SFC Energy AG plans capital increase of approx. EUR 25 million to fund further growth and increase strategic flexibility
DGAP-News: SFC Energy AG / Key word(s): Capital Increase
SFC Energy AG - Press Release - ISIN DE0007568578
SFC Energy AG plans capital increase of approx. EUR 25 million to fund further growth and increase strategic flexibility
- SFC Energy AG ("SFC") is a leading provider of stationary and portable hybrid power generating / energy solutions based on the direct methanol fuel cell ("DMFC") technology.
- To date SFC has sold over 40,000 fuel cells in its four core vertical markets and has successfully established a global methanol distribution network.
- The global market for fuel cells is expected to grow with a CAGR of 20% between 2017 and 2024e and provides ample attractive growth opportunities for SFC.
- SFC intends to increase its share capital and achieve gross proceeds from the issue of approx. EUR 25 million, which it would use to accelerate organic growth in its current core vertical markets, roll out newly developed hydrogen fuel cell solutions, and finance potential strategic inorganic growth opportunities.
- As part of the capital increase transaction, three of SFC's largest shareholders HPE PRO Institutional Fund B.V. (HPE), Havensight Capital Ltd. (Havensight) and Conduit Ventures IIA LP (Conduit Ventures), which together hold approx. 41.7% in the SFC's share capital, have agreed that they will waive their subscription rights and have subjected themselves, at customary conditions, to a lock-up of 180 days, consisting of (i) a so-called hard lock-up agreement for a period of 90 days, which shall not be waived by the Joint Global Coordinators; and (ii) a so-called soft lock-up agreement for a further period of 90 days which may be waived by the Joint Global Coordinators.
- The capital increase is intended to strengthen the equity base of SFC and to increase the free float of its shares.
- The shares will be offered for sale to qualified investors in a pre-placement process via an accelerated bookbuilding prior to the commencement of the subscription period.
- The pre-placement and the subscription offer are currently expected to commence end of June 2019 following approval by the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) of a prospectus for the subscription offer and the listing of the new shares. The exact amount of shares to be placed, the issue price, and the issue proceeds will be announced once the bookbuilding process will have been completed.
SFC combines a proven track-record with profitability and substantial growth potential
Key financials 2018 and Q1 2019
For the first quarter of 2019, consolidated sales amounted to EUR 16.46 million (Q1 2018: 16.76 million) with an EBITDA underlying of 1.55 million (Q1 2018: 1.82 million). Especially the Clean Energy & Mobility segment as well as the Industry segment showed robust growth and the Oil & Gas segment got off to a stronger start than expected in fiscal 2019. The Defense & Security segment has successfully broadened its customer base in the first quarter of 2019, however it did not match the high level seen in the first quarter of the prior year, which was impacted by the delivery of a major order by German Bundeswehr.
Forecast 2019 and mid-term outlook
The Management Board expects the current growth to continue in the medium term. SFC targets to realize over EUR 100 million in sales and a continued sales growth at more than 10% annually over the next three to four years. At the same time, SFC targets to further improve profitability disproportionally and achieve an EBITDA margin underlying clearly above 10%.
Key Investment Highlights
With the conclusion of a co-development and IP-licensing agreement for hydrogen fuel cells with the back-up and emergency-power specialist adKor GmbH in November 2018, SFC has expanded its technology portfolio for hydrogen fuel cells, thus expanding the power range of its product offering of up to 100kW by the end of this year. Based on this cooperation SFC is planning to enter gradually the hydrogen fuel cell market for critical infrastructure and back-up power applications and in the long-term for e-mobility applications.
SFC is planning to benefit from the increasing growth in global fuel cell demand and from trends towards clean and sustainable energy generation. The global fuel cell market is expected to grow with a CAGR of 20% between 2017 and 2024e and nearly 50% of that is dominated by hydrogen fuel cells with power outputs of up to 100kW. Key drivers are the surge for renewable energy to reduce the environmental carbon footprint, increasing requirements for security within changing geo-political situations and increasing digitization in core markets, putting SFC into an excellent position with a substantial growth potential in coming years.
SFC benefits from the unique features of its product offering of its fuel cell solution and its hybrid principle using fuel cells together with batteries, as well as its standardized platform approach. Key product advantages are energy density of the fuel, quiet operation, light weight, low environmental impact, availability, running time and reliability. Based on the two platforms EFOY and JENNY, SFC is able to develop customer specific applications within a fairly short time. In addition, most of SFC's products consist of standardized core components, which is in particular true for fuel cells. This enables SFC to make use of economies of scope.
