Next Generation Power Network Management
Next Generation Power Network Management
Next Generation Power Network Management
Next Generation Power Network Management
Power Network Management
Introduction by the Management Board The Heliocentris share
Interim Group Management Report as at 30 June 2015 Organisational structure of the Group
Business performance and significant events General economic environment
Research and development Results of operations
Financial position and net assets Risk report
Outlook
Supplementary report
Consolidated half-yearly financial report as at 30 June 2015 Condensed consolidated statement of profit & loss Condensed consolidated statement of financial position Condensed consolidated statement of changes in equity Condensed consolidated statement of cash flows Notes to the condensed consolidated financial statements Financial calendar / contact / editorial information 2 5 7 7 8 9 9 9 13 14 14 15 16 16 17 18 19 20 32
Contents
Dear Shareholders,
In the first half of the year, Heliocentris Energy Solutions AG has taken a major step towards achieving its growth targets for 2015, which has seen us expand our customer base in the industrial business significantly in the first six months of the year. This has meant that despite the only slight rise in sales in the first half-year due to delays in acquiring new customers we have laid the foundation stone with a view to again increasing our sales significantly year-on-year for the 2015 financial year as a whole.
A highlight in the reporting period and the most important milestone in the company’s history to date was the conclusion of a global frame agreement with a leading northern European operator of mobile base stations. Heliocentris thus became the preferred supplier of solar hybrid systems based on Heliocentris’ Energy Management System for the mobile network operator’s more than 30 subsidiaries worldwide. Our new major customer is one of the top 15 mobile network operators in the world with around 186 million mobile network customers. This frame agreement has seen Heliocentris secure a new customer with the biggest sales potential so far since the founding of the company. The agreement was concluded with a term of three years, with the simultaneous option to extend it by a further two years.
In the past few years, Myanmar has become one of our main generators of revenue and continues to represent a significant growth market. Over 900 mobile base stations in Myanmar are currently supplied with power and remotely monitored by energy solutions from Heliocentris. The considerable efficiency and reliability of our energy solutions in Myanmar has resulted in a noticeable rise in demand and has seen us acquire further customers in Myanmar and the United Arab Emirates (UAE) over the reporting period. In the second quarter, we received an initial order worth around EUR 1 million for the modernisation and hybridisation of 30 Etisalat mobile base stations in the UAE. This order was the first call-up under a frame agreement for the supply and installation of up to 500 systems. In the reporting period, we likewise received a further order from “Emirates Integrated Telecommunications Company – du” to supply and install 30 solar hybrid systems. After the end of the reporting period, we were also awarded a major order from a Japanese electronics corporation to supply and install additional turnkey hybrid power solutions for the development of 152 new mobile base stations in Myanmar. The frame order is for a total volume of approximately EUR 6 million and current planning indicates that this should have an impact on sales in the current financial year.
On the supply side, we also made considerable headway in the first half of 2015 towards underpinning our competi-tiveness in the long term. We invested in the development of our remote management software and developed a brand-new software package, which has numerous management functions allowing for flexible integration within the networks of our telecoms customers worldwide. The market launch of the first modules will take place in the current financial year. Greater service and licence sales are expected to be generated on this basis in future. We are also making considerable progress with our Zero Emissions Roadmap and currently anticipate being able to install the first fuel cell systems with integrated hydrogen generators for customers as early as in 2015.
In the reporting period, we increased our sales and order backlog by 31% or EUR 3,047 thousand year-on-year to EUR 12,856 thousand. This increase primarily results from sales and orders for the supply and installation of hybrid power systems for mobile base stations in Myanmar. A further increase was driven by supply, installation and maintenance contracts from the United Arab Emirates. In the period from January to June 2015, the Group’s sales rose by 26% to EUR 5,627 thousand (previous year: EUR 4,476 thousand). EUR 3,664 thousand or 65% of sales in the first half of the year related to the Industry segment and, in particular, to the supply and installation of turnkey energy efficiency solutions for mobile base stations in Myanmar. The share of sales of the Academia segment amounted to 35% or EUR 1,964 thousand. Order intake, a key performance indicator for sales performance, increased by 36% in the first six months of the current financial year to EUR 9,855 thousand (previous year: EUR 7,258 thousand). Of this figure, EUR 8,221 thousand related to the Industry segment and EUR 1,634 thousand to the Academia segment.
In the first half of 2015, the Group’s gross profit in relation to growth amounted to EUR -424 thousand (previous year: EUR -207 thousand). It should be noted in particular that cost of sales for the first half of the year contains a significant proportion of fixed costs relating to capacity development and expansion. Owing to delays in acquiring new customers, the positive variable profit contributions were still not sufficient to cover fixed cost of sales in the first half of the year. In light of the successful new customer acquisitions, particularly in the last few months, significantly higher sales are expected in the second half of 2015 than in the first six months of the year. Along with this, the company is planning to keep fixed costs at the same level as in the first six months of the year, which – if it continues to anticipate positive profit contributions – should result in a significant improvement in gross profit in the second half of 2015.
At EUR -10,637 thousand, the total comprehensive income (loss) for the period was 84% higher than in the first half of 2014 (EUR -5,792 thousand). EUR -10,583 thousand of the total comprehensive income (loss) is attributable to equity holders of the parent. Several factors contributed to the total comprehensive loss. Due to delays in acquiring new customers in the first half of 2015, no additional profit contributions were generated in comparison to 2014, which meant that the rise in costs, which was essentially due to the acquisition of FutureE Fuel Cell Solutions GmbH (subsequently Heliocentris Fuel Cell Solutions GmbH) and the non-recurring costs relating to the segment transfor-mation and restructuring of the company, were not offset.
Ayad Abul-Ella, Chief Executive Officer (CEO)
Dr. Henrik Colell, Chief Technology Officer (CTO)
As at 30 June 2015, cash and cash equivalents climbed to EUR 12,699 thousand from EUR 2,258 thousand as at 31 December 2014. Equity rose by EUR 9,657 thousand or 83% as a result of the capital increases carried out in the reporting period, from EUR 11,692 thousand as at 31 December 2014 to EUR 21,349 thousand as at 30 June 2015. The equity ratio likewise moved up to 51% at the end of the reporting period (31 December 2014: 36%).
The orders and new customers acquired in the first half of 2015 give us tailwind for a strong second half to the year. This applies, on the one hand, to the aforementioned large-volume frame agreement with the mobile telecommuni-cations provider but also to the successes in Asia, which underscore the robustness of our solution and the efficiency of our service organisation in the field. In the meantime, Heliocentris has established an excellent reputation in this particular region as a leading supplier of hybrid power solutions. In the months ahead, we will continue to pull out all the stops to carry on the success story of Heliocentris Energy Solutions AG. In light of rising sales and the elimination of non-recurring effects, the Management Board expects to see a significantly improved result in the second half of 2015 compared with the first half of the year. Overall, as at 28 August 2015, sales and order intake combined total EUR 21.9 million and are thus EUR 7.3 million higher than in the prior-year period and already EUR 3.0 million higher than total sales in 2014.
