Ladies and gentlemen, good morning or good afternoon. Welcome to the Meyer Burger Technology Press and Analyst Half-Year Results 2018 conference call and live webcast. I am Iruna, the call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. After the presentation, there will be a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing via the relative field. Should you need assistance, please press star and zero to call an operator. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Hans Brändle, CEO, and Mr. Michel Hirschi, CFO of Meyer Burger Technology. Please go ahead, gentlemen.
Good morning and welcome. Thank you for joining our earnings call today. Let me start with the good news first. Yes, in the first half-year 2018, we successfully returned to profitability at net profit level after seven years. However, there is unfortunately no time to celebrate for us as the next major challenge hit us in June and calls for full attention. I'm talking about the decision on May 31st by the Chinese government to restructure its solar program, a decision which came out of the blue for the whole industry. Before we jointly take a deeper dive into this disruptive 531 notice, let me start with a short review of our key financials. The sales of CHF 232 million was 9% higher than in the same period in 2017.
But all in all, in line with the half-year sales in the recent years, as you can see in the chart in the right upper section of this slide. With these sales, we achieved an EBITDA of CHF 29.2 million, which corresponds to a margin of 12.6%, and we are able to report with plus CHF 8.3 million, the first positive net earnings since 2011. This is an important milestone for our whole organization. It unleashes additional energies because it proves that we not only have leading products, but we can also earn money with them. This achievement is mainly the result of various cost optimization programs and measures executed over the past 18 months. Focusing on profitable products and a strong team effort made the successful return to profitability on net earnings level possible.
The disappointing fact is, however, that at the same time, the market environment dramatically changed and order intake plummeted to a level of CHF 138 million, which is the lowest level since five years. While we had a quite weak start into 2018, as reported in March during our last earnings call, the order intake recovered to a good level in April, May. However, not only a potential trade war between U.S. and China, but especially the 531 announcement of the Chinese government changed the picture completely. Since the announcement, the whole PV industry is facing major uncertainties and therefore reviewing their expansion plans, which is having a strong impact on our order intake since June, as we will see later in the presentation of Michel Hirschi. Let's now spend a couple of minutes to understand what happened end of May.
China's 531 solar announcement, actually a radical subsidy cut, came as a surprise to the whole industry just after a very successful edition of the world's largest solar show in Shanghai, the SNEC, had closed end of May. The 53 GW installed in 2017 substantially exceeded the earlier forecast in the same year by the China PV Industry Association, which was only 20-30 GW. Q1 this year was also showing new record numbers. It was then in May that the Chinese government put the brakes on. I recently had the opportunity for a personal meeting with a high-ranking government official of the NEA, the National Energy Administration in Beijing. The discussion can be summarized in three bullet points.
First, the Chinese government strives to regain control of PV end installation growth in China, which had gotten out of control due to its unkept very attractive feed-in tariffs, which have been often higher than in many other regions of the world. Second, the Chinese government wants to achieve grid parity within the next three years and strengthen a more market-driven auction model such as the Top Runner Program. It's a fact that the winning projects of the Top Runner Program have led to much lower winning prices compared to local feed-in tariffs. Actually, the prices shown in yellow in the chart on the left-hand side are very close to the local tariff for coal plants, a tariff which is considered as grid parity. Last but not least, the Chinese government is dedicated to pushing their industry from a purely cost-driven focus more towards quality and technology.
Again, the Top Runner Program turns out to be very effective. PERC is now the minimum level, and advanced technologies beyond PERC are highly encouraged. Which is, by the way, good news for high-tech solution providers like Meyer Burger. Slide five summarizes the concrete 531 decisions of the NEA, the NDRC, and the Ministry of Finance. The decision was to fully terminate further feed-in tariffs for utility-scale plants for this year. A hard cap on distributed grid systems that was, by the way, already met by mid-year, and another round of feed-in tariff cuts. However, quality and technology remains key to the NEA. That's why the Top Runner Program was not touched. On slide six, the consequences on the 531 announcement is illustrated. Analysts expect the Chinese demand after the record year 2017, with 53 GW, might drop to 30-37 GW this year.
