Price Target: EUR 7.50 (7.50) 26 March 2013 FY 2012 figures confirmed

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1 Recommendation: BUY (BUY) Risk: HIGH (HIGH) Price Target: EUR 7.50 (7.50) 26 March 2013 FY 2012 figures confirmed Industry segment will be the main growth driver Share price (dark) vs. CDAX FY 2012 figures: This morning, SFC Energy AG issued the annual report The final FY 2012 figures exactly match the preliminary figures which were discussed in our update from 29 January A detailed overview of the 4Q and FY figures is given on page 2 of this document. Guidance: The guidance for FY 2013 (revenue growth of around 10% and an associated further improvement of the earnings figures) was confirmed once again. Additionally, the management now targets to break-even on an underlying EBIT basis in FY CBSR estimates not raised for the time being: While this backs up our estimates, we nevertheless remain a bit cautious and maintain our slightly lower sales growth assumption for 2013E for the time being. This is due to our impression that uncertainty in the Consumer segment as well as in the Defense sector is still rather high at this point in time. In the Consumer segment, the management currently expects sales to remain flat in 2013, but we do not rule out that demand for RV/Cabins and sailing boats might still come down a bit more in some countries. Regarding the Defense sector, national budget allocations still have to be awaited, and there are no largescale Defense projects scheduled for at the moment. The management currently expects this segment's sales to drop by 15% to 20% in 2013E. Oil and gas sector provides opportunities in the Industry segment: The Industry segment, especially the oil and gas sector, are expected to be the main growth driver of the group. Significant growth is expected be achieved through regional business expansion, strategic partnerships regarding sales and product integration, and a greater focus on complete solutions/systems. Even though the oil and gas sector has rather high barriers to entry for new and small players, SFC Energy appears to be well positioned to expand its foothold in this sector and generate significant business potential. In our view, this might also be achieved by an acquisition. Recommendation: We leave our price target for SFC Energy unchanged at EUR 7.50 and maintain our BUY recommendation. Y/E 31 Dec, EUR m E 2014E 2015E Sales revenues EBITDA EBITA EBIT Net income/loss EPS CPS EBITDA margin -30.1% 2.3% 6.0% 9.2% 10.1% EBIT margin -42.9% -1.7% 0.1% 3.8% 5.9% EV/Sales EV/EBITDA neg Source: SFC Energy AG; CBS Research AG Source: CBS Research AG, Bloomberg, SFC Energy AG Change 2013E 2014E 2015E new old new old new old Sales EBITDA EPS Internet: WKN: Reuters: F3CG.DE Short company profile: Shares outstanding (m): Market capitalisation (EUR m): Enterprise value (EUR m): 18.6 Ø daily trading volume (6 m., no. of shares): Performance data: Absolute performance (12 months): Relative performance vs. CDAX: Shareholders: HPE Conduit Ventures Havensight Previous owners of PBF (lock-up agreement) Management and Supervisory Board DWS Other free float 1Q 2013 report: Author: 3,196 High 52 weeks (EUR): 7.20 Low 52 weeks (EUR): Sector: Alternative energy ISIN: DE Bloomberg: F3C GY SFC Energy AG is a market leader for off grid and stationary power generation and distribution. The Company has established fully commercialized fuel cells in the Consumer, Industry, and Defense & Security sectors and furthermore develops, produces and globally distributes higher level power management components. The products increasingly are delivered as customised power supply system solutions. Share data: Share price (EUR, latest closing price): % 1 month -9.0% 3 months -11.3% Financial calendar: months -14.6% 12 months 20.9% Martin Decot (Analyst) Close Brothers Seydler Research AG Phone: +49 (0) % 10.15% 10.22% 4.66% 2.14% 4.92% 42.21% 2 May 2013 research@cbseydlerresearch.ag Please notice the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by 34b WpHG (Securities Trading Law) at the end of this document. This financial analysis in accordance with 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others in connection with their trading activities, occupation, or employment.

