SBF AG looks back on a challenging 2023 and sets course for a successful future

SBF AG looks back on a challenging 2023 and sets course for a successful future

• Revenue forecast of EUR 34.0 million achieved, adjusted balanced EBITDA below earnings forecast
• "Rolling Stock" business area: strategic alliances in the pipeline and promising major projects started
• "Public and Industrial Lighting" business area: cost-cutting program initiated to increase efficiency
• Management Board expects significant revenue growth of between EUR 48 and 50 million in 2024

Leipzig, 15 May 2024 – SBF AG (ISIN: DE000A2AAE22; WKN A2AAE2, "SBF"), a listed specialist for innovative solutions in the fields of rolling stock, lighting, electromechanics and sensor technology, yesterday published its Annual Report 2023. In a challenging market environment, SBF achieved its revenue forecast and made important strategic decisions. The result was below the earnings forecast.

Rudolf Witt, Member of the Executive Board of SBF AG says: “We look back on an extraordinarily challenging 2023. We have used this phase to put SBF in a good position for the future with targeted measures. With the integration of AMS Software & Elektronik GmbH and the introduction of an internal program to increase efficiency, we have taken important steps in this direction. Even though 2024 is still a year of transition, we believe SBF is in a promising position for sustainable and profitable growth with interesting strategic opportunities.”

Difficult market environment and special effects characterize financial year 2023
Despite the challenging conditions, Group revenue remained at a high level of EUR 34.0 million (2022: EUR 34.9 million) and within the target corridor forecasted on August 24, 2023. Adjusted Group EBITDA achieves a balanced result and is therefore below the forecast of around EUR 1.0 million. The decline in earnings is due in particular to the very weak economic environment, higher procurement prices, increased personnel expenses and individual project postponements. In addition, the business figures for 2023 are characterized by special effects amounting to EUR 1.0 million - in particular due to the acquisition of AMS Software & Elektronik GmbH, extraordinary legal and consulting costs and an extraordinary goodwill amortization at Lunux Lighting GmbH and property refurbishment costs that cannot be capitalized. Excluding the special effects, EBITDA amounted to EUR -1.0 million (2022: EUR 2.3 million).

In the financial year, revenue in the "Rolling Stock" segment fell to EUR 19.0 million (2022: EUR 21.0 million). The business in the 2023 reporting year was characterized by cost-intensive new launches of major projects. These will largely take place in 2024 and 2025 and will therefore have an impact on revenue development in the current and upcoming financial years. In addition, the gross profit margin in 2023 was lower than expected, as material procurement costs remained at a high level and the personnel expense ratio was higher than expected. Segment EBITDA fell accordingly to EUR 1.5 million (2022: EUR 2.5 million). The aim is to further strengthen the rolling stock business area. To this end, specific negotiations will be held this year with market participants to pool resources in order to strategically strengthen the market presence, as this area is expected to offer enormous revenue and earnings potential in the future.

Segment revenue in "Public and Industrial Lighting" was comparatively robust in a volatile environment and rose slightly to € 15.7 million (2022: € 15.1 million). Nevertheless, the significantly stronger sales growth originally forecast for the division was not achieved due to the general market weakness. The capacities geared towards sales growth and the corresponding cost structure led to a significant decline in earnings, as did impairment losses on goodwill in the amount of EUR 0.4 million. EBITDA fell accordingly compared to the previous year to EUR -1.7 million (2022: EUR -0.1 million). In order to strengthen the segment's profitability, extensive measures have already been introduced to reduce the cost base in order to be able to operate profitably even with the current revenue level.

Deepening the value chain and increasing efficiency
The acquisition and ongoing integration of AMS Software & Elektronik GmbH marked an important milestone in the 2023 financial year and opened up new growth potential. AMS is a leading specialist for electronics, sensor and communication technology and OEMs. With the products from AMS, SBF is significantly expanding its range of products in the fields of electronics and sensor and communication technology. Due to the consolidation from January 1, 2024, the new division will be fully included in the financial figures for the current financial year.

With the deepening of the value chain and the measures introduced to increase efficiency, SBF is well positioned in the medium and long term. In a persistently weak economic environment, the Executive Board expects profitability to remain temporarily weak this year. In the 2024 financial year, consolidated revenue is expected to be between EUR 48 million and EUR 50 million and the consolidated net loss for the year is expected to be in the mid six-digit range. The structural measures introduced in all areas will have their full positive effect from the coming financial year.

The 2023 Annual Report is available on the company's website at https://www.sbf-ag.com/investor-relations/finanzpublikationen/.

About SBF Group:
The listed SBF Group is a specialist for innovative solutions in the fields of rolling stock, lighting, electromechanics and sensor technology. In the group of companies, highly specialized and leading hidden champions in their fields pool their expertise. With a high-quality and forward-looking product and service portfolio, SBF benefits from the megatrends of mobility, climate protection, automation and digitalization.

In the “Rolling Stock” business field, the Tier 1 system supplier and development partner supplies the world's leading rolling stock manufacturers with complex interior, ceiling and lighting systems “Made in Germany”. The “Public and Industrial Lighting” business field comprises intelligent and customized LED systems for efficient lighting for industrial, municipal and infrastructural projects. In addition, the “Sensor Technology and Electromechanics” business field develops and produces pioneering components and software for electromechanical products such as circuit boards, sensors and communication technology.

For more information, visit https://www.sbf-ag.com.

Company contact:
SBF AG
The Board of Directors
Zaucheweg 4
04316 Leipzig
Tel: +49 (0)341 65235 894
E-mail: info@sbf-ag.com

Press contact:
Kirchhoff Consult GmbH
Alexander Neblung
Borselstraße 20
22765 Hamburg
Tel: +49 (0)40 60 91 86 70
E-mail: sbf@kirchhoff.de