SolarPower Europe expects that the Chinese market will bottom out in 2019. As of 2020, however, Chinese demand is expected to again return to a growth pattern with two-digit growth numbers. Due to China, many analysts expect to see no growth this year for the global market. Goldman is probably the most conservative with only 75 GW, while GTM Research just cut its 2018 forecast from 104-85 GW, which has to be compared to almost 100 GW in 2017. This 2018 pause will be followed by the next double-digit growth phase, as more and more countries will enter the club of GW-scale markets as shown on this slide. While China represented over 50% of global solar market demand in 2017, this share will drop to more healthy 30% going forward.
To summarize, due to the restructuring of the Chinese market, the global solar market is catching its breath this year and is expected to continue to grow again from 2019 as demand geographically diversifies. Experts from across the spectrum agree that the mid- and long-term solar growth story remains fully intact. Let me switch topics and have a closer look into how the overall situation developed for Meyer Burger, focusing on PERC, heterojunction, and SmartWire technology. PERC became the new mainstream technology much faster than predicted by all experts. Once more, Meyer Burger was key enabling the PV industry to achieve this technology change, with MAiA setting the industrial standard for PERC. Since beginning of this year, Meyer Burger is challenged in the Chinese market by an alternative technology called ALD. This new competitive environment led to strong pressure on equipment prices and throughput.
While we have almost doubled the throughput of our MAiA, the market only accepts slightly lower prices per machine compared to 2017, leading to a drop of CapEx per gigawatt by about a factor of two. Thanks to our modular and standardized MAiA platform, we continue to be competitive. It goes without saying that we are working on measures to combat the current margin squeeze. Despite major push-outs and delays in the investment plans of our customers, we won approximately three gigawatts for PERC in the first half year of this year, and we did not suffer from any cancellations. While the competition in mainland China is fierce, we are still the preferred partner outside China. Please note the need for large Chinese players to expand their manufacturing footprint outside China due to tariffs, but also due to 531 can be seen as a clear upside for us.
As PERC is meanwhile established as mainstream technology, our customers try to push the PERC cell efficiency to higher levels. Many concepts are being explored, each having a different name, such as TOPCon, monoPoly, et cetera. We summarize these efforts under the term passivated contacts. During the SNEC, the largest trade show in our industry, we surprised the CTOs in our industry with excellent results on these passivated contacts using our MAiA. Again, the MAiA platform turns out to be the ideally suited platform, demonstrating the versatility of our technology. We expect a dedicated solution on MAiA early next year. On page 10, you find the simplified technology roadmap for crystalline silicon solar cells. You can see the passivated contacts I just mentioned as the last possible evolutionary step after PERC.
To really go for the full potential of crystalline silicon solar cells beyond efficiencies of 23+%, a technology switch to heterojunction is necessary. In contrast to passivated contacts, heterojunction is ready and available. Heterojunction delivers not only the highest possible efficiencies, but also enables lowest LCOE, which stands for levelized cost of energy. A growing number, I have to say, of players are considering or are already working on heterojunction, supported by the technology push of the Chinese government to achieve grid parity soon. We see a number of Chinese companies trying to produce heterojunction modules using various single equipment from competitors. The common challenge for them is either overall performance or cost, or the combination of both, as well as the lack of integration capabilities. They are, generally speaking, very much interested in our technology.
They would like, however, to see the performance of a Meyer Burger line in real mass production. The focus of these customers, as they told us, is now on our flagship project, 3SUN, the subsidiary of Enel, who ordered a 200 MW heterojunction solution from us last fall. This project, by the way, is fully on track. Meyer Burger is working on a number of important deals, not only, but also in China. However, the high CapEx are still a hurdle, and 531, unfortunately, led to further delays. At this point, it's fair to say that Meyer Burger is recognized as the leader in technology for heterojunction and the only supplier with proven performance, even on the final product, the module, as we will see on the next slide 11.
