estimated global installations to have reached 29GW in 2012, giving SMA Solar shipments of 7.2GW with its 25% market share. This is exactly in line with SMA Solar’s reported shipment numbers, a decline of 5.3%, compared with shipments of 7.6GW in 2011.

Significant pricing pressure also impacted revenue in 2012. The company reported 2012 sales of €1.5 billion, near higher end of previously revised down guidance, a 13% decline compared to sales of €1.7 billion in 2011.

Sales prices per watt fell to around €0.19 in 2012, down from almost €0.21 per watt in 2011, according to its 2012 annual report.

As a consequence, and earnings before interest and taxes (EBIT) declined 14.3% to €102 million, compared to €240.3 million in 2011. EBIT margin halved from the prior year to only 7.0%. EBIT margin in 2011 was 14.3%, down from a recent peak in 2010 of 26.9%.

SMA Solar, noted in the annual report that material expenses improved by €133.1 million, lowering costs by 9% from 2011. However, increased component costs were said to have impacted overall gross margins.

The expansion of sales and marketing due to efforts to expand its geographical footprint forced the cost of sales to increase 4.7% to €68.9 million in 2012.

As part of efforts to slow the rate of margin decline and profitability, SMA Solar said that it had reduced its headcount by 500 in the fall of 2012.

Consolidated net profit 2012 was €75.1 million, down from €166.1 million in 2011.

Management reiterated previous 2013 guidance issued last year that a break-even result this year would be the best scenario, though did not rule out the possibility of being loss making in 2013.

Although the German market continued to be its strongest through the first nine-months of 2012, FiT changes resulted in a significant fall in sales in the fourth quarter if 2012. SMA Solar expects PV installations in Germany in 2013 to fall to between 3.5GW and 4GW, down from over 7GW in 2012.

SMA Solar noted that PV inverter sales in Germany in 2012 were €576 million. Based on 2013 guidance, the company is not expecting to be able to offset the expected fall in sales in Germany with its continued efforts to increase business overseas.

In 2012 the most important overseas markets were North America, Australia, Belgium and Italy, according to the company. Despite the recent acquisition of a majority ownership of Chinese PV inverter manufacturer, Jiangsu Zeversolar New Energy the Chinese market is not expected to be a key emerging market for the company in 2013.

SMA Solar noted that key emerging markets in 2012 were North America, Japan and Thailand, which led to a export ratio of 56.3%, slightly above an export ratio of 53.6% in 2011. The company said that it was operating in 21 countries.

“2013 will be a tough year for the solar sector,” said Pierre-Pascal Urbon, CEO of SMA Solar. “The photovoltaic market is currently undergoing major changes. However, we focused our corporate strategy on the future requirements of the energy sector at an early stage. Due to our development of innovative system technology and energy management solutions, company-wide efforts to reduce costs and consistent internationalization, we believe that SMA is well positioned to take the opportunities arising in the international photovoltaic markets.”

The company reiterated in its annual report its continued focus on new product introductions as its main strategy to remain competitive. The company said that it expected to spend approximately €120 million on R&D activities in 2013.

Source: PV Tech

 

About Ritesh Pothan

Ritesh Pothan, is an accomplished speaker and visionary in the Solar Energy space in India. Ritesh is from an Engineering Background with a Master’s Degree in Technology and had spent more than a decade as the Infrastructure Head for a public limited company with the last 9 years dedicated to Solar and Renewable Energy. He also runs the 2 largest India focused renewable energy groups on LinkedIn - Solar - India and Renewables - India
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