DGAP-News: 2G Energy AG boosts total output in 1st half-year by 24% to EUR 137.8 million

2G Energy AG boosts total output in 1st half-year by 24% to EUR 137.8 million

• Sales revenues increase to EUR 114.0 million (H1 2021: EUR 106.9 million)
• Management Board narrows sales expectations for 2022 to EUR 290 to 310 million (previously: EUR 280 to 310 million)
• EBIT of EUR 2.6 million exceeds the previous year's level by 13% (H1 2021: EUR 2.3 million)
• Increased energy price level has a positive effect

Heek, 05 September 2022 - 2G Energy AG (ISIN DE000A0HL8N9), one of the leading international manufacturers of gas-fired combined heat and power (CHP) plants, has - as already reported in the Corporate News of 25 August lifted sales by EUR 7.1 million to EUR 114.0 million in the first half of the year 2022 (+7%). Much stronger than sales, which were characterized by customer delays in the new installations business, 2G was able to boost total output in the past half-year. Overall, output rose by EUR 26.2 million to EUR 137.8 million.

"With this performance, we were able to increase total output to a new record value in the first 6 months, which is certainly a positive highlight in view of the ongoing supply chain problems," says COO Ludger Holtkamp. "The timely stocking or restocking of inventories, which has been intensified again in recent months, has had a correspondingly positive effect on production capability and capacity utilization at the company's Heek location."

The high factory output in the first half of the year results in work in progress of EUR 65.1 million, which is EUR 24.1 million higher than the comparable figure at the end of 2021. This lays the foundation for reliably achieving the previous sales forecast of EUR 280 to 310 million. The Management Board has therefore decided to raise the lower limit to EUR 290 million (previously: EUR 280 million). In view of the very dynamic situation on the procurement side, however, the Management Board is leaving the EBIT forecast unchanged in the range of 6.0 to 8.0%.

EBIT of EUR 2.6 million, up 13% on prior-year level

In line with the increase in total operating performance, the cost of materials was up from EUR 72.6 million EUR 92.7 million. The cost of materials ratio increased by 2.2 percentage points. To date, this proportionate increase is only partly due to material price increases, as in the first half of the year mainly components and materials were used which were procured in good time before the inflationary spikes. The main reason for the increased materials expense ratio is the stronger use of service providers, subcontractors and workers from external companies in Germany and abroad, which was necessary above all to realize the enormous rise in production levels. 

In this context, the personnel cost ratio was down by 1.9 percentage points, as the increased level of production was not matched by an equal increase in the number of direct production employees. Only in sales and service were significant numbers of additional employees taken on board in Germany and abroad. Consequently, personnel expenses advanced to EUR 28.4 million in the past half-year (H1 2021: EUR 25.1 million, +13.0%). Senertec Center Schweinfurt GmbH, which was fully consolidated for the first time, contributed around EUR 0.25 million to this figure.

Other operating expenses increased by EUR 2.6 million to EUR 13.8 million, but remained constant in relation to total operating performance at 10.0% (previous year: 10.0%). Increased (outgoing) freight costs accounted for EUR 0.9 million, while the significant increase in travel activities was reflected in additional costs of EUR 0.5 million. In addition, vehicle expenses were up by a total of EUR 0.3 million, in particular due to higher fuel prices.

EBIT at the half-year reporting date stood at EUR 2.6 million (H1 2021: EUR 2.3 million), corresponding to an EBIT margin of 2.2% (H1 2021: 2.1%).

2G will publish the full half-year report next Thursday, on September 08.

Higher energy price levels exerting a positive effect

With spot prices of over EUR 200 per MWh for gas and EUR 500 per MWh for electricity, energy prices have climbed to unprecedented levels in recent weeks. Consequently, the economic viability of Natural Gas CHP units is increasing quite considerably. Projects are being implemented for both natural gas CHP units and biogas CHP units, some of which have payback periods of less than two years.

"Owner-managed medium-sized businesses in particular are currently investing in CHP units, according to the motto: gas can't stay this expensive and electricity will certainly only become cheaper to a limited extent," assesses CEO Christian Grotholt the current market development.

There are reports from various countries and markets that projects that have been put on hold for economic reasons are being revived in order to ensure security of supply with electricity and heat by means of CHP that can also be operated with hydrogen. Moreover, biogas plant operators are showing a significantly increased interest in cogeneration solutions.

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. After-sales 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 hydrogen, natural gas, biogas as well as other lean gases. Worldwide, more than 7,000 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 power conversion 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. As a consequence, 2Gs customers 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 hydrogen, natural gas and biogas applications, as well as in specific software development. Moreover, in the energy revolutions 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 creates a high barrier to market entry for competitors.

2G employs around 750 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 266 million in the 2021 financial year. 2G was founded in 1995 and has been listed on the capital market since 2007. The shares of 2G Energy (ISIN DE000A0HL8N9) are listed in the Scale segment of the Frankfurt Stock Exchange.

2022 calendar dates
September 8          Half year report 2022
November 21         Q3 key figures and business trends
November 28-30    German Equity Forum, Frankfurt

IR contact
2G Energy AG
Benzstrasse 3, 48619 Heek
Phone: +49 (0) 2568 93 47-2795
Fax: +49 (0) 2568 93 47-15
Email: ir@2-g.de
Internet: www.2-g.de