Dynamic demand for fuel cells leads to record quarter – Forecast at the upper end of the range substantiated

SFC Energy AG reports sustained growth in nine-month period of 2022 – Dynamic demand for fuel cells leads to record quarter – Forecast at the upper end of the range substantiated

Consolidated sales rise by 37.2% to EUR 63,776 thousand (9M/2021: EUR 46,476 thousand)
Underlying EBITDA up +27.2% to EUR 7,366 thousand (9M/2021: EUR 5,789 thousand)
Strong growth of 45.0% for the Clean Energy segment to EUR 43,918 thousand (9M/2021: EUR 30,280 thousand)
Order momentum remains high – order intake at EUR 88,290 thousand (9M/2021: EUR 59,940 thousand)
Q3/2022 the best third quarter in company history
North American and industrial business as drivers of sales growth
Forecast for 2022 substantiated at the upper end of the forecast range on the basis of the positive business development

Brunnthal/Munich, Germany – SFC Energy AG (“SFC,” F3C:DE, ISIN: DE0007568578), a leading supplier of hydrogen and methanol fuel cells for stationary and mobile hybrid power solutions, is publishing its nine-month report for 2022 today.

Management Board Report

Dr. Peter Podesser, CEO of SFC Energy AG: “Our business development is at the upper end of our expectations and we managed to increase our sales in the nine-month period by a significant 37.2%. The strong growth in the third quarter of 2022, in which we grew by 67% compared to the same period of last year further accelerated the overall growth compared to previous quarters.

Looking back, SFC Energy achieved the best third quarter in the company’s history. This positive development reflects the further increasing demand for our hydrogen and methanol fuel cells as a clean, efficient and reliable power generation technology as well as our highly efficient power management solutions. In the current comparative quarter, we were able to increase our sales in Clean Energy by 58% (9M/2022: +45%) and in Clean Power Management by as much as 89% (9M/2022: +22%). The latter was partly due to a third quarter of 2021 characterized by COVID-19 and supply chain challenges. The North American business performed particularly well, with sales more than doubling to +121% in the third quarter (9M/2022: +63%). The European business also remains on a strong growth track, rising by 27% in the third quarter of 2022. While industrial applications increased overall, the public safety and end-customer markets fell short of expectations in both the third quarter and the nine-month period, which is why the growth achieved should be considered to an even greater extent.

Our long-term motivation is fed by the vision of making a measurable contribution to the global race-to-zero and climate-neutrality for future generations. We share this vision with our customers, who rely on our environmentally friendly and efficient fuel cells. In August, for example, we secured follow-up orders for EFOY fuel cells from our long-standing partner Oneberry Technologies in Singapore. Oneberry’s renewed confidence demonstrates customer satisfaction in our fuel cell solutions. Overall, we are seeing dynamic demand in the networking of sustainably generated energy and IoT topics such as reliable monitoring technology.

We continue to focus our attention on the global supply chain situation. In the third quarter, we recorded shifts in sales of around EUR 2.0 million to EUR 3.0 million due to delivery delays for power electronics components. We managed to cushion stronger negative effects through the permanently high inventory levels of critical components, as well as through continued targeted near- and onshoring in procurement. We are opening a central logistics warehouse at our German site in Kirchheim near Munich in order to be able to respond even better and more flexibly to delivery delays in the future. This will take our logistics and distribution processes to a new level.”

Development of sales

In the first nine months of fiscal year 2022, SFC Energy generated consolidated sales of EUR 63,776 thousand (9M/2021: EUR 46,476 thousand) and thus a significant increase of 37.2% compared to the same period of the previous year. This pleasing development is attributable to both extremely strong organic growth in Clean Energy segment sales, which increased by 45.0% compared to the previous year, and to strong sales growth of 22.6% in the Clean Power Management segment.

Sales by segment (in EUR thousand)	9M/2022	9M/2021
Clean Energy	43,918	30,280
Clean Power Management	19,858	16,196
Total	63,776	46,476

Development of the Segments

Clean Energy

The Clean Energy segment generated significant sales growth of 45.0% to EUR 43,918 thousand in the nine-month period, compared to EUR 30,280 thousand in the same period of the previous year, due to the continuing strong demand for fuel cell solutions, for industrial applications in particular. The segment managed to further expand its share of total consolidated sales in the reporting period to 68.9% (9M/2021: 65.2%).

Clean Power Management

Following a challenging procurement environment in the first half of the year, the Clean Power Management segment grew significantly in the third quarter of 2022. The segment achieved sales growth of 22.6% to EUR 19,858 thousand in the nine-month period (9M/2021: EUR 16,195 thousand). The segment’s share of consolidated sales amounted to 31.1% in the reporting period (9M/2021: 34.8%).

Development of earnings

In the course of its dynamic business development, SFC continued its successful fiscal year and achieved gratifying operating results in the nine-month period. Both the convincing overall growth in sales and the increased sales contribution of the higher-margin Clean Energy segment led to a 36.7% increase in consolidated gross profit to EUR 23,368 thousand (9M/2021: EUR 17,090 thousand). This compensated for the decline in margins in the Clean Power Management segment. The resulting gross profit margin of the Group (gross profit as a percentage of sales) in the reporting period was 36.6% (9M/2021: 36.8%), virtually at the level of the previous year.

