interim report as of june 30, 2011 - centrotherm & wafer solar cell & module thin film...

Silicon & Wafer

Solar Cell & Module

Thin Film Module

Semiconductor

Interim Report as of June 30, 2011 Webcast and Conference Call August 10, 2011

2© centrotherm photovoltaics AG Interim Report as of June 30, 2011

Disclaimer

We have exercised utmost care in the preparation of this presentation. It contains forecasts and/or information relating to forecasts. Forecasts are based on facts, expectations, and/or past figures. As with all forward-looking statements, forecasts are connected with known and unknown uncertainties, which may mean the actual result deviates significantly from the forecast. Forecasts prepared by third parties, or data or evaluations used by third parties and mentioned in this communication, may be inappropriate, incomplete, or falsified. We cannot assess whether information, evaluations, or forecasts made by third parties are appropriate, complete, and not misleading. To the extent that information in this presentation has been taken from third parties, or these provide the basis of our own evaluations, such use is made known in this report. As a result of the above-mentioned circumstances, we can provide no warranty regarding the correctness, completeness, and up-to-date nature of information taken, and declared as being taken, from third parties, as well as for forward-looking statements, irrespective of whether these derive from third parties or ourselves.

Rounding differences may arise.

Silicon & Wafer

Solar Cell & Module

Thin Film Module

Semiconductor

Contents

1. Highlights H1 20112. Market & Strategy3. Financials

Silicon & Wafer

Solar Cell & Module

Thin Film Module

Semiconductor


H1 2011: On track to achieve 2011 guidance

54.0 % revenue growth: from m€ 278.3 to m€ 428.6

EBIT margin improved to 12.4 % (H1 2010: 12.2 %)

ROCE return on capital employed climbs to 29.8 % (H1 2010: 26.5 %)

EBIT increased by 57.2 % to m€ 53.2 (H1 2010: m€ 33.9)

Confirming guidance for FY 2011


H1 2011: Margin excellence in the Solar Cell & Modul segment

EBIT increased by 93.4 % to m€ 81.7

Single equipment shipments averaging 80 systems per month more than double year-on-year

Increasing demand for upgrade business (e.g. selective emitter technology)

EBIT-margin at 21,4 %; Q2 2011 EBIT-Margin 27.5%


Silicon & Wafer and Thin Film Module

Thin film CIGS pilot line in Taiwan is well on the way to achieving objectives.

Silicon & Wafer

Thin Film Module

Lower level of revenues, coupled with non-recurrent expenses burdened the segment result

Result is to be improved by a sales campaign and a cost efficiency program by the end of 2011

Costs will stay within the budget.

Strategically positioned to benefit from market trend towards downstream integration

Considerable revenue potential from the Ingot & Wafering business

Contents


Silicon & Wafer

Solar Cell & Module

Thin Film Module

Semiconductor


Long term development of the PV market: The share of the German market will decrease

Sources: EuPD research, Sarasin Bank, centrotherm photovoltaics

0

5

10

15

20

25

30

35

40

Installed PVPower (GW)

CAGR+22%

CAGR+75%

2014

38

2013

29

2012

23

2011

21

2010

17

2009

8

2008

6

2007

3

ROWAsiaAmericaEurope

German market share is decreasing: ~50% <40% <30% <20%

Risk of weaker PV market growth than in the past due to stonger FIT degression and too slow / low growth of unsubsidized PV market


Diversification of PV markets

South Africa

Canada

ChinaUSA

India

Australia

Algeria

Brasil

ItalySpain

Germany

MexicoMiddle East

(GCC)

BelarusUkraine

TaiwanKorea

Market entry in the Middle East and South America is in progress

Regional diversification: New markets discover photovoltaics

Upside potential of emerging markets

Established marketsUpcoming markets“Sweet spots” / Future trend markets

Malyasia

new

newexisting

existing

Protect / build

Market development

Product development

Diversification

Swing in public opinion:How to benefit from

the trend?

