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SFC Energy AG
Quarterly Report • Nov 19, 2024
388_10-q_2024-11-19_911b468d-4471-468d-9763-2d9887255282.pdf
Quarterly Report
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QUARTERLY STATEMENT
January 1 to September 30, 2024
TABLE OF CONTENTS
SFC ENERGY AG - COMPACT ..... 3
INTERIM STATEMENT ON THE BUSINESS DEVELOPMENT AS OF SEPTEMBER 30, 2024 ..... 4
BUSINESS PERFORMANCE AND ECONOMIC SITUATION ..... 5
Earnings position ..... 5
Assets and financial position ..... 12
FORECAST ..... 17
SUPPLEMENTARY FINANCIAL INFORMATION ..... 19
Consolidated Statement of Income ..... 19
Consolidated Statement of Comprehensive Income ..... 20
Consolidated Statement of Financial Position ..... 21
Consolidated Statement of Cash Flows ..... 23
Consolidated Statement of Changes in Equity ..... 25
Group Segment Reporting ..... 26
SUPPLEMENTARY REPORT ..... 27
Financial Calendar 2024 ..... 28
Share Information ..... 28
The figures presented in this quarterly statement have been rounded in accordance with commercial practice. This may mean that, when aggregated, individual figures do not equal the totals shown.
The financial figures for the first nine months of 2024 and 2023 are unaudited and are not subject to an auditor's review.
SFC ENERGY AG - COMPACT
| CONSOLIDATED KEY FIGURES | in EURthousand | |||||
|---|---|---|---|---|---|---|
| $\begin{gathered} 2024 \ 01 / 01-09 / 30 \end{gathered}$ | $\begin{gathered} 2023 \ 01 / 01-09 / 30 \end{gathered}$ | Change | $\begin{gathered} 2024 \ 07 / 01-09 / 30 \end{gathered}$ | $\begin{gathered} 2023 \ 07 / 01-09 / 30 \end{gathered}$ | Change | |
| Sales | 105,190 | 88,030 | $19.5 \%$ | 34,333 | 30,977 | $10.3 \%$ |
| Gross profit on sales | 43,945 | 33,321 | $31.9 \%$ | 14,403 | 11,445 | $25.8 \%$ |
| Gross margin | $41.8 \%$ | $37.9 \%$ | $42.1 \%$ | $36.9 \%$ | ||
| EBITDA | 16,047 | 11,564 | $38.8 \%$ | 4,832 | 4,776 | $1.2 \%$ |
| EBITDA margin | $15.3 \%$ | $13.1 \%$ | $14.1 \%$ | $15.4 \%$ | ||
| Adjusted EBITDA | 18,230 | 11,931 | $52.8 \%$ | 5,704 | 4,610 | $23.7 \%$ |
| Adjusted EBITDA margin | $17.4 \%$ | $13.6 \%$ | $16.8 \%$ | $14.9 \%$ | ||
| EBIT | 11,521 | 7,194 | $60.2 \%$ | 3,274 | 3,371 | $-2.9 \%$ |
| EBIT margin | $11.0 \%$ | $8.2 \%$ | $9.5 \%$ | $10.9 \%$ | ||
| Adjusted EBIT | 13,704 | 7,561 | $81.3 \%$ | 4,146 | 3,205 | $29.3 \%$ |
| Adjusted EBIT margin | $13.0 \%$ | $8.6 \%$ | $12.1 \%$ | $10.3 \%$ | ||
| Consolidated net income for the period | 8,735 | 6,495 | $34.5 \%$ | 2,314 | 3,168 | $-27.0 \%$ |
| Earnings per share, undiluted | 0.48 | 0.37 | $27.9 \%$ | 0.11 | 0.18 | $-39.9 \%$ |
| Earnings per share, diluted | 0.46 | 0.36 | $26.2 \%$ | 0.09 | 0.18 | $-48.8 \%$ |
SALES BY QUARTER
in EUR thousand
Q1
Q2
Q3
Q4
FY
$40,048 \quad \square \quad \square \quad \square \quad 2024$
■ 2023
■ 202230,809
29,599
Q3
Q4,333
30,977
FY
118,148
SALES BY REGION
in EUR thousand
SALES BY SEGMENT
in EUR thousand
1 JAN. - 30 SEP. 2024
Rest of the World
INTERIM STATEMENT ON THE BUSINESS POSITION AS OF SEPTEMBER 30, 2024
Brunnthal, November 19, 2024
SFC Energy AG (ISIN: DE0007568578), a leading provider of fuel cell solutions for stationary, portable and mobile applications based on hydrogen (PEM) and direct methanol fuel cell (DMFC) technology, announced its business performance and key events today as part of the publication of its quarterly statement Q3/2024 for the period from January 1, 2024 to September 30, 2024.
SFC Energy AG (,SFC AG"), together with its subsidiaries, forms an internationally active Group of companies (,SFC" or „Group") in the fuel cell sector. In addition to the parent company SFC Energy AG (Germany), the scope of consolidation of the Group includes the subsidiaries listed below.
| SO | Se | Share in the capital | Currency | ||
|---|---|---|---|---|---|
| Indirectly | Directly | Total | |||
| SFC Energy B.V. (,SFC NL") | Almelo, Netherlands | $100 \%$ | - | $100 \%$ | EUR |
| SFC Energy Power SRL (,SFC RO") | Cluj-Napoca, Romania | - | $100 \%$ | $100 \%$ | RON |
| SFC Energy Ltd. (,SFC CA") | Calgary, Canada | $100 \%$ | - | $100 \%$ | CAD |
| SFC Energy UK Ltd. (,SFC UK") | Swindon, UK | $100 \%$ | - | $100 \%$ | GBP |
| SFC Energy India Pvt. Ltd. (,SFC IN") | Gurgaon, India | $92 \%$ | - | $92 \%$ | INR |
| SFC Clean Energy SRL (,SFC RO II') | Cluj-Napoca, Romania | $100 \%$ | - | $100 \%$ | RON |
| SFC Energy LLC (,SFC USA") | Wilmington, USA | $100 \%$ | - | $100 \%$ | USD |
| SFC Energy Denmark ApS (,SFC DK") | Aarhus, Denmark | $100 \%$ | - | $100 \%$ | DKK |
The segmentation of the Group's activities is primarily aligned to its internal organisational and reporting structure by business area. These are based on the Group's technology platforms and range of products and services. The Clean Energy segment comprises the products, systems and solutions for stationary and mobile off-grid energy supplies based on hydrogen (PEMFC) and direct methanol (DMFC) fuel cells. The segment addresses customers in the private, industrial and public sectors in various markets. These include equipment suppliers and system integrators for telecommunications, security and surveillance technology, remote sensing technology and defence technology, as well as for the caravanning and marine markets. The Clean Power Management segment pools all of the Group's business in high-tech, standardised and semi-standardised power management solutions such as voltage converters and coils, which are used in devices for the high-tech industry. The segment also includes business in frequency converters for the upstream oil and gas industry as well as other industries, some of which are integrated and some sold.
