SFC Energy AG: Project delays in the Defense and Industry sectors adversely affect sales and earnings in the first half - forecast for entire year remains unchanged


SFC Energy AG / Key word(s): Half Year Results

30.07.2013 / 07:34

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- Sales 6M/13: 13,582k EUR (6M/12: 14,966k EUR, down 9.2%)
- Sales decline primarily attributable to postponement of projects in the     Defense & Security and Industry sectors

  - EBITDA 6M/13: negative 773k EUR

- Preparations for the integration of Simark well under way
Brunnthal/Munich, July 30, 2013 - SFC Energy AG, technology and market leader for portable, mobile, and off-grid power generation and distribution, generated sales of 13,582k EUR in the first half of 2013, versus 14,966k EUR in the first half of 2012. The reasons for this development are primarily massive project delays in Germany and in North America in the Defense & Security and Industry sectors. In Q2/13 sales amounted to 6,237k EUR and were 15.9% below the prior year quarter (Q2/12: 7,412k EUR).

Key data:
k EUR 6M/13 6M/12 yoy Q2/13 Q2/12 qoq
Sales 13,582 14,966 -9.2% 6,237 7,412 -15.9% Gross profit 5,100 6,146 -17.0% 2,221 3,083 -28.0% Gross margin 37.5% 41.1% n.a. 35.6% 41.6% n.a. EBITDA -773 479 n.a. -1,066 293 n.a. EBITDA underlying -693 509 n.a. -807 323 n.a. EBITDA margin underlying -5.1% 3.4% n.a. -12.9% 4.4% n.a. EBIT -1,726 163 n.a. -1,543 -154 >100% EBIT underlying -1,646 -342 >100% -1,284 -124 >100% EBIT margin underlying -12.1% -2.3% n.a. -20.6% -1.7% n.a. EAT -1,762 189 n.a. -1,551 -150 >100%
Gross profit in the first half was 5,100k EUR (6M/12: 6,146k EUR; Q2/13: 2,221k EUR; Q2/12: 3,083k EUR). The primary reason for this trend was the lack of economies of scale due to lower sales and a change in the product mix. Accordingly the gross margin was 37.5% (6M/12: 41.1%; Q2/13: 35.6%; Q2/12: 41.6%).

The Group's EBITDA amounted to negative 773k EUR (6M/12: 479k EUR; Q2/13: negative 1,066k EUR; Q2/12: 293k EUR). The special effects of around 80k EUR include acquisition costs in the amount of 559k EUR and the reversal of an earn-out liability in the amount of 479k EUR. The underlying EBITDA amounted to negative 693k EUR (6M/12: 509k EUR; Q2/13: negative 807k EUR; Q2/12: 323k EUR). The Group's EBIT amounted to negative 1,726k EUR (6M/12: 163k EUR; Q2/13: negative 1,543k EUR; Q2/12: minus 154k EUR). The underlying EBIT amounted to negative 1,646k EUR (6M/12: negative 342k EUR; Q2/13: negative 1,284k EUR; Q2/12: negative 124k EUR).
Earnings after tax fell from 189k EUR in 6M/12 to negative 1,762k EUR in 6M/13 (Q2/13: negative 1,551k EUR; Q2/12: negative 150k EUR).
Incoming orders in the reporting period fell from 18,938k EUR in 6M 2012 to 9,654k EUR. The previous year's figure included the major order by the German Bundeswehr for the SFC energy networks in the amount of almost 5 million EUR. The order backlog at June 30, 2013 amounted to 5,635k EUR (June 30, 2012: 10,973k EUR).

Freely available cash and cash equivalents came to 17,712k EUR at June 30, 2013 (June 30, 2012: 19,964k EUR). Net cash outflows increased to 4,914k EUR in 6M/13, compared with 2,483k EUR a year ago. The primary reasons for this are the negative earnings and the normalization of working capital.
At June 30, 2013 the Group had 187 permanent employees (June 30, 2012: 185 employees).

Markets

Sales in the Industry market came in at 9,388k EUR, almost at the previous year's level (6M/12: 9,657k EUR; Q2/13: 4,387k EUR; Q2/12: 5,349k EUR). The reason for the slight decrease was primarily that the previous period had contained a large order in the field of traffic management which was not repeated this year and which could not be offset by purely organic growth. In the Defense & Security segment massive project delays both in Germany and the United States continue to affect the fuel cell business, so that sales of 1,330k EUR were generated in 6M/13 (6M/12: 2,341k EUR, Q2/13: 664k EUR; Q2/12: 898k EUR). The Consumer segment performed in keeping up with the forecasts - the sales generated amounted to 2,864k EUR (6M/12: 2,968k EUR, Q2/13: 1,186k EUR; Q2/12: 1,165k EUR).

Organization

The contract to acquire the established Canadian oil and gas specialist Simark Controls Ltd. was signed in early July. With this acquisition, SFC acquires direct market access to one of the fastest growing industrial markets for SFC energy solutions, thus taking another important step towards being a systems provider and towards forward integration and expansion in the attractive North American oil & gas market.
Outlook

For the current fiscal year, the new SFC Group expects total sales between 38 and 43 million EUR - assuming the consolidation of Simark starts with effect from September 1, 2013. The Group expects strong growth in the Industry market - partly from organic growth, but in particular from Simark's contribution to sales.

The prospects for the third quarter are at the same level as for the second quarter, as we not only expect continuing project delays in the defense sector, but also there will be the traditional seasonality in the Consumer and Industry markets.

Due to the difficult market climate in the consumer market, the Management Board expects total sales in this segment to remain at the previous year's level. No large projects like the ones in 2012 are planned in the Defense & Security market; in addition, projects by the German and U.S. armed forces may also be delayed into the fourth quarter, which could lead to lower sales in this segment than in 2012.

Taking all these factors together, the adjusted EBITDA of the SFC Group is expected to improve in line with sales growth in fiscal year 2013, although EBIT is expected to be adversely affected by several one-time factors, particularly in connection with the acquisition of Simark. The forecasts for EBITDA and EBIT in 2013 will be updated after the closing of the Simark acquisition and the purchase price allocation.

Consolidated sales of between 55 and 60 million EUR are expected for 2014, with a significant improvement in the earnings figures.
Detailed financial information

The complete 2013 half-year report of SFC Energy AG can be downloaded from the Company's website at
http://www.sfc.com/en/investors/financial-reports#header.
About SFC Energy AG
SFC Energy AG (www.sfc.com) is a market leader for off grid and stationary power generation and distribution. With approx. 28,000 fuel cells sold the Company has successfully and globally established fully commercialized and award winning products in the Consumer, Industry, and Defense & Security markets for many years. Equally successfully, the group develops, produces and globally distributes higher level power management components, e.g. converters and switched mode power supplies. The products increasingly are delivered as power supply system solutions according to customer requirements. SFC is DIN ISO 9001:2008 certified. The Company is based in Brunnthal/Munich, Germany, and operates facilities in the Netherlands and Romania, and a sales organization in the U.S. SFC Energy AG is listed at the Deutsche Boerse Prime Standard (WKN: 756857 ISIN: DE0007568578).
SFC Investor Relations and PR contact:

Barbara von Frankenberg 
Head of Investor Relations & Public Relations
SFC Energy AG
Eugen-Sänger-Ring 7
D-85649 Brunnthal 
Tel. +49 89 673 592-378
Fax. +49 89 673 592-169
Email: [email protected]


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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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