Quarterly Report • Aug 12, 2011
Quarterly Report
Open in ViewerOpens in native device viewer
SMA solar technology AG
| SMA Group | H1 2011 | H1 2010 | Change | Year 2010 | |
|---|---|---|---|---|---|
| Sales | € million | 715.0 | 815.8 | –12% | 1,920.1 |
| Export ratio | % | 57.9 | 36.4 | 44.9 | |
| Inverter output sold | MW | 3,147 | 3,146 | 0% | 7,750 |
| Capital expenditure1 | € million | 71.7 | 67.6 | 6% | 158.3 |
| Depreciation | € million | 22.2 | 12.9 | 72% | 31.3 |
| Operating profit (EBIT) | € million | 103.7 | 219.9 | –53% | 516.8 |
| Operating profit margin | % | 14.5 | 27.0 | 26.9 | |
| Consolidated net profit | € million | 73.5 | 158.2 | –54% | 365.0 |
| Earnings per share2 | € | 2.12 | 4.56 | 10.52 | |
| Employees3 | 5,922 | 5,025 | 18% | 5,519 | |
| in Germany | 5,395 | 4,728 | 14% | 5,179 | |
| abroad | 527 | 297 | 77% | 340 | |
| SMA Group | 06/30/2011 | 12 / 31 / 2010 | Change | ||
| Total assets | € million | 1,221.0 | 1,251.5 | –2% | |
| Equity | € million | 696.1 | 728.4 | –4% | |
| Equity ratio | % | 57.0 | 58.2 |
Net working capital4€ million 340.6 284.6 20%
Net cash € million 308.2 523.4 –41%
Net working capital ratio5 % 18.7 14.8
1 Excl. finance leases
2 Converted to 34,700,000 shares
3 Average during the period, incl. temporary employees 4 Inventories and trade receivables minus trade payables
5 Relating to the last twelve months (LTM)
6 Rebased to 100%
Economic Conditions
Disclaimer
Inside Cover: Financial Calendar 2011, Imprint, Contact
058 Other Information
The Share
| Security code number | A0DJ6J |
|---|---|
| ISIN | DE000A0DJ6J9 |
| Stock market code | S92 |
| Reuters | S92G.DE |
| Bloomberg | S92 GR |
| Listing | Prime Standard of |
| Frankfurt Stock Exchange | |
| Share class | No par value ordinary bearer shares |
| Share capital | € 34.7 million |
| Number of shares | 34.7 million |
| Index | TecDAX ® |
In the first half of 2011, stock market developments were influenced by the natural disaster in Japan, the debt crisis in Europe and the political unrest in North Africa. The positive trend of the business climate index spurred on the mood on the stock exchanges so that the DAX reached its highest point for three years on May 2, 2011 at 7,527.64 points. The lowest level of 6,513.4 points was reached on March 16, 2011, after the nuclear catastrophe in Japan. At the end of the reporting period, the DAX stood at 7,386 points on June 30, 2011. This corresponds to an increase of 1.1% since the beginning of the year.
The TecDAX saw its highest level on April 5, 2011 at 948.59 points. The development was marked decisively by the debate regarding the early exit from nuclear energy in Germany and the related further expansion of renewable energies. The TecDAX developed slightly better than the DAX in the reporting period. The lowest value was reached on March 16, 2011 at 854.83 points. On June 30, 2011, the TecDAX was up 1.3% at 893.78 points. This corresponds to an increase of 3.9% since the beginning of the year (January 3, 2011).
SMA shares began the year 2011 at a market price of € 70.15 (January 3, 2011, closing price Xetra trading platform). The ongoing discussions about plans to further cut solar incentive programs led to uncertainty in the capital market. This was reflected in the share price, which reached its lowest value of this year on January 14, 2011 at € 63.20. After the resolution of the German Federal Government to exit nuclear energy and confirmation of SMA's annual outlook, the shares experienced a trend reversal. In the period from March 11, 2011 to March 27, 2011, SMA's shares rose by 28.25%. The half-yearly high of € 89.25 (closing price Xetra trading platform) was reached on March 30, 2011.
in%, rebased to 100 points
SMA share
TecDAX ®
DAX ®
Interim Management Report Interim Consolidated Financial Statements 008 030
Other Information 058
In the first half of 2011, the acquisition of the Polish manufacturer of electromagnetic components, dtw Sp. z o.o., had a positive influence on the price of SMA shares. On the date of publication, the price increased by 2.18% to € 75.40 (June 14, 2011, closing price Xetra trading platform). The share increased by a further 2% after the German Federal Government decided to make no further reductions in the feed-in tariffs (June 30, 2011, closing price Xetra trading platform). This means that the price of SMA shares increased by a total of 10% in the first half year of 2011 to € 76.82 (June 30, 2011, closing price Xetra trading platform).
The volume-weighted average price of SMA stock in the period under review stood at € 75.46. The average volume of SMA shares traded was 133,864 per day (Xetra) and thus 26.52% above the trading volume of the previous year.
Credibility, transparency and up-to-dateness characterize our communication culture and investor-oriented information policy. We maintain a continuous dialog with the capital market with the main objective of building up a trusting, long-term relationship with shareholders. Our Investor Relations Web site www.IR.SMA.de provides comprehensive and up-todate information about our Company – this includes, for instance, financial publications and a financial calendar. An interactive share chart enables comparisons between SMA share prices and selected stock market indices.
In the first quarter of 2011, the Chief Financial Officer and the Investor Relations team participated in investor conferences by CA Cheuvreux and Commerzbank in Frankfurt. There were three further investor conferences in Germany and abroad in the second quarter. The locations were London (UBS), Luxembourg (HSBC) and Frankfurt (Deutsche Bank). In addition, at this year's Intersolar 2011, the largest photovoltaics trade fair, SMA had about 20 one-to-one and group discussions with international investors and analysts for the first time. In addition, there was a road show in Zurich and Geneva (Barclays).
In the first half of 2011, SMA conducted about 170 one-on-one discussions and conference calls with investors. The Investor Relations team will use 2011 to further intensify the successful dialog with institutional and private investors.
| Volume-weighted average price in 2011 | €75,46 |
|---|---|
| Market capitalization (Ø) | €2.64 billion |
| Daily trading volume (Ø) | 113,864 shares |
| Maximum price (March 30, 2010) | €89.25 |
| Minimum price (January 14, 2011) | €63.20 |
| Closing price (June 30, 2011) | €76.82 |
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
006
The Share
At the end of the second quarter, twenty banks and financial institutions reported regularly on SMA shares. In the first half year of 2011, Equinet Bank and Natureo Finance started coverage of SMA shares. The following list shows the range of sell-side reporting.
| Analyst |
|---|
| Claus Roller |
| Rupesh Madlani |
| Lars Dannenberg |
| Julien Desmaretz |
| Andrew Benson |
| Ben Lynch / Lauren Licuanan |
| Alexander Karnick |
| Sven Kürten |
| Sebastian Freudenreich |
| Stephen Benson |
| Christian Rath |
| Michael Tappeiner |
| Erkan Aycicek |
| Robert Schramm |
| Andreas Thielen /Hüseyin Özkaya |
| Daniel Seidenspinner |
| Ingo Queiser |
| Alla Gorelova |
| Jean-Francois Meymandi |
| Peter Wirtz |
In May 2011, founders and major shareholders of SMA Solar Technology AG, Günther Cramer, Peter Drews and Reiner Wettlaufer established three non-profit foundations, placing part of their shares in them. Two million SMA shares were brought into each of the foundations. Furthermore, they are endowed with cash by the founders. An important objective of the establishment of the foundations was that SMA will continue to have a very stable shareholder structure, therefore being largely independent in the future as well.
Interim Management Report 008
Interim Consolidated Financial Statements Other Information 030 058
The Annual General Meeting was held at Kongress Palais Kassel on May 26, 2011 with about 600 shareholders attending. The shareholders granted discharge to the Managing Board and Supervisory Board by a large majority and resolved to pay out a dividend of € 3.00 per qualifying bearer share for the 2010 fiscal year with a vote of almost 100%. This corresponds to a distribution volume of € 104.1 million. The dividend per share increased compared to the previous year by more than 130% (2009: € 1.30 per share) and reflects the excellent results SMA achieved in the 2010 fiscal year. Also in future, SMA will attach great importance to involving the shareholders in the Company's development, therefore striving for a dividend payout ratio of 20% to 40%.
As was previously announced, company founders Günther Cramer and Peter Drews stepped down from the Managing Board after 30 years as the Company's leaders. The Annual General Meeting elected them to the Supervisory Board by a large majority. They succeed Siegfried L. Drueker and Dr.-Ing. Martin Hoppe-Kilpper, who resigned from their posts on the Supervisory Board effective as of the end of the Annual General Meeting.
Following the Annual General Meeting, the Managing Board is comprised of the following members: Jürgen Dolle (Chief Human Resources Officer), Roland Grebe (Chief Technology Officer), Uwe Hertel (Chief Operating Officer), Pierre-Pascal Urbon (Chief Executive Officer and Chief Financial Officer), and Marko Werner (Chief Sales and Marketing Officer).
At the constituent meeting of the new Supervisory Board, which took place following the Annual General Meeting, the company founder Günther Cramer was appointed as the Chairman and Dr. Erik Ehrentraut was appointed Deputy Chairman of the Supervisory Board. In addition, the members of the Presidial, Audit, Nomination and Mediation Committees were elected.
The Supervisory Board is now made up as follows: Günther Cramer (Chairman), Peter Drews, Dr. Erik Ehrentraut (Deputy Chairman), Dr. Winfried Hoffmann, Prof. (em.) Dr. Werner Kleinkauf and Reiner Wettlaufer as shareholder representatives as well as Dr. Günther Häckl, Johannes Häde, Ulrich Meßmer, Alexander Naujoks, Joachim Schlosser and Mirko Zeidler as employee representatives.
All relevant documents regarding the 2011 Annual General Meeting are available on SMA's Web site at www.SMA.de/en/investor-relations/annual-general-meeting.
in%
| 29.15% | Free float |
|---|---|
| 25.20 % | Pool SMA Solar Technology AG |
| 7.03 % | Günther Cramer |
| 7.05 % | Peter Drews |
| 7.05 % | Reiner Wettlaufer |
| 7.24 % | Prof. (em.) Dr. Werner Kleinkauf |
| 5.76 % | Günther Cramer foundation |
| 5.76 % | Peter Drews foundation |
| 5.76 % | Reiner Wettlaufer foundation |
OF WHICH 19 FOREIGN COMPANIES
WITH 23 COMPANIES
IN 18 COUNTRIES
ON 4 CONTINENTS
030 Interim Consolidated Financial Statements
058 Other Information
The recovery of the global economy has been continuing in the first six months of 2011. The newly industrialized economies showed a rapid growth in production, resulting in very high economic dynamics. In the euro area, on the other hand, the situation was divided. Whereas Germany and some of the neighboring countries recorded a massive growth in the first six months of 2011, the economy of the Mediterranean countries remained static due to the debt crisis in those countries. The USA as well only showed a moderate economic growth, still experiencing growing unemployment rates and a high national debt.