2 Key figures with YOY comparison IFRS EURm 4Q Q 2011 FY 2012 FY 2011 Total sales YOY grow th 104.9% 10.3% 102.6% 15.7% Industry as % of total sales 32.9% 34.7% 56.0% 29.6% Defense & Security as % of total sales 55.2% 23.0% 28.5% 28.6% Consumer as % of total sales 11.8% 42.3% 15.5% 41.8% Gross profit as % of sales 41.7% 37.5% 40.8% 34.8% Gross profit - Industry as % of segment sales 34.4% 32.1% 37.6% 38.0% Gross profit - Defense & Security as % of segment sales 47.1% 53.5% 49.3% 42.9% Gross profit - Consumer as % of segment sales 36.5% 33.2% 36.9% 27.0% EBITDA as % of sales 8.8% -32.9% 2.3% -30.1% EBITDA - Industry as % of segment sales -18.7% -62.2% -0.7% -52.1% EBITDA - Defense & Security as % of segment sales 32.8% -19.4% 15.0% -20.6% EBITDA - Consumer as % of segment sales -26.2% -16.0% -9.9% -21.0% Adjusted EBITDA as % of sales 9.2% 7.8% 2.7% -17.4% EBIT as % of sales 4.2% -52.9% -1.7% -42.9% Adjusted EBIT as % of sales 4.6% -12.2% -3.1% -26.5% Net income after minorities as % of sales 4.9% -50.7% -1.4% -40.3% Basic earnings per share (EUR) Cash flow from operating activities Free cash flow (incl. interest received) Source: SFC Energy AG, CBS Research AG Close Brothers Seydler Research AG 2

3 Profit and loss account IFRS EURm E 2014E 2015E Sales YoY grow th 14.1% 15.7% 102.6% 6.7% 14.2% 11.5% Cost of sales as % of sales -69.7% -65.2% -59.2% -58.2% -57.4% -57.0% Gross profit as % of sales 30.3% 34.8% 40.8% 41.8% 42.6% 43.0% Research and development expenses as % of sales -14.2% -16.4% -13.6% -12.3% -11.0% -10.3% Selling expenses as % of sales -35.6% -31.7% -18.8% -17.3% -16.5% -16.0% General and administrative expenses as % of sales -15.4% -17.4% -11.4% -11.6% -10.8% -10.2% Other operating income as % of sales 1.7% 1.3% 2.4% 1.5% 1.5% 1.5% Other operating expenses as % of sales -0.6% -10.4% -1.2% -2.1% -2.1% -2.1% EBIT before restructuring expenses as % of sales -33.8% -39.8% -1.7% 0.1% 3.8% 5.9% Restructuring expenses as % of sales 0.0% -3.1% 0.0% 0.0% 0.0% 0.0% EBIT as % of sales -33.8% -42.9% -1.7% 0.1% 3.8% 5.9% Net financial result EBT (Earnings before income taxes) as % of sales -30.9% -40.4% -1.4% 0.7% 4.3% 6.4% Income taxes as % of EBT 0.0% -0.1% -4.3% % -24.2% -19.0% Income from continuing operations Income from discontinued operations, net of taxes Group net income including minorities as % of sales -30.9% -40.3% -1.4% -0.1% 3.3% 5.2% Minority interests Net income attributable to shareholders Shares outstanding (m) Basic earnings per share (EUR) EBITDA EBITA Source: CBS Research AG, SFC Energy AG Close Brothers Seydler Research AG 3