Be Innovation- leader: new business models mitigate potential market down-turn

Provide new countries with RE capabilities:

Incubator function

W aterCoolingenergy/

( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proachnew

newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


Short-term, the market is in a cyclical down-turn

2.000

01Q

20114Q3Q2Q1Q

20104Q3Q2Q1Q

20094Q3Q

8.000

6.000

4.000

2Q1Q2008

4Q3Q2Q1Q2007

?

Long term growth, but short term cycles of PV installations

seasonal demand for modules and solar cells

forecasts expect trough demand in Q2 2011

Global PV inverter market [MWp ] = approx. PV module demand [MWp ]


Our technological strength supports the market to ride out the waves

This holds for three segments:

Manufacturers of low-cost products: need to upgrade to sustain competitiveness

Technology leaders: need to upgrade to maintain market leadership

State-owned corporations: buy high-end products only anyway

Currently, as in every downturn market, we

observe a clear customer trend towards high-performance

modules(245 Wp and above)

Pressure on manufacturers to upgrade their production lines


We support our customers in their ambitions to become technology leaders

Products

Mar

kets

new

newexisting

existing

Protect / build

Market development

Product development

Diversification

Existing business „as usual“: in downturn cycle but short of recovery

Be Technology-leader: with our new products we support our customers to enhance their module performance

Provide new countries with PV capabilities:New Markets (e.g. India, Brasil, South Africa, MENA…)

WaterCoolingenergy /

(heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedApproach

WaterCoolingenergy /

(heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedApproach

such as:

• 250 Wp modules (selective emitter, backside modifications)

• Diamond cropping saw• New Materials (pastes,

additives)• Hydrochlorination • …and others

Performance-enhancingproduct pipeline,


new

newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function

W aterCoolingenerg y/

( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach

Short-term technological upgrades offer substantial market potential in the Cell & Module segment

Short-term

Mid-term

Market recovery expected from Q1 2012

From 2012 onwards: more efficient module technology (innovative designs, new materials,…)

For Example:

Upgrade packages: selective emitter and centaurus rear side equipment

Selling price per line upgrade : approx. ~ 4 m€ (selective emitter and centaurus rear side)

Of 1000 lines worldwide, around 800 could be upgraded

Revenue potential of a three-digit million euro figure by

the end of next year


centrotherm SiTec: High potential through focussing on high- turnover segments of the value chain

New products:

Upgrade crystallisation furnaces (Gen 5, Gen 6)

Diamond wire cropping saw

Quasi-mono crystallisation

Shift of focus towards ingot/wafer

Poly-Si Upstream market trends:

Further upward integration: manufacturers move into metallurgical Si

Value-chain re-focusses on ingot casting (crystallisation)

Consequently, currently lower demand on poly-Si


Short-term

new

newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnergy

Photovoltaics, Wind

IntegratedAp proach

Pending projects: Extension of Algeria and Qatar

Market Development in various high-potential countries (e.g. Brasil, India, Africa…; cf. Ansoff-Matrix)

Mid-term

new

newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind


newexisting

existing

Protect / build

Market development

Product development

Diversification


the trend?



Incubator function


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach


( heat)

RenewableEnerg y

Photovoltaics, Wind

IntegratedAp proach

From conventional technology to technology leadership

For Example:

Quasi-Mono crystallisation furnace

Ingot casting to result in mono-crystalline square ingots (not crystal-pulling, CZ-like mono)

Upgrade of existing crystallisation furnaces not possible: new equipment sales!

