2G Energy AG: Sales in Q1 2017 up 20 % to EUR 30.4 million

- Planned dividend increase from EUR 0.37 to EUR 0.40

- Q1/2017 sales EUR 30.4 million (EUR 25.3 million), EBIT EUR -0.5 million (EUR 0.1 million) seasonally in line with plan

- 2017 guidance: Sales EUR 160 - 180 million, EBIT margin 3 - 5 %

- CHP system order book position at end of April 2017: EUR 111.1 million (EUR 88 million)

- Contracts with CEO Christian Grotholt and COO Ludger Holtkamp extended for five years / CFO Dietmar Brockhaus steps down from Management Board at own request

2G Energy AG (ISIN DE000A0HL8N9), one of the internationally leading manufacturers of gas driven combined heat and power (CHP) systems, generated consolidated sales growth of 14 % to reach a level of EUR 174.3 million in the 2016 financial year (as of 31 December), on the basis of audited figures (previous year: EUR 152.9 million). Total operating revenue increased by 19 % to around EUR 183.6 million (EUR 154.7 million), taking into account EUR 7.1 million of inventory changes (EUR 0.1 million) and EUR 2.3 million (EUR 1.8 million) of other work performed by the company and capitalized. 2G generated 18 % higher earnings before interest and tax (EBIT) of EUR 5.6 million in the reporting year (EUR 4.8 million), on the basis of accounting standards according to the German Commercial Code (HGB). This corresponds to a 3.2 % EBIT margin (3.1 %), as already reported as part of the publication (corporate news on 27 April 2017) of preliminary results. After an extraordinary result of EUR -1.8 million, the consolidated net income for 2016 amounted to EUR 1.8 million (EUR 2.6 million). Other operating expenses include an extraordinary expense item for previous years' business transactions due to a EUR 1.8 million allocation to miscellaneous other provisions. This provision is connected with tax law questions that have not yet been finally clarified relating to foreign supply and service relationships for the 2012-2015 years. Earnings per share excluding minority interests stand at EUR 0.40 (EUR 0.59).

Management and Supervisory boards propose increased dividend of EUR 0.40
At its 29 May 2017 meeting to approve the annual financial statements, the Supervisory Board concurred with the Management Board's proposal that the 2016 AGM approve an increased dividend of EUR 0.40 per share. With this first-time increase in the dividend (previously: EUR 0.37), the Management Board would like to express the 2G Group's potential for sustainable income growth.

Dynamic start to FY 2017 with order book position exceeding EUR 110 million
2G generated EUR 30.4 million of sales in the first quarter 2017 (EUR 25.3 million). This 20 % growth arises from CHP orders from the previous year that were finally invoiced as well as from a high level of service revenues. The inventory of work in progress reported an increase of EUR 7.0 million as of the reporting date, reflecting good production utilization. Total operating revenue amounts to EUR 37.5 million as a consequence (EUR 35.6 million). The result before interest and tax (EBIT) stood at EUR -0.5 million (EUR 0.1 million). The seasonally typical negative Q1 interim result is mainly attributable to work in progress recognized under German Commercial Code (HGB) accounting policies, as well as the recognition of sales and earnings once the orders have been accepted and finally invoiced. As a consequence, business during the first quarter of 2017 does not yet allow any specific conclusions to be drawn about full-year trends. The order book position as of 30 April 2017 remained at a constantly high level of EUR 111.1 million (EUR 88.0 million). Around 45 % of the order volume for gas driven 2G CHP systems derives from abroad. The high order book position and continuous cash flows from the Service business - an area that is not dependent on new order intake - generate confidence that the forecast figures for the 2017 financial year can be attained with a sales range between EUR 160 million and EUR 180 million and an EBIT margin in a range between 3 % and 5 %.

The focus of company management in the 2017 financial year is on a broad-based cost reduction program to boost profitability, on sales activities and on further optimizations in the Service business. Relinquishing project business of a general contractor type already forms one of the first specific actions.

Good financial position in FY 2016
As before, the balance sheet structure of the 2G Energy Group remains sound as of the 31 December 2016 reporting date. Consolidated total assets grew by 16.2 % to EUR 111.4 million, mainly due to the higher level of inventories at EUR 43.4 million as of the balance sheet date (EUR 32.2 million). This increase chiefly reflects a rise in raw materials and supplies from EUR 24.1 million to EUR 30.4 million due to higher stocks of motors, which enables faster delivery times as well as price advantages through bundled purchases, thereby creating competitive advantages. Trade receivables also increased from EUR 24.6 million to EUR 29.2 million. The stockbuilding in relation to the reporting date reflects the (final) year-end invoicing due to the acceptance of CHP systems.

On the equity and liabilities side of the balance sheet, especially prepayments received for orders were up by EUR 11.0 million to EUR 25.7 million.

Working capital (the difference between current assets and current liabilities) reported a slight year-on-year reduction, from EUR 31.8 million to EUR 31.4 million. Liquid funds of EUR 10.2 million as of the balance sheet date (EUR 10.1 million) were recorded at a stable and satisfactory level. Cash flow from operating activities increased significantly to EUR 6.4 million in 2016 (EUR 2.1 million). The company invested a total of EUR 4.5 million in tangible fixed assets in the reporting year (EUR 3.3 million). Overall, the financial position of the 2G Group was good over the full course of the year under review.

As a result of retained earnings as of 31 December 2016, the equity of the 2G Group increased to EUR 52.9 million (EUR 52.6 million). Due to the higher level of total assets, the equity ratio reduced to 47.5 % on the reporting date (54.9 %).

