Meyer Burger Technology AG (MBTN) Earnings Call Transcript & Summary

Dear investors, dear analysts, ladies and gentlemen, a warm welcome. Good morning, good afternoon from wherever you have joined us for our Fiscal Year 2021 Media Conference. I'm Gunter Erfurt, the CEO of Meyer Burger.

And I'm Moritz Borgmann, Chief Commercial Officer of Meyer Burger.

We are welcoming you here live from our solar cell manufacturing in Thalheim. So if you hear noises then don't be afraid. That's a manufacturing site, and we are working here 24/7, every day. And maybe in the background, you once in a while see people are walking through, but that's not in that room, but in our factory hall. We would like to give you today a business review of 2021 and also of what has happened in 2022 until today and of course, the financial figures, an update from sales and marketing as well as an outlook. 2021 has been a very important and exciting year for us. We completed our strategic transformation, and we have achieved all our milestones along the strategic targets we had set for the year, which included the installation and the establishment of our production of currently 0.4-gigawatt or 400-megawatt of nominal nameplate capacity for solar cells and solar modules. We very successfully started sales of our 3 product variants that we provided to the market from day 1. We completed the financing for our accelerated growth initiative. And we, of course, prepared our factories for the next expansion to reach the target of 1.4 gigawatts of nominal nameplate capacity for solar cells in our site in Thalheim here where we are and 1-gigawatt of module production in our factory in Freiberg and initial 0.4 gigawatts of module capacity in our Goodyear, Arizona site. And we also continued to restructure our legacy business. We closed our sites in Malaysia, in Taiwan, in Korea and we are -- we have reduced also costs that came with these old legacy businesses. And that's most important for us, we have to prove now that our business model is working. Our new business model is working and that we are also having a very scalable business model, and we will speak about growth today. Of course, we are also not fully satisfied with 2021. Even though, we can very proudly say that we achieved the strategic targets, we are not satisfied with our operational achievements. The year has been very demanding for various reasons and many, many challenges had to be mastered. And we've seen a very material impact from the COVID pandemic. We had informed the market already in August that we were facing or had been facing a delay in the start of our ramp-up because of missing components we needed for the factory ramp to switch on the line entirely that has held us back for some time. And moreover, we were hit by the Delta wave of the COVID pandemic very badly in the fourth quarter of 2021 with a very high rate of absent people in our -- especially our module factory in Freiberg. And even though our factories are highly automated, there are still people needed who run the equipments to do the quality checks and if they are not available because they are on sick leave, then we had to take actions and close one part of the factory line and that also resulted in a much, much lower output of product compared to our original plan. Nevertheless, and that is very important for us to say that we have not been facing any strategic hurdles along our way. It's just been more challenging than we had originally expected it to be to get the factories up and running. And we are very hopeful that the pandemic now is over. We have also mastered the debottlenecking of our line and are now going to implement new factory equipments' in order to do the ramp-up to reach 1-gigawatt of production for the year's end. In terms of our positioning in the market, we've been speaking a lot about technology. Meyer Burger has a very unique positioning with our proprietary, heterojunction SmartWire technology. And there have been many doubts also in the market as far as competitors are concerned, and also their activities in new technology fields. And what we can see and say is that today's world is still a PERC world. PERC is the standard product which is the basis for more than 90% of the global volume of solar modules produced and only very little 2% are heterojunction. That's all-nameplate capacity, not even product that we see in our markets and 5% is nameplate capacity for so-called TOPCon technology. So that's today, it's more important to understand and to analyze what's going to happen in future? Is Meyer Burger still having a uniqueness with our technology or also other companies doing steps towards implementing new technologies. And what you can see on that slide is but even adding in the announced additional capacities currently being built or announced to be built in future, we do not really see that the picture is changing not at all if we'd say in heterojunction and according to