Sincerely
The Management Board of Heliocentris Energy Solutions AG
Ayad Abul-Ella, Dr. Henrik Colell,
The Heliocentris Energy Solutions AG share
Share price performance in first half of 2015
The shares of Heliocentris Energy Solutions AG began the 2015 financial year on 2 January 2015 at an opening price of EUR 5.049. Following a brief weak period at the start of the year the shares reached their lowest value in the period under review at EUR 4.651 on 15 January 2015. Subsequently, the Heliocentris shares profited among other things from positive com-ments by analysts from Berenberg Bank and Baader Bank. As of 14 April 2015, the share price rose to a half-year high of EUR 8.00. The closing price on 30 June 2015 was EUR 5.599. Over six months, there was therefore a price increase of 10.9%.
In the first half of the year, the average daily trading volume of Heliocentris shares increased considerably compared to the previous year to 10,306 shares (previous year: 3,748 shares). With the change from the Entry Standard (Open Market) into the Prime Standard, Heliocentris shares were made accessible for a broader group of investors and their profile was raised among international investors and analysts. At the end of the first half of 2015, the market capitalisation of Heliocentris Energy Solutions AG was EUR 79.7 million on the basis of 14.24 million shares (all data on the basis of Xetra prices).
As a company in the strictly regulated Prime Standard of the Frankfurt Stock Exchange (first trading day on 20 May 2015), Heliocentris Energy Solutions AG meets all important publication and transparency standards. Lang & Schwarz AG acts as Designated Sponsor. Further informa-tion is available for potential investors in the Investor Relainforma-tions secinforma-tion of the website at http://www.heliocentris.com/investoren/ir-home.html.
Annual General Meeting
The Annual General Meeting of Heliocentris Energy Solutions AG was held in Berlin on 16 June 2015 with 68.5% of the share capital in attendance. The shareholders consistently approved the management’s proposals with clear majorities. The shareholders approved the conduct of the Management and Supervisory Boards and declared themselves satisfied with the boards’ work. In addition, Mr Klaas de Boer was elected as a new member of the Supervisory Board at the Annual General Meeting. Klaas de Boer is Managing Director of Entrepreneur Fund Services Ltd., London, and Managing Partner of Entrepreneur Fund Management LLP, London. Mr de Boer takes over the position from Mr Oliver Krautscheid, who resigned his Supervisory Board post as of the end of the Annual General Meeting on 16 June 2015.
Total number of shares 14,242,233 WKN (Securities Code Number) A1MMHE ISIN (International Securities
Identification Number)
DE000A1MMHE3 Bloomberg ticker symbol H2FA
Reuters ticker symbol H2Fn
Stock Category ordinary registered shares
Stock exchange Frankfurt, FWB
Stock Market Segment Regulated Market / Prime Standard
Trading platforms XETRA, Frankfurt, Berlin, Düsseldorf, Stuttgart Designated Sponsor Lang & Schwarz AG
Share information
Capital measures and shareholder structure
As part of the sustainable financing of Heliocentris Energy Solutions AG’s business activities, a cash capital increase with indirect pre-emption rights for shareholders was successfully imple-mented in May 2015, fully placing 3,250,289 shares. The cash capital increase generated gross issue proceeds of EUR 18.7 million for the company. The capital measure increased the share capital from EUR 10,991,944 to EUR 14,242,233.
In the wake of the capital increase, the shareholder structure of Heliocentris Energy Solutions AG also changed. Since 19 May 2015, a total of around 29.3% of the shares have been held by institutional investors such as Ruffer, Fidelity Investments, etc. Family offices hold an approxi-mately 29% stake in Heliocentris Energy Solutions AG. Around 16.9% is held by clean-tech funds, such as Entrepreneurs Fund, Conduit Ventures and ENERTEC. Around 59.8% of the shares are held in free float, to which investors with holdings of less than 5% are assigned according to the Deutsche Börse definition. Precise details on the shareholder structure are shown in the Share section of the Heliocentris Energy Solutions AG website.
Analyst research
The research houses Baader Bank/Helvea and Berenberg Bank covered Heliocentris Energy So-lutions AG in the reporting period. In their studies, the Heliocentris share is recommended as a buy with price targets from EUR 10.00 to EUR 10.40. The full research studies are available on the Heliocentris Energy Solutions AG website at http://www.heliocentris.com/investoren/ak-tie/analystenempfehlungen.html.
1. ORGANISATIONAL STRUCTURE OF THE GROUP Heliocentris develops, supplies and monitors energy management systems and hybrid energy solutions for stationary industrial applications, fuel cell-based back-up solutions for safeguarding critical infrastruc-ture as well as fuel cell-based systems for customers in science and education, training and research world-wide. The company was founded in 1995 and has its head offi ce in Berlin and offi ces in Munich, Wendlingen, Dubai, Yangon, Vancouver and Johannesburg. The Industry segment at Heliocentris is geared towards energy management systems, hybrid energy solutions, monitoring and management solutions and back-up power systems for distributed stationary energy so-lutions, in particular for mobile telecommunications. Within the mobile telecommunications sector Helio-centris off ers its products and services to operators of mobile networks and mobile systems.
The Academia segment, with its education, training and research (ETR) product lines, off ers a range of systems for fuel cell and solar hydrogen technology in addition to other renewable energy technologies. Its customers are training facilities, research institutes as well as industrial customers.
The Heliocentris Group consists of Heliocentris Energy Solutions AG, Heliocentris Academia GmbH in Berlin, Heliocentris Industry GmbH in Berlin, Munich and Wendlingen, Heliocentris Fuel Cell Solutions GmbH in Wendlingen, Heliocentris Energy FZE in Dubai, UAE, Heliocentris Energy Systems Inc. in Vancouver, Cana-da, and Heliocentris Italy s.r.l. in Rome, Italy, founded in May 2015. As a holding company, Heliocentris Ener-gy Solutions AG mainly performs administrative func-tions and is responsible for the Group’s management and its M&A and fi nancial market activities.
The operating divisions of production and logistics, commissioning and service and product management, product development, marketing and sales are located in the subsidiaries.
At the start of the year, Heliocentris bundled its home power activities, which focus on providing zero-emis-sions power to homes and apartment buildings, in He-liocentris HPS GmbH. HeHe-liocentris HPS GmbH was then sold for shares to HPS Home Power Solutions GmbH (HPS GmbH) as at 27 April 2015. Since this transac-tion, Heliocentris has held 48.57% in HPS GmbH. Due to the strict rules regarding how Heliocentris Energy Solutions AG’s control over HPS Home Power Solutions GmbH is to be interpreted, the latter is consolidated in the interim fi nancial statements.
Interim Group Management Report as at 30 June 2015
HELIOCENTRIS GROUP Heliocentris
Energy Solutions AG 100% Heliocentris Industry GmbH 100% Heliocentris Energy Systems Inc. 100% Heliocentris Academia GmbH 100% Heliocentris Energy FZE 100% Heliocentris Fuel Cell
Solutions GmbH 48,57% HPS Home Power Solutions GmbH 100% Heliocentris Italy s.r.l.
2. BUSINESS PERFORMANCE AND SIGNIFICANT EVENTS
Sales and order backlog increased by 31% or EUR 3,047 thousand as against 30 June 2014 to EUR 12,856 thousand as at 30 June 2015.
