Quarterly Report • Aug 14, 2008
Quarterly Report
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JANUARY TO JUNE 2008
SMA Solar Technology AG
| SMA Group | 1. Half-year 2008 |
1. Half-year 2007 |
Change | Year 2007 |
|
|---|---|---|---|---|---|
| Sales | € million | 292.6 | 113.7 | +157 % | 327.3 |
| Export Ratio | in % | 47 % | 27 % | 29 % | |
| Capital Expenditure1 | € million | 28.2 | 5.3 | +432 % | 12.3 |
| Depreciation | € million | 3.7 | 5.0 | –26 % | 16.0 |
| Operating Income (EBIT) | € million | 68.7 | 14.2 | +384 % | 59.3 |
| EBIT-margin | in % | 23.5 % | 12.4 % | 18.1 % | |
| Consolidated Net Profit | € million | 48.2 | 8.6 | +460 % | 36.8 |
| Earnings Per Share2 | € | 1.39 | 0.25 | 1.06 | |
| Employees (average during the period)3 | 2,226 | 1,374 | +62 % | 1,600 | |
| In Germany | 2,129 | 1,321 | +61 % | 1,533 | |
| Abroad | 97 | 53 | +83 % | 67 |
| SMA Group | 06/30/2008 | 12/31/2007 | Change | ||
|---|---|---|---|---|---|
| Total Assets | € million | 370.2 | 163.2 | +127 % | |
| Shareholders' Equity | € million | 208.5 | 64.4 | +224 % | |
| Equity Ratio | in % | 56.3 % | 39.5 % | ||
| Net Working Capital4 | € million | 84.0 | 59.4 | +41 % | |
| Net Working Capital ratio | in % | 16.6 % | 18.1 % | ||
| Cash & Cash Equivalents5 | € million | 65.6 | 52.8 | +24 % |
1 Excl. Finance Leases, excl. R&D
2 Converted to 34,700,000 shares
3 Incl. temporary employees
4 Inventories and trade receivables minus trade payables
5 As at June 30, 2008 before IPO proceeds
| INVERTER OUTPUT SOLD | GROUP SALES |
|---|---|
| IN MEGAWATT | IN MILLION EURO |
| 293 | 113.7 |
| 895 | 292.6 |
| " | " |
| 1. Half-year 2007 | 1. Half-year 2007 |
| " | " |
| 1. Half-year 2008 | 1. Half-year 2008 |
| OPERATING INCOME (EBIT) | EARNINGS PER SHARE |
| IN MILLION EURO | IN EURO |
| 14.2 | 0.25 |
| 68.7 | 1.39 |
Half-year 2008 1. Half-year 2007 (Converted to 34,700,000 shares)
Half-year 2007
Half-year 2008
Highlights of the First Half-year Company Profi le
The SMA IPO has been the largest to date in Germany in 2008
SMA Solar Technology AG develops, produces and sells photovoltaic inverters, monitoring systems for photovoltaic facilities and electronic components for railway technology.
The photovoltaic inverter is a central component in any solar power system. SMA can offer the right type of inverter for every type of photovoltaic module used around the world and every type of gridconnected, isolated and backup operation application. SMA is the world market leader for photovoltaic inverters. In 2007, SMA sold solar inverters with a total output of 950 MW, thereby increasing its global market share to around 34 %. SMA's sales volume in 2007 corresponded to more than three times the inverter output sold by its next-biggest competitor.
SMA's head office is located in Niestetal near Kassel. It is represented by international subsidiaries on four continents in eight countries. The Group employs more than 2,500 people (including temporary workers). In 2007, SMA generated earnings before interest and taxes (EBIT) of EUR 59.3 million on sales of EUR 327.3 million, which corresponds to an EBIT margin of 18.1 %.
SMA focuses on the high-growth market for solar technology. The Photovoltaics Technology division comprises mainly the photovoltaic inverter business. A solar inverter controlled by powerful microprocessors is at the very heart of every photovoltaic system. The photovoltaic inverter converts the direct current generated in photovoltaic cells into alternating current for the grid. As an intelligent system manager, the division is responsible for generator control, yield monitoring and network management.
A solar power system is only as good as its photovoltaic inverter: the greater its efficiency, the greater the energy yield of the entire system. Thanks to its technological expertise and high capacity for innovation, SMA has considerably increased the maximum efficiency from around 90 % in 1990 to more than 98 % today. At the same time, SMA has significantly lowered the selling price per watt of photovoltaic inverters by around 70 %. The technological excellence of SMA photovoltaic inverters has also been confirmed by independent experts. For example, Sunny Boy inverters emerged as test winners in both of the studies conducted so far by Stiftung Warentest, Germany's leading consumer protection association. The Sunny Mini Central 8000TL was the editor's top pick and had the highest score in a product test by the specialist magazine Photon.
SMA's business model is driven by technological progress. Due to its flexible and scalable production, SMA can react quickly to customer requests, implement product innovations promptly, keep pace with the rapid growth rates of the photovoltaic industry and handle short-term fluctuations in demand for photovoltaic inverters at the same time. As a result of this high level of flexibility, production capacity is never a limiting factor at SMA.
SMA is headquartered in Niestetal/Kassel and it is represented by its own branches in Spain, Italy, France, Greece, Australia, South Korea, the People's Republic of China and the United States. Thanks
IPO Performance Investor Relations Corporate Governance
to its comprehensive sales and service organization, SMA can profit from the development of the global photovoltaic market and quickly react to specific conditions.
Since it was founded, SMA has been distinguished by a particular corporate culture, which is based on the values of open communication, mutual respect and comprehensible decision-making processes. The Company profits from the deep commitment of its employees to shaping change and to improving their work on an ongoing basis. The corporate culture that has been developed over many years has led to SMA being voted as one of the top ten companies in Germany in the "Germany's best employer" contest for both years in which it has taken part.
The Management Board of SMA consists of Günther Cramer (Chairman, Development), Peter Drews (Operations), Pierre-Pascal Urbon (Sales, Marketing and Investor Relations) and Reiner Wettlaufer (Finance).
Since June 27, 2008, SMA Solar Technology AG has been the first solar company with photovoltaic inverters as its core business to be listed on the regulated market of the Frankfurt Stock Exchange (Prime Standard). The IPO is an important milestone in SMA's corporate development and allows the Group to enter its next growth phase.
| Basic share data | |
|---|---|
| Security code number (WKN) | A0DJ6J |
| ISIN | DE000A0DJ6J9 |
| Stock market code | S92 |
| Ticker | Reuters S92G.DE/Bloomberg S92 GR |
| Market segment | Prime Standard of the Frankfurt Stock Exchange |
| Prime sector | Industrial goods |
| Industry group | Renewables |
| Class of shares | Ordinary bearer shares with no par value (shares) |
The exponential growth of the solar industry challenges companies constantly to react flexibly and instantly to new market trends. The IPO has provided the management with the financial flexibility to handle increasingly faster market growth, the associated capacity expansion and smaller acquisitions. In addition to strengthening its equity base and increasing its development capacity, SMA intends to use some of the proceeds generated by the IPO for continued internationalization. In addition, going public will further increase awareness of the SMA brand. The IPO can also help to further encourage employee participation.
