Dear investors, analysts, ladies and gentlemen, welcome to Meyer Burger's webcast presentation of the results of H1 2021. My name is Gunter Erfurt. I'm the CEO of the company. With me, I have the CFO of the company, Mr. Jürgen Schiffer, and our Managing Director responsible for sales and marketing, Mr. Moritz Borgmann. Two housekeeping advices, t his conference is being recorded and available on demand from Meyer Burger's website after the call. The second housekeeping advice is that you find on your left screen side a question mark, which you can use to send us a question, which will be answered after the presentation of myself, Jürgen Schiffer, and Moritz Borgmann. Presentation is going to take about 20 to 30 minutes, and then we have around 30 minutes to also answer your questions. Moving on to the next slide.
I will give a quick review of what has happened in the last period and also most recent developments. The financial statements will be presented by Jürgen Schiffer, and I believe most important to all of you, the sales and marketing update. You hear it directly from Moritz Borgmann, and then we will close with an outlook. In the solar energy market, nothing really has changed, at least not to the negative side. What we can conclude from observing the markets in the past months is that neither the COVID pandemic nor the resulting module price increase has affected the solar market growth prospects. We stick to our early on publication expectation with regards to the global solar market growth of a CAGR of plus 13% for the years to come.
This is driven essentially by the fact that solar energy is already among the most competitive sources of electricity and will most likely stay there forever and ever. What we have communicated today in our press release is something that makes me very proud, makes the company very proud. We have completed our strategic transformation. That means we have in the last, on the H1 2021, and since we announced the change of the business model, delivered and achieved all the major transformation milestones, which we had communicated in our plan. Especially in the sales and marketing segment, we have been able to start reestablishing Meyer Burger as a premium solar module brand. This is a process that is ongoing. It's not finished, and it will be continued, and Moritz will give us an update later.
We have done successfully the product launch and the sales start. This happens basically at the same time. We have also, as planned, achieved our IEC certification, which is required in order to also sell the product. The production was started. We had the grand opening of both factories in May. We have, moreover, before, of course, opening the factories, secured the supply chain for all the materials for the sale and module production. In that respect, and despite the current tight situation in global supply chains, we can report that we have no issues on that front and are able to feed our production accordingly with the materials required.
We have started the ramp and the startup and the ramp of the line, which is not entirely completed, as we have communicated a week ago because we were suffering from, I would say, minor supply chain issues, which had a great impact to some of the components needed to stock up certain equipments were not available on time. Last week, we concluded as a management that it is very unlikely that we can keep the advised timeline or envisioned timeline of closing the ramp at the end of August. That's going to take a few weeks longer, but this is not a strategic issue or a material event. In terms of the organization and the financing, we have also been able to transform and rebuild the organization.
As you know, we had to grow a new sales organization, a new marketing organization, and this process went very, very well. Besides, of course, also growing the operations organization with all the personnel required to run in a full continuous 24/7 mode, as well also the supply chain organization. We can report today that this process has come to an end in regards or in respect of having a critical size of an organization in place that is working on the common targets. Last but not least, but this is not an order of priority or an order of impact on our business transformation, we were able to secure financing both in the debt financing as well as in the funding that we received from the bond placement and the additional share placements.
I would also like to spend a few minutes on the last week reported delays in our production ramp-up, because it may have sounded very serious, but I can assure you that this is of temporary nature only, and it's closely managed, and we expect this to be resolved within the coming few weeks. We did, as expected, start module deliveries in July. The cell and module production has transitioned to 24/7 operation, as I already mentioned. That also means we were able to hire enough personnel also for the shifts operations. As I already mentioned, we have been able to secure all the components and the materials required as direct materials for the cell and module production. This has been secured for the current capacity and, also from today's perspective, we do not see critical issues for the anticipated growth of the business.
Bottlenecks in the supply chains for some standard components, very simple components, nothing really critical, had an impact on the commissioning of certain machines, and hence has also this small negative impact on the speed of the production ramp. The components have arrived, so this gap is closed. The delay we have piled up, if you will, we are unable to keep up or catch up in order to get back to the original plan. This is very unlikely to happen. Therefore, we expect the ramp to be completed a few weeks later. The sales team is in very close discussions with our customers who are affected. What I can also say, and with a lot of pride, is that we have now entered the operational phase. Coming from the transformation phase, which was pretty challenging in many regards.