The Kiel-based Institute for the World Economy (IfW) expects in its assessment of June 2011 that the expansion of the world economy will continue, however with slower speed. In total, the IfW expects an increase in world production by 4.4%. This assessment is shared by the International Monetary Fund (IMF) in its outlook on the occasion of the G20 meeting in the beginning of July 2011. Compared to its assessment of April 2011, the expectations of the IMF have not changed very much and it still predicts a global economy growth of 4.3%. According to the IMF, the growth of the economy could not only be reduced by the debt issue and missing medium-term financial concepts of the countries involved, but also by restrictive measures in the economic policy in the newly industrialized countries to reduce the acceleration in prices.
In the first six months of 2011, the German economy was characterized by a strong growth and a considerably more dynamic development than other euro countries. This development is based on an increased external demand as well as a strong internal economy. The leading German economic research institutes expect the growth to be continuing.
Economic Conditions
Interim Management Report Interim Consolidated Financial Statements 008 030
Other Information 058
Cautious growth of the photovoltaicS markets after the record year 2010
With a growth of 125% up to 150%, 2010 had been a record-breaking year for the entire photovoltaics industry. According to the projections of SMA's Managing Board, the global market for PV inverters reached a market volume of 17GW to 20GW in 2010. Germany had once again the world's largest photovoltaics market with approx. 7.4 GW of newly installed output.
The strong growth of the photovoltaics markets has not been continuing in the first six months of 2011. Due to the weather conditions and the insecurity concerning the future solar subsidies in important photovoltaics countries like Germany and Italy, the demand of photovoltaic systems was especially low in the first quarter of the year. In the second quarter, the subsidy requirements in the important photovoltaics markets were adjusted, thereby establishing the basis for a continuous market development. Compared to the beginning of the year, the global demand grew considerably in the second quarter. According to an estimate of SMA's Managing Board, however, the globally newly installed capacity was below the previous year's level. The strongest photovoltaics markets in the first six months of 2011 include Germany, North America, Italy, France and Australia.
The natural and reactor disasters in Japan in March 2011 has led to an intensive political discussion in many countries concerning an accelerated expansion of renewable energies. With regard to issues of energy politics, Germany has taken a leading role and drew most extensive consequences. Both the Federal Cabinet and Federal Council resolved a progressive nuclear phaseout until 2022 on June 30, 2011 and July 8, 2011, respectively. Eight nuclear power plants that had been shut down after Fukushima, will not be connected to the grid again. The Federal Network Agency may decide until 2011 whether one nuclear power plant will remain on standby until 2013 in case of energy shortages. Due to the premature nuclear phaseout until 2022, regulations were passed concerning grid expansion and green power subsidies.
In February 2011, the German Solar Industry Association (BSW) and the Federal Government agreed on an earlier, extension-dependent reduction of solar subsidies as of July 1, 2011. The recommendation had been approved by the Federal Cabinet and the Federal Council in the first quarter of 2011. In the reference months March to May, the installed capacity was only 0.7GW due to the considerable reduction of the feed-in reduction at the beginning of the year. This means that the expansion of PV plants is within the narrow corridor defined by the Federal Government, so that a premature adjustment of the feed-in tariffs as of July 1, 2011 was not necessary.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Economic Conditions
In Italy, the second-largest market for PV plants after Germany, a new regulation took effect in May, providing a progressive reduction of solar subsidies until 2013. According to this regulation, the financing of PV plants is linked to the total existing capacity of the PV power stations and will be limited to € 300 million in the year 2011. In the following year, the limitation will be € 280 million. The total feed-in compensation will be limited to € 1.3 billion from 2013 until 2016. The financing of the photovoltaics industry is socially widely supported in Italy as well. This is reflected in a referendum held in Italy in June, in which the Italian people decided against a comeback of nuclear power.
SMA is the world market leader for PV inverters. Due to the new establishments in Japan and Thailand in the second quarter of 2011, the Company is now represented in 18 countries with its own organizations. The highly valued range of products includes PV inverters for both rooftop systems as well as large-scale solar projects. Therefore, SMA is able to provide technically optimal inverter solutions for all power classes and all types of plants worldwide. The range of products is also supplemented by a global service network, which is an important distinguishing feature in business competition. The highly flexible production facilities in Germany and North America enable SMA to adjust production promptly to market conditions, thereby profiting from a positive, global demand development on a short-term basis.
In the first quarter of 2011, the demand of SMA PV inverters was low due to high stocks at our customers, high solar module prices as well as bad weather conditions. However, the demand has been continuously growing since the end of March. SMA was successfully able to distinguish itself from the competition and doubled the sold inverter capacity in the second quarter compared to the first quarter. Analogously, sales showed a likewise positive trend and almost reached the level of the strong month of June 2010 in June 2011. The sales in the first six months of the year were mainly driven by the foreign markets, which contributed to the sales with 57.9% in the period under review.
According to the estimation of SMA's Managing Board, the fundamental data for the solar industry improved compared to the beginning of the year. From the SMA Managing Board's point of view, the favorable interest rate level as well as the reduced specific costs of constructing PV plants compared to the first six months of the year will lead to a notable increase in demand after the summer months. SMA is represented in all important photovoltaics markets with its own organizations and can provide solutions for all market segments. The Managing Board of SMA, therefore, reconfirms the revenue guidance for 2011, first published on September 15, 2010, of € 1.5 billion to € 1.9 billion at an operating profit (EBIT) of € 315 million to € 475 million (EBIT margin of 21% to 25%).
008
013
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
More than € 100 million operative result in the first six months of the year In the first six months of 2011, SMA sold PV inverters with a total capacity of 3.1GW (Q1–Q2 2010: 3.1GW). This means that the sold PV inverter capacity is twice as high in the second quarter of 2011 as in the first quarter of 2011. Sales of SMA amounted to € 715.0 million in the first six months of the year. The decrease in sales of 12.4% compared to the reference period of the previous year (Q1–Q2 2010: € 815.8 million) was caused by a shift in the product mix towards inverters with a higher capacity as well as a reduction of the specific sales prices.
The Medium Power Solutions segment with its sales share of 73.1% (€ 523.3 million) was the strongest segment of the SMA Group in terms of sales in the first six months of 2011. The sales share in the reference period of the previous year was 85.7% (Q1–Q2 2010: € 699.1 million). In the High Power Solutions segment, sales increased significantly in the first six months of 2011 by 66.6% to € 170.6 million compared to the same period of the previous year (Q1 –Q2 2010: € 102.4 million). This means that the High Power Solutions segment contributed to the sales with 23.9% (Q1–Q2 2010: 14.3%). The strong increase in sales emphasizes the excellent position of SMA in the market segment of large-scale solar projects.
The period under review was marked by a regional shift in demand. SMA generated 43.7% of its gross sales before sales deductions in Germany. In the foreign markets, SMA increased its gross sales by 39.5% to € 413.8 million (Q1–Q2 2010: € 296.7 million) due to its excellent sales and service structures as well as the full range of products. The most important foreign markets for SMA were North America, Italy, Australia and France. In total, the gross foreign market share amounted to 56.3%, which is significantly higher than in the previous year (Q1–Q2 2010: 36.4%).
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
Earnings before interest and tax (EBIT) recovered due to the improved sales situation compared to the beginning of the year, but lag clearly behind the record result of the previous year. In the first six months of 2011, SMA's EBIT amounted to € 103.7 million (Q1–Q2 2010: € 219.9 million). This corresponds to an EBIT margin of 14.5%, which is in the double-digit range again. The development emphasizes SMA's enormous flexibility to serve the market promptly in case of an increased demand, taking into account profitability.
Consolidated net profit was € 73.5 million (Q1–Q2 2010: € 158.2 million). Earnings per share fell to € 2.12 (Q1–Q2 2010: € 4.56).
amounted to € 693.9 million (Q1–Q2 2010: € 801.5 million). The Medium Power Solutions segment was the strongest segment with € 523.3 million, amounting to a share of 73.1% (Q1 –Q2 2010: € 699.1 million). With € 170.6 million, a share of 23.9% in total sales (Q1 –Q2 2010: € 102.4 million) was attributable to the High Power Solutions segment.
The Medium Power Solutions segment covers the products Sunny Boy, Sunny Mini Central, Sunny Tripower, Sunny Island, Sunny Backup and products for monitoring PV plants. The grid-connected inverters and Sunny Backup inverters are deployed mainly in residential and commercial buildings, while Sunny Island is used for stand-alone systems, so-called off-grid applications.
The product families of one-phase inverters have power classes ranging from 700 watts to 11 kilowatts (kW). The new product generation of three-phase inverters under the trade name Sunny Tripower covers the power classes from 8 kW to 17 kW. In the first quarter of 2011, the Sunny Boy HF (High Frequency) product family was added to the range of products. This product family in particular serves the strongly growing market segment of rooftop systems of the US market. For PV plants with more than 2 kW, Sunny Boy HF is definitely the more economic solution compared to the so-called module inverters.
The Share 004
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
The products of the Medium Power Solutions segment are produced, exclusively based on purchase orders, in Kassel, Germany, and North America. The delivery periods in the first six months of 2011 were usually up to four weeks.
The Medium Power Solutions segment benefited from the increasing demand in Germany in particular. Domestic business increased in the second quarter by three and a half times. The sales share of the German business amounted to a total of 51.4% of gross sales in the first six months of the year 2011. The most successful foreign markets during the period under review were Australia, Italy, Belgium and North America.
The product mix has changed on a year-on-year basis. In the first six months of 2011, the inverter types Sunny Tripower 12000TL to 17000TL and Sunny Boy 3000TL to 5000TL were important sales drivers. Already shortly after its introduction, the new Sonny Boy 3000HF was among the top products. As expected, the Sunny Mini Central product family, which was one of the best-selling inverter types of SMA in 2010, was of minor significance in the first six months of 2011.
The profitability of the Medium Power Solutions segment improved significantly in the second quarter of 2011 compared to the first three months. Earnings before interest and taxes (EBIT) amounted to € 59.9 million in the first six months of 2011. The EBIT margin was 10.8% (Q1 – Q2 2010: 25.4%) in relation to internal and external sales. Compared to the same period of the previous year, the significant decrease (Q1 – Q2 2010: € 185.4 million) was in particular caused by missing pull-forward effects and new structures in the product mix.
The High Power Solutions segment contains the central inverters of the type Sunny Central as well as the accessories, such as medium voltage switchgear, transformers and concrete stations. With Sunny Central, SMA mainly covers the market for large PV plants with a capacity of more than 100 kW up to several megawatts. The complex products are produced, exclusively based on purchase orders, in Kassel, Germany, and North America and are usually delivered within 8 to 10 weeks.