SMA published its plans for the IPO for the first time on June 4, 2008. The Federal Financial Supervisory authority (BaFin) approved the securities prospectus for the IPO on June 17, 2008. On the morning of June 18, 2008, the SMA management presented the key data on the IPO at a press conference in Frankfurt am Main and started the investor road show on the same date. In a decoupled bookbuildung process, the price range for the offer was set based on feed-back from discussions with investors. On June 22, 2008, SMA announced a price range between €40.00 and €52.00 per share. The offer period started on June 23, 2008 and ended on June 26, 2008. The placement price was set at €47.00 on June 26, 2008. SMA shares were traded on the Frankfurt Stock Exchange for the first time on June IPO Performance Investor Relations Corporate Governance
The shareholder structure of SMA after full exercise of the greenshoe option is as follows:
Since the beginning of the year, stock markets have been hit hard by the effects of the subprime crisis, the weakness of the US dollar, rising commodity prices (particularly for crude oil) and an impending recession in the US. The German Dax and TecDax indices have also trended downwards since the beginning of the year. At the end of the reporting period, the Dax closed on 6,418.32 points, while the TecDax closed on 770.58 points – a drop of around 20 % in each case since the beginning of the year.
Despite the turbulent market environment, SMA shares got off to an excellent start on June 27, to their first day of trading. At €47.00 per share, the placement price was set in the upper half of the published price range. The placement was oversubscribed several times. At €48.00, the opening price on the first day of trading price on the day the shares were listed was above the IPO price. The share price rose to a high of €55.97 before closing on their first day of trading at €55.50. SMA shares were traded on two days in the reporting period, which ended on June 30, 2008.
IPO Performance Investor Relations Corporate Governance
Since its incorporation, SMA has been distinguished by open and transparent communication with its employees and banks. SMA will inform the capital market of its key developments and corporate strategy transparently, continuously and promptly.
SMA posts current information for investors, analysts and journalists on its shares and the company on its investor relations website www.ir.sma.de. This is also where SMA publishes its mandatory disclosures (Ad-hoc releases) and financial news and reports. An overview of upcoming events for investors and research analysts can be found in the financial calendar.
The quarterly financial statements for the third quarter of 2008 will be published on November 14, 2008. The next Annual General Meeting of SMA Solar Technology AG will take place on May 28, 2009 at the Kassel town hall. All shareholders are cordially invited.
The "Government Commission of the German Corporate Governance Code" (Regierungskommission Deutscher Corporate Governance Kodex) established by the German Federal Ministry of Justice in September 2001 approved on February 26, 2002 the German Corporate Governance Code (the "Code") at last adopted various amendments to the Code on June 6, 2008, which have been published on August 8, 2008 in the "Electronic Federal Gazette" (elektronischer Bundesanzeiger). The Code makes recommendations and suggestions for the management and supervision of German listed companies. In this respect, it is based on internationally and nationally accepted standards for good and responsible corporate management. The Code is intended to make the German corporate governance system transparent and comprehensible. The Code includes recommendations (so-called "shall provisions") and suggestions (so-called "should or can provisions") on corporate governance in relation to shareholders and the general shareholders meeting, the management board and the supervisory board, transparency, accounting and auditing of financial statements. The Code is available under www.corporate-governance-code.de.
There is no obligation to comply with the recommendations or suggestions of the Code. The German Stock Corporation Act merely obliges the management board and supervisory board of a listed company to declare annually either that the principles of the Code were and are being complied with or to declare which principles were not and are not applied. This declaration is to be made accessible to shareholders on a permanent basis. It is permissible to deviate from the recommendations in the Code without having to disclose this.
Prior to the listing of the shares of the Company on the stock exchange, the Company has not been subject to the obligation to issue any declaration on the Code. Having been an unlisted enterprise with a limited number of shareholders, the Company did not comply with several recommendations of the Code.
The Company intends to comply with most of the recommendations of the Code in the version dated June 6, 2008 as from the listing of its shares on the stock exchange and will comply with the obligation arising upon the listing of the shares on the exchange to issue a corresponding declaration under § 161 AktG during the course of the current fiscal year and to publish it and make it permanently available to the Shareholders. At present, the Management Board and the Supervisory Board are in discussions as to which recommendations are not being complied with in the future.
The resolution was adopted in the general shareholders meeting on April 30, 2008 not to individually show the compensation for the members of the Management Board until the end of the fiscal year 2012. Thus, the Company is currently and will most likely in the future be deviating from the recommendation of individually disclosing the compensation for the Management Board.
The Supervisory Board has so far refrained from forming an audit committee, a presidium committee and a nominating committee which is possible under the rules of procedure for the Supervisory Board. This is based on the consideration that the current size of the Supervisory Board with six members and its composition permits an efficient performance of the responsibilities of the Supervisory Board without establishing committees. In the view of the Company, this does not constitute any deviance to be declared pursuant to § 161 AktG from the recommendation in Clause 5.3.1 of the Code to form committees with sufficient expertise. This recommendation to the Supervisory Board is "depending on the specifics of the enterprise and the number of its members". Thus, the Code also assumes that not every Supervisory Board should form committees in order to efficiently fulfill its responsibilities.
General Economic Conditions Group Sales and Earnings Sales and Earnings by Segment Assets and Financial position Investments Research and Development Employees/Human resources Supplementary Report Risk and Opportunities Report Forecast Report
14
Largest european exhibition for solar technology in Munich: Intersolar 2008
Despite the head wind generated by the crisis in financial markets and rising commodity prices, the global economy demonstrated that it was in good shape in the first six months of 2008. In the industrialized countries, growth in real gross national product even accelerated again, particularly since production in Japan and the euro zone rose sharply. By contrast the economy in the United States once again grew only slightly. However, according to estimates by the Institute for the World Economy (IfW), economic expansion in the industrialized countries slowed significantly in the first half of 2008. The global economic climate cooled markedly because of the rapid rise in inflation.
The photovoltaics sector has de-coupled from trends in the global economy because of the global support programs and the rise in energy prices, in particular. The photovoltaics sector posted strong growth in the first half of 2008. However, growth was limited by the availability of silicon and modules. Demand for photovoltaic systems was mainly supported by countries in the euro zone, South Korea and the United States. Solar technology's increasing popularity throughout the world was also evident at the sector's leading trade fair, the Intersolar, which took place from June 12 to 14, 2008 in Munich. The number of exhibitors rose by more than 60 % compared with the previous year to over 1,000. At the same time, the proportion of international exhibitors rose by 10 percentage points to 47 %.
In the first six months of fiscal year 2008, the SMA Group achieved sales of €292.6 million and consequently increased sales by 157 % or €178.9 million on the comparable period in the previous year. The positive trend in sales at the beginning of the year accelerated further over the course of the year, so that the second quarter contributed €177.4 million to sales. SMA expanded its capacity continuously to service the unexpectedly sharp increase in demand and outsourced significant amounts of primary electronics products.
International markets have become even more important for the SMA Group. International sales were increased by 350 % on the comparable period in the previous year to €142.4 million. Spain was the most successful international market, followed by South Korea, the US, Italy and France. The proportion of international sales rose to 47 % (Q1-Q2 2007: 27 %) in the reporting period.