We are now a solar module manufacturer with a growth roadmap that we are executing accordingly. We are now in a phase where we are optimizing our operating business, both in manufacturing, in supply chain management, and of course, in sales and marketing. We are in parallel, of course, preparing the next growth phase and are in the midst of these projects already. Supply chain management has secured all the materials, as I already mentioned, and we have now also introduced a process where we continuously minimize supply chain risks and optimize our procurement pricing, i.e., multi-vendor strategy is pursued.
We have also, in order to achieve our planned cost structure, we have launched projects which aim at achieving target costs in accordance with the business plan and the next expansion project to achieve or to reach 1.4 GW of cell and 1 GW module in our existing factories in Germany is on the way, and we have already started ordering the equipment. It's closely monitored and tracked, and also this requires some management attention, as also for the equipment business supply chains are tight, but we have started early enough and I believe we can deliver things on time. The decision for the second module production site for the additional initial 0.4 GW is on the way, and we had communicated on June 16th that we expect to make a decision in Q3 2021.
This is very likely happening within the next couple of weeks. We have an update also on the competitive situation, and the message here is comparing this with what we have communicated on also June the 16th with the last update before this one. Nothing really has changed. We still see a situation globally where the majority of existing tier ones and the industry leaders, primarily the companies from China that you see on the right side, with Aiko Solar, Canadian Solar, and the others are continuously focusing their expansions on PERC existing technology. We see a little bit of cadmium telluride with First Solar. Also a little bit of TOPCon announcements, but not really much. Meyer Burger, that's what we can clearly say. We have a well-founded expansion strategy, number one, because we have a plug-and-play technology available.
Number two, we have now the funding also on hand and can act according to market requirements. We'll, of course, continuously monitor this. The message here is not that our competitors are standing still and do nothing. Of course, everybody is trying to get their foot in the door into new technologies. We believe we have a big advantage and a timing advantage here due to our plug-and-play ready technology. Speaking about technology, also this was already communicated, but since this is a half year 2021 communication, I would like to re-emphasize this. We have, besides building factories, hiring people, setting up sales and marketing, and everything we spoke about, we have, of course, also continued working on the next generation technologies, which is the next step for Meyer Burger.
Our Gen 2 heterojunction, which will provide much higher module efficiencies and energy yields, and we could achieve a proof of concept of 24.7% module efficiency. This is an outstanding result, and we are working now towards the finalization of the industrialization in order to be ready to use this also in production and to produce the products accordingly. With this, I'm coming to the end of my part of the presentation and would like to give the floor to Jürgen Schiffer.
Thank you, Gunter. Good afternoon, ladies and gentlemen. I am Jürgen Schiffer, CFO of Meyer Burger Group. Now I'm presenting to you the figures of the first half year report 2021. Please, before I step into the report, please allow me some short comments. These figures I am presenting to you are characterized by the transformation on the one hand and the ramp-up phase on the other hand. Therefore, this report should also be interpreted against that background. Let's start with the net sales. You see CHF 18 million. In this, CHF 18 million includes the machine sales, the legacy service business, and inspection equipment business. The reducing business of a machinery producer leads to a negative EBIT of minus CHF 34 million end of June 2021, and accordingly, net sales also minus CHF 37 million. You see the activity of the new business model in the following pictures.
The employees, the non-current assets, and the equity. The employees measured in the full-time equivalents, we have 70.43 end of June. You see also the increase in our equipment within the last six months of CHF 50 million, up to nearly CHF 90 million. Still, you see a very high equity ratio of about 82%. Thank you. Next slide. Our successful funding in this year is not shown in the first half year. Therefore, I provided you a little preview, which you can see here. We have here our equity increase, about CHF 80 million. We have our successfully launched green, senior unsecured guaranteed convertible bond of about CHF 148 and the syndicate loan facility of CHF 136 million. With the factoring agreement of CHF 65 million, we came to a total funding of about CHF 440 million. That was roughly the key figures from my side. Thank you.
Thank you, Jürgen. Please, Moritz, it's your turn. I'm switching slides, and you tell me when to go to the next slide.