EUR 10,020 thousand of this amount is attributable to the Industry segment, representing a rise of EUR 2,692 thousand (37%) compared to the prior-year period. This increase primarily results from sales and orders for the supply and installation of hybrid power systems for mobile base stations in Myanmar amounting to EUR 4,813 thousand. The increase was further driven by supply, installation and maintenance contracts from the United Arab Emirates and from OEM custom-ers with volumes of EUR 3,379 thousand and EUR 693 thousand, respectively.
In the Academia segment, sales and order backlog rose from EUR 2,481 thousand in the prior-year period to EUR 2,836 thousand, representing an increase of EUR 355 thousand or 14%.
On 25 March 2015, an additional agreement was reached with the former shareholders of Heliocentris Fuel Cell Solutions GmbH (formerly: FutureE Fuel Cell Solutions GmbH) conclusively settling their earn-out claims against the issue of 332,015 shares. This agree-ment covers all outstanding eleagree-ments of the purchase agreement in connection with the acquisition of Helio-centris Fuel Cell Solutions GmbH.
On 25 March 2015, the Management Board and the Su-pervisory Board resolved a capital increase against the issue of a total of 391,520 new shares to the former shareholders of Heliocentris Fuel Cell Solutions GmbH to cover their earn-out claims and other claims from the share purchase agreement, which was entered in the commercial register on 14 April 2015.
On 6 April 2015, Heliocentris received the initial order worth around EUR 1 million for the modernisation and
hybridisation of 30 Etisalat mobile base stations in the United Arab Emirates. This order was the fi rst call-up under a frame agreement for the supply and installa-tion of up to 500 systems.
On 8 April 2015, Heliocentris announced a further or-der received from “Emirates Integrated Telecommuni-cations Company - du” to supply and install 30 solar hybrid systems.
Also in April, Heliocentris signed a cooperation agree-ment with the Japanese trading company INABATA. This agreement, initially concluded for a period of fi ve years, grants INABATA the exclusive rights to sell all Heliocentris products in Japan, and for applications that are not target applications of Heliocentris, in Korea and the United States. In return, INABATA has undertaken to source products and solutions such as those of Heliocentris exclusively from Heliocentris. As part of the cooperation, INABATA subscribed to con-vertible bonds of Heliocentris in the amount of EUR 1 million. The issue price was set at 93.75%; all other conditions are the same as the convertible bonds is-sued last year: the coupon is 4% p.a., the conversion price is EUR 7.6542 per share and the bond will be re-paid in January 2017.
On 27 April 2015 Heliocentris contributed 100% of shares in Heliocentris HPS GmbH to HPS Home Power Solutions GmbH, Wildau, in return receiving an inter-est of 48.57% in HPS Home Power Solutions GmbH, Wildau.
Also on 27 April 2015, following approval by the Bundesanstalt für Finanzdienstleistungsaufsicht (Ba-Fin - German Federal (Ba-Financial Supervisory Authority), the securities prospectus was published for the imple-mentation of a capital increase and the change to the Prime Standard.
Gross issue proceeds of EUR 18.7 million were gener-ated as part of a fully placed cash capital increase, with indirect pre-emptive rights for shareholders, against
the issue of 3,250,289 shares from Authorised Capital 2014/I, which was entered in the commercial register on 13 May 2015. Following the issue of new registered shares, the share capital therefore increased from EUR 10,991,944 to EUR 14,242,233.
At the end of June a global frame agreement for the supply and installation of solar hybrid systems based on Heliocentris’ Energy Management System was signed with a leading northern European supplier of mobile base stations. With around 186 million mobile network customers, the northern European company is one of the world’s largest mobile network operators and is particularly active in Asia and Eastern Europe as well as in Scandinavia. This contract has a term of three years with the option to extend it by a further two years.
3. GENERAL ECONOMIC ENVIRONMENT
In the first half of 2015 the global gross domestic prod-uct grew by around 2.5% compared to the prior-year period. Worldwide industrial output only grew by ap-proximately 2% in the first six months of the year. The reason for the slow growth was the weak start to the year in the US and China. In the US, declining invest-ments in the oil industry, the severe winter and the strong US dollar negatively impacted the dynamic of the economy. Conversely, the economy in the euro area benefited from the low oil prices and the weak euro during the reporting period.
According to their most recent forecast this July, ana-lysts at the IfW are projecting global growth of 3.3% in 2015. The global economy is forecast to grow by 3.8% in 2016. The current growth estimate of 1.5% slightly exceeds January’s forecast for the euro area. The key drivers of growth remain the emerging markets, partic-ularly the People’s Republic of China, which could grow by around 6.8% this year. The US, where the economy is set to expand by 2.5% in the current financial year, remains a prime mover in the global economy. A slow-down in China’s economic growth as well as uncer-tainty regarding growth in Europe continue to pose
risks. However, Asia is not only China and remains the overall driving force in the global economy. The Ger-man Institute for Economic Research (DIW) predicts that German gross domestic product will expand by 1.8% compared to the previous year. A 1.9% change in gross domestic product compared to 2015 is forecast for 2016.
4. RESEARCH AND DEVELOPMENT 4.1 Industry segment
In the energy management systems and remote man-agement servers product lines the focus was on two new developments:
• Development of the next generation of the Energy Management System (EMS 3.0) that uses the current hardware (EM 2.0) to allow grid-centred monitoring and optimisation of decentralised energy systems. A beta version of the new system is expected to be avail-able during 2015.
• Development of a software suite that allows auto-mated monitoring and optimisation of energy systems from within the data centre and enables these systems to be connected directly to the network operators’ ERP systems. This enables network operators firstly to opti-mise the lifetime and operating costs of the respective systems in the field and secondly to operate the sys-tems more efficiently from the data centre. A beta ver-sion has recently been completed. Commercial avail-ability is scheduled for the fourth quarter of 2015. In the hybrid solutions product line a new development project was launched for the integration of lithium-ion batteries in diesel hybrid solutions. The aim here is to provide more compact solutions in the future.
Developments in the fuel cell systems product line fo-cussed on two main areas in the first half of the year: • Firstly, the costs of the Jupiter system were reduced further. Among other things, EM 2.0 was integrated into the fuel cell system solutions as a controller. In
addition, thanks to operating strategy improvements the lifetime of Jupiter fuel cell modules can be virtually doubled, which means significant savings in operating costs for customers. This is mainly significant for use in bad grid applications, where the fuel cell has a life of > 500 hours per year.
• Secondly, a new version of the Jupiter fuel cell sys-tem was developed that contains an integrated elec-trolysis module based on Acta technology and a hydro-gen tank. This will make it possible in future to offer hydrogen-based solutions in markets where there is not yet a hydrogen cylinder infrastructure.
4.2 Academia segment
The Academia segment’s activities focussed primarily on maintaining the existing product range. The devel-opment of the innovative “HyDrive” - Electro Vehicle Trainer, a product developed as part of the publicly funded ETUDE project, was successfully completed and is now in the commercialisation phase. The first orders have already been placed and the first products will be delivered in the third quarter of 2015. Develop-ment of the new version of the new energy lab was also completed successfully. The first of these systems have already been delivered to customers in 2015.