Together with CEA-INES, the French PV Research and Development Institute, we produced in May this year a 72-cell record module with 410 W. CEA-INES uses the Meyer Burger heterojunction production technology. This 410 W module is our next champion module after the announcement of last November with a 335 W champion 60-cell module. Please note, the 335 W, 60-cell champion module would have a nominal power of 402 W as a 72-cell module. The 8 W increase within 6 months shows again the potential of our heterojunction technology, as typically the progress of the industry is more around 5 W, not within half a year, but within a year. If we go then to the next slide. As we hear repeatedly in the market, Meyer Burger is the only technology provider offering a heterojunction solution with proven integration capabilities, including module performance.
And now, 5 years after introducing the first generation of our SmartWire connection technology, this technology is starting to play an important role in increasing module performance, primarily with heterojunction, but it's also suitable for improvement of other premium silicon technologies. Based on our new SmartWire Stringer, we were able to announce 3 important deals for SmartWire connection technology so far this year: with REC in February, with Panasonic for their heterojunction modules in May, followed by an undisclosed module manufacturer who buys heterojunction cells from a heterojunction cell and module producer. All in all, we are making substantial progress in all product areas, and we are well prepared as soon as the market disruption and uncertainties created by 531 faded out. Finally, I would like to spend some minutes on operational topics on page 14 and 15.
The reorganization of the production site in Thun, as announced on November 2nd last year, is fully on track. In April this year, we announced the preferred partnership with Mondragon as an outsourcing partner for our SmartWire equipment. Mondragon from Spain is a leading global industrial company with a long track record in manufacturing module production equipment. In May 2018, we announced the divestment of our in-roof solar systems business, known under the brand name MegaSlate. As part of the transaction, 32 employees were transferred to the 3S Solar Plus company. The closing took place in June this year. Furthermore, we recently signed a manufacturing service agreement with Flex to outsource the production of our new launched diamond wire saw, DW 291, to their manufacturing site in Suzhou, China, starting in January next year.
Flex is one of the leading worldwide suppliers of manufacturing services located in Singapore, with head office in San Jose, California, with about 200,000 employees worldwide and a very strong footprint in China. As a result, all manufacturing activities in Thun will be discontinued by year-end 2018. As mentioned at the beginning, we successfully returned to profitability on net profit level for the first time in seven years. With the disruptive announcement 531 of the Chinese government and the subsequent uncertainties on the investment plans of the PV industry, the management of Meyer Burger is initiating additional structural measures to safeguard our long-term profitability. These measures aim to further increase customer proximity and to further optimize our global production footprint. Finally, help to increase the company's robustness against market volatilities.
The additional measures target to reduce the break-even level on net profit to a sales volume below CHF 300 million. Details of the program will be finalized over the next few weeks. More information on the individual measures will be announced on October 16. With this, I hand over now to our CFO, Michel Hirschi, for a deeper dive into the financials before I then will conclude with the updated guidance.
Good morning, ladies and gentlemen. This is Michel Hirschi speaking, the CFO of Meyer Burger. A very warm welcome also from my side. Overall, the financial performance of Meyer Burger has been fully in line with our internal expectations and also with our guidance that we issued in March, as well as with our pre-announcement that we published in July. Net sales, EBITDA, and net profits have developed as expected, and we reached our most important goal to return to profitability for the first six months of this year. This is the result of several restructuring programs and cost-cutting initiatives that have been implemented in the last 18 months and before.
There have been very few unexpected financial impacts, the impact on our P&L, on our balance sheet, Meyer Burger presents, as of the end of June, a very solid balance sheet with close to 55% of equity and net cash. The first half, as Hans Brändle mentioned, was also characterized by several turbulences in the PV market. Initially, we were confronted with tariff discussions between the U.S. and China that later developed into a trade conflict. In May, China changed the support regime, as mentioned, for PV, and all of that led to ongoing uncertainties and concerns amongst our customers. These issues led to reduced equipment spendings in our industry. Meyer Burger was, just like all equipment companies, also exposed to these effects and achieved an order entry of CHF 137.9 million, which is the lowest value of order entry in any six months since five years.