Perfect. Thank you, Gunter and Jürgen. My name is Moritz Borgmann. I'm Managing Director at Meyer Burger, and I'm responsible for all commercial aspects of the business, i.e., sales, marketing, product management, and business development. Gunter, if you would switch to the first slide. Thank you.
Already there.
Great. Next one.
So we have this-
We're still seeing the chapter divider. Should be on slide 16. I don't see it in the webcast yet. There we are. Good. Perfect. Thank you. I'm very happy to report that now is the time that we can finally back up the confidence that we have had as management into our new business model with hard facts. I can also say that we, as management, are very happy with the results so far. The results on the sales side are fully in line with the expectations and the business plan and even exceed our personal expectations as management. Can you please stay on number 16? With the launch of our product in April, we immediately started taking orders.
Since then, we have experienced a steady ramp-up in our order books and are very happy about the volumes, which is now reflected in the fact that we're well sold out into Q4 2021. Also, of course, the very important message is that the pricing that we're selling at is fully in line with the expectations. Currently, we are in fact limited by the availability of product in terms of onboarding new customers, and as we ramp and of course also as we expand our production capacity next year, we will be able to take on new customers.
Some sales highlights include, first of all, we have now around 30 customers on board. This includes all the big players in Europe and already some very relevant players, market leaders in the U.S., including names such as BayWa r.e., Krannich Solar, IBC Solar, Sonnenstromfabrik, Memodo, and Greentech Renewables. This means that we are extremely well represented in all the relevant sales branches. In fact, we are now represented in more than 60 individual country branches of our customers. It is safe to say that installers that want to install Meyer Burger usually have a very easy and convenient way to actually source Meyer Burger products. Among the installers, already more than 175 have listed with us and registered as Meyer Burger installers. This number keeps growing week on week.
We have especially good coverage in the German-speaking region of Europe and are currently quite actively expanding that into the further countries in our core regions as well. As Gunter said, we have now started shipping product end of July, and I am very happy also to report that we have booked first orders in the project business, i.e., orders for the utility and large C&I segment already ahead of plan. These are, of course, pilot projects, since at this time we do not have the specific customized utility scale product yet, which will come at the end of 2022. We do have to pilot large scale installations on our path to bankability, of course. This all is backed up with a very strong commercial team, of course, foremost the sales team.
We have an extremely motivated team, and we repeatedly managed to hire the top talent in the industry. What we are doing here is really giving our staff a sense of purpose and we have very mission-driven people on board, which fills me with great confidence that we can then also translate that into future sales success. Next slide, please. I want to go into a bit of detail on why things are currently going very well. This has two key drivers. One is that we have an intrinsic strength in how we are approaching the market, but also we are experiencing tailwinds from the markets, i.e., the macro environment. Gunter, have you switched to number 17? I'm still seeing 16 on the webcast.
Yes, I did. It takes a little longer, apparently.
Okay, good. Okay. The key strength that we have is our product. It ticks all the right boxes in terms of market demand. We have a highly performing product that is among the best, if not the best performing product currently in the market, which is manufactured according to very high European quality standards. It is manufactured in the heart of Europe, very close to the demand. Of course, we also have very high sustainability standards, which all meets the requirements and expectations that customers, especially in the premium sector of the residential market, have. We have already started the preparation of our sales and marketing a long time ago, already in the third quarter of 2020, immediately after we had decided on the strategic transformation and came the first financing round.
This is now paying off in the sense that we have now well-established relationships to the around 30 customers, as I said before, and we can now execute on those existing relationships. Also, what we clearly sense in every conversation that we're having is that we do enjoy a high level of trust. Of course, in a sense, we are a startup, but we, at the same time, have a long history going back to 1953. We are perceived as a very reliable quality player, and we are seeing that trust in the relationship to our customers already today, even at the point where we've just started shipping product.
The sales marketing team has a very long track record, a collective track record, and experience in the market, and, of course, also brings an extensive network to customers, to wholesale distributors, and installers in the market. This is now also helping us to take off from the ground and realize our sales. Last but not least, the human touch is very important. Meyer Burger wants to be close to the customers. We are here in the markets in Europe, in the U.S., we're close to our customers, the distributors, and also the installers, and I'll also talk about end customer engagement a little later. This is clearly also rewarded and very well perceived. In terms of the macro environment, the overall growth of demand is continuing unabatedly, especially in our focus regions.
