ANNUAL REPORT 2010 PROGRESS ANNUAL REPORT 2010 CONTENTS MARKET SEGMENTS BRANDED OEM PRIVATE ROOFTOP ARRAYS LARGE SOLAR (CELLS) ROOFTOPS AND ON SMALL POWER PLANTS IN-ROOF-ARRAYS COMMERCIAL AND AND SYSTEMS INDUSTRIAL BUILDINGS Module Distributors, Large C & I, Utility, TARGET GROUPS manufacturers large installers segment integrators customers / IPP’s PRODUCTS Solar cells Mono Multi PROGRESS 4 NEWSolar PRODUCTS modules Q.PEAK * 12 NEW MARKETS Q.SMART 24 NEW DEVELOPMENTSQ.PRO Q.BASE MANAGEMENTSolar systems GROUP MANAGEMENT REPORT CONSOLIDATED 32 INTERVIEW WITH THE CEO 66 BUSINESS AND FINANCIAL STATEMENTS 35 MEMBERS Product utilisation OF THE per BOARD segment. OPERATING ENVIRONMENT 110 CONSOLIDATED * Introduction planned for the second half-year 2011. INCOME STATEMENT 36 REPORT OF THE 76 INCOME, FINANCIAL AND SUPERVISORY BOARD NET ASSET POSITION 111 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 41 CORPORATE GOVERNANCE 87 OTHER DISCLOSURES 112 CONSOLIDATED BALANCE SHEET 50 CORPORATE RESPONSIBILITY 91 RISK REPORT 114 CONSOLIDATED 60 Q-CELLS AT THE CAPITAL MARKET 102 SUPPLEMENTAL REPORT CASH FLOW STATEMENT 103 FORECAST REPORT 116 CHANGES IN CONSOLIDATED EQUITY 118 NOTES TO THE CONSOLIDATED 2010 RESULTS FINANCIAL STATEMENTS 192 LIST OF SHAREHOLDINGS FURTHER INFORMATION Target What we achieved in 2010 196 AUDITOR’S REPORT Building up our innovative • We have added to our product portfolio and offer solutions for 197 all applications. RESPONSIBILITY STATEMENT product portfolio for all • We have successfully launched our crystalline Q.PRO and Q.BASE solarOF THE modules COMPANY’S on the market. photovoltaic applications • Our Q.SMART thin-film modules have achieved a record-breaking levelLEGAL of efficiency. REPRESENTATIVES • We have upped our production volume significantly: 2010 saw the production of solar cells and modules with a total volume of over 1 GWp for the first time. 198 GLOSSARY Moving into new markets • We have made a successful entry into the market segments Residential 200 FIVE-YEAR and Commercial SUMMARY & Industrial: 27 % of our sales in 2010 came from new business openings 201 for ourFINANCIAL solar modules CALENDAR and systems. 2011 • We have expanded the systems business around the world and improved our processes. • We have identified important up-and-coming markets and established CONTACT a global salesINFORMATION structure with a presence in local markets. In 2010, Q-Cells opened more nationalPUBLISHER’S branches in Australia IMPRINT and India. KEY FIGURES 2010 IFRS 2010 2009 1) Change % Income Revenues € million 1,354.2 790.4 71.3 Export ratio % 50.5 42.4 – Total output € million 1,524.6 832.9 83.0 Earnings before interest, taxes, depreciation and amortisation (EBITDA) € million 182.2 – 209.0 – Operating income (EBIT) € million 82.3 – 362.5 – Earnings before taxes (EBT) € million 112.3 – 455.0 – Net income for the period (after minorities) € million 18.9 – 1,342.9 – from continuing operations € million 90.9 – 370.8 – from discontinued operations € million – 72.0 – 972.1 – Return on capital employed (ROCE) 2) % 7.2 – – Financial position Cash flow from operating activities € million 70.2 – 109.9 – Capital expenditure 3) € million 118.7 310.2 – 61.7 Cash flow from investing activities € million – 22.2 45.4 – Free cash flow 4) € million 48.0 – 64.5 – Cash flow from financing activities € million – 87.4 263.0 – Production Capacity solar cells (p.a.) 5) MWp 1,100 800 37.5 Production solar cells MWp 939 537 74.9 Capacity thin-film modules (p.a.) 5) 6) MWp 135 30 350.0 Production thin-film modules 6) MWp 75 14 435.7 31 Dec. 2010 31 Dec. 2009 1) Asset position Cash and cash equivalents € million 473.9 411.9 15.1 Net financial receivables (+) / net financial debt (–) 7) € million – 330.7 – 503.7 – 34.3 Net Working capital 8) € million 339.8 374.5 – 9.3 Capital employed (CE) 9) € million 1,151.1 1,147.8 0.3 Shareholders’ equity € million 882.7 737.0 19.8 Equity ratio % 40.5 33.1 – Gearing 10) % 37.5 68.3 – Total assets € million 2,179.4 2,227.7 – 2.2 Employees continuing operations number 2,379 2,421 – 1.7 1) Changed due to an error correction in accordance with IAS 8. 8) Inventories + Trade accounts receivable + Financial assets accounted for 2) EBIT / Capital employed (average). using the equity method (only systems business) + Other current financial 3) Capital expenditure on intangible assets + Capital expenditure on property, assets (only operating business) – Trade accounts payable – Other financial plant and equipment. liabilities (previous year partly) – Other current liabilities (systems business, 4) Cash flow from operating activities + Cash flow from investing activities. miscellaneous accrued liabilities and advance payments received). 5) At the end of the respective period. 9) Shareholders’ equity – Net financial receivables respectively + net financial 6) Solibro (Q.SMART). debt – Financial assets accounted for using the equity method. 