Let's look at the results in detail. Please move to page 17. As mentioned, the incoming orders for the first half of 2018 were CHF 137.9 million. Market uncertainties led to project and investment postponement, and there were almost no real large PV projects in the market in the first half of last year. Demand for non-PV equipment, such as cutting equipment for sapphire and semiconductor, was stronger than a year earlier, and the number of orders won in this segment actually increased. Overall, our book-to-bill ratio was 0.59. Needless to say that with such a book-to-bill, the revenue level will be impacted in the future. We ended H1 2018 with a backlog of CHF 240.9 million. Still a very solid backlog, a lot of revenue to be recognized in the future periods.
The backlog is composed of slightly below two-thirds of PV back orders and 37% of non-PV. As mentioned, this share of non-PV is above the average share we had in the past. On page 18, you find the monthly distribution of our order entry. As mentioned, there's been only one major PV project that we were able to announce in April of this year. The other announced projects, both or all of them were for non-PV application. Also the base orders, which historically were around CHF 25 million a month, were reduced to an average of around CHF 15 million in the first seven months of this year. Net sales, I've mentioned, were very strong, and Meyer Burger reached a level of CHF 232.3 million, which is 9.4% growth compared to H1 2017. This is due to our rather long order-to-revenue cycle of six to 10 months.
In other words, the revenues we're showing here are the result of orders that could be won in 2017, mostly. This net sales level is one of the highest in any six-month period in the last five years. The positive development also contains a positive currency effect of 6.5%. Looking at the organic growth of the ongoing continuing business, we also had an increase of 5.2%. Our revenue of our core business was growing net-net. The growth of our share of sales in Europe is mostly caused by the 3SUN project in Italy, where we could book some considerable revenue in the first half of 2018. On page 20, you see a split of the net revenue according to different characteristics. The share of the European business is 28%. That's an up of 9%.
The share of revenue we do in EUR has also increased to a level of 79%, a very high, I think unprecedented share of revenue that has been concluded with products that we produce and develop in the European market. Corresponding to that, the share of CHF revenue has decreased to 11%. One of the most important profitability measures for us is the operating income of the cost of products and services. That's some kind of a gross margin. We have a long-term average of 47%-50%, and I'm very happy to announce that in H1 2018, we reached a level of 51.7%. Also, looking at the currency-normalized gross margin, the value was at 51.1%, both above our long-term average. That's roughly CHF 120 million of gross margin that has been generated in the first half.
If you look at our most important cost elements, personnel cost and OpEx, let's look at the personnel cost first. In the last 12 months, Meyer Burger reduced its headcount by 76 FTEs overall in 12 months, and we reached a level of 1,227 FTEs, full-time equivalents, at the end of June 2018. Also, the temporary staff has been reduced considerably in the last 12 months by 138. Most of the reduction happened in the first six months of this year. We are still employing 75 temps, which might be a surprise to you. We need these temps to flexibilize our cost structure, particularly here in Thun, where our core troop of production people has been reduced, and we are filling some of the gaps with temporary staff.
30 FTEs of this reduction are generated by the transfer of the energy system business to 3S, so a significant part of the reduction actually is initiated by the sale of this business. The decrease in FTEs also led to a further decline in our personnel expenses by 7.4%. We reached a level of CHF 64.2 million of personnel expense. That's CHF 5.1 million below the expenses of H1 2017 and is fully on track and in line with our expectation. On the OpEx side, on page number 23, Meyer Burger was not able to further reduce the cost in H1 2018. We spent CHF 26.6 million in OpEx. That's an increase of CHF 4.7 million compared to H1 2017. Almost all of that has been caused by the loss of the transaction of selling the solar system business in June to 3S.
