SFC Energy Reports Third Quarter 2015 Financial and Operating Results, Revenue and Profit Warning


DGAP-News: SFC Energy AG / Key word(s): 9-month figures

2015-11-09 / 15:15


SFC Energy AG - Corporate News

SFC Energy Reports Third Quarter 2015 Financial and Operating Results, Revenue and Profit Warning

- Consolidated third quarter 2015 revenues increased to EUR 11.5 million (Prior year period: EUR 11.2 million)

- Improved underlying EBITDA of EUR -0.4 million in Q3 20115 (Prior year period: EUR -0.8 million)

- New revenue guidance for 2015 of c. EUR 48-50 million and lower profitability than in 2014

Brunnthal/Munich, Germany, November 09, 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 financial results for the third quarter and nine months of 2015.

Management Commentary

"The third quarter of 2015 was characterized by a seasonally weak business environment for SFC Energy. This made the important milestones we reached in the civil and the defense markets on our way towards sustainable operative growth all the more gratifying. In our Industry segment we received orders from market leading customers like Toyota Tsusho and Volkswagen/BAG. After the success of our fuel cells in oil & gas applications in North America, we see the inclusion of our EFOY Pro fuel cell in a solution officially qualified for Gazprom's vendor list as an accolade for the reputation of our products in international applications. Our Defense and Security business has significantly gained momentum over the past months. In the third quarter alone, we were able to win three important orders of two defense organizations. However, we were notified that an important defense project planned for Q4/15 will be postponed into the first half of 2016. Even though conditions in the Oil & Gas segment have remained challenging, we were able to maintain business in this market in the first nine months with a slight decrease of 3.1% on a comparable level to the 2014 record year," says Dr. Peter Podesser, CEO of SFC Energy.

Financial Performance

Revenues

In the third quarter of 2015 revenues of SFC Energy rose by 3.4% to EUR 11.5 million, compared to EUR 11.2 million in the same period 2014. The order backlog was EUR 10.3 million at the end of September 2015.

In the first nine months of the ongoing business year SFC Energy generated revenues of EUR 36.3 million, compared to EUR 37.3 million in the same period 2014. The 2.7% decrease in revenues is primarily attributable to the slower ramp-up of new products by SFC Energy's customers and the postponement of orders.

Sales by Segment

Segment (in million EUR) Q1-Q3 2015 Q1-Q3 2014
Oil & Gas 20.1 20.7
Security & Industry 13.2 13.4
Consumer 3.0 3.2
Total 36.3 37.3

Segment Performance

Oil & Gas

Despite operating in an environment of lower oil prices during the last quarter, SFC Energy's revenues in the Oil & Gas segment came in almost at last year's level and the Company was able to make significant progress. A highlight in the third quarter was marked by Canadian subsidiary Simark Controls receiving an order to the amount of CAD 1.3 million from a major international oil & gas producer.

Oil & gas producers have adjusted to the presumably lower oil price level for a longer period of time. Many of the budgets for new projects are correspondingly low. The pressure on the oil and gas producers targeted by SFC Energy as customers for its products and solutions, remained high over the quarter, as the industry still faces the challenge of having to reduce production costs and increase efficiency. This so called "de-bottlenecking" was a revenue driver for SFC Energy in the reporting period. Oil & gas revenues in the first three quarters of 2015 were at EUR 20.1 million, compared to EUR 20.7 million in the same period 2014 (Q3 2015: EUR 5.6 million / Q3 2014: EUR 6.7 million).

Security & Industry

The Security & Industry segment was stable compared to prior year. It generated revenues of EUR 13.2 million in the first nine months of the ongoing business year, compared to EUR 13.4 million in the same period 2014. In the third quarter, revenues rose by 42% to EUR 5.2 million (Q3 2014: EUR 3.7 million). This was due to the revenues from the Defense business, which exceeded the previous year's level.

After two difficult years, the Defense and Security business gained momentum in the reporting period. At the beginning of the quarter SFC Energy received an order for delivery of EMILY fuel cells by the German Bundeswehr. The order to the amount of EUR 1.3 million is a follow-up order. The German Bundeswehr has successfully deployed the proven EMILY fuel cell since December 2011. In the further course of the third quarter SFC Energy was able to win two important orders of another international defense force. In this case, SFC Energy was able to outplace international competitors by superior performance. Delivery of these orders is to a large extent planned for the first and fourth quarters of 2016. In addition, the customer holds an option to purchase additional units to an amount of EUR 4.2 million after successful fulfillment of the initial contract.