SMA increased its profitability as a result of the sustained very positive business development. While demand in the first quarter of the previous year started weak and then rose continuously, fiscal year
General Economic Conditions Group Sales and Earnings Sales and Earnings by Segment Assets and Financial Position Investments Research and Development Employees/Human resources Supplementary Report Risk and Opportunities Report Forecast Report
16
2008 started with record figures for sales and earnings in the first quarter. In the second quarter, these record figures were boosted significantly once more by enormous demand for our inverters. Operating income EBIT (earnings before interest and taxes) improved, mainly through economies of scale, in the first six months of 2008 to €68.7 million (Q1-Q2 2007: €14.2 million). The second quarter contributed €44.4 million (Q2 2007: €12.9 million) or almost two-thirds to this. The EBIT margin for the first six months of 2008 improved to 23.5 % (Q1-Q2 2007: 12.4 %). Since the financial result was almost balanced in both reporting periods, the EBT margin was more or less equal to the EBIT margin. In the first six months of 2008, the SMA Group's profit for the period reached €48.2 million (Q1-Q2 2007: €8.6 million). This meant that more was achieved in the first half of the year than in the entire previous year (2007: €36.8 million).
In the first six months of 2008, the Photovoltaics Technology division achieved external sales of €283.6 million (Q1-Q2 2007: €104.9 million) and consequently increased sales by 170 % or €178.7 million. The inverter output sold to generate these sales rose by 205 % from around 293 MW to around 895 MW.
81 % of the sales by the Photovoltaics Technology division was attributable to the Medium Power Solutions segment (Residential and Commercial) with the product lines Sunny Boy and Sunny Mini Central and 19 % to the High Power Solutions segment (Industrial) with the product line Sunny Central.
In the Medium Power Solutions segment, external sales rose by 148 % in the reporting period to €229.8 million compared with €92.8 million in the first six months of the previous year. 61 % of gross sales were achieved in Germany. Spain was the most successful international market, followed by the US and Italy. Sunny Mini Central 7000HV and Sunny Mini Central 8000TL inverters were the bestselling products in the first six months of the year. Sales were driven by Sunny Boy 5000 Multi-String in the same period in the previous year. Overall, the trend is towards more powerful products, which can also be used in remote photovoltaic systems generating up to one megawatt. The surge in demand in the first quarter of 2008 led to longer delivery times for the most popular products at times in the second quarter. Operating income (EBIT) was increased by over 350 % to €45.8 million (Q1-Q2 2007: €10.3 million) thanks to the significant expansion in sales.
In the High Power Solutions segment, sales rose by €41.7 million, or 344 %, in the reporting period to €53.8 million (Q1-Q2 2007: €12.1 million). €40.2 million of the sales in 2008 was attributable to the second quarter alone following €13.6 million in the first quarter. Among other things, this is attributable to the fact that a large number of virtually completed project orders were not invoiced until the second quarter. Around 50 % of sales were attributable to the Spanish market, followed by South Korea and Germany. As in the previous year, the most successful product was the Sunny Central 100 with an output of 100 kW, since this is used particularly in Spain in large ground-mounted systems. While EBIT was slightly negative in the same period of the previous year, EBIT of €13.8 million was generated in the first six months of 2008 as a result of the strong rise in sales.
In the Railway Technology division, external sales in the first six months of 2008 were 1 % up on the comparable period in the previous year at €7.5 million. 53 % of sales in this division, which is characterized by larger-scale individual projects, were conducted in Germany and 40 % in EU countries. In the previous year, 80 % of sales were still achieved in Germany. Internal sales, which rose by 26 % in the reporting period, related primarily to supplies of cable and mechanical components to the High Power Solutions segment. Operating income (EBIT) shrank to €1.2 million (Q1-Q2 2007: €1.3 million).
Following the hiving off of the Railway Technology division from the parent company to an independent company, SMA Railway Technology GmbH, which was resolved by the Annual Shareholders' Meeting on April 30, 2008 and came into effect on June 2, 2008, the division can hone its image now that it is disassociated from the main business of the SMA Group, namely photovoltaic inverters.
The Electronics Manufacturing segment, which is primarily characterized by intra-Group sales, was working at full capacity in the first six months of fiscal year 2008 because of high demand in the Photovoltaics Technology division (three shift operation six days a week). More than half the products requested were therefore purchased via external suppliers. In the reporting period, total sales (external and internal revenues) rose to €65.7 million (Q1-Q2 2007: €28.7 million). Operating income (EBIT) rose to €6.8 million (Q1-Q2 2007: €1.9 million) as a result of capacity being fully utilized.
General Economic Conditions Group Sales and Earnings Sales and Earnings by Segment Assets and Financial Position Investments Research and Development Employees/Human resources Supplementary Report Risk and Opportunities Report Forecast Report
View from the south onto the new production hall which will be inaugurated in Q1 2009
As a result of the IPO on June 27, 2008 and the associated net issue proceeds of around €121.1 million, the Company's equity base has increased significantly. As at June 30, 2008, the equity ratio improved to 56.3 % compared with 39.5 % at the end of fiscal year 2007. The inflow of funds did not occur until after the reporting date for the interim financial statements.
Cash flow from operating activities has increased from €0.0 million to €71.9 million compared with the comparable figure in the previous year. Very good earnings in the first six months of fiscal year 2008 led to the fact that despite a dividend payment of €25.2 million at the beginning of May and an outflow of funds caused by investments of €30.6 million, the SMA Group had cash and cash equivalents of €65.6 million at its disposal on the reporting date for the interim financial statements (December 31, 2007: €52.8 million). As a result, SMA has a very sound financial base.
Compared with December 31, 2007, total assets have grown by €207.0 million to €370.2 million, which is mainly a tribute to the issue proceeds from the IPO and the expansion in business activities. In the reporting period, net working capital increased by 41 % to €84.0 million (December 31, 2007: €59.4 million). While inventories and trade receivables increased by 56 % and 57 % respectively, trade payables rose by 118 %. Therefore the net working capital ratio in relation to the last twelve months' sales fell to 16.6 % compared with 18.1 % at the end of fiscal year 2007.
In the first half of 2008, investments focused on the construction of a new production facility for inverters in Kassel, which is to be commissioned on schedule at the beginning of 2009. Of the total volume of around €45 million earmarked for this, around €14 million had been used as at the reporting date. Further investments basically relate to essential expansion in production capacity at interim sites and replacement investment. At €28.2 million, total investments in the first six months of the financial year – without capitalizing the costs of development projects amounting to €0.2 million – were up more than 400 % on the comparable figure in the previous year of €5.3 million. Accordingly, the investment ratio rose to 9.6 % (Q1-Q2 2007: 4.7 %). Investments of around €60 million are planned for 2008 as a whole.
General Economic Conditions Group Sales and Earnings Sales and Earnings by Segment Assets and Financial Position Investments Research and Development Employees/Human resources
Supplementary Report Risk and Opportunities Report Forecast Report
The costs of research and development amounted to €15.2 million in the first six months of the financial year and were consequently 79 % above the level of the previous year (Q1-Q2 2007: €8.5 million). In essence, this rise is attributable to an increase in the number of staff employed in development. Despite this, the R&D ratio fell as a consequence of the marked expansion in sales to 5.2 % (Q1-Q2 2007: 7.5 %).