CHF 4.3 million was the P&L effect of this sale because also CHF 1 million of goodwill recycling, equity neutral goodwill recycling, had to be included in the OpEx of H1 2018. The remaining part of the cost increase was in connection with the relocation of our production from Thun to other locations. It's not a trend, it's just a one-off that we had to face. Taking all this together, Meyer Burger reached an EBITDA of CHF 29.2 million. That's roughly four times the amount of H1 2017 and is an EBITDA margin of 12.6%, quite a bit above our guidance for this year. Let's move to page number 24. Depreciation and amortization developed fully in line with our expectation and reached a value of CHF 14.4 million, which is a reduction of CHF 1.4 million. Both depreciation on property, plant, and equipment and amortization on intangibles were scheduled.
There were no unexpected extraordinary bookings, and this is the last six months in which we have such a significant charge on amortization, as all technologies from acquisitions will be fully amortized by the end of July 2018. In other words, H2 of this position will be significantly lower and onwards. This leads to an EBIT of CHF 14.9 million, an EBIT margin of 6.4%. On the next slide, you find the details of the financial results, the extraordinary results, and taxes. All of these are minor impacts, no major surprises. Financial results was CHF 4 million negative. We had CHF 4 million net cost. This is much lower than the charges we had a year earlier. This is due to the fact that our interest-bearing debt has been reduced by the repayment of our straight bond in May 2017, and also by the reduction of the outstanding convertible bond.
There is a foreign exchange rate difference in the financial result of minus CHF 1.7 million included. We have not booked any new events into the extraordinary results. There is a gain of CHF 800,000 in the extraordinary results in the first half of 2018. This gain is in conjunction with an unused provision that we took in connection with the closure of production in Thun, and this provision could be reversed as it was not used in 2018, so it's a profit. Taxes were CHF 3.4 million. Needless to say that Meyer Burger did not really have significant cash payments as we are still using DTAs of previous periods. After many years of considerable losses, I'm very happy to be able to present a net profit for Meyer Burger. We reached a net result of CHF 8.3 million in the first six months of 2018.
That's an EPS of CHF 0.01, and we are very happy and proud that we could finally reach this most important target that we set ourselves. The overview on the income statement only requires a few additional comments. Most of the ratios improved. Many cost elements were reduced and were mentioned and explained in my previous explanations. There's one thing I would like to highlight. You see that the cost of products and service remains almost unchanged, with CHF 114.5 million compared to CHF 119.8 million one year earlier. That means that the production effort and the production that Meyer Burger actually did in the first half of 2018 was still almost on the same level as it was a year earlier. The lower order entry did not yet really push down our production.
We were well utilized and used, broadly speaking, the same amount of material for our production as we did in the previous period a year earlier. Other than this, I have no further comments to the income statement. Let's move to the balance sheet. Our balance sheet remains very solid. Fluctuations were minor in the first half of 2018. Equity remains very healthy with 54.6%. Not only has the equity slightly increased in absolute terms, our balance sheet became slightly shorter, which positively supports the equity ratio. Cash is at CHF 102 million and has been almost stable for the last five months. The non-current financial liabilities contains both the CHF 30 million mortgage on our building here and the remaining outstanding amount of our convertible bond, which will be due in 2020. Our inventory value in the balance sheet increased by around CHF 18 million.
There is both an increase of our gross inventories, the main reason is a reduction of the prepayment that we were able to offset against our gross inventory. We'll see that on the next slide in detail. Let's move to the analysis of the net working capital then. There are two main reasons for the increase of our net working capital of CHF 40 million. Number 1, our inventories, our net value of inventories increased by CHF 18 million. As mentioned, the main reason is the reduction of the attributable customer prepayments of CHF 14 million. Those of you who follow us since many years know that part of the prepayments are allocated directly and netted in the inventory, and the remaining part remains on the liability side, and you see them here also on the lower end of the slide.
