centrotherm photovoltaics AG

EANS-News: centrotherm photovoltaics publishes preliminary results and announces extensive efficiency program and refocusing

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  Corporate news transmitted by euro adhoc. The issuer/originator is solely
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annual result


Blaubeuren (euro adhoc) - -       Revenue up 11.9 % to EUR 698.5 million

-       EBIT operating loss of EUR 19.8 million
-       "ct focus" efficiency program launched to reduce costs and further
adjust capacities
-       Business refocusing: strategic concentration on crystalline silicon
along photovoltaic value chain


Blaubeuren, March 6, 2012 - centrotherm photovoltaics AG, Blaubeuren, continued
to report growth in the 2011 financial year, which was a difficult year for the
solar sector: revenue generated by the globally leading provider of technology
and equipment to the photovoltaic sector grew by 11.9 % to EUR 698.5 million
according to preliminary figures (previous year: EUR 624.2 million). Earnings
before interest, tax, depreciation and amortization (EBITDA) fell from EUR 101.3
million to EUR 10.2 million in the 2011 reporting period. The company reported a
EUR 19.8 million operating loss at the earnings before interest and tax (EBIT)
level (previous year: EUR 75.4 million profit). Continued tensions within the
sector, in particular, tangibly affected the 2011 earnings trend. One-offs
amounting to a loss off EUR 75.0 million arose from adjustments to individual
large-scale projects, and a weak third- and fourth-quarter operating profit and
corresponding adjustments, which reflected market trends. Due to the
surprisingly drastic deterioration in market and financial circumstances, the
Group failed to achieve its guidance for the 2011 financial year of EUR 710
million of consolidated revenue, and a slightly positive EBIT margin.

Segment trends 
In the Solar Cell & Module segment, revenue was up from EUR 404.5 million in the
previous year to EUR 607.9 million in 2011, thereby running counter to a
generally difficult trend in the sector. The strained market situation,
particularly in the fourth quarter of 2011, resulted in the postponement and
cancellation of some projects, and necessitated a revaluation of inventories,
which fed through to a fall in segment earnings to EUR 71.9 million (previous
year: EUR 91.6 million). In the Silicon & Wafer segment, revenue stood at EUR
57.9 million (previous year: EUR 201.7 million), and EBIT reported a loss of EUR
70.3 million (previous year: EUR 21.2 million profit). This segment's business
trend was primarily affected by the tense sector situation, and the polysilicon
price fall. Given the extremly worsening of the market and financial situation,
the Management Board was prompted to apply adjustments to individual large-scale
projects in Asia in the third quarter, which exerted a considerably negative
impact on segment operating earnings.

In the Thin Film Module segment, the company reported EUR 32.7 million of
revenue (previous year: EUR 18.0 million) - predominantly from the wholly-owned
FHR Anlagenbau subsidiary. EBIT improved to a EUR 21.4 million loss, in line
with expectations (previous year: EUR 37.4 million loss).

Sector environment affects order trends
The financial year elapsed was characterized by ongoing uncertainty on financial
markets, the difficult photovoltaic sector market environment, and customers'
continued reluctance to invest. Correspondingly, centrotherm photovoltaics
reported EUR 423.4 million as its total new order intake in the 2011 financial
year. The Solar Cell & Module segment generated 90 % of these orders. The order
book position stood at EUR 423.0 million as of December 31, 2011, of which EUR
234.6 million was attributable to the Solar Cell & Module segment, EUR 176.1
million to the Silicon & Wafer segment, and EUR 12.3 million to orders generated
in the Thin Film Module segment.

"ct focus" efficiency program launched
The Management Board has responded to the continued tensions on the market, and
has launched its "ct focus" efficiency program, which will run alongside costs
and sales initiatives that are already in place. The program's declared
objective is to grow profitably and sustainably with a streamlined and efficient
organizational structure, and a strategic focus on crystalline silicon along the
photovoltaic value chain. This program's first step will entail a significant
reduction of costs, and an adjustment to Group personnel capacities. The company
aims to achieve around EUR 22 million of cost savings per year by the end of
2013. Along with a refocusing on business entailing production systems and
technologies to manufacture crystalline solar cells and modules, and the
production of high-purity silicon, a further significant component of the
program will be the expansion of the Semiconductors & Microelectronics area. The
Management Board has decided in this connection to close the Thin Film Module
segment at the Blaubeuren site and to transfer some areas to Asia. This move
will bundle resources, and create a unit that is closely geared to the market.
An extensive sales campaign conducted by all segments will complete the "ct
focus" package of measures.

---- End of the ad hoc announcement ----

Supplementary information to the ad hoc announcement:
"The course of our business the past 2011 financial year shows that we were
unable to decouple from the difficult sector environment, despite our excellent
market position and technological strength," commented Dr. Thomas Riegler, CFO
of centrotherm photovoltaics AG. "We are still in a turbulent market environment
characterized by moderate order intake. This requires us to flexibly adjust our
organization capacities in order to maintain our future competitiveness."