announcement, and there is some addition of TOPCon technology. But the majority of the expansion plans announced is on PERC. And why is that? For TOPCon, what we clearly can observe is that the technology is not yet mature enough to be fully deployed in the industry because of industrially feasible equipment that's not available, yields being too low and also gains from efficiency and achievements also too low on the end product. And for heterojunction is very similar. Despite many gigawatt announcements that we've already seen years ago, not much really has been implemented. And we believe the reason is clearly also the lack of the technology and the equipment needed for that. And we believe we have a very unique position here. And of course, we are also not standing still beside our very ambitious expansion plans, we have continued to work on the next technology steps and have been pretty successful also on the development of next-gen heterojunction IBC technology and expect this to be tested in a smaller pilot line size soon and fully deployed industrially also in the years to come. In terms of the ramp-up, I already explained that we -- we're not happy with the speed of our ramp-up in the last year. And I also do understand that there is some disappointment in the market that this has not been more obvious to the market to investors to analysts. We have, on purpose, not provided any guidance for the year 2021. Since it has been such a transformational year and since we had to master all these challenges and we did our job. And in the meantime, also pretty successfully in terms of the run rates achieved. But for last year, the volume that we could ship into the market has been very, very low. And to explain that a bit better, what I can show here is the volume produced, not the volume sold until so far and also not until the year's end of 2021. We've been producing a total of 18 megawatts of our Meyer Burger White product and 13 megawatts of our Meyer Burger Black product, a total of 30. We've been selling 20 only. There are inventory effects that have to be factored in, and this is explaining the low number of volume shipped. What is more important to us, and Moritz will speak about it is the ASPs we could achieve because we also did provide today the sales volume, the portion in our annual result for 2021. And we are very, very happy with the achieved ASPs in the market in the last year but also in this year. This year until today, and this is exactly last night, midnight, the number 41-megawatt produced, including now the 3 products, White, Black and Glass. What's important also for us to mention here, Meyer Burger is not new in PV. We are doing this since 40 years, but we are in our first year of module production. And there have been doubts in the market is Meyer Burger even able to achieve the high quality needed, yes or no. And the answer is shown here. We have now the first customer return or customer claims report and the number is ultra-low. And the reasons for customer claims in most of the cases could be resolved without even a full replacement of the product. Some stuff that went wrong in logistics with damaged pallets and things like this. But we are very, very proud of our product quality we've achieved, and this has been a focus area for us, clearly, when we started the ramp-up. Very much rewarded in the market is the fact that we started with 3 product variants from day 1 in our sales process. From an operational point of view, that has been a challenge. I can honestly say that because we currently only operate 1 line. And solar module production is not that you do a Black product and a White product and then a Glass product, but you do run sequential campaigns. So you run, for instance, 4 weeks White, 3 weeks Black and so on and so forth. And any time you change the product, you have to also change the line. You have to adjust a few things. Production processes are not the same entirely, and this is also slowing down the throughput. We believe that's going to ease in future because we are then taking more lines into operations and will become more flexible and any of these bottlenecks that we are still facing with only 1 line available, I think we can remove and that will also help us in the future to be more faster when we do the ramp-ups. And of course, any lesson learned from the first ramp-up is going to be included in the next. And so we believe that we can shorten the ramp-up periods. We have a very, very new situation, I would say, since already 2 years due to the COVID pandemic in supply chains and now even more challenging since exactly a month ago since the Russian invasion started on Ukraine. And the world is different. Supply chains are shifting. Nevertheless, I can happily say that Meyer Burger is, for the time being, or has not suffered from any major impacts from the lack of availability of any material for our ongoing production. That's very important. We've been able to manage this