DGAP-News: 2G Energy AG / Key word(s): Half Year Results/Incoming Orders 2G Energy AG: FY 2014 sales revenue forecasts increased to over EUR 165 million; EBIT margin forecasts of 6 to 8 % confirmed 30.09.2014 / 07:28 --------------------------------------------------------------------- Corporate News 2G Energy AG: FY 2014 sales revenue forecasts increased to over EUR 165 million; EBIT margin forecasts of 6 to 8 % confirmed - 2014 H1 sales revenue: EUR 52.2 million (H1 2013: EUR 41.9 million) - 2014 H1 total operating revenue: EUR 86.5 million (H1 2013: EUR 48.3 million) - H1 2014 EBIT loss of EUR 0.5 million (H1 2013: loss of EUR 2.1 million) - Business trends impacted by amendment to German Renewable Energies Act as of August 1, 2014 Heek, September 30, 2014 - 2G Energy AG (ISIN DE000A0HL8N9), one of the leading German manufacturers of combined heat and power (CHP) plants, generated EUR 52.2 million of consolidated revenue in the first half of 2014 (as of June 30), compared with EUR 41.9 million in the equivalent period of the previous year, representing 25 % growth. Business trends in the first half of the year were affected by debate and speculation about the amendment to the Renewables Energy Act (EEG) in Germany as of August 1, 2014. 2G reported a CHP order position of EUR 112.3 million as of June 30, 2014, comprising finished goods and work in progress. Total operating revenue was up by almost 80 % to EUR 86.5 million compared with the previous year's reporting date. As many supplies and services arising from CHP orders for the German market that were placed before the amended EEG came into force were being processed beyond the June 30, 2014 balance sheet date, sales revenues and earnings were shifted into the second half of the 2014 financial year on the basis of German Commercial Code (HGB) accounting. As of June 30, 2014, the company still reports a loss before interest and tax (EBIT) of EUR 0.5 million due to reporting date and seasonal factors (H1 2013: EUR -2.1 million), as the high order book position consisting of work in progress of EUR 58.8 million arising from the aforementioned CHP plant orders will not be finally invoiced with customers until the second half of the year, when it will become effective in terms of sales revenue and earnings. In markets outside Germany, sales developed particularly well in the United Kingdom. A marked reticence to invest was evident in Southern Europe, while trends in Eastern Europe were stable, in line with expectations. 2G's US business is moving in a sideways trend at a low level, as the CHP market in the USA remains heterogeneous and lacks decisive impulses for a jump in sales. The Group incurred a consolidated net loss of EUR 1.4 million in the first half of 2014 (previous year: consolidated net loss of EUR 1.6 million). The loss per share (EPS) stood at EUR -0.40 (previous year: EUR -0.36 per share), after deducting profits/losses attributable to non-controlling shareholders. Good business in Germany, differing trends on foreign market The first half of 2014 was characterized for 2G by a boost in orders for CHP systems as the result of the amendment to the German Renewable Energies Act (EEG) that came into force on August 1. High new order intake levels in February, March and April prevented 2G from accepting any more orders from mid-April with delivery deadlines by July 31, 2014. Capacities were fully utilized, and some production was processed with three-shift operations including work on Sundays and public holidays. As of the June 30 reporting date, CHP sales revenue in Germany was split approximately 48 % among biogas driven systems and 52 % among natural gas driven CHP systems. CHP system sales revenue was 53 % attributable to Germany and 47 % attributable internationally. In countries outside Germany, business with biogas driven CHP systems continued to dominate at around 84 %. A higher level of new order intake was recorded in the United Kingdom due to the adjustment at the end of the third quarter to feed-in compensation for electricity generated from biogas systems. At the same time, the transformation process toward the utilization natural gas driven CHP systems has started on more developed foreign markets. This is reflected in new order intake in this area from Italy, the USA and, in particular, the United Kingdom. Overall, Group sales revenue in the first half-year was 61 % attributable to sales of CHP systems, 29 % to service, and 10 % to after sales. 2G generated 71 % of its total sales revenue in Germany (previous year: 84 %), and 29 % abroad (previous year: 16 %). This view is nevertheless somewhat skewed as many projects in Germany are still under construction, and will not become effective in terms of sales revenue and earnings until the second half of 2014. 2G's solid balance sheet structure secures financial independency The balance sheet structure of the 2G Energy Group continued to be very stable as of June 30, 2014. Total assets grew to reach EUR 115.1 million, up by 30 % compared with the December 31, 2013 balance sheet date. This is particularly due to an increase in stocks of raw materials and supplies, as well as the inventory of work in progress. The balance sheet structure and key balance sheet figures are distorted due to factors relating to the reporting date. Working capital amounts to EUR 26.4 million (previous year: EUR 28.8 million). 