BUSINESS PERFORMANCE AND ECONOMIC SITUATION
Earnings position
Compared to the same period of the previous year (, previous year"), the Group realised in the first nine months of the 2024 financial year (, reporting period") particularly strong sales growth of $19.5 \%$ or EUR 17,160 thousand and achieved sales of EUR 105,190 thousand (previous year: EUR 88,030 thousand). This positive sales trend is attributable to the very strong organic growth in Clean Energy segment sales, which increased by $24.6 \%$ compared to the previous year. Sales in the Clean Power Management segment also strongly increased by $9.1 \%$.
Exchange rate effects had a negative impact of EUR 1,185 thousand on the Group's sales in the reporting period compared to the same period of the previous year.
The Clean Energy segment, whose share of Group sales increased slightly to 69.8\% (previous year: 66.9\%), remained the segment with the highest sales. Accordingly, the Clean Power Management segment's share of Group sales fell to $30.2 \%$ (previous year: $33.1 \%$ ).
Consolidated gross profit increased by EUR 10,624 thousand or $31.9 \%$ over the same period of the previous year to EUR 43,945 thousand (previous year: EUR 33,321 thousand) and thus exceeded sales growth, so that the Group's gross profit margin (gross profit as a percentage of sales) rose to $41.8 \%$ (previous year: $37.9 \%$ ) and thus increased significantly.
- 01/01-09/30/2024
- 01/01-09/30/2023
Sales development by segments
The sales segmentation for the reporting period compared to the previous year is as follows:
| SALES BY SEGMENT | in EUR thousands | |||||
|---|---|---|---|---|---|---|
| $\begin{gathered} 2024 \ 01 / 01-09 / 30 \end{gathered}$ | $\begin{gathered} 2023 \ 01 / 01-09 / 30 \end{gathered}$ | Change | $\begin{gathered} 2024 \ 07 / 01-09 / 30 \end{gathered}$ | $\begin{gathered} 2023 \ 07 / 01-09 / 30 \end{gathered}$ | Change | |
| Clean Energy | 73,385 | 58,877 | $24.6 \%$ | 22,525 | 20,287 | $11.0 \%$ |
| Clean Power Management | 31,805 | 29,153 | $9.1 \%$ | 11,808 | 10,690 | $10.5 \%$ |
| Total | 105,190 | 88,030 | $19.5 \%$ | 34,333 | 30,977 | $10.8 \%$ |
BREAKDOWN OF SALES BY SEGMENT
1 JAN. - 30 SEP. 2024
Clean Energy
$69.8 \%$
Sales development by region
The sales trend by region for the reporting period and the third quarter of 2024 compared to the previous year is as follows:
| SALES BY REGION | in EURthousand | |||||
|---|---|---|---|---|---|---|
| $\begin{gathered} 2024 \ 01 / 01-09 / 30 \end{gathered}$ | $\begin{gathered} 2023 \ 01 / 01-09 / 30 \end{gathered}$ | Change | $\begin{gathered} 2024 \ 07 / 01-09 / 30 \end{gathered}$ | $\begin{gathered} 2023 \ 07 / 01-09 / 30 \end{gathered}$ | Change | |
| North America | 39,571 | 40,673 | $-2.7 \%$ | 13,336 | 13,756 | $-3.1 \%$ |
| Europe (excluding Germany) | 36,744 | 28,665 | $28.2 \%$ | 13,854 | 9,714 | $42.6 \%$ |
| Germany | 9,370 | 6,584 | $42.3 \%$ | 3,753 | 2,302 | $63.1 \%$ |
| Asia | 17,381 | 10,655 | $63.1 \%$ | 2,488 | 4,909 | $-49.3 \%$ |
| Rest of the World | 2,123 | 1,453 | $46.2 \%$ | 902 | 296 | 205.2\% |
| Total | 105,190 | 88,030 | $19.5 \%$ | 34,333 | 30,977 | $10.8 \%$ |
BREAKDOWN OF SALES BY REGION
1 JAN. - 30 SEP. 2024
Europe (excluding Germany)
$34.9 \%$
| North America | |
|---|---|
| $37.6 \%$ | |
| West of the World | |
| $2.0 \%$ |
The regional distribution of sales developed as follows in the reporting period compared to the previous year: North America's relative contribution to Group sales fell noticeably in the reporting period to $37.6 \%$ (previous year: $46.2 \%$ ) and recorded a decline of EUR 1.103 thousand. By contrast, the Europe region's (excluding Germany) relative share of consolidated sales rose to $34.9 \%$ (previous year: $32.6 \%$ ) and increased slightly in absolute terms by EUR 8,079 thousand. Asia's relative share of sales also increased slightly to $16.5 \%$ (previous year: $12.1 \%$ ).
In the reporting period, the region of Germany region contributed $8.9 \%$ (previous year: $7.5 \%$ ) to Group sales and Rest of the World (RoW) generated 2.0\% (previous year: $1.7 \%$ ) of consolidated sales.