very well. What I can also say is that, of course, management attention has been increasing in the last weeks and months. So there is a lot of topics being escalated to the management for us to take care of items which we have in the past would not have to take care of because it was simply a procurement topic, but we are pretty optimistic that we can also manage that in the future. We've started early with our process. We also started 2 years ago to restructure supply chains when we withdraw from China. And so that has helped us. On the other hand, also input costs have gone up quite remarkably to mention a few polysilicon plus 280%; transportation plus 350%; copper aluminum more than 100% price increase; silver, 80% price increase since we first announced the change in business model. So there are these challenges that we have to master. Of course, it also has an impact on global module pricing. Our competitors have increased prices. We also did after competitors because we wanted to implement our business and develop relationships with our customers, but we also have now increased prices effective beginning of this year. And it's also very clear that the European supply chains specifically for us being a producer in Europe are very important for us to be developed, and we have started initiatives with partners to at least have a critical available -- equitable amount of product and volume available that we need for our manufacturing in Europe. On the other hand, I spoke about transportation cost plus 350%. It's a competitive advantage for us, but we are producing very close to our customers and transportation is not so much an issue for us as it is for our Asian competitors. To give you one example, I believe that's very important and illustrates the challenges in photovoltaics. We've seen that very remarkable price increase in polysilicon plus 280%, as I said. And the expectation in the market and the consensus is that this will remain stable throughout the entire year. We also don't have a mirror ball. It's hard to say what's going to happen in 2023, probably likely that the situation will ease because more capacities are becoming available. What we can also derive from this is that module prices also will stay very likely higher than we and others have originally expected it. So this is also pretty important for us looking forward. So now I'm ending with the revenue, and we'll quickly guide you through the financial statement, and I will focus on the most important elements here in order to also give more it's enough time to educate you about the sales and marketing situation. So from a net sales perspective, that's very clear that we see a more stronger effect in 2021 from basically the full stop of the previous -- the old legacy business model of selling equipments. So we have a decline of CHF 59 million compared to 2020. And of course, the first but small contribution of CHF 9 million from the initial module sales resulting in the 40. And of course, the result is according to the lower net sales. All right. So FTEs of course, have increased. So we have seen a decline, of course, from our restructuring of the legacy business. On the other hand, we have also increased FTEs because of the new factories, that's pretty obvious. Cash and cash equivalents, even though we've been spending a lot, we have higher cash end of year 2021 due to our financial measures in 2020. One, the capital increase and the bond and, of course, also our debt financing. PP&E, of course, has also increased due to the investment and on the other hand, because of the debt financing and the bond we have a lower equity ratio. The cash bridge, it's also very important to see here that from when we look beyond 2021, that we have still the second tranche of our debt financing not strong. So that's going to happen in 2022 and the same also for the factory and facility and a little bit is to be expected also from government subsidies. This is coming from the announced CHF 25 million, pretty much 50% of it we realized in 2021. And the remaining portion is coming in 2022. The investment, I also would like to draw your attention to one aspect that also shows how we improve performance here. The investment for the 400-megawatt is shown here with CHF 160 million and now going to the 1.4 nameplate capacity. We are adding another 202, which is comparing the volume that we are implementing pretty more -- much more effective in terms of how we spend CapEx. The financial liabilities, of course, have -- came from 0 pretty much. And now we have a different picture because of the bond, the debt financing standing at CHF 180 million. And also interesting to see and important, we put our share price performance next to the [indiscernible] showing this relatively and pretty much follows also the performance of this important index. And with this, I would like to hand over to Moritz to educate us on the most important part, which is the sales and marketing.

