Meyer Burger – Strategic partnership with Oxford PV; Fiscal year 2018 results; Re-sized Executive Board Donnerstag, 21. März 2019 - 06:30

Meyer Burger Tech­nol­ogy Ltd (SIX Swiss Ex­change: MBTN) and Ox­ford Pho­to­voltaics Lim­ited (Ox­ford PV) have en­tered into a strate­gic part­ner­ship and signed an ex­clu­sive co­op­er­a­tion agree­ment to jointly ac­cel­er­ate the de­vel­op­ment of mass pro­duc­tion tech­nol­ogy for per­ovskite on sil­i­con Het­ero­junc­tion (HJT) tan­dem cells.

Ox­ford PV was founded in 2010 as a spin-out from Uni­ver­sity of Ox­ford in Eng­land. They have de­vel­oped per­ovskite tan­dem solar cells using bot­tom cells of crys­talline sil­i­con and achieved a cer­ti­fied world-record ef­fi­ciency of 28% in 2018. Such tan­dem de­vices use the higher en­ergy blue part of the solar spec­trum more ef­fec­tively, al­low­ing a the­o­ret­i­cal ef­fi­ciency limit of 43% com­pared to 29% for tra­di­tional sin­gle-junc­tion sil­i­con-based solar cells. Per­ovskite tan­dem solar cells are viewed in the solar in­dus­try as the next gen­er­a­tion in solar cell tech­nol­ogy en­abling the re­duc­tion of the cost of solar en­ergy (LCOE) to un­prece­dented lev­els. Among ex­perts, Ox­ford PV is re­garded as the lead­ing global com­pany for per­ovskite tan­dem solar cells. Its tech­nol­ogy and ma­te­r­ial know-how is pro­tected by a patent port­fo­lio of over 200 patents.

In order to ac­cel­er­ate the in­dus­tri­al­iza­tion of this promis­ing tech­nol­ogy, Meyer Burger and Ox­ford PV agreed to com­bine Meyer Burger’s lead­ing Het­ero­junc­tion (HJT) and SmartWire Con­nec­tion (SWCTTM) tech­nol­ogy with Ox­ford PV’s un­ri­valed per­ovskite solar cell tech­nol­ogy. Meyer Burger will sell a 200 MW HJT line for the pilot pro­duc­tion of tan­dem cells which will be ramped up by the end of 2020 in Ox­ford PV’s Bran­den­burg an der Havel fa­cil­ity. The ini­tial tan­dem solar cell ef­fi­ciency tar­get for the 200 MW pilot pro­duc­tion line will be 27%. The char­ac­ter­is­tics of Meyer Burger’s HJT cells make them the per­fect bot­tom cells for Ox­ford PV’s per­ovskite top cell lay­ers. Meyer Burger’s SWCT™ is the ideal tech­nol­ogy, con­nect­ing the new per­ovskite on HJT tan­dem cells into re­li­able and highly ef­fi­cient solar mod­ules. Meyer Burger will also de­velop equip­ment to in­dus­tri­al­ize the mass pro­duc­tion of the re­spec­tive per­ovskite lay­ers which are de­posited onto HJT bot­tom cells. This fur­ther ac­cel­er­ates the time-to-mar­ket and en­larges Ox­ford PV’s and Meyer Burger’s ad­van­tage as per­ovskite and HJT tech­nol­ogy lead­ers in the global solar in­dus­try.

To un­der­score this strate­gic part­ner­ship, Meyer Burger will take a stake in Ox­ford PV of up to 18.8% of cap­i­tal through the issue of up to 62.29 mil­lion new Meyer Burger reg­is­tered shares from the com­pany’s ex­ist­ing au­tho­rised cap­i­tal (up to 9.99% of the cur­rently listed share cap­i­tal of Meyer Burger). As a re­sult, Meyer Burger will be­come the largest share­holder of Ox­ford PV. Fur­ther­more, Meyer Burger was granted the op­tion to in­crease its share­hold­ing in the course of the joint de­vel­op­ment agree­ment at the same val­u­a­tion price to 31.6% of cap­i­tal and 24.0% of vot­ing rights in Ox­ford PV. As strate­gic in­vestor, Meyer Burger will be granted spe­cial cor­po­rate gov­er­nance rights and Hans Brändle, Meyer Burger CEO, will be­come mem­ber of the Board of Di­rec­tors of Ox­ford PV.

