earnings situation

Development of revenues and profit or loss. We were able to clearly increase our cumulated shipments of wafers and solar modules in the course of the reporting year: It increased by 38 per cent to 578 (previous year: 418) MW. The group benefited from the increasing demand for high-quality solar power products.

As compared to the previous year, group revenues increased by 12.5 per cent or € 112.3 million to € 1,012.6 million (previous year: € 900.3m). This enabled us to over-compensate for the decrease in prices the industry experienced by increasing the sales volume.

The group-wide foreign quota amounted to 29.3 (previous year: 54.0) per cent. This change can be attributed to the above average increase in demand on the German solar market during the second half of the year, in particular. The decreasing Spanish market additionally added to the effect.

Earnings before interest and taxes (EBIT) amounted to € 151.8 million (previous year: € 263.3m) in 2009. Earnings before interest, taxes and depreciation and amortization (EBITDA) amounted to € 215.5 million (previous year: € 318.4m). The group-wide 2009 EBIT margin amounted to 15.0 (previous year: 29.2) per cent.

Group profit amounted to € 59.0 million (previous year: € 148.7m) in the reporting year. To better understand this development, the fact needs to be taken into consideration that deferred taxes of € 32.4 million (previous year: € 19.8m) accumulated by the year-end 2009 were adjusted due to the overall unstable market environment and the previous year’s group profit was influenced by the proceeds from the disposal of 65 per cent of the shares in Gällivare PhotoVoltaic AB in the amount of € 13.4 million. The adjusted group profit amounted to € 91.4 million (previous year: € 135.2m).

Order trend. Due to the difficult market environment – especially with respect to manufacturers that only produce cells or modules – wafer customers of our subsidiary Deutsche Solar AG ordered less than the agreed quantity in 2009. As the underlying contracts stipulate take-or-pay obligations, the customers were contacted successively in order to compensate for order shortages by, for instance, reordering. At this point, we also benefited from our strategic positioning as an integrated solar technology manufacturer, which was – at the same time – the answer to the increasing demand for modules all over the world: We were able to compensate for default risks by conducting a strategic shifting of externally scheduled wafer quantities into inner-group processing.  Default risks  Sales and price risks

Development of material income statement items. As compared to the previous year, employee expenses increased by € 9.7 million to € 99.8 million (previous year: € 90.1m). This increase is mainly due to a continuous increase of employees within the scope of our consistent global expansion of manufacturing capacities and the increased shipments. The employee expense ratio was slightly reduced by 0.4 percentage points to 9.4 (previous year: 9.8) per cent.

The cost of materials quota increased to 64.9 (previous year: 49.2) per cent. This is mainly due to price reductions and the increase in inventories of work in progress and finished goods measured at cost on 31 December, 2009.

Amortization and depreciation increased by € 8.5 million to € 63.7 million (previous year: € 55.2m) as a result of the planned continuation of investments in the expansion of manufacturing capacities.

The increase in other operating expenses by € 22.2 million to € 108.9 million (previous year: € 86.7m) can mainly be attributed to the increased production and shipments as well as investments in expanding brand recognition. The expense quota amounted to 10.2 (previous year: 9.4) per cent.

As compared to the previous year, and especially due to the reversal of customer advances in the amount of € 25.4 million, other operating income rose by € 24.5 million to € 50.7 million (previous year: € 26.1m).

After the previous year’s financial result was burdened by write-downs on securities, the financial result for the reporting year increased by € 54.5 million to € -20.1 million (previous year: € -74.6m).