The strong growth in sales in the first six months of 2011 is based on the exceptionally successful development of the important foreign markets. In North America alone, 25.9% of the gross sales were realized. Further important markets were Italy, France and India. The most successful products in the High Power Solutions segment were Sunny Central 800CP, which was introduced last year, followed by Sunny Central 630HE.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
Earnings before interest and taxes (EBIT) improved by 25.5% to € 31.0 million in the first six months of the year (Q1–Q2 2010: € 24.7 million). The EBIT margin in the period under review was 17.5% (Q1–Q2 2010: 21.8%). Compared to the same period of the previous year, the lower profitability is due to the changed product mix and the adjustment of the specific sales prices.
The Railway Technology division is still characterized by a successful development. External sales increased by 27.3% to € 15.4 million in the first six months of 2011 (Q1–Q2 2010: € 12.1 million). This division is characterized by larger individual projects and we were able to increase the foreign revenue in Europe in particular by increased sales activities. The internal sales figure of € 4.1 million (Q1–Q2 2010: € 7.7 million) was mainly attributable to supplies of cable and mechanical components to the High Power Solutions segment. Earnings before interest and taxes (EBIT) rose to € 1.5 million (Q1–Q2 2010: € 1.1 million). The EBIT margin improved and was 7.7% (Q1–Q2 2010: 5.6%) in relation to internal and external sales. This division had achieved good capacity utilization at the end of the period under review.
The Electronics Manufacturing segment is the main supplier for the other segments, above all the Medium Power Solutions segment. The production area was well utilized throughout the period. The share of electronic assemblies manufactured by third parties was adapted to the demand. Due to the recovery of the business activities in the Medium Power Solutions segment, the total turnover of external and internal sales rose to € 184.6 million (Q1–Q2 2010: € 182.9 million). In the first quarter of 2011, the total turnover had been decreasing. Earnings before interest and taxes (EBIT) amounted to € 9.4 million, which is 26.6% below the same period in the previous year (Q1–Q2 2010: € 12.8 million). In relation to internal and external sales revenues, this corresponds to an EBIT margin of 5.1% (Q1–Q2 2010: 7.0%).
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
008
Changed product mix leads to shifts
The share of production costs in sales amounted to € 506.8 million in the first six months of 2011 (Q1–Q2 2010: € 508.5 million). The lower gross margin of 29.1% is basically caused by a shift in the product mix (Q1–Q2 2010: 37.7%). The decrease could be partially compensated by the discontinuation of liabilities. In the first six months of 2011, the cost of sales was attributable as follows: 75.8% to material expenses, 16.3% to personnel expenses and 7.9% to other expenses as well as depreciation and amortization.
Selling expenses grew as expected to € 28.7 million (Q1–Q2 2010: € 26.0 million). The ratio of selling expenses to sales increased to 4.0% in the first six months of 2011 due to the comparably low turnover (Q1–Q2 2010: 3.2%).
Research and development expenses, excluding capitalized development projects, in the first six months of the year totaled € 39.8 million (Q1– Q2 2010: € 34.4 million). This increase by 15.7% is due to the fact that we further strengthened the research and development (R&D) segment and in particular took on new personnel. At the end of the first six months of 2011, the SMA Group had 920 employees in R&D (June 30, 2010: 722 employees). The total research and development expenses, including capitalized development projects, amounted to € 44.6 million (Q1–Q2 2010: € 41.8 million). Among the new development projects are the Sunny Home Manager, the expansion of the Sunny Tripower product family as well as the development of innovative PV inverters and monitoring systems for the Japanese market. Scheduled depreciation of capitalized development projects amounted to € 2.1 million in the first six months of the year.
Administrative expenses amounted to € 32.2 million in the first six months of 2011 (Q1–Q2 2010: € 20.2 million). In view of the expected growth and increasing internationalization, SMA created new structures in the finance, legal and personnel areas in a targeted manner. Therefore, personnel expenses increased by € 2.7 million. The reduction of depreciations is caused by the changes in the assessment system. The change in other expenses, too, mainly results from the adjustment of the assessment system as well as the realization of strategically important projects. The administrative costs ratio was increased in the first six months of 2011 by 4.5% (Q1–Q2 2010: 2.5%).
018
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
The performance of the Company improved in the second quarter of 2011 compared to the first quarter of 2011, but still lagged behind the figures of the same period in the previous year 2010 in the first six months of 2011. With € 65.3 million, the gross cash flow was significantly lower than in the same period of the previous year (Q1–Q2 2010: € 226.4 million).
The net cash flow from the Company's performance was significantly influenced by the intended buildup of the net working capital and the change in the remaining net capital and amounted to € –39.3 million in the first six months of the year (Q1–Q2 2010: € 133.8 million).
The net working capital rose by € 60.5 million in the period under review. In view of the expected increase in demand in the second half of the year, SMA purposefully stocked components to be able to serve its customers with the usual short delivery times also in the future. In addition to that, the value of the inventories rose due to the business-related increase in finished goods. The higher share of the project business and the international customers led to an increase of the accounts receivable trade. The rise of the working capital was partly financed by the increase in the accounts payable trade.
The change of the remaining net working capital led to an outflow of funds of € 44.2 million in the period under review. The change was particularly caused by the payment of variable salary components to employees and bonus agreements with clients.
The net cash flow from investing activities amounted to € –75.9 million in the period under review (Q1–Q2 2010: € –147.3 million). Amongst the most important investments in fixed assets were the construction of the world's largest service center for PV inverters in Niestetal, Germany, and the expansion of the office buildings at the headquarters of the Company in Niestetal/Kassel, Germany. Investments in intangible assets concern most of all software licenses.
As a major position, the net cash flow from financing activities includes the dividend payment of SMA Solar Technology AG, amounting to € 104.1 million in the period under review.
The cash and cash equivalents amounting to € 133.7 million (December 31, 2010: € 354.1 million) include cash in hand, bank balances and short-term deposits with an original term to maturity of less than three months. Together with the time deposits with a term to maturity of more than three months and fixed-interest-bearing securities as well as financial liabilities, this results in a net liquidity of € 307.8 million (December 31, 2010: € 523.4 million).
The Share 004
Interim Management Report Interim Consolidated Financial Statements 008 030
Other Information 058
The balance sheet total amounted to € 1,221.0 million as of June 30, 2011 and almost reached the same level as the year-end result of the previous year (December 31, 2010: € 1,251.5 million).
As of June 30, 2011, net working capital (NWC) had risen to € 340.6 million (December 31, 2010: € 284.6 million) and was 18.7% of sales over the last twelve months. This means that the ratio ranged in the corridor of 18% to 20% defined by the management. The increase of the net working capital is due to the planned buildup of the inventories of raw materials, consumables and supplies as well as the business-related increase in finished goods. The inventories of raw materials, consumables and supplies were increased again in the first six months of 2011 by € 31.5 million compared to December 31, 2010. The stock of finished goods consists mainly of Sunny Central inverters which were not yet requested by customers due to the postponement of projects. This position has already decreased by about 20% compared to the first quarter of 2011. The SMA Managing Board expects that the stock of Sunny Central inverters will be removed until the end of the year.
The accounts receivable trade amounted to € 191.8 million and increased significantly by 63.5% (December 31, 2010: € 117.3 million) due to the strongly growing project business and the increasing internationalization. Days sales outstanding increased to 31.0 days (December 31, 2010: 21.9 days). The rise in inventories of raw materials, consumables and supplies is reflected in the accounts payable trade. This figure increased by € 65.9 million to € 136.5 million on a year-on-year basis (December 31, 2010: € 70.6 million). The share of supplier credits in total assets rose to 11.2% (December 31, 2010: 5.6%).
Mainly caused by the dividend payment, shareholders' equity decreased to € 696.1 million as of June 30, 2011 (December 31, 2010: € 728.4 million). The equity ratio of 57.0% provides SMA once again with a comfortable shareholders' equity and underlines the solidity of its balance sheet structure.
030 Interim Consolidated Financial Statements
058 Other Information Investments
The SMA Group has planned investments of € 150 million to € 200 million for the 2011 fiscal year. Investments will be focused on the building of the world's largest service center for PV inverters and office buildings as well as the purchase of machines and equipment.
In the first six months of the 2011 fiscal year, the investments in fixed assets and intangible assets amounted to € 71.7 million (Q1 –Q2 2010: € 75.0 million). The investment ratio was 10.0%. A share of 91.2% of investments in fixed assets amounting to € 60.9 million (Q1 –Q2 2010: € 63.2 million) was attributable to advance payments / construction in progress. Premises and buildings amounted to 4.4% of investments in fixed assets. Of the investments in intangible assets amounting to € 10.7 million (Q1 –Q2 2010: € 11.8 million), 44.4% was attributable to capitalized development expenses and 55.6% to other intangible assets.
Research and Development
008
021
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
In the Medium Power Solutions segment, SMA's Sunny Home Manager is a solution for optimizing self-consumption. It is simpler, more precise and more comprehensive than any comparable product made by the competitors. The device significantly increases the selfconsumption of solar energy and also provides a comprehensive and intelligent system for managing household energy. In combination with the Sunny Backup System, it even allows the temporary storage of solar power. Its use of location-based weather forecasts to predict solar power generation is unparalleled. On the basis of these forecasts as well as the consumption habits of the users, the Sunny Home Manager draws up an intelligent schedule for the controllable consumers, thereby maximizing the share of self-consumption. As soon as proposal- and demand-based electricity tariffs are provided, the Sunny Home Manager is able to incorporate them in the control of the household consumers. The operator's profitability can be further increased and an additional reduction of grid load can be realized.
An increase in self-consumption of solar power could lead to a more cost-efficient PV support and an improvement in grid integration because decentralized solar power – which is directly used where it is produced – reduces grid construction costs and discharges the net infrastructure.
Moreover, the development in the Medium Power Solutions segment focuses on the adjustment of the entire product portfolio in compliance with the new practical guide VDE-AR-N 4105 "Erzeugungsanlagen am Niederspannungsnetz" (generators connected to the low-voltage grid), which takes effect as of August 1, 2011 and will be binding as of January 1, 2012. In accordance with the practical guide, small and medium-sized PV plants are to realize system services for the grid to a larger extent for the first time. This is an important contribution to the integration of PV plants in the existing grid infrastructure.