Reason number two, we had an overall decrease in the customer prepayments of CHF 19.2 million. Less customer money was available to finance our working capital. These are the two main reasons. There has been a slight increase in the receivable. The main reason for that is the accounting treatment of the 3SUN project, which is a POC project, which follows different accounts in the P&L as our normal completed contract business. On page 30, you find the cash flow statement. Meyer Burger generated an operational cash flow from operating activities before change in net working capital of CHF 27.1 million. Our day-to-day work did generate significant funds. As mentioned before, all of these funds had to be invested into our net working capital. There is some additional inventory we had to finance and also less prepayments.
Overall, the cash flow from operating activities was minus CHF 16.4 million. We were very cautious in our spendings. Investment on property, plant, and equipment was CHF 1.8 million, a very low value. You also see here the net proceeds of the sale of the solar system business, the cash proceeds that have been received. There will be other proceeds in the future to the sale of this business. The cash flow from financing activities was CHF 4.2 million. Most of that is a cash out in connection with the share plan of Meyer Burger, where the company had to buy shares that will be allocated to employees and management later. Overall, the change in cash was CHF 22.5 million. There's been hardly any currency effect on our cash available. With this, I would like to hand back to Hans Brändle for the conclusion guidance.
Okay. Thank you, Michel. Now let me then conclude with an update on our guidance. I made it clear in the first part of the presentation, we are convinced about the long-term attractiveness of the solar industry. We have heard that the government of the by far biggest market expects grid parity within three years, which is very good news. Second, we make fast progress in further developing our technology in order to defend our technology leadership position. Third, after successfully returning to profitability, we will make sure with additional measures that this achievement remains sustainable. Nevertheless, due to the circumstances Michel and myself we described just some minutes ago, plus the sale of the MegaSlate business, we expect now a net sales for 2018 in the range of CHF 400 million-CHF 440 million. However, with an unchanged EBITDA margin of about 10%.
It is not the first time that we have to face turbulences in our market. As Meyer Burger management, our influence on world's politics is very limited, to say the least. However, it is our job to successfully lead Meyer Burger through heavy weather, which this very dynamic PV industry has already seen a few times. Let me paraphrase Pericles, who lived around 400 BC in Greece. It is very difficult to predict the future, but it's mandatory to be prepared for the future. With our return to profitability, our strongly improved balance sheet, and our leading products and strong reputation, we are already well prepared. With this, the announced additional measures, we will further increase our robustness against market volatilities. Now I would like to go over to the Q&A session.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the attached telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question from the phone comes from the line of Alessandro Taiana with UBS. Your line is now open. Please go ahead.
Yes. Good morning, gentlemen. Thank you for taking the time to answer some questions. I have three for you. The first one being. Regarding the profitability improvements, do you have a sense of how much cost reduction is still left to squeeze? I know you announced already savings from personnel expenses and that unprofitable products and businesses are being discontinued, but where would you say that you still have the most potential to further improve profitability? Number two, if you could please talk a little more in depth about your current order backlog, and where have you experienced the most deferrals and cancellations besides PERC? If you see the risk of any more happening, or if there could be a large rebound in the second half of the year, given that some orders have been pushed out a little.
Lastly, if you could please provide an update on your operations outside China, particularly India and Middle East, and any other emerging market that will experience faster than expected growth in PV installations. Thank you.
Okay. Thank you, Alessandro, for your questions. Let me start with question number two. Where did we have the most deferrals or cancellations? We did not have any cancellations so far. The deferrals we had were mainly in project discussions and negotiations. There were some delays within already received orders as well, but these were not that meaningful. The main effect we witnessed was that projects got delayed because customers had to reevaluate where and if they should continue their expansion as the demand is coming back in China. Question number one, you asked me where we see the most potential to further squeeze our P&L. Hans and I are not able to fully answer this question at this point in time. As Mr. Brändle mentioned, we will disclose further details to the next program we are working on in two months, on the 16th of October.
We know that it will require further improvements on both our margins, I mean product margins, as well as on our cost structure. It will be a combination of different elements. It is not just personnel expense or just increasing our gross margins. It will require improvement on all levels to reach the target of reaching a net profit break-even level of CHF 300 million sales. Further details, as mentioned, will be disclosed only later. For the update of the business outside of China.