4 Balance sheet IFRS EURm E 2014E 2015E Assets Current assets as % of total assets 86.7% 68.5% 70.6% 74.0% 76.5% 78.8% Inventories and prepayments Trade accounts receivable Other assets incl. tax and PoC receivables Cash and cash equivalents Cash and cash equival. with limitation on disposal Noncurrent assets as % of total assets 13.3% 31.5% 29.4% 26.0% 23.5% 21.2% Intangible assets excl. goodwill Goodwill Property, plant and equipment Other non-current assets Deferred taxes Total assets Shareholders equity and liabilities Current liabilities as % of total equity and liabilities 6.9% 15.1% 16.1% 19.6% 20.0% 20.5% Provisions Advance payments received Trade accounts payable Financial debt Other liabilities Noncurrent liabilities as % of total equity and liabilities 3.1% 10.6% 7.5% 8.5% 8.6% 7.8% Other noncurrent provisions Financial debt Other noncurrent liabilities Deferred tax liabilities Shareholders equity as % of total equity and liabilities 90.1% 74.3% 76.4% 71.9% 71.4% 71.7% Subscribed capital Capital reserve Other changes in equity not effecting profit or loss Accumulated loss brought forward Net result of the year Total equity and liabilities Source: CBS Research AG, SFC Energy AG Close Brothers Seydler Research AG 4

5 Cash flow statement IFRS EURm E 2014E 2015E Income/loss before interest and taxes Depreciation of PP&E Amortisation of intangible assets incl. assets from PPA Other expenses / income with no effect on liquidity Increase/decrease in inventories, trade receivables, and other assets Increase/decrease in trade accounts payable and other liabilities Cash taxes paid Cash flow from operating activities Net cash outflows from the purchase and retirement of noncurrent assets Bank balances released/pledged Interests received Purchase of consolidated companies Cash flow from investing activities Net cash inflow from capital stock increases deducting expenses Net cash flow from financial debt incl. leasing Interests paid Cash flow from financing activities Total change in cash and cash equivalents Currency effects on cash and cash equivalents Cash and cash equiv. at the start of the period Cash and cash equiv. at the end of the period Source: CBS Research AG, SFC Energy AG Close Brothers Seydler Research AG 5

6 Research Schillerstrasse Frankfurt am Main Phone: +49 (0) Roger Peeters +49 (0) Member of the Board Martin Decot +49 (0) Igor Kim +49 (0) (Equities) (Equities) Anna von Klopmann +49 (0) Gennadij Kremer +49 (0) (Equities/Fixed Income) (Fixed Income) Daniel Kukalj +49 (0) Ralf Marinoni +49 (0) (Equities) (Equities) Manuel Martin +49 (0) Felix Parmantier +49 (0) (Equities) (Equities) Nicolas Pütz +49 (0) Marcus Silbe +49 (0) (Support) (Equities) Simone Steymann +49 (0) Veysel Taze +49 (0) (Support) (Equities) Ivo Višić +49 (0) (Equities) Institutional Sales Schillerstrasse Frankfurt am Main Phone: +49 (0) Raimar Bock +49 (0) Head of Sales Raimar.Bock@cbseydler.com Rüdiger Eich +49 (0) Sule Erkan +49 (0) (Germany, Switzerland) Ruediger.Eich@cbseydler.com (Sales-Support) Sule.Erkan@cbseydler.com Dr. James Jackson +49 (0) Klaus Korzilius +49 (0) (UK) James.Jackson@cbseydler.com (Benelux, Germany) Klaus.Korzilius@cbseydler.com Stefan Krewinkel +49 (0) Markus Laifle +49 (0) (Execution, UK) Stefan.Krewinkel@cbseydler.com (Execution) Markus.Laifle@cbseydler.com Michael Laufenberg +49 (0) Bruno de Lencquesaing +49 (0) (Germany) Michael.Laufenberg@cbseydler.com (Benelux, France) Bruno.deLencquesaing@cbseydler.com Angela Leser +49 (0) Carsten Pfersdorf +49 (0) (Fixed Income) Angela.Leser@cbseydler.com (Sales Trading) Carsten.Pfersdorf@cbseydler.com Carsten Schlegel +49 (0) Christopher Seedorf +49 (0) (Sales Trading) Carsten.Schlegel@cbseydler.com (Sales-Support) Christopher.Seedorf@cbseydler.com Janine Theobald +49 (0) Bas-Jan Walhof +49 (0) (Austria, Germany) Janine.Theobald@cbseydler.com (Benelux) Bas-Jan.Walhof@cbseydler.com Close Brothers Seydler Research AG 6

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