Updated: Leading PV inverter manufacturer, SMA Solar Technology, is slashing a further 1,000 jobs, primarily in Germany due to lower expected sales in 2015 from its traditional German and European markets.
SMA Solar had previously announced around 600 full-time job cuts in a bid to return to profitability. The company noted that a total of 1,600 job cuts would be implemented by the end of June 2015.
The company said that around 1,300 full-time jobs in Germany and approximately 300 full-time positions in international locations would be cut. SMA Solar had 4,667 full-time employees at the end of 2014.
“We expect to see high price pressure on the global photovoltaic market still in the coming years and a further decline in demand in Europe, particularly in Germany” said, Pierre-Pascal Urbon, chief executive of SMA Solar. “By contrast, the non-European markets will develop positively. This means, that although the market measured in gigawatts will continue to grow in the medium term, we expect to see a global decline when measured in euros. To return to profitability in this environment, we want to make adjustments to SMA’s structures in line with the lower sales level. This is the only way that we can break even with reduced sales.”
The company noted that it expected to report 2014 revenue of €790 million and a loss approaching €115 million.
“However, the effects of these measures will not emerge until the second half of the year at the earliest, meaning that SMA will probably not yet return to profitability in the current fiscal year,” added Urbon.
According to market research firm IHS, the global PV inverter market is forecasted to increase around 1% in 2015 to US$6.4 billion, in contrast to SMA’s CEO’s remarks of a decline.
Global inverter shipments are forecast to increase by 12% to reach 46.5GWac in 2015, due to an increase in demand for inverters in key markets such as China, Japan and the United States. However, revenue growth will be limited by average global prices declining by 10%, IHS noted.
“To date, SMA’s market share in China, the world’s largest inverter market in shipment terms, has been limited due to the dominance of the domestic suppliers and the highly competitive prices offered in this market,” noted Cormac Gilligan, Senior Analyst at IHS. “Despite its acquisition of Zeversolar, SMA has been unable to gain significant market share in China.
“Even in Germany, SMA’s domestic market where it has a dominant market share, decreasing prices and a highly competitive environment have severely impacted its revenue growth. PV inverter revenues in Germany in 2015 are forecast to reach US$300 million, down from US$1.6 billion in 2012. Even the exit of some leading European suppliers such as SolarMax has given limited breathing space due to the limited growth potential in Germany and the emergence of new Asian suppliers in the market,” added Gilligan.
A key emerging market for SMA Solar that avoids the highly competitive inverter space is the ‘Smart Home’.
IHS notes that SMA is aiming to diversify its business and move into the smart home and energy management industries which are presently higher margin and less commoditised industries, which it believes SMA is better placed for success in those segments.