On top of that, we are currently seeing very poor availability of PV modules in general, and especially the disruptions in the global supply chains and logistics are having a huge impact on the availability of modules here in Europe and also in the U.S., which means that our competitors are currently struggling with supplying their customers and are usually perceived as being quite unreliable. Our customers are having a lot of grief with fitting their orders that they're getting from their customers. On top, also, there is a heightened awareness, of course, of the product origin in connection with the logistics, also in connection with certain supply chain issues related to sustainability. We can, of course, already assure our customers that we have a clean supply chain, that we are sourcing our silicon from renowned manufacturers such as Wacker.
Of course, we are manufacturing here in Europe and a very large chunk of our value creation is happening here in Europe. Related to the poor availability of product, pricing of standard module has also gone up quite significantly, which, of course, generally helps. Then the sort of the icing on the cake, our competitors in our specific segment, i.e., the premium segment, are currently struggling. Many of them are losing the technical edge. There's some brain drain as well going on, and we have seen competitors losing market share, and we are stepping in with our product, which is a technically highly differentiated product, manufactured in Europe. So again, we are filling the right market demands at the right time and are confident that we can very quickly gain substantial market shares from our competitors. Next one, number 18.
It may take, again, a bit of time.
As a background, there has been quite some discussion in the market around our sales strategy and how we are scaling our sales. What I want to convey today is that we have a very scalable sales model. The key paradigm is that as we scale up our production capacity, our revenues will effectively be limited by the available production capacity. The objective of our sales effort is always to basically sell all the product that we are manufacturing, of course, up to a customary small amount of inventory that simply needs to be kept for reasons of flexibility. We have quite strategically divided our sales efforts into four phases. The first phase is now coming to a close, which was the market entry in the rooftop segment. We successfully set up our sales organization.
We built our customer network, which we're still expanding on, but the base foundation is now set. We are now ensuring the availability of our product at all the key customers. This is still an ongoing process as we have just started shipping product in July. The focus is on the core European markets, especially the German-speaking countries and also increasingly in the U.S. This is immediately followed by phase II, which we are basically entering now, which means that we then need to make sure that our customers, in turn, are selling our product, which we have delivered to their warehouses, to their customers. Selling through the product is the key objective here. This requires, on one hand, a very dedicated and intensive sales effort, which we are in full gear running with our sales team that we have on board.
We are now engaging the distributors and the installers, with the objective to turn as many installations as possible into a Meyer Burger installation. At the same time, we have launched our end customer and installer marketing campaign, and I'll talk about that in a bit as well, which is, again, very important to create the pull from the market for the new Meyer Burger product. At the same time, strategically, we are pursuing pilot projects for utility and large C&I installations, which then serves to prepare bankability and to build the pipeline for the last stage, which is the execution on utility projects. This phase will span for around three to four quarters, well into the second half of 2022. At that point, we will be expanding our production capacity in Freiburg to approximately 1 GW, i.e., more than a doubling of capacity.
Of course, we need to be ready by then for the market to absorb that additional volume. This means that we will continuously strengthen our covered markets. Also, of course, then, putting more and more emphasis on the non-German-speaking countries. We will additionally also start to supply into further markets, such as the markets in the APAC region. Of course, the U.S. will get even more into focus, and we will also start executing on our C&I pipeline, which we are already in the process of building up. We will have a specific product at that time that is targeted and catered towards C&I projects.
At the same time, we will continue building on bankability for the later entry into the utility segment, which is then going to happen with the opening of our second module fab, initially with around 400 MW of capacity, which will then be able to produce specific utility-scale products, which we will then sell into our pipeline which we have more than a year now to build up. Overall, if you are wondering into how our overall sales process is working from order intake to delivery, invoicing, and revenue recognition. Currently, and for the time being, well into 2022, we will be operating primarily under a distribution model, i.e., we continuously supply our customers. They keep a certain amount of stock, typically a couple of months on stock, and we resupply them as they sell off the product.