Furthermore, the Medium Power Solutions segment focuses on decentralized storage solutions. With the Sunny Backup System, SMA offers a product for the decentralized storage of solar power which, in addition to a grid-quality uninterruptible power supply, also provides storage of solar power to increase the percentage of self-consumption. To ensure that the products are as future-proof and state-of-the-art as absolutely possible, SMA is currently working with leading battery manufacturers. Accordingly, the Sunny Backup System is compatible with different battery types and also designed for operation with lithium-ion batteries, which are characterized by a high cycle stability and low storage losses.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
022
SMA presented the new "Utility Grade Standard" in the High Power Solutions segment at the Intersolar. The standard is an integrated concept for the realization of large-scale PV power stations in a global environment. The concept combines SMA system technologies and services to provide the customers in the project business, mainly system integrators, with the best possible support. With this step, SMA ensures that its competencies in the project business are also internationally recognized. The concept includes both the necessary system components and pre-configured stations as well as turnkey and fully integrated power blocks with the necessary AC and DC monitoring technologies.
In the first six months of 2011, the development department of the High Power Solutions segment is being newly organized. The department is now divided into a customer-oriented and a standard-oriented segment. SMA sees great potential in this new development to be able to integrate customer- and market-specific requirements into innovative products even faster.
On June 14, 2011, a contract concerning the acquisition of Krakow-based dtw Sp. z o.o. ("dtw") in Poland was signed. dtw specializes in the production of technologically innovative core components, such as chokes and transformers, for the production of inverters. Founded in 1991 by Stefan and Izabella Domagała, the company currently has around 530 employees (including temporary staff). dtw has experienced strong growth over the past few years and achieved € 74 million in sales in 2010. The company is known for its highquality products and excellent research and development work.
For SMA, this acquisition is a strategically important step towards the development of powerful products and the further expansion of the Company's technology leadership. SMA will synchronize the development processes of mechanical systems, electromagnetic components and power electronics, thereby shortening the development times significantly. Furthermore, several development projects will look into new magnetic materials with new types of alloys. SMA's Managing Board is positive that the acquisition will provide a great way to further distinguish the Company from competitors in the future.
The purchase price for 100% of the shares in dtw amounts to € 33.5 million. According to estimations of SMA's Managing Board, the transaction will already lead to a positive result of € 20 million to € 25 million in the current fiscal year.
Employees
The Share 004
030
023
Interim Management Report 008
Interim Consolidated Financial Statements
Other Information 058
As of the reporting date June 30, 2011, the SMA Group has 4,815 employees (June 30, 2010: 3,737 employees, excluding temporary employees, respectively), which is 28.8% more than last year.
In the period under review, we strengthened our existing foreign companies with new staff. The number of employees in the foreign companies rose by 41.6% to 500 employees in the first six months of 2011 (June 30, 2010: 353 employees).
| 06/30/2011 | 06/30/2010 | 06/30/2009 | 06/30/2008 | |
|---|---|---|---|---|
| Employees (excl. temporary employees) |
4,815 | 3,737 | 2,490 | 1,841 |
| of which domestic | 4,315 | 3,384 | 2,316 | 1,734 |
| of which abroad | 500 | 353 | 174 | 107 |
| Temporary employees | 1,453 | 1,873 | 891 | 733 |
| Total employees (incl. temporary employees) |
6,268 | 5,610 | 3,381 | 2,574 |
In order to be able to deal effectively and efficiently with the increasing number of possible candidates in the last few years, we introduced a web-based e-recruiting system. Processes for tenders, applications and processing within the Company as well as towards the candidates could be harmonized and accelerated, thereby enabling safe and transparent processes. In reaction to the increasing demand of specialists and executives, we design and implement concepts and projects for the recruitment of apprentices, students and professionals. An important success factor is our quality and attraction as employer, for which we were awarded the Great Place to Work® Institute's award as Germany's best employer in 2011.
At the end of the period under review, SMA worked with 1,453 temporary employees (June 30, 2010: 1,873 temporary employees). The volatile photovoltaics market presents a great challenge for the flexibility of our production and production-related business areas. We use the temporary employees mainly to be able to directly react to the sometimes volatile production utilization. Due to a short-term decline in orders in the first quarter of 2011, our temporary-staff agency offered short-time work to temporary employees in various production areas for a preliminary period. Their deployment at SMA showed a flexible range between 0% and 100% of the working hours, depending on the order situation.
024
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Employees
With the increase of the production volume in the second quarter of 2011, the share of short-time work of the temporary employees decreased gradually, so that their workload is steadily rising towards 100% by the end of the second quarter.
The company founders Günther Cramer and Peter Drews stepped down from the Managing Board of SMA Solar Technology AG after 30 years as the Company's leaders. The change was effective with the close of the Annual General Meeting on May 26, 2011. New spokesman of the Managing Board, previously Günther Cramer's function, is Pierre-Pascal Urbon.
The Annual General Meeting elected Günther Cramer and Peter Drews as shareholder representatives to the Supervisory Board by a large majority. They succeeded Siegfried L. Drueker and Dr. Martin Hoppe-Kilpper, who resigned their posts on the Supervisory Board also effective at the end of the Annual General Meeting. At the constituent meeting of the Supervisory Board following the Annual General Meeting, the members of the Supervisory Board appointed Günther Cramer as their Chairman and Dr. Erik Ehrentraut as the Deputy Chairman.
The Share 004
Interim Management Report Interim Consolidated Financial Statements 008 030
Other Information 058
025
On July 13, 2011, the Federal Cartel Office unconditionally approved of the acquisition of dtw Sp. z o.o. by SMA. The SMA Supervisory Board approved of the transaction by circulation. All suspensive conditions of the purchase contract signed on June 14, 2011 are therefore fulfilled. The transaction has been completed on August 1, 2011.
Other significant events after the closure of the period under review, which could influence the results of operations, financial position and net assets, did not take place.
The Group's risks and opportunities management as well as possible individual risks are described in detail in the Annual Report 2010. Essentially, the comments made there remain applicable. At the moment, no risks that could seriously jeopardize the Company's continuing existence or could significantly impair its performance are discernible.
The general conditions of the global economy in the first six months of 2011 were marked by the continuing economic recovery, but also by the persistent debt crisis in Europe and the US, the catastrophe in the Fukushima nuclear power plant in Japan and the unrest in North Africa.
In its growth forecast of July 2011, the International Monetary Fund (IMF) stood by its forecast of April 2011 and expects economic growth of 4.3% for 2011. The growth in the newer industrialized countries is projected to be significantly stronger at 6.5% than in established economies at only 2.5%. In the opinion of the IMF, the earthquake in Japan will have only minor macroeconomic effects. However, it may lead to uncertainty. The price of oil might also have an impact so that growth of the global real gross domestic product (GDP) is estimated to be 4.5% in each of the next two years. Thus, this estimate is slightly below GDP growth of 5.0 % in the last year.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Forecast Report
The German economy was characterized by a considerably more dynamic development than other European countries in the first six months of 2011. In their spring report, the leading economic research institutes forecast a growth of 2.8% for 2011. In June, they corrected their forecasts markedly to currently 3.3% and even more than 4.0%. The Munich-based Ifo Institute, however, noted that the European debt crisis for instance could have a slowing effect.
The development of the respective markets depends on the political consent regarding the expansion of photovoltaics, the financing conditions, the available production and installation capacities as well as the price development for the installation of PV plants.
According to the estimation of the SMA Managing Board, the general conditions in the photovoltaics industry improved compared to the beginning of the year. Many countries in the world introduced subsidy programs or tax benefits for an accelerated expansion of the photovoltaics industry. Especially in the large photovoltaics markets, a broad social and political acceptance for the expansion of decentralized energy supply systems is noticeable. Additionally, the historically favorable interest rate level as well as the reduced specific costs for the erection of PV plants will have a positive influence on the growth perspective. Currently, there are no signs of shortages in the production of components for PV plants or of solar power professionals.
Against this background, SMA's Managing Board expects an average growth in globally newly installed capacities to 30GW, a growth of almost 15% p. a. until 2013. The future development will be accompanied by a regional shift in demand and a change in plant size. SMA's Managing Board, for instance, expects that the submarkets in North America and Asia and the market segments of commercial and industrial PV plants will gain increased importance.
In 2011, the Managing Board of SMA predicts stagnating global markets and does not even rule out the possibility of a downturn in growth. The spectrum of the forecast ranging from 17GW to 20GW is due to the fact that the subsidy conditions were adjusted in the established photovoltaics markets in 2011 and that the development of these markets cannot be precisely predicted for the time being.
Forecast Report
The Share 004
027
Interim Management Report Interim Consolidated Financial Statements 008 030
Other Information 058
SMA is world market leader and has an excellent position The following statements on the future development of SMA are based on the estimates
drawn up by the Managing Board of SMA. They result from the expectations presented above regarding the development of global photovoltaics markets.
SMA is the world market leader for PV inverters. Due to the new establishments in Japan and Thailand, the Company is now represented in 18 countries with its own organizations. The highly valued range of products includes PV inverters for both rooftop systems as well as large-scale solar projects. Therefore, SMA is able to provide technically optimal inverter solutions for all power classes and all types of plants worldwide. The range of products is also supplemented by a global service network, which is currently an important distinguishing feature in business competition. Due to the highly flexible production facilities in Germany and North America, SMA is able to react promptly to fluctuations in demand, thereby profiting from the global demand development.
For 2011, the Managing Board of SMA confirms its forecast of expected sales between € 1.5 billion and € 1.9 billion and an operative result between € 315 million and € 475 million (EBIT margin between 21% and 25%). The sales and earnings forecast is based on the assumption that the demand in the important photovoltaics markets will show a more dynamic growth in the second half of the year than in the first six months of the year.
According to estimates by the Managing Board, the Medium Power Solutions segment with up to 80% will be the major driving force for sales in 2011. The trend to larger solar systems with an output of between 10 kW and 500 kW will also be reflected in our product mix. The first six months of 2011 confirmed the Managing Board's expectations that the three-phase PV inverter Sunny Tripower will gain importance, replacing the one-phase Sunny Mini Central inverter.
The High Power Solutions segment will contribute with approx. 20% to the total sales in 2011. Large-scale PV projects in North America, Italy and France, in particular, will mainly contribute to the result. The Sunny Central Compact Power will in all likelihood be one of the product families that generate the greatest sales in this segment, since it is characterized by especially low system costs.
With a share of less than 5% in sales, the Managing Board predicts a sales increase for the small but successful Railway Technology division of approx. 10% with a strong export rate of about 80% in the year 2011.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Forecast Report
According to estimates by the Managing Board of SMA, the regional shift in demand will result in significantly stiffer competition for the Company. This development will also be reflected in the average selling price per watt. Therefore, the management of SMA predicts that the gross earnings margin will fall in 2011. In order to counter this trend in forthcoming years, SMA will carry out a systematic analysis of production costs aimed at identifying potential for savings and thus lowering production costs consistently.
The acquisition of the long-standing supplier dtw is a strategically important step towards the development of powerful products and the further expansion of SMA's technology leadership. SMA expects that the development processes of mechanical systems, electromagnetic components and power electronics will be even better synchronized, thereby shortening the development times significantly. A number of development projects will focus on magnetic materials that are based on new types of alloys and high-frequency transformers optimized for high performance and low weight. SMA's Managing Board is positive that these developments will provide a great way to further distinguish the Company from competitors in the future.