2G's consolidated equity stands at EUR 45.8 million as of the balance sheet date (December 31, 2013 EUR 47.1 million). The equity ratio has fallen to 39.8 % as of the balance sheet date (December 31, 2013: 53.2 %) due to the sharp increase in total assets which reflects seasonal and reporting date factors. Bank borrowings stood at EUR 6.6 million as of the balance sheet date (previous year: EUR 7.2 million). The Group financial position is characterized by the bind business during the first half of the year and the jump in orders in Germany. Operating cash flow amounts to EUR 2.1 million. The company realized EUR 1.5 million of investments, primarily spending on its vehicle fleet. Operating expenses determined by high level of capacity utilization The cost of materials ratio (in relation to total operating revenue) increased to 75.7 % in the period under review due to the strong buildup of inventory as of the balance sheet date (H1 2013: 68.3 %). The personal expense ratio was down year-on-year from 21.4 % to 14.4 % due to the marked increase in production output, and despite further hiring within the Group to a level of 554 employees (H1 2013: 486 employees). Other operating expenses increased from EUR 1.7 million to EUR 8.8 million as part of higher sales, operating and administrative expenses. 2G has invested in adaptation measures to expand and restructure its national and international service network. Order book positions characterized by German business The order book position consisting of CHP system orders amounts to around EUR 112.3 million as of June 30, 2014, up by around 87 % compared with the previous year (previous year: approximately EUR 60 million). This order book position comprises around 48 % biogas and 52 % natural gas applications. The geographic distribution approximately reflects around 83 % from Germany and 17 % from abroad. As far as gas types are concerned, the order book in Germany comprises a preference for natural gas-driven CHPs of around 60 %. The opposite applies abroad where around 89 % of the order book position is attributable to biogas-driven CHPs. Outlook: Sales revenue forecast upgraded For the second half of the 2014 financial year, 2G anticipates marked sales revenue growth due to its current order book position and a higher level of invoicing of existing work in progress arising from CHP orders. New order intake in Germany in the second half eased due to changes of the EEG effective as of August 1, 2014. The order book position for CHP systems amounts to around EUR 92 million including unfinished goods as of the end of September 2014 (previous year: EUR 80 million). The international share stands at approximately 21 % (previous year: 27 %), and the share of biogas and natural gas driven CHP projects amounts to 42 % and 58 % respectively (previous year: 52 % / 48 %). The Management Board is upgrading the FY 2014 sales revenue forecast that it issued at the end of May to more than EUR 165 million (previously: between EUR 145 million and EUR 165 million), and is confirming its forecast for the EBIT margin at a range of between 6 % and 8 %. Half-yearly report as of June 30, 2014 available for download The company will make the half-yearly report as of June 30, 2014 available for download on September 30, 2014 at http://www.2-g.de/?langid=1&seitenid=86. 2G Energy AG company profile 2G Energy AG is amongst the world's leading manufacturer of cogeneration systems (CHP) for decentralized energy production and supply by means of combined heat and power. The company's product portfolio includes systems with an electrical capacity between 20 kW and 4,000 kW for the operation with natural gas, biogas or bio methane. So far, 2G was able to successfully install thousands of CHPs in 25 countries. Especially, in the performance range of 50 kW to 550 kW 2G posses own technological combustion engine concepts characterized by low specific fuel consumptions. Next to the main production site at its headquarter 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 farmers to industrial clients, municipalities, real estate industry, up to municipal utilities and big utility companies. The high level of customer satisfaction is founded on the close-knit service network as well as the high technical quality and performance of 2G power stations. Thanks to the combined heat and power performance they achieve an overall degree of efficiency between 85 percent and well above 90 percent. To further enlarge the technologically leadership the company continuously invests in its R&D activities for gas engines for the use of natural gas, biogas and synthetic gases (e.g. hydrogen). Next to the construction of combined heat and power stations, the company, located in Westphalia in the north-west of Germany, offers integrated solutions reaching from the planning stage and installations to serial service and maintenance work. Due to its decentral locations, scalability and projectable availability combined heat and power stations shall play a crucial role as part of intelligent networked energy systems - so called virtual power stations - within the ongoing switch to clean energy. In the context of Germany's new energy policy, CHPs within smart grids - so-called virtual power plants - are becoming rapidly important due to their predictable availability. 2G Energy (ISIN DE000A0HL8N9) is listed in the Entry Standard of Deutsche Börse AG. The share capital amounts to EUR 4,430,000, and is split into 4,430,000 shares. As of December 31, 2013, the company's founders held 55.9 % of the shares, with the free float amounting to 43.9 %. In 2013 financial year (January 1 to December 31), 2G Energy generated EUR 126.1 million of revenues, EUR 3.1 million of earnings before interest and tax (EBIT), and EUR 1.0 million of net income. The company employs 518 staff as of 31 Dec., 2013. Forthcoming dates in 2014 Nov. 25-26, 2014 Deutsches Eigenkapitalforum 2014, Frankfurt Further information: www.2-g.de Investor relations contact 2G Energy AG Benzstr. 3 48619 Heek Germany Telephone: +49 (0) 2568 93 47-2795 Fax: +49 (0) 2568 93 47-15 E-mail: [email protected] Internet: www.2-g.de --------------------------------------------------------------------- 30.09.2014 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. Media archive at www.dgap-medientreff.de and 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: [email protected] Internet: www.2-g.de ISIN: DE000A0HL8N9 WKN: A0HL8N Listed: Freiverkehr in Berlin, Düsseldorf, Stuttgart; Frankfurt in Open Market (Entry Standard) End of News DGAP News-Service --------------------------------------------------------------------- 289309 30.09.2014