SFC Energy AG publishes audited consolidated figures for 2019 and annual report
DGAP-News: SFC Energy AG
/ Key word(s): Annual Results
SFC Energy AG - Corporate News
- Consolidated sales at €58,538k (2018: €61,704k)
- Underlying EBITDA at €3,614k (2018: €3,705k), underlying EBIT at €284k (2018: €2,553k)
- Clean Energy & Mobility segment reports strongest growth by 25.7% to €11,758k (2018: €9,353k)
- Despite a very dynamic start to the current financial year - detailed guidance for 2020 currently not possible due to the COVID-19 pandemic and highly volatile oil price development
- Cost reduction measures put in place
Brunnthal/Munich, March 26, 2020 - SFC Energy AG (ISIN: DE0007568578), a leading international supplier of fuel cells and stationary and mobile hybrid power generation, is today publishing its annual report and audited consolidated figures for 2019.
The Group generated sales of €58,538k in the 2019 financial year, compared with €61,704k in the previous year, and was thus within the guidance that was revised in November 2019. The Clean Energy & Mobility segment (up 25.7% compared with 2018) and the Industry segment (up 5.7% compared with 2018) continued to enjoy dynamic performance in 2019. The overall 5.1% decline in consolidated sales is due predominantly to weak demand in the Oil & Gas segment (down 15.6%) and lower sales year-on-year in the Defense & Security segment (down 24.2%) as a result of a major order with the German armed forces being delayed.
Performance by segment
Oil & Gas
In the Oil & Gas segment, a lack of pipeline capacity in Canada, and uncertainties regarding the future regulatory environment for the construction of new pipelines resulted in a general reluctance to invest. Sales in the Oil & Gas segment declined by 15.6 % to € 21,954k for the year as a whole (2018: € 26,026k).
To take advantage of regional growth opportunities in the US market and to reduce our dependence on the oil and gas industry and the Canadian market, SFC concluded several local sales partnerships in the year under review. These cooperations provide SFC with direct access to the market. SFC's sales area thus extends from Canada to the southern United States. The high-margin business with EFOY products showed again growth in the year under review. Sales in this area represented more than 16 % of product sales in this segment (previous year: 12 %).
Sales in the Industry segment grew by 5.7 % to € 17,238k (previous year: € 16,314k) in the year under review. Key factors here were the growth with existing customers and the implementation of initial substantial projects with the new modular product platform developed by PBF that is becoming increasingly established in the market. In terms of earnings, the start-up costs for the new product platform as well as low quantities continued to put pressure on the margin. This is why the focus is on improving margins, taking into consideration a more efficient purchasing and sales strategy while at the same time scaling sales based on the High Power Standard Platform technology.
Defense & Security
In the year under review, SFC continued to expand on the internationalization of the Defense business in India, Israel and the UK. Germany's share of total revenue in the Defense & Security segment therefore fell to 29.5 % (previous year: 71.0 %) in favor of a strong international share of 70.5 % (previous year: 29.0 %). International business thus improved year-on-year by 84.5 %. Nevertheless, at € 7,588k, total sales generated in the Defense & Security segment were down 24.2 % on the previous year (€ 10,011k), as the traditional year-end business in particular fell short of expectations due to the fact that a program in Germany was not awarded.
Clean Energy & Mobility
Sales in the Clean Energy & Mobility segment grew considerably by 25.7% to € 11,758k in the 2019 financial year compared with € 9,353k in the previous year. This dynamic performance was supported by a strong project pipeline in various regions as well as robust demand from different user industries. The growing demand for civil security technology and increased use of fuel cells during the construction and maintenance of wind turbines as well as greater demand in the consumer sector contributed to this growth in sales. These different applications are based on EFOY Pro and EFOY COMFORT fuel cells. The Consumer sub-segment recorded an increase of 6.3%, with sales up 36.1% year-on-year in Industrial Applications.
In the year under review, gross profit and gross margin at Group level rose slightly by 0.2% to €20,128k and 34.4% respectively (2018: €21,082k and 34.2%).
While the gross margin in the Oil & Gas segment improved to 29.2%, the Defense & Security segment was well below the previous year's figure at 44.7%. The Industry segment posted a slight decline to 30.4%. The Clean Energy & Mobility segment achieved significant growth in its gross margin to 43.2%. The key factor here was the higher share of sales with industrial clients, as the industrial business traditionally has a higher margin than the consumer business.
Gross profit by segment
EBITDA for the Group fell to €2,042k in the year under review, compared with €2,478k in the previous year. Underlying EBITDA adjusted for non-recurring effects amounted to €3,614k in the 2019 financial year, after €3,705k in the same period of the previous year.
Group EBIT decreased to minus €1,288k (2018: €1,325k) due to the lack of earnings contributions as a result of a tender not being awarded and thus also no sales being generated for an order in the defense segment as well as declining sales in the Oil & Gas segment in the second half of 2019. Taking into account non-recurring effects, underlying EBIT in the year under review amounted to €284k (2018: €2,553k).
The effects of the first-time adoption of IFRS 16 in the 2019 financial year are included in EBIT and EBITDA. The effect on EBITDA amounts to plus € 2.3 million.
For the 2019 financial year, there was a consolidated loss for the period of €1,927k, after €1k in the same period of the previous year. This resulted in earnings per share in accordance with IFRS (basic and diluted) of minus €0.17 (2018: minus €0.00).
Statement of financial position
The equity ratio increased to 55.3% as a result of the capital measures carried out in the year under review (December 31, 2018: 43.3%). Available cash and cash equivalents amounted to €20,906k as of December 31, 2019 (December 31, 2018: €7,520k). As of December 31, 2019, the SFC Energy Group had a total of 282 permanent employees (December 31, 2018: 279).
Despite the current very challenging and dynamic situation, SFC's good capital base and solid overall accounting ratio put it in a position to soundly get through a turbulent phase, drive forward essential product developments, tap into new market segments and achieve sustainable growth in the medium term.
Guidance for 2020
Despite a very dynamic start to the current financial year, SFC Energy AG is assuming that the COVID-19 pandemic and the recent negative development in the price of oil in connection with the OPEC+ dispute will have a negative impact on the guidance for the 2020 financial year that was published on February 11, 2020. However, in view of the unprecedented operational and financial challenges posed by the spread of COVID-19 and the uncertain developments in the coming weeks, the financial impact of the pandemic on the SFC Group can currently be neither adequately determined nor reliably quantified. For this reason, the guidance for the 2020 financial year that was published in February has been retracted. A sound and sufficiently reliable guidance for the current financial year in the form of the previously projected ranges is therefore not possible at present.
Against this background and the current high level of uncertainty, the Management Board is expecting - subject to a recession - revenues and profitability to be significantly lower than in the previous year.
The Management Board of SFC Energy will be closely and comprehensively monitoring further developments in connection with the COVID-19 pandemic and will respond to the resulting challenges in the individual segments early, quickly and consistently.
Key figures 2019/2018
* As of December 31
Detailed financial information
The 2019 annual report of SFC Energy AG is available for download at https://www.sfc.com/en/investors/finance/.
SFC Energy AG will hold a conference call in English for interested investors and members of the media at 9:00 a.m. today, March 26, 2020.
26.03.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.