2G energy AG (DE:2GBG) continues to diversify its activities, expanding export markets and developing service revenues, so that it is less exposed to changes in the regulatory environment for renewables and CHP in Germany. This supported a 9% y-o-y increase in FY17 sales to a record €189.4m, and EBIT margin rise from 3.2% to 3.9%, both ahead of management expectations.
Export growth drives record sales in FY17
Group sales increased by 9% y-o-y to a record €189.4m, beating management guidance of €180m. This was driven by exports and services revenues and improved project management, which led to faster throughput and a high level of CHP completions at the year-end. Exports rose by 34% y-o-y to represent 42% of all CHP sales. Services grew by 13% y-o-y to 34% of total sales. Personnel costs rose in line with sales, reflecting an increase in service staff in Germany. Other operating expenses increased by 11%, reflecting higher logistics costs associated with exports and higher sales commissions. The improvement in EBIT margin also beat management’s guidance of 3.0-3.5%. Management proposes raising the dividend by 5% to €0.42/share. Net cash increased by €5.8m to €9.8m, despite the €3.7m investment in CHP plant for use by the in-house leasing operation and c €1.0m in the vehicle fleet and purchase of tools and IT equipment.
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