Meyer Burger plans to issue the newly is­sued shares out of its ex­ist­ing au­tho­rised cap­i­tal (no lock-up). The clos­ing of the trans­ac­tion is ex­pected by the end of April 2019.

Fis­cal year 2018 re­sults

For the PV man­u­fac­tur­ing in­dus­try, 2018 turned out to be a chal­leng­ing year. It started in Jan­u­ary 2018 with the an­nounce­ment by the US pres­i­dent that steep tar­iffs on im­ported solar pan­els would be in­tro­duced, fol­lowed by an in­ten­si­fy­ing trade dis­pute be­tween the USA and China which af­fected many com­pa­nies and in­dus­tries world­wide. Fur­ther­more, on 31 May 2018, the Chi­nese gov­ern­ment an­nounced sub­stan­tial sub­sidy cuts in the solar in­dus­try. De­spite the pos­i­tive long-term out­look for the solar in­dus­try, these facts have cre­ated a lot of un­cer­tain­ties and led to a sig­nif­i­cant re­luc­tance by cus­tomers to in­vest in PV man­u­fac­tur­ing equip­ment. The mar­ket started to show signs of re­cov­ery to­wards the end of the year.

After a very suc­cess­ful 2017 with strong order in­take for Meyer Burger’s PERC tech­nolo­gies, the Com­pany has made the ex­pe­ri­ence that Chi­nese cus­tomers seem to put ad­di­tional em­pha­sis on buy­ing PV man­u­fac­tur­ing equip­ment lo­cally, when­ever pos­si­ble. De­spite Meyer Burger’s lead­ing po­si­tion with re­gards to “Cost of Own­er­ship”, the dis­cus­sion on “CAPEX per GW” has in­ten­si­fied, putting pres­sure on sell­ing prices for man­u­fac­tur­ing equip­ment while at the same time higher through­put has to be guar­an­teed.

Against the back­ground of the po­lit­i­cal en­vi­ron­ment and the mar­gin pres­sure seen for stan­dard PV busi­ness so­lu­tions, Meyer Burger achieved in­com­ing or­ders of CHF 326.8 mil­lion in 2018 (2017: CHF 560.7 mil­lion). Larger or­ders in 2018 rep­re­sented CHF 122 mil­lion (in­clud­ing a CHF 74 mil­lion Het­ero­junc­tion/SWCT™ order in De­cem­ber 2018) com­pared to CHF 243 mil­lion in the pre­vi­ous year (also in­clud­ing a CHF 45 mil­lion Het­ero­junc­tion order in Oc­to­ber 2017). The total order back­log as at 31 De­cem­ber 2018 stood at CHF 240.5 mil­lion (31.12.2017: CHF 343.8 mil­lion).

Net sales reached CHF 407.0 mil­lion (2017: CHF 473.3 mil­lion). Com­pared to the pre­vi­ous year, the di­vest­ment of the Solar Sys­tems busi­ness to 3S Solar Plus AG in June 2018 had a neg­a­tive ef­fect of about CHF 10.2 mil­lion, com­pen­sated by pos­i­tive cur­rency ef­fects (mainly EUR) of MCHF 15.2 mil­lion. On a com­pa­ra­ble basis, the con­tin­u­ing busi­ness de­clined by CHF 71.3 mil­lion or 15% in 2018.

Op­er­at­ing in­come after costs of prod­ucts and ser­vices reached CHF 200.8 mil­lion (2017: CHF 194.8 mil­lion), re­flect­ing a mar­gin of 49.3% (2017: 41.2%).