R&D product innovations meet demand
The new 2G aura series was presented for the first time as part of the Hanover Trade Fair (Messe) in April 2017, a product in the 100 kW to 550 kW output range based on the company's own Lambda-1 technology. The aura's strength lies in its high thermal efficiency and extremely low emission levels, with the product fitting optimally into the constantly growing requirements of worldwide emission regulations alongside reduced life-cycle costs. The development of a proprietary SCR catalyst technology (selective catalytic reduction method) has also been completed. This allows all other 2G portfolio products to be set up for emission-sensitive applications. The new version of the Technical Manual on Air Pollution Control of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) relating to new limits for nitrogen oxides (NO, NO) is to be concluded by mid-2017. 2G CHP modules are prepared for this and are already being offered on the market.

2G is also setting benchmarks with detailed solutions that are optimized for transportation costs and ready for connection, such as a newly designed outdoor acoustic capsule. Space requirements to set up 2G systems outdoors have thereby been reduced by around 15 % compared with standard container solutions, enabling faster commissioning on-site through pre-assembled connections.

Along with technical developments, 2G is also expanding its portfolio to include a pay-per-use concept for CHP systems, representing a unique offering within the sector to date. In order to enable customers to enjoy the cost benefits of combined heat and electricity generation without the need to make their own investments and sign long-term contracts, 2G is offering industrial, commercial, wholesale, retail and real estate clients a solution where only actual use of the 2G power plant is paid for.

Service becomes second business pillar
2G service has reached a share of one third, or EUR 57.1 million, of consolidated sales in 2016, thereby offering a solid long-term sales base with growing profitability. With the expansion of its service network, a 'Best in Class' works service, and the digitalization of communications and processes, this business area is developing into an important element of performance and earnings within the 2G Group. Better staff deployment planning, digital access to plant parameters in real time, online ordering of accessories and replacement parts, as well as access to constantly updated technical manuals and documentation generate customer satisfaction, reliability and efficiency.

As before, the business and financial position of the 2G Group can be described as good. Business trends in 2016 proved favorable overall with the sales growth that was achieved and a positive result. Moreover, the company continues to report a comfortable equity ratio of almost 50 %, as well as stable cash flow. The Management Board is also firmly of the view that profitability can also be enhanced accordingly in the near future through concentrating on margin improvements in the product and service businesses.

Contracts with CEO Christian Grotholt and COO Ludger Holtkamp extended for five years / CFO Dietmar Brockhaus steps down from Management Board at his own request
The Supervisory Board has extended the contracts with the Management Board Chairman (CEO) Christian Grotholt and Chief Operating Officer (COO) Ludger Holtkamp by a period of five years each, until July 2022, in other words. A high degree of stability in the management of the company has thereby been ensured. CFO Dietmar Brockhaus is to step down from the Management Board at his own request for personal reasons. His contract will be canceled by mutual agreement as of 31 July 2017. The Supervisory Board would like to thank Dietmar Brockhaus for the work he has contributed, his commitment to the company and for his successful collaboration with his colleagues. Christian Grotholt will assume the CFO role on an interim basis.

The audited and approved consolidated financial statements of 2G Energy AG can be downloaded from the company's website under Investor Relations / Financial Publications:
http://www.2-g.com/start.php?seitenid=453&langid=18

The English language version of the annual report will be published at the latest on 2 June 2017 and can also be downloaded from the company's website.

2G company portrait
2G Energy AG ranks among the world's leading manufacturers of cogeneration (CHP) systems for decentralized energy production and supply by means of combined heat and power. The company's product portfolio includes systems with electric capacity between 20 kW and 4,000 kW for operation with natural gas, biogas, biomethane and other lean gases. 2G has successfully put into operation several thousand CHP systems in 40 countries to date. Especially in the 50 kW to 550 kW performance range, 2G commands proprietary technological combustion engine concepts characterized by low specific fuel consumptions, high operational availability and optimized service intervals. Besides the main production site at the Group headquarters 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 agricultural and industrial operations, local authorities, and the residential sector through to municipal utilities and large-scale utilities. The high level of customer satisfaction is founded on a dense service network as well as 2G power stations' high technical quality and performance. These power stations achieve an overall degree of efficiency from 85 percent and to well above 90 percent thanks to the combined heat and power performance.

Along with the construction of combined heat and power stations, the company, located in Westphalia in the northwest of Germany, offers integrated solutions spanning the planning stage and commissioning through to service and maintenance work. In the context of the energy policy revolution, and as part of modern energy supply concepts, CHP systems are gaining considerably in importance in intelligent energy grid systems - so-called virtual power plants - due to their decentralized and scalable operation, and predictable availability.

2G is consistently expanding its technology leadership through continuous research and development work, both in gas engine technology for natural gas, biogas and synthetic gas applications (e.g. hydrogen), as well as in specific software development. The 'virtual power plant' operating type, for example, has been created with a software solution. Overall, the 2G power plant is thereby operated on a basis that is 'heating-managed and electricity-oriented' in order to significantly simplify integration within a grid group. In the energy policy revolution's future electricity market design, such digitalization-enabled flexibility 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.

The shares of 2G Energy (ISIN DE000A0HL8N9) have been listed in the trading segment Scale on the Frankfurt Stock Exchange since March 01, 2017. The share capital amounts to EUR 4,430,000, and is divided into 4,430,000 shares. The company's founders held 53.3 % of the shares as of the end of January 2017, with the free float amounting to 46.9 %.

2017 dates

July 11, 2017 Ordinary AGM, Ahaus
Sept. 28, 2017 Semiannual consolidated financial statements as of June 30, 2017
Nov. 27-29, 2017 German Equity Capital Forum 2017
Nov. 30, 2017 Q3 key figures and business trends

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