SMA has been trendsetting in the photovoltaics sector for many years and systematically developed approaches for grid integration and optimization of self-consumption. Therefore, our product, the PV inverter, will continue to be a high-tech product in the future as well. In order to expand our technological edge in 2011, we will invest up to € 100 million in research and development. This corresponds to 5% to 7% of the sales forecast. In addition, SMA will expand its network of strategic research and development cooperations in a targeted fashion.
However, the essential growth impulses will originate from the foreign markets in the future. We will also continue with consistency our proven strategy to be one of the first PV inverter manufacturers represented with own subsidiaries in young markets in the next years. We established sales companies in Japan and Thailand in the first six months of 2011. We expect approval of our inverters in Japan until the end of 2011, which means that we could start our business in 2012. In the meantime, we plan the expansion of further sales and service companies in strong Asian markets.
With its factories in Germany and North America, SMA disposes of an annual production capacity of about 11.5GW. A further expansion of capacities is not planned for 2011. Aiming to fully utilize our production capacities in the short term, we will stockpile large quantities of raw materials, consumables and supplies in 2011. In particular, this stockpiling strategy will be reflected in a net working capital ratio of between 18% and 20% in 2011.
Forecast Report
The Share 004
Interim Management Report Interim Consolidated Financial Statements 008 030
Other Information 058
The functional organization of SMA is reaching its limits. Therefore, great potential lies in the current change towards a divisional organization. In the future, we will place different customers and varying market requirements more effectively than before at the center of our activities. With distinct responsibilities and largely decentralized decisions, SMA will gain significantly more effectiveness.
The implementation of the new concept has already started in the first six months of 2011. The Medium Power Solutions, Power Plant Solutions, Off-Grid Solutions and Service divisions already presented themselves to the customers at the leading Intersolar trade fair in Munich. During the course of the year, the changes in the organization should be completed.
Our proximity to customers and our range of excellent services are of incalculable value. We will make use of our competitive edge and strive for the expansion of our market position. Our claim as the world market leader is clear and simple: to provide the technically best product for all installations, all modules and all power classes.
Niestetal, August 5, 2011
SMA Solar Technology AG The Managing Board
€ 815.8 million
€ 715.0 million
032
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
| STATEMENT OF COMPREHENSIVE INCOME SMA GROUP | 034 | |
|---|---|---|
| CONSOLIDATED BALANCE SHEET SMA GROUP | 035 | |
| CONSOLIDATED STATEMENTS OF CASH FLOWS SMA GROUP | 036 | |
| STATEMENT OF CHANGES IN EQUITY SMA GROUP | 037 | |
| Notes | to the condensed interim |
|
| financial | statements as at June 30, 2011 |
038 |
| 038 038 039 040 |
1. Basic information 2. Consolidated group and principles of consolidation 3. Accounting and valuation policies 4. Segment reporting |
|
| 043 C |
Selected Notes to the Statement of omprehensive Income SMA Group |
|
| 043 | 5. Cost of sales | |
| 043 | 6. Selling expenses | |
| 044 | 7. Research and development expenses | |
| 044 | 8. General administrative expenses | |
| 045 | 9. Other operating income / other operating expenses | |
| 045 | 10. Benefits to employees and temporary employees | |
| 046 | 11. Financial result | |
047 12. Earnings per share
Contents Interim Consolidated Financial Statements
Interim Consolidated Financial Statements
Interim Management Report
Other Information
034
030 Interim Consolidated Financial Statements
058 Other Information
| Note | April– June (Q2) 2011 € '000 |
April–June (Q2) 2010 € '000 |
Jan.– June (Q1– Q2) 2011 € '000 |
Jan.–June (Q1–Q2) 2010 € '000 |
|
|---|---|---|---|---|---|
| Sales | 4 | 459,045 | 476,430 | 714,978 | 815,755 |
| Cost of sales | 5 | 312,197 | 299,537 | 506,845 | 508,459 |
| Gross profit | 146,848 | 176,893 | 208,133 | 307,296 | |
| Selling expenses | 6 | 16,086 | 14,041 | 28,693 | 26,019 |
| Research and development expenses | 7 | 20,608 | 17,212 | 39,830 | 34,406 |
| General administrative expenses | 8 | 19,442 | 11,071 | 32,155 | 20,234 |
| Other operating income | 9 | 3,921 | 7,492 | 8,132 | 11,868 |
| Other operating expenses | 9 | 4,622 | 14,559 | 11,920 | 18,558 |
| Operating profit (EBIT ) |
90,011 | 127,502 | 103,667 | 219,947 | |
| Financial income | 1,628 | 627 | 3,141 | 1,216 | |
| Financial expenses | 649 | 778 | 1,090 | 1,038 | |
| Financial result | 11 | 979 | –151 | 2,051 | 178 |
| Profit before income taxes | 90,990 | 127,351 | 105,718 | 220,125 | |
| Income tax expense | 27,773 | 35,779 | 32,196 | 61,936 | |
| Consolidated net profit | 63,217 | 91,572 | 73,522 | 158,189 | |
| of which attributable to non-controlling interest |
0 | –1 | 0 | –27 | |
| of which attributable to shareholders of SMA AG |
63,217 | 91,573 | 73,522 | 158,216 | |
| Earnings per share, basic (in €) | 12 | 1.82 | 2.64 | 2.12 | 4.56 |
| Earnings per share, diluted (in €) | 12 | 1.82 | 2.64 | 2.12 | 4.56 |
| Number of ordinary shares (in thousands) | 34,700 | 34,700 | 34,700 | 34,700 | |
| Consolidated net profit | 63,217 | 91,572 | 73,522 | 158,189 | |
| Unrealized gains (losses) from foreign currency translation |
–194 | 1,380 | –973 | 1,990 | |
| Net loss on available-for-sale financial assets |
–130 | 0 | –721 | 0 | |
| Overall result | 62,893 | 92,952 | 71,828 | 160,179 | |
| of which attributable to non-controlling interest |
0 | –1 | 0 | –27 | |
| of which attributable to shareholders of SMA AG |
62,893 | 92,953 | 71,828 | 160,206 | |
The Share Interim Management Report 004 008
Interim Consolidated Financial Statements 030
Other Information 058
| Not-e | 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|---|
| Non-current assets | |||
| Intangible assets | 13 | 35,463 | 29,242 |
| Fixed assets | 14 | 310,076 | 268,507 |
| Other financial investments | 75 | 73 | |
| Other financial assets | 16 | 1,888 | 3,890 |
| Deferred taxes | 22,984 | 23,687 | |
| 370,486 | 325,399 | ||
| Current assets | |||
| Inventories | 15 | 285,225 | 237,838 |
| Trade receivables | 191,822 | 117,268 | |
| Other financial assets | 16 | 200,877 | 196,798 |
| Claims for income tax refunds | 34,249 | 4,161 | |
| Other receivables | 4,653 | 15,901 | |
| Cash and cash equivalents | 26 | 133,651 | 354,083 |
| 850,477 | 926,049 | ||
| Total assets | 1,220,963 | 1,251,448 | |
| Shareholders' equity | |||
| Share capital | 34,700 | 34,700 | |
| Capital reserves | 119,200 | 119,200 | |
| Retained earnings | 542,236 | 574,508 | |
| Non-controlling interest | 2 | 2 | |
| 17 | 696,138 | 728,410 | |
| Non-current liabilities | |||
| Other provisions | 18 | 89,290 | 80,651 |
| Financial liabilities | 19 | 16,930 | 19,452 |
| Other financial liabilities | 20 | 894 | 0 |
| Other liabilities | 21 | 65,270 | 53,840 |
| Deferred taxes | 14,776 | 13,292 | |
| 187,160 | 167,235 | ||
| Current liabilities | |||
| Other provisions | 18 | 71,315 | 86,686 |
| Financial liabilities | 19 | 3,484 | 1,748 |
| Trade payables | 136,447 | 70,554 | |
| Other financial liabilities | 20 | 61,683 | 133,279 |
| Income tax liabilities | 39,247 | 39,468 | |
| Other liabilities | 21 | 25,489 | 24,068 |
| 337,665 | 355,803 | ||
| Total equity and liabilities | 1,220,963 | 1,251,448 |
030 Interim Consolidated Financial Statements
058 Other Information
| Note | Jan.– June (Q1– Q2) 2011 € '000 |
Jan. – June (Q1–Q2) 2010 € '000 |
|
|---|---|---|---|
| Consolidated net profit | 73,522 | 158,189 | |
| Income tax expenses | 32,196 | 61,936 | |
| Financial result | –2,051 | –178 | |
| Depreciation and amortization | 22,164 | 12,857 | |
| Change in other provisions | –6,732 | 38,663 | |
| Losses from the disposal of assets | 45 | 842 | |
| Other non-cash expenses / revenue | 5,870 | 4,434 | |
| Interest received | 1,103 | 947 | |
| Interest paid | –516 | –374 | |
| Income tax paid | –60,318 | –50,903 | |
| Gross cash flow | 65,283 | 226,413 | |
| Increase of inventories | –49,918 | –119,387 | |
| Increase in trade receivables | –76,430 | –86,446 | |
| Increase in trade payables | 65,892 | 46,269 | |
| Change in other net assets / other non-cash transactions |
–44,175 | 66,916 | |
| Net cash flow from operating activities | 23 | –39,348 | 133,765 |
| Payments for investments in fixed assets | –60,923 | –63,164 | |
| Proceeds from the disposal of fixed assets | 259 | 94 | |
| Payments for investments in intangible assets | –10,727 | –11,819 | |
| Payments for investments in financial fixed assets | –2 | 0 | |
| Payments for the acquisition of business units | 0 | –2,418 | |
| Proceeds from the disposal of securities and other financial assets |
170,000 | 0 | |
| Payments for the acquisition of securities and other financial assets |
–174,505 | –70,000 | |
| Net cash flow from investing activities | 24 | –75,898 | –147,307 |
| Issuance of debt | 0 | 254 | |
| Repayment of debt | –786 | 0 | |
| Dividends paid by SMA Solar Technology AG | –104,100 | –45,110 | |
| Net cash flow from financing activities | 25 | –104,885 | –44,856 |
| Net decrease in cash and cash equivalents | –220,131 | –58,398 | |
| Change in cash and cash equivalents due to exchange rate effects |
–301 | 52 | |
| Cash and cash equivalents as of 01 / 01 | 354,083 | 225,010 | |
| Cash and cash equivalents as of 06 / 30 | 26 | 133,651 | 166,664 |
The Share 004
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
| Equity attributable to the shareholders of the parent company | |||||||
|---|---|---|---|---|---|---|---|
| Share capital € '000 |
Capital reserves € '000 |
Market valuation of securities € '000 |
Other retained earnings € '000 |
Total € '000 |
Equity attributable to non-controlling interest € '000 |
Consolidated shareholders' equity € '000 |
|
| Shareholders' equity as of January 1, 2010 |
34,700 | 119,200 | 0 | 253,687 | 407,587 | 0 | 407,587 |
| Dividend payments of SMA Solar Technology AG |
0 | 0 | 0 | –45,110 | –45,110 | 0 | –45,110 |
| Consolidated net profit H1 2010 | 0 | 0 | 0 | 158,216 | 158,216 | –27 | 158,189 |
| Differences from currency translation | 0 | 0 | 0 | 1,990 | 1,990 | 0 | 1,990 |
| Overall result | 160,179 | ||||||
| Changes in minority interests | 0 | 0 | 0 | 0 | 0 | 82 | 82 |
| Shareholders' equity as of June 30, 2010 |
34,700 | 119,200 | 0 | 368,783 | 522,683 | 55 | 522,738 |
| Shareholders' equity as of January 1, 2011 |
34,700 | 119,200 | 0 | 574,508 | 728,408 | 2 | 728,410 |
| Dividend payments of SMA Solar Technology AG |
0 | 0 | 0 | –104,100 | –104,100 | 0 | –104,100 |
| Consolidated net profit H1 2011 | 0 | 0 | 0 | 73,522 | 73,522 | 0 | 73,522 |
| Changes not shown in the income statement |
0 | 0 | –721 | 0 | –721 | 0 | –721 |
| Differences from currency translation | 0 | 0 | 0 | –973 | –973 | 0 | –973 |
| Overall result | 71,828 | ||||||
| Changes in minority interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Shareholders' equity as of June 30, 2011 |
34,700 | 119,200 | –721 | 542,957 | 696,136 | 2 | 696,138 |
038
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
The Condensed Interim Consolidated Financial Statements of SMA Solar Technology AG as at June 30, 2011 were prepared – as were the Consolidated Financial Statements as at December 31, 2010 – in compliance with the International Financial Reporting Standards (IFRS) adopted and published by the International Accounting Standards Board (IASB), as endorsed and defined as mandatory by the European Union. Accordingly, the Interim Financial Statements of SMA Technology AG are prepared in line with IAS 34 Interim Financial Reporting in the 2011 fiscal year. In accordance with the regulations of IAS 34, a condensed reporting format compared with the consolidated financial statements as at December 31, 2010 was chosen. The Condensed Financial Statements do not include all the information and disclosures required for consolidated financial statements and are therefore to be read in conjunction with the Consolidated Financial Statements as at December 31, 2010.