Reconciliation of adjusted EBITDA and adjusted EBIT
Adjusted EBITDA and adjusted EBIT are reported in order to allow for any distortions in the presentation of financial performance indicators caused by non-recurring effects that may either increase or decrease operating earnings in the reporting period and to ensure comparability of these performance indicators from period to period. The non-recurring effects listed below, which are included in the relevant functional costs, are eliminated in the reporting period as part of the reconciliation with adjusted EBITDA and adjusted EBIT.
In the reporting period, the non-recurring effects include expenses and income arising from additions to or the reversal of provisions and the share premium for obligations under the long-term variable share-based payment programmes ("LTI programmes") as well as expenses associated with transaction endeavours (e.g. potential acquisitions).
The LTI programmes entail stock appreciation rights („SARs"), stock option programmes (,SOPs") and performance share plans (,PSPs") for the Management Board and executives of Group companies. The expenses for these amounted to EUR 2,370 thousand (previous year: EUR 326 thousand) (,extraordinary expenses"). In the reporting period, income from the LTI programmes (,extraordinary income") in the amount of EUR 638 thousand (previous year: EUR 397 thousand) was also recognised. This income is due, among other things, to the reversal through profit or loss of provisions previously recognised for the SARs or the reversal of the capital reserve for the SOPs, which are higher than the payments of the amounts received in cash in a reporting period or resulted from accounting in accordance with IFRS 2.
Expenses associated with transaction endeavours, such as potential acquisitions, amounted to EUR 450 thousand (previous year: EUR 437 thousand) are included in the non-recurring effects.
On balance, the non-recurring effects are included as net expenses in the amount of EUR 2,183 thousand (previous year: EUR 367 thousand) for the reporting period are included in EBIT and EBITDA.
The expenses for the LTI programmes of the Management Board currently in office are included in both selling expenses and general administrative expenses. The expenses for the LTI programmes for employees (management staff) are included in selling expenses, research and development expenses and in general administrative expenses. The expenses associated with transaction endeavours are included in general administrative expenses.
The reconciliation to adjusted EBITDA and adjusted EBIT (= adjusted operating result) and the allocation of the non-recurring effects to the items in the income statement are accordingly as follows:
| NON-RECURRING EFFECTS | in EUR thousand |
|---|---|
| 2024 $01 / 01-09 / 30$ |
|
| Expenses from the recognition of provisions and additions to the capital reserve for LTI programmes | $-2,370$ |
| Income from the reversal of provisions for LTI programmes | 638 |
| Expenses in connection with transaction endeavours | $-450$ |
| Total net expense / income | $-2,183$ |
| of which included in selling expenses | $-643$ |
| of which included in research and development expenses | $-65$ |
| of which included in general administrative expenses | $-1,475$ |
Gross profit
In relation to sales growth, gross profit increased by $31.9 \%$ disproportionately high. The gross profit amounted to EUR 43,945 thousand (previous year: EUR 33,321 thousand) and was EUR 10,624 thousand significantly above the previous year's figure. This increase was mainly due to the aforementioned significant organic sales growth combined with margin expansion, which was also due to a very advantageous product mix in favor of products with attractive margins and a noticeable increase in production capacity utilization in the Clean Energy segment.
The Group's gross profit margin (gross profit as a percentage of sales) resulting from the development of sales amounted to $41.8 \%$ (previous year: $37.9 \%$ ), well above the level of the prior-year period and also above the gross profit margin for the 2023 financial year ( $39.6 \%$ ).
While in the higher-revenue and higher-margin Clean Energy segment, the gross profit margin amounted to $48.2 \%$ (previous year: $44.1 \%$ ), significantly exceeding the same period of the previous year and slightly surpassing the level of the 2023 financial year ( $46.0 \%$ ), the Clean Power Management segment recorded a moderate gross profit margin expansion of $26.9 \%$ (previous year: $25.2 \%$ ).
Selling expenses
In the reporting period, selling expenses increased by $6.4 \%$ noticeably to EUR 12,598 thousand (previous year: EUR 11,842 thousand). As mentioned above, selling expenses include extraordinary expenses in the amount of EUR 643 thousand (previous year: extraordinary income in the amount of EUR 226 thousand) are included.
Adjusted for these effects, selling expenses in the reporting period increased marginally by $0.9 \%$ to EUR 11,955 thousand (previous year: EUR 12,068 thousand) ${ }^{1}$. Lower adjusted personnel costs, in particular due to the higher utilization of current personnel provisions, were the main reason for the decrease.
Across the Group, adjusted selling expenses as a percentage of sales amounted to $11.4 \%$ (previous year: $13.7 \%$ ), slightly below the previous year's level.
Research and development expenses
The research and development expenses recognised in the Consolidated Statement of Income increased significantly in the reporting period by $17,3 \%$ to EUR 4,859 thousand (previous year: EUR 4,144 thousand).
Adjusted for the non-recurring effects listed above and including the development expenses capitalised in the reporting period and grants received in the total amount of EUR 2,729 thousand (previous year: EUR 2,370 thousand), the Group's total research and development expenses amounted to EUR 7.523 thousand (previous year: EUR 6,513 thousand) and amounted to $15.5 \%$ significantly above the previous year's figure. The higher total expenses in the reporting period resulted mainly from significantly increased personnel expenses, also due to additional development resources in SFC UK for the further development of the Membrane Electrode Assembly (MEA), and significantly higher costs for the materials used in the development department, as well as higher depreciation and amortization.
The Group's overall development ratio (research and development costs adjusted for non-recurring effects and including capitalised development costs and grants as a percentage of sales) increased moderately to $7.2 \%$ (previous year: $7.4 \%$ ) due to sales growth, despite overall higher expenditures.
General administrative expenses
General administrative expenses in the reporting period amounted to EUR 14,625 thousand (previous year: EUR 11,335 thousand) and were significantly higher than in the same period of the previous year. After adjustment for the aforementioned net non-recurring effects amounting to EUR 1,475 thousand (previous year: EUR 610 thousand), general administrative expenses increased compared to the same period of the previous year by $22.6 \%$ to EUR 13.150 thousand (previous year: EUR 10.725 thousand). The increase is mainly attributable to higher personnel expenses in both segments, higher travel expenses and higher depreciation and amortization.