Major highlights in development include the start of production of two new inverters. On the one hand, the Sunny Mini Central 11000TL as an extension of the very successful Sunny Mini Central series in the higher performance range, which is distinguished by a markedly reduced specific price and the outstanding efficiency rating of 98 %. On the other hand, the new generation of the Sunny Boy family, the Sunny Boy 5000TL went into production. As a successor to the Multi-String inverter, which sold in large numbers, this inverter is equipped for the first time as a global inverter with an improved efficiency rating and with Bluetooth communication and will also be produced in large numbers. Following successful UL certification, delivery of the first new Sunny Central inverters for the US market could start, with the result that SMA also has a presence in the commercial and industrial segments of the US market now.
The development team is focusing on the development of the Sunny TriPower 17000TL and the Sunny Boy 3000HF equipped with high frequency transformers as well as a new generation of Sunny Central inverters, which will go into production in 2009. A further expansion in employee numbers in the development team is planned for the second half with the aim of reducing the "time to market" period.
The rapid expansion in business entailed the further recruitment of new staff in the reporting period. Taking account of 733 temporary employees, the number of employees in the SMA Group rose by 66 % to 2,574 (June 30, 2007: 1,554). The permanent staff increased by 44 %. In the international sales and service branches run by the Photovoltaics Technology division, the number of employees doubled to 107, compared with 55 a year ago.
On April 30, 2008, the Annual Shareholders' Meeting elected Dr. Winfried Hoffmann to the Supervisory Board until the Annual Shareholders' Meeting in 2011.
Since the end of the reporting quarter, business activities have developed in line with expectations. There have been no significant changes in the general economic conditions or SMA's situation in the sector. No events have occurred that could have a material impact on the net assets, financial position or results of operations. In addition, there are no events to be reported elsewhere that are of particular significance for the SMA Group.
The Group's risk and opportunities management as well as possible individual risks are described in detail in the Annual Report 2007 and in the securities prospectus dated June 17, 2008. 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.
General Economic Conditions Group Sales and Earnings Sales and Earnings by Segment Assets and Financial Position Investments Research and Development Employees/Human resources Supplementary Report Risk and Opportunities Report Forecast Report
22
The new photovoltaic inverter Sunny Mini Central 9000/10000/11000TL with a maximum effi ciency of 98 %
With the amendment of the Renewable Energy Sources Act (EEG), the German government has created the basis for further growth in the world's largest photovoltaics market. The amendment to the law that has been adopted provides for a larger reduction in the feed-in tariff and consequently creates a substantial incentive for the solar industry to develop technological innovations to reduce the costs of a photovoltaic system. With the market launch of the Sunny Mini Central 11000TL, SMA is already fulfilling the future requirements of the EEG. With further product innovations such as the Sunny TriPower 17000TL, we shall extend our technological lead and, at the same time, contribute to reducing system costs.
Support programs are currently subject to scrutiny in other countries, too. Spain will probably adjust the feed-in tariff for photovoltaic systems (Real Decreto 661/07) this year. We assume that the adjustment will lead, among other things, to the new output installed each year being capped and that Spain will cease to be the engine of growth from the fourth quarter of 2008. The extension of the tax incentives for ground-mounted systems is currently under negotiation in the United States.
Given the planned changes to support programs in almost every important photovoltaics market in 2009, we assume that demand will remain strong in the remaining quarters of fiscal year 2008. SMA is very well positioned to benefit from these particular circumstances. SMA is the only solar inverter manufacturer, whose product range covers all applications, all types of solar module and all performance ranges. Thanks to our extraordinary flexibility, we can also service demand peaks within a short time. We are therefore expecting sales between €580 million and €640 million for fiscal year 2008. This would equate to sales growth of virtually 80 % and 100 % respectively compared with the previous year. The EBIT margin is expected to stand at the level of half-yearly earnings.
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
| April - June (Q2) January - June (Q1 - Q2) | ||||||
|---|---|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |||
| Note | € million | € million | € million | € million | ||
| Sales | (D) | 177,414 | 75,865 | 292,559 | 113,739 | |
| Cost of Sales | 109,908 | 48,505 | 180,690 | 73,336 | ||
| Gross Profi t | 67,506 | 27,360 | 111,869 | 40,403 | ||
| Selling Costs | 10,061 | 5,818 | 16,118 | 9,852 | ||
| Research and Development Costs | (1) | 7,822 | 4,670 | 15,199 | 8,543 | |
| General administrative Expenses | 4,411 | 3,773 | 10,072 | 7,097 | ||
| Other Operating Income | 1,604 | 328 | 1,951 | 544 | ||
| Other operating Expenses | 2,415 | 518 | 3,777 | 1,207 | ||
| Operating Income (EBIT) | 44,401 | 12,909 | 68,654 | 14,248 | ||
| Financial Income | 402 | 227 | 993 | 470 | ||
| Financial Expenses | 247 | 301 | 598 | 619 | ||
| Net Finance Costs | (2) | 155 | -74 | 395 | -149 | |
| Earnings before Income Taxes | 44,556 | 12,835 | 69,049 | 14,099 | ||
| Income taxes | (3) | 13,691 | 4,985 | 20,863 | 5,453 | |
| Consolidated Net Profi t | 30,865 | 7,850 | 48,186 | 8,646 | ||
| Earnings Per Share | ||||||
| Basic = Diluted (€) | (4) | 0.89 | 1.96 | 1.39 | 2.16 | |
| Number of ordinary shares on the reporting date (in thousands) |
34,700 | 4,000 | 34,700 | 4,000 |
24
| Note | 06/30/2008 € million |
12/31/2007 € million |
|
|---|---|---|---|
| Non-current Assets Intangible Assets |
(5) | 2,572 | 1,859 |
| Property, Plant and Equipment | (6) | 58,593 | 31,335 |
| Other Financial Assets | 70 | 70 | |
| Deferred Taxes | 1,616 | 1,158 | |
| 62,851 | 34,422 | ||
| Current assets | |||
| Inventories | (7) | 74,369 | 47,598 |
| Trade Receivables | 41,578 | 26,387 | |
| Other Financial Assets | (8) | 125,208 | 1,626 |
| Other Receivables | 602 | 351 | |
| Cash & Cash Equivalents | 65,614 | 52,847 | |
| 307,371 | 128,809 | ||
| TOTAL ASSETS | 370,222 | 163,231 | |
| Shareholders' Equity | |||
| Issued Capital | 34,700 | 4,000 | |
| Capital Reserve | 118,390 | 0 | |
| Retained Earnings | 55,450 | 60,437 | |
| (9) | 208,540 | 64,437 | |
| Non-current liabilities | |||
| Other Provisions | (10) | 11,706 | 9,377 |
| Financial Liabilities | 13,416 | 10,546 | |
| Other fi nancial Liabilities | 0 | 477 | |
| Miscellaneous Liabilities | (11) | 12,285 | 8,988 |
| Deferred Taxes | 1,939 | 1,344 | |
