- Sales of CHF 48.7 million and an operating loss at EBIT level of CHF 321.7 million
- Solar module production in Goodyear, Arizona ramping up
- Advanced negotiations on the restructuring of convertible bonds and the provision of fresh capital to close financing gap
Meyer Burger Technology AG has published its half-year report 2024 today. The results for the first half of 2024 reflect the strategic shift of the business focus from Germany to the USA, Meyer Burger generated sales of CHF 48.7 million in the reporting period, as expected around half below the previous year’s figure (CHF 96.9 million). Nevertheless, sales were almost 30% higher than the weak second half of 2023. The scheduled closure of module production in Freiberg, Germany in the first quarter of 2024 reduced the volume of solar modules produced to 105.2 megawatts (MW), while module inventories fell from 365 MW at the end of 2023 to 340 MW at the end of the reporting period.
Personnel costs fell slightly with CHF 3.5 million to CHF 43.7 million against the previous year, with expenses gradually shifting from the German site to America. Operating costs increased by around CHF 9.4 million to CHF 40.6 million due to the relocation and construction work at the plants in the U.S. Overall, this resulted in an operating loss at EBITDA level of CHF 123.5 million (HY 2023: CHF 43.3 million). Depreciation of property, plant and equipment increased from CHF 12.3 million in the previous year to CHF 197.4 million in the reporting period due to the adjustment of useful lives (CHF 57.6 million) and a value adjustment (CHF 45.0 million) as a result of the closure of module production as well as impairments on US equipment (CHF 69.9 million) due to the strategic realignment. This led to a negative EBIT of CHF 321.7 million (HY 2023: CHF 56.1 million) and, thanks to a slightly positive financial result, to a net loss of CHF 317.3 million compared to a loss of CHF 64.8 million in the previous year.
Cash flow from investment activities was negative at CHF 123.4 million due to the investments in the USA, but was more than offset by the successful capital increase in the second quarter. Overall, cash and cash equivalents amounted to CHF 158.6 million at the end of the period on 30 June 2024. As of 30 September 2024, cash and cash equivalents amounted to CHF 83.4 million.
Solar module production in the U.S. ramping up
In June 2024, Meyer Burger started ramping up its first production line for the manufacturing of high-performance solar modules in Goodyear, Arizona after passing the required factory audit without any deviations. Preparations for the commissioning of the second production line, which are currently ongoing, are well underway. The solar cells required for module production have been produced at the German site in Thalheim (City of Bitterfeld-Wolfen) since the beginning of the year and will continue to be supplied from there.
Operational restructuring takes shape
In September 2024, Meyer Burger decided to stop the planned solar cell production project in Colorado Springs due to a lack of required third-party financing and to focus on module production in Goodyear. At the same time, an operational restructuring program was initiated to enable a return to profitability. Meyer Burger is focusing on reaching the nominal capacity of 1.4 gigawatts (GW) at the Goodyear module plant, which is already largely installed and in the ramp-up phase. The long-term off-take agreements are intended to be fulfilled through production at the Goodyear factory and the production capacities in Goodyear should therefore be fully utilized. The production site in Thalheim, Germany, will remain central to the supply of solar cells and the technology site in Hohenstein-Ernstthal, Germany, will also be retained for the future development of the technology. The significant streamlining of the entire group structure will lead to a reduction in the number of employees worldwide from around 1050 to an expected 850 by the end of 2025, with the disproportionate reduction in Europe being offset by an increase in the USA until full production capacity is reached in Goodyear.
Financing
With the decision to stop the project in Colorado Springs and not to build any further cell production facilities, certain significant initial investments can no longer be utilized and have lost significant value. At the same time, further investments are required for the completion of the module plant in Goodyear. In combination, this has resulted in a high double digit million funding gap. The Board of Directors has commissioned an independent external restructuring consultant to prepare a customary German restructuring opinion, which is expected to provide an independent professional view on the conditions for a viable operating business and capital structure going forward. This opinion and accompanying report are expected to certify Meyer Burger’s ability to restructure its operations as well as its external liabilities, provided that the remaining financing gap can be closed.
In that context, the Board of Directors is in advanced negotiations with a group of holders of the existing convertible bonds maturing in 2027 and 2029, who have indicated an initial willingness to provide fresh capital and restructure the existing liabilities under the convertible bonds. The outcome of these discussions naturally remains subject to finalized diligence and approvals of the Group’s lender constituents. Given the conversations with its bondholders to date, the Company is aiming to execute its restructuring in the near term in order to fully set itself up for stable, profitable business operations in 2026.
Outlook
With the ramp-up of the first production line in Goodyear, Meyer Burger expects a continuously increasing production volume of solar modules in the second half of 2024. Production volumes will again increase significantly with the ramp-up of the second line at Goodyear, scheduled for the end of the year. Due to the existing long-term off-take agreements, the solar modules produced can be sold immediately and will have a positive impact on sales in the second half of the year. After the ramp-up of all lines with a nominal capacity of 1.4 GW, Meyer Burger expects annual sales of around CHF 350 to CHF 400 million and EBITDA of around CHF 70 million from 2026.
Given the level of indebtedness of Meyer Burger and its cash-burn, the group's ability to continue operating as a going concern assumes a successful restructuring and closure of its financing efforts set out above in the very short term as well as the implementation of its business plan. There is no assurance that this will be achievable or on terms attractive to Meyer Burger and its shareholders.
Furthermore, additional liquidity is to be secured through the sale of solar modules from existing inventories. Also, the Company plans to sell other assets that are no longer required in order to financially support operations during the ramp-up phase.
The 2024 Half-Year Report can be found at the following link:
https://www.meyerburger.com/en/investor-relations/financial-reports-publications
A video webcast incl. a conference call in English will take place tomorrow (November 1, 2024) at 10:00 CET. You can follow the webcast under the following link:
https://www.webcast-eqs.com/meyerburger-2024-hy
(Audio and presentation in web browser)
Please use the following link to register to ask questions via conference call:
https://webcast.meetyoo.de/reg/gTh3T084FR5g
Media contacts:
Meyer Burger Technology AG
Anne Schneider
Head Corporate Communications
M. +49 174 349 17 90
anne.schneider@meyerburger.com
Alexandre Müller
Investor Relations
M. +41 43 268 3231
alexandre.mueller@meyerburger.com