Other operating income
Other operating income fell sharply in the reporting period compared to the same period of the previous year and amounted to EUR 1,237 thousand (previous year: EUR 1,700 thousand). This was mainly due to the development of income from exchange rate differences included in this item in the amount of EUR 780 thousand (previous year: EUR 1,071 thousand).
[^0]
[^0]: 1 In the quarterly statement from 1 January to 30 September 2023, income of EUR 534 thousand was reported under adjusted selling expenses. These are reported under impairment losses on financial assets in the quarterly statement from 1 January to 30 September 2024.
Other operating expenses
Other operating expenses in the reporting period amounted to EUR 1,541 thousand (previous year: EUR 1.043 thousand) and mainly result from expenses from exchange rate differences.
The reporting period also included a provision for any costs incurred by a business partner in connection with delays in the production start-up of a subsidiary in the amount of EUR 500 thousand (previous year: EUR 0).
Impairment losses on financial assets
In the reporting period, there was an expense of EUR 38 thousand (previous year: income of EUR 536 thousand) from the recognition of risk provisions in the amount of the expected credit loss on trade receivables over the entire term.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
Earnings before interest, taxes, depreciation and amortization (EBITDA) of the Group increased particularly sharply in the reporting period to EUR 16,047 thousand (previous year: EUR 11,564 thousand), resulting in an EBITDA margin (EBITDA in relation to sales) of $15.3 \%$ (previous year: $13.1 \%$ ) resulted.
The key financial performance indicator for managing the operating business, EBITDA adjusted for non-recurring effects (adjusted EBITDA), amounted to EUR 18,230 thousand (previous year: EUR 11,931 thousand) in the reporting period and increased significantly year-on-year by EUR 6,299 thousand, driven by strong operational performance. The adjusted EBITDA margin recorded an increase of 3.8 percentage points and amounted to $17.3 \%$ (previous year: $13.6 \%$ ), noticeably above the previous year's level.
The increase in adjusted EBITDA was mainly due to strong sales growth with a relatively lower increase in functional costs, combined with the marked improvement in the gross profit margin.
Operating result (EBIT)
The Group's earnings before interest and taxes (EBIT) increased considerably in the reporting period to EUR 11,521 thousand (previous year: EUR 7,194 thousand) despite the EUR 4,328 thousand increase in depreciation and amortisation compared to the previous year. However, the EBIT margin (EBIT in relation to sales) improved to $11.0 \%$ (previous year: $8.2 \%$ ).
EBIT adjusted for non-reccuring effects (adjusted EBIT) amounted to EUR 13,704 thousand (previous year: EUR 7,561 thousand), improved by EUR 6,143 thousand and, like unadjusted EBIT, was significantly higher than in the previous year. This resulted in a significantly higher adjusted EBIT margin of $13.0 \%$ (previous year: $8.6 \%$ ).
Interest and similar income
Interest and similar income amounted to EUR 1,087 thousand (previous year: EUR 541 thousand) in the reporting period due to the rise in interest rates and higher average level of cash and cash equivalents.
Interest and similar expenses
Interest and similar expenses amounted to EUR 651 thousand (previous year: EUR 519 thousand). This includes interest expenses of EUR 416 thousand (previous year: EUR 331 thousand), resulting from the application of IFRS 16.
Consolidated net income for the period
Consolidated net result for the period increased in the reporting period, in particular due to the good operating performance and despite the higher negative impact of the non-recurring effects listed above, to EUR 8,735 thousand (previous year: EUR 6,495 thousand) and was therefore significantly higher than in the same period of the previous year.
Earnings per share
Basic (undiluted) and diluted earnings per share in accordance with IFRS amounted to EUR 0.48 and EUR 0.46 (previous year: EUR 0.37 and EUR 0.36).
Incoming orders and order backlog
Incoming orders in the reporting period amounted to EUR 98,772 thousand (previous year: EUR 89,678 thousand), well above the previous year's level. As at the reporting date, however, the Group's order backlog as at September 30, 2024 decreased to EUR 75,443 thousand (December 31, 2023: EUR 81,300 thousand). SFC AG accounted for EUR 17,919 thousand (December 31, 2023: EUR 37,111 thousand), SFC NL EUR 46,174 thousand (December 31, 2023: EUR 27,267 thousand), SFC CA EUR 11,337 thousand (December 31, 2023: EUR 16,922 thousand), and SFC IN EUR 13 thousand (December 31, 2023: EUR 0) of this amount.
Clean Energy
The segment generated sales of EUR 73.385 thousand (previous year: EUR 58.877 thousand) in the reporting period under review and thus achieved a significant increase of EUR 14,508 thousand or $24.6 \%$ compared to the same period of the previous year.
The continued high demand for fuel cell solutions in industrial applications, which account for slightly more than half of segment sales, contributed in particular to the growth in sales. Segment sales with industrial customers increased by around $17 \%$ compared to the same period of the previous year.
The segment also benefited from the significant growth in project business and the increase in demand in the core target markets for public safety. Sales of fuel cell solutions to customers in these markets more than doubled.
Demand in the core target markets for private applications, which now account for the smallest share of segment sales, declined slightly. In the opinion of the Management Board, one of the main reasons for this is the muted consumer climate combined with greater price sensitivity among private households, particularly in Germany.
The segment's gross margin was $48.2 \%$ (previous year: $44.1 \%$ ) in the reporting period due to the attractive product mix in conjunction with, among other things, a dilution of production overheads and the ongoing normalization of raw material prices and the absence of material write-ups for inventories. In line with the significant increase in sales and the improved gross margin, gross profit in the reporting period was EUR 35,392 thousand (previous year: EUR 25,967 thousand) a significant increase of EUR 9,425 thousand compared to the same period of the previous year.
At EUR 10,362 thousand (previous year: EUR 10,379 thousand), selling expenses adjusted for the above-mentioned non-recurring effects of EUR 643 thousand (previous year: extraordinary income of EUR 226 thousand) were at the previous year's level.
