Power-One’s PV inverter market share rising

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Power-One’s global market share has gone from 11% at the end of 2011 to 13% at the end of the third quarter of 2012, according to market research firm IHS.

The increase in market share has been buoyed by new product introductions, improved manufacturing performance in the US and continued strong demand for its PV inverters across commercial and residential markets in Europe, North America and Asia-Pacific, according to Power One’s management, during a conference call to discuss Q3 2012 financial results, last week.

The PV inverter manufacturer maintained its number 2 ranking, while also noting that its share of the Australian market exceeded 20%, with focus on the residential and small to medium commercial rooftop markets. This translated to a 200% revenue growth year-to-date.

However, the potential for further market penetration was expected as the market evolves for larger commercial and utility scale projects in the country.

Financial results

 

Power-One reported net sales of US$284 million for Q3 2012, with its Renewable Energy Solutions (RE) segment, contributing US$216 million and Power Solutions posting US$67 million in sales. Sales exceeded previous guidance of between US$260 million -US$280 million.

Consolidated gross margin in the quarter was 29%, down marginally from the 30% in the second quarter of 2012. EBITDA was US$42 million in the quarter, down from US$77 million in the previous quarter.

On a regional basis the EMEA represented 82% of RE segment revenue, with 43% of total revenue coming from Italy and 22% from Germany. Asia Pacific increased 7% sequentially to 11% of total RE revenue, and North America increased from 2% to 7%.

The commercial segment, represented 59% of shipped megawatts of inverters, which management said was driven by a strong commercial rooftop market across all regions. Shipments to the residential sector were 28% of total megawatts shipped, and the utility sector represented 13%.

Richard Thompson, Chief Executive Officer, President and Director of Power-One said in the conference call, “Our commercial rooftop and residential products continued to gain traction. Our 3-phase TRIO line of string inverters that address commercial rooftop applications, and our single-phase inverters for residences are being well received in the marketplace. We shipped over 450 megawatts of these product lines during Q3 and 1,070 megawatts year-to-date.”

The company said that for the first nine-months of 2012 it had shipped 2.9GW, an increase of 42% over the same period in 2011.

Pricing dynamics

Power-One said that pricing in the third quarter was slightly lower after an approximate drop of 7% in the first half of the year. The company expected further price erosion in the fourth quarter and that lower pricing levels of between 10%-12% are expected by year end.

Entering Japan

Management noted that it was entering the Japanese market with a range of products currently undergoing JET certification but will using business partnerships with large industrial companies to fast track market penetration. However, Thompson noted that meaningful revenue from the Japanese market was not expected until in the second half of 2013.

Entering China

With the China PV market dominated by utility-scale project business and domestic inverter suppliers, Power-One noted that it would concentrate efforts to break into the market via EPCs and energy utility companies.

Guidance

Power-One guided demand in Germany and Italy was expected to decline in the fourth quarter, resulting in revenue being in the range of US$210 million-US$230 million. Gross margins would be in the mid-20% range.

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