SFC Energy AG: Sales and earnings for 9M/13 adversely affected by project delays in defense and industry segments - Simark consolidated as of September - cost-saving measures introduced


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

22.11.2013 / 07:04


SFC Energy AG - Corporate News - ISIN DE0007568578

Sales and earnings for 9M/13 adversely affected by project delays in defense and industry segments - Simark consolidated as of September - cost-saving measures introduced

- Sales 9M/13: 20,585k EUR (9M/12: 21,172k EUR, down 2.8%)

- Sales decrease largely attributable to project delays in Defense & Security and Industry

- Sales Q3/13: 7,002k EUR (Q3/12: 6,206k EUR, up 12.8%)

- Simark consolidated as of September 1, 2013

- Underlying EBITDA 9M/13: negative 1,863k EUR (9M/12: negative 100k EUR)

Brunnthal/Munich, November 22, 2013 - SFC Energy AG, technology and market leader for portable, mobile, and off-grid power generation and distribution and integrated power supply solutions, generated sales of 20,585k EUR in the first nine months of 2013 (9M/12: 21,172k EUR). This performance did not meet expectations and was predominantly attributable to massive project delays in the Defense & Security and Industry sectors in both Germany and North America. Third-quarter sales were 12.8% above the previous year at 7,002k EUR (Q3/12: 6,206k EUR). It is important to note that Simark, which was acquired at the beginning of July 2013 and consolidated as of September 1, 2013, contributed 1,825k EUR to sales in the third quarter of 2013. Because of this acquisition, there is only limited comparability with the prior-year figures, in which Simark is not included.

Key data:

k EUR 9M/13 9M/12 yoy Q3/13 Q3/12 qoq
Sales 20,585 21,172 -2.8% 7,002 6,206 12.8%
Gross profit 7,253 8,560 -15.3% 2,153 2,414 -10.8%
Gross margin 35.2% 40.4% n.a. 30.7% 38.9% n.a.
EBITDA -2,003 -162 > -100% -1,230 -641 -91.9%
EBITDA underlying -1,863 -100 > -100% -1,170 -609 -92.1%
EBITDA margin underlying -9.1% -0.5% n.a. -16.7% -9.8% n.a.
EBIT -3,587 -950 > -100% -1,862 -1,113 -67.3%
EBIT underlying -3,302 -1,423 > -100% -1,655 -1,081 -53.1%
EBIT margin underlying -16.0% -6.7% n.a. -23.6% -17.4% n.a.
EAT -3,600 -919 > -100% -1,838 -1,108 -65.9%

Gross profit was 7,253k EUR (9M/12: 8,560k EUR; Q3/13: 2,153k EUR; Q3/12: 2,414k EUR). The primary reason for this decrease was the lack of economies of scale due to lower sales and a change in the product mix. In addition, Simark's margin is lower than SFC's or PBF's. Accordingly, the gross margin was 35.2% (9M/12: 40.4%; Q3/13: 30.7%; Q3/12: 38.9%).

The Group's EBITDA came to negative 2,003k EUR (9M/12: negative 162k EUR; Q3/13: negative 1,230k EUR; Q3/12: negative 641k EUR). The special effects of around negative 286k EUR this reflects include acquisition costs in the amount of 1,048k EUR and the reversal of an earn-out liability in the amount of 921k EUR. The underlying EBITDA came to negative 1,863k EUR (9M/12: negative 100k EUR; Q3/13: negative 1,170k EUR; Q3/12: negative 609k EUR). The Group's EBIT came to negative 3,587k EUR (9M/12: negative 950k EUR; Q3/13: negative 1,862k EUR; Q3/12: negative 1,113k EUR). The underlying EBIT came to negative 3,302k EUR (9M/12: negative 1,423k EUR; Q3/13: negative 1,655k EUR; Q3/12: negative 1,081k EUR).

Earnings after tax fell from negative 919k EUR in the previous year to negative 3,600k EUR in the reporting period (Q3/13: negative 1,838k EUR; Q3/12: negative 1,108k EUR).

Incoming orders in the first nine months fell from 26,458k EUR in the prior-year period to 16,317k EUR. The previous year's figure included the major order by the German Bundeswehr for SFC energy networks in the amount of almost 5 million EUR. The order backlog at September 30, 2013 was 10,487k EUR (September 30, 2012: 12,288k EUR), with Simark's accounting for 5,095k EUR of this amount.

Freely available cash and cash equivalents came to 8,354k EUR as of September 30, 2013 (December 31, 2012: 22,626k EUR). Net cash outflows increased to 14,262k EUR in the first nine months of 2013, compared with 2,726k EUR in the same period a year ago. The primary reason for this was the acquisition of Simark.

At September 30, 2013, the Group had 259 permanent employees (September 30, 2012: 187 employees).

Markets

Sales in the Industry market rose from 14,180k EUR in 9M/12 to 14,690k EUR, with 1,825k EUR generated by Simark, 9,581k EUR by PBF (9M/12: 9,983k EUR) and 3,284k EUR by SFC (9M/12: 4,197k EUR). The reason for the decrease at SFC was primarily that the previous period had contained a large order in the field of traffic management that was not repeated this year. In addition, there were delays in the delivery of fuel cells to the oil & gas market related to the switch from distribution through a Canadian oil and gas integrator to direct distribution.

Sales grew by 4.5% to 3,807k EUR in SFC's business with consumer markets, a positive development in light of the negative market trend.

Sales in the Defense segment decreased to 2,088k EUR in the reporting period (9M/12: 3,349k EUR), mostly because of contract award delays relating to the unresolved federal budget issues in the U.S. and Bundeswehr reforms in Germany. Required technical rework also delayed new orders in Germany.

Organization

The contract to acquire the established Canadian oil and gas specialist Simark Controls Ltd. was signed in early July. With this acquisition, SFC gains direct access to one of the fastest growing industrial markets, thus taking another important step towards becoming a systems provider and towards forward integration and expansion in the attractive North American oil & gas market. The integration plan is set, and its implementation is proceeding as scheduled.

To ensure the future profitability of all areas of the SFC Energy Group's business, a comprehensive cost-cutting program has been developed, the prompt implementation of which will result in savings across all divisions.

Outlook

In the area of fuel cells, project delays in the core market of defense & security in Germany, the U.S., and Russia are causing sales and margins to decline. Furthermore, growth in the industry market is slower than expected. Whereas the Company had been expecting total sales of between EUR 38m and EUR 43m (previous year: EUR 31.3m) and an improvement in adjusted EBITDA for fiscal year 2013 commensurate with this sales growth, it no longer appears possible to achieve these goals for 2013. The Management Board is now anticipating total sales for 2013 of between EUR 32m and EUR 36m.

Because of the decrease in sales, especially in the high-margin defense business for fuel cells, adjusted EBITDA for 2013 is expected to be between about minus EUR 2.5m and minus EUR 3.0m.

For 2014 the Company expects a rebound of its defense business and an expansion of international industry sales, especially in the North American oil and gas market. Thus, the Management Board continues to expect consolidated sales of between 55m and 60m EUR for the full year 2014, with an associated significant improvement in the earnings figures.

Detailed financial information

The complete report of SFC Energy AG for the first nine months of 2013 can be downloaded from the Company's website at http://www.sfc.com/en/investors/financial-reports#header.

SFC Investor Relations and Public Relations Officer:

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



End of Corporate News


22.11.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG.
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241142  22.11.2013

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