Measures in the "ct focus" efficiency program:
COST PERSPECTIVE
- Cost reduction and capacity adjustment
centrotherm photovoltaics has reported dynamic growth over recent years, and has
created capacities accordingly. As a logical and consistent step, these
capacities are to be further adjusted to match current market requirements. We
reduced the massive buildup of overtime hours and vacation that we acquired
during the boom phase, and we launched short-time working in the production
area, for example. In addition, personnel adjustments are to be implemented with
the aim of significantly reducing costs across the entire Group. Around 400 jobs
are to be cut by mid-2012 from the 1,928 Group employees worldwide (status as of
December 31, 2011). 

ORGANISATIONAL PERSPECTIVE
- Reorganization and refocusing 
As part of the internal reorganization, process adjustments and more streamlined
management structures within individual Group companies will allow synergies to
be tapped, and the entire organization to be optimized. The refocusing entails
centrotherm photovoltaics' future activities being concentrated on the
traditionally stronger business of Solar Cell & Module, including Semiconductors
and Microelectronics, as well as Silicon & Wafer. This area will include the
further development of new production technologies and procedures, and an
ongoing improvement of existing technologies and production systems. The Group's
refocusing in its Thin Film Module segment has already started successfully with
the conclusion of the CIGS project in Taiwan.

- Large-scale project business and integrated factories as strategic cornerstone
The large-scale project business comprises a combined offering of engineering,
technology and production systems to build silicon factories and integrated
factories that range from silicon through to the solar module. This business is
an important sales-driver, and will form an important strategic cornerstone as
part of the future corporate organization. With the founding of centrotherm
power solutions GmbH in Vienna, centrotherm photovoltaics has expanded its
engineering expertise in the project business to include many years of
specialist knowledge in large-scale plant construction.

Particularly in its Silicon & Wafer segment, centrotherm photovoltaics has
successfully concluded several projects over recent months, thereby qualifying
for further orders. Two customer projects were brought to a successful
conclusion at the start of the 2012 financial year. Advanced discussions are
currently being conducted with customers for further projects in North Africa,
the Middle East and Asia.

SALES PERSPECTIVE
- "Sales Push"
The Management Board is assuming that future growth opportunities will arise
from the solar sector's structural shift. The so-called "Sales Push" initiative
was launched in order to tap these potentials, and to continue to achieve rapid
sales successes. These measures include the cross-segment management of key
customers and core markets, a strategic evaluation of current and future
customer requirements, a strengthening of customer loyalty activities, and the
further tapping of certain customer segments such as state companies and major
industrial conglomerates.

- MENA growth region in focus
Sales activities in the MENA region (Middle East and North Africa) were
bolstered considerably in 2011. Along with the traditionally strong Asian
business, centrotherm photovoltaics' already good market position is to be
further expanded in this growth region in the future. The Middle East and North
Africa are witnessing growing interest in renewable energy sources, with the aim
of creating domestic industries. The MENA countries possess favorable energy
supplies, allowing them to competitively cover the energy-intensive production
steps along the photovoltaic value chain: starting with metallurgical silicon,
the raw material to produce polysilicon, and moving through to polysilicon
production, and the manufacturing of ingots and wafers. The political will to
create local jobs is supporting and driving this strategy. With its range of
products and services, centrotherm photovoltaics is optimally positioned to
benefit from future investments in the MENA region.

Summary and outlook
Robert M. Hartung, CEO of centrotherm photovoltaics, drew the following summary:
"The 2011 business year posed major challenges for us. We failed to achieve the
targets we set ourselves as a result of the surprising deterioration in the
market and financial circumstances, particularly during the last few weeks of
the year. I am nevertheless pleased that we won new orders against the sector
trend in our traditionally strong Solar Cell & Module business, and that we grew
our revenue by 50 percent in this segment. We have positioned ourselves very
well for the future in strategic terms with our focus on our core competencies,
a strong large-scale project business and by directing our sales efforts towards
the MENA countries. We believe that photovoltaics is quite clearly on a medium-
and long-term growth path due to rising energy demand worldwide, and the
turnaround in energy policy that has started. We aim to benefit from this with a
streamlined and efficient organization."

Note: The above figures are still subject to a final audit by the company's
auditor. The finalized figures and 2011 annual report will be published on March
27, 2012.

About centrotherm photovoltaics AG
centrotherm photovoltaics AG, which is based at Blaubeuren, Germany, is the
world's leading technology and equipment provider for the photovoltaics sector.
The company equips well-known solar companies and new sector entrants with
turnkey production lines and single equipment to manufacture silicon, ingots and
bricks, crystalline solar cells and modules, and thin film modules. As a
consequence, the Group possesses a broad and well-founded technological basis,
as well as key equipment at practically all steps of the photovoltaics value
chain. centrotherm photovoltaics guarantees its customers important performance
parameters such as production capacity, efficiencies, and completion deadlines.
The Group employs around 1,900 staff, and operates globally in Europe, Asia and
the USA. The company is listed in the TecDAX index on the Frankfurt Stock
Exchange.


Further inquiry note:
Saskia Feil
Tel: +49 (0) 7344 918-8890
saskia.feil@centrotherm.de

end of announcement                               euro adhoc 
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company:     centrotherm photovoltaics AG
             Johannes-Schmid-Str. 8
             D-89143 Blaubeuren
phone:       +49 (0) 7344 91880
mail:     info@centrotherm.de
WWW:      http://www.centrotherm.de
sector:      Energy
ISIN:        DE000A0JMMN2
indexes:     TecDAX
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
             regulated dealing/prime standard: Frankfurt 
language:   English
 



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