Bloomberg News

Meyer Burger CEO Weighs Deeper Cuts to Ride Out Slowdown

November 02, 2012

Meyer Burger Technology AG (MBTN), the Swiss supplier of machinery to solar-panel makers, said it is evaluating deeper cost cuts as it braces for tough trading conditions next year.

The company has more work to do on “fat-trimming” after acquiring competitor Roth & Rau AG (R8R) in 2011, on top of a 15 percent headcount reduction announced in March, Chief Executive Officer Peter Pauli said in an interview. Meyer Burger can withstand a “worst-case scenario” of sales at the current level or lower sales growth in the next 12 months, he said.

“We can go up to 2014 with the cash available now,” he said in Thun, Switzerland, yesterday. “We could go further by making strategic decisions about our research and development resources. That’s what we have to decide right now.”

Solar-cell and panel manufacturers, Meyer Burger’s clients, are battling overcapacity after a boom in Chinese government spending flooded the market with cheap equipment. Pauli is in the midst of budget planning which will determine how Meyer Burger will address market conditions next year.

Meyer Burger, which first sold shares to the public in 2006, has lost 40 percent this year, compared with a 15 percent gain on the Swiss Performance Index. Second-half sales may “improve slightly compared to the first half, but not significantly,” the CEO said.

“They have to cut costs,” Christoph Ladner, an analyst at Kepler Capital Markets in Zurich, said by telephone. “One of the highest operational costs is personnel exposure. This is something they need to work on if business remains as it is.”

The precision machinery-maker reduced expenses this year by relocating manufacturing facilities to its Thun headquarters and closing duplicate offices in China which it inherited from the purchase of Roth & Rau in 2011.

Pauli is considering using Meyer Burger’s technology outside of the solar industry in markets which could potentially account for 5 to 15 percent of the business. For instance, the company may sell machinery used to make sapphire screens for smart phones, or coatings for batteries, he said.

“We have technology to do other things,” he said. “It’s at very early stages.”

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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