- Consolidation measures implemented
- Significant reduction of cost base
- New Blu-ray markets developed
- Mastering system for dual layer Blu-ray accepted
- First coating machine for silicon solar cells delivered
- New products give rise to optimism for solar market
Kahl am Main, November 05, 2009 - Since the beginning of the banking crisis in the 3rd quarter of 2008 the global economy has remained in a deep recession. Plant and machinery engineering shows the most negative trend in new orders compared with the prior-year. The SINGULUS TECHNOLOGIES AG (SINGULUS) is also impacted by these developments. The financial key figures of SINGULUS in both the Optical Disc and the Solar segments remained below previous year’s levels.
SINGULUS generated sales in the amount of € 95.9 million during the first nine months of 2009 (previous year: € 149.9 million). The order intake is characterized by weak activities in the segments Optical Disc and Solar. It totaled € 56.0 million after the first nine months of 2009 which is significantly below the € 197.4 million reported in the prior-year period. The order intake in the 3rd quarter 2009 also declined and dropped to € 15.2 million (Q3 2008: € 42.2 million). The order backlog amounted to € 30.3 million as of September 30, 2009 (previous year: € 103.4 million). On an operating basis (before extraordinary write-offs) the EBIT was negative at € -13.9 million (previous year: € -11.7 million). However, the gross margin improved to 31.6 % during the first nine months of the business year 2009 (previous year: 28.1 %).
Additional consolidation measures required
The difficult situation in the optical disc sector has increasingly deteriorated due to the global economic and financial crisis as well as due to restrained investment spending in the past twelve months, while in particular the creditworthiness of individual customers has declined. This trend inevitably resulted in negative impacts on the recoverability of our receivables and inventories.
Accordingly, the Executive Board of the SINGULUS TECHNOLOGIES AG once again reviewed all positions in the company in detail with respect to necessary adjustments and write-offs. In the course of the meeting on November 4, 2009 it was resolved to perform balance sheet-relevant write-offs of € 37.4 million in total.
Specifically, write-offs on inventories and receivables amount to € 19.3 million. The assets of HamaTech APE are reduced in the balance sheet due to a revaluation of the business activities by € 8.6 million. The intangible assets from the Oerlikon acquisition in spring 2008 are written off by around 50 %, i.e. by € 9.5 million. This results in non-cash write-offs in the total amount of € 37.4 million.
The restructuring charges incurred in the 3rd quarter 2009 amounted to € 3.3 million and will result in significant savings in personnel expenses from 2010. Therefore, taking into account the extraordinary items a negative EBIT in the amount of € -53.3 million results. In the 3rd quarter the EBIT before one-time charges amounted to € -6.2 million. Including the extraordinary expenses SINGULUS posted a negative EBIT totaling € -42.7 million in the quarter under review (previous year: € -39.0 million).
Optical Disc and Solar
The demand for new machines mainly concerns the third format generation Blu-ray. With the exception of SONY, today all disc producers manufacture this new format on SINGULUS machines.
So far, SINGULUS has delivered more than 65 Blu-ray production machines to customers around the world. On a favorable note, an additional Blu-ray mastering system CRYSTALLINE was also sold and accepted by the customer following the technical acceptance for single and dual layer after a short-period of commissioning.
The demand for the new format Blu-ray continues to grow overall worldwide. Accordingly, the DEG (Digital Entertainment Group) reported an increase of Blu-ray Disc sales in the US by 83 % compared with the first 9 months of the prior-year period in 2008. For the medium-term this growth provides a good base for our Blu-ray equipment business in the next couple of years. SINGULUS succeeded in developing new regions for Blu-ray production machines this year. Amongst others, BLULINE II systems were sold to Brazil and Japan.
The first implementation of our SINGULAR coating machine in a production line for silicon solar cells, a new handling system for silicon wafers as well as the development of a new ion layer gas reaction (ILGAR) process for new plant technology for thin-film solar cells are just a few examples of our new developments.
Outlook and strategy
A pick-up in the overall business activities has not yet taken place in the 3rd quarter 2009 either. Accordingly, for the business year 2009 SINGULUS therefore confirms sales in a range of € 115 to 125 million with significantly negative earnings.
The overall economic situation is expected to improve once again in 2010. In addition, the restructurings implemented in 2009 - together with the completed adjustments and write-offs - will result in a significant reduction of the cost base in the coming years.
The Blu-ray format has prevailed internationally and develops increasingly towards a mass market. SINGULUS, as the market leader in the Optical Disc industry with mastering and its replication line BLULINE II, is optimally positioned for this trend and will benefit substantially from the growth in the coming years.
SINGULUS and STANGL are closely cooperating with leading cell manufacturers in the development of new technologies and new plant concepts for improved cell concepts with higher efficiency and production technologies with decreasing production costs. We will position ourselves up front in silicon solar as well as in thin-film solar technology.
Roland Lacher, CEO of SINGULUS TECHNOLOGIES comments: “Our goal is to offer a broad product range of new machines for the photovoltaics industry, which will offer manufacturers of both silicon and thin-film cells new production technologies and therefore particular cost advantages. Especially now, in a time of a global economical down-turn, we see a rising interest for new plant concepts in the PV market". Roland Lacher adds:” Due to the technologies and personnel capabilities existing in both companies, SINGULUS and STANGL will not only deliver individual machines and systems in the future, but consistently transform itself towards a joint supplier of systems and process know-how. This change of the business model was also successful in the Optical Disc market some years ago. The same strategy will also pave the way for the business field of photovoltaics.”
SINGULUS TECHNOLOGIES is sure that the company, as the market leader in the Optical Disc segment and with new products in the Solar segment, will again be able to stabilize its operations and to generate sustainable positive earnings.