Thank you, Gunter. So I would like to spend a few minutes to talk about where we stand in the commercial part of the operations in sales, marketing and of course, the most important question that is on our mind on a daily basis, is how is sales actually performing? And I'm very happy to say that we are very confident about the strong performance of our sales. And what we're showing here is the cumulative order intake over time. And as we've communicated before, we started selling our products way before we even started producing. And due, of course, to the unfortunate delay in the ramp-up, we were basically held back in sales and could not sell as much as we would have liked to at the time. But still, we have built up a very substantial order book over time. And you see this here. So in 2021, we took in more than 100 megawatts of orders. And at this time now in March, we are sold out almost entirely for the entire -- for the first half of 2022. And then this is, of course, reflecting our current main business model, which is selling our product to the residential market through our distribution partners. And the typical model there is that our partners order product around 1 to 2 quarters ahead. And given that we are now sold out almost entirely for the first half of the year. We are well ahead of our targets in terms of order book depth. How do we do this? We have started already back in 2020, building up our sales and marketing organization. And by now, we're serving around 30 direct customers. We have listed more than 500 installers who are installing Meyer Burger products. You can now find them on our website if you're interested in an installer in your region. We are covering more than 17 countries. And this is all executed by a staff of more than 45 in sales and marketing, of course, highly distributed in the market. And what Gunter already mentioned, not only the quantity is important, but also price and we're very happy and very satisfied with the prices that we're achieving in the market and at the beginning of '22, we -- we're also successful in passing through cost increases that we unfortunately suffered on the procurement side. Next slide. With respect to regional coverage, be through our distributor network, we are covering all of the relevant European markets plus the U.S., and we have already established a local presence in most of the European markets and the U.S. with the exception of Great Britain and the Nordics at this time, but this is in preparation, and we'll have staff on the ground there later this year as well. At this time, given the relatively low production volume in 2022 so far, and 2021 so far, we have deferred the shipment of product to the U.S., but we are now starting to also ship product there, and it will, of course, then show up with our customers in the U.S. with a shipment delay within the second quarter of this year. And we are also currently investigating market entry in Japan and Australia and are quite confident that these will also be attractive markets for us. Next one. In terms of our segments, our segment strategy remains largely the same and has been further differentiated in the meantime. So we are executing a value centric strategy, i.e., we always sell our product in the highest-value segment first, which obviously is the premium residential rooftop sector. And this is currently the dominating market segment. And then as we grow the availability of product in our production capacity, we will gradually also enter the small and later large commercial industrial rooftop segments and eventually also the utility scale segment. On a selective basis, we are already pursuing commercial industrial projects at this time. And we communicated earlier, for example, that we won the highly iconic soccer stadium project for SC Freiburg in Germany. And on the utility scale sector, we are already -- we have already won pilot projects and are currently in discussions with strategic partners on a long-term offtake relationship. Then coming to the last slide. So far, we have, as I said, very happy with our performance in sales, and this is primarily due to, of course, our strengths. So first and foremost, we have a very attractive product. And we have by now established very strong relationships to our partners, i.e., the distribution partners and the installers. But there's also currently a lot of tailwinds coming from the market. So first of all, of course, the market keeps growing. And every time we update our numbers, the market keeps surprising us with even higher growth rates. Given the high demand and still relatively limited supply, there are continued shortages of modules, in particular, in Europe and the U.S. which, of course, is benefits us. And also very important for us in the residential premium segment. Some of the key competitors there have been struggling or even left the market. And the most prominent example, of course, is LG, which used to be one of our main competitors, but they have announced that they will leave the market by the middle of this year. With this, I'd like to conclude and hand over back to Gunter.