As we enter the C&I segment, and later on also the utility segment, with larger volumes in towards Q3 and Q4 of next year, we will be experiencing longer lead times and also an even longer visibility into our order books. It doesn't mean that we don't have long-term visibility into our offtake already now. The opposite is the case. We do not have the firm orders yet, stuff on a very long-term basis. Of course, given that we have now successfully entered the market, the demand is there, our product is in high demand, and the market's not stopping, we can, of course, be very confident that this business model is working very well on a rolling basis.
I would like to then continue on the next slide, on number 19, and give you some insights into how we are now fueling the demand and creating the pull from the end customer side and also the installer side, of course. The key for that is the brand and the marketing efforts that we are running, which is basically put on four pillars. The first one is our very successful repositioning of the Meyer Burger brand, and we've seen that since March of this year. We have completely reinvented Meyer Burger, also from a corporate identity perspective, as a European premium solar module manufacturer. This is very well reflected in our new corporate identity and is receiving very good recognition from the market. The second pillar is our digital marketing campaign.
Quite deliberately, we are almost exclusively focusing on digital channels for our advertising and end customer marketing specifically, because we are convinced that this is the most effective way to spend our media budget. This way we can target our potential customers in a very efficient manner. I'm very proud that we have just launched a terrific marketing campaign, which was built together with the renowned marketing agency, Jung von Matt. You may already have encountered some of our ads on YouTube, Facebook, Google Search, et cetera. If not yet, I'm quite certain that you will over the next couple of weeks and months. Please also have a peek at our new brand clip, which you can see on our website.
Next to the marketing campaign, it is also very important for us to set new standards in terms of how we engage customers and specifically end customers. This is really quite novel in the industry. So far, the dialogue between and the engagement of the module manufacturer with the end customer is typically quite limited. Our ambition is to set new standards in that respect. For that purpose, we have already launched the Meyer Burger app concurrently with the product back in April and are continuously expanding on the functionality. Last but not least, of course, we also are present physically, primarily at trade shows and customer events. Of course, this is currently slightly hampered by the coronavirus pandemic situation.
We are confident that we will still have three major trade shows this year, and that is of course very important for the direct contact to our customers. With this, I would like to conclude my section and hand over back to Gunter Erfurt. Thank you very much.
Thank you, Moritz. I have the pleasure now to provide you an outlook of what we expect for the next period before we come to the Q&A, and I'm sure we'll get back to you, Moritz, with many questions already received from the audience related to sales and marketing. What we can conclude as of today is that Meyer Burger is now standing on four sustainable, strong pillars. On the one hand, we have a future-proof technology platform established, i.e., we can build on what we have in place. We can do add-ons, if we will, to enrich the technology and get to, number one, higher efficiency levels, but also work on reducing our cost structure accordingly. This will result in new products and also segments, which we are supplying.
We have already provided some examples in previous communications with regards to our envisioned products we are going to launch next year for the utility segment, as well as our solar roof tile product, which will as well be available in the second half of 2022. A first preview is being provided at Intersolar this year in Munich in October. The second thing, of course, is the secured financing. We can now execute our expansion plans for better economy of scale. We have more flexibility to act according to market requirements with a solid financing. Just to reflect the last 12 months, we were able to raise almost CHF 600 million for the future expansion plans. The strong solar brand as a third pillar was just explained by Moritz. We've made very good progress here, but this is not the end.
We'll continue to further enrich the branding and Meyer Burger's position as a premium module supplier. As Moritz has entertained to you, we have a scalable sales strategy in place where we are trying to foresee as good as we can certain segments and how we can scale within these certain segments in the solar market. Meyer Burger is ready to shine. As I said, the solar markets continue to grow, and this despite the COVID pandemic. That was only last year in June when the pandemic broke out. First wave, the market had seen a little bit of a drop and some delays in the execution of especially utility projects. What is also now very visible is that despite from the COVID pandemic resulting rising module prices due to higher input costs, has not really harmed the market growth globally.
We can scale on the business and expand the capacities first at the German sites, and which are made ready as we speak for receiving the additional equipment. This is planned to be completed in 2022. We will have the new products, as I already mentioned, with the utility modules and the solar roof tiles in 2022. As Moritz has also explained, we can use the benefit of producing locally. This is not only a big advantage in the market the way we can approach customers, but it also helps saving logistics costs and shortening lead times to the customers.
