SFC Energy AG
SFC Energy AG publishes audited consolidated figures 2017 and forecast for 2018 – Step into profitability successfully achieved

SFC Energy AG – Corporate News

SFC Energy AG publishes audited consolidated figures 2017 and forecast for 2018 – Step into profitability successfully achieved

– Final consolidated figures confirm preliminary figures of February 8, 2018

– Record sales and earnings in 2017:

o EUR 54.29 million (2016: EUR 44.04 million)

o Positive adjusted EBITDA of EUR 1.45 million for the first time (2016: minus EUR 2.66 million) and positive adjusted EBIT of EUR 177 thousand (2016: minus EUR 4.11 million)

– Guidance 2018: increase in sales to EUR 60-64 million and sustainable profitability – significantly improved underlying EBITDA and a clearly improved underlying EBIT

Brunnthal/Munich, Germany, March 29, 2018 – SFC Energy, a leading provider of hybrid power solutions to the stationary and mobile power generation markets, today published its annual report and final consolidated figures for the financial year 2017 as well as a guidance for 2018.

Sales

In the reporting year, the Group generated the highest ever turnover in the company’s history with EUR 54.29 million compared with EUR 44.04 million in the previous year. This marks an increase well in excess of market growth of more than 23%. Significantly responsible for the positive development was a considerable growth on all our core markets – Oil & Gas, Industry, Defense and Authorities.

Segment Performance

With the boom in growth in 2017, SFC Energy has refined its corporate structures and better adapted them to its markets. Therefore, from January 1, 2018, the segments have been reorganized and increased from three to four. Accordingly, the business activities of SFC Energy AG will be divided into the segments of Clean Energy & Mobility, Defense & Security, Oil & Gas and Industry. In implementing this reorganization, the Management is also recognizing the successful business development of recent years in the markets of industrial fuel cell business, industrial power electronics and defense and security. Those businesses have been reported in the Security and Industry segment so far. Power electronics as well as defense and security businesses will in future be reported as separate segments Industry and Defense & Security. The fuel cell business for industrial users and end-consumers will be combined in the segment Clean Energy & Mobility. The reporting for the first quarter of 2018 includes the new segment reporting.

Oil & Gas (in future Oil & Gas)

Sales in the Oil & Gas segment benefited from rising investment activity in the oil and gas industry thanks to the recovery of the price of oil in the past fiscal year as well as strong stimulus in new project business. Revenue in the Oil & Gas segment increased by 26.8% year-on-year from EUR 19.30 million to EUR 24.46 million. Under consideration of the discontinuation of a low-margin product line at the beginning of 2017, the comparable product revenue grew by approx. 58%.

Security & Industry (in future divided into the three segments: Industry, Defense & Security and Clean Energy & Mobility)

What was previously SFC Energy’s largest segment, Security & Industry, achieved significant growth of 25.1% to EUR 26.38 million in the reporting year after EUR 21.09 million in 2016. This increase reasons in the worldwide growing demand among government and private users for reliable and off-grid power supply for innovative applications, e.g. security and surveillance systems. In addition to a strong increase in Power Electronic sales of 19.0%, in particular the Industry segment with fuel cells grew in 2017 with a plus of 34.4% on a broad basis. After a long period of testing and successful technical qualification, SFC Energy succeeded in establishing the “fuel cell” as a sustainable and independent energy supply for defense organizations both nationally and internationally. Pleasing examples of this are orders from India, Great Britain and, of course, Germany. As of the end of the year, SFC Energy was awarded the contract from the German Bundeswehr for a major order worth EUR 3.6 million, which will initially cover the first part of the customer’s defined demand. The contract marks a milestone for SFC Energy and highlights the high level of trust in SFC Energy’s solutions on the one hand while also strengthening the Group’s leading position as a provider of reliable, off-grid power solutions in the defense sector on the other.

Consumer (in future part of Clean Energy & Mobility)

As anticipated, revenue in the Consumer segment was down slightly year-on-year at EUR 3.65 million in 2017 (EUR 3.45 million). While changing user habits in the former core segment of caravanning reduce the general demand for off-grid energy supply in a submarket, the demand for clean auxiliary power supply in vehicles is increasing on a broad front. “The megatrend of e-mobility is raising awareness in the automotive and consumer industry for high-performance and onboard energy solutions. SFC Energy has a long history of success in this area and works closely with its customers to provide clean and lightweight “APUs” (Auxiliary Power Units) for vehicles. For this reason, we are convinced of the future viability of this business segment”, says Dr. Peter Podesser, CEO of SFC Energy AG.

Gross Profit

Gross profit increased significantly in the 2017 financial year to EUR 17.73 million or 32.6% (previous year: EUR 13.25 million or 30.1%). The gross margin improvement was recorded in all segments.

EBITDA improved compared to the previous year from minus EUR 2.51 million to plus EUR 862 thousand in the period under review. Adjusted for one-off effects, underlying EBITDA improved significantly to plus EUR 1.45 million (previous year: minus EUR 2.66 million). The Group’s EBIT improved in financial year 2017 significantly to minus EUR 885 thousand (previous year: minus EUR 4.90 million). In consideration of one-off effects, underlying EBIT amounted to positive EUR 177 thousand in the reporting year (previous year: minus EUR 4.12 million). Consolidated net income improved in financial year 2017 to minus EUR 2.07 million compared to minus EUR 4.99 million in the previous year. Earnings per share under IFRS (basic and diluted) amounted to minus EUR 0.23 (previous year: minus EUR 0.58).

Balance Sheet

Available cash and cash equivalents amounted to EUR 4.41 million as of December 31, 2017 (December 31, 2016: EUR 1.76 million). This is mainly a result of the positive cash flow from operating activities and a cash inflow from financing activities. On the one hand, cash and cash equivalents from the proceeds of the capital increase of EUR 400 thousand were received by the company, and on the other hand a cash inflow of EUR 4.9 million was generated in August 2017 from a secured bearer bond. The equity ratio increased due to capital measures from 39.5% to 40.2% in the financial year 2017. As of December 31, 2017 SFC Energy had 258 permanent employees (December 31, 2016: 228).

Outlook for 2018

“We generated considerable growth on all our core markets over the whole of 2017, while at the same time surging to profitability. Thus, SFC Energy is the world’s first fuel cell company to operate profitably. We are feeling very positive about the current year. In particular, our growth forecast for 2018 is based on higher investment by our customers in defense and security, in both the private and public sectors, on continuing robust demand in industrial business as well as on an increasingly positive performance in the oil and gas sector. Furthermore, clean energy is becoming significantly important for mobility applications. We are optimistic to benefit greatly from this resurgent growth momentum”, comments Dr. Peter Podesser.

Based on a strong order book of EUR 18.63 million as of the end of 2017 and a successful start to the current fiscal year, the Management Board is expecting a consolidated sales target of between EUR 60 million and EUR 64 million for 2018, as well as sustainable profitability with a significantly improved underlying EBITDA and a clearly improved underlying EBIT.

In estimating Simark’s revenue and earnings, Management has assumed an exchange rate of 1.50 between the Canadian dollar and the euro.

Key figures 2017