Struggling PV module manufacturer, Solon is reacting to the weak end-user demand in Germany by reducing module output and plans to introduce short-time working to reduce inventory levels. However, management noted that its two most important overseas markets, Italy and the US remained strong - noting revenue for the quarter was ‘slightly ahead’ of expectations.
Though Solon did not provide further details over production level cutbacks the company noted that approximately 100 workers would be affected by the reduction in production, which was understood to have started on October 1, 2011. The company did not say when the policy would end. The German production facilities are in Berlin and Greifswald.
Back in July, 2011 Solon announced sweeping plans to restructure the company to reduce debts (net debt as of June 30, 2011 €402.4 million) and bring the company back to a firmer financial footing. Then, management noted the need to reduce manufacturing costs, which led to the announced closure of its module assembly lines in the US.
As part of the restructuring efforts, management have appointed Dr. Walter Bickel to join the board as CRO with immediate effect. Dr. Bickel comes from global professional services firm, Alvarez & Marsal, which specializing in turnaround and interim management duties. He and a team from the firm have worked with Solon since restructuring efforts were announced.
However, as a knock-on effect, of current Management Board members Andreas Amelang and Dr. Martin Detje have left their positions by mutual consent. The company noted that Dr. Detje resigned as he disagreed with the strategic repositioning of the company under plans being implemented.
“The restructuring of Solon is on a tight time schedule,” noted Dr. Karl Werner, chairman of the Solon SE Supervisory Board. “We believed it was important for Dr. Bickel, a proven restructuring expert with the necessary skills, to work closely with the Chief Executive Officer so that the decisions that have been made are implemented rapidly and stringently.”
As part of the restructuring, Dr. Werner said that the company had been organized into three business segments, which included components, industrial roofs, and power plants, which were along the lines set out in July this year. However, the business segments were said to be operated as independent organizational units and ‘profit centres.’
Citing a pick-up in business in Germany by the end of the year, management said it remained confident of meeting its downward revised guidance for the full-year.