5. RESULTS OF OPERATIONS 5.1 Order and sales development
Sales increased by EUR 1,151 thousand (26%) from EUR 4,476 thousand in the first half of 2014 to EUR 5,627 thousand in the first half of 2015.
EUR 3,664 thousand or 65% of sales in the first half of the year related to the Industry segment and, in par-ticular, to the supply and installation of turnkey energy efficiency solutions for mobile base stations in Myanmar. The share of sales of the Academia segment amounted to 35% or EUR 1,964 thousand, EUR 1,010 thousand of which was due to the delivery of a centre of excellence in Ghana.
Order intake, a key performance indicator for sales performance, increased by EUR 2,596 thousand (36%) from EUR 7,258 thousand in the first half of 2014 to EUR 9,855 thousand in the first half of 2015. EUR 8,221 thousand of order intake in the first half of 2015 related to the Industry segment and EUR 1,634 thousand to the Academia segment.
The sales of the Industry and Academia segments break down by region as follows:
The international share of total sales rose from 80% in the first half of 2014 to 92% in the first half of 2015.
Sales by region in EUR
First half of First half of First half of First half of
2015 2014 2015 2014
Germany, Austria, Switzerland 386,482 635,100 84,940 254,648 Rest of Europe 104,109 - 190,537 169,387
America 18,827 65,755 386,549 246,296
Middle East and North Africa 570,870 499,916 189,213 91,835
Rest of Afrika - - 1,012,202 918
Asia and Australia 2,583,347 2,377,515 100,395 134,648 Total 3,663,636 3,578,287 1,963,835 897,732
Industry Academia
5.2 Earnings development Cost of sales
The cost of sales comprises staff costs, costs of mate-rials, purchased services, travel and other expenditure that can be directly and indirectly assigned to the prod-ucts, projects and services sold. Projects usually have a term of up to one year, hence the costs can vary from year to year depending on their complexity and the num-ber of projects performed.
In the first half of 2015, the cost of sales amounted to EUR 6,052 thousand. In the reporting period, the cost of sales as a share of sales therefore amounted to 108%, thus remaining approximately at the level of the previ-ous year (105%). The slight increase in the profit con-tribution (sales minus variable costs) was more than offset, largely as a result of the vacancy costs in the production of fuel cell-based power back-up systems in Wendlingen.
Gross profit
The Group’s gross loss increased by 105% or EUR 217 thousand from EUR 207 thousand in the first half of 2014 to EUR 424 thousand in the first half of 2015. The gross profit in relation to sales declined to -8% in the first half of 2015 after -5% in the first half of 2014. The cost of sales contains a significant proportion of fixed costs. Owing to delays in acquiring new customers, the positive variable profit contributions were still not sufficient to cover fixed cost of sales in the first half of the year. In light of the successful new customer acquisi-tions, particularly in the last few months, significantly higher sales are expected in the second half of 2015 than in the first six months of the year. Along with this, the company is planning to keep fixed costs at the same level as in the first six months of the year, which – if it continues to anticipate positive profit contributions – should result in a significant improvement in gross profit in the second half of 2015.
General and administrative expenses
The general and administrative expenses of the Group comprise salaries for management and administra-tive employees, legal and consulting costs, travel ex-penses, property expenses and overheads as well as the costs for the segment transformation carried out in May 2015.
The general and administrative expenses increased by EUR 1,381 thousand or 76% compared to the first half of 2014 to EUR 3,199 thousand in the first half of 2015. This rise is due to non-recurring costs of EUR 671 thou-sand arising in relation to the capital increase and the segment transformation in May 2015 as well as legal and consulting costs for spinning off Heliocentris HPS GmbH and founding new enterprise Heliocentris Italy s.r.l. The costs of EUR 1,490 thousand directly attrib-utable to the capital increase were deducted directly from equity and therefore are not reported in profit or loss. Operating costs climbed by EUR 709 thousand due to the acquisition of FutureE Fuel Cell Solutions GmbH (now Heliocentris Fuel Cell Solutions GmbH) in 2014 as well as higher administrative costs as a result of listing on the Prime Standard and introducing the International Financial Reporting Standards.
Sales and marketing expenses
Sales and marketing expenses primarily comprise salaries and commission for the Group’s sales and marketing staff, consulting costs, mainly for consult-ing services in sales, travel expenses, commission for independent sales representatives, office rent, market promotion and other expenses.
Sales and marketing expenses increased by EUR 334 thousand (13%) from EUR 2,625 thousand in the first half of 2014 to EUR 2,959 thousand in the first half of 2015. Adjusted for non-recurring special write-downs amounting to EUR 501 thousand in the first quarter of 2014, sales and marketing expenses rose by EUR 835 thousand. This rise is essentially due to pro rata sales and marketing expenses resulting from the acquisition of FutureE Fuel Cell Solutions GmbH, now Heliocentris Fuel Cell Solutions GmbH, and the expansion of sales activities in Asia.
Research and development expenses
R&D costs mainly relate to development activities in connection with technologies and products for the advancement of the Group’s platform-based technolo-gies. R&D costs comprise wages and salaries, pur-chased services, R&D materials for testing and analy-sis and travel expenses.
At EUR 1,222 thousand in the first half of 2015 after EUR 1,148 thousand in the first half of 2014, R&D costs were virtually constant (up EUR 75 thousand or 6%). In addition, own work capitalised for product develop-ments amounted to EUR 1,269 thousand in the first half of 2015 (compared to EUR 1,359 thousand in the first half of 2014).
The rise in R&D costs due to the integration of Helio-centris Fuel Cell Solutions GmbH was largely offset by higher income from subsidies.
Other operating income
The Group’s other operating income includes income from the sale of securities, the reversal of provisions, exchange rate gains and insurance compensation. Total other operating income declined by EUR 353 thousand or 50% from EUR 699 thousand in the first half of 2014 to EUR 347 thousand in the first half of 2015.
Other operating income in the first half of 2015 essen-tially comprised income from the reversal of provisions amounting to EUR 210 thousand, insurance compensa-tion amounting to EUR 41 thousand and income from exchange rate effects (EUR 55 thousand).
Other operating expenses
Other operating expenses mainly report the adjust-ment in liabilities from additional purchase price claims from the acquisition of Heliocentris Fuel Cell Solutions GmbH (formerly: FutureE Fuel Cell Solutions GmbH) of EUR 408 thousand. The additional purchase price payment to the former shareholders of Heliocen-tris Fuel Cell Solutions GmbH was settled in shares. The change in value in the period from 1 January 2015
to 25 March 2015 (the date of the resolution to increase capital against shares) resulting from the rise in the price of shares was recognised in profit or loss. Amortisation, depreciation and
write-downs of intangible and tangible assets epreciation of property, plant and equipment and am-ortisation of intangible assets rose sharply by EUR 1,206 thousand from EUR 266 thousand in the first half of 2014 to EUR 1,472 thousand in the first half of 2015. This resulted firstly from the steep rise in write-downs on own work capitalised (up EUR 549 thousand) and also from the write-downs in connection with the technologies purchased as part of the acquisition of Heliocentris Fuel Cell Solutions GmbH in the amount of EUR 614 thousand.