7) Cash and cash equivalents – Convertible bonds – Profit participation capital 10) Net financial receivables respectively net financial debt / Shareholders’ equity. – Non-current borrowings – Current borrowings and profit participation capital. MARKET SEGMENTS BRANDED OEM PRIVATE ROOFTOP ARRAYS LARGE SOLAR (CELLS) ROOFTOPS AND ON SMALL POWER PLANTS IN-ROOF-ARRAYS COMMERCIAL AND AND SYSTEMS INDUSTRIAL BUILDINGS Module Distributors, Large C & I, Utility, TARGET GROUPS manufacturers large installers segment integrators customers / IPP’s PRODUCTS Solar cells Mono Multi Solar modules Q.PEAK * Q.SMART Q.PRO Q.BASE Solar systems Product utilisation per segment. * Introduction planned for the second half-year 2011. 2010 RESULTS Target What we achieved in 2010 Building up our innovative • We have added to our product portfolio and offer solutions for all applications. product portfolio for all • We have successfully launched our crystalline Q.PRO and Q.BASE solar modules on the market. photovoltaic applications • Our Q.SMART thin-film modules have achieved a record-breaking level of efficiency. • We have upped our production volume significantly: 2010 saw the production of solar cells and modules with a total volume of over 1 GWp for the first time. Moving into new markets • We have made a successful entry into the market segments Residential and Commercial & Industrial: 27 % of our sales in 2010 came from new business openings for our solar modules and systems. • We have expanded the systems business around the world and improved our processes. • We have identified important up-and-coming markets and established a global sales structure with a presence in local markets. In 2010, Q-Cells opened more national branches in Australia and India. 2010NEW ENERGY RELIABLE RELIABLE POWER 1. NEW PRODUCTS 2. NEW MARKETS 3. NEW DEVELOPMENTS 2 Q-CELLS | NEW ENERGY – RELIABLE POWER NEW 2010 ENERGY RELIABLE POWER POWER ON Q-Cells has advanced solar cell technology and secured its position at the top of the global solar industry. We have become a leading provider of photovoltaic solutions and will therefore continue to shape the solar industry in the future. The advancement of our cell technology, the quality of our products and the continuous improvement of our processes remain our critical success factors. However, we have also been engaging ourselves intensively with new questions. Which solutions do our customers need in order to draw closer to our common goal of an energy supply that is ready for the challenges of the future? How can we tailor our products still more closely to their requirements? We are finding answers to these questions. We have created new and better structures for our company, so we can show a stronger presence in decisive markets and respond more quickly to developments. We have extended our portfolio of solar modules, manufactured in-house, and developed products and services for new areas of application. In this way, we are continuing the Q-Cells success story. 3 PROGRESS Today, we are one of Europe’s largest suppliers of photovoltaic solutions and deliver cells, modules and systems for all applications to all parts of the globe. The fundament of our success is our expertise in the manufacture of solar cells and the Q-Cells brand’s awareness levels and good reputation among those using our technology in a professional capacity. Our name is a promise of quality, and we keep this promise in both established and new areas of our business. This is one of the key reasons why the year 2010 saw us increasing our sales revenue by over 70 %, to approximately € 1.35 billion. Solar energy is more than technology: It is a solution for the energy supply challenges of tomorrow. This has been Q-Cells’ mission for more than ten years – and will remain so in the future, thanks to our new products and solutions. 4 Q-CELLS | NEW PRODUCTS – FAMILIAR QUALITY 5 NEWINNOVATION PRODUCTS FAMILIAR FAMILIAR QUALITY 6 Q-CELLS | NEW PRODUcts – fAMILIAR QUALitY HIGH PERFORMANCE FROM THE BEGINNING It all began with the solar cell, the technological heart of every photovoltaic system. With the solar cell, our credo emerged: high quality and continuous technological optimisation with simultaneous cost reduction. Cells from Q-Cells deliver long-term high performance in the module and are tested more thoroughly and comprehensively than any other cells. Anyone can make this claim to market leadership: Q-Cells has made it reality. The result is a notably high awareness of and regard for the Q-Cells brand among professional users. Q-Cells is recognised in its business environment as a premium brand; the overwhelming majority of installers in all significant European markets would recommend Q-Cells products to others. ON ti INNOVA EW N S ct RODU P FAMILIAR QUALitY 7 Q-CELLS BRAND AWARENESS % 2009 59 2010 71 0 20 40 60 10080 Brand awareness is growing as we expand our service portfolio: Source: EuPD Research. In 2010, more than two thirds of installers were familiar with the Q-Cells brand.