2G Energy AG increases EBIT margin to 6.7 % in FY 2020 (previous year: 6.5 %)

Corporate News Heek, March 25, 2021

2G increases EBIT margin to 6.7 % in FY 2020 (previous year: 6.5 %)

- Consolidated net sales grow by 4.4 % to EUR 246.7 million (previous year: EUR 236.4 million)

- Total operating revenue reports significant rise to EUR 254.2 million (previous year: EUR 226.1 million, +12.4 %)

- EBIT improves to EUR 16.4 million (previous year: EUR 15.5 million, +6.4 %), consolidated net profit stands at EUR 12.0 million (previous year: EUR 10.3 million, +16.1 %)

- Management Board expects further revenue growth and an EBIT margin between 6.0 % and 7.5 % for 2021

- Foundation of 2G Energy International GmbH and appointment of a Senior Vice President International Sales

Heek, March 25, 2021 - 2G Energy AG (ISIN DE000A0HL8N9), one of the internationally leading manufacturers of gas driven combined heat and power (CHP) systems, reports higher consolidated net sales of EUR 246.7 million in the past 2020 financial year, as planned (previous year: EUR 236.4 million). In addition, 2G improved its consolidated earnings before interest and tax (EBIT) to EUR 16.4 million (previous year: EUR 15.5 million), corresponding to a 6.7 % EBIT margin (previous year: 6.5 %).

2G increased its total operating revenue by 12.4% to EUR 254.2 million in the 2020 financial year. The company thereby continued to successfully pursue its organic growth as planned.

Significant growth in foreign sales

With net sales up 14 % to EUR 94.4 million (previous year: EUR 82.9 million), foreign business accounted for a disproportionately large contribution to the net sales growth. In total, 43 % of net sales from CHP systems were generated outside of Germany (previous year: 39 %). The branch operations generating the highest sales again included 2G Energy Inc. (USA) at EUR 27.2 million (previous year: EUR 18.4 million) and 2G Energy Ltd. (UK) contributing EUR 22.2 million (previous year: EUR 18.1 million).

Net sales from services and parts increased by 4 % compared to the previous year. The service division generated a total of EUR 93.3 million (previous year: EUR 89.4 million), or 38%, of consolidated net sales.

Expense ratios almost constant

The cost of materials ratio (65.8 %, previous year: 64.9 %) and the personnel cost ratio (17.4 %, previous year: 17.2 %) rose slightly in nominal terms compared with the previous year. It should be noted in relation to the expense ratios that total operating revenue reflects a considerable increase in inventories (EUR +7.4 million, previous year: EUR -10.3 million), which are valued at production cost in accordance with the accounting principles of the German Commercial Code (HGB). If net sales and changes in inventories were in a similar relationship as in the previous year, the cost of materials ratio and the personnel cost ratio would have remained virtually unchanged. The extensive cost-cutting measures, particularly in the area of engine procurement, have thereby proved to be sustainable. Despite the Covid-19 pandemic and associated protective measures, the 'Lead-to-Lean' lead project is clearly continuing to make positive contributions.

In absolute figures, the cost of materials rose to EUR 167.3 million (previous year: EUR 146.8 million), while personnel costs increased to EUR 44.3 million (previous year: EUR 39.0 million).

2G will publish its audited consolidated financial statements and 2020 Annual Report on April 29.

Management Board anticipates further growth in net sales in 2021

In light of the lively start to the year (see the company's announcement of February 25) and given the prospect of further growth in service revenues, the Management Board is confident that consolidated net sales of between EUR 245 million and EUR 260 million can be achieved in the current financial year (previous guidance: EUR 240 million to EUR 260 million). The earnings guidance for the 2021 financial year currently envisages an EBIT margin of between 6.0 % and 7.5 %. Despite the highly pleasing corporate development so far, it cannot be ruled out that the coronavirus pandemic will make itself felt at 2G in the current year in the form of decreasing orders, supply bottlenecks, logistics problems and necessary quarantine measures in production, sales and administration at 2G sites, as well as in the partner network, and that this will impact on net sales and earnings trends.

With a view to the medium-term, the Management Board remains committed to its goal of achieving net sales of EUR 300 million by 2024, and of generating a 10 % EBIT margin through efficiency gains from the lead projects, margin contributions from the service business, and cost degression.

2G establishes '2G Energy International GmbH' and hires Jan van Ooijen as Senior Vice President International Sales

In order to achieve the medium-term sales target and to focus to an even greater extent on developing and supporting international markets, 2G will establish a company under the name 2G International GmbH to be headquartered in Heek. The task of this new sales company is to address export markets even more intensively, especially those that have not yet been served by a separate national company. At the same time, the interests of export markets without their own national companies are to be better bundled and structured internally.

With Jan van Ooijen, a highly experienced and seasoned expert of the international heating construction and infrastructure scene has been hired as Managing Director of 2G Energy International GmbH. 'We are delighted that Jan will now be putting his decades of experience to work for us, not least as COO of our important partner, the BDR Thermea Group', comments CEO Christian Grotholt. 'Jan's international background and multilingualism will help us to gain new perspectives, identify attractive foreign markets in addition to the expansion of the developed sales markets, as well as planning a systematic market entry and ultimately realizing ambitious goals in the export business overall. We are thereby consistently following our long-standing strategy of making ourselves less dependent on local markets.'

Jan van Ooijen will take up his position as Senior Vice President International Sales on April 1.

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, the company offers comprehensive solutions in the growing market for highly efficient combined heat and power (CHP) systems. 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 utilized 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. 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 236 million in the 2019 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 45.45 % interest in the company, with the free float amounting to 54.55 %.

2021 calendar dates
March 26 Metzler MicroCap Days
April 14 Warburg Renewables Conference
April 29 Publication of the consolidated financial statements for the FY ending December 31,2020
May 17 Q1 key figures and business trends
May 17-19 Spring Conference, Frankfurt am Main
June 15 Ordinary AGM, Ahaus
September 9 Consolidated financial statements as of June 30, 2021
November 18 Q3 key figures and business trends
November German Equity Capital Forum, Frankfurt am Main

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

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