Financing costs and similar expenses
Financing costs and similar expenses amounted to EUR 728 thousand in the first half of 2015, a rise of EUR 315 thousand or 76% as compared to EUR 413 thousand in the first half of 2014. This rise is the result firstly of the convertible bonds with a 4% coupon and discount of 10% or 6.25% which were issued in three tranches in January and April 2014 and April 2015 and, secondly, of the interest and discount relating to the loans for EUR 2.5 million obtained in March which were reduced in May 2015.
Total comprehensive income (loss) for the reporting period
At EUR -10,637 thousand the total comprehensive in-come (loss) for the period was EUR 4,845 thousand or 84% higher than in the first half of 2014 (EUR -5,792 thousand). EUR -10,583 thousand of the total compre-hensive income (loss) is attributable to equity holders of the parent. Due to delays in acquiring new custom-ers in the first half of 2015, no additional profit contri-butions were generated in comparison to 2014, which meant that the rise in costs, which was essentially due to the acquisition of FutureE Fuel Cell Solutions GmbH (subsequently Heliocentris Fuel Cell Solutions GmbH) and the non-recurring costs relating to the segment transformation and restructuring of the company, were not offset.
In light of the successful new customer acquisitions over the last few months, significantly higher sales are expected in the second half of 2015 than in the first six months of the year. The profit contributions that this generates are expected to result in a significant improvement in profit compared with the first half of 2015.
6. FINANCIAL POSITION AND NET ASSETS ASSETS
The total assets of the Group increased by EUR 9,111 thousand to EUR 41,915 thousand as at 30 June 2015 as against 31 December 2014 (EUR 32,804 thousand). The increase was essentially due to the inflow of cash from the capital increase in May 2015, an increase in inventories of EUR 1,283 thousand and a reduction in trade receivables of EUR 2,540 thousand as key receiv-ables were paid by customers in the Industry segment. Investment and non-current assets
Non-current assets remained virtually constant as against 31 December 2014 (EUR 19,869 thousand) at EUR 19,834 thousand as at 30 June 2015. At EUR 1,413 thousand, Heliocentris’ net investment vol-ume remained at approximately the same level as the previous year (EUR 1,463 thousand) in the first half of 2015 and largely relates to own work capitalised for product developments. This amounted to EUR 1,269 thousand in the first half of 2015 after EUR 1,329 thou-sand net in the first half of 2014.
Current assets
In order to service the increased order intake in the third quarter of 2015, inventories were raised by EUR 1,283 thousand or 50% to EUR 3,868 thousand in the reporting period from EUR 2,585 thousand as at 31 December 2014.
Trade receivables and other receivables declined sharply by EUR 2,540 thousand or 32% from EUR 7,876 thousand as at 31 December 2014 to EUR 5,336 thousand as at 30 June 2015 as a result of
the above payments by customers for outstanding trade receivables.
As at 30 June 2015 the company had cash and cash equivalents of EUR 12,699 thousand (31 December 2014: EUR 2,258 thousand).
EQUITY AND LIABILITIES Equity
On 25 March 2015, the Management Board and the Su-pervisory Board resolved a capital increase against the issue of 391,520 new shares to the former shareholders of Heliocentris Fuel Cell Solutions GmbH (formerly: Fu-tureE Fuel Cell Solutions GmbH) to settle their earn-out claims and other claims from the purchase agreement, which was entered in the commercial register on 14 April 2015. This capital increase covers all outstanding elements of the purchase agreement in connection with the acquisition of FutureE Fuel Cell Solutions GmbH. The share capital of Heliocentris Energy Solutions AG climbed by EUR 391,520 from EUR 10,600,424 as at 31 December 2014 to EUR 10,991,944 as at 31 March 2015. Consequently, the capital reserve was increased by EUR 1,958 thousand.
Based on resolutions by the Management Board and the Supervisory Board on 24 April and 12 May 2015, the share capital of Heliocentris Energy Solutions AG has increased from EUR 10,991,944 to EUR 14,242,233 as a result of the issue of new registered shares as part of a fully placed cash capital increase, with indirect pre-emptive rights for shareholders, against the issue of 3,250,289 shares from Authorised Capital 2014/I. The capital increase was entered in the commercial register on 13 May 2015. After netting against the costs of the capital increase, the capital reserve rose by EUR 16,354 thousand as a result of the issue of new shares. Equity changed by EUR 9,657 thousand or 83% from EUR 11,692 thousand as at 31 December 2014 to EUR 21,349 thousand as at 30 June 2015. The eq-uity ratio was 51% as at 30 June 2015 after 36% as at 31 December 2014.
Liabilities
Non-current liabilities rose by EUR 1,908 thousand (20%) from EUR 9,424 thousand as at 31 December 2014 to EUR 11,332 thousand and mainly comprise borrowings relating to the convertible bonds issued in three tranches in January and April 2014 and April 2015. The amount repayable on the convertible bonds due in January 2017 is EUR 11,231 thousand. This item also contains a subordinated loan from an external in-vestor to HPS Home Power Solutions GmbH in the nomi-nal amount of EUR 720 thousand.
The provisions reported under current liabilities in-creased by EUR 1,033 thousand (35%) from EUR 2,978 as at 31 December 2014 to EUR 4,011 thousand as at 30 June 2015. This rise is largely attributable to EUR 351 thousand in provisions for the costs of the capital in-crease carried out in May 2015, an inin-crease of EUR 216 thousand in warranty provisions and a rise of EUR 163 thousand in provisions for holiday and overtime. Trade payables were reduced significantly in the re-porting period by EUR 3,210 thousand or 55% from EUR 5,812 thousand as at 31 December 2014 to EUR 2,601 thousand as at 30 June 2015 as a result of payments on trade payables.
The other current liabilities item declined by EUR 444 thousand (15%) from EUR 2,898 thousand as at 31 December 2014 to EUR 2,622 thousand. As at 31 December 2014 this item mainly comprised EUR 1,941 thousand in additional purchase price claims of former shareholders of Heliocentris Fuel Cell Solu-tions GmbH, which were reclassified to equity under the capital increase resolved by the Management Board and the Supervisory Board on 25 March 2015 after adjust-ment for the change in value by 25 March 2015. As at 30 June 2015 this item primarily contained advance payments in the amount of EUR 1,506 thousand for the supply of hybrid power systems to Myanmar as well as liabilities amounting to EUR 829 thousand for wages and salaries, wage taxes and social security contribu-tions.
7. RISK REPORT
Heliocentris is exposed to a series of risks and oppor-tunities that are described in detail in the risk report of the 2014 annual report and in the securities prospectus of 27 April 2015. The 2014 annual report and the secu-rities prospectus (approved version as at 27 April 2015) are available at www.heliocentris.com.
Over the course of the first six months of the 2015 fi-nancial year, the Management Board did not detect any significant additions or changes to the risks and oppor-tunities as described in the 2014 annual report and the securities prospectus of 27 April 2015.
8. OUTLOOK
Based on current business performance, and in particu-lar on the successful acquisition of new customers in the last few months before this report, for the second half of 2015 the Management Board expects a signifi-cantly better result compared to the first half of the year.