Last but not least, even though this has never been a pillar on which we built our new strategy, but as a result also of the COVID pandemic, but also some other global trends, industry policies in the West are discovering the solar manufacturing sector as strategic and why it's not just a simple consumer product, it is critical energy infrastructure. This is providing us some more tailwinds also along our expected growth. The financial outlook, our guidance remains unchanged. We can again confirm the targets for 2023 and the long-term goal is 2027. This we can confirm today. With this, I'm coming to an end of the presentation, and I'm now going through the questions one by one as we receive them here. Then I will pass on the question to either Moritz or Jürgen, or will answer it myself.
Starting with the first one, do you have any initial feedback you can share with us concerning the first shipment? Have distributors, installers already given feedback regarding installers from countries ex Germany, Switzerland? Why haven't we seen more registrations? I think, Moritz, that goes to you.
Yeah. This is still too early to say, as we have just started shipping product. Overall, the feedback is positive, but nothing substantial to report yet.
Next question, when can we expect the commercial module efficiency of over 24% in mass manufacturing? This is most likely related to the update on the IBC technology. There is no firm plan yet when we are going to do this. First of all, we need to work through remaining industrialization topics. This is not yet finalized. What I would like to say is, a product should be introduced into the market when the market is ready and when the time is ripe, and not when the product necessarily is ready. We will carefully balance and find the right time for the introduction of those products. Another one. Going forward, input costs versus pricing of panels allow some differential margin. I'm not sure if I understand the question entirely correct.
I believe it's referring to increased input costs and the pricing and hence the gross profit margin. Trying to answer. Currently, we are facing higher input costs, which we already explained in June. Silicon is the primary driver. We have one enormous benefit compared to anyone else in the market that we can, for the silicon example, for instance, use thinner wafers, as-cut wafers, which is saving us also with regards to the silicon use. We have other projects, as I said, already launched in order to achieve the cost levels where we want to be. I'm quite confident that we have a very fair chance to be successful. We have many questions related to the Oxford PV topic. What exactly should be achieved legally in relation to the dissolution of the cooperation with Oxford PV?
We have another one which is asking the same thing. What is the outcome of the review of legal options against Oxford PV, and so on and so forth. I would like to answer them all in one. The legal assessment is not yet finished, so that's why we cannot comment further on this question. How high will be the total investment in the roof integrated high performance solar system, and what EBIT margin is planned? Also, this is too early to say. We are not commenting this as of today. You said that pricing is very much in line with your expectations. Can we therefore expect price levels to be around CHF 0.40 for watt peak or above? Moritz, question goes to you.
We are generally not commenting on specific prices.
You're showing your backlog in chart, but there is no number you're sharing, or I'm missing anything here? Another one goes to you, Moritz.
Yeah. Again, this is of course, commercially highly sensitive information. We will not share quantitative information on our order backlogs at this time.
Do you expect any issues or delays concerning the availability of components in the ramp of the 1.4 GW , similar to what happened recently? After the fact, you're always smarter. From what we can see today, I would say this issue is well contained and under control and managed well. Important for us is, of course, the direct material, as well as anything we need to build our own equipment. As I said, we have started early enough. We have been able to secure many components already, and we'll do so accordingly in the coming months in order to stay on the projected timeline. There's another one. Could Meyer Burger, independent of Oxford, start perovskite tandem cell production in competitive mass production until end of 2023 and scale the production capacity at least to over 1 GW?
I would answer this question by there is nobody who can scale a production, a competitive mass manufacturing of tandem solar cells Till the end of 2023. This was never the plan for Meyer Burger, and it is also very unlikely that this is going to happen globally. The technology requires some more years in order to reach the level of competitiveness, specifically also elements like the efficiency on one hand, but also the reliability and durability of the product. There is still some work to do. Could Meyer Burger, independent of Oxford, start perovskite tandem cell production eventually? The answer is yes. Once all these issues are resolved. Have distributors taken other than expected normal stock level sell-through rate trends? Not sure if I understand the question. Moritz, can you answer this?
Yes, I can just say that we are very happy with the level of sell-through that we're seeing. This, of course, also is a direct consequence of our already quite strong brand that we're having, even from the past and from our brand repositioning in the spring. Now as the physical product actually gets in customers' hands, we expect that sell-through will get even stronger.
