DGAP-News: 2G Energy AG grows profitably in 2016 and expands foreign business
DGAP-News: 2G Energy AG / Key word(s): Final Results/Forecast
2G Energy AG grows profitably in 2016 and expands foreign business
27.04.2017 / 13:15
The issuer is solely responsible for the content of this announcement.
- FY 2016 net sales grow 14 % to EUR 174.3 million (previous year: EUR 152.9 million)
- EBIT up in line by 18 % to EUR 5.6 million (previous year: EUR 4.8 million)
- EBIT margin at 3.2 % (previous year: 3.1 %)
- Order book position signals continued high contribution from important foreign markets for 2017
- Business strategy focusing on expanding margins in product and service businesses
- 2017 guidance: net sales of EUR 160 million to EUR 180 million, EBIT margin 3-5 %
2G Energy AG (ISIN DE000A0HL8N9), one of the internationally leading manufacturers of gas-driven combined heat and power (CHP) systems, grew its consolidated net sales by 14 % to reach EUR 174.3 million in the 2016 financial year, and reported a 19 % year-on-year increase in total operating revenue to EUR 183.6 million based on preliminary results. The company lifted its earnings before interest and tax (EBIT) by 18 % to EUR 5.6 million (previous year: EUR 4.8 million), with the EBIT margin thereby rising slightly from 3.1 % to 3.2 % - below the last specific full-year forecast. At the end of November 2016, 2G communicated an EBIT margin at the upper end of the 3 % to 5 % range. Factors affecting EBIT as part of preparing the consolidated financial statements included an unexpected negative result contribution of EUR 0.6 million from the UK subsidiary, mainly arising from a postponement of a total of 19 orders worth EUR 7.6 million into the current 2017 financial year. A revaluation of various major general contractor projects was also necessary. Project costs and subcontractor services in excess of the amount foreseen in the calculations, amounting to around EUR 2.6 million also retrospectively burdened the FY 2016 results.
In light of this, the Management Board has reappraised the opportunities and risks entailed in project business with general contractor characteristics and decided not to progress this business any further. Current projects of this type are to be terminated on an orderly basis. Starting this year, 2G is focusing mainly on margin enhancement in the familiar product and service business in Germany and abroad.
Foreign share of consolidated sales rises to more than 30 %
2G generated EUR 52.8 million of net sales abroad in the 2016 financial year (previous year: EUR 41.1 million), corresponding to a 30 % share of total sales (previous year: 27 %), with 2G thereby successfully further advancing its diversification strategy in the reporting year. Along with the UK, the strongest foreign markets included mainly France, the USA and Japan. In the German market, 2G achieved approximately 9 % sales growth.
Overall, the Münsterland-based company generated around EUR 112.0 million at Group level from the sale of CHP systems, equivalent to 67 % of its total sales. The foreign share in this business area amounted to 34 % (previous year: 35 %). In Germany, the company achieved sales growth with Biogas driven CHP modules of 80 % to EUR 28.8 million especially due to a pickup in the business of the flexibilisation of biogas plants (previous year: EUR 16.1 million).
2G reported a slight year-on-year increase in its sales from the service and spare parts business to EUR 57.1 million (previous year: EUR 52.1 million). This business area thereby continues to account for an important proportion of sales of around one third (previous year: 34 %).
Personal expense ratio falls, cost of materials ratio rises
The cost of materials ratio (in relation to total operating revenue) rose in total to 70.1 %, compared with 65.0 % in the previous year, reflecting, firstly, a higher inventory of finished goods and work in progress (EUR 7.1 million compared with EUR 0.1 million in the previous year), and, secondly, under cost of materials the marked increase in expenses for purchased services of EUR 18.8 million (12.2 % of total operating revenue) to reach EUR 28.4 million (15.5 % of total operating revenue) in the reporting year. These purchased services are mainly connected with the project business, as well as to offset capacity utilization peaks in production at the Group's main site in Heek.
Personnel costs reduced year-on-year from 19.0 % to 16.3 % due to the increased total operating revenue.
