Solar PV Inverter Giant SMA Cutting Workforce Amid Sales Slide

Global inverter leader SMA AG cast a downward glance in its fiscal 1Q13 results today, and is preparing for what could be major layoffs in the face of the global PV market’s first decline in many years.

SMA sold €212 million of inverters in 1Q13 representing 1.2 GW, compared with €405 million and 1.9 GW a year ago, and swung to a net loss of €5.8 million vs. a €29 million profit. Sales actually were toward the higher end of SMA’s guidance thanks to a boost in international business in the U.S., Japan, Australia and Thailand. For 2013 overall, SMA sees “a strong decline in demand” for PV inverters — €4.4 billion, a 19 percent decline from 2012 — with overall demand sagging under the weight of subsidy cuts in major European markets and uncertainty about pending penalties on Chinese-imported PV modules in Europe.

With sales half what they were just two years ago, efforts to make the German company leaner must go beyond productivity gains and savings on material costs; “we are forced to have leaner structures,” said CEO Pierre-Pascal Urbon in the company’s conference call discussing the results. That means layoffs are coming — the company offered no specific number of the “magnitude of the headcount reduction,” but Urbon did say the majority of the cuts will be in Germany and particularly in the administration (sales/service) area. Local reports this week suggest it could be as many as 1,000 workers affected; that’s roughly the same number that SMA indicated back in October that it would gradually trim in the coming year, but there’s no confirmation whether these new layoffs are a clarification of, or in addition to, that previous plan. More clarity is promised in the next few weeks, as the company begins laying out its plans to employees (department leaders have already been notified) and starts negotiations with the Work Council.

The bottom line, though, is that SMA’s soft results and expectations confirm the observation that the solar PV market is getting crowded and complicated, with pricing pressures and product and technology shifts based on customer and regional trends.

SMA’s inverter output sold dropped by 38 percent due to weak demand and accelerated price pressure. (Source: SMA’s 1Q13 analyst/investor presentation)

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Jim is Contributing Editor for RenewableEnergyWorld.com, covering the solar and wind beats. He previously was associate editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, renewable energy and industrial lasers since 2003. His work has earned both internal awards and an Azbee Award from the American Society of Business Press Editors. Jim has 17 years of experience in producing websites and e-Newsletters in various technology markets.

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