These forecasts for the expected development of the Heliocentris Group include careful consideration of the risks and opportunities in the development of the mar-ket environment. Actual results may differ considerably from forecasts if, for example, the expansion of sales activities and new products do not result in increased sales or an improved earnings situation, or if these fail to materialise on account of greater competitive pres-sure.
9. SUPPLEMENTARY REPORT
On 17 July 2015 Heliocentris announced a further major order from Asia. The frame agreement covers the sup-ply and installation of turnkey hybrid power solutions for the development of 152 new mobile base stations in Myanmar and has a volume of around EUR 6 million. Overall, as at 28 August 2015, sales and order in-take combined total EUR 21.9 million and are thus EUR 7.3 million higher than in the prior-year period and already EUR 3.0 million higher than total sales in 2014. There were no other significant events that could have a material impact on the business performance of the Group after the end of the reporting period.
Berlin, den 28. August 2015
Ayad Abul-Ella,
Chief Executive Officer (CEO)
Dr. Henrik Colell,
6 months ended 3 months ended
Note 30 June 2015Unaudited 30 June 2014Unaudited 30 June 2015Unaudited 30 June 2014Unaudited
EUR EUR EUR EUR
Sale of goods 4,989,388.54 3,783,052.11 2,275,320.29 3,287,000.34
Rendering of services 638,082.42 692,966.31 411,194.59 470,513.73
Total revenue 5,627,470.96 4,476,018.42 2,686,514.88 3,757,514.07
Cost of sales -6,051,823.23 -4,683,311.52 -2,894,963.21 -3,548,870.59
Gross profi t (loss) -424,352.27 -207,293.10 -208,448.33 208,643.48
General and administrative -3,198,700.91 -1,818,090.75 -1,922,279.67 -1,064,347.87 Sales and marketing -2,959,080.68 -2,624,801.77 -1,497,395.48 -1,117,967.05 Research and development -1,222,157.54 -1,148,134.91 -584,576.00 -515,536.70
Other operating income (6) 346,523.95 699,081.66 131,878.69 190,602.31
Other operating expenses (6) -409,006.30 0.00 -885.55 0.00
Amortisation, depreciation and write-downs of
intangible and tangible assets (7) -1,471,867.80 -266,016.17 -758,507.69 -125,217.54
Other interest and similar income 24,303.67 1,876.10 28.92 542.14
Finance cost and similar expense (8) -727,605.58 -412,506.18 -453,014.01 -227,050.92 Profi t (loss) before tax -10,041,943.46 -5,775,885.12 -5,293,199.12 -2,650,332.15
Income tax -555,771.98 -11,468.32 -555,771.98 -11,468.32
Profi t (loss) for the period -10,597,715.44 -5,787,353.44 -5,848,971.10 -2,661,800.47 Other comprehensive income
Items which may be subsequently reclassifi ed to profi t or loss
Exchange diff erences on translation of foreign operations -39,124,73 -4,565,06 -30,256,54 233,39 Other comprehensive income for the period -39,124,73 -4,565,06 -30,256,54 233,39 Total comprehensive income for the period -10,636,840,17 -5,791,918,50 -5,879,227,64 -2,661,567,08 Profi t (loss) attributable to:
Equity holders of the parent -10,543,683,51 -5,787,353,44 -5,794,939,17 -2,661,800,47
Non-controlling interests -54,031,93 0,00 -54,031,93 0,00
Total comprehensive income attributable to:
Equity holders of the parent -10,582,808,24 -5,791,918,50 -5,825,195,71 -2,661,567,08
Non-controlling interests -54,031,93 0,00 -54,031,93 0,00
Earnings per share
Basic, profi t (loss) for the period attibutable to equity
Note 30 June 2015Unaudited 31 December 2014Audited
EUR EUR
ASSETS
Non-current assets
Property, plant and equipment 1,090,519.55 1,161,480.21
Intangible assets 14,690,351.55 14,686,874.51
Goodwill 4,002,762.51 3,970,231.58
Investments 50,337.70 50,337.70
Current assets
Inventories 3,867,641.32 2,585,071.36
Trade and other receivables (9) 5,335,599.34 7,875,629.19
Prepaid expenses 179,150.94 216,778.65
Cash and cash equivalents 12,698,920.29 2,257,615.16
Total assets 41,915,283.20 32,804,018.36
LIABILITIES AND EQUITY Non-current liabilities
Interest-bearing loans and borrowings * (10) 11,084,518.76 9,239,637.31
Provisions 86,541.15 83,013.33 Other liabilities (11) 160,899.20 101,500.56 Current liabilities Provisions 4,010,625.16 2,977,971.37 Trade payables 2,601,482.13 5,811,640.63 Other liabilities (11) 2,622,372.26 2,898,207.51 Total liabilities 20,566,438.66 21,111,970.71 Equity Share capital (12) 14,242,233.00 10,600,424.00 Capital reserve (12) 60,071,435.59 43,715,486.20
Other capital reserve (12) 795,756.38 503,029.37
Foreign currency translation reserve -75,859.56 -36,734.83
Accumulated defi cit -43,083,777.95 -33,307,661.70
Current period result 10,543,683.51 -9,782,495.39
Total equity attributable to parent 21,390,894.55 11,692,047.65
Non-controlling interests -57,259.41 0.00
Total equity 21,348,844.54 11,692,047.65
Total equity and liabilities 41,915,283.20 32,804,018.36
* The convertible bonds have been reported under this item since 1 January 2015.