| 39,346 | 30,732 | ||
| Current liabilities | |||
| Other Provisions | (10) | 15,807 | 5,861 |
| Financial Liabilities | 912 | 1,074 | |
| Trade Payables | 31,932 | 14,620 | |
| Other Financial Liabilities | 37,477 | 28,568 | |
| Tax Liabilities | 22,349 | 10,609 | |
| Miscellaneous Liabilities | (11) | 13,859 | 7,330 |
| 122,336 | 68,062 | ||
| TOTAL CAPITAL | 370,222 | 163,231 |
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
| January - June (Q1 - Q2) |
January - June (Q1 - Q2) |
||
|---|---|---|---|
| Note | 06/30/2008 | 06/30/2007 | |
| € million | € million | ||
| Earnings after Taxes | + 48,186 | + 8,646 | |
| Income Taxes | + 20,863 | + 5,453 | |
| Net Finance Costs | - 395 | + 149 | |
| Depreciation on Property, | + 3,718 | + 5,030 | |
| Plant and Equipment and Intangible Assets | + 12,275 | + 1,459 | |
| Gains (-)/losses (+) on the disposal of Non-current Assets | + 1 | + 29 | |
| Other Non-cash Expenses/income | + 1,508 | - 156 | |
| Interest Payments made | + 982 | + 470 | |
| Dividends Received | - 13 | - 18 | |
| Income Tax Payments made | - 6,539 | - 11,312 | |
| Gross Cash Flow | + 80,586 | + 9,750 | |
| Increase/decrease in inventories | - 27,246 | - 10,575 | |
| Increase/decrease in trade receivables | - 16,799 | - 6,139 | |
| Increase/decrease in trade payables | + 17,312 | + 4,698 | |
| Change in other net assets/other Non-cash transactions | + 18,004 | + 2,228 | |
| Net Cash fl ow from Operating Activities | (14) | + 71,857 | - 38 |
| Investments in Property, Plant and Equipment | - 30,585 | - 4,997 | |
| Proceeds from the disposal of Property, Plant and Equipment | + 24 | - 18 | |
| Investments in Intangible Assets | - 3,343 | - 1,824 | |
| Proceeds from the Disposal of Intangible Assets | + 0 | + 1 | |
| Net Cash fl ow from Investing Activities | (15) | - 33,904 | - 6,838 |
| Dividend paid by SMA Solar Technology AG | - 25,200 | + 0 | |
| Net Cash fl ow from Financing Activities | (16) | - 25,200 | + 0 |
| Net Increase in Cash & Cash Equivalents | + 12,753 | - 6,876 | |
| Changes caused by Changes in Exchange Rates | + 14 | - 14 | |
| Cash & Cash Equivalents on 01/01/ | + 52,847 | + 33,518 | |
| Cash & Cash Equivalents on 06/30/ | + 65,614 | + 26,628 |
| Issued | Capital | Treasury | Retained | Consolidated | |
|---|---|---|---|---|---|
| Capital | Reserves | Shares | Earnings | Shareholders' Equity |
|
| € million | € million | € million | € million | € million | |
| Shareholders' Equity as at 01/01/2008 | 4,000 | 0 | 0 | 60,437 | 64,437 |
| Consolidated Net Profi t for H1 2008 | 0 | 0 | 0 | 48,186 | 48,186 |
| Dividend payment at SMA Solar Technology AG | 0 | 0 | 0 | -25,200 | -25,200 |
| Differences from Currency Translation | 0 | 0 | 0 | 27 | 27 |
| Capital Increase from Corporate funds | 28,000 | 0 | 0 | -28,000 | 0 |
| Capital Increase from Issuing new Shares | 2,700 | 118,390 | 0 | 0 | 121,090 |
| Shareholders' Equity as at 06/30/2008 | 34,700 | 118,390 | 0 | 55,450 | 208,540 |
| Issued | Capital | Treasury | Retained | Consolidated | |
|---|---|---|---|---|---|
| Capital | Reserves | Shares | Earnings | Shareholders' | |
| Equity | |||||
| € million | € million | € million | € million | € million | |
| Shareholders' Equity as at 01/01/2007 | 4,000 | 0 | 0 | 36,720 | 40,720 |
| Consolidated Net Profi t for H1 2007 | 0 | 0 | 0 | 8,646 | 8,646 |
| Dividend Payment at SMA Solar Technology AG | 0 | 0 | 0 | 0 | 0 |
| Differences from Currency Translation | 0 | 0 | 0 | -26 | -26 |
| Purchase of Treasury Shares | 0 | 0 | 0 | 0 | 0 |
| Sale through Employee Share Programme | 0 | 0 | 0 | 0 | 0 |
| Shareholder's Equity as at 06/30/2007 | 4,000 | 0 | 0 | 45,340 | 49,340 |
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
The condensed interim consolidated financial statements of SMA Technology AG as at June 30, 2008 were prepared, as were the condensed interim consolidated financial statements as at March 31, 2008 and the consolidated financial statements as at December 31, 2007, in compliance with the International Financial Reporting Standards (IFRS) including the interpretations of the IFRS (IRIC) adopted and published by the International Accounting Standards Board (IASB), as adopted by the European Union and whose application is mandatory. Accordingly, the interim financial statements of SMA Solar Technology AG were also prepared in line with IAS 34 Interim Financial Reporting. In line with the regulations of IAS 34, a condensed reporting format compared with the consolidated financial statements as at December 31, 2007 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, 2007.
The interim consolidated financial statements were prepared in euro. Unless indicated otherwise, all amounts are stated in thousands of euro (€'000). The income statement is classified according to the cost of sales method.
The Managing Board of SMA Solar Technology AG authorized the interim consolidated financial statements for transmission to the Supervisory Board on August 5, 2008.
The Company's shares are traded publicly; they are listed on the Frankfurt Stock Exchange's Prime Standard.
The renaming of SMA Technologie AG as SMA Solar Technology AG and the hiving off of the Railway Technology division into the wholly owned subsidiary SMA Railway Technology GmbH was decided by resolution of the Annual Shareholders' Meeting on April 30, 2008.
The SMA Group produces predominantly in Germany and distributes inverters throughout the world. More detailed information on the segments is provided in note D.
One company has been added to the group of companies included in consolidation as at June 30, 2008 as against December 31, 2007, namely the wholly owned subsidiary SMA Railway Technology GmbH, into which the Railway Technology division has been hived off. The hiving off became legally effective when it was registered in the Commercial Register of the parent company on June 2, 2008.
The companies included in consolidation during the comparison period ended June 30, 2007 have not changed as against December 31, 2007.
The companies included in the SMA Group's as of June 30, 2008 consolidation are shown in the following table:
| Registered offi ce | Incorporation | Holding | Consolidation | |
|---|---|---|---|---|
| Parent company | ||||
| SMA Solar Technology AG | Niestetal, Germany | 1981 | ||
| Shares in affi liated companies | ||||
| SMA America, Inc. | Rocklin, USA | 2000 | 100 % | |
| SMA Ibérica Technología Solar, S.L. | Barcelona, Spain | 2005 | 100 % | |
| SMA Italia S.r.l. | Milan, Italy | 2005 | 100 % | |
| SMA Technology Korea Co., Ltd. | Seoul, Korea | 2006 | 100 % | F |
| SMA Beijing Commercial Company Ltd. | Beijing, China | 2007 | 100 % | F |
| SMA France S.A.S. | Lyon, France | 2007 | 100 % | F |
| SMA Hellas AE | Athens, Greece | 2007 | 100 % | F |
| SMA Technology Australia Pty. Ltd. | Sydney, Australia | 2007 | 100 % | F |
| SMA Railway Technology GmbH | Kassel, Germany | 2008 | 100 % | F |
The interim consolidated financial statements are based on the financial statements of SMA Technology AG and the subsidiaries included in consolidation, which are prepared in accordance with uniform accounting policies applicable throughout the Group.
More detailed information is provided in the notes to the consolidated financial statements as at December 31, 2007.