Thank you, Moritz. Outlook. So Moritz already mentioned that we are seeing a pretty, pretty strong demand and even a faster trend towards sustainability. So all of you who have followed us in the last 2 years are now seeing me presenting the fourth update on the CAGRs, we are taking from analysts and with plus 17.5%. That's a pretty fresh numbers from the fourth quarter of 2021 shown here. I remember when we first explained our new business strategy to the market 2 years ago, we've been starting with 8%, and that is already -- or has been already a lot. And I'm also convinced that this number is going to increase when we meet again because of the tailwinds, Moritz, described and the political environment we are currently seeing. And again, why is that? We are still seeing many question marks in the market, and it's clearly the fact that solar energy is among the cheapest sources of electrical energy generation. It's going to be the future also for providing fuel to mobility and other new applications, which are currently being fossil-fueled. And also to put things in perspective, there's always the misperception that solar energy even in pretty cloudy regions like maybe Germany or the U.K. is not providing enough energy. If you do on a pure energy balance basis, so that does not include the necessity for storage and all the other technologies needed for a successful transformation. Only about 5% of Germany's country size would be required to convert the country completely to solar in terms of the primary energy use. So anything we are consuming today, you can basically harvest the electrical energy from solar energy from only 5% of the country's size, which is about 17,000 square kilometers. And that's probably true for all industry countries. The same is also correct for Switzerland and for France and other nations. So solar has an enormous potential, and the area available is definitely there. Another important aspect when we speak about availability of material needed, there is hardly any limitations in terms of rare materials needed for module production. Of course, there are a few critical materials, which needs to be substituted. But this is what we are working on, what others are working on. So we believe there is no limitation for growth there. And last but not least, and this became even more obvious since a month ago, solar energy is going to make a very, very decisive contribution when it comes to energy supply independence. And this is not only true for the deployment of solar, but also for the question, where does the product actually come from? And again, I can only emphasize it -- emphasize what I already said. Meyer Burger is uniquely positioned in that because we are for the time being, the only scalable technology autonomous PV specialist for crystalline silicon-based solar cells and modules outside of Asia and primarily outside of China, and that puts us in a pretty unique position in our opinion. The production plans in order to avoid, I would say, the disappointment that we probably have created with the pretty low volume we've been able to produce and to sell in the last year. We would like to give you a little bit of guidance here when it comes to production volume for the next 2 years. Starting again of recapturing the 2021 year, 400-megawatt nameplate capacity was completely installed end of August of 2021. The nameplate capacity, nominal capacity, all tools in place, all tools being tested, and they needed to be ramped up together. We had to basically bring factory organism to life, and that has, as we explained, took longer than we originally had planned for, leading to the 30-megawatt produced and 20-megawatt sales recognized. What we are doing this year is well on track in this factory where we are right now achieving a nameplate capacity of 1-gigawatt. Meyer Burger is going to be a gigawatt factory -- a gigawatt company in 2021. End of year, the nameplate capacity will clearly be 1-gigawatt and also fully ramped up. Since this is nothing where you just switch on and then you have the 1-gigawatt, it takes time to get there. I explained already that we are embedding the additional capacities within an existing factories, which is providing us or giving us some operational challenges. We are expecting a total volume produced this year of 0.5-gigawatt. For 2023, the nameplate capacity will be 1.4 gigawatts and volume produced will be slightly below 1,350 megawatts or 1.35 gigawatts. We are expecting to be able to produce in the year of 2023. So what we have also announced today in our press release is that we believe the time is ripe to consider faster growth to scale up faster. I showed to you our analysts see the market growth in solar for this year, the market is expecting a total installation of around 210-gigawatt plus/minus. Meyer Burger's producing, as I explained, 0.5-gigawatt, which is very homeopathic, I would say. So there's much to win and much to gain for us. And this is why we would like to participate in the pretty much a result of a general consensus that we need more renewable energy, and this needs to be independently made. And again, Meyer Burger is uniquely positioned in that. In order to grow faster, we are considering to accelerate the capacity expansion beyond the 1.4-gigawatt already in 2023 with a focus on the utility scale factor. Moritz explained the segments to you. Utility scale -- our utility sector is the largest segment globally and provides the biggest growth opportunities and scale opportunities. And this is why we have started discussions for offtake agreements with partners with 1 partner, which is unnamed for the time being, a large major utility company in the United States. We have signed a memorandum of understanding and are working on the terms with this party now. And the combination -- or the utility customer is not only going to offtake the product. But in order to grow faster, we are discussing a financial contribution for the necessary investments such that it is not at the expense of existing shareholders. That's the concept here and also, of course, for us to reduce the capital intensity. And this is, as I said, being discussed with many parties. There is growing demand for various reasons. One is, of course, availability of the product in general. What is proximity to the customer. Another one is clearly the independency from a supply chain point of view. And last but not least, that's also important, customers are understanding that our product is something special and better and definitely better performing than the standard. And so it's -- there's a bunch of reasons we believe is fueling this initiative. And of course, even though we have never built our new business case on subsidies and policies and things like this, we clearly see a political urgency now growing in Europe and in the U.S. for a solar industry, a strong solar industry to be rebuilt. And we believe, again, we are uniquely positioned because we are already there, and we are ready to grow and ideally faster than we had originally expected. And with this, I'm coming to the end of our presentation, and we are very happy to take your questions. Thank you.