Gross profit for the two segments compared to the same period of the previous year was as follows:

Gross profit by segment (in EUR thousand)	9M/2022	9M/2021
Clean Energy	18,505	12,820
Clean Power Management	4,863	4,270
Total	23,368	17,090

Underlying EBITDA, i.e. EBITDA adjusted for non-recurring effects, increased by 27.2% to EUR 7,366 thousand in the nine-month period (9M/2021: EUR 5,789 thousand). The underlying EBITDA margin decreased slightly by 0.9 percentage points to 11.5% (9M/2021: 12.5%). Underlying EBIT, i.e. EBIT adjusted for non-recurring effects, increased significantly year-on-year to EUR 3,737 thousand (9M/2021: EUR 2,692 thousand). This resulted in an underlying EBIT margin of 5.9% (9M/2021: 5.8%). The Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) increased significantly in the nine-month period to EUR 9,754 thousand (9M/2021: EUR -636 thousand). The Group’s earnings before interest and taxes (EBIT) improved to EUR 6,126 thousand (9M/2021: EUR -3,733 thousand). For the nine-month period, consolidated net income amounted to EUR 5,254 thousand compared to a consolidated net loss of EUR 4,367 thousand in the prior-year period. Accordingly, earnings per share according to IFRS (basic) amounted to EUR 0.35 (9M/2021: EUR -0.30).

New orders increased to EUR 88,290 thousand in the reporting period (9M/2021: EUR 59,940 thousand), resulting in an order backlog of EUR 55,398 thousand as of September 30, 2022 (December 31, 2021: EUR 30,551 thousand). Overall, the geopolitical turmoil is accelerating the demand for alternative technologies in conventional fossil-based power generation, as a result of which SFC continues to record high order intake in the current fourth quarter.

Solid balance sheet

Equity increased by EUR 57,503 thousand in the reporting period, mainly due to the capital increase carried out in the third quarter of 2022, and amounted to EUR 107,522 thousand as of September 30, 2022 (December 31, 2021: EUR 50,019 thousand). The net financial position (freely available cash and cash equivalents less liabilities to banks) consequently increased to EUR 60,368 thousand as of September 30, 2022 (December 31, 2021: EUR 21,888 thousand). As of September 30, 2022, the SFC Energy Group had 331 permanent employees (December 31, 2021: 288).

Outlook for 2022 concretized at upper end of the forecast range

Despite the current macroeconomic challenges, SFC Energy sees continued high demand for fuel cell solutions, further growth in its segments, and continued positive business development.

Sales

Based on the successful operational development in the first nine months of 2022, which was characterized by strong growth in sales in the Clean Energy segment and sustained high order volumes in both segments, and in anticipation of a continued dynamic business development through the end of the fiscal year, the Management Board is narrowing down its forecast for the SFC Group and expects organic sales growth at the upper end of the previous forecast range of EUR 81.0 million to EUR 83.0 million (previously: EUR 75.0 million to EUR 83.0 million) in fiscal year 2022.

Underlying EBITDA

Supported by the positive development of demand, the improved product mix and positive exchange rate developments for SFC’s business, the Management Board has specified the forecast for underlying EBITDA in the upper range of the forecast range and now expects a range between EUR 7.5 million and EUR 8.5 million (previously: EUR 6.0 million to EUR 9.1 million).

Underlying EBIT

In line with the positive development of earnings in the first nine months of the current fiscal year and the expectations described above, the Management Board is raising the forecast for underlying EBIT to a range of EUR 2.6 million to EUR 3.6 million (previously: EUR 1.6 million to EUR 2.9 million).

This more specific forecast is based on the assumption that there will be no significant production disruptions by the end of the year and that supply chains will remain largely intact. Due to the economic and geopolitical imponderables summarized above, the forecasts (including those of the above key indicators) are subject to increased uncertainty. SFC is monitoring the further developments very closely and will adjust its expectations accordingly, if necessary.

Key figures 9M 2022/9M 2021

In EUR thousand	01/01-09/30/2022	01/01-09/30/2021
Sales	63,776	46,476
Gross profit	23,368	17,090
Gross margin	36.6%	36.8%
EBITDA	9,754	-636
EBITDA margin	15.3%	-1.4%
Underlying EBITDA	7,366	5,789
Underlying EBITDA margin	11.5%	12.5%
EBIT	6,126	-3,733
EBIT margin	9.6%	-8.0%
Underlying EBIT	3,737	2,692
Underlying EBIT margin	5.9%	5.8%
Consolidated net result for the period	5,254	-4,367
Order book a)	55,398	23,345

a) as of September 30

Detailed financial information

The Quarterly Release for the third quarter of 2022 of SFC Energy AG is available for download at www.sfc.com.

SFC Energy AG will hold a conference call in English for interested investors and members of the press today, November 15, 2022, at 10:00 am. Please send an email to susan.hoffmeister@sfc.com to register.

About SFC Energy AG

SFC Energy AG is a leading provider of hydrogen and methanol fuel cells for stationary and mobile hybrid power solutions. With the Clean Energy and Clean Power Management business segments, SFC Energy is a sustainably profitable fuel cell producer. The company distributes its award-winning products worldwide and has sold more than 60,000 fuel cells to date. The company is headquartered in Brunnthal, near Munich, Germany, and operates production facilities in Germany, the Netherlands, Romania, and Canada. SFC Energy AG is listed on the Deutsche Boerse Prime Standard (GSIN: 756857, ISIN: DE0007568578).

SFC Energy AG Reports Sustained Growth in Nine-Month Period of 2022