Outlook for the current FY 2017
The order book position for CHP systems stood at EUR 106.0 million as of March 31, 2017 (previous year: EUR 86.9 million). New order intake of EUR 29.4 million during the first quarter significantly exceeded the previous year's level of EUR 13.3 million in this context. Risky plant construction projects are not anymore included in the order book. The order book position divides half-half between domestic and foreign orders. The UK (EUR 16.7 million), the USA (EUR 16.5 million) and France (EUR 8.6 million) are currently the strongest international markets in this connection. In Germany, demand for biogas driven CHP systems as part of the flexibilisation business is currently dominant with around 80 % of the German order book position deriving from this area.
In light of this order book position and taking the market and competitive situation in Germany and abroad into account, the Management Board assumes sales in a range between EUR 160 million and EUR 180 million can be achieved in the current financial year and an EBIT margin of between 3 % and 5 %.
As planned, 2G will publish its audited consolidated financial statements and 2016 annual report on May 30, 2017.2G company portrait
2G Energy AG ranks among the world's leading manufacturers of cogeneration (CHP) systems for decentralized energy production and supply by means of combined heat and power. The company's product portfolio includes systems with electric capacity between 20 kW and 4,000 kW for operation with natural gas, biogas, biomethane and other lean gases. 2G has successfully installed several thousand CHP systems in 40 countries to date. Especially in the 50 kW to 550 kW performance range, 2G commands proprietary technological combustion engine concepts characterized by low specific fuel consumptions, high operational availability and optimized service intervals. Besides the main production site at the Group headquarters in Heek, Germany, the company has invested in an additional production and sales & service site in St. Augustine, Florida, USA. 2G's customers range from agricultural and industrial operations, local authorities, and the residential sector through to municipal utilities and large-scale utilities. The high level of customer satisfaction is founded on a dense service network as well as 2G power stations' high technical quality and performance. These power stations achieve an overall degree of efficiency from 85 percent and to well above 90 percent thanks to the combined heat and power performance.
Along with the construction of combined heat and power stations, the company, located in Westphalia in the northwest of Germany, offers integrated solutions spanning the planning stage and installation through to service and maintenance work. In the context of the energy policy revolution, and as part of modern energy supply concepts, CHP systems are gaining considerably in importance in intelligent energy grid systems - so-called virtual power plants - due to their decentralized and scalable operation, and predictable availability.
2G is consistently expanding its technology leadership through continuous research and development work, both in gas engine technology for natural gas, biogas and synthetic gas applications (e.g. hydrogen), as well as in specific software development. The "virtual power plant" operating type, for example, has been created with a software solution. Overall, the 2G power plant is thereby operated on a basis that is "heating-managed and electricity-oriented" in order to significantly simplify integration within a grid group. In the energy policy revolution's future electricity market design, such digitalization-enabled flexibility forms an indispensable system-relevant element in combination with solar, wind, biogas and natural gas producers, and creates a high barrier to market entry for competitors.
The shares of 2G Energy (ISIN DE000A0HL8N9) have been listed in the trading segment Scale on the Frankfurt Stock Exchange since March 01, 2017. The share capital amounts to EUR 4,430,000, and is divided into 4,430,000 shares. The company's founders held 53.3 % of the shares as of the end of January 2017, with the free float amounting to 46.9 %.
2017 dates
May 30, 2017 Publication of Group Financial Report as of Dec. 31, 2016
July 11, 2017 Ordinary AGM, Ahaus
Sept. 28, 2017 Semiannual consolidated financial statements as of June 30, 2017
Nov. 27-29, 2017 German Equity Capital Forum 2017
Nov. 30, 2017 Q3 key figures and business trends
IR contact
2G Energy AG
Benzstr. 3, 48619 Heek
Tel.: +49 (0) 2568 93 47-2795
Fax: +49 (0) 2568 93 47-15
Email: ir@2-g.de
Internet: www.2-g.de
27.04.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de
Language:
English
Company:
2G Energy AG
Benzstr. 3
48619 Heek
Germany
Phone:
+49 (0)2568-9347-0
Fax:
+49 (0)2568-9347-15
E-mail:
service@2-g.de
Internet:
www.2-g.de
ISIN:
DE000A0HL8N9
WKN:
A0HL8N
Listed:
Regulated Unofficial Market in Berlin, Dusseldorf, Stuttgart, Tradegate Exchange; Open Market (Scale) in Frankfurt
End of News
DGAP News Service
568287 27.04.2017