EQS-News: 2G Energy AG boosts EBIT by 26 % to EUR 27.6 million in 2023 (previous year: EUR 22.0 million)

2G Energy AG boosts EBIT by 26 % to EUR 27.6 million in 2023 (previous year: EUR 22.0 million)

• EBIT margin improves to 7.6 % (previous year: 7.0 %)
• New plants business grows by 22 % to around EUR 200 million (previous year: EUR 164.5 million)
• Service business up 11 % to EUR 165.1 million (previous year: EUR 148.1 million)
• Management Board raises lower sales revenue forecast limit to EUR 360 million (previously: EUR 350 million) and continues to expect an EBIT margin between 8.5 % and 10.0 % for 2024

Heek, April 11, 2024 - 2G Energy AG (ISIN DE000A0HL8N9), one of the leading international manufacturers of combined heat and power (CHP) systems and a producer of heat pumps, once again increased consolidated sales revenue by 17 % to EUR 365.1 million (previous year: EUR 312.6 million), lifting the EBIT margin to 7.6 % (previous year: 7.0 %). EBIT growth accelerated in absolute terms due to the significant increase in sales revenues and margins to EUR 5.6 million, resulting in EBIT of EUR 27.6 million (previous year’s increase: EUR 4.1 million to EUR 22.0 million).

Of all the sales regions, the new plants business in Germany posted the strongest growth of EUR 40.3 million (+48.6 %) to EUR 123.1 million (previous year: EUR 82.8 million) and was thereby able to overcome the weak growth of the previous year in full measure. At the same time, the service business in the domestic market maintained its continuous growth of the last few years (+8.1 % to EUR 111.9 million). Almost all the major, traditional international markets also contributed significant gains in the service segment, in many cases with double-digit growth rates. However, the new plants business in Anglo-Saxon territories declined markedly due to temporary effects, and the other foreign markets were not able to make up for them. Overall, however, foreign markets expanded by EUR 3.8 million to EUR 130.1 million (previous year: EUR 126.3 million).

As announced in the Corporate News of February 29, 2024, scarcely any heat pump projects have reached final settlement since the acquisition of NRGTEQ B.V., as was to be expected.

The following table shows the composition of net sales in the 2023 fiscal year*:

* Rounding differences can arise.

Cost of materials ratio normalizes, personnel expense ratio increases moderately

The cost of materials ratio which had risen to 66.1 % in the previous year, fell back to a more normal level of 64.2 % as 2G’s list price adjustments made in 2022 and 2023 were increasingly reflected in the final settlements for completed projects. This means that the rapid rise in procurement costs in 2022 and 2023 is now being offset – at least partially – by the adjusted list prices.

Nevertheless, this normalization effect did not fully manifest itself in the year under review as revenues from the sale of new plants, which traditionally have a much higher material input, exhibited a significantly steeper rise than service revenues which are more labor-intensive. This resulted in a shift in the mix from labor-intensive service revenues to material-intensive new systems business which partially obscured the normalization of the cost of materials ratio. 

Personnel expenses grew slightly faster than total operating revenue due, on the one hand, to general increases in wages and salaries which turned out to be unusually high in 2023. On the other, 2G had cautiously increased staffing levels against the backdrop of strategic projects, in particular the company’s entry into the heat pump market, but also the project to fundamentally realign the IT and ERP systems architecture. These staff increases will ensure the success of these projects and underpin future growth.

2G will publish its audited consolidated financial statements and its 2023 annual report on April 18.

Management Board raises lower sales revenue forecast limit to EUR 360 million (previously: EUR 350 million) and continues to expect an EBIT margin between 8.5 % and 10.0 % for 2024

With a look to the current fiscal year, the order book is well filled at the start of 2024 to the tune of EUR 156 million – in spite of final billings reaching record levels in the fourth quarter of 2023. This good order position is coupled with an order intake in Germany that continues to pick up as well as increasingly significant orders received from regions outside the G7.

The Management Board is now expecting consolidated sales revenues in the 2024 fiscal year to be recorded within a range of EUR 360 million to EUR 390 million. The annual report, which will be published shortly, still forecasts a range of EUR 350 to EUR 390 million. Revenues in the heat pump segment are expected to be posted in the single-digit millions.

In terms of profitability, the Management Board continues to see a marked improvement in margins resulting primarily from further normalization of the cost of materials ratio. The EBIT margin is therefore forecasted to come in between 8.5 to 10 %, which would equate to an absolute EBIT of between EUR 30 million and EUR 39 million.

With regard to 2025, provided the underlying geopolitical framework remains stable, the Board continues to expect sales revenues of up to EUR 450 million in 2025, meaning that the long-term growth target of annual growth of 10% plus Inflation remains unchanged.

2G company portrait
The 2G Energy AG Group is an internationally leading manufacturer and system provider of decentralized energy supply systems. The company develops, produces and installs comprehensive solutions in the growing market for highly efficient CHPs and large heat pumps. Digital grid integration and plant control for both types of energy generators, as well as service and maintenance, are further decisive performance criteria.

The product portfolio includes CHP plants in the output range from 20 kW to 4,500 kW for operation with hydrogen, natural gas, biogas and other lean gases, as well as large heat pumps in the range from 100 kW to 1,000 kW. CHP plants operate with efficiencies of 90 percent and more, while large heat pumps achieve efficiencies of 300 to 500 percent, depending on the general conditions. With its products and services, 2G is at the interface to a decentralized, secure and largely decarbonized energy supply. More than 8,000 2G systems have already been installed worldwide in various applications, supplying electrical and thermal energy to a wide range of customers from the housing industry, agriculture, commercial and industrial companies, energy suppliers, municipal utilities and local government authorities.

2G is positioned worldwide as a system provider for decentralized energy solutions with its combination of CHP plants and large heat pumps. The company benefits from far-reaching synergies of both plant categories, ranging from project development, procurement, and production to the largely identical customer base and regulatory framework as well as sales channels and digital control and service.

2G is consistently expanding its technological leadership through continuous research and development work, both in power plant and pump technologies as well as in specific software development for service and maintenance activities. The digital grid integration consistently implemented by 2G is an indispensable, system-relevant element in the future electricity market design and represents a high market entry hurdle for competitors. The sector coupling required for the success of the energy transition is reflected in 2G's portfolio.

2G employs more than 900 employees 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 312.6 million in the 2022 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.

Termine 2024
April 18   Consolidated financial statements for FY 2023
April 23   Quirin Champions Conference, Frankfurt am Main
April 24   Metzler MicroCap Conference, Frankfurt am Main
May 13-14      Spring Conference, Frankfurt
May 23           Q1 key figures and business trends
June 4            Ordinary AGM, Ahaus/Germany
June 6            Warburg Highlights Conference, Hamburg
September 5    Consolidated financial statements for H1 2024
November 25   Q3 key figures and business trends
November 25-27  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