ATTRIBUTABLE TO THE OWNERS OF THE PARENT
Share capital Capital reserve Other capital
reserve currency Foreign translation reserve
Accumulated
defi cit Total controlling Non-interests
Total equity
EUR EUR EUR EUR EUR EUR EUR EUR
As at 1 January 2014 8,650,218.00 35,784,760.97 -347,625.37 -22,795.23 -33,307,661.70 10,756,896.67 0,00 10,756,896.67 Result of the period -5,787,353.44 -5,787,353.44 -5,787,353.44 Other comprehensive
income -4,565.06 -4,565.06 -4,565.06 Total comprehensive
income -4,565.06 -5,787,353.44 -5,791,918.50 0,00 -5,791,918.50 Capital increase 250,002.00 1,250,010.00 1,500,012.00 1,500,012.00 Issue of convertible bond 522,505.42 522,505.42 522,505.42 Share-based payment
transactions 138,497.40 138,497.40 138,497.40 Transaction costs, net
of tax -26.543,71 -6,186.66 -32.730,37 -32.730,37 As at 30 June 2014
(unaudited) 8,900,220.00 37.008.227,26 307,190.79 -27,360.29 -39,095,015.14 7.093.262,62 0,00 7.093.262,62 As at 1 January 2015 10,600,424.00 43,715,486.20 503,029.37 -36,734.83 -43,090,157.09 11,692,047.65 0.00 11,692,047.65 Result of the period -10.543.683,51 -10,558,892.91 -54.031,93 -10,597,715.44 Other comprehensive
income -39,124.73 -39,124.73 -39,124.73 Total comprehensive
income -39,124.73 -10.543.683,51 -10,598,017.64 -54.031,93 -10,636,840.17 Capital increase 3,250,289.00 15,438,872.75 18,689,161.75 18,689,161.75 Issued shares to settle the
outstanding purchase pri-ce claims in connection with the acquisition of a
subsidiary 391,520.00 1,957,600.00 2,349,120.00 2,349,120.00 Issue of convertible bond 94,833.27 94,833.27 94,833.27 Share-based payment transactions 198,795.04 7,595.72* 206,390.76 206,390.76 Acquisition of non-controlling interests -1,216.58 -1,216.58 -3,227.48 -4,444.06 Transaction costs, net
of tax -1,040,523.36 -901.30 -1,041,424.66 -1,041,424.66 As at 30 June 2015
(unaudited) 14,242,233.00 60,071,435.59 795,756.38 -75,859.56 -53.627.461,46 21,390,894.55 -57.259,41 21,348,844.54
6 months ended Note 30 June 2015 Unaudited 30 June 2014 Unaudited EUR EUR Operating activities
Profi t (loss) for the period -10,597,715.44 -5,787,353.44
Income tax expense 555,771.98 11,468.32
Net profi t (loss) before tax -10,041,943.46 -5,775,885.12
Non-cash adjustments to reconcile profi t before tax to net cash fl ows:
Depreciation and impairment of property, plant and equipment 185,695.38 137,990.51 Amortisation and impairment of intangible assets 1,286,172.42 128,027.83 Fair value measurement of fi nancial liabilities 408,120.75 0.00
Other non-cash adjustments 1.871.951,03 1,565,065.65
Working capital adjustments -225,167.25 -2,646,021.67
Interest paid -312,382.16 -3,637.15
Net cash fl ows used in / from operating activities -6,827,553.29 -6,594,459.95 Investing activities
Purchase of property, plant and equipment -128,884.22 -114,911.43
Government grants received 0.00 21,250.20
Interest received 29.80 1,876.10
Purchase of intangible assets -1,289,649.43 -1,348,887.26
Acquisition of subsidiary net of cash (14) 677,813.09 0.00
Net cash fl ows used in / from investing activities -740,690.76 -1,440,672.39 Financing activities
Proceeds from capital increases 17.198.974,34 1,473,468.29
Proceeds from borrowings 2,375,000.00 0.00
Repayment of borrowings -2,500,000.00 0.00
In-/decrease of fi nance lease liabilities 27,089.98 18,928.64
Issue of convertible bond 928,590.00 9,098,875.00
Net cash fl ows used in / from fi nancing activities 18.029.654,32 10,591,271.93 Net in-/decrease in cash and cash equivalents 10,461,410.27 2,556,139,59
Net foreign exchange diff erence -20,105.14 -4,565.06
Cash and cash equivalents at the beginning of the period 2,257,615.16 1,428,913.06 Cash and cash equivalents at the end of the period 12,698,920.29 3,980,487.59
1. COMPANY INFORMATION
Heliocentris Energy Solutions AG is the holding company of the Group (hereinafter Company or HES). Its shares were listed on the Entry Standard/Open Market of the Frankfurt Stock Exchange until 19 May 2015. Since 20 May 2015 (first day of trading) the Company’s shares have been listed on the Prime Standard/Regu-lated Market of the Frankfurt Stock Exchange (see note 12).
The Parent’s registered office is located at Rudower Chaussee 29, 12489 Berlin, Germany. The company is registered at the registration court Berlin Charlottenburg and its registration number is HRB 99290 B. Heliocentris Energy Solutions AG is a technology leader in energy efficiency services and distributed power solutions for customers around the globe in the field of Information & Communication Technologies as well as Training and Research. A more detailed description of the Company’s business activities is included in the segment report in Note 5.
2. BASIS OF PRESENTATION
These interim condensed consolidated financial statements of Heliocentris Energy Solutions AG and its sub-sidiaries (collectively, the Group) for the six months ended 30 June 2015 have been prepared in accordance with IAS 34 Interim financial reporting. The interim condensed consolidated financial statements do not in-clude all the information and disclosures required in the annual financial statements. Therefore they should be read in conjunction with the Group´s annual financial statements as at 31 December 2014, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB) as endorsed by the European Union as of that date. They include comparative financial information for the six months ended 30 June 2014, prepared in accordance with the same standards, except as described below. These interim condensed consolidated financial statements have been prepared on a historical cost basis and are presented in Euros and Cents, except when otherwise indicated. The Company has elected to present a single statement of profit or loss, disclosing the expenses by function.
These interim condensed consolidated financial statements are not subject to an audit or a review by an audi-tor. They were authorised for issue by the Management Board on 28 August 2015.
3. ACCOUNTING POLICIES AND ESTIMATES
The accounting policies adopted and the judgements, estimates and assumptions made in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group´s annual financial statements for the year ended 31 December 2014, except for the adoption of new standards and interpretations effective as of 1 January 2015. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The following new standards and amendments to existing standards adopted by the European Union were applicable from 1 January 2015 and currently have no significant impact on the Group’s interim condensed consolidated financial statements and are not expected to have a significant impact on the Group’s annual financial statements:
• Amendments to IAS 19 Defined Benefit Plans: Employee Contributions • IFRIC 21 Levies
• Annual improvements 2011-2013 Cycle
4. INFORMATION ABOUT SUBSIDIARIES
By resolution on 10 March 2015, the Management Board decided to rename FutureE Fuel Cell Solutions GmbH to Heliocentris Fuel Cell Solutions GmbH. The entry in the commercial register was made on 18 March 2015. On 26 May 2015, Heliocentris Italy s.r.l. was founded with its office in Rome. The foundation was entered in the commercial register on 29 May 2015. The company is a wholly owned subsidiary of Heliocentris Energy Solutions AG.
With effect from 27 April 2015, the Group made a contribution in kind of all of its shares in Heliocentris HPS GmbH to HPS Home Power Solutions GmbH, Wildau. In return Heliocentris received an interest of 48.57% in HPS Home Power Solutions GmbH. Under the contract dated 19 June 2015, Heliocentris HPS GmbH merged with HPS Home Power Solutions GmbH with effect from 1 January 2015. Due to Heliocentris Energy Solutions AG’s position of control to date, HPS Home Power Solutions GmbH is also categorised as a subsidiary in ac-cordance with IFRS and is included in the interim consolidated financial statements as at 30 June 2015. Apart from this, these interim condensed consolidated financial statements include the same subsidiaries as the consolidated financial statements for the year ended 31 December 2014.
5. SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their products and services and has two reportable segments. The Industry segment specialises in energy effi ciency, monitoring and man-agement solutions as well as back-up power solutions for mobile telecommunications base stations. This segment compromises the product lines Energy Management System, Hybrid Power Solutions, Remote Man-agement, Services and Fuel Cell Solutions. The Academia segment off ers a range of education and training systems for fuel cell and solar hydrogen technology as well as other renewable energy technologies.
