CENTROSOLAR ends 2010 financial year with record revenue and earnings

• Annual revenue of EUR 404 million and operating result (EBIT) of EUR 26.6 million well up on both previous year and original forecast for 2010
• Export revenue share increased to 59 %
• Equity ratio over 50 %, financial debt further reduced
• Outlook for 2011: further revenue growth to EUR 420 to 450 million, with EBIT margin of 4 to 6 % forecast

CENTROSOLAR Group AG was able to post new record levels of revenue and earnings in the past financial year. Revenue rose by 31 % from EUR 308.7 million in the previous year to EUR 403.4 million. The original forecast for the year of EUR 340 to 370 million was thus easily exceeded. The export revenue share was increased from 49 % to 59.4 %.

The operating result before interest and taxes (EBIT) of EUR 26.6 million was actually almost four times the previous year’s figure (EUR 6.9 million) and was therefore also well above the original forecast for the year of EUR 14 to 16 million. Earnings after taxes reached EUR 15.8 million compared with the highly negative figure for the previous year of EUR -29.7 million that reflected the discontinuation of the joint venture with Qimonda. This equates to earnings per share of EUR 0.78 (compared with EUR -1.94 in the previous year).

CENTROSOLAR invested above all in the further expansion and modernisation of production capacities for solar module manufacturing and solar glass coating in 2010. Despite this extensive investment activity and the growth-driven rise in net working capital, net financial debt was reduced further from EUR 44.0 million to a present EUR 39.9 million. Thanks to this improvement and the profits achieved, it was possible to increase the equity ratio substantially from 43.0 % to 51.8 %.

The positive earnings performance is also ref lected in the cash flow. Despite the expansion in working capital, an operating cash flow of EUR 18.4 million was posted in the past financial year.

For 2011, CENTROSOLAR expects to see a weakening of the German market compared with the previous year. There will once again be anticipatory effects in the second quarter prior to the reduction in the feed-in tariff, albeit not quite to the same extent as in 2010. On the other hand fresh growth opportunities are arising in other European and North American markets but the scope for realising them depends to some degree on the outcome of the ongoing debates about the structuring of the various national feed-in tariffs. All in all, the competitive environment is generally becoming more intense.

Thanks to having built up a comparatively strong sales organisation over a number of years, along with its flexible purchasing policy and its continuous improvement processes aimed at optimising costs, the company has long been prepared for tackling such a development in the markets. CENTROSOLAR is moreover able to set itself apart from the competition by focusing on roof systems and being able to offer patented key components such as its anti-reflective solar glass. In concluding the production agreement with TSMC, the company has opened up an additional sales channel that it will be readily able to serve following the expansion of manufacturing operations at Wismar to 350 MWp in the third quarter of 2011, alongside meeting growing demand from the worldwide sales organisation.

The successful placement of a EUR 50 million bond has furthermore given the company the leeway and flexibility to seize organisational or potentially external opportunities for growth. Against this backdrop, the management is confident that CENTROSOLAR is well positioned to maintain its profitable growth trend over the years ahead. For 2011, based on the assumption that there will be adequate continuity in the incentives available in Europe, the company expects to see further revenue growth to approx. EUR 420 to 450 million, with an operating margin (EBIT) of approx. 4 to 6 %. Assuming that the general framework for financial incentives for photovoltaic roof systems in Europe and North America continues to be adjusted in line with the general potential for cost reductions, the company considers that its strategy means it is well equipped to maintain profitable growth in 2012 and beyond.