The segment's general administrative expenses, adjusted for the aforementioned extraordinary expenses of EUR 1,475 thousand (previous year: EUR 610 thousand), also increased significantly by $27.5 \%$ to EUR 9,902 thousand in the reporting period (previous year: EUR 7,769 thousand) and were therefore significantly higher than in the previous year. The increase is mainly due to higher personnel expenses, depreciation and amortisation, consulting costs and IT costs.
Due to the significant increase in gross profit and the lower increase in functional costs in relation to sales, segment EBITDA adjusted for non-recurring effects also improved substantially in the reporting period to EUR 15,041 thousand (previous year: EUR 9.634 thousand), which also resulted in a significant increase in the segment's adjusted EBITDA margin of $20.5 \%$ (previous year: $16.4 \%$ ).
Clean Power Management
Compared to the previous year, the Clean Power Management segment recorded significant sales growth of $9.1 \%$ to EUR 31,805 thousand (previous year: EUR 29,153 thousand). While business with power management solutions increased significantly, business in the upstream oil and gas industry recorded moderate growth compared to the same period of the previous year.
Gross profit in the Clean Power Management segment also increased slightly disproportionately to sales to EUR 8,553 thousand (previous year: EUR 7,355 thousand). The segment's gross margin, which was moderately higher than in the same period of the previous year at $26.9 \%$ (previous year: $25.2 \%$ ) is attributable to both a marginally higher gross profit margin in the power management solutions business and a slightly higher gross profit margin in the frequency converter business.
The segment's selling expenses, which do not include any non-recurring effects, amounted to EUR 1,594 thousand (previous year: EUR 1,689 thousand) noticeably below the previous year's level. This was in particular due to lower personnel costs and lower advertising and travel expenses.
The segment's general administrative expenses in the reporting period amounted to EUR 3,247 thousand (previous year: EUR 2,956 thousand) and were mainly due to higher personnel costs, IT costs and depreciation and amortization of EUR 291 thousand were also significantly higher than in the same period of the previous year.
The segment's EBITDA also does not include any non-recurring effects. It improved significantly, mainly due to the increased gross profit margin in conjunction with the significantly higher sales in the reporting period to EUR 3,189 thousand (previous year: EUR 2,297 thousand). The segment's EBITDA margin also increased significantly compared to the same period of the previous year to $10.0 \%$ (previous year: $7.9 \%$ ).
Assets and financial position
Capital structure
Equity increased significantly in the reporting period by EUR 9,952 thousand and amounted to EUR 138,085 thousand as at September 30, 2024 (December 31, 2023: EUR 128,133 thousand).
The increase in shareholders' equity was mainly due to the Group profit for the period generated during the course of the year in the amount of EUR 8,735 thousand (previous year: EUR 6,495 thousand).
The net financial position (freely available cash and cash equivalents less liabilities to banks) increased in the reporting period by EUR 5,443 thousand and amounted to EUR 61,499 thousand (December 31, 2023: EUR 56,056 thousand).
Cash and cash equivalents
The freely available cash and cash equivalents as at September 30, 2024 amounted to EUR 65.413 thousand (December 31, 2023: EUR 59,847 thousand) and increased significantly by EUR 5,565 thousand.
Overall, liabilities to banks increased slightly in the reporting period compared to the end of the 2023 financial year by EUR 122 thousand to EUR 3,913 thousand (December 31, 2023: EUR 3,791 thousand).
Cash flow and investments
| CASH FLOW | in EUR thousand | |
|---|---|---|
| 01/01-09/30/2024 | 01/01/-09/30/2023 | |
| Operating cash flow before changes in working capital | 18,038 | 12,164 |
| Cash flow from | ||
| Operating activity | 14,104 | $-1,644$ |
| Investing activity | $-6,367$ | $-4,401$ |
| Financing activities | $-2,190$ | $-1,833$ |
Operating cash flow and cash flow from operating activities
Operating cash flow before changes in net working capital and income taxes (operating profit before changes in working capital) amounted to EUR 18,038 thousand (previous year: EUR 12,164 thousand) and thus particularly strong above the previous year's level.
After taking into account the change in net working capital, which increased cash-effective by EUR 2,448 thousand (previous year: EUR 12,761 thousand) and income tax payments, there was a significant improvement in cash flow from operating activities compared to the same period in the previous year amounting to EUR 14,104 thousand (previous year: EUR -1,644 thousand).
With regard to the main changes in net working capital, inventories increased in the reporting period with an effect on liquidity by EUR 2,977 thousand and trade receivables with an effect on liquidity by EUR 1,479 thousand. The above-mentioned increase was offset by the cash-effective increase in trade payables in the same period of EUR 2,601 thousand. Other current liabilities increased in the same period by EUR 965 thousand. Together with the other working capital items, this resulted in an increase in net working capital and therefore a cash outflow of EUR 2,448 thousand (previous year: EUR 12,761 thousand) in the reporting period.
Cash flow from investing activities and investments
The cash outflows from investing activities came to EUR 6,367 thousand (previous year: EUR 4,401 thousand). The payments for investments in intangible assets included in this figure amounted to EUR 2,283 thousand (previous year: EUR 3,320 thousand), of which EUR 2,223 thousand (previous year: EUR 2,082 thousand) was attributable to capitalised development expenses. The higher cash outflow in the previous year was mainly due to the acquisition of intangible assets.
The cash outflows for investments in plant and office equipment were valued at EUR 5,170 thousand (previous year: EUR 1,637 thousand) and more than tripled compared to the previous year. This very sharp increase is mainly due to the construction and expansion of the sites for SFC UK and SFC RO II.
The investments were made from the company's own funds or under the current loan agreements.
Cash flow from financing activities
The cash outflow from financing activities increased significantly in the reporting period to EUR 2,190 thousand (previous year: EUR 1,833 thousand). This increase is due to higher cash outflows for repayments of lease liabilities amounting to EUR 1,583 thousand (previous year: EUR 1,348 thousand) in connection with the application of IFRS 16.
Change in the cash flow components of cash and cash equivalents
The net change in cash and cash equivalents totalled to EUR 5.547 thousand (previous year: EUR -7.878 thousand). As of September 30, 2024, unrestricted available cash and cash equivalents amounted to EUR 65,413 thousand (December 31, 2023: EUR 59,847 thousand).
