Meyer Burger completes strategic transformation in the first half of 2021 and successfully launches solar module sales
- Meyer Burger is fully sold out until well into the fourth quarter of 2021 with the orders on hand from Europe and the USA. The first projects in the segment for utility-scale and large industrial rooftop systems have been won.
- The first modules were shipped in July. Production is running in continuous shift operation, but full capacity has not yet been reached.
- Financing for an accelerated expansion of production capacity was secured, which will enable Meyer Burger to reach 1.4 GW of cell and module production capacity already by the end of 2022 and which will also enable the further expansion.
- As expected, the results of the first half of 2021 reflect the strategic realignment of the business model. With sales of CHF 18.0 million (H1 2020: CHF 51.0 million), the net result was CHF -37.2 million (H1 2020 adjusted: CHF -37.4 million).
Meyer Burger has completed the strategic transformation of its business model within the ambitious timeframe set and has successfully launched the distribution of its high-performance solar modules. Following the launch of Meyer Burger’s solar modules for the rooftop segment, order intake developed highly positively. Meyer Burger is now fully sold out with the orders on hand until well into the fourth quarter of 2021. The prices achieved are fully in line with expectations. In addition, earlier than planned, Meyer Burger was able to win its first pilot projects in the segment for utility-scale and large industrial rooftop systems.
With experienced and highly motivated new team members from the solar industry, Meyer Burger has established a powerful sales and marketing organization in Europe and the USA. The team continues to grow. Meyer Burger’s customer list now includes around 30 customers, including market-leading distributors such as BayWa r.e., Krannich Solar, IBC Solar, Sonepar, Memodo in Europe and the U.S. distributor CED Greentech. This means that Meyer Burger’s products are represented in more than 60 individual distributor country branches. More than 175 installers have now registered as Meyer Burger installers.
Parallel to the ramp-up of production and after successful certification of the modules, delivery of the first modules began at the end of July. Production at both sites is now running around the clock in continuous shift mode. However, missing standard components required for the scheduled ramp-up of the factories have delayed the commissioning of individual parts of the production lines and are currently reducing the speed of the production ramp-up. These parts have been delivered in the meantime. Nevertheless, Meyer Burger now no longer expects to reach full production capacity at the end of August, as originally announced, but a few weeks later. Meyer Burger is currently continuously delivering individually coordinated partial shipments in order to meet the agreed delivery dates as well as possible.
Despite the tense global supply chain situation, Meyer Burger has sustainably secured the supply of critical materials for solar cell and module production with binding supply agreements.
Financing secured for medium- and long-term capacity expansion
In addition, financing for an accelerated expansion of production capacity has already been secured in July 2021. This will enable Meyer Burger to achieve critical economies of scale more quickly and also to utilize its own production equipment capacity in a more uniform manner and thus to operate more efficiently.
With previously existing cash reserves, the syndicated loan of EUR 125 million, the factoring facility of EUR 60 million and additional funds from the capital increase of CHF 80 million and the green convertible bond of EUR 145 million, the company’s further continuous growth is secured. Meyer Burger plans to reach 1.4 GW of cell and module production capacity each already by the end of 2022, thereby also closing the gap between module and cell capacity. Meyer Burger plans to establish an annual module production capacity of approximately 1 GW in Freiberg and initially approximately 0.4 GW at a second, scalable module production site. The company intends to take a decision on the second production site will be taken in the third quarter of 2021.
Strengthening the team
At the Annual General Meeting on May 4, Urs Schenker, a Swiss lawyer, was elected to the Board of Directors of Meyer Burger Technology Ltd.
In June, the Board of Directors appointed Katja Tavernaro to the Executive Board. She holds the newly created position of Chief Sustainability Officer (CSO). With this new function, the Board of Directors aims to ensure that a coherent ESG strategy is implemented throughout the company and that Meyer Burger can set new sustainability standards in the industry.