Per­son­nel ex­penses de­clined by CHF 9.8 mil­lion or 7% com­pared to the pre­vi­ous year and were CHF 125.9 mil­lion (2017: CHF 135.7 mil­lion), as Meyer Burger con­tin­ued to flex­i­bilise its or­gan­i­sa­tion and to sig­nif­i­cantly re­duce its fixed cost base. Other op­er­at­ing ex­penses amounted to CHF 48.8 mil­lion, in­clud­ing one-time charges of CHF 4.3 mil­lion in con­junc­tion with the di­vest­ment of the Solar Sys­tems busi­ness ac­tiv­i­ties (2017: CHF 46.7 mil­lion). With­out this one-time charge, other op­er­at­ing ex­penses would also have de­clined by about 5%.

EBITDA reached CHF 26.1 mil­lion in fis­cal year 2018 (2017: CHF 12.4 mil­lion), re­sult­ing in an EBITDA mar­gin of 6.4% (2017: mar­gin of 2.6%). De­pre­ci­a­tion and amor­ti­sa­tion came to a total of CHF 24.3 mil­lion (2017: CHF 31.7 mil­lion) and have de­clined in line with ex­pec­ta­tions. The re­sult at EBIT level amounted to CHF 1.8 mil­lion (2017: CHF -19.3 mil­lion).

The fi­nan­cial re­sult, net, was CHF -9.8 mil­lion (2017: CHF -10.3 mil­lion). The ex­tra­or­di­nary re­sult amounted to CHF +0.7 mil­lion, mainly in con­junc­tion with sub­se­quent costs and ef­fects of the change in es­ti­mates in con­nec­tion with the dis­con­tin­u­a­tion of pro­duc­tion ac­tiv­i­ties at the Thun site an­nounced in 2017 (2017: CHF -48.8 mil­lion, mainly in con­junc­tion with the di­vest­ment of DMT and re­lated good­will re­cy­cling as well as costs in re­la­tion to the re­or­gan­i­sa­tion and dis­con­tin­u­a­tion of man­u­fac­tur­ing ac­tiv­i­ties in Thun).

Tax ex­penses were CHF 52.1 mil­lion (2017: tax ex­penses of CHF 0.9 mil­lion). The tax ex­penses in 2018 in­clude value ad­just­ments on de­ferred tax as­sets in a total amount of CHF 49.0 mil­lion. Tax ex­penses in 2018 re­lated to cur­rent in­come taxes on prof­its for the pe­riod were CHF -4.4 mil­lion and de­ferred in­come taxes CHF +1.3 mil­lion.

Due to the highly neg­a­tive im­pact of the ad­just­ments on de­ferred tax as­sets (CHF 49.0 mil­lion), the net loss for fis­cal year 2018 was only slightly re­duced to CHF -59.4 mil­lion (2017: CHF -79.3 mil­lion).

The bal­ance sheet total de­clined com­pared to the pre­vi­ous year, mainly be­cause of lower cus­tomer pre­pay­ments due to the re­duced order in­take and the value ad­just­ments on de­ferred tax as­sets. The bal­ance sheet amounted in total to CHF 349.2 mil­lion as at 31 De­cem­ber 2018 (31.12.2017: CHF 470.0 mil­lion). Cash and cash equiv­a­lents were CHF 89.8 mil­lion, in­ven­to­ries CHF 78.6 mil­lion, prop­erty, plant and equip­ment CHF 82.3 mil­lion, in­tan­gi­ble as­sets CHF 11.9 mil­lion and de­ferred tax as­sets CHF 27.7 mil­lion.

Total li­a­bil­i­ties came to CHF 167.4 mil­lion, of which trade payables were CHF 17.3 mil­lion, cus­tomer pre­pay­ments CHF 34.4 mil­lion, pro­vi­sions CHF 14.1 mil­lion and fi­nan­cial li­a­bil­i­ties CHF 55.6 mil­lion. The fi­nan­cial li­a­bil­i­ties in­clude a loan in an amount of CHF 30.0 mil­lion se­cured by mort­gage cer­tifi­cates (on build­ing in Thun), a value of CHF 25.3 mil­lion for the re­main­ing con­vert­ible bonds that have not been con­verted yet and CHF 0.3 mil­lion of other loans.

