Sales and earnings development
In 2008, the SOLARWORLD Group succeeded, in comparison with the prior year, in increasing the group revenue by 30.6 per cent or € 210.7 million to € 900.3 million (previous year: € 689.6m) due to greater production capacities and strong demand both domestically and internationally. In the process, revenue from the Trade segment increased by 28 per cent or € 144 million to € 665 million (previous year: € 521m), and by 43 per cent or € 61 million to € 203 million (previous year: € 142m) in the Wafer segment. With regard to the Cell segment, revenue increased by 19 per cent or € 5 million to € 32 million (previous year: € 27m).
Domestic sales increased by 17.3 per cent or € 61 million to € 413.8 million (previous year: € 352.8m). Due to a strong Spanish market, in particular, international sales increased by 44.5 per cent or € 149.7 million to € 486.5 million (previous year: € 336.8m). As compared to the prior year, the group-wide foreign quota increased by 5 per centage points to 54 (previous year: 49) per cent.
Earnings before interest and taxes (EBIT) improved by 31.1 per cent or € 61.9 million as compared to the prior year, now amounting to € 260.8 million (previous year: € 198.9m). Earnings before interest, taxes and depreciation and amortization (EBITDA) exceeded the prior year by € 75.1 million and increased to € 316.0 million (previous year: € 240.9m).
The 2008 EBIT-margin amounted to 29.0 (previous year: 28.8) per cent. As compared to the prior year, group profit increased by 31.3 per cent or € 35.4 million to € 148.7 million (previous year: € 113.3m). This increase can primarily be attributed to the positive development in operations, a decreased tax burden due to the 2008 corporate tax reform in Germany and to income from the disposal of 65 per cent in gällivare photovoltaic ab in the amount of € 13.4 million.
Sales by segment // in m€
The 2007 and 2008 fiscal year results include income from expense grants agreed in the scope of the acquisitions carried out in 2006. In 2008, these expense grants amounted to € 6.6 million (previous year: € 27.6m) before tax and were released to income in the second quarter of 2008 for the last time. The key components, EBIT and group profit, for both 2007 and 2008 are shown adjusted by these special items in order to allow better assessment of the development of the SOLARWORLD group’s operations.
In 2008, EBIT adjusted for the expense grants increased by € 82.9 million to € 254.2 million (previous year: € 171.3m).
The adjusted EBIT margin reached 28.2 (previous year: 24.8) per cent.
The adjusted group profit – including the income from the disposal of 65 per cent of the shares in GPV – increased by € 46.8 million to € 144.1 million (previous year: € 97.3m) in 2008.
With the conclusion of new, long-term delivery contracts, the group-wide volume of orders received until 2018 in the wafer business amounted to € 7 billion (previous year: € 5.4bn) as of the cut-off date of 31 December 2008. The well-filled order books strengthen our competitive position in the wafer market over the long term and are proof of the acceptance and quality of our wafer brand SOLSIX® in the world market.
With this development we are creating a solid order base to support the expansion of our wafer production.
In the trading segment with modules and solar kits, we already had an order book volume for 2009 at the beginning of the year that exceeded the total volume delivered in 2008.
The cost of materials quota decreased by 0.4 per centage points to 49.2 (previous year: 49.6) per cent.
As compared to the prior year, employee expenses increased by € 15.1 million to € 90.1 million (previous year: € 75m) – especially because of the new hires due to manufacturing expansion in Freiberg, Germany and Hillsboro, USA. The employee expense ratio could be reduced by 1.4 per centage points to 9.8 (previous year: 11.2) per cent due to the continuous increase in our productivity.
Development of significant profit and loss account items // in m€
Due to the group-wide expansion of our manufacturing capacities, amortization and depreciation increased by € 13.1 million to € 55.2 million (previous year: € 42.1m) as compared to the prior year.
The increase of other operating expenses by € 19.8 million to € 99.9 million (previous year: € 80.1m) can be attributed, in particular, to the change in sales-related expenses in the course of the business volume increase, e.g. transportation and travel expenses as well as expenses for external staff. However, it was possible to reduce the expense ratio by 1.1 per cent to 10.8 (previous year: 11.9) per cent.
The decrease in other operating income by € 20.4 million to € 36.8 million (previous year: € 57.3m) is mainly due to the decrease in expense grants (as compared to the prior year) by € 21 million to € 6.6 million (previous year: € 27.6m) that had an effect on profit and loss in the 2nd quarter of 2008 for the last time.
In 2008, the financial result reached € -72.1 million (previous year: € -23m). In particular, it was negatively impacted by the valuation allowance of a promissory note amounting to € 29.6 million, and by adjustments to the decreased market value of a fund invested in Asset Backed Securities (ABS) products amounting to € 24.1 million as a result of the global financial crisis.
Multi-period overview of the earnings situation // in k€
| 2004 | 2005 | 2006 | 2007 | 2008 | |
| Revenues | 199,933 | 355,971 | 515,246 | 698,818 | 900,311 |
| Revenues from continued operations | 509,139 | 689,588 | 900,311 | ||
| Changes on inventories of finished goods and work in process | -14,658 | 12,387 | 30,916 | -17,670 | 15,160 |
| Own work capitalized | 0 | 3,359 | 590 | 542 | 7,740 |
| Other operating income | 10,616 | 14,856 | 96,185 | 57,253 | 36,841 |
| Operating performance | 195,891 | 386,573 | 636,830 | 729,713 | 960,052 |
| Cost of materials | -93,005 | -210,902 | -302,988 | -333,654 | -454,060 |
| Personnel expenses | -30,833 | -37,780 | -54,958 | -75,004 | -90,130 |
| Amortization and depreciation | -16,456 | -19,687 | -41,954 | -42,054 | -55,166 |
| Other operating expenses | -22,706 | -29,590 | -59,351 | -80,129 | -99,883 |
| Sub-Total | -163,000 | -297,959 | -459,251 | -530,841 | -699,239 |
| Operating result | 32,891 | 88,614 | 177,579 | 198,872 | 260,813 |
| Financial result | -4,356 | -4,850 | 1,285 | -22,962 | -72,144 |
| Taxes on income | -10,421 | -31,782 | -49,811 | -65,027 | -53,422 |
| Income from discontinued operations | 1,513 | 2,373 | 13,432 | ||
| Consolidated net income | 18,114 | 51,982 | 130,566 | 113,256 | 148,679 |
Indicators // in %
| 2004 | 2005 | 2006 | 2007 | 2008 | |
| Return on sales (Consolidated net income/revenues) | 9.1 | 14.6 | 25.3 | 16.2 | 16.5 |
| Cost of material quota (cost of materials/revenues from continued operations plus changes in inventory and own work capitalized) | 50.2 | 56.7 | 56 | 49.6 | 49.2 |
| Employee expenses ratio (personnel expenses/ revenues from continued operations plus changes in inventory and own work capitalized) | 16.6 | 10.2 | 10.2 | 11.2 | 9.8 |