The Condensed Interim Consolidated Financial Statements were prepared in euros. Unless indicated otherwise, all amounts stated were rounded to full thousands of euros (€ '000) or millions of euros (€ million) for the sake of clarity.
The Managing Board of SMA Solar Technology AG authorized the Interim Consolidated Financial Statements for submission to the Supervisory Board on August 5, 2011.
The registered office of the Company is Sonnenallee 1, 34266 Niestetal, Germany. The shares of SMA Solar Technology AG are traded publicly; they are listed in the Prime Standard of the Frankfurt Stock Exchange. Since September 22, 2008, the Company's shares have been listed in the technology index TecDAX.
The SMA Group produces in Germany, the USA and Canada and distributes inverters throughout the world. More detailed information on segments is provided in chapter 4.
The scope of consolidation as at December 31, 2010 was expanded compared to the scope as at December 31, 2009 due to the newly acquired companies SMA Immo GmbH&Co. KG (Niestetal) ("SMA Immo"), previously SMA Immo GmbH (Niestetal), SMA Solar Technology Beteiligungsgesellschaft mbH (Niestetal) and the newly founded companies SMA Solar Technology Canada Inc. (Vancouver), SMA Solar India Private Limited (Mumbai) and SMA Solar UK Ltd. (London). All companies were fully consolidated. The company so far operating under the name of SMA Service GmbH in Niestetal was renamed SMA Immo Beteiligungs GmbH (Niestetal). Non-controlling interest's share in equity of the consolidated companies is shown separately within equity.
The Share Interim Management Report 004 008
Interim Consolidated Financial Statements 030
Other Information 058
039
The IFRS 3 rule was not applied to the acquisition of shares in SMA Immo. It was not applicable in this case because this acquisition does not involve a business as defined in IFRS 3. Rather, this transaction concerns the acquisition of a group of assets. The costs of acquisition were allocated to the individually identifiable assets on the basis of their relevant fair values. There have been no significant effects on the net assets, financial position and results of operations of SMA Solar Technology AG.
The scope of consolidation as at June 30, 2011 was expanded compared to the scope as at December 31, 2010 due to the newly founded companies SMA Japan Kabushiki Kaisha (Tokyo) and SMA Solar Thailand Co. Ltd. (Bangkok). Both companies were fully consolidated. The Interim Consolidated Financial Statements are based on the Financial Statements of SMA Solar Technology AG and the subsidiaries included in consolidation, which are prepared in accordance with uniform accounting policies throughout the Group. More detailed information is provided in the Notes to the Consolidated Financial Statements as at December 31, 2010. As at June 30, 2011, the requirements of IFRS 3 concerning the acquisition of dtw Sp. z o. o. had not yet been met.
There were no changes to the accounting and valuation policies in the present Interim Consolidated Financial Statements as at June 30, 2011 compared with the Consolidated Financial Statements of SMA Solar Technology AG as at December 31, 2010. A detailed description of these policies is published in the Notes to the Consolidated Financial Statements as at December 31, 2010.
The SMA Group has implemented all accounting standards that are to be applied mandatorily from the 2011 fiscal year in the preparation of the Interim Consolidated Financial Statements. This relates primarily to IAS 1 "Presentation of Financial Statements". The other standards to be applied initially in fiscal 2011 have no significant impact on the Interim Consolidated Financial Statements.
The SMA Group has implemented all accounting standards that are to be applied mandatorily from the 2011 fiscal year in the preparation of the Consolidated Financial Statements.
The standards to be applied initially in the fiscal year 2011 have no significant impact on the Interim Consolidated Financial Statements. The Consolidated Financial Statements as at December 31, 2010 contain a detailed description of the new accounting standards that are on principle relevant to the SMA Group.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Notes to the Condensed Interim Financial Statements as at June 30, 2011
The Group's operating segments were defined in compliance with the regulations contained in IFRS 8 and match those of the Consolidated Financial Statements as at December 31, 2010. Sales in the Photovoltaics Technology division are subject to fluctuations, i. a., because of discontinuous incentive programs.
The segment information pursuant to IFRS 8 is made up as follows for the second quarters of 2011 and 2010:
| Segment | Photovoltaics Technology | |||
|---|---|---|---|---|
| Medium Power Solutions | High Power Solutions | |||
| € million | Q2 2011 | Q2 2010 | Q2 2011 | Q2 2010 |
| External sales | 333.7 | 389.7 | 114.0 | 79.2 |
| Internal sales | 18.8 | 18.2 | 3.3 | 5.7 |
| Total sales | 352.5 | 407.9 | 117.3 | 84.9 |
| Depreciation and amortization | 4.9 | 4.8 | 0.7 | 0.8 |
| Operating profit (EBIT) | 59.6 | 97.1 | 18.1 | 23.6 |
| Sales by regions | ||||
| Germany | 200.1 | 278.6 | 28.1 | 46.7 |
| European Union | 95.0 | 75.2 | 44.9 | 17.1 |
| Third-party countries | 52.1 | 52.3 | 41.1 | 16.4 |
| Sales deductions | –13.5 | –16.4 | –0.1 | –1.0 |
| External sales | 333.7 | 389.7 | 114.0 | 79.2 |
The segment information pursuant to IFRS 8 is made up as follows for the first half years of 2011 and 2010:
| Segment | Photovoltaics Technology | |||
|---|---|---|---|---|
| Medium Power Solutions | High Power Solutions | |||
| Q1– Q2 | Q1–Q2 | Q1– Q2 | Q1–Q2 | |
| € million | 2011 | 2010 | 2011 | 2010 |
| External sales | 523.3 | 699.1 | 170.6 | 102.4 |
| Internal sales | 29.8 | 30.6 | 6.4 | 10.8 |
| Total sales | 553.1 | 729.7 | 177.0 | 113.2 |
| Depreciation and amortization | 9.3 | 8.5 | 1.3 | 1.4 |
| Operating profit (EBIT) | 59.9 | 185.4 | 31.0 | 24.7 |
| Sales by regions | ||||
| Germany | 278.7 | 484.6 | 34.0 | 56.8 |
| European Union | 164.5 | 148.4 | 71.2 | 27.5 |
| Third-party countries | 99.2 | 93.0 | 65.9 | 19.5 |
| Sales deductions | –19.1 | –26.9 | –0.5 | –1.4 |
| External sales | 523.3 | 699.1 | 170.6 | 102.4 |
Interim Management Report 008
Interim Consolidated Financial Statements 030
Other Information 058
| Railway Technology | Electronics Manufacturing | ||||||
|---|---|---|---|---|---|---|---|
| Railway Technology | Electronics Manufacturing | Reconciliation | Continuing operations | ||||
| Q2 2011 | Q2 2010 | Q2 2011 | Q2 2010 | Q2 2011 | Q2 2010 | Q2 2011 | Q2 2010 |
| 7.9 | 6.5 | 3.5 | 1.1 | 0.0 | 0.0 | 459.1 | 476.5 |
| 1.8 | 3.5 | 113.2 | 100.0 | –137.1 | –127.4 | 0.0 | 0.0 |
| 9.7 | 10.0 | 116.7 | 101.1 | –137.1 | –127.4 | 459.1 | 476.5 |
| 0.1 | 0.1 | 1.0 | 1.3 | 5.0 | 0.3 | 11.7 | 7.3 |
| 0.8 | 0.6 | 6.3 | 6.6 | 5.2 | –0.4 | 90.0 | 127.5 |
|---|---|---|---|---|---|---|---|
| 2.4 | 2.3 | 2.2 | 1.1 | 0.0 | 0.0 | 232.8 | 328.7 |
| 4.0 | 2.3 | 0.0 | 0.0 | 0.0 | 0.0 | 143.9 | 94.6 |
| 1.5 | 1.9 | 1.3 | 0.0 | 0.0 | 0.0 | 96.0 | 70.6 |
| 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | –13.6 | –17.4 |
| 7.9 | 6.5 | 3.5 | 1.1 | 0.0 | 0.0 | 459.1 | 476.5 |
| Electronics Manufacturing | Railway Technology | |||||
|---|---|---|---|---|---|---|
| Continuing operations | Railway Technology | |||||
| Q1– Q2 2011 |
Q1–Q2 2010 |
Q1– Q2 2011 |
Q1–Q2 2010 |
Q1– Q2 2011 |
Q1–Q2 2010 |
Q1– Q2 2011 |
| 715.0 | 0.0 | 0.0 | 2.2 | 5.7 | 12.1 | 15.4 |
| 0.0 | –229.8 | –219.2 | 180.7 | 178.9 | 7.7 | 4.1 |
| 715.0 | –229.8 | –219.2 | 182.9 | 184.6 | 19.8 | 19.5 |
| 22.1 | 0.5 | 9.3 | 2.3 | 2.0 | 0.2 | 0.2 |
| 103.7 | –4.1 | 1.9 | 12.8 | 9.4 | 1.1 | 1.5 |
| 320.8 | 0.0 | 0.0 | 2.1 | 3.6 | 3.9 | 4.5 |
| 243.8 | 0.0 | 0.0 | 0.1 | 0.0 | 4.4 | 8.1 |
| 170.0 | 0.0 | 0.0 | 0.0 | 2.1 | 3.8 | 2.8 |
| –19.6 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| 715.0 | 0.0 | 0.0 | 2.2 | 5.7 | 12.1 | 15.4 |
| Reconciliation | Electronics Manufacturing |
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
The reconciliation of the total segment operating profit (EBIT) pursuant to IFRS 8 to profit before income taxes produces the following figures:
| Q2 2011 € million |
Q2 2010 € million |
Q1– Q2 2011 € million |
Q1–Q2 2010 € million |
|
|---|---|---|---|---|
| Total segment earnings (EBIT) | 84.8 | 127.9 | 101.8 | 224.0 |
| Eliminations | 5.2 | –0.4 | 1.9 | –4.1 |
| Consolidated operating profit (EBIT) | 90.0 | 127.5 | 103.7 | 219.9 |
| Financial result | 1.0 | –0.2 | 2.0 | 0.2 |
| Profit before income taxes | 91.0 | 127.3 | 105.7 | 220.1 |
Circumstances are shown in the reconciliation which by definition are not part of the segments. In addition, unallocated parts of the Group head office, including cash and cash equivalents and owned buildings, are included therein, the expenses of which are assigned to the segments. Business relations between the segments are eliminated in the reconciliation.