Financial results reflect the transition phase
As expected, the results for the first half of 2021 reflect the strategic realignment of the business model. While residual sales under the old business model amounted to CHF 18.0 million (H1 2020: CHF 51.0 million), Meyer Burger will generate its first solar module sales from the beginning of the second half of 2021.
EBITDA generated amounted to CHF -30.9 million (H1 2020 adjusted: CHF -25.5 million). Including depreciation, amortization and impairment losses, the financial result and the share of profit of associated entities as well as taxes, the half-year net profit was CHF -37.2 million (H1 2020 adjusted: CHF -37.4 million).
The capital increase and the green convertible bond were effected in July 2021 and are therefore not yet included in the balance sheet as of June 30, 2021. Likewise, the existing syndicated loan agreement and the factoring agreement have not yet been drawn upon as of June 30, 2021.
As of June 30, 2021, total assets were CHF 273.5 million (December 31, 2020: CHF 296.8 million) with an equity ratio of 82.2% (December 31, 2020: 87.5%). The net cash position including restricted bank balances amounted to CHF 78.4 million (December 31, 2020: CHF 157.0 million). Property, plant and equipment increased to CHF 89.1 million (December 31, 2020: CHF 38.1 million) with cash-effective investments of CHF 52.5 million as well as capitalized goods and services, mainly in connection with the construction of the new production facilities.
As expected, demand for the service business for existing customers of production equipment is declining. Meyer Burger therefore announced a restructuring of its Asian locations in July 2021. Meyer Burger is thus optimizing the global organizational structure in line with the realignment and thereby strengthening the company’s earnings power. The operations of the subsidiary Pasan with global sales and service of its high-precision measurement technology products will continue unchanged.
Expansion of the product portfolio and roadmap
As part of the anticipated capacity expansion, Meyer Burger plans to offer solar modules with its high-performance technology customized for the globally growing utility-scale solar segment from the second half of 2022.
From the second half of 2022, it is also planned to expand the portfolio in the residential rooftop segment to include innovative solar roof tiles that can be easily installed like traditional roof tiles. Meyer Burger has acquired a certified solution from a German engineering service provider for this purpose.
Meyer Burger has also further developed its next-generation heterojunction technology (heterojunction/IBC) towards production maturity. In a proof of concept, a module efficiency of 24.7 % was demonstrated for the first modules produced with customary sizes. This figure is one of the highest module efficiencies ever achieved with silicon technology and underlines Meyer Burger’s claim to technology leadership.
In July 2021, Oxford Photovoltaics Limited (Oxford PV) unexpectedly terminated the cooperation agreement in place since 2019 for the joint development of technology for the mass production of perovskite tandem cells. Meyer Burger is currently reviewing legal options to enforce its rights. Any consequences of Oxford PV’s announcement have no impact on the success of Meyer Burger’s transformation nor on the communicated guidance. Meyer Burger is pursuing new research projects on the industrialization of perovskite solar cells and is intensifying discussions and evaluating partnerships with globally leading research institutes on the topic of perovskite solar cells, with an extensive industrial research project already underway with the Fraunhofer Institute in Germany.
The global solar market continues to grow dynamically, despite the COVID pandemic and rising solar module prices. Due to the sustainably competitive power generation costs as well as positive climate impact of solar power generation, demand for solar energy is expected to continue rising, as power systems are transformed from conventional power generation to renewable energy. Already in the short term, Meyer Burger is experiencing strong tailwinds. Due to Meyer Burger’s strong market entry, but also driven by macro market trends such as globally scarce availability of solar modules, Meyer Burger’s high-performance modules are in high demand and achieve the targeted prices in the market. The company expects this momentum to continue in the coming years. Manufacturing cells and modules in the center of Europe further strengthens Meyer Burger’s market position, as delivery times are short and logistics costs are low compared to Asian producers. The Europe-focused supply chain also improves the carbon footprint. The solar sector is also experiencing growing industrial policy support in the USA and the European Union and is increasingly perceived as a strategically important industry. With the completion of the strategic transformation, the stage is now set for Meyer Burger’s success in a continuously rapidly growing market.