Asset position
Total assets amounted to EUR 191,096 thousand as at September 30, 2024 (December 31, 2023: EUR 176,399 thousand) and thus increased in the reporting period by $8.3 \%$ or EUR 14,697 thousand.
On the assets side, this was mainly due to the increase in current assets by EUR 11,095 thousand in particular due to the increase in inventories and cash and cash equivalents. On the liabilities side, current liabilities increased significantly by EUR 3,652 thousand. Non-current liabilities increased noticeably by EUR 1,093 thousand. The equity ratio was $72 \%$ (December 31, 2023: 73\%) close to the level at the beginning of the reporting period.
On the current assets side, inventories in particular increased noticeably by 10.3\% or EUR 2,582 thousand and, following the reduction in inventories in the first half of the 2024 financial year, increased to EUR 27,625 thousand (December 31, 2023: EUR 25,043 thousand).
Trade receivables increased significantly, mainly due to the sales momentum, by 4.7\% to EUR 29,983 thousand (December 31, 2023: EUR 28,645 thousand).
Other assets and receivables increased substantially in the reporting period by EUR 2,283 thousand to EUR 7,707 thousand (previous year: EUR 5,424 thousand). This was mainly due to higher advance tax prepayments. Intangible assets increased as at September 30, 2024 to EUR 20,243 thousand (December 31, 2023: EUR 19,820 thousand), mainly due to capitalised development expenses.
At EUR 22,433 thousand, property, plant and equipment were $32.4 \%$ above the level at the end of the 2023 financial year (December 31, 2023: EUR 16,944 thousand). This increase is mainly due to the investments in the expansion and development of international locations described above.
The sharp increase in current liabilities of EUR 3,652 thousand in the reporting period to EUR 37,230 thousand (December 31, 2023: EUR 33,578 thousand) was mainly the result of the significant increase in trade payables of EUR 2,438 thousand to EUR 15,328 thousand (December 31, 2023: EUR 12,890 thousand).
The reason for the significant increase in non-current liabilities in the reporting period to EUR 15781 thousand (December 31, 2023: EUR 14,688 thousand) is mainly due to non-current lease liabilities, which increased significantly by EUR 1,426 thousand or $13.8 \%$ in the reporting period.
Financial liabilities climbed in the reporting period by EUR 122 thousand slightly to EUR 3,913 thousand (December 31, 2023: EUR 3,791 thousand) and are solely of a current nature. They mainly concern the working capital facilities for SFC NL.
| NET FINANCIAL LIABILITIES | in EUR thousand | ||
|---|---|---|---|
| 30 Sep. 2024 | 31 Dec. 2023 | Change | |
| Liabilities to banks | 3,913 | 3,791 | 122 |
| of which SFC AG | 0 | 0 | 0 |
| of which SFC NL | 3,913 | 3,791 | 122 |
| of which SFC CA | 0 | 0 | 0 |
| Less | |||
| Freely available cash and cash equivalents ${ }^{a}$ | 65,413 | 59,847 | 5,565 |
| Total | 61,499 | 56,056 | 5,443 |
a) Cash and cash equivalents less restricted cash and cash equivalents
The composition and development of net financial liabilities are as follows:
Overall, the share of liablilities in total capital amounted to $27.7 \%$ (December 31, 2023: 27.4\%).
The Group's equity increased in the reporting period to EUR 138,085 thousand (December 31, 2023: EUR 128,133 thousand). The equity ratio remained almost constant at $72.3 \%$ (December 31, 2023: 72.6\%). Please refer to the Consolidated Statement of Changes in Equity in the supplementary financial information for information on the development in equity.
Employees
The number of permanent employees as at September 30, 2024 is as follows:
EMPLOYEES
| 30 Sep. 2024 | 31 Dec. 2023 | Change | |
|---|---|---|---|
| Management Board | 3 | 3 | 0 |
| Research and development | 77 | 77 | 0 |
| Production, logistics, quality management | 194 | 156 | 38 |
| Sales and marketing | 104 | 103 | 1 |
| Administration | 73 | 64 | 9 |
| Permanent employees | 451 | 403 | 48 |
EMPLOYEES BY FUNCTION
As at September 30, 2024, the Group employed 451 permanent employees worldwide (December 31, 2023: 403).
FORECAST
The Group forecast for the 2024 financial year was published on 12 February 2024. In view of the continued sales growth and strong profitability, which was also confirmed in the third quarter of 2024, this quarterly statement now includes a reaffirmation and specifies the forecast within the existing ranges, along with a moderate upward adjustment to the upper end of the adjusted EBIT forecast range.
The sustained strong demand for SFC's products and solutions has also had a positive impact on SFC's growth and financial performance in the current financial year. As expected, both sales and earnings increased significantly in the third quarter compared to the same quarter last year. The Management Board expects the demand for SFC's energy solutions to be sustained and to continue to grow steadily.
Based on the current and expected business development in the fourth quarter, a continued disciplined pricing strategy, and the ongoing implementation of efficient cost structures, the Management Board expects SFC's profitability to improve significantly in the current year compared to 2023. However, the ongoing regional expansion may initially incur expenses that could impact the development of the operating result in the fourth quarter.
In addition to a possible decline in sales volumes, which would at the same time lead to a lower dilution of production overheads, a significantly stronger Euro compared to the average for the current financial year and, at this point in time, unexpected impairments of current assets in the fourth quarter would also have a negative impact on the operating result.
SFC's overall risk and opportunity situation has not changed materially from the description in the 2023 management report. From today's perspective, there are no discernible risks that could jeopardize the company's continued existence.
Sales
In view of the course of business in the first nine months of 2024 and the expected deliveries and current order backlog for the fourth quarter of 2024, we are specifying the forecast for SFC Energy AG's sales growth in 2024 at $20.0 \%$ to $22.6 \%$. We now expect sales revenues in a range of around EUR 142,000 thousand to EUR 145,000 thousand (previously: EUR 141,700 thousand to EUR 153,500 thousand).
