SFC Energy AG: Q1/12 figures confirm reorientation success - SFC Energy in a good position for reaching 2012 sales and earnings targets

SFC Energy AG / Key word(s): Quarter Results

03.05.2012 / 08:06

* Q1/12 total sales of EUR 7,554k up 103.0 percent * Positive EBITDA of EUR 186k
* Strong organic growth in the Industry and Defense & Security core segments
* Integration of PBF Group B.V. proceeds according to plan, synergies contribute to a positive business development

Brunnthal/Munich, Germany, May 3, 2012 - SFC Energy AG, technology and market leader for portable, mobile and off grid power generation and distribution, generated EUR 7,554k in the first three months of 2012, which marks an increase of 103.0% over previous year (Q1/11: EUR 3,721k). In addition to the strong organic growth in the Industry and Defense & Security core markets, the sales contribution of the acquired PBF (EUR 3,351k) was instrumental for this positive development.
The SFC Energy AG 2012 Three-months-report is available at http://www.investor-sfc.de/en/finanzberichte.php.

Key data:
TEUR                  Q1/12   Q1/11   qoq
Sales                 7,554   3,721   +103.0%
Gross profit          3,063  1,073    +185.5%
Gross margin           40.6%   28.8%    -
EBITDA                  186     -971    >100%
EBITDA underlying       186     -971    >100%
EBITDA margin underlying 2.5% -26.1%    -
EBIT                    318   -1,280    >100%
EBIT underlying       -218    -1,280    >100%
EBIT margin underlying  -2.9% -34.4%    -
EAT                 339       -1,175    >100%

Gross profit in the first three months of 2012 increased by 185.5% to EUR 3,063k (Q1/11: EUR 1,073k). This positive development is mainly due to the sales increases achieved in the Industry and Defense & Security markets and to production cost savings as a consequence of the technical improvements implemented in the EFOY COMFORT fuel cell series. As a consequence, gross margin increased strongly to 40.6% (Q1/11: 28.8%).
The Company's EBIT in the first quarter of 2012 of EUR 318k was positive (Q1/11: minus EUR 1,280k). Contained in this is a reversal on impairment charges on capitalised development costs to the amount of EUR 536k as a consequence of the major order placed by Deutsche Bundeswehr for energy networks (sales volume: approx. EUR 5m). Underlying EBIT after this reversal was minus EUR 218k in the first quarter of 2012.
EBITDA in the first quarter of 2012 increased to plus EUR 186k (Q1/11: minus EUR 971k), with the EBITDA of each of the three segments being significantly improved as compared to previous year.
EAT improved from minus EUR 1,175k in the previous year to plus EUR 339k in the first quarter of 2012.

In the first three months of 2012 demand for SFC Energy products continued to grow. Incoming orders in this period of EUR 10,825k were significantly over previous year (Q1/11: EUR 2,795k). The strong incoming orders of the first quarter of 2012 resulted, apart from PBF's contribution, mainly from the serial order placed by Deutsche Bundeswehr for portable fuel cells with energy network with a volume of approx. EUR 5m. Delivery and turnover recognition of this order are expected to take place before the end of 2012. As a consequence, the order backlog of SFC Energy at March 31, 2012, was EUR 10,272k (March 31, 2011: EUR 2,225k).

Cash and cash equivalents (freely available) at March 31, 2012 came to EUR 21,506k (31.03.2011: EUR 31,018k). Net cash flow was lowered from EUR 2,532k in the first three months of 2011 to EUR 933k in the first quarter of 2012. This is mainly due to the strongly improved result as well as to last year's purchases of the precious metals platinum and ruthenium needed for fuel cell production.

As of March 31, 2012 SFC Energy AG had 183 permanent employees (March 31, 2011: 95 employees). The increase is a consequence of the PBF acquisition. Markets

With the concentration on core segments having been implemented, SFC Energy is now introducing a new segmentation for reporting, starting with the 2012 financial year. This segmentation follows the Company's three core markets.
* Industry (industrial applications in the oil & gas and wind industry, traffic man-agement, surveillance, as well as in the analytical and semiconductor

* Defense & Security (portable, mobile, and vehicle-based power generators and field chargers for defense and government applications) and
* Consumer (leisure applications, e.g. motor homes, sail boats, holiday cabins).

TEUR Industry Defense & Consumer                             Security

Q1/12 Q1/11 qoq Q1/12 Q1/11 qoq Q1/12 Q1/11 qoq Sales 4,308 656 >100% 1,443 825 74.9% 1,803 2,239 -19.5% Gross 1,578 256 >100% 768 311 >100% 717 506 41.7% Profit
EBITDA -32 -486 93.4% 6 -374 >100% 212 -111 >100%

In the Industry segment, sales of SFC Energy increased significantly to EUR 4,308k in the reporting period. In addition to PBF's sales contribution, this was also due to a shift of the product mix towards stronger performance models, and to sales in the oil & gas and the security & surveillance applications of SFC's traditional business. In the Defense & Security segment sales were up 74.9% to EUR 1,443k (Q1/11: EUR 825k). This increase was mainly due to the delivery of 50 fuel cell field chargers to the U.S. Army. The Consumer segment was down by 19.5% to EUR 1,803k (Q1/11: EUR 2,239k). The measures initiated in the previous year resulted in significant improvements of gross profit and result in all three segments.
The Company's reorientation was successfully completed with the concentration on the three core segments, as described above. The integration of the Dutch PBF Group acquired at the end of 2011 proceeds according to plan and has already in this quarter contributed to the improved results.

After a pleasant development of the first quarter the usual seasonality for SFC's business is expected in the second and third quarter. Due to consumption and user habits there will be less demand for EFOY fuel cells in this period of time.

For the fiscal year 2012 management considers consolidated sales of around EUR30m achievable, reflecting the upper end of the previous guidance. In the consumer market sales are expected nearly at last year's level. Growth in the industry and defense & security markets is to be achieved primarily through strategic industrial partnerships and a greater focus on complete solutions. This may also include further acquisition steps.
Further, a sustainably positive EBITDA should be reached in the second half of 2012.

Detailed financials
The SFC Energy AG 2012 Three-months-report is available at http://www.investor-sfc.de/en/finanzberichte.php.

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Language: English Company: SFC Energy AG Eugen-Saenger-Ring 7 85649 Brunnthal Germany Phone: +49 (89) 673 592 - 100 Fax: +49 (89) 673 592 - 169 E-mail: [email protected] Internet: www.sfc.com ISIN: DE0007568578 WKN: 756857 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Stuttgart  
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