DGAP-News: SFC Energy AG publishes figures for the first half of 2019 - Strong growth in the Clean Energy & Mobility and Industry segments

SFC Energy AG - Corporate News

SFC Energy AG publishes figures for the first half of 2019 - Strong growth in the Clean Energy & Mobility and Industry segments

- Consolidated sales at EUR31,076k (H1/2018: EUR30,860k)
- Adjusted EBITDA at EUR2,199k (H1/2018: EUR2,131k), adjusted EBIT at EUR584k (H1/2018: EUR1,571k)
- Continued positive sales development in the Clean Energy & Mobility and Industry segments
- Capital increase successfully completed: Gross proceeds of EUR27 million
- Outlook for 2019: Management Board confirms sales forecast of between EUR67 million and EUR74 million, adjusted EBITDA of EUR4.5 million to EUR7 million and adjusted EBIT of EUR3.5 million to EUR6 million

Brunnthal/Munich, August 20, 2019 - SFC Energy AG (ISIN: DE0007568578), a leading international supplier of fuel cells and stationary and mobile hybrid power generation, is publishing its figures for the first half of 2019 today.

Management Board Report

Dr. Peter Podesser, CEO of SFC Energy AG: "In the first half of the year, we succeeded in exploiting and continuing the positive momentum generated in the Clean Energy & Mobility and Industry segments in the previous quarters. We pressed ahead with the internationalization of our Defense business in the reporting period, a fact that is underlined by the rise in the proportion of sales generated outside Germany (70.5%). The establishment of production facilities for hydrogen fuel cells is proceeding as planned, and we expect to launch our fuel cell-based backup power sources for critical communication infrastructure on the market by the end of the current financial year. We also plan to address the market for e-mobility applications in the long term. One significant project for long-term corporate finance in the first half of the year was the capital increase that was successfully completed in July. We are delighted by the positive response from existing and new investors alike and the high subscription ratio among our existing shareholders. The gross proceeds of EUR27.0 million will provide us with financial stability for the long term and allow us to accelerate the implementation of our growth strategy. Among other things, we are seeking to expand our organic growth through the further internationalization and penetration of our existing core markets and the introduction of our hydrogen fuel cell solutions, as well as targeted strategic acquisitions and investments. This will enable us to take even more effective advantage of the opportunities presented by the continuing rise in demand for fuel cells and for reliable, off-grid and sustainable power generation."

Sales growth

The Group generated sales of EUR31,076k in the period from January to June 2019, compared with EUR30,860k in the same period of the previous year. The Clean Energy & Mobility segment (+17.0% compared with H1/2018) and the Industry segment (+8.3% compared with H1/2018) continued to enjoy positive performance in the reporting period. As expected, sales in the Oil & Gas and Defense & Security segments were down on the previous year. While the lower level of sales in the Defense & Security segment was due to a major order from the German armed forces (Bundeswehr) that was delivered in the first quarter of 2018, sales in the Oil & Gas segment were adversely affected by seasonal fluctuations as well as the uncertainty resulting from the lack of pipeline capacity in the Canadian oil and gas industry.

Performance by segment

Oil & Gas

There has been a sustained slowdown in momentum in the Oil & Gas segment since the start of the new financial year. This is attributable to the muted level of overall investment in Western Canada as a result of a lack of pipeline capacity, along with uncertainties regarding current approval procedures for further pipelines and the unusually long break-up season. Sales declined by 2.2% year-on-year to EUR11,907k in the reporting period (H1/2018: EUR12,172k). We have established several sales partnerships in the US in the past few months in order to increasingly exploit demand in the attractive US Oil & Gas market and to position ourselves for profitable growth. These cooperations will provide SFC with direct access to the US Oil & Gas market and expand its regional presence in North America.

Industry

The Industry segment was the strongest performer in terms of sales in the first half of the year. The extremely positive development recorded in the first quarter continued with sales of EUR4,719k in the second quarter of 2019. Revenues in the first half of 2019 increased by 8.3%, from EUR8,310k in the previous year to EUR8,998k. This growth was primarily due to the successful launch of the modular product platform for customers in the laser industry that was developed by PBF, as well as sustained robust demand among existing customers. Segment earnings were impacted by start-up costs for the new product platform in the areas of R&D and supply chain as quantities remain relatively low.

Defense & Security

Traditionally characterized by particularly strong year-end business, the Defense & Security segment generated sales of EUR4,633k in the first half of 2019, down just EUR1,014k on the same period of the previous year (H1/2018: EUR5,647k). As previously, this lower level of sales must be seen in the context of the significant contribution made by the major order from the Bundeswehr in Q1/2018 (total sales volume EUR3.6 million). The results for the first six months of the current financial year clearly reflect the successful internationalization strategy in the Defense business. The proportion of total sales generated outside Germany in the Defense & Security segment increased to 70.5% in the first half of the year. This meant the segment increased its international business by around 90% year-on-year, further reducing its dependence on domestic business, which accounted for 29.5% of total sales.

