SFC Energy AG: Reports Second Quarter and First Half Financial and Operating Results


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

2015-08-03 / 07:30


SFC Energy AG - Corporate News

SFC Energy AG: Reports Second Quarter and First Half Financial and Operating Results

- Strong growth expected for second half of 2015 due to major breakthroughs in the defense sector

- Consolidated revenues of EUR 24.8 million in the first half of 2015 (Prior year period : EUR 26.2 million)

- Quarterly and first half revenue decline largely due to a larger, defense project being pushed until July 2015

- Underlying EBITDA of EUR -2.0 million in the first half of 2015 (Prior year period: EUR -0.5 million)

- Outlook for 2015: Management reaffirms revenue guidance of EUR 55 to 65 million and improved profitability over prior year

Brunnthal/Munich, August 3, 2015 - SFC Energy AG (F3C:DE, ISIN: DE0007568578), a leading international supplier of stationary and mobile hybrid power supply solutions on the basis of fuel cells, today announced its financial results for the second quarter and first half ended June 30, 2015.

Management Commentary

Dr. Peter Podesser, the CEO of SFC Energy AG, commented: "We are pleased with the progress made over the first half of 2015 with strong operating performance in our oil and gas segment despite difficult market conditions. In addition, we achieved breakthroughs in the defense market by securing the inital order with the German Bundeswehr and two key contracts with another international defense force after the reporting period. The process to deliver the EMILY product to the Bundeswehr required a thorough and lengthy testing process. While we had initially planned to ship in the second quarter, we were pleased to complete the order and remain on track to achieve our targeted performance for the year."

Financial Performance

Revenues

For the first six months of 2015, SFC Energy generated revenues of EUR 24.8 million, compared to EUR 26.2 million in the same period last year. The 5.2% decrease in revenues is primarily attributable to several large orders that were postponed in the Security & Industry segment as well a challenging environment in the oil & gas segment.

In the second quarter, revenue was EUR 12.2 million compared to EUR 13.2 million in the same period last year.

Sales by Segment

Segment (in million EUR) H1 2015 H1 2014
Oil & Gas 14.44 14.04
Security & Industry 8.03 9.73
Consumer 2.32 2.39
Gesamt 24.79 26.16
 

Segment Performance

Oil & Gas

The Company's Oil & Gas segment performed on last year's record level during the first six months of the year despite the downturn in the price of oil. The Oil & Gas segment's revenue increased 2.8% to EUR 14.4 million during the first six months compared to EUR 14.0 million in the prior period (Q2 2015: EUR 7.2 million/Q2 2014: EUR 7.4 million). The significant decline in oil price after it peaked in July 2014 has resulted in companies revaluating or postponing their capital expenditure spending, particularly around new expansion. SFC Energy began to see many of its customers concentrate their efforts in cutting production costs and increasing efficiency. This "de-bottlenecking" process is a revenue driver for SFC Energy in the current financial year.

In addition, the cooperation between the Canadian subsidiary Simark Controls and Schneider Electric, announced in the second quarter of 2015, marked a milestone and an important step towards the expansion of the SFC Energy customer base in North America and further organic growth in the Oil & Gas segment despite the challenging market environment. The new sales agreement between Simark Controls & Gentherm Global Power Technologies ("GPT"), a world-leading provider of remote off-grid power solutions to the Oil & Gas market, will serve SFC Energy as a strong platform for business development in the Oil & Gas market globally.

Finally, a cost containment program in the Oil & Gas segment was completed with the goal of rationalizing expenses to better align the SFC Energy infrastructure with the changing market environment. This results in annual savings of 1 million CAD, with 0.5 million CAD savings kicking in the second half of 2015.

Security & Industry

In the Security & Industry segment, the revenue for the first half-year of 2015 was EUR 8.0 million, as compared to EUR 9.7 million in the same period last year (Q2 2015: EUR 3.8 million/Q2 2014: EUR 4.7 million). The 17.5 % decrease was attributable to core projects being delayed that have since been signed.

After two challenging years in the defense market, SFC Energy recently achieved major breakthroughs. The Company received a large order from the German Army for the EMILY fuel cell which proved to the market the efficacy of its fuel cell product in providing dependable, light-weight form of energy in the field with low detectability.

The second milestone were two programs with a leading international defense force. Here SFC Energy has received an order for next generation stationary fuel cells with extremely long hours of unattended operation. The second order was for the JENNY 1200, the more powerful next generation of SFC's portable fuel cell platform. In the latter case, SFC Energy was able to outplace competitors by superior performance.

While the German order took longer than anticipated (SFC Energy expected it to close in Q2), all contracts serve as a major win for the Company with significant positive impact on financial performance and long-term growth. In the defense market in particular, the Management sees a good chance for additional orders from armed forces for the running business year, however, this is historically an end-of year business. All three contracts as well as the ongoing need of defense forces for service, stock and spare parts broaden the basis to reach a level sustainable revenues and profits. A profound change of the geopolitical situation over the last 12 months drives fundamental demand for defense and security systems, e.g. in border control applications.