Short- and mid-term potential of new markets and new products in Silicon & Wafer Segment


Solar Cell / Module

Poly-Si

Ingot / Wafer

The Product Roadmap (excerpt) is designed to drive technological leadership and ensure revenues

Selective emitter

Backside modifications

New Metallization

24-pair reactor

High pressure converter

Metallurgical-grade Si

2011 2012 2013

Hydrochlorination

Crystallisation furnace

Diamond cropping saw

Quasi-mono crystallisation

Crystallisation Gen5+6

2011 2012 2013

2011 2012 2013

Well-filled product pipeline ensures continuing revenues


Summary: centrotherm is well positioned to benefit from fundamental market trends

Fundamental market trends:

High-Performance cells and modules

Materials cost savings

Upward integration

Focus on ingot casting

Hydrochlorination

centrotherm pipeline:

Upgrade packages + selectice emitter

GP Materials

Metrology

Metallurgical-grade Si

Diamond saw equipment

Mono-Crystallisation furnace

Strong Technology Strategy to enhance the Business Performance

Silicon & Wafer

Solar Cell & Module

Thin Film Module

Semiconductor

Contents


Silicon & Wafer

Solar Cell & Module

Thin Film Module

Semiconductor


H1 2011 vs. H1 2010 – Key figures show profitable growth

Net income 37.4 22.9 + 63.3%

Earnings per share 1.77 1.08 + 63.9%

EBITDA 66.5 45.9 + 45.0%

EBITDA margin* 15.5% 16.5% - 1.0

6M 2011 6M 2010 %-change

Sales 428.6 278.3 + 54.0%

*Margins referring to sales, changes in percentage points; all figures in million EUR

Group 6M 2011 vs. 6M 2010

EBIT 53.2 33.9 + 57.2%

EBIT margin* 12.4% 12.2% + 0.2

ROCE 29.8% 26.5% + 3.3

Order book Jun. 30 715.2 864.0 - 17.2%

Total expenses R&D 21.7 18.8 + 15.4%


Excellent performance in Solar Cell & Module segment

6M 2011 6M 2010 %-change

Sales 33.9 90.7 - 62.6%

EBIT - 15.8 7.8 - 303.4%

EBIT margin* - 46.7% 8.6% - 55.3

6M 2011 6M 2010 %-change

Sales 12.7 7.2 + 75.2%

EBIT - 12.6 - 16.2 + 22.0%

EBIT margin* - 99.3% - 223.1% + 123.8

6M 2011 6M 2010 %-change

Sales 382.0 180.3 + 111.8%

EBIT 81.7 42.2 + 93.4%

EBIT margin* 21.4% 23.4% - 2.0

Segments 6M 2011 vs. 6M 2010

Silicon & Wafer

Solar Cell & Module

Thin Film Module

*Margin referring to sales, changes in percentage points All figures in million EUR


High order book level

715.2

869.8843.8747.7

864.0

30.06.10 30.09.10 31.12.10 31.03.11 30.06.11

Order book 12 month

1,200

800

600

400

200

0

1,000

Order book

Solar cell & Module

Silicon & Wafer

Thin film module

Solar cell & Module

Silicon & Wafer

Thin film module

Total: 715.2

Total: 344.5

Order book 30.06.2011 per segment

Order intake H1 2011 per segment

in million EUR

in million EUR

444.9

243.4

27.0

326.4

3.4

14.7

in million EUR


Asia385.4 (89.9%)

Germany20.6 (4.8%)

Rest of Europe16.5 (3.9%)

Rest of World6.1 (1.4%)

Total: 428.6

Core business: Single equipment in Asia

Turnkey production

lines37.2 (8.7%)

Single equipment

369.0 (86.1%)

Service & Replacement

parts17.0 (4.0%)

Other1.4 (0.3%)

Total: 428.6

Consulting & Engineering

4.0 (0.9%)

in million EURin million EUR

Sales breakdown H1 2011 by products Sales breakdown H1 2011 by regions


Material and Personnel Expenses

284.5

66.4%

162.0

58.2%

+122.5

54.3

12.7%

37.3

13.4%

+17.0

Personnel ExpensesMaterial Expenses

H1 2010 H1 2011

Higher business volume leads to higher Material Expenses

Conversion to IAS 18 results in higher materials expanse ratio

Consolidation of Chinese subsidary and higher business volume result in higher personnel expenses