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
With the exception of the changes shown below, there were no changes to the accounting policies in the present interim consolidated financial statements as at June 30, 2008 compared with the consolidated financial statements of SMA Solar Technology AG as at December 31, 2007. A detailed description of these policies is published in the notes to the consolidated financial statements as at December 31, 2007.
In deviation from the consolidated financial statements as at December 31, 2007, the following interpretations were applied for the first time in 2008. In their entirety, the new interpretations had no significant impact on the Group's net assets, financial position and results of operations. There are no changes as against the financial statements as at March 31, 2008.
The Interpretation IFRIC 11 was published in November 2006 and is to be applied for the first time to fiscal years beginning on or after March 1, 2007. It regulates how IFRS 2 is to be applied to share-based payment agreements, which include the company's own equity instruments or equity instruments issued by another company within the group. The Interpretation is currently not relevant to the SMA Group.
The Interpretation IFRIC 12 was published in November 2006 and is to be applied for the first time to fiscal years beginning on or after January 1, 2008. To date, IFRIC 12 has not been endorsed in European law by the EU. The interpretation regulates the accounting treatment of obligations assumed and rights received as part of service concession agreements in the operator's financial statements. The companies included in the consolidated financial statements are not operators for the purposes of IFRIC 12. The interpretation therefore has no impact on the Group.
The Interpretation IFRIC 14 was published in July 2007 and is to be applied for the first time to fiscal years beginning on or after January 1, 2008. To date, IFRIC 14 has not been endorsed in European law by the EU. The Interpretation gives guidelines for determining the maximum amount of the surplus from a defined benefit plan, which may be capitalized as an asset under IAS 19 Employee Benefits. Since no defined benefit plans are accounted for in the Group, this Interpretation has no impact on the Group.
The Group's operating segments were defined in compliance with the regulations contained in IFRS 8 on December 31, 2007 and match those of the consolidated financial statements as at December 31, 2007. Sales in the Photovoltaics Technology division are subject to fluctuations because of discontinuous support programs among other things.
The segment information pursuant to IFRS 8 is made up as follows for the second quarters of 2008 and 2007:
| Photovoltaics Technology | Railway Technology | |||||
|---|---|---|---|---|---|---|
| Medium Power Solutions | High Power Solutions | Railway Technology | ||||
| Q2 | Q2 | Q2 | Q2 | Q2 | Q2 | |
| € million | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| External Sales | 133.0 | 63.3 | 40.2 | 8.1 | 3.6 | 3.9 |
| Internal Sales | 4.3 | 2.1 | 0.8 | 0.4 | 3.1 | 2.1 |
| Total Sales | 137.3 | 65.4 | 41.0 | 8.5 | 6.7 | 6.0 |
| Depreciation | 1.1 | 1.8 | 0.2 | 0.2 | 0.2 | 0.2 |
| Operating Income (EBIT) | 25.8 | 9.9 | 12.2 | -0.2 | 0.8 | 0.7 |
| Sales | ||||||
| Germany | 81.9 | 51.3 | 6.4 | 4.6 | 1.8 | 3.1 |
| EU | 48.2 | 8.1 | 24.2 | 3.0 | 1.3 | 0.8 |
| Third-party Countries | 10.9 | 5.7 | 9.7 | 0.8 | 0.5 | 0.0 |
| Sales Allowances | -8.1 | -1.8 | -0.1 | -0.3 | 0.0 | 0.0 |
| Total External Sales | 132.9 | 63.3 | 40.2 | 8.1 | 3.6 | 3.9 |
| Electronics Manufacturing | Reconciliation | Continuing operations | ||||
| Q2 | Q2 | Q2 | Q2 | Q2 | Q2 | |
| € million | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| External Sales | 0.7 | 0.6 | 0.0 | 0.0 | 177.4 | 75.9 |
| Internal Sales | 36.2 | 17.8 | -44.4 | -22.4 | 0.0 | 0.0 |
| Total Sales | 36.9 | 18.4 | -44.4 | -22.4 | 177.4 | 75.9 |
| Depreciation | 0.5 | 0.4 | 0.0 | 0.0 | 2.0 | 2.6 |
| Operating Income (EBIT) | 4.7 | 1.2 | 0.9 | 1.3 | 44.4 | 12.9 |
| Sales | ||||||
| Germany | 0.7 | 0.7 | 0.0 | 0.0 | 90.8 | 59.7 |
| EU | 0.0 | 0.0 | 0.0 | 0.0 | 73.7 | 11.9 |
| Third-party Countries | 0.0 | 0.0 | 0.0 | 0.0 | 21.1 | 6.5 |
| Sales Allowances | 0.0 | -0.2 | 0.0 | 0.0 | -8.2 | -2.2 |
| Total External Sales | 0.7 | 0.5 | 0.0 | 0.0 | 177.4 | 75.9 |
Total segment assets as at June 30, 2008 have not changed significantly as against the reporting date of the last annual financial statements (as at December 31, 2007).
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
The segment information pursuant to IFRS 8 is made up as follows for the first halves of 2008 and 2007:
| Photovoltaics Technology | Railway Technology | ||||||
|---|---|---|---|---|---|---|---|
| Medium Power Solutions | High Power Solutions | Railway Technology | |||||
| Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | ||
| € million | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| External Sales | 229.8 | 92.8 | 53.8 | 12,1 | 7.5 | 7.4 | |
| Internal Sales | 8.0 | 3.2 | 1.2 | 0,8 | 4.4 | 3.5 | |
| Total Sales | 237.8 | 96,0 | 55,0 | 12,9 | 11.9 | 10.9 | |
| Depreciation | 2.1 | 3.4 | 0.4 | 0,5 | 0.3 | 0.3 | |
| Operating Income (EBIT) | 45.8 | 10.3 | 13.8 | -0.6 | 1.2 | 1.3 | |
| Sales | |||||||
| Germany | 148.5 | 72.8 | 8.7 | 5,2 | 4.0 | 5.9 | |
| EU | 75.8 | 13.2 | 29.3 | 6.1 | 3.0 | 1.3 | |
| Third-party Countries | 17.5 | 9.2 | 16.3 | 1.2 | 0.5 | 0.2 | |
| Sales Allowances | -12.0 | -2.4 | -0.5 | -0.3 | 0.0 | 0.0 | |
| Total External Sales | 229.8 | 92.8 | 53.8 | 12.2 | 7.5 | 7.4 |
| Electronics Manufacturing | Reconciliation | Continuing operations | ||||
|---|---|---|---|---|---|---|
| Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | Q1 - Q2 | |
| € million | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| External Sales | 1.5 | 1.3 | 0.0 | 0.0 | 292.6 | 113.7 |
| Internal Sales | 64.2 | 27.4 | -77.8 | -34.9 | 0.0 | 0.0 |
| Total Sales | 65.7 | 28.7 | -77.8 | -34.9 | 292.6 | 113.7 |
| Depreciation | 0.9 | 0.8 | 0.0 | 0.0 | 3.7 | 5.0 |
| Operating Income (EBIT) | 6.8 | 1.9 | 1.1 | 1.3 | 68.7 | 14.2 |
| Sales | ||||||
| Germany | 1.5 | 1.5 | 0.0 | 0.0 | 162.7 | 85,4 |
| EU | 0.0 | 0.0 | 0.0 | 0.0 | 108.1 | 20.6 |
| Third-party Countries | 0.0 | 0.0 | 0.0 | 0.0 | 34.3 | 10.6 |
| Sales Allowances | 0.0 | -0.2 | 0.0 | 0.0 | -12.5 | -2.9 |
| Total External Sales | 1.5 | 1.3 | 0.0 | 0.0 | 292.6 | 113.7 |
32
The reconciliation of the total segment earnings (EBIT) pursuant to IFRS 8 to earnings before income taxes produces the following figures:
| Q2 | Q2 | Q1 - Q2 | Q1 - Q2 | |
|---|---|---|---|---|
| € million | 2008 | 2007 | 2008 | 2007 |
| Total Segment Earnings (EBIT) | 43.5 | 11.6 | 67.6 | 12.9 |
| Eliminations | 0.9 | 1.3 | 1.1 | 1.3 |
| Consolidated EBIT | 44.4 | 12.9 | 68.7 | 14.2 |
| Net Finance Costs | 0.2 | -0.1 | 0.4 | -0.1 |
| Earnings before Income Taxes | 44.6 | 12.8 | 69.1 | 14.1 |
Circumstances are shown in the reconciliations, which by definition are not part of the segments. In addition, unallocated parts of Group head office, e.g. from circumstances that are accounted for centrally, are included therein. Business relations between the segments are eliminated in the reconciliation.
