2G Energy AG: 2G welcomes the new hydrogen strategy of the German federal government and expects sustainable impulses for hydrogen-ready CHP solutions.

2G welcomes the new hydrogen strategy of the German federal government and expects sustainable impulses for hydrogen-ready CHP solutions.

• Political impasse due to Building Energy Act (GEG) and Europe-wide energy policy uncertainties delay order intake in the second quarter
• Order intake recorded at EUR 36.7 million in the second quarter (previous year: EUR 60.8 million)
• Israeli customer places major order in July, Q3 order intake so far stronger than last year
• Management Board confirms sales and earnings guidance for 2023 and reaffirms long-term growth perspectives
• Construction of new multipurpose hall expands existing capacities

Heek, July 27, 2023 – 2G Energy AG (ISIN DE000A0HL8N9), one of the internationally leading manufacturers of Combined Heat and Power (CHP) systems, welcomes the hydrogen strategy presented yesterday. In particular, the targets for the expansion of hydrogen production in Germany, which have been doubled to 10 GW by 2030, as well as the clear move towards more open technologies should noticeably increase the demand for hydrogen-ready CHP solutions in the years before 2030 and beyond.

Political stalemate caused by Building Energy Act (GEG) puts the brakes on order intake

In the past quarter, 2G recorded a total order intake of EUR 36.7 million, which is around 40% below the previous year’s level (EUR 60.8 million). The high prior-year figure was the result of the sharp rise in energy prices which at the time were prompted by Russia's invasion of Ukraine and  of pull-forward effects initiated by customers due to an announced price increase. In the second Quarter of 2023, the German domestic market was 52% lower than the comparable period 2022, due to concerns about a winter gas shortage being replaced by protracted, exceptionally controversial, at times confusing and still ongoing debates revolving around the GEG. All in all, 2G continues to face very high customer interest in connection with wait-and-see sentiment regarding final orders.

In Q2 the order intake from abroad was only able to compensate for the restraint in Germany to a limited extent, as the gas shortages feared last winter resulted in delays in the development of new projects, at least also in Europe.   

"It is understandable that in Europe, and especially in Germany, the current energy policy is causing uncertainty and therefore has resulted temporarily to purchasing restraint," as CEO Christian Grotholt stated. "We are actually assuming delays that could still have subsequent impact, particularly in Germany. This does not, however, change our long-term growth plans, especially as we continue to operate with a very high order backlog, continuous growth in our service business as well as a well-filled project pipeline. The already announced expansion and rounding off of the product portfolio with high-capacity heat pumps will help in securing our successful future growth."

Israeli customer places major order in July

Already in the first weeks of the third quarter, 2G acquired a single order weighing in at EUR 6.3 million. This first large-scale project in Israel is a cascade of containerized natural gas CHP units harnessed by an energy service provider to supply sites at an industrial company. Delivery is scheduled for the first quarter of 2024. Further projects from Israel – while not of a comparable size – are expected to follow in the coming quarters.

Together with orders already received or firmly advised, it is already apparent that the cumulative order intake from July and August will exceed the corresponding prior-year figure.

The composition of new order intake in the past quarter is as follows:

* Rounding differences arise.

Management Board confirms sales and earnings guidance for 2023 and reaffirms long-term growth prospects

In view of the unchanged high order backlog, steadily rising service revenues and the sales already recorded, the Management Board confirms the corporate targets already communicated for the current fiscal year (sales revenues in a range between EUR 310 to 350 million with an EBIT margin of between 6.5% and 8.5%).

“Taking into account the uncertainties in German and European energy policy, we continue to expect to achieve our sales and earnings targets for this year and next year, namely to generate sales of up to €390 million with an EBIT margin of 8.5 to 10.0%,” CFO Friedrich Pehle said.

Construction of a new multipurpose hall expands capacities

Against the background of these long-term growth targets, 2G is currently building a new multi-purpose hall with a floorspace of approximately 1,250 sqm and a height of 13 m at the Heek site.

“We specifically opted for a multi-purpose hall,” as COO Ludger Holtkamp stated, “because the service business is growing markedly year by year, while the product portfolio is being expanded, soon with the high-capacity heat pump. Consequently, our plant structure planning has to be flexible for new markets and provide for enough reserves."

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, 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 8,000 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, 2G’s 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 power plant technology for hydrogen, natural gas 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 creates a high barrier to market entry for competitors.

2G employs more than 850 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.

2023 calendar dates
September 07       Half-year figures as at June 30, 2023
November 27        Q3 key figures and business trends
November 27-29   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