Annual Report 2010
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2ANNUAL0 10REPORT ANNUAL REPORT 2010 TABLE OF CONTENTS 1. Letter from the President 2. The Company 3. Main figures 4. Main strategic lines 5. The sector 6. Lines of business 7. Corporate Social Responsibility (CSR) 8. Audit Committee Report 9. Consolidated annual accounts 10. Consolidated management report LETTER FROM THE PRESIDENT 3 ANNUAL REPORT 2010 4 LETTER FROM THE PRESIDENT Dear partners, shareholders, employees and clients: The year of 2010 was characterised by regulatory ups and downs in the photovoltaic industry, with the shadow of retroactivity flying over the Spanish market and tariff discussions dominating activities in the German market. This environment of uncertainty affected demand, creating peaks and leading to significant price pressure. Nonetheless, Solaria knew better than ever how to materialise opportunities identified in markets such as the Italian, Spanish and Central European ones, with the company reporting total sales figures higher than in 2009 by 81%. 2010 was the year of Solaria’s international consolidation as a project designer and producer of turnkey photovoltaic solutions, where exports represented 77% of total sales. We launched our activities in turnkey projects for third parties with four projects in Italy and one more in Greece. The Solaria generation park grew by 26 MW with plants executed in Central Europe, Italy and Greece that were added to the 22 MW that the company already had operative in Spain. External financing for these projects, employing Project Finance, entailed a true challenge faced with the economic and financial climate in which we are submerged, but it was successfully achieved, once again spotlighting the solidity of our company. 5 ANNUAL REPORT 2010 LETTER FROM THE PRESIDENT During 2010 we drove forward our policy of compensating shareholders by means of dividend distribution, treasury stock amortisation and a share repurchase programme, with the aim of favouring share liquidity. Despite the aforementioned regulatory oscillations, 2010 saw great growth in the photovoltaic sector, with a total worldwide installed capacity of some 15 GW. At present, the engine for photovoltaic energy is in Europe, although new regions primarily located in the so-called ‘Sun Belt’ are creating new growth opportunities, including the Middle East and South America. Solaria will be ready where these opportunities are, as revealed by the announcement of the construction of the largest grid- connected energy facility in Brazil through our subsidiary in this country, for the first semester of the year in progress. 6 Photovoltaic energy is undoubtedly a future energy that is already playing an important role in the energy mix of the principal territories in the world. As harshly reminded by the energy situation in Japan and political instability in North Africa, the certainty of energy supplying and climate change are the main issues we must tackle and resolve globally with regard to energy. Solar energy is and will be –naturally– part of this solution. I do not want to sign off without thanking shareholders, clients and suppliers again for placing their trust with us, as well as the Solaria team for its hard work and dedication throughout 2010. Mr Enrique Díaz–Tejeiro Gutiérrez President of Solaria Energía y Medio Ambiente, SA 7 THE COMPANY 9 ANNUAL REPORT 2010 THE COMPANY Company profile Solaria Energía y Medio Ambiente, the only solar energy company listed on the Spanish Stock Exchange, manufactures at its production centres in Spain, with capacity for the production of 250 MW modules, cells and photovoltaic modules, executing turnkey projects for large facilities both its own and third party, operates and maintains photovoltaic plants and generates electricity by means of the plants constructed and operated by Solaria in several European countries. Generation capacity at the end of 2010 was 48 MW on permanently-owned lands, which translates into recurrent earnings, guarantees great financial solidity and validates our commitment to photovoltaic solar energy. Solaria has become one of the leading companies in the renewable energy sector, thanks to its ongoing investment in R&D&i, its vertical integration in the value chain and its international presence, representing 77% of its consolidated invoicing in 2010. Further strengths include recognition and endorsement by the top main international banks and institutions that have issued certifications that let it market its products throughout the world and guarantee the quality of its production processes. Founded in 2002, Solaria is one of the main photovoltaic plant operators in Spain, contributing decisively to the expansion of the photovoltaic market in this country, exporting its knowledge base to the other countries in which it operates. These activities make it one of the few Spanish companies that provides vertical integration across the entire value chain from the production of solar cells to operation & maintenance services at photovoltaic facilities. 