Segment assets as at June 30, 2011 increased as against the reporting date of the last Consolidated Financial Statements (December 31, 2010) by € 88.3 million in the Medium Power Solutions segment, by € 20.1 million in the High Power Solutions segment and by € 14.8 million in the Electronics Manufacturing segment.
In the reconciliations as at June 30, 2011, segment assets increased by € 44.6 million compared to December 31, 2010.
The Share 004
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
| Q1– Q2 2011 € '000 |
Q1–Q2 2010 € '000 |
|
|---|---|---|
| Material expenses | 384,328 | 352,037 |
| Personnel expenses | 82,682 | 84,887 |
| Depreciation | 19,728 | 8,985 |
| Other | 20,107 | 62,550 |
| 506,845 | 508,459 |
Cost of sales include, as direct costs, the product-related material expenses as well as all other expenses for the areas of production, purchasing and service as well as facility management and IT. Due to shifts in the product mix, material expenses increased by 9.2% in the period under review on a year-on-year basis. The increase in material expenses was partially compensated by the reduction of the variable employee gratification as well as the reduced expenses for temporary employees. The depreciation development is in particular marked by the investments in buildings and machinery during the last twelve months. The change of the other expenses basically results from the lower provisions for distribution service obligations and a reduction of the freight and shipping costs on a yearon-year basis. Furthermore, the expenses for the facility management and IT areas contain proportionate costs according to their utilization as of the beginning of the year. This change results in a relief of the other expenses in the period under review.
| Q1– Q2 2011 € '000 |
Q1–Q2 2010 € '000 |
|
|---|---|---|
| Material expenses | 361 | 384 |
| Personnel expenses | 15,205 | 15,822 |
| Depreciation | 217 | 657 |
| Other | 12,910 | 9,156 |
| 28,693 | 26,019 |
Selling expenses include expenditure for global sales activities, internal sales departments and marketing. On a year-on-year basis, SMA systematically expanded its global distribution and marketing structures to benefit from the worldwide developments in the photovoltaics markets. Despite an increased number of employees, personnel expenses were reduced by € 0.6 million. This development is mainly due to the reduced variable employee gratification. The reduction of depreciations is caused by the changes in the apportionment procedure.
Selected Notes to the Statement of Comprehensive Income SMA Group
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
The other expenses contain proportional costs for facility management and IT. The increase is mainly attributable to the growing global marketing activities. SMA supports solar power professionals in the distribution of PV plants with specific marketing measures, thereby influencing the decision-making process.
| Q1– Q2 2011 € '000 |
Q1–Q2 2010 € '000 |
|
|---|---|---|
| Material expenses | 2,069 | 1,205 |
| Personnel expenses | 28,553 | 31,531 |
| Depreciation | 1,915 | 2,108 |
| Other | 12,054 | 6,985 |
| 44,591 | 41,829 | |
| Capitalized development projects | –4,761 | –7,423 |
| 39,830 | 34,406 |
Research and development expenses include all costs that may be attributed to the areas of product development, development-related testing and product management. In order to strengthen its technology leadership even further, SMA systematically expanded the development department. The decrease of personnel expenses is mainly due to reduced variable employee gratification. The reduction of depreciations is also caused by the changes in the apportionment procedure. The other expenses contain proportional costs for facility management and IT. The increase is mainly attributable to outsourced development services. SMA works systematically with development cooperations to reduce development times.
| Q1– Q2 2011 € '000 |
Q1–Q2 2010 € '000 |
|
|---|---|---|
| Material expenses | 64 | 55 |
| Personnel expenses | 19,728 | 17,714 |
| Depreciation | 303 | 1,105 |
| Other | 12,060 | 1,360 |
| 32,155 | 20,234 |
008
045
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
Administrative expenses include expenses for the Managing Board, for quality management as well as for the accounting, controlling, legal and compliance areas. In view of the future growth, SMA systematically expanded the finance and human resources departments. Therefore, personnel expenses increased by € 2.7 million. The reduction of depreciations is caused by the changes in the apportionment procedure. The change in other expenses mainly results from the adjustment of the apportionment procedure as well as the realization of strategically important projects.
Other operating income mainly comprises income from foreign currency valuation and non-operating income, for example, from assets classified as "at fair value through profit or loss".
Other expenses include, in particular, expenses incurred from foreign currency valuation, impairment losses on receivables and inventories, expenses for the disposal of tangible assets as well as for assets classified as "at fair value through profit or loss".
| Q1– Q2 2011 € '000 |
Q1–Q2 2010 € '000 |
|
|---|---|---|
| Wages and salaries | 109,126 | 104,904 |
| Expenses for temporary employees | 20,955 | 30,666 |
| Social security contribution and welfare payments | 16,087 | 14,386 |
| 146,168 | 149,956 |
In the first six months of the year, SMA took on 662 new employees (incl. temporary employees). The moderate increase in salaries and wages by 4% on a year-on-year basis is attributable to a lower variable compensation. SMA bases the variable compensation on the earnings before taxes. In addition, significantly fewer temporary employees were deployed in the period under review than in the record year 2010. This development is also reflected in the expenses for temporary employees.
046
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
The average number of employees in the Group amounted to:
| Q1– Q2 2011 | Q1–Q2 2010 | |
|---|---|---|
| Research and Development | 820 | 620 |
| Production and Service | 2,602 | 1,817 |
| Sales | 431 | 326 |
| Administration | 445 | 269 |
| 4,298 | 3,059 | |
| Trainees and interns | 413 | 334 |
| Temporary employees | 1,211 | 1,632 |
| 5,922 | 5,025 |
During the period under review, the employees of the facility management and IT departments have been regrouped from administration to production and service. For reasons of comparability, previous year's figures were adjusted accordingly.
| Q1– Q2 2011 € '000 |
Q1–Q2 2010 € '000 |
|
|---|---|---|
| Interest income | 2,874 | 1,201 |
| Other financial income | 267 | 15 |
| Financial income | 3,141 | 1,216 |
| Interest expenses | 516 | 366 |
| Other financial expenses | 62 | 34 |
| Interest share from valuation | 512 | 638 |
| Financial expenses | 1,090 | 1,038 |
| Financial result | 2,051 | 178 |
The average of freely available funds increased from approx. € 350 million to approx. € 450 million on a year-on-year basis. At the same time, the average interest rate of the monetary investments rose from approx. 0.8% to approx. 1.15%.
008
047
Interim Management Report Interim Consolidated Financial Statements 030
Other Information 058
Earnings per share are calculated by dividing the consolidated earnings attributable to the shareholders by the weighted average of ordinary shares in circulation during the period.
The consolidated earnings attributable to the shareholders are the consolidated net income after tax, excluding the portion attributable to non-controlling interests. Since there are no shares held by the Company on the reporting date nor are there any other special cases, the number of ordinary shares issued equates to the number of shares in circulation.
The calculation of earnings in relation to the weighted average number of shares in accordance with IAS 33 produces earnings of € 1.82 per share, for the period from April 1 to June 30, 2011 and earnings of € 2.12 per share for the period from January 1 to June 30, 2011, each on the basis of 34.7 million shares. The calculation of earnings in relation to the weighted average number of shares in accordance with IAS 33 produces earnings of € 2.64 per share, for the period from April 1 to June 30, 2010 and earnings of € 4.56 per share for the period from January 1 to June 30, 2010, each on the basis of 34.7 million shares.
There are no options or conversion options as at the reporting date. Therefore, there are no diluting effects so that the diluted and basic earnings per share are the same.
030 Interim Consolidated Financial Statements
058 Other Information Selected Notes to the Balance Sheet SMA Group
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|
| Software | 9,541 | 8,393 |
| Development projects | 24,022 | 19,849 |
| Prepayments | 1,900 | 1,000 |
| 35,463 | 29,242 |
The additions to the development projects reflect the intensified development activities to secure the SMA Group's technology leadership. The additions to software result, among other things, from the purchase of software licenses for the growth-related expansion of the ERP system.
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|
| Land and buildings incl. buildings on third-party property | 120,910 | 114,180 |
| Technical equipment and machinery | 33,119 | 34,706 |
| Other equipment, fixtures and furniture | 80,643 | 77,252 |
| Prepayments | 75,404 | 42,369 |
| 310,076 | 268,507 |
The addition to premises and buildings is in particular attributable to the expansion of the parking garage and leasehold alterations and improvements of the buildings.
The prepayments as at June 30, 2011 include investments for the expansion of the site at Sandershäuser Berg and for the construction of office buildings amounting to € 23.9 million.