Let me take over. Yes, we see activities outside China. I think in my part, I made the point that some of these activities are, again, Chinese players who see now the need to establish manufacturing outside of China. We announced one order, which was outside of China with a Chinese player. Also, we announced SmartWire connection technologies, actually three announcements. They were all outside of China. Also, the third one, not disclosed one, is non-Chinese player. We see activities there going on. Also, these guys talking about the PV industry, of course, they are affected by now some oversupply as Chinese players push towards going outside China. Alessandro, did that answer your questions?
Yes. That's perfect. Thank you very much.
The next question from the phone comes from the line of Patrick Laager with Credit Suisse. Please go ahead, sir.
Yes. Good morning, gents. I have a couple of questions, but I will limit myself to 4 actually. First question, I am seeing actually a good chance that market conditions may probably turn more favorable, let's say, by 2020, hopefully. We are also seeing Meyer Burger being, let's say, very well-placed from a technological perspective. However, my feeling is that we are seeing these Asian players now grabbing more market shares, especially in PERC. Can you provide more insight about the competitive landscape in PERC and, or let's say, which player is currently making your life tougher? We need more clarity about your competitive landscape here. This is question number 1. Question number 2 is, I am, let's say, wondering how relevant your non-PV business may become in future. If I am right, the non-PV is about, let's say, 20, 25% of group sales.
What are your plans here to expand further outside of PV? Question number 3 is on slide 14. You have actually summarized the different realignment measures you have implemented. Do you have any numbers you can provide in terms of savings for each step you have taken? This would definitely help us to make a forecast here. Finally-
I am wondering why you are not committing actually to a guidance for the incoming orders, because basically this is the key metrics for the sell side analysts and basically also for investors. Is this a kind of signal that visibility is much too low to provide any indication? These are the four questions I am having.
Let me start to answer the two easier questions, and then the more difficult ones I leave to Michel here. You are asking me about the competitive landscape on the PERC side. As a matter of fact, we always had competitors on the PERC side, but we were able to capture, let's say, the biggest portion to be on the careful side, the biggest portion of the first big wave. As a matter of fact, especially one player popped up in China. He is only present in China. The company's name is Leadmicro. The mother company is Lead, with a very specific solution with ALD technology. This player was able to capture one big account. The one big project, which was out in the market the beginning of this year, and the second part took place recently. This company was able to get this account.
Of course, we have competition, but I think I made it very clear we are still very competitive. We announced products with much higher throughputs, and the response from the market side is a positive one. Again, let me repeat. We are competitive, also on the price side. Yes, indeed, there is now more competition, especially one of these competitors to be watched. The second question was about our non-PV business. Thank you for this question. Yes, indeed. We are, of course, trying to balance our exposure to focus more on the non-PV side. We are progressing there. For instance, in the sapphire business, some of the bigger orders we announced this year, this is one stronghold we have. We also see increasing interest after some repositioning of our printing business, Pixdro business, which we perform out of our Netherlands operations.
We are, of course, looking for more opportunities as well on the non-PV side, but it's now too early to go into further details. Your observation is correct. Of course, we try to strengthen this part of the business. With this, I would like then to hand over to you, Michel, for the more difficult questions to be answered.
Thank you, Hans. Maybe the operator can move to slide number 14, the slide that was referred to. That's a very tough one, Patrick, that you ask here. All these three initiatives aim for Meyer Burger to allow us to close our manufacturing sites in Thun. These are the three production pieces that were present here, and for all the three of them, we have found a solution for the future. The sale of the solar system business contained 30 FTEs, as explained, 32 humans that left our company and reduced our cost base. I guess the modeling is rather easy, and it was a, let's say, CHF 15 million-CHF 20 million sales business that we sold.