10 This lets it offer a wide range of products and Fuenmayor (La Rioja) - and its sales offices in the services, guarantee complete stability in the leading world markets: Germany, France, Italy, manufacturing process and minimise exposure to Spain, Greece and Brazil. supply risks. Solaria employs over 800 workers, among its two factories in Spain -Puertollano (Ciudad Real) and Main milestones 2002 Year founded 2002- 2003 Start of progressively installing photovoltaic modules produced by third parties and development of solar farms. 2004 Start search for suitable technological suppliers for designing, installing and operating a photovoltaic module production plant. 2005 Construction of Solaria’s first photovoltaic panel production plant in Puertollano (Ciu- dad Real). Before year-end 2005, the first mass production of photovoltaic modules was successfully completed. 2006 In February 2006, Solaria sold the first panels it produced. 2007 In April, construction was started on industrial buildings located in the La Nava II Industrial Estates, which house the facilities for the new Solaria photovoltaic cells fac- tory, as well as start-up of the Fuenmayor factory. In June, Solaria entered the stock exchange via an Initial Public Offering. 2008 Solaria completed 44 MW in turnkey projects in Spain, becoming one of the largest PV plant operators in Spain. 2009 Start of Solaria’s international expansion: Germany, Italy, France. 2010 Because of internationalisation, Solaria supplies more than 110 MW throughout Europe and finishes construction of 37 MW for in-house and third-party projects, reaching a total of more than 250 MW supplied. Solaria’s presence in the world Latin America, widening its expansion network to encompass the main international markets. Solaria has two production centres in Spain with around 800 employees: Solar has a R&D centre located in the Puertollano plant, one of the international centres par • Puertollano (Ciudad Real) excellence in developing photovoltaic technology. • Fuenmayor (La Rioja) The company makes ongoing investments with the aim of maintaining technology leadership, applying Solaria’s headquarters are in Madrid and employ a advances to module production and in-house and further 50 professionals, primarily housing functional third-party turnkey projects. departments. Internationally, Solaria is present in Germany, Italy, France, the United Kingdom, Greece, Israel and 11 MAIN FIGURES 13 ANNUAL REPORT 2010 MAIN FIGURES This section presents some of the most significant total sales, compared to 1% in 2008, the year in figures for the 2008-2010 triennial, a period which our deployment into international markets during which the Spanish market underwent a began. severe contraction and during which Solaria was able to open up new international markets to counteract this situation in the local market and present positive results. During the 2010 fiscal year, international turnover represented 77% of Comparison of the main lines of business between 2008 and 2010 Thousands of euros 2008 2009 2010 Turnover 109.685 88.892 161.335 EBITDA -1.250 9.491 18.049 Operating results -26.654 2.962 8.967 Net profits -21.462 298 6.504 Thousands of euros 2008 2009 2010 Photovoltaic line 77.788 23.325 108.673 Turnkey projects 30.892 45.388 37.852 Generation & others 1.005 20.179 14.810 Total sales 109.685 88.892 161.335 2008 2009 2010 Domestic sales 99% 85% 23% Export sales 1% 15% 77% Consolidated data under IFI standards 14 2008 2009 2010 Main 200.000 Figures 150.000 100.000 50.000 0 -50.000 Turnover EBITDA Operating results Net profits Thousands of euros 2008 2009 2010 Turnover by line of product 120.000 100.000 80.000 60.000 40.000 20.000 0 Thousands of euros Photovoltaic line Projects Generation and others 15 ANNUAL REPORT 2010 MAIN FIGURES OTHER DATA OF INTEREST During 2010, we launched our activities in turnkey projects for third parties in Italy and Greece. Over the course of the year, we strengthened our generation activities, increasing operating plants from three units in Spain with an accrued power of 22 MW to 11 facilities in Spain, Italy, Germany, Greece and the Czech Republic, totalling 48 MW attributable to Solaria. 16 NUMBER OF EMPLOYEES 2010 Number of employees (to 31 December 2010) 780 Average staff during 2010 716 OUR STAFF In 2010, the Company’s average staff experienced a employees who assisted in setting production significant rise, moving from 505 to 716 employees records at both plants. During the first months of (+42%). 2010, the Temporary Redundancy Plan was nearly inoperative, as the majority of staff worked almost The substantial increase in sales, particularly at non-stop, without need to suspend employment an international level, the fruit of the Company’s contracts. efforts to internationalise and increase its range of businesses, notably reactivated production and, The increase in structural staff was also remarkable, consequently, needs for personnel. jumping from 91 to 120 employees (45%): the large part of them for the Company’s international The largest jump in staff took place in the industrial business offices.