Clean Energy & Mobility

The Clean Energy & Mobility segment made the strongest contribution to sales growth in the reporting period, with an increase of 17.0% to EUR5,539k compared with EUR4,732k in the first half of the prior year. This positive development was driven by sustained high demand for our solutions across numerous customers from different industries and various regions, with particular impetus coming from the markets for security technology and wind energy, as well as the caravanning and marine end customer markets.

Earnings performance

In the first half of the year, gross profit and the gross margin at Group level declined slightly to EUR10,404k and 33.5% respectively (H1/2018: EUR10,571k and 34.3% respectively). The reduction in the gross margin is due in particular to the lower share of sales generated in Germany in the Defense & Security segment compared with the previous year. By contrast, the Industry and Clean Energy & Mobility segments saw an increase in gross profit. The gross margin in the Clean Energy & Mobility segment rose from 39.6% to 43.4%.

Gross profit by segment

EBITDA for the Group amounted to minus EUR371k in the reporting period compared with EUR1,057k in the first half of the previous year. EBITDA adjusted for non-recurring effects improved to EUR2,199k in the first six months of 2019 after EUR2,131k in the prior-year period.

The Group's EBIT for the first half of the year amounted to minus EUR1,987k (H1/2018: EUR497k). Taking into account non-recurring effects of EUR2,570k (H1/2018: EUR1,074k), adjusted EBIT amounted to EUR584k in the reporting period (H1/2018: EUR1,571k).

The consolidated net result after tax amounted to minus EUR2,555k in the first half of 2019 after minus EUR149k in the same period of the previous year. This resulted in earnings per share in accordance with IFRS (undiluted and diluted) of minus EUR0.25 (H1/2018: minus EUR0.02).

With effect from the 2019 financial year, the Group is applying the new IFRS 16 accounting standard for the recognition and measurement of leases. The application of IFRS 16 had the following effects on profit or loss that are already included in the figures presented:

Statement of financial position

The equity ratio declined to 32.8% at the end of the reporting period (December 31, 2018: 43.3%), mainly due to the mandatory first-time application of IFRS 16. As of June 30, 2019, the SFC Energy Group had a total of 287 permanent employees (December 31, 2018: 279).

Available cash and cash equivalents amounted to EUR4,988k as of June 30, 2019. The reduction as against December 31, 2018 (EUR7,520k) is due to the earnings development in the first half of the year. It should be noted that the cash inflow from the aforementioned cash capital increase totaled only EUR2,700k up to June 30, 2019. The inflow of an additional EUR24,300k was completed by mid-July 2019.

Guidance for 2019

The Management Board anticipates further significant organic growth in 2019 as a whole and is confirming its forecast of consolidated sales of between EUR67 million and EUR74 million. The Management Board also expects a further substantial increase in profitability and is forecasting adjusted EBITDA of between EUR4.5 million and EUR7 million as well as adjusted EBIT of between EUR3.5 million and EUR6 million in 2019.

This forecast was prepared without taking into account the effects of the adoption of IFRS 16.

When calculating sales revenue and Simark's earnings, the Management Board assumes an exchange rate of 1.50 between the Canadian Dollar and the euro.

Key figures for H1/2019

Detailed financial information

SFC Energy AG's semi-annual report is available as a download at https://www.sfc.com/en/investors/finance/.

SFC Energy AG will hold a conference call in English for interested investors and press representatives today, August 20, 2019, at 9:00 am. To register, please send an e-mail to susan.hoffmeister@sfc.com.

About SFC Energy AG

SFC Energy AG is a leading provider of direct methanol and hydrogen fuel cells for stationary and mobile hybrid power solutions. With more than 40,000 fuel cells sold worldwide, SFC Energy is a sustainably profitable fuel cell producer. The Company has award-winning products and serves a range of applications in Clean Energy & Mobility, Defense & Security, Oil & Gas and Industry markets. The Company is headquartered in Brunnthal/Munich, Germany, operates production facilities in the Netherlands, Romania, and Canada. SFC Energy AG is listed on the Deutsche Boerse Prime Standard (GSIN: 756857 ISIN: DE0007568578).

SFC Investor Relations

SFC Energy AG
Eugen-Sänger-Ring 7
D-85649 Brunnthal
Tel. +49 89 673 592-378
Email: ir@sfc.com
Web: www.sfc.com

CROSS ALLIANCE communication GmbH
Susan Hoffmeister
Tel. +49 89 125 09 03-33
Email: susan.hoffmeister@sfc.com
Web: www.crossalliance.de

Important Note

This release neither constitutes an offer to purchase, or to sell, or to subscribe, nor an invitation to purchase or subscribe any securities.

This release may contain forward-looking statements, estimates, opinions and projections with respect to anticipated future performance of the Company ("forward-looking statements"). These forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, the terms "expects," "plans," "anticipates," "expects," "intends," "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. Forward-looking statements are based on the current views, expectations and assumptions of the management of SFC Energy AG and involve significant known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date of this release. We undertake no obligation, and do not expect to publicly update, or publicly revise, any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof, whether as a result of new information, future events or otherwise. We accept no liability whatsoever in respect of the achievement of such forward-looking statements and assumptions.