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
| Q1-Q2 2008 | Q1-Q2 2007 | |
|---|---|---|
| € million | € million | |
| Staff Costs | 12,256 | 6,285 |
| Cost of Materials | 1,271 | 1,272 |
| Other | 1,892 | 986 |
| 15,419 | 8,543 | |
| Capitalised Development Projects | -220 | 0 |
| 15,199 | 8,543 |
| Q1-Q2 2008 | Q1-Q2 2007 | |
|---|---|---|
| € million | € million | |
| Interest Income | 982 | 470 |
| Other Financial Income | 11 | 0 |
| Financial Income | 993 | 470 |
| Interest Expenses | 13 | 18 |
| Other Financial Expenses | 6 | 12 |
| Interest Share from Valuation | 579 | 589 |
| Financial Expenses | 598 | 619 |
| Net Finance Costs | 395 | -149 |
Income tax expenses were calculated on the basis of the average tax rate expected for the respective company. The reduction in the average tax rate from 38.7 % in the first half of 2007 to 30.2 % in the first half of 2008 is mainly the result of the 2008 German Business Tax Reform Act (Unternehmenssteuerreformgesetz), which was passed by the Upper House of the German parliament on July 6, 2007. The changes came into effect on January 1, 2008. The basis for calculating deferred taxes is the respective expected future tax rate of 30 %.
Earnings per share are calculated by dividing the consolidated earnings attributable to the shareholders by the number of ordinary shares in circulation.
For fiscal year 2007 as a whole, the number of shares amounted to 4,000,000. As a result of the capital increase (on June 2, 2008) from corporate funds, the number of shares has increased by 28,000,000. As a result of the IPO, 2,700,000 new shares were also issued so the number of shares stands at 34,700,000 at the end of the second quarter.
The consolidated earnings attributable to the shareholders are the consolidated profit for the period after tax. Since, at the reporting date, the Company does not hold any of its own shares and neither are there any special cases, the number of ordinary shares issued equates to the number of shares in circulation. Since the new shares are entitled to a share in the profits from the beginning of fiscal year 2008, the profit per share (see income statement) as at June 30, 2008 was calculated on the basis of all shares in circulation at this date.
The calculation of earnings in relation to the weighted average number of shares produces earnings of €0.96 per share on 32,090,000 shares for the period from April 1 to June 30, 2008, earnings of €1.50 per share on 32,045,000 shares for the period from January 1 to June 30, 2008. In this connection, an adjustment as defined in IAS 33.28 was undertaken for calculating the weighted average with regard to the above-mentioned capital increase. There were no deviations through the calculation according to the weighted average for the other comparison periods.
There are no options or conversion rights at the reporting date. Therefore there is no dilution and diluted and basic earnings per share are the same.
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
| 06/30/2008 | 12/31/2007 | |
|---|---|---|
| € million | € million | |
| Software | 2,237 | 1,736 |
| Research and Development Costs | 220 | 0 |
| Advance Payments | 115 | 123 |
| 2,572 | 1,859 |
| 06/30/2008 € million |
12/31/2007 € million |
|
|---|---|---|
| Land and Buildings | ||
| including Buildings on Third-party Land | 22,716 | 16,702 |
| Technical Equipment and Machinery | 4,541 | 3,863 |
| Other Equipment, Operating and Offi ce Equipment | 14,812 | 10,770 |
| Advance Payments | 16,524 | 0 |
| 58,593 | 31,335 |
Advance payments made in the period from January 1, 2008 to June 30, 2008 include payments amounting to €13,845 thousand for the construction of a production facility in Kassel. Further details are provided in note (13).
Furthermore, a car park was acquired from SMA Immo GmbH for €1,205 thousand in the first quarter. Further details are provided in note (19).
In particular, the further increase in property, plant and equipment of €27.3 million in total should be viewed against the background of the expansion in the Group's business, which entailed an increasing build-up of property, plant and equipment.
| 06/30/2008 | 12/31/2007 | |
|---|---|---|
| € million | € million | |
| Raw Materials and Supplies | 35,116 | 20,855 |
| Work in Progress | 12,372 | 8,188 |
| Finished Goods and Goods for Resale | 26,547 | 18,520 |
| Advance Payments | 334 | 35 |
| 74,369 | 47,598 |
As at June 30, 2008, other financial assets include the receivable from the syndicate banks from the capital increase, which resulted from the issue of shares, see also section (9, 16).
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
The change in shareholders' equity including effects not shown in the income statement is presented in the statement of changes in shareholders' equity.
The following changes with regard to shareholders' equity resulted from the resolution by the Annual Shareholders' Meeting on April 30, 2008:
companies affiliated with the Company; to exclude possible fractions from the subscription right; in the case of capital increases in return for cash contributions if the issue amount of the new shares does not fall significantly (in the sense of sections 203 (1) and (2), 186 (3) sentence 4 AktG) below the market price of shares of the same class and terms that are already listed at the time the Managing Board sets the final issue amount and the pro rata amount of the issued capital attributable to the new shares, for which the subscription right is excluded, does not exceed 10 % of the issued capital available at the time the new shares are issued.
As a result of the IPO on June 27, 2008, gross issue proceeds of €126,900,000 were achieved. Following deduction of provisional issue costs of €8,300,000 and in line with the associated income tax benefit of €2,490,000 this resulted in net issue proceeds of €121,090,000 in accordance with IAS 32.35. The amount equal to the proportional amount of the issued capital of the new shares issued of €2,700,000 was posted in issued capital, while the amount in excess of the proportional amount of the issued capital of the new shares issued amounting to €118,390,000 was transfered to the capital reserves.
| 06/30/2008 | 12/31/2007 | |
|---|---|---|
| € million | € million | |
| Production | 20,040 | 12,166 |
| Staff | 515 | 424 |
| Other | 6,958 | 2,648 |
| 27,513 | 15,238 |
Provisions take into account all discernible risks and uncertain liabilities at the balance sheet date. Staff provisions essentially relate to anniversaries. In particular, production provisions include warranty provisions for products sold.
