- Net sales and incoming orders increased in 2014 compared to the previous year
- Net sales 2014 rose by 56% to CHF 315.8 million
- Incoming orders of CHF 326.0 million; +13% compared to the previous year
- Profitability impacted by special items; EBITDA of CHF -95.6 million (2013: CHF -117.3 million); adjusted EBITDA of CHF -75 million
- Net result of CHF -134.7 million (2013: CHF -162.8 million)
- Equity ratio at a solid level of 46.6%
- Long-term outlook – Road 2020 defined with target net sales of CHF 1.3 billion
In 2014, after a very difficult year 2013, Meyer Burger Technology Ltd. (SIX Swiss Exchange: MBTN) achieved better results despite negative effects from special items (restructuring measures, GTAT bankruptcy proceedings).
As expected, the technology group achieved a strong increase in net sales compared to the previous year. In addition, incoming orders further improved and reflect the upturn in demand especially for Photovoltaic (PV) upgrade technologies and Specialised Technologies. This positive trend in incoming orders continued during the first months of 2015. New orders in 2014 reached CHF 326.0 million, representing a 13% increase year-on-year (2013: CHF 287.7 million). Net sales rose substantially by 56% to CHF 315.8 million (2013: CHF 202.7 million).
EBITDA amounted to CHF - 95.6 million (2013: CHF -117.3 million) and was negatively influenced by special items mainly in connection with the Chapter 11 filing of GT Advanced Technologies Inc. (GTAT). Excluding non-recurring special items, adjusted EBITDA totalled approximately CHF -75 million. The net result for the year was CHF -134.7 million (2013: CHF -162.8 million).
For 2015, Meyer Burger has defined the target to reach break-even at the EBITDA level and to achieve net sales of about CHF 400 million. In addition, the Company has defined a long-term target for the year 2020: Based on the strong long-term market potential and the unique positioning of Meyer Burger Group, the Company wants to achieve net sales of CHF 1.3 billion, an EBITDA margin of 13% to 15% and sustainable positive cash flows in 2020.
Details on the Financial Results 2014
Incoming orders and oder backlog
In 2014, Meyer Burger’s volume in new orders reached CHF 326.0 million, representing an increase of 13% compared to the previous year (2013: CHF 287.7 million). The average run-rate of “normal business” was 67% above the level in 2013 and illustrates the upturn in demand for PV solutions and especially PV upgrade systems as well as for Specialised Technologies solutions. Large orders amounted to about CHF 42 million in 2014 compared to CHF 118 million in the previous year. The book-to-bill ratio stood at 1.03 in fiscal year 2014 (2013: 1.42). The order backlog was at CHF 190.1 million as of 31 December 2014 (31.12.2013: CHF 190.3 million).
Net sales increased by 56% to CHF 315.8 million (2013: CHF 202.7 million). This was about in line with the Company’s expectations and was mainly created during the second half of the year (CHF 186.8 million in H2 compared to CHF 129.0 million in H1 2014). The breakdown in net sales changed as follows: Asia achieved 49% of net sales (2013: 45%), Europe 27% (2013: 40%), USA 24% (2013: 14%) and other countries 0.2% (2013: 1%).
Operating income after costs of products and services amounted to CHF 133.5 million (2013: CHF 102.5 million). The margin declined by 8.3 percentage points to 42.3% for fiscal year 2014 (2013: 50.6%). The margin decline is mainly due to high production efforts (manufacturing of machines, costs of materials) in connection with the GTAT orders. A large number of machines ready for delivery and diamond wire materials did not become sales-relevant after the Chapter 11 filing and had to be written off. The normalised margin without these effects would have been at about 50%. The bankruptcy proceedings at GTAT are ongoing and Meyer Burger is in extensive negotiations with GTAT to define the amount that Meyer Burger is owed by GTAT.