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
008
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|
| Raw materials, consumables and supplies Unfinished goods, work in progress |
180,055 26,822 |
148,548 17,895 |
| Finished goods and goods for resale | 77,028 | 71,091 |
| Prepayments | 1,320 | 304 237,838 |
| 285,225 |
Inventories are measured at the lower value of acquisition or production costs and net realizable value. As of the 2010 fiscal year, SMA specifically started to build up inventories of raw materials, consumables and supplies to guarantee a high delivery capacity. The finished goods mainly concern Sunny Central inverters, produced basically for projects whose realization had been postponed. The change in the impairment on inventories, included under expenses as production costs, amounts to € 2.5 million (Q1–Q2 2010: € 0.2 million).
As at June 30, 2011, other current financial assets include in particular time deposits amounting to € 20.0 million (December 31, 2010: € 190.0 million) with a term to maturity of over three months and financial assets amounting to € 174.5 million as well as accrued interest. The other non-current financial assets include a rent deposit for a building in the USA amounting to USD 2.5 million (December 31, 2010: USD 5.0 million).
The change in equity, including effects not shown in the income statement, is presented in the Statement of Changes in Equity.
On May 26, 2011, the General Meeting of SMA Solar Technology AG passed a resolution to distribute a dividend for the fiscal year 2010 amounting to € 104.1 million (€ 3.00 per qualifying bearer share).
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
The Share
004
Other provisions account for all discernible risks and all contingent liabilities on the balance sheet date and break down as follows:
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|
| Warranties | 135,288 | 118,091 |
| Other obligations deriving from sales transactions | 18,375 | 44,342 |
| Other | 6,942 | 4,904 |
| 160,605 | 167,337 |
Warranty provisions consist of general warranty obligations (periods of between five and ten years) for the various product areas within the Group. In addition, provisions are set aside for individual cases, which are used in the following year.
The other distribution service provisions contain several claims made in delivery contracts, which are set up in the amount of the expected claims. The reduction compared to December 31, 2010 mainly comprises of the release of provisions and lead to a corresponding improvement of results. The other provisions contain mainly provisions for long-service anniversaries, death benefits and partial retirement as well as service contributions.
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|
| Finance lease liabilities | 4 | 10 |
| Liabilities towards credit institutions | 19,976 | 20,655 |
| Derivative financial liabilities | 434 | 535 |
| 20,414 | 21,200 |
The liabilities towards credit institutions were incurred for the financing of SMA Immo's properties and have an average time to maturity of eleven years.
Derivative financial liabilities consist of interest derivatives related to the financing of SMA Immo.
Interim Management Report Interim Consolidated Financial Statements 030
Other Information 058
008
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|
|---|---|---|
| Liabilities Human Resources department | 46,108 | 99,468 |
| Liabilities Sales department | 15,238 | 32,699 |
| Other | 1,231 | 1,112 |
| 62,577 | 133,279 |
Liabilities in the Human Resources area contain obligations towards employees regarding performance-based bonuses, positive vacation and flexitime balances as well as variable salary components and contributions to the workers' compensation association. The reduction of this amount is mainly due to a lower profitability in the current fiscal year. The liabilities in the Sales area primarily contain liabilities towards customers from advance payments received and bonus agreements.
| 06/30/2011 € '000 |
12 / 31 / 2010 € '000 |
|---|---|
| 64,922 | 53,397 |
| 21,320 | 19,661 |
| 2,654 | 3,116 |
| 1,429 | 1,524 |
| 434 | 210 |
| 90,759 | 77,908 |
The accrual item for extended warranties includes liabilities from chargeable guarantee extensions granted for the products in the Photovoltaics Technology division. The main items included in the liabilities due to tax authorities are tax liabilities from payroll accounting as well as turnover tax liabilities. The liabilities from subsidies received relate to taxable government grants from funds of the common-task program "Improvement of the Regional Economic Structure" (EU GA), granted as investment subsidies. The total amount of retransfer of government grants is stated under other operating income.
052
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
As at June 30, 2011, the Balance Sheet included one forward transaction intended to hedge the exchange rate risks of expected future sales generated with customers in the USA. The derivative is still classified as held for trading. It is not part of a hedging relationship as defined by IAS 39. The acquisition of SMA Immo has resulted in the initial recognition of interest derivatives in fiscal 2010. SMA Immo is exposed to interest risks due to existing financial liabilities. To secure the interest in the long term and to have a secure basis for calculating the financing, interest derivatives were concluded for a part of these financial liabilities. The derivatives are classified as held for trading. They are not part of a hedging relationship as defined by IAS 39.
As at June 30, 2011, there were fund shares (amounting to € 50.2 million) which were classified as held for trading, and interest-bearing securities classified as available for sale amounting to € 98.8 million. In addition, there was a security held to maturity of € 25.5 million.
008
053
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
The liquid funds shown in the Statements of Cash Flows correspond to the balance sheet item "Cash and cash equivalents".
The gross cash flow amounting to € 65.3 million (previous year: € 226.4 million) shows the operating income prior to any commitment of funds.
Net cash flow from operating activities decreased in fiscal 2011 to € –39.3 million (previous year: € 133.8 million). The decrease is mainly attributable to the year-on-year lower gross cash flow (€ –161.1 million) and the development of the net working capital.
The increase in net working capital results primarily from a targeted increase in the raw material stocks of critical components and the business-related increase in finished goods. Inventories increased on a year-on-year basis by a gross amount of € 49.9 million to a total of € 285.2 million. The changes in the other net assets were particularly caused by the payment of variable salary components to employees and bonus agreements with clients.
The net cash flow from investing activities is reduced to € –75.9 million after a result of € –147.3 million in the same period last year. The outflow of funds due to investments in fixed assets and intangible assets amounted to € 71.7 million (previous year: € 75.0 million). Pursuant to IAS 7.17, monetary investments with a term to maturity of more than three months are allocated to the net cash flow from investing activities. The outflow of funds for the acquisition of the shares in SMA Immo in fiscal 2010 amounted to € 1.4 million. In addition, short-term financial liabilities on current accounts amounting to € 1.1 million were assumed following the acquisition.
The net cash flow from financing activities includes the dividend payment of SMA Solar Technology AG and the redemption of credit liabilities of SMA Immo in the period under review.
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Notes to the Statements of Cash Flows of SMA Group
The cash and cash equivalents amounting to € 133.7 million (December 31, 2010: € 354.1 million) include cash in hand, bank balances and short-term deposits with an original term to maturity of less than three months. Together with the time deposits with a term to maturity of more than three months and other financial assets, this results in financial resources amounting to € 328.2 million (December 31, 2010: € 544.1 million).
Other Disclosures
The Share 004
008
055
Interim Management Report Interim Consolidated Financial Statements 030
Other Information 058
On July 13, 2011, the Federal Cartel Office unconditionally approved of the acquisition of dtw Sp. z o. o. by SMA. The Supervisory Board approved of the transaction by circulation. All conditions of the purchase contract signed on June 14, 2011 are therefore fulfilled. The transaction has been completed on August 1, 2011.
There were no significant events on or after the reporting date other than those presented in or recognizable from the statements in the Notes to the Consolidated Financial Statements.
There were no significant changes in respect of related parties as against December 31, 2010. The scope of transactions with team-time GmbH in the first half year of the current year was identical to the previous extent.
Niestetal, August 5, 2011
SMA Solar Technology AG The Managing Board
Jürgen Dolle Roland Grebe
Uwe Hertel Pierre-Pascal Urbon Marko Werner
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information
056
Responsibility Statement
We assure to the best of our knowledge that, in accordance with the applicable accounting standards for interim financial reporting, the Consolidated Interim Financial Statements give a fair view of the net assets, financial position and results of operations of the Group and that the Consolidated Interim Management Report gives a fair view of the course of business including the results of operations and the Group's position and describes the fundamental opportunities and risks associated with the expected development of the Group for the remaining months of the fiscal year.
Niestetal, August 5, 2011
SMA Solar Technology AG The Managing Board
Auditor's Review Report
The Share 004
008
057
Interim Consolidated Financial Statements 030
Interim Management Report
Other Information 058
We have reviewed the Condensed Interim Consolidated Financial Statements – comprising the Condensed Income Statement, the Condensed Statement of Comprehensive Income, Condensed Balance Sheet, Condensed Statement of Changes in Equity, Condensed Statements of Cash Flows and Selected Explanatory Notes – together with the Interim Group Management Report of SMA Solar Technology AG, Niestetal, for the period from January 1, 2011 to June 30, 2011, which are components of the Half-Yearly Financial Report pursuant to Section 37x (2) of the German Securities Trading Act (WpHG). The preparation of the Condensed Interim Consolidated Financial Statements in accordance with the International Financial Reporting Standards (IFRS) applicable to interim financial reporting as adopted by the EU and of the Interim Group Management Report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the Company's Managing Board. Our responsibility is to issue a review report on the Condensed Interim Consolidated Financial Statements and on the Interim Group Management Report based on our review.
We conducted our review of the Condensed Interim Consolidated Financial Statements and of the Interim Group Management Report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer – IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the Condensed Interim Consolidated Financial Statements have not been prepared, in all material respects, in accordance with the IFRSs applicable to interim financial reporting as adopted by the EU and that the Interim Group Management Report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical assessments and therefore does not provide the assurance attainable in a financial statements audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the Condensed Interim Consolidated Financial Statements have not been prepared, in all material respects, in accordance with the IFRSs applicable to interim financial reporting as adopted by the EU nor that the Interim Group Management Report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Hanover, August 5, 2011
Deloitte&Touche GmbH Wirtschaftsprüfungsgesellschaft
Scharpenberg Schwibinger Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
008 Interim Management Report
030 Interim Consolidated Financial Statements
058 Other Information Disclaimer
058
This Half-Yearly Financial Report was published in German and English on August 12, 2011. The German version is authoritative. Both versions are available as downloads on our Web site:
www.SMA.de/IR/Finanzberichte
www.SMA.de/IR/FinancialReports
This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as "expects", "looks forward to", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "will", "projects" or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond SMA's control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of SMA to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions (incl. margin developments), in the legal and regulatory framework, changes in currency exchange rates and interest rates. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. SMA does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
August 12, 2011 Publication of the Half-Yearly Financial Report January to June 2011, Analyst Conference Call: 9:00 a. m. CET
September 15, 2011 Capital Markets Day
November 11, 2011 Publication of the Quarterly Financial Report January to September 2011, Analyst Conference Call: 9:00 a. m. CET
May 22, 2012 Annual General Meeting, Kassel, Kongress Palais
pUblisher SMA Solar Technology AG coNcept UNd desiGN FIRST RABBIT GmbH, Cologne Text SMA Solar Technology AG pUblicatioN date August 12, 2011
Sonnenallee 1 34266 Niestetal Germany Phone: + 49 561 9522–0 www.SMA.de
Stephanie Kniep Phone: + 49 561 9522–2222 Fax: + 49 561 9522–2223 E-mail: [email protected]
SMA Solar Technology AG Sonnenallee 1 34266 Niestetal Germany Phone: + 49 561 9522–0 Fax: + 49 561 9522–100 E-mail: [email protected] www.SMA.de
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.