SMA posts €93 million loss for 2024
SMA Solar Technology AG recorded a 19.7% decline in revenue to €1.53 billion ($1.65 billion) in the past fiscal year. At the same time, operating earnings before interest, taxes, depreciation and amortization (EBITDA) slid into the red, from €311 million in 2023 to a loss of €16 million in 2024, according to the PV company's preliminary, unaudited figures published on Wednesday. The decline in earnings before interest and taxes (EBIT) was similarly sharp, falling from €269.5 million to a loss of €93.1 million.
SMA attributed the earnings development to low sales in the Home Solutions and Commercial & Industrial Solutions segments. In addition, the company recorded cost increases and write-downs on inventories and provisions in connection with its restructuring and transformation program.
Overall, SMA saw inverter sales reach 19.5 GW in 2024, only 1 GW less than in 2023. The overall lower demand combined with high inventory levels on the distributor side led to significant declines in sales beyond the power plant division. According to SMA, sales in the Home Solutions segment fell from €580.2 million to €170.3 million and in the Commercial & Industrial Solutions segment from €478.9 million to €183.8 million. In addition to the decline in sales, EBIT for small rooftop systems was also impacted by increased costs and impairments on inventories (€44.6 million), capitalized development projects (€14.5 million) and a production line (€4.2 million) as well as provisions for purchase obligations (€10.2 million). It amounted to a loss of €150.7 million last year. In 2023, SMA was still able to record a profit of €148 million in this segment. The commercial and industrial segment also recorded a heavy loss of €164.3 million in 2024. In 2023, this division also recorded a profit of €22.7 million.
SMA was able to partially offset these declines in sales and earnings through its Large Scale & Project Solutions segment. In the power plant sector, the company increased sales significantly from €845 million to €1.176 billion while EBIT also more than doubled. It rose year-on-year from €103.8 million to €227 million. The high level of sales combined with a reduction in fixed costs, a profitable product mix and the sale of a battery storage project by SMA Altenso GmbH had a positive effect. However, according to SMA, impairments of €19.3 million were also made on inventories in the power plant sector.
At the end of the year, the order backlog was significantly below the previous year's level at €1.356 billion. However, this was expected due to the challenging situation in the Home Solutions and Commercial & Industrial Solutions segments. A good €1 billion of the order backlog is attributable to the product business. SMA's net liquidity was also significantly below the value at the end of 2023, falling from €283.3 million to €84.2 million.
Only two divisions in the future
SMA has now launched an extensive restructuring and transformation program. Since September 2024, work has been underway to significantly reduce costs and simplify the company structure and management. As a result, the company intends to merge the Home Solutions and Commercial & Industrial Solutions segments into a new Home & Business Solutions division in the first half of 2025. The existing Large Scale & Project Solutions unit will remain as is.
“In the future, there will be two divisions with strong vertical integration and full profit and loss responsibility,” the company said. It likewise intends to streamline central departments. In addition, SMA plans to withdraw “from countries with low growth potential.”
The company is also planning job cuts in Germany. In February, negotiations with the works council on a so-called voluntary program, or more precisely, the determination of conditions for voluntary termination, were concluded. SMA has already started implementing it. Olaf Heyden, who was appointed chief transformation officer in February, is responsible for the program and has also taken over the Operations, Human Resources and Digitalization areas as chief operating officer.
“Despite the very good sales and earnings development in the Large Scale & Project Solutions segment, the 2024 fiscal year was very challenging overall,” said SMA CEO Jürgen Reinert. “The operational development of the Home Solutions and Commercial & Industrial Solutions segments was largely shaped by the overcapacity in the market and the falling demand in the home and commercial sectors. Due to the worsening market situation, we took decisive countermeasures from mid-2024 with measures to reduce costs and increase sales and have supplemented these measures with a comprehensive restructuring and transformation program since September 2024.” With a successful transformation and restructuring, around €150 million to €200 million in costs are to be saved from 2026, which should create the basis for profitable growth in the future, according to the company.
Forecast for 2025
SMA expects the programs and measures to have the first positive effects on its earnings in the current fiscal year. This is also reflected in the forecast. For its newly created Home & Business Solutions division, SMA expects a stable sales level with a result significantly above the previous year's level. However, the break-even point has not yet been reached. Further sales growth is expected in the second division, although the result is likely to be slightly below the previous year due to higher costs and a changed product and regional mix, SMA CFO Barbara Gregor added.
For the entire group, the management board expects sales of between €1.5 billion and €1.65 billion and a positive EBITDA of between €70 million and €110 million this year.