So as for the questions, like in the last 2 press conferences, please use the chat function or the Q&A tool that's better. And we are trying to answer all of them. If we can't answer all of them, then we'll -- will give you the answer by e-mail. So I'm going to start with a question on supply chain. Fair to assume that the 500 megawatts to be produced in '22 will be back-end weighted, how much of the required input components? All right, how much of the required inputs components do you already have in stock or is being shipped? So the first part of the question, I think I will pass on to Moritz and the second I can take.

Yes, given that we are currently operating approximately the first half of our cell module capacity and will only add the second half of that capacity in the second half of the year, your assumption is right. Yes, the 500 megawatts will be back-end weighted.

And the second part regarding the inputs and components. We have, of course, long-term frame agreements in place with our suppliers. So from that point of view, it's fair to say that it's all secured. Nevertheless, there is a remaining risk that the current situation out there is giving us some headaches here and there in terms of the supply of the material. But until today, I can clearly say this is very well risk managed. A question is asking here, which module price increase is realistic in 2022?

Well, I would say that, as I said, we are very happy with the pricing level currently. And of course, we are given that we are a premium brand, we are also asking for premium pricing. And at this time, there is no intention to further raise prices. But at the end of the day, of course, our pricing is always a function of overall market price environment and, of course, also to some extent, the input cost, which again drives the market price level. So and I guess there's -- in this sort of industry, it's always been a very dynamic environment, but there is, I think, never been a market environment that's been as dynamic as it has been in the past year or so given the global supply chain distressed situation. So it requires a excellent crystal ball to predict this. And we cannot make any further statements beyond what we've made.

Thank you. Next one here is, can you give us some color on the 2023 guidance with the delay of the U.S. factory ramp up? Is this at risk? So we have also informed the market today that we are currently in a process of a guidance revision. First of all, due to the fact that we are currently working on a potential faster growth in 2023. And also secondly, to digest the current situation out there in terms of the supply chain and potential price developments, but I think we could show that the volume produced in 2023 is expected to be pretty close to the nameplate capacity with 1.35 gigawatts. So from a pure production and volume point of view, I believe there is no real change to be expected, except of -- or in terms of the net sales to be expected. Comparing to the guidance, the previous guidance of EUR 500 million at 1.4-gigawatt nameplate capacity, if you would assume that's also the sales volume, then the ASP would be some between EUR 0.35 and EUR 0.36 per watt peak blended or throughout all segments. And it's going to be exactly the question that Moritz tried to elaborate on what's the pricing at that time. It's also very likely from our point of view. But again, no one got the mirror ball to exactly say that, but there is a likelihood that prices will be higher. So even the net sales guidance could be higher and any level below we are currently analyzing. So yes. And maybe continuing on the 2023 volume produced or the volume guidance. You're indicating 50-megawatt lower production in 2023 than originally planned. Can you talk through which exact things for 2023 will have been delayed? This has nothing -- again, nothing to do with the delay. We have to differentiate or distinguish here between nominal nameplate capacity. So that's the equipment installed, that's capable of running of 1.4 gigawatts and what, at the end of the day, we produce. So there could be multiple effects that the overall volume is slightly lower than the installed capacity which could be, for instance, that you have a preventive maintenance window that you have to do, take the factory down for a day or 2 in order to do some preventive maintenance. So this could affect it. So it's never true that a nominal nameplate capacity equals exactly the volume produced. And also the volume produced does not equal the volume sold because of inventory effects. So that's hopefully giving you an answer here. So the -- maybe we -- the -- another question is related to, again, what I believe we explained already why we have only produced and sold 20 megawatts? I think this we explained. So another one is asking. You already received over 22 million in grants a year ago, knowing that you need to push for solar PV adoption? Could it be expected that it provides some level of support on the supply side, loan guarantees for the grant's incentives, further tax breaks, has there been an approach with EU or local governments to discuss mutual interest? So what's correct is that we've been awarded to receive these grants in 2021, but we did not realize the intake of these grants. So that's the difference here. So that happened partly in 2021. And still, we have CHF 12 million outstanding what I just -- what I explained. And yes, there is a growing political urgency as we explained to do something for the EU solar industry. There are many initiatives currently being on the way at the EU level, at the national levels, even the Swiss parliament last week endorsed the rebuild of a strong European solar industry, which is, I believe, very remarkable. And I think you can also expect from us that, of course, we are sitting first row discussing any of these concepts and how Meyer Burger can contribute. I'm continuing here what is the level of capacity you think is required to reach the utility scale market? I'm assuming this is talking about the production capacity. That's a very good one because the utility segment is clearly the more competitive segment in terms of pricing. So you exactly need to be very clear about the input costs and the cost structures. So it requires a certain scale. So that's also why we did -- not do this in the first place, but are now preparing to enter. Running above a gigawatt and then reaching 1.5-gigawatt is already providing us a good level of scale in order to produce the products at competitive costs.