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
| 06/30/2008 | 12/31/2007 | |
|---|---|---|
| € million | € million | |
| Deferred items for Extended Guarantees | 13,153 | 9,443 |
| Liabilities from Advance Payments Received | 10,095 | 5,116 |
| Liabilities to the Tax Offi ce | 2,089 | 886 |
| Liabilities from Subsidies Received | 734 | 843 |
| Other | 73 | 30 |
| 26,144 | 16,318 |
As at June 30, 2008, the balance sheet includes a forward transaction intended to hedge the exchange risks of expected future sales to customers in the US. It has not been designated as a hedging relationship. The purchasing volume in USD has increased as against fiscal year 2007.
As at June 30, 2008, there were guarantees by banks to third parties amounting to €2,716 thousand (December 31, 2007: €2,737 thousand) in the form of warranty and advance payment guarantees.
As at June 30, 2008, the Company had entered into commitments to acquire property, plant and equipment amounting to €11,686 thousand. This figure includes commitments of €7,455 thousand for the construction of a new production facility in Kassel, completion of which is planned for the end of 2008. The other obligations relate predominantly to production tools. There is also the customary amount of business commitments.
In the reporting period, net cash flow from operating activities amounted to €71,857 thousand as against € – 38 thousand in the same period in the previous year. This increase is mainly attributable to the increase in sales and the increase in earnings associated therewith.
Net cash flow from investing activities stood at € – 33,904 thousand (same period in the previous year: € – 6,838 thousand). Essentially, the difference is the result of the increased investment in property, plant and equipment, in particular, the advance payments made for the construction of the new production facility in Kassel.
In the first half of the year, net cash flow from financing activities stood at € – 25,200 thousand (same period in the previous year: €0 thousand) and includes the full amount of the dividend payment resolved by the Annual Shareholders' Meeting in April 2008. In the previous year, the dividend payment did not take place until the 3rd quarter because the Annual Shareholder's Meeting was held at a later date.
The inflow of funds from the IPO was accounted for as a non-cash transaction in the first half of the year but the Company had not yet received the funds at the reporting date. The funds were only received at the beginning of July 2008.
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
No significant, reportable events have occurred since the balance sheet date.
| 06/30/2008 | 06/30/2007 | |
|---|---|---|
| € million | € million | |
| Wages and Salaries | 64,681 | 29,759 |
| Social Security Contributions and Welfare Payments | 5,228 | 3,336 |
| 69,909 | 33,095 |
| 06/30/2008 | 06/30/2007 | |
|---|---|---|
| Development | 292 | 187 |
| Production and Service | 869 | 593 |
| Sales and Administration | 362 | 335 |
| 1,523 | 1,115 | |
| Trainees and Interns | 148 | 103 |
| Temporary Employees | 555 | 156 |
| 2,226 | 1,374 |
By way of agreement dated February 28, 2008, SMA Solar Technology acquired a car park from SMA Immo GmbH for a price of €1,205 thousand. The agreed purchase price is slightly below the carrying amount of the car park in SMA Immo GmbH's financial statements at the time the contract is concluded.
By way of agreement dated March 17, 2008 (with effect from April 1, 2008) with SMA Immo GmbH, five tenancy agreements concluded in previous years, which qualified as finance leases, were combined in a new agreement. This agreement also includes a further finance lease relating to a building that is currently still under construction. The new agreement has a term of 15 years and came into effect on April 1, 2008. The finance lease installment payable to SMA Immo GmbH currently amounts to €149 thousand/month and will amount to €219 thousand/month from the time the building is handed over. From the probable handover of the building (on August 15, 2008) this will lead to a total lease installment under the new agreement of €2.1 million in 2008 (previous year: €1.6 million). Liabilities to SMA Immo GmbH were balanced on June 30, 2008 (December 31, 2007: €57 thousand).
As part of the IPO a total of 5.0 million shares were sold by the four main shareholders.
On April 30, 2008, SMA concluded an employee allocation agreement on the allocation of temporary employees. The sole shareholder and managing director is the wife of one of the members of the Managing Board. At the reporting date, no transactions had been dealt with under the agreement.
Niestetal, August 5, 2008
SMA Solar Technology AG The Managing Board
Günther Cramer Peter Drews Pierre-Pascal Urbon Reiner Wettlaufer
Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Statement of Changes in the Consolidated Shareholders' Equity Notes to the Condensed Interim Consolidated Financial Statements Responsibility Statement Review Report
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group for the remaining months of the fiscal year.
Niestetal, August 5, 2008
SMA Solar Technology AG The Managing Board
Günther Cramer Peter Drews Pierre-Pascal Urbon Reiner Wettlaufer
(Translation - the German text is authoritative)
We have reviewed the condensed consolidated interim financial statements – comprising the condensed balance sheet, condensed income statement, condensed cash flow statement, condensed statement of changes in shareholders' equity, and selected explanatory notes – and the interim report of SMA Solar Technology AG, Niestetal, for the period from January 1, 2008 to June 30, 2008, which are part of the half-year financial report pursuant to Article 37x (3) of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRSs applicable to interim financial reporting as adopted by the EU and of the interim report in accordance with the provisions of the German Securities Trading Act applicable to interim reports is the responsibility of the parent company's Management Board. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (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 consolidated interim 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 report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement 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 consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU or that the interim report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim reports.
Kassel, August 8, 2008
Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
Holger Plaum ppa. Matthias Schwarze-Gerland
November 14, 2008 Report on Q3 2008
May 28, 2009 Annual General Meeting 2009
SMA Solar Technology AG Sonnenallee 1 Tel.: +49 561 9522 0 34266 Niestetal www.SMA.de
Investor Relations Tel.: +49 561 9522 2222 Fax: +49 561 9522 1103 E-Mail: [email protected]
Public Relations Volker Wasgindt Tel.: +49 561 9522 1121 Fax: +49 561 9522 1103 E-Mail: [email protected]
Publisher SMA Solar Technology AG
Art Direction Matthias Holzhauer Shauna Klose
Text SMA Solar Technology AG A&B Financial Dynamics
Photos SMA Solar Technology AG
Publication date August 14, 2008
This interim report was published in German and English on August 14, 2008. Both versions are available as downloads on our website.
Text and illustrations conform to technical standards on printing. Subject to technical modifications. No liability for typographical errors. Printed on chlorinefree paper.
All trade marks are acknowledged, even if they are not separately identified. An absence of identification does not mean that goods or a mark are free. Reproduction, even of extracts, only with written approval by the publisher.
© Copyright 2008, SMA Solar Technology AG All rights reserved
The report is published in German and as an English translation. In the event of any conflict or inconsistency between the English and the German versions, the German original shall prevail.
This Financial Report contains forward-looking statements based on current assumptions and forecasts made by SMA Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual assets, financial position, earnings, development or performance of SMA group and the estimates given here. These factors include those discussed in SMA's public reports, such as the Annual Report 2007 and the Wertpapierprospekt, dated June 17, 2008, which are available on the SMA website at www.ir.sma.de. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
SMA Solar Technology AG Sonnenallee 1 34266 Niestetal Germany Tel.: +49 561 9522 0 Fax: +49 561 9522 100 E-Mail: [email protected] www.SMA.de Q2BERICHT-KEN083310 No liability for typographical errors. Printed on chlorine-free paper.
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