For the module manufacturing and for the wafer equipment that we outsourced to Flex, these two initiatives allow Meyer Burger to safeguard competitiveness and good, healthy margins on these products, having similar cost structures as our competition with Chinese supply chain and less transportation costs. The effect of these two relocations will be that we remain competitive and hopefully can increase our sales on these products. The overall improvement of these three initiatives was, as we announced the program in November 2017, is to get rid of a fixed cost block here in Thun of CHF 8 million-CHF 10 million, and this amount was mentioned at that point in time. This roughly CHF 10 million fixed cost we will be able to save once all production activities are relocated from here and we will no longer maintain a supply chain here at this location.
This is when we announced that the break-even EBITDA level will go down from CHF 300 million, as it is today, to CHF 270 million next year because CHF 10 million cost represents roughly CHF 30 million EBITDA break-even sales reduction. The overall reduction is around, let's say, close to CHF 10 million. Question number 4, order entry guide. I understand that you would be very happy if we would provide an order entry guide. In fact, Meyer Burger has never provided an order entry guide. It's not normal and also not possible in our project business. You know us since many years, and you've seen that our project business is lumpy.
Sometimes we get three big projects in a month. Sometimes we get a dry period, and the proof of that you see on slide number 18, with the past monthly order entries, where you see it's very lumpy, and it's, for us, not possible to predict if orders can be won in December, or maybe the customer will only send the down payment in January. We've never done it. We cannot do it today, but this is not any sign for anything. It's just the normal.
Okay. Thank you very much, gentlemen.
For any further questions or comments, please press star and one on your telephone. The next question from the phone comes from Richard Fry from Zürcher Kantonalbank. Please go ahead, sir.
Good morning, gentlemen. Just one question remaining for myself regarding the base order run rate. I'm wondering what the reason is that it is dropped by around CHF 10 million on average. Is it that you sell less single machines which drop into this base order pattern, or is it also that you sold less spare parts, maintenance, service business? If so, why is this service spare part maintenance business slowing? Thanks.
Yeah.
There are several reasons to that. Both things you mentioned are true. Number one, yes, we have sold less consumables because last year, in the first half, we still had DMT in our group, the diamond wire company, which had a consumables business of, let's say, roughly CHF 1 million a month. This business was discontinued and sold last year and is no longer in our portfolio. Let's say CHF 1 million of reduction maybe comes from there. The rest, as you stated correctly, is a result of overall seeing less orders, both for big projects and for single machines. I wouldn't say that the share of small single machines against lines has changed in any way, but it's an indication of the generally lower order entry also in the single equipment area.
Let me add maybe to be at one point more concrete. On the wafering side, for the diamond wire saws for PV, not for sapphire, for PV, there is tremendous overcapacity in the Chinese market. China, as you know, is good for 85% of the globally produced volume. We clearly see less orders for the diamond wire machines on the PV side. That's another concrete reason for a reduced baseline, because these orders were usually in the gray area of the corresponding side, so in the base orders.
Mr. Fry, does this answer your question?
Yes. Thank you.
We have also received one question through a different source from Mr. Sulc from "The Bund," a local newspaper here in Switzerland. The question is: what's the status of the sanction investigation of Meyer Burger with the SIX, with the Swiss Stock Exchange? There has been no further development. As we have announced, the Swiss Stock Exchange has initiated a sanction request to the Sanctions Commission this summer. Meyer Burger has provided all required information and data to that, and we were informed that we will receive a decision from this commission in early fall after the summer break. This has not happened yet, there's no update on that one for the time being. Are there any further questions from the audience?
Gentlemen, there are no more questions at this time.
Okay, ladies and gentlemen. If there are no more questions, we would like to conclude this call. We thank you very much for your participation and interest in our companies. If there are any follow-ups, please get back to us. Many of you we will see you in the coming days in meetings that already have been scheduled. For all others, if there is anything left, please get back to us.
Thank you very much also from my side. I'm looking forward to see some of you on the upcoming roadshow. Thank you for participating. Have a good day.
Have a good day. Bye-bye.
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