Magazine

No. 9: Q-Cells


SALES: 128.7 million euros

SUN POWER

On the roof of Q-Cells' plant in Thalheim

JOCHEN ECKEL/BLOOMBERG NEWS

These are sunny days for Q-Cells. First-half sales at the German maker of solar cells more than doubled, it recently bagged several awards for best startup and, to top it off, its shares soared 25% in their trading debut on Oct. 5, giving it a market value of euro 1.75 billion.

Few can ignore the buzz surrounding solar energy companies as record oil prices and growing concerns about greenhouse gas emissions spark interest in alternatives to fossil fuels. In Germany, one of the world's largest solar energy markets, this level of investor excitement has not been seen since the Internet craze in the late '90s, and Q-Cells, as the largest stand-alone maker of solar cells, is a particular draw. There's one crucial difference, though, between Q-Cells and many of those dot-com highfliers: Q-Cells is profitable. In the first half of 2005, net income tripled to euro 15.3 million on sales of euro 116.7 million.

The company's success has far exceeded the expectations of British-born CEO and ex-McKinsey consultant Anton Milner, who joined forces with an engineer and two physicists from Germany to start Q-Cells (the "Q" stands for quality) in 1999. In the space of just four years, it has grabbed 6% of the global market for photovoltaic cells, the building blocks for solar panels, and currently ranks No. 5 in the industry. Sharp, the No. 1, has a 26% share. Q-Cells now employs more than 700 in its home town of Thalheim, in a part of eastern Germany where almost one in five are out or work. "We've gone from nothing to a world leader," says Milner.

The future for Q-Cells looks bright indeed. The market for solar power is set to grow at an annual clip of up to 35% until 2010, as other countries follow in Germany's footsteps with policies designed to spur the development of renewable energy resources. Q-Cells plans to use proceeds from its share offering to fund construction of new factories and to ensure a supply of silicon. Increasing profits, a growing market, cash on hand -- not bad for an upstart from eastern Germany.


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