As a result of the incoming orders received in 2013 and the first half of 2014, the workforce was increased during the first six months of 2014, mainly at the production sites of Diamond Materials Tech, Inc. in Colorado Springs and at Meyer Burger Ltd in Thun. With the situation of GTAT, capacities at DMT which had specifically been increased for this project had to be reduced again by the end of October 2014 (overall 105 positions). In addition, the restructuring measures in Hohenstein-Ernstthal led to a decrease in personnel of a further 100 positions during the second half of the year. First cost effects of these and other measures are recognisable, when both half-year periods are compared (personnel expenses of CHF 84.3 million in H2 versus CHF 95.9 million in H1). However, the full cost effect in an amount of about CHF 30 million will only come through in fiscal year 2015. In 2014, total personnel expenses amounted to CHF 180.2 million (2013: CHF 165.7 million). Other operating expenses declined by 10% to CHF 48.9 million, despite the increase in net sales (2013: CHF 54.2 million). The main reasons for the decline were a consistent cost management and the release of provisions.
EBITDA for fiscal year amounted to CHF -95.6 million, as it included a substantial amount of non-recurring special items (2013: CHF -117.3 million). Without these special items, the normalised EBITDA would have been at about CHF -75 million in fiscal year 2014. Depreciation and amortisation came to a total of CHF 66.2 million (2013: CHF 79.6 million. At EBIT level, Meyer Burger posted a result of CHF -161.8 million (2013: CHF -196.8 million). The net result for fiscal year 2014 came to CHF -134.7 million (2013: CHF -162.8 million). Out of this amount, CHF -132.7 million are attributable to the shareholders of Meyer Burger Technology Ltd (the remaining CHF -2.0 million are attributable to the minority shareholders of Roth & Rau AG). The net result per share amounts to CHF -1.50 (2013: CHF -2.26).
Total assets were CHF 755.9 million as of 31 December 2014 (31.12.2013: CHF 784.0 million). Current assets include cash and cash equivalents of CHF 169.8 million; inventories are CHF 134.4 million. Long-term assets mainly include property, plant and equipment of CHF 141.2 million, intangible assets of CHF 132.1 million and deferred tax assets of CHF 110.2 million. Total liabilities amounted to CHF 403.5 million, of which trade payables were CHF 35.8 million, customer prepayments CHF 50.9 million, provisions CHF 20.4 million and financial liabilities CHF 248.1 million. Equity as of 31 December 2014 stood at CHF 352.4 million, reflecting a solid equity ratio of 46.6%.
Operating cash flow
In 2014, cash flow from operating activities was CHF -152.8 million (2013: CHF -130.4 million). In the operating cash flow, the effects from preparatory works in connection with GTAT and further investments into net working capital during the first half of 2014 are particularly pronounced. The operating cash flow before changes in net working capital amounts to CHF -107.7 million (2013: CHF -142.5 million). The reduction of the cash drain in operating activities was mainly achieved during the second half of 2014 (CHF -54.1 million in H2 compared to CHF -98.7 million in H1 2014). Further significant improvements in the cash flow from operating activities are expected for 2015,
Outlook and Road 2020
Solar energy, as an important element of the future energy supply, will continue to enjoy significant growth rates in the coming years and decades. Among others, International Energy Agency (IEA) estimates an installed base of more than 4,700 GW of PV capacity by the year 2050. In 2014, the installed PV base increased to about 180 GW and approximately 600 GW are expected in 2020. Meyer Burger is addressing this long-term growth trend with an industry leading and unique Photovoltaic process know-how combined with the broadest and most cutting-edge technology and product portfolio, which provides optimal solutions in quality and format for future requirements in terms of energy yield and energy efficiency. With the expected increase in capacity by cell and module manufacturers as well as by the potential of new PV markets, Meyer Burger Group addresses an overall market of about CHF 18-20 billion in the next five years (2015-2019).
With its Specialised Technologies, Meyer Burger also possesses a strong, comprehensive spectrum of key technologies for a variety of high-tech industries and trend markets. Innovative and industrialised products and system platforms are used in trend markets such as MEMS industry 4.0, RFID solutions, semiconductor, opto-electronics, pharmaceutical and medical technology. Our customers profit from our extensive, in-depth know-how in such fields of technology as ion beams, industrial inkjet applications, microwave and automation & software.
For 2015, Meyer Burger has set itself the goal to reach break-even at the EBITDA level and to achieve net sales of about CHF 400 million. With the “Road 2020”, a target in net sales of CHF 1.3 billion, an EBITDA margin of 13% to 15% and achieving good, sustainable operating cash flows were defined. On the path to this long-term goal, over the period 2016-2019 the Company wants to reach strong sales growth, a steady improvement in the EBITDA margin and positive cash flows.