Eq­uity stood at CHF 181.7 mil­lion as at 31 De­cem­ber 2018 (31.12.2017: CHF 243.0 mil­lion). The eq­uity ratio at year-end 2018 was 52.0% (31.12.2017: 51.7%).

Re-sized Ex­ec­u­tive Board

In line with the com­pany’s strate­gic focus on cell/mod­ule tech­nolo­gies, the Ex­ec­u­tive Board will  be re-sized from five to four mem­bers. Daniel Lip­puner, COO, will leave the Ex­ec­u­tive Board by the end of June 2019. The Board of Di­rec­tors and the Ex­ec­u­tive Board would like to thank Daniel Lip­puner for his achieve­ments and con­tri­bu­tions as well as his strong com­mit­ment to Meyer Burger and wish him all the best for his fu­ture.

Out­look for 2019

It is dif­fi­cult to pre­dict 2019, due to po­lit­i­cal un­cer­tain­ties, such as trade tar­iffs, en­ergy poli­cies and new Chi­nese sub­sidy poli­cies which have not yet been re­leased. The signed di­vest­ment of the wafer­ing busi­ness is ex­pected to close within weeks and gen­er­ates CHF 50 mil­lion pro­ceeds.

Meyer Burger re­mains con­fi­dent in re­la­tion to the de­vel­op­ment of the het­ero­junc­tion and SmartWire Con­nec­tion equip­ment busi­ness, which has been fur­ther val­i­dated by the order from and joint roadmap de­vel­op­ment with top-tier PV player REC Group, the co­op­er­a­tion with Ox­ford PV and the sub­stan­tially in­creas­ing sales pipeline for HJT over the past months. Meyer Burger also sees the ac­cel­er­at­ing mar­ket in­ter­est in TOP­Con as the next up­grade tech­nol­ogy be­yond PERC. Since its break­through at the end of 2018, Meyer Burger is ex­pe­ri­enc­ing in­creased cus­tomer in­ter­est in its CAiA® as the pro­pri­etary so­lu­tion for TOP­Con. On the back of China’s an­tic­i­pated new en­ergy poli­cies and de­mand from out­side China, man­age­ment ex­pects 2019 to be the in­flec­tion point for these new tech­nolo­gies with at­trac­tive gross mar­gins start­ing to re­place PERC. Meyer Burger, as the leader in high ef­fi­ciency cell and mod­ule tech­nolo­gies, is ex­pected to be the main ben­e­fi­ciary of such ad­vanced tech­nol­ogy buys. Today’s an­nounced part­ner­ship with Ox­ford PV fur­ther un­der­scores Meyer Burger’s strat­egy to drive the PV tech­nol­ogy roadmap.

Con­tacts:

In­grid Carstensen

Head of Cor­po­rate Com­mu­ni­ca­tions

Phone: +41 (0)33 221 28 34

in­grid.​carstensen@​meyerburger.​com

Ste­fan Diepen­brock

Se­nior Cor­po­rate Com­mu­ni­ca­tions Man­ager

Phone: +41 (0)33 221 27 85

ste­fan.​diepenbrock@​meyerburger.​com

KEY FIG­URES FIS­CAL YEAR 2018

The An­nual Re­port 2018 and the in­vestors‘ pre­sen­ta­tion for the full year re­sults are avail­able for down­load on the com­pany web­site www.​meyerburger.​com under – In­vestor Re­la­tions – Fi­nan­cial Re­ports & Pub­li­ca­tions. 

https://​www.​meyerburger.​com/​ch/​en/​meyer-​burger/​investor-​relations/​financial-​reports-​pub​lica​tion​s/