Another one related to utility project. Can you talk a bit more about this, please? What panels have been used? If residential, do you expect to get more orders? How should we think about this? Moritz.
Yeah. Just a second. Can you repeat the question, please?
It was related to the utility project.
Okay, I'm seeing the question now. Okay, thanks. Yep.
Okay.
The challenge that we're currently having is that we need to create bankability for the Meyer Burger technology now. We need to get started with creating the bankability, i.e., to pilot the product, but we currently do not have the potential product that will be sold in mass quantities into large-scale installations from the end of 2022. What we are doing is we are strategically working with customers to build sort of mid-size installations with our current product, which is not yet ideally suited to large-scale installations. It, of course, has all the fundamental product properties of the eventual utility product, i.e., high efficiency, high energy yield, high quality, bifaciality, et cetera. We are effectively sampling the market with a slightly suboptimal product.
This is the right strategy, and we're confident that this will serve us well to then have a full project pipeline once the production is actually starting for the utility scale product.
Another one. What do you expect from the Intersolar trade show? Before Moritz is going to answer this, I would like to comment, at least we expect that it is taking place at all. We are hoping for this, given the fact that we may see another COVID wave of infections. Assuming that this is not going to happen and we can be there, then Moritz, please, your turn.
Yes. Intersolar is, of course, the solar trade show, at least here in Europe, if not globally. It is the occasion to meet with customers and to physically present the products. There's a healthy mix of distributors and installers typically present. It is absolutely key for us to be there. It's also the first time that we are having a physical presence at a major trade show. We're very happy that we have a prominent space booked in the now slightly reduced overall booth layout. It's very important for us to show presence there and then be in direct contact with our customers, and we certainly look forward to the event.
There's a question regarding R&D spends. Can you give an idea of how the levels of R&D and marketing expense will trend as you move through 2023? We are not providing details here, but what I can say is that from the current levels of our spending, we may slightly adjust according to the requirements, but we believe we are well positioned with the spendings in place and may adjust slightly, but what you should not see is that we keep a certain level of X% of net sales and move through the years as we grow our capacity. This is not going to happen. Of course, we will see then also a further optimization in specific functional costs in all segments, R&D, sales, marketing, G&A, as we grow because of the scaling effects.
There were some more questions related to the fact that we currently see increased input costs for the reasons I mentioned already, so increased silicon costs and others, and what would be the consequence also on Meyer Burger to do what anybody else does to increase pricing of our modules. The question goes to you, Moritz.
Yeah. Sorry, you were cut off for a second. Can you repeat the question please?
I have summarized many questions of the same kind, asking for, are there any plans to maybe also increase pricing given the fact that input costs are higher, as also other competitors do so?
Currently our strategy is to keep pricing stable and, I think this is also rewarded by our customers. We want to establish a long-term trusted relationship with our customers and not play this relationship opportunistically. Of course, we are moving in a larger market environment and as pricing in the market moves, we may also need to adjust that at a given time.
Another question on where first megawatt scale utility projects sold into U.S. or Europe. It's Europe. There was another question dealing with the same content, so I think this was answered. Another question on how much is the order book balance? We have not published it, and Moritz, you can maybe provide us some insight.
Yeah. Again, it's unfortunately, of course, a highly sensitive commercial figure, so we're not giving any guidance on our order book at this time.
Another question regarding the U.S. market entry. Do the delivery delays affect all of your U.S. market entry negatively, or can the planned amount for modules be delivered to the U.S.? Moritz.
It is of course also affecting the uptake in the U.S. because everything is shifting a bit, but we are striving to supply strategic customers, at least with first volumes, very early already in the U.S. Overall it's in the same ballpark as the overall delays.
Another question related to our expectations or projections for personal costs, as we go to the 1.4 GW . We are not providing details about how many FTEs we are going to hire for the time being. We are almost through and almost on time. For what other reasons besides the higher efficiency, Meyer Burger panels are better than the ones from competitors? Moritz.
