SMA Solar details transformation plan as sales continue to decline

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Major PV inverter manufacturer SMA Solar said that its 2015 sales would continue to decline, guiding sales of between €730 million to €770 million. 

The company provided guidance at its Capital Markets Day in the same week it announced 1,000 new job cuts, a prediction that 2014 sales would be in the region of €790 million and a loss approaching €115 million. 

SMA Solar expects losses to continue through the year and guided EBITDA losses between €30 million to €60 million in 2015. 

However management noted that losses would be partially determined by the speed at which its planned transformation measures were implemented.

Transformation measures 

Key to the transformation measures would seem to be a swathe of cost-cutting measures, which include the 34% headcount reduction. Management said the cost-cutting measures would be implemented in the coming months and were planned to bring SMA’s financial breakeven point to €700 million by saving the company more than €160 million on an annual basis. 

Currently, SMA said that its fixed cost base was €407 million, with plans to reduce that to €245 million by the end of 2016. 

Measures are widespread and impact nearly all areas of its operations. 

Technology headcount reductions are severe. SMA said that around half (550) of the 1,050 full-time technology jobs would be slashed, resulting in the downsizing of its technology operations located in Kassel, Germany, Denver, US and Suzhou, China. 

In respect specifically to its important R&D activities, SMA noted that it would reorganise the R&D department with emphasis on improved efficiency and cost reduction. No further details were provided.

Within its operations segment, SMA expects to reduce headcount from around 2,030 to 1,480. The company plans to outsource what it described as non-core activities and streamline the management hierarchy with the phasing-out of ‘interim’ managers. 

The company expects to implement a ‘flat hierarchy’ with the loss of around 50% of existing management positions worldwide. 

The administration segment is to lose over half its positions. Headcount is planned to be reduced from 630 to 350, which includes the restructuring of the CFO and CEO functions, though details were not provided. The company said it would also centralise administration functions.

Within its sales and marketing segment the current headcount of 450 will be reduced to 260, mainly from the reduction in ‘back office staff’. However, costs will be curtailed on downsizing market and communications as well as the closure of some subsidiaries. The number of sales offices would be reduced from 19 to 16.

SMA also highlighted that its service segment would not be immune to the headcount reductions, but due to its overall importance to long-term revenue and the difficulty in downsizing such operations as SMA is a global provider, job losses will only amount to 80, with 430 remaining.

However, the number of service facilities would be reduced from 25 to 21, SMA added.

With respect to other facilities, SMA said that it would retain its three string inverter manufacturing facilities, while reducing central inverter manufacturing to one facility, down from three. 

Logistics centres would be reduce from 51 to 33. 

Overall, headcount reductions in Germany are expected to total 1,300 and be accompanied by 300 job losses from overseas operations. This would result in a workforce of 1,800 in Germany and 1,270 in overseas territories, highlighting the impact of the decline in the German PV market in the last couple of years.

The company said that the transformation measures outlined would be monitored by a special project management office and that 98% of the planned restructuring was already deemed to be ‘measurable tasks’.

23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.
7 April 2022
Solarex Istanbul, Turkey’s first and unique exhibition on solar energy, provides a huge opportunity to Turkey on the way to being a solar energy hub. Solarex Istanbul will take place on 7-9 April 2022 for the 14th time. It will be a commercial platform to have the latest technologies and combination of new products from all around the world. It takes place annually at Istanbul Expo Center, Turkey. It is also called the most important platform for manufacturers, suppliers and dealers of the solar industry in Eurasia.

Read Next

January 28, 2022
Greek industrial group Mytilineos said its renewables and storage unit continues with “full speed” to invest in solar and battery energy storage systems globally following a 2021 that saw the business expand its PV engineering, procurement and construction (EPC) operations.
January 28, 2022
Indian independent power producer (IPP) ReNew Power has sold its 117MW rooftop solar portfolio as part of a strategy to heighten its focus on utility-scale PV.  
January 28, 2022
Global investment in renewables rose to new heights in 2021 as solar and wind deployment surged, but total energy transition expenditure needs to triple in the coming years to get on track for net zero, according to new research from BloombergNEF.
January 28, 2022
LONGi has raised its wafer prices for a second time in just over a month as hopes of falling costs fade and China shuts down for a week for its annual Luna New Year holiday.
January 27, 2022
Renewables owner and operator Brookfield Renewable has tripled its US development pipeline to 31GW through the US$650 million acquisition of clean power developer Urban Grid.
January 27, 2022
Hecate Energy’s first stage application for a 500MW solar PV plant in the state of New York has been accepted by the newly formed New York State Office of Renewable Energy Siting (ORES).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal
Solar Media Events
April 25, 2022
Berlin, Germany