Consumer

Revenues in the consumer segment were EUR 2.3 million for the first half-year of 2015 compared to EUR 2.4 million in the prior period (Q2 2015: EUR 1.1 million/Q2 2014: EUR 1.1 million). The Consumer segment grew in Scandinavia and Italy in the period under review. In the first half-year, the consumer market in France remained challenging, however sales in Q2 were better compared to the prior year. New business generation on the West Coast in United States and Norway remained strong.

The implementation of marketing strategies for the innovative mobile power outlet EFOY GO! is expected to create additional momentum in the second half of the year. EFOY GO! beta prototypes have been delivered to existing sales-channels and to media partners for field-testing. To reiterate, SFC Energy expects a stable business in the consumer segment for the current fiscal year.

EBITDA/EPS

The SFC Energy Group's profitability for the first half-year of 2015 trailed the prior year period due to several large projects being postponed in the Security & Industry segment.

EBITDA for the first six months was EUR -2.7 million, compared to EUR -1.1 million in the same period last year. Adjusted for non-recurring items, EBITDA was EUR -2.0 million for the first half of 2015 (Q2 2015: EUR -1.4 million) and trailed the same period last year (HY 2014: EUR -0.5 million / Q2 2014: EUR -0.3 million).

EBIT for first six months was EUR -3.9 million, compared to EUR -2.4 million in the same period last year. It should be noted that in the first half 2015 non-recurring effects of EUR 1.3 million resulting from the acquisition of Simark as well as staff measures were recorded. Adjusted for non-recurring effects, underlying EBIT was EUR -2.7 million compared to EUR -1.3 million in the same period last year (Q2/2015: EUR -1.7 million).

The earnings per share ("EPS") under IFRS (undiluted and diluted) was EUR -0.46 for the first half-year of 2015, compared to EUR -0.33 in the prior year period. In the second quarter of 2015, EPS decreased compared to the same period last year from EUR -0.17 to EUR -0.28.

Balance sheet

As of June 30, 2015, the Company had EUR 3.8 million cash on hand (December 31, 2014: EUR 6.1 million). The decrease of EUR 2.3 million is primarily related to the profitability of the period and deferred payments out of the Simark transaction. As of June 30, 2015, the Company's equity ratio reduced slightly to 56.8% (December 31, 2014: 58.4%). At June 30, 2015, SFC Energy employed 239 permanent staff (June 30, 2014: 247).

Outlook

Management is pleased with the progress of business development and operations during the first half of the year, despite several large projects being postponed, which adversely affected revenues and profits during the period.

Dr. Peter Podesser, the CEO of SFC Energy AG, commented: "We remain confident of achieving our guidance target and expect revenues to be in the range of EUR 55 to 65 million. These expectations are supported by the robust development in the Security & Industry segment, increased defense business and spending as well as visibility of large orders and upcoming tenders in the industrial markets in the second half of the year."

The Management of SFC Energy also estimates improvements to the profitability over the course of the year due to the adjustments of the Company cost structures in Canada and the Netherlands as well as revenue growth and product mix.

In addition, normal seasonality should also contribute to a stronger second half of the year with the fourth quarter expected to be the strongest, whereupon traditionally the third quarter turns out relatively weaker, as Oil & Gas companies will extend their summer break to cut costs.

Key figures HY 2015

In million EUR 1/1 - 30/06/2015 1/1-30/06/2014
Sales 24.79 26.16
Gross profit 6.56 7.67
Gross margin 26.5 % 29.3 %
EBITDA -2.71 -1.07
EBITDA underlying -1.99 -0.49
EBITDA-margin underlying -8.0 % -1.9 %
EBIT -3.93 -2.43
EBIT underlying -2.65 -1.30
EBIT-margin underlying -10.7 % -5.0 %
Net result -4.00 -2.68
Order backlog 9.96 13.73
 

Detailed financial information

The complete 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.

SFC Energy AG will hold a telephone conference today, August 3rd, 2015, at 9:00 a.m., in English for interested investors and representatives of the press. To register please send an email to [email protected].

About SFC Energy Group
SFC Energy AG (www.sfc.com) is a leading provider of hybrid solutions to the stationary and portable power generation markets. SFC is the number one supplier of fuel cells, with over 33,000 fuel cells sold to date. The Company has award-winning products and serves a range of applications in the Oil & Gas, Security & Industry and Consumer markets. The Company is headquartered in Brunnthal/Munich, Germany, operates production facilities in the Netherlands, Romania, and Canada, and sales offices in the U.S and Canada. SFC Energy AG is listed on the Deutsche Boerse Prime Standard (WKN: 756857 ISIN: DE0007568578).

SFC Investor 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]
Web: www.sfc.com

CROSS ALLIANCE communication GmbH
Susan Hoffmeister
Tel. +49 89 898 27 227
Email: [email protected]





2015-08-03 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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382973  2015-08-03 

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