As an industry pioneer, SFC has been able to successfully build a global and well-diversified portfolio of reputable and loyal customers (including governmental clients). In addition to the longstanding successful track record of in-house product development and new innovations these established customer relationships form the basis for high market entry barriers for potential competitors. The direct methanol fuel cell technology, which currently is the technological basis of all of SFC's fuel cell products, was developed and constantly further enhanced by SFC's own research and development team. This team was first to bring fuel cell systems out of the prototype phase to a commercial product. Based on this experience, the R&D team is currently adding the hydrogen fuel cell technology to the existing platform of SFC Group.
SFC's growth strategy going forward is based on three pillars: (i) Acceleration of growth through internationalization, especially to the USA and Asia, and through the development of a next EFOY generation extending operation time at lower costs; (ii) Roll-out of hydrogen fuel cell solutions for various applications and further development of the hydrogen fuel cell platform; (iii) Selective inorganic growth in order to gain access to new regions and markets as well as to expand the technological know-how and expand the current business model for new services.
Details on the capital increase
The new shares will be offered for sale in a private placement to qualified investors and will, to the extent not relating to waived subscription rights from the three large shareholders, be subject to a claw-back structure. The offer price per share for the private placement as well as the subscription price will be determined on the outcome of a pre-placement process by way of an accelerated bookbuilding. The offer price and the subscription price will be identical. The exact amount of shares to be placed as well as the offer and subscription price per share will not be determined before the outcome of the bookbuilding.
The private placement to qualified investors and the subscription period are expected to commence end of June 2019 following approval by the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) of a prospectus for the subscription offer and the listing of the new shares. The new shares will be admitted to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment thereof with additional post-admission obligations (Prime Standard).
SFC intends to use the proceeds of the capital increase for (i) the acceleration of growth in the current core verticals (a new generation of fuel cells coupled with geographic expansion and expansion of business with existing clients); (ii) leveraging of the existing product platform to roll-out hydrogen fuel cell applications (recent acquisition of hydrogen fuel cell technology enables immediate roll-out of higher power products and opens up vast end markets); and (iii) realizing selective acquisitions and investments to expand technological / system capabilities and add new revenue models to the business (e.g. leasing).
ABN AMRO Bank N.V. and COMMERZBANK Aktiengesellschaft are acting as Joint Global Coordinators on the Offering, B. Metzler seel. Sohn & Co. KGaA is acting as selling agent.
Final decisions on the implementation of the capital increase have not yet been made. The implementation of the capital increase is subject to the pre-placement being completed successfully.
About SFC Energy AG
This announcement is not and does not constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities in the United States of America, Germany or any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Any public offering of securities to be made in the United States of America would be made by means of a prospectus that could be obtained from the issuer and that would contain detailed information about the company and management, as well as financial statements. There will be no public offer of the securities in the United States of America.
Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan.
This publication is an advertisement, not a prospectus. Investors should not purchase or subscribe for any shares referred to in this publication except on the basis of information in the prospectus to be issued by the company in connection with the offering of such shares. Copies of the prospectus will, following approval of the German Financial Supervisory Authority (BaFin) and publication, be available free of charge from the issuer or on www.sfc.com.
This publication is directed at and/or for distribution in the United Kingdom only to (i) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities falling within article 49(2)(a) to (d) of the Order (all such persons are referred to herein as "relevant persons"). This publication is directed only at relevant persons. Any person who is not a relevant person should not act or rely on this publication or any of its contents. Any investment or investment activity to which this publication relates is available only to relevant persons and will be engaged in only with relevant persons.
This release may contain forward-looking statements, estimates, opinions and projections with respect to anticipated future performance of the Company ("forward-looking statements"). These forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, the terms "expects," "plans," "anticipates," "expects," "intends," "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. Forward-looking statements are based on the current views, expectations and assumptions of the management of SFC Energy AG and involve significant known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date of this release. We undertake no obligation, and do not expect to publicly update, or publicly revise, any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof, whether as a result of new information, future events or otherwise. We accept no liability whatsoever in respect of the achievement of such forward-looking statements and assumptions.
05.06.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.