SMA Solar Technology AG (SMTGF) Q4 2024 Earnings Call Highlights: Navigating Challenges with ...
Group Sales: EUR1.5 billion in 2024, down from EUR1.19 billion in 2023.
Group EBITDA: Minus EUR16 million in 2024, compared to EUR311 million in 2023.
Free Cash Flow: Minus EUR184 million in 2024, improved from minus EUR220 million at the end of Q3 2024.
Total Order Backlog: EUR1.36 billion at the end of 2024.
Home Segment Revenue: EUR170 million in 2024, down 71% from EUR580 million in 2023.
Commercial & Industrial (C&I) Revenue: EUR184 million in 2024, down from EUR479 million in 2023.
Large Scale Revenue: EUR1.18 billion in 2024, up from EUR845 million in 2023.
EBITDA Margin: Minus 1% in 2024, compared to 16% in 2023.
Net Cash: EUR84 million at the end of 2024, down from EUR283 million in 2023.
Gross Cash Flow: EUR111 million in 2024, down from EUR333 million in 2023.
Net Working Capital: EUR473 million at the end of 2024, up from EUR392 million in 2023.
Shareholders' Equity: Decreased to EUR553 million from EUR686 million in 2023.
Provisions: Increased to EUR233 million from EUR201 million in 2023.
Warning! GuruFocus has detected 4 Warning Signs with SMTGF.
Release Date: March 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
SMA Solar Technology AG (SMTGF) reported strong performance in the large-scale segment, with revenues increasing from EUR845 million in 2023 to EUR1.18 billion in 2024.
The company's order backlog reached EUR1.36 billion at the end of 2024, indicating strong future demand.
The Americas region saw a significant increase in revenue share from 25% to 40%, driven by the large-scale segment.
SMA Solar Technology AG (SMTGF) is implementing a restructuring and transformation program aimed at improving long-term cost efficiency and reducing liquidity requirements.
The company is focusing on cybersecurity, sustainability, and energy system stability, positioning itself as a leader in advanced inverter and battery technology.
Group EBITDA fell to minus EUR16 million in 2024 from EUR311 million in 2023, primarily due to low sales and increased costs.
The Home and Commercial & Industrial (C&I) solutions segments experienced significant revenue declines, with the home segment decreasing by 71% from EUR580 million in 2023 to EUR170 million in 2024.
Free cash flow was negative at minus EUR184 million, impacted by increased net working capital and reduced sales in Home and C&I segments.
The company recorded impairments on inventories and capitalized development projects, contributing to the negative financial performance.
SMA Solar Technology AG (SMTGF) plans to reduce its workforce by approximately 1,100 full-time equivalents as part of its restructuring efforts.
Q: Your guidance is EUR1.5-1.65 billion, but your backlog is EUR1 billion. How do you expect to fill the gap, especially with the market still weak? A: Jurgen Reinert, CEO: We are seeing a slow recovery in the Home and Business Solutions segment as distributor stocks deplete. We expect a slight improvement in order intake throughout the year. For large-scale, we are confident in maintaining market share despite some market reluctance, particularly in the US.
Q: What is the break-even level for the Home and C&I business after restructuring? A: Barbara Gregor, CFO: It's too early to provide a specific break-even level as we are still aligning personnel and costs within divisions. We expect to have a clearer picture in the second half of the financial year.
Q: Can you comment on the competitive environment in large-scale and any changes? A: Olaf Heyden, COO: The competitive landscape remains largely unchanged with key players like Sangro, Power Electronics, and us. Tesla has become a notable competitor in storage solutions.
Q: How do you perceive the current situation in the US market, and what are your plans for accessing it? A: Olaf Heyden, COO: We see some reluctance in large-scale orders but have 90% of our planned revenues for this year already secured. We are localizing transformer production with a partner to meet local content requirements and are monitoring upcoming regulatory announcements.
Q: What is driving the slight comeback in demand for residential and C&I markets? A: Olaf Heyden, COO: The main driver is the depletion of distributor stocks. Additionally, the cost of systems has decreased significantly, making them more attractive despite stable electricity prices and high interest rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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