ersol winds up year of greatest expansion with a high degree of success

• 25.4 % increase in sales to € 160.2 million
• 10.1 % increase in operating income (EBIT) to € 22.3 million, despite
up-front costs
• Outlook for 2008 and 2009 promises strong growth
• Further expansion of capacity to approx. 550 MWp in crystalline segment and about 200 MWp in thin-film segment by the end of 2012

Preliminary key figures for the ersol Group as of 31 December 2007

million euros (IFRS) 2007 2006 Change
Sales 160.2 127.8 plus 25.4 %
EBIT 22.3 20.3 plus 10.1 %
EBIT margin 13.9 % 15.9 % ─
EBT 13.4 19.7 minus 31.8 %
Employees 802 448 plus 79.0 %

Erfurt, 26 February 2008. ersol Solar Energy AG (ersol) looks back on a successful year 2007: consolidated revenue increased from € 127.8 million to € 160.2 million compared to 2006 – corresponding to growth of 25.4 %. Key driving forces for the encouraging boost in revenue were increased cell production (2007: 53 MWp output, 2006: 40 MWp output) and revenue from aimex-solar GmbH in 2007. The wholly-owned subsidiary generated € 20.4 million alone in the last quarter – in the previous nine months the figure was € 26.6 million.

At the same time there was an increase in operating result for 2007, despite up-front costs of over € 6 million for capacity expansion: whereas operating income (EBIT) in 2006 stood at € 20.3 million, in the reporting year it reached € 22.3 million – a rise of 10.1 %. The EBIT margin amounted to 13.9 % (2006: 15.9 %). Despite an above-average contribution to sales of ersol subsidiary aimex-solar GmbH, due to the low trading margins customary in the industry the impact on consolidated EBIT was very low.

In earnings before tax (EBT) ersol reported a scheduled decline of 31.8 % to € 13.4 million (2006: € 19.7 million). The reason for this was higher financing expenses due to higher interest expenses for increased use of lines of credit on the one hand and interest and currency hedging transactions on the other hand – although in part these had a purely bookkeeping effect.

“2007 was a good year for ersol in which we created substance for realising our continued ambitious targets in the years ahead. Our revenue and earnings figures confirm that we are on the path to success. Not only were they higher than in the previous year, they even exceeded our own forecasts,” Dr Claus Beneking, Chief Executive of ersol Solar Energy AG, explains the preliminary business figures of the Thuringian photovoltaic company.

Forecast revenue and earnings in 2008 and 2009
In line with anticipated market development, ersol is expecting continued corporate growth in the next few years – in particular in view of the fact that 2007 was the year of greatest expansion so far, and that from 2008 onwards capacities can finally be exploited distinct better: “Now ersol will be able to harvest the fruits of its efforts so far,” Beneking gleefully proclaims the bright prospects for this and next year.

Sales for 2008 will reflect an output of approx. 140 MWp solar cells and about 20 MWp of amorphous thin-film modules. Together with other segments, ersol is anticipating total revenue of € 300 to 320 million. Sales of € 420 to 440 million are forecast for 2009, based on a planned output of about 180 MWp in the crystalline segment, about 30 MWp in thin-film photovoltaic modules and additional revenue from the company segment Silicon and from the sale of crystalline modules.

In terms of consolidated EBIT ersol is assuming a figure of € 70 to 80 million with a margin of over 20 % for 2008; the forecast for 2009 is between € 90 and 100 million.
Growth plans of the ersol Group until 2012
The course has been set for ersol’s continued growth in the period 2008 to 2012. “We are planning to expand our capacities in the crystalline solar cell segment to about 550 MWp by the year end 2012. And the thin-film module segment is likewise exhibiting a most promising trend. ersol is intending to expand its capacities in this segment – according to milestones – to approx. 200 MWp also by the year end 2012,” Beneking explains the next steps to be taken by the ersol Group. Two further solar cell production plants and a factory for crystalline modules with about 50 MWp – subject to a positive outcome of the final site evaluation and approval of the EU subsidies – are to be constructed on the site of Cell Fab 2 in Arnstadt, because short distances save costs and minimise rejects. ersol is planning to invest about € 500 million by 2012 in the expansion of the crystalline sector.

“Before the end of 2008 ersol will be welcoming the 1,000th employee to the company. At the end of 2010 our payroll will have grown to approx. 2,000. This we will achieve in the face of intensive competition for qualified employees,” Beneking is confident.

In 2007 ersol signed extensive long-term agreements to safeguard this future scenario: for example, the biggest silicon purchase contract in company history was concluded with Hemlock Semiconductor Corporation. Together with other contracts this will virtually guarantee our supplies of raw materials until 2012. A similarly important contract was the long-term customer agreement with Solon AG for the supply of solar cells – ersol’s biggest contract to date for cell deliveries. “This and other customer agreements mean that 60 to 70 % of our production up until the year 2012 is already sold. This year ersol solar cells are already sold out,” Dr Claus Beneking added.

Key dates
ersol AG will be publishing the complete annual financial statements as planned on 28 March 2008. Further information can be found from this point in time at the IR website www.ersol.de/en/investorrelations/.

ersol Solar Energy AG
Wilhelm-Wolff-Str. 23
99099 Erfurt
Germany

Further information:
Sonja Teurezbacher
Tel.: +49 361 2195-1130
Fax: +49 361 2195-1133
ir@ersol.de
www.ersol.de

About ersol

ersol Solar Energy AG produces and markets high-quality silicon-based photovoltaic products. The Group comprises the segments Silicon, Wafers, Solar Cells and Modules. With sales of € 160 million in financial year 2007, the Thuringia-based company is one of the leading players in the solar industry. Listed since 30 September 2005 on the Prime Standard of the Frankfurt Stock Exchange, the young ersol share had already been added to the TecDAX on 19 December 2005. Currently the ersol Group has more than 850 employees.

The Company’s main goal is to establish itself even more strongly as a manufacturer of high quality silicon solar cells and to account for a disproportionate slice of the anticipated growth in the photovoltaic industry. To achieve this, ersol currently focuses on technologically demanding stages of the value chain for photovoltaic plants, and in particular on the production of wafers and solar cells. There are a number of pillars to the Company’s supply of the raw material it needs, silicon. It is primarily secured by long-term delivery agreements with leading polysilicon manufacturers. In addition to this, the Company’s internal recycling capacities in the silicon area also make an important contribution. Silicon is processed in the Wafers segment. The monocrystalline wafers manufactured there are preliminary products for the manufacturing of highly-efficient silicon solar cells in the Solar Cells segment. Since early 2006 the company has been delivering a part of its solar cells for the production of solar modules to the joint venture Shanghai Electric Solar Energy Co. Ltd. (SESE) in which the ersol Group has a 35% holding. The sales of these and other photovoltaic modules are handled in part by the Modules business segment. In the future, this segment is expected to include the Company’s own module production, planned for 2009. ersol also develops silicon-saving thin-film technology in the Modules segment. For this purpose ersol has a production facility for silicon thin-film modules.

This release was published on openPR.