Corporate News Heek, June 09, 2021

2G Energy AG acquires HJS Motoren GmbH and raises sales forecasts

- Complete acquisition of HJS Motoren GmbH broadens customer access

- Sales forecast 2021 now set at EUR 250 to 260 million (previously: EUR 245 to 260 million), EBIT margin (6.0% to 7.5%) unchanged

- Sales forecast 2024 raised to EUR 330 million (previously: EUR 300 million), unchanged EBIT margin of 10% expected

- First-time sales forecast for 2026 of EUR 400 million, EBIT forecast at 8.5 % to 10 %

Heek, June 09, 2021 - 2G Energy AG (ISIN DE000A0HL8N9), one of the leading international manufacturers of gas-fired combined heat and power (CHP) plants, has now fully acquired Amtzell-based HJS Motoren GmbH. To date, 2G held a 50% stake in the company, which specializes in the maintenance and repair of combined heat and power plants with gas engines.

HJS Motoren GmbH employs a total of 30 service technicians at 5 locations in Germany. Founded in 2017, the company has succeeded in continuously raising its sales revenues. The past fiscal year 2020 was concluded with sales of EUR 7.3 million and an EBIT margin in the double-digit range. Besides to the additional revenue and earnings contributions from HJS Motoren GmbH, 2G is also anticipating complementary potential for sales of the company's own new equipment. To date, HJS Motoren GmbH is already servicing around 400 systems, most of which are not from 2G and whose motors will reach the end of their technical service life in the next few years.

"After we initially acquired a 50% share in HJS Motoren GmbH in 2018, the company has developed extremely well, posting sales gains of 91% in 2019 and an additional 44% in 2020. In view of the sound and trust-based cooperation with local management as well as the further positive growth prospects, we are very pleased to have now reached an agreement with the founding shareholder on the acquisition of the remaining 50%," as CEO Christian Grotholt stated. "Not least due to the fact that our deepened cooperation will secure the sales level and presents the genuine opportunity to leverage additional synergies."

With a look to the medium term, 2G expects the full consolidation of HJS Motoren GmbH to generate additional sales revenues of EUR 10 to 15 million per year, in connection with an EBIT margin above 10%.

Full sales and earnings consolidation, with retrospective effect from January 01, will be carried out for the first time in the 2021 half-year financial statements.

Forecast 2021
Since the acquisition of the first 50% of the shares in HJS Motoren GmbH, the company has been consolidated at equity, with the result that its sales figures were previously not included and EBIT was only included at 50% (corresponding to the 2G share) in 2G's consolidated financial statements.

For the current fiscal year, 2G now expects sales in the range of EUR 250 to 260 million (previously: 245 to 260 million euros). The acquisition of the remaining shares in HJS Motoren GmbH is associated with goodwill, which will lead to respective depreciation and amortization. Therefore, the earnings forecast remains unchanged at 6.0 to 7.5%.

Forecast 2024
Even in the medium-term planning to date (2024: sales of EUR 300 million, EBIT margin of 10%), the sales of HJS Motoren GmbH are not yet included, whereas the earnings contribution is already included proportionately, i.e. at 50%, in Group EBIT.

Taking into account the contribution by HJS Motoren GmbH, but especially against the backdrop of the successful internationalization strategy, 2G is now raising its sales forecast for 2024 to EUR 330 million.

Whether the current distortions on the procurement market, which are also reflected in noticeable price increases for many raw materials and products, will be compensated by further successes in the lead-to-lean project cannot yet be foreseen. 2G therefore leaves its EBIT margin forecast unchanged at 10%.

Forecast 2026
Assuming that further international market potential is tapped and in the expectation that the energy transition in Central Europe and especially in Germany will strongly increase demand for base-load and hydrogen-capable power plants that can be supplied at short notice, 2G expects to achieve sales of around EUR 400 million in 2026.

In this context, 2G is planning an EBIT margin in the range of 8.5 to 10%.

Note on the virtual Annual General Meeting
The speeches of the Board of Management for the Annual General Meeting, which will be held as a virtual Annual General Meeting next Tuesday, June 15, 2021, will be available for download on the website https://www.2-g.com/de/hv2021 as of tomorrow (only available in German).

2G company portrait
The 2G Energy AG Group is an internationally leading manufacturer of decentralized energy supply systems. With the development, production and technical installation as well as digital grid integration of combined heat and power systems (CHPs), the company offers comprehensive solutions in the growth market for highly efficient CHPs. Aftersales and maintenance services comprise an important additional performance criterion. The product range especially includes CHP modules in the 20 kW and 4,500 kW range for operation utilizing natural gas, biogas, as well as other lean gases and hydrogen. Worldwide, more than 6,500 installed 2G systems in various applications supply electrical and thermal energy to a broad spectrum of customers including companies in the housing industry, agriculture, commercial and industrial companies, public energy utilities, and municipal and local government authorities.

2G benefits from global long-term trends that make efficient and decentralized energy solutions ever more important. These trends include not only rising energy demand but also the need to conserve natural resources. The parallel generation of electrical and thermal energy makes CHP technology more efficient and climate-compatible than conventional energy production methods, especially when, for example, hydrogen of regenerative origin is harnessed as fuel. 2G power plants can offset wind and solar power plant production fluctuations as required, thereby forming a backbone technology for future supply concepts, especially in the deployment of hydrogen engines. 2G's customers thereby derive consistent benefits from economically and ecologically highly beneficial innovations that rapidly pay for themselves and create extensive added values.

2G is consistently expanding its technological leadership through continuous research and development work, both in gas engine technology for natural gas, hydrogen and biogas applications, as well as in specific software development. Moreover, in the energy revolution's future electricity market design, the digitalization that 2G consistently implements forms an indispensable system-relevant element in combination with solar, wind, biogas and natural gas producers, and establishes a high barrier to market entry for competitors.

2G employs around 700 staff at its headquarters in Heek, Germany, in North America, as well as at five other European locations. The company is active in more than 50 countries and generated net sales of EUR 247 million in the 2020 financial year. 2G was founded in 1995 and has been listed on the stock market since 2007. The shares of 2G Energy (ISIN DE000A0HL8N9) are listed in the "Scale" segment of the Frankfurt Stock Exchange. As of February 15, 2021, company founders Christian Grotholt and Ludger Gausling held a 45.1 % interest in the company, with the free float amounting to 54.9 %.

2021 calendar dates
June 15                   (Virtual) Ordinary AGM, Heek
September 6            Q2 Key financials and business trends
September 6-7         Equity Forum Fall Conference (Virtual or physical)
September 9            Consolidated financial statements as of June 30, 2021
November 18           Q3 Key financials and business trends
November 22-24      (Virtual) German Equity Forum

IR contact
2G Energy AG
Benzstrasse 3, 48619 Heek
Telephone: +49 (0) 2568 93 47-2795
Fax: +49 (0) 2568 93 47-15
Email: [email protected]
Internet: www.2-g.de