A highlight of the period under review represents the collaboration with the Toyota Tsusho Corporation. This cooperation gives SFC Energy access to a rapidly growing Japanese market with immense potential. It is another major step in the further internationalization of SFC Energy's business.

After a slower ramp-up of new products by SFC Energy's customers as well as the postponement of orders in the power electronics business, a rationalization program was implemented in the Dutch subsidiary, with the transferal of significant parts of the production to SFC Energy's location in Romania. This resulted in savings of EUR 0.3 million already in this year. In the years thereafter, Management expects annual savings of approx. EUR 1 million, and thus a much lower break-even threshold.

Consumer

Revenues in the Consumer market slightly decreased in the reporting period. This was due to lower sales in the French and German markets. The Consumer segment generated revenues of EUR 3.0 million in the first nine months of 2015, compared to EUR 3.2 million in the same period 2014. (Q3 2015: EUR 0.7 million / Q3 2014: EUR 0.8 million).

In the third quarter SFC Energy launched sales of the innovative mobile power socket EFOY GO! both at SFC's channel partners as well as online in SFC's new web shop. Customer and partner feedback is very positive, initial sales are promising as well. The overall mood in the caravanning market has improved over the course of the year. SFC Energy expects stable business in this segment for the current financial year.

EBITDA/EPS

In the third quarter of 2015 the EBITDA of SFC Energy group improved to EUR -0.9 million, compared to EUR -1.1 million in the third quarter of 2014.

In the first nine months EBITDA amounted to EUR -3.6 million, compared to EUR -2.1 million in the same period 2014. The decline is due to the above described macro-challenges as well as a slower ramp-up of new products by SFC Energy's customers.

Adjusted for one-off effects, EBITDA stood at EUR -2.4 million in the first three quarters of 2015, lower than the EUR -1.3 million in the same period 2014.

EBIT improved in the third quarter 2015 from EUR -1.7 million in Q3 2014 to EUR -1.5 million. In the first nine months of 2015 EBIT declined from EUR -4.2 million in the same period 2014 to EUR -5.4 million. Here should be mentioned, that in the first three quarters of 2015 one-off effects to the amount of EUR 2.0 million resulted from the Simark acquisition and personnel action. Adjusted for one-off effects, EBIT underlying stood at EUR -3.4 million, compared to EUR -2.4 million in the same period 2014.

In the third quarter of 2015, earnings per share (EPS) following IFRS (undiluted and diluted) increased to EUR -0.18, compared to EUR -0.23 in Q3 2014. In the first nine months of 2015 EPS stood at EUR -0.64, compared to EUR -0.56 in the same period 2014.

Balance Sheet

As of September 30, 2015, the Company had EUR 3.1 million cash on hand (December 31, 2014: EUR 6.1 million). The decrease of EUR 3.0 million is primarily related to the profitability of the period and deferred payments out of the Simark transaction. As of September 30, 2015, the Company's equity ratio decreased slightly to 55.6% (December 31, 2014: 58.4%). At September 30, 2015, SFC Energy employed 237 permanent staff (June 30, 2014: 246).

Outlook

Given the continued difficult macro-environment in the Oil & Gas market SFC Energy expects in 2015 to be 10 to 15% below 2014's record revenues in this segment. In the Defense market, a large project to be awarded to SFC expected for Q4/15 will be delayed into the first half of 2016. Therefore, planned revenues in 2015 will not materialize and can no longer compensate for other markets. Due to these developments SFC management expects now 2015 revenues of ca. EUR 48-50 million and a profitability below the level of 2014.

Key figures Q1-Q3 2015

In million EUR 1/1-9/30/2015 1/1-9/30/2014
Sales 36.33 37.33
Gross profit 10.13 10.83
Gross margin 27.9% 29.0%
EBITDA -3.60 -2.15
EBITDA underlying -2.38 -1.27
EBITDA margin underlying -6.6% -3.4%
EBIT -5.45 -4.18
EBIT underlying -3.41 -2.45
EBIT margin underlying -9.4% -6.6%
Net result -5.51 -4.52
Order backlog 10.32 14.56

Detailed financial information

The complete Q3 2015 report of SFC Energy AG can be downloaded from the Company's website at www.sfc.com. SFC Energy AG will hold a telephone conference today, November 09, 2015, at 4:15 p.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 89827227
Email: [email protected]





2015-11-09 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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