- 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
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
sh@crossalliance.de.
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).
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SFC Investor Relations:Tel. +49 89 673 592-378Fax. +49 89 673
592-169Email: ir@sfc.comWeb: www.sfc.comorCROSS ALLIANCE
communication GmbHSusan HoffmeisterTel. +49 89 898 27 227Email:
sh@crossallliance.com