Personnel expense ratio improved

in million EUR in million EUR

H1 2010 H1 2011


Other Operating Expenses

89.1

20.8%

52.6

18.9%

36.5

Breakdown by cost categoryOther operating expenses

Higher business volume results in increased costs for freight and packing

Write-downs to trade receivables and receivables relating to construction orders (particularly for Thin Film project)

in million EUR

H1 2010 H1 2011

in million EUR 30.06.2011 30.06.2010Freight and packaging 15.9 5.5

Write-downs to trade receivables andreceivables relating to construction orders 11.2 5.0

Litigation costs and contractual penalties 9.1 3.6

Third-party services 7.0 3.3

Sales commissions 6.9 7.1

Travel expenses 6.9 4.8

Legal and general consultancy 6.4 2.8

Temporary help 5.4 1.6

Premises expenses 2.4 1.9

Employee benefit costs 1.8 1.1

Bank charges 1.6 1.0

Advertising costs 1.5 1.4

Increase in obgliation for services yet to be rendered 1.5 2.6

Insurance and contributions 1.4 0.8

Research and development 1.0 0.9

Telephone and communication 1.0 0.7

Passenger vehicle costs 0.8 0.6

Guarantee 0.7 0.4

Foreign-exchange losses 0.4 0.4

Asset disposals 0.3 0.0

Other services 0.1 0.1

Management services 0.1 3.8

Write-downs to inventories 0.0 0.2

Miscellaneous 5.9 3.0

Total 89.1 52.6


805,7Aktiva

805,7Passiva

915,0Aktiva

915,0Passiva

Healthy balance sheet and high equity ratio

Thereof Goodwill:129.3

Thereof Securities: 10.8

Cash and cash equivalents: 180.6

Current assets:479.8 (59.6%)

Non-current assets : 325.8 (40.4%)

Equity: 396.4 (49.2%)

Non-current liabilities : 72.1 (8.9%)

Current liabilities : 337.2 (41.9%)

Thereof advance payments received 167.2

Thereof Goodwill:129.3

Thereof Securities: 0.1

Cash and cash equivalents: 153.9

Current assets:608.9 (62.8%)

Non-current assets: 360.6 (37.2%)

Equity: 433.5 (44.7%)

Non-current liabilities: 76.1 (7.8%)

Current liabilities: 459.9 (47.5%)

Thereof advance payments received:174.0

Balance Sheet as of December 31, 2010Balance Sheet as of June 30, 2011

in million EUR

969.5 Total assets

969.5 Total equity and liabilities

805.6 Total assets

805.6 Total equity and liabilities

in million EUR


Cash flow development

Total Cash flow

Cash flow from operating activities Cash flow from investing activities

Cash flow from financing activities

NWC = Changes in Net Working Capital

EBT = Earnings Before Taxes

in m

illio

n EU

Rin

mill

ion

EUR

in m

illio

n EU

R

in m

illio

n EU

R

Other reconciliation effects

Net investments

Sale of securities

33.152.9

-18.6

4.8

-43.8

5.7

-75

-55

-35

-15

5

25

45

-28.9

30.2

-40

-30

-20

-10

0

10

20

30

40

43.6

-9.5 -26.3

-49.2

10.73.7

-50

-40

-30

-20

-10

0

10

H1 2010

19.19.2

-5

15

35

55

75

95

H1 2011H1 2011H1 2010

-22.6

H1 2010 H1 2011H1 2010 H1 2011

-38.5


Confirming guidance for FY 2011

Further sales growth to between m€ 690 to m€ 710

Achievement of a low double-digit EBIT margin

Technological upgrades offer substantial market potential

Boosting research and development expenditures to 7 - 10 % of sales

Supplementing product and technology portfolio

Further cost structure optimization through creation of divisional organization

Expansion of sales share in countries outside Asia


Contact

Thank you for your attention!

interim report as of june 30, 2011 - centrotherm & wafer solar cell & module thin film...

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