And to add to that answer. So as I elaborated before, we have a value optimizing strategy, i.e., we, of course, sell our product into the highest-valued segment first. And even at the low gigawatt production level, there is still a high demand for our product in the residential and small commercial segment. So you can assume that of the 1.4-gigawatt capacity, we will still sell a very large share into the residential and commercial sector, both in Europe and the U.S.

So continuing with the question here. The question is on the rollout capacity and the biggest bottlenecks for our expansion. So as Moritz, I think, very clearly explained, the market is not our problem. So we are selling where we have very successfully established our ASPs in the market and also work very successfully on reestablishing Meyer Burger as a very trustworthy brand in the residential segment, but also starting in the commercial industrial. I think our biggest challenges are definitely to tackle all the operational challenges. So we need to hire personnel. We need to train personnel. Starting a factory is nothing easy. It's a lot of disciplines that you need to combine if that is also hitting a pandemic, then this can create a lot of trouble that you have to work through. But what I can also clearly tell you is that with every day going by, we are gaining more experience and all that will be put into the next expansions as a lesson learned. And we believe we can continuously and gradually improve also the rate of implementation or the pace of the implementation rate to increase it. So that's the expectation. That's what we are working on, but I believe all eyes on operations. That's what I'm always saying. We need to get there faster than we did in 2021, which has been a disappointment for you as well as for us. And I think the next one goes to Moritz to what extent we are able to pass through higher input costs.

Yes. So as I said before, we have raised our prices at the beginning of 2022. And it is hard to tell with scientific precision. But it is safe to say that at this time, we were able to pass on the majority of our input cost increase to our customers.

Okay. So another one did ask the same question. Can you provide an indication of pricing levels in 2021 and 2022? And how much of the cost increases were successfully passed on? It continues, please update us on the competitive landscape. I think I did that. The world is still PERC dominated. And anything we had pretty much expected to happen in the market with competitors not being -- definitely not being faster than we are because of our head start in the market because of our unique profile of being a technology developer with in-house equipment industrialization, I think has proven correct. And so as long as we continue investing in R&D, we believe at the module level, we can compete. The question continues here how are players providing complete home solutions and if that's impacting the growth of our business with solar storage, EV charging and probably also it's not being asked here, but I would, I think it's fair to answer. Is that something we are also considering?

Yes. So let me complement the answer on the competitive landscape. So what's, of course, most relevant for us is not the mainstream Asian competition, but the premium competition, that's the market segment where we are playing. And when we started the transformation of our business model, there were essentially key competitors, LG, REC, Panasonic and SunPower. The #1 competitor, LG, has just announced that they are leaving the market this year. Panasonic has already left the market last year. And the reception for us stepping in at the same time has been very, very positive. On the aspects regarding system components, for example, batteries, EV charging, et cetera. Yes, of course, that's all tailwinds for us as well. We are consistently executing a 3-stage business model, i.e., we are selling the modules out to distributors and the distributors are then complementing the kit, i.e., are adding the inverters, the modules systems, the EV charging solution, the battery if needed. And that way, the customer has a full flexibility -- the end customer has full flexibility to get what they want, and we don't have to manage that additional complexity at the system level. So the question here is, can you also share the level of order intake year-to-date? What portion of the 500-megawatt guidance is already covered by your order intake? So I do not want to give -- to go into specific quantitative detail. However, we have said that we are almost entirely sold out for the first half of the year. And as I also said before, we are very closely monitoring the metric of how far and advance we are sold out. So far, we are very happy with that, including the -- also taking into account the additional capacity that will come online in the second half of the year, which means that we are also looking, of course, to already presell portions of that additional capacity in the second half of the year.