Yes. I could, of course, talk for ages about this point. We have a whole set of differentiating factors. Of course, one of the important one is performance, and this not only comes down to efficiency, but also energy yield. Compared to standard modules, the Meyer Burger product can achieve up to 20% more energy output on the same area. Of course, we are producing to the highest quality standards here in the heart of Europe. Our products have highly appealing aesthetics. They're made in Germany with Swiss innovation and Swiss engineering. Last, but definitely not least, sustainability is a key topic for us. The product is made with first of all, it is clean. There's no toxic materials in our product, which is different from virtually every other module in the market. Certain amounts of lead are still in PERC modules, typically.
Also our supply chains are clean. We are pursuing a very dedicated supply chain strategy and making sure that our supply chains are made transparent to us, and work very closely with our suppliers on those topics.
Thank you. Will the initial sales into the utility segment with a product that is not specifically designed for utility have a negative effect on margins? Moritz.
Of course. Yes. This is all already catered for in the business plan itself. Of course, our strategy is currently not to sell enormous volumes into these pilot projects. Hence, I've said that we're only targeting mid-size installations, because we're confident that we can actually achieve higher margins by selling the same modules into residential channels.
Another question is related to our expectation for the module sales in MW, for 2021. We have not provided any guidance on this and also won't do this. We are now working through the remaining issues and are stabilizing production and then are not providing, as of today, communicating expectation for the module sales in 2021. Another question is related to slide number nine of the presentation where we are showing announced new production capacities for heterojunction of 15.3 GW. There is an assumption that there are 65 GW announced. We have very clearly defined what goes into this calculation. We have a situation in photovoltaics that, of course, every company is trying to sell their products and new products and excite the market.
We are in a situation that we are almost every week reading about a new record solar cell that has been built in a certain laboratory, which sometimes creates an expectation that this is going into mass manufacturing the other day. I can clearly say as of today and with all the knowledge we have about the market, that there is a clear gap in between the lab to fab timelines. In order to get from a certain cell efficiency to a mass manufacturing, you need to go through the industrialization. You need to have the equipment available, and not only some equipment, but proven equipment that has gone through testings. As you know, it took Meyer Burger 12 years to reach the level at where we are today.
What we have baked into our assumptions, and you can see this also in the footnote of that respective slide. The market leaders in the industry, i.e., the companies with track record, with installed capacities, with patents, with strong people, we believe that they are dominating the industry, and are not the ones that make an announcement that they might do something of large scale in the coming years. For instance, there has been a project that was announced already in 2019 by the SMSL, Solar Module Super League, a tier one player, Risen from China, expecting that this factory is going to be fully up and running in 2021 of 2.5 GW. It's not fully up and running. It was pushed out into 2023 officially. Everybody can read it from public sources.
Of course, there is another announcement, even before the first factory was finished, to build another 4 GW of capacity by Risen, without providing a timeline of when that is going to happen. I could go on also providing more examples when we go, for instance, or when we look into the TOPCon world. There is JinkoSolar, also an SMSL player from China, among the few companies who have piloted TOPCon as a competitive technology to heterojunction. According to their information, they are operating an 830 megawatt line of TOPCon beside their multi-gigawatt PERC fleet. What you don't see here, because there was nothing announced, is an announcement to continue investing in TOPCon.
For reasons which we have elaborated on, you need to have a technology that is ready, by all means, in terms of equipment availability, in terms of cost structures, in terms of efficiencies, in terms of energy yields. This is, in our opinion, from what we read in the market, not yet provided to the other competitors. We are not selling our technology any longer, and we have decided only to include companies in these statistics which have a proven track record, which know the industry, which have established sales channels, and not newcomers which have nothing but an announcement. We have also reviewed announcements of these non-track record companies in the past. None of those announcements, none, zero, have been executed and put in place. None of them.
That's why I think it is fair enough to also assume that the likelihood is pretty little that those projects will come to fruition. A last question no, we answered this already. How much modules will be missed in the 2021 due to the slight delay in the ramp up? It goes along with the question regarding our expectation for the overall module sales. We are not quantifying this, working through the remaining operational issues and then more stabilizing manufacturing and not providing those details as of today. With this, we have answered all questions I can see here and exceeded slightly our time slot. I thank you all for attending this call and for your strong participation by sending your questions. It is much appreciated, and we look forward to speaking with you soon. Thank you so much.