SMA Solar’s 9M 2024 business was driven by the large-scale and project solutions division, which grew by 47.6% YoY
Home solutions, and C&I segments continued to pull down group sales as a low demand and oversupply situation persisted
The management has lowered the annual financial guidance; plans to make home and C&I segments viable for the future
Job cuts of up to 1,100 full-time positions globally are on the horizon, mostly in Germany
German solar inverter manufacturer SMA Solar Technology AG is sticking to its restructuring plans announced last month as the home and commercial and industrial (C&I) segments continue to face challenging market conditions. This would impact up to 1,100 full-time positions globally, according to the management, with about 2/3rd in Germany.
“The results for the first nine months of this year in the Home and C&I segments highlight the importance of moving ahead with the implementation of our restructuring and transformation program we just started,” explained SMA CFO Barbara Gregor. “We are putting the company on more streamlined, efficient and flexible footing to build profitable growth in the future. We will be adjusting the cost base to the lower sales volume and changes in demand.”
During 9M 2024, SMA’s group sales of €1.059 billion represented an almost 21% year-on-year (YoY) decline. The home solutions segment accounted for 13.9% of the total sales with €147 million, which is a decline of 69.8% YoY, due to a lower supply situation, combined with high inventories at distributors.
Sales in the C&I segment were down by 55.4% over the same period to €148.7 million for which the company blames the weak demand situation along with high inventories at distributors. It accounted for 14% of the group sales of SMA.
During the period, the EMEA region was the largest buyer for both these segments of SMA.
It was the large-scale and project solutions division that continued to pull the sales for the group with a 72.1% share. The segment's external sales during the reporting period went up by 47.6% to €764 million. All regions recorded double-digit growth here, including the Americas which accounted for 52.7% of the segment's gross sales.
Nevertheless, a decrease in sales volume led to the group EBITDA declining from €231.2 million in the previous year to €83.5 million, as the EBITDA margin tumbled from 17.3% to 7.9%. Group net income was down by over 80%, to €34.7 million.
In line with the overall situation, SMA had its order backlog declining from over €2.02 billion as of September 30, 2023, to €1.44 billion a year later. Almost 75% of this is attributable to the product business.
Guidance
Citing ‘market weakness’, the company has revised its FY 2024 guidance downwards to expect group sales of €1.45 billion to €1.5 billion, from €1.55 billion to €1.7 billion guided previously.
The revised EBITDA guidance is now -€20 million to €20 million, down from €80 million to 130 million.
SMA expects cost savings of €150 million to €200 million until the end of 2025 due to job cuts as part of its previously announced restructuring and transformation program (see SMA Solar Announces Company-Wide Restructuring & Job Cuts).
“In the coming months, we will be laying the financial and organizational foundation to be able to position SMA in the future even more decisively as a leading global provider of systems and solutions,” stated SMA CEO Jürgen Reinert. “Our approach will be to make the Home and C&I segments viable for the future and continue building on our competitive edge in the Large Scale & Project Solutions segment.”
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