External revenues and the segment profi t contribution for the six months ended 30 June 2015 are as follows:
SEGMENT External revenue
6 months ended Profi t contribution6 months ended 30 June 2015 30 June 2014 30 June 2015 30 June 2014
EUR EUR EUR EUR
Industry 3,663,635.68 3,578,286.64 -4,384,189.59 -3,424,739.82 Academia 1,963,835.28 897,731.78 -113,678.98 -882,598.71 Total Segment 5,627,470.96 4,476,018.42 -4,497,868.57 -4,307,338.53
Adjustments and eliminations 0.00 0,00 0.00 0.00
Group (local GAAP) 5,627,470.96 4,476,018.42 -4,497,868.57 -4,307,338.53
In addition to sales and cost of sales, the profit contribution includes expenses for research and development and sales and marketing.
The reconciliation of total segment profit contribution to the result of the Group before tax for the six months ended 30 June 2015 is as follows:
6 months ended
30 June 2015 30 June 2014
EUR EUR
Segment result -4,497,868.57 -4,307,338.53
General and administrative -4,572,060.65 -2,105,728.47
Depreciation & amortisation -1,483,124.49 -368,724.80
Other operating income 346,523.95 720,331.86
Other operating expenses -885.55 0.00
Finance income 24,303.67 1,876.10
Finance expense -618,268.03 -349,596.51
Group result before tax under local GAAP
-10,801,379.67 -6,409,180.35
Fair value measurement of fi nancial liabilities -408,120.75 0.00
Share issue costs 1,490,187.41 279,769.50
Transaction costs convertible bonds 8,910.00 34,055.00
Finance cost convertible bonds -104,353.63 -58,954.52
Internally generated intangible assets -221,625.47 418,944.47 Elimination of goodwill amortisation 233,707.03 117,953.28
Investment grants 13,603.20 -4,616.36
Share-based payments -243,183.56 -144,599.93
Asset retirement obligation -9,406.86 -9,125.10
Finance leases -281.16 -131.11
6. OTHER OPERATING INCOME AND EXPENSES
The other operating income in the first half of 2015 results mainly from the release of provisions (EUR 209,995.58; first half of 2014: EUR 376,510.81) and foreign currency exchange gains and losses (net; EUR 55,262.63; first half of 2014: EUR 768.50).
The other operating income in the first half of 2014 relates mainly to the release of warranty provisions in the amount of EUR 325,686.48 due to the avoidance of a contract with a customer in Mozambique. This release came along with the redemption of material of EUR 174,956.24 and the write off of trade receivables of EUR 500,642.72. Furthermore, EUR 97,885.39 resulted from a subsequent reduction in the purchase price for the assets of P21 GmbH Power for the 21st Century acquired by Heliocentris Industry GmbH (formerly: P21 GmbH) in 2011.
In context with the acquisition of Heliocentris Fuel Cell Solutions GmbH (formerly: FutureE Fuel Cell Solutions GmbH) in 2014 contingent considerations and an adjustment claim have been agreed. An amendment agree-ment to the original purchase agreeagree-ment was signed on 25 March 2015, in which the parties agreed an addi-tional payment to settle all outstanding purchase price elements payable in shares. Based on the Management Board’s resolution on 25 March 2015, the Company issued the agreed number of 391,520 shares to the former shareholders of Heliocentris Fuel Cell Solutions GmbH (see note 12). Previously to the share issue, the liabili-ties have been measured at fair value, with the difference in value of EUR 408,120.75 recognised in other operating expenses.
7. AMORTISATION, DEPRECIATION AND WRITE DOWNS OF INTANGIBLE AND TANGIBLE ASSETS Technologies purchased as part of the business combination with Heliocentris Fuel Cell Solutions GmbH (for-merly: FutureE Fuel Cell Solutions GmbH) as at 20 August 2014 have been recognised as separate intangible assets and are amortised over five years. Amortisation of EUR 614,212.62 has been recognised for these technologies in the first six months of 2015.
8. FINANCING COSTS AND SIMILAR EXPENSES
Financing costs and similar expenses comprise primarily finance cost relating to the convertible bonds issued for the first half of 2015 and finance expense for the short-term loans taken out in the first half of 2015 (see note 10).
9. TRADE AND OTHER RECEIVABLES
The trade and other receivables decreased by EUR 2,540,029.85 to EUR 5,335,599.34 during the first six months of 2015 due mainly to payments from customers.
In the first half of 2015 trade receivables of an initial value of EUR 8,317.79 have been written off. The amounts written off are recognised in the statement of profit or loss within sales and marketing.
10. INTEREST-BEARING LOANS AND BORROWINGS
Compared to 31 December 2014, this item has increased by EUR 1,844,881.45 to EUR 11,084,518.76. This is due chiefly to the issue of a further tranche of convertible bonds and the consolidation of a subordinated loan (see note 14).
In conjunction with the strategic partnership with INABATA EUROPE GmbH, on 17 April 2015 the Company issued a further tranche of convertible bonds with a nominal value of EUR 1,000,000.00 to INABATA EUROPE GmbH. This tranche was issued at EUR 937,500.00 or 93.75% of nominal value, bears a coupon of 4%, runs until January 2017 and is convertible at the option of the shareholders into ordinary shares of the parent of the Group at a conversion price of EUR 7.6542 per share. The issue of this further tranche of convertible bonds was resolved by the Management Board on 13 April 2015 and approved by the Supervisory Board on 16 April 2015. In accordance with the terms of the contract at the time of the issue the convertible bonds were divided into a liability and an equity component. The fair value of the liability component is determined using a market interest rate for a similar non-convertible debt. This amount is classified as a financial liability measured at amortised cost after deduction of transaction costs amounting to EUR 8,008.70 until it expires upon conver-sion or redemption. In line with this method the liability component recognised amounted to EUR 834,658.03 after deduction of transaction costs. After deduction of transaction costs of EUR 901.30 the remaining part of the proceeds amounting to EUR 94,833.27 is allocated to the conversion option, which is recognised directly in equity. The carrying amount of the conversion option will not be measured again in subsequent periods. Furthermore a subordinated loan of EUR 720,000.00 to HPS Home Power Solutions GmbH from an external investor is also reported under this item.
In the first quarter of 2015, the Company took out five short-term loans from strategic investors in the total amount of EUR 2,500,000.00. The short-term loans have been issued at EUR 2,375,000.00 or 95% of total nominal value and bear interest of 10% p.a. payable together with the repayments of the nominal value of the loans. All five loans were repaid on 29 May 2015.
11. OTHER LIABILITIES
Current other liabilities decreased by EUR 275,835.25 to EUR 2,622,372.26. This decrease results mainly from the settlement of liabilities from additional purchase price claims of the former shareholders of Heliocentris Fuel Cell Solutions GmbH (formerly: FutureE Fuel Cell Solutions GmbH) from the purchase agreement (as at 31. December 2014: EUR 1,940,999.25). The liabilities were reclassified to equity under the capital increase resolved by the Management Board and the Supervisory Board on 25 March 2015 after adjustment for the change in value by 25 March 2015 (see note 12).
Conversely, advance payments received for the supply of energy efficiency solutions for mobile base stations in Myanmar (as at 30 June 2015: EUR 1,250,140.25) led to a corresponding rise in other current liabilities.
12. ISSUED CAPITAL AND RESERVES Share capital
As at 30 June 2015, the Company’s share capital totalled EUR 14,242,233.00, consisting of 14,242,233 no-par shares.
The Annual General