Adjusted EBITDA
Adjusted EBITDA is one of our key financial indicators for managing the operating business. Taking into account the positive sales development, the results achieved in the first nine months of the year and the developments described above, we are specifying our adjusted EBITDA forecast at the upper end of the previous forecast and narrowing the range to approximately EUR 20,000 thousand to EUR 21,500 thousand (previously: EUR 17,500 thousand to EUR 22,400 thousand).
Adjusted EBIT
In line with the results achieved in the first nine months of the financial year and the expectations described above, we are also specifying the forecast for adjusted EBIT, moderately raising the upper end and narrowing the range to around EUR 13,800 thousand to EUR 15,100 thousand and thus the upper end of the previous forecast (previously: EUR 9,800 thousand to EUR 14,700 thousand).
SUPPLEMENTARY FINANCIAL INFORMATION
Consolidated Statement of Income
FROM JANUARY 1 TO SEPTEMBER 30, 2024 (UNAUDITED)
Sales revenue
Cost of goods sold and services rendered to generate revenue
Gross profit
Selling expenses
Research and development expenses
General administrative expenses
Other operating income
Other operating expenses
Impairment losses on financial assets
Operating result (EBIT)
Interest and similar income
Interest and similar expenses
Earnings before taxes
Taxes on income and earnings
Consolidated profit for the period
attributable to the owner of SFC Energy AG
attributable to non-controlling interests
Earnings per share
| basic | 0.48 |
|---|---|
| diluted | 0.46 |
2023
1 Jan. -30 Sep.
(Retroactively
adjusted)
2023
1 Jan. -30 Sep.
(Retroactively
adjusted)
Consolidated Statement of Comprehensive Income
FROM JANUARY 1 TO SEPTEMBER 30, 2024 (UNAUDITED)
- See notes to the annual report 2023: Error corrections via retrospective amendment as a result of an error
There are no deferred tax effects on the changes in value recognised directly in equity.
Consolidated Statement of Financial Position
ASSETS AS AT SEPTEMBER 30, 2024 (UNAUDITED)
| 30 Sep. 2024 | 31 Dec. 2023 | |
|---|---|---|
| Current assets | 132,353,445 | 121,258,735 |
| Inventories | 27,625,238 | 25,043,347 |
| Trade receivables | 29,982,629 | 28,645,153 |
| Assets from contracts with customers | 1,303,315 | 2,013,114 |
| Income tax receivables | 36,588 | 0 |
| Other assets and receivables | 7,707,487 | 5,424,007 |
| Cash and cash equivalents | 65,412,568 | 59,847,494 |
| Restricted cash and cash equivalents | 285,620 | 285,620 |
| Non-current assets | 58,742,432 | 55,140,522 |
| Intangible assets | 20,242,622 | 19,819,787 |
| Property, plant and equipment | 22,432,815 | 16,943,596 |
| Other assets and receivables | 48,954 | 960,644 |
| Deferred tax assets | 16,018,041 | 17,416,495 |
| Assets | 191,095,877 | 176,399,257 |
Consolidated Statement of Financial Position
| in EUR | ||
|---|---|---|
| 30 Sep. 2024 | 31. Dec. 2023 | |
| Current liabilities | 37,230,231 | 33,578,134 |
| Tax provisions | $1,526,644$ | $1,331,652$ |
| Other provisions | $3,023,950$ | 2,108,107 |
| Liabilities to banks | $3,913,180$ | $3,791,132$ |
| Liabilities from advance payments | 26,655 | 178,982 |
| Trade payables | $15,328,015$ | $12,890,047$ |
| Leasing liabilities | $2,459,475$ | 2,200,030 |
| Liabilities from contracts with customers | 238,798 | $1,470,035$ |
| Other liabilities and deferred income | $10,713,514$ | $9,608,149$ |
| Non-current liabilities | $15,780,617$ | $14,687,907$ |
| Other provisions | $2,542,915$ | 2,188,891 |
| Leasing liabilities | $11,789,212$ | $10,363,153$ |
| Other liabilities | $1,299,629$ | 2,015,720 |
| Deferred tax liabilities | 148,861 | 120,143 |
| Equity | $138,085,029$ | 128,133,216 |
| Non-controlling interests | $-54,630$ | $-29,009$ |
| Equity attributable to the owners of SFC Energy AG | $138,139,659$ | 128,162,225 |
| Subscribed capital | $17,363,691$ | $17,363,691$ |
| Contributions made to implement the conditional capital increase | 18,000 | 0 |
| Share premium | $174,813,223$ | $173,167,237$ |
| Other changes in equity not recognised through profit and loss | $-1,503,437$ | $-1,059,431$ |
| Profit/loss carried forward | $-61,309,272$ | $-82,393,765$ |
| Consolidated unappropriated surplus | $8,757,454$ | 21,084,493 |
| Equity and liabilities | $191,095,877$ | 176,399,257 |
Consolidated Statement of Cash Flows
FROM JANUARY 1 TO SEPTEMBER 30, 2024 (UNAUDITED)
Consolidated Statement of Cash Flows
FROM JANUARY 1 TO SEPTEMBER 30, 2024 (UNAUDITED)
| Cash flow from investing activities | |
|---|---|
| $+/-$ | Investments in intangible assets from development projects |
| $+/-$ | Investments in other intangible assets |
| $+/-$ | Investments in property, plant and equipment and right-of-use assets |
| $+/-$ | Interest and similar income received |
| $+/-$ | Proceeds from the purchase of restricted bank balances |
| $+/-$ | Sale of fixed assets |
| Cash flow from investing activities | |
| Cash flow from financing activities | |
| $+/-$ | Cash inflow from the contributions made to realise the resolved capital increase (less transaction costs) |
| $+/-$ | Repayment of lease liabilities |
| $+/-$ | Interest paid and similar expenses |
| Cash flow from financing activities | |
| Cash-effective change in cash and cash equivalents | |
