Inverter giant SMA's sales fell in the first six months, but profits soared

In the first six months of this year, SMA, a world-renowned inverter manufacturer, sold about 6.8 GW of inverters (7.1 GW in the first half of 2020) with sales revenue of 488.3 million euros (514.2 million euros in the first half of 2020). In the first half of 2021, the company generated EBITDA of 38.1 million euros (EBITDA margin: 7.8%; in the first half of 2020: 24 million euros, accounting for 4.7%). Although sales have declined, profits have increased significantly.

The company's sales were slightly lower than the same period last year, as uncertainty surrounding the coronavirus pandemic persisted and small and medium-sized enterprises remained reluctant to invest in the first months of the year. As a result, demand in the company's Commercial Solutions division was lower than expected and product prices fell. In contrast, sales increased in the company's Home Solutions and Large (Ground) Project Solutions divisions. The shortage of electronic components had little overall impact on SMA's sales levels.

According to overseas reports, SMA's net income increased significantly to 13.3 million euros (2020 H1: 2.7 million euros), and earnings per share increased to 0.38 euros (0.08 euros in H1 2020). The company's net cash was 170 million euros (December 31, 2020: 226 million euros). It is worth noting that in the context of a general shortage of materials, the company has increased its storage. With good reserves, SMA may be able to achieve better expected levels of delivery in the second half of 2021.

"Compared with the first six months of the previous year, we increased our earnings (EBITDA) by around 60% in the first half of 2021. This is particularly due to our continued improvement of our product and cost structure," explained SMA CEO Jürgen Reinert. "In the field of private residential photovoltaic systems and photovoltaic power plants, our sales volumes and backlog of orders increased compared with the previous year." In contrast, the company's sales of commercial systems fell sharply due to lower demand and falling prices.

“Due to the coronavirus pandemic, small and medium-sized companies were still reluctant to invest in the first months of the year. However, in the second quarter, orders received in this division (Business Solutions) increased again. We therefore expect a positive development of sales and earnings here in the second half of the year as well,” said Reinert.

The SMA board of directors confirmed its sales and earnings guidance for the 2021 fiscal year issued on February 5, 2021, which forecasts sales to increase to between 1.075 billion euros and 1.175 billion euros, and EBITDA to increase to between 75 million euros and 95 million euros. The current tight supply of electronic components may limit SMA's delivery capacity in the second half of this year. The company's management board is also responding to this situation by implementing a stricter and more intensive supplier management policy and developing an inventory strategy.