| $+/-$ | Exchange rate-related and other changes in cash and cash equivalents |
| Cash and cash equivalents at the beginning of the reporting period | |
| Cash and cash equivalents at the end of the reporting period | |
| Net change in cash and cash equivalents |
[^0]
[^0]: * Presentation adjusted: cash and cash equivalents incl. current account liabilities
Consolidated Statement of Changes in Equity
FROM JANUARY 1 TO SEPTEMBER 30, 2024 (UNAUDITED)
Group Segment Reporting
FROM JANUARY 1 TO SEPTEMBER 30, 2024 (UNAUDITED)
| Clean Energy | Clean Power Management | Group | ||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023* | |
| Sales revenue | 73,385,295 | 58,877,058 | 31,804,615 | 29,152,645 | 105,189,910 | 88,029,703 |
| Cost of goods sold and services rendered to generate sales revenue | $-37,993,538$ | $-32,910,304$ | $-23,251,467$ | $-21,798,028$ | $-61,245,005$ | $-54,708,332$ |
| Gross profit | 35,391,757 | 25,966,754 | 8,553,148 | 7,354,617 | 43,944,905 | 33,321,371 |
| 44.1\% | 26.9\% | 25.2\% | ||||
| Selling expenses | $-11,004,124$ | $-10,153,141$ | $-1,593,761$ | $-1,688,714$ | $-12,597,885$ | $-11,841,855$ |
| Research and development expenses | $-3,126,564$ | $-2,711,101$ | $-1,732,766$ | $-1,432,454$ | $-4,859,330$ | $-4,143,555$ |
| General administrative expenses | $-11,377,478$ | $-8,379,396$ | $-3,247,146$ | $-2,955,783$ | $-14,624,624$ | $-11,335,179$ |
| Other operating income | 1,195,439 | 1,651,114 | 41,541 | 48,433 | 1,236,980 | 1,699,547 |
| Other operating expenses | $-1,517,378$ | $-1,000,686$ | $-23,345$ | $-42,009$ | $-1,540,723$ | $-1,042,695$ |
| Change in impairment on financial assets** | $-51,058$ | 459,533 | 12,779 | 76,354 | $-38,279$ | 535,887 |
| Operating result (EBIT) | 9,510,594 | 5,833,077 | 2,010,449 | 1,360,444 | 11,521,043 | 7,193,521 |
| Adjustments to EBIT | 2,182,755 | 367,005 | 0 | 0 | 2,182,755 | 367,005 |
| Adjusted EBIT | 11,693,349 | 6,200,082 | 2,010,449 | 1,360,444 | 13,703,798 | 7,560,526 |
| Amortization and Depreciation | $-3,347,285$ | $-3,433,956$ | $-1,178,832$ | $-936,835$ | $-4,526,117$ | $-4,370,791$ |
| EBITDA | 12,857,879 | 9,267,033 | 3,189,281 | 2,297,279 | 16,047,160 | 11,564,312 |
| Adjustments to EBITDA | 2,182,755 | 367,005 | 0 | 0 | 2,182,755 | 367,005 |
| Adjusted EBITDA | 15,040,634 | 9,634,038 | 3,189,281 | 2,297,279 | 18,229,915 | 11,931,317 |
| Financial result | 436,111 | 21,340 | ||||
| Earnings before taxes (EBT) | 11,957,154 | 7,214,861 | ||||
| Taxes on income and earnings | $-3,222,424$ | $-719,689$ | ||||
| Consolidated net income for the period | 8,734,730 | 6,495,172 |
- See notes to the annual report 2023. Error corrections via retrospective amendment as a result of an error
** Change in presentation: Separate disclosure of impairment losses on financial assets
SUPPLEMENTARY REPORT
On October 1, 2024, SFC Energy AG, together with its Danish subsidiary SFC Energy Denmark ApS, signed an agreement to acquire selected assets of the stationary hydrogen fuel cell business in Scandinavia, including IP rights and (subject to customer approval) customer contracts, from Ballard Power Systems Europe A/S. The purchase price is in the low single-digit million euro range.
The purchase agreement is expected to be finalized in November 2024.
No events of particular significance expected to have a significant impact on the Group's net assets, financial position and results of operations had occurred by the time of preparation.
Brunnthal, November 19, 2024
The Executive Board
FINANCIAL CALENDAR 2024
NOVEMBER 19, 2024
NOVEMBER 25 - NOVEMBER 27, 2024
QUARTERLY RELEASE Q3 2024
DEUTSCHES EIGENKAPITALFORUM, FRANKFURT (MAIN)
SHARE INFORMATION
Bloomberg symbol
Reuters symbol
GSIN
ISIN
Number of shares outstanding as of 30 Sep. 2024
Share characteristics
Stock-market segment
Sector
Index membership
Home exchange
Designated sponsor
INVESTDR-RELATIONS
SFC Energy AG
Eugen-Sänger-Ring 7
85649 Brunnthal
Germany
F3C
F3CG
756857
DE0007568578
$17,363,691$
No-par value shares
Prime standard
Renewable energies
SDAX
Frankfurt, FWB
mwb fairtrade Wertpapierhandelsbank AG
Phone: +49 (0) 89/673592-378
Fax: +49 (0) 89/673592-169
E-Mail: [email protected]
IMPRINT
SFC Energy AG
Eugen-Saenger-Ring 7
85649 Brunnthal
Germany
Phone: +49 (0) 89 / 673592 - 0
Fax: +49 (0) 89 / 673592 - 369
Responsible: SFC Energy AG
Editing: SFC Energy AG/
CROSS ALLIANCE communication GmbH
Concept and Design:
CROSS ALLIANCE communication GmbH
Photo credit:
SFC Energy AG
This quarterly statement contains forward-looking statements and information - i.e. statements about events that lie in the future, not in the past. These forward-looking statements can be identified by formulations such as ,expect", ,,intend", ,plan", , believe", ,aim", ,,estimate" or similar terms. Such forward-looking statements are based on our current expectations and certain assumptions. They therefore involve a number of risks and uncertainties. A variety of factors, many of which are beyond SFC Energy AG's control, affect SFC Energy AG's business activities, performance, business strategy and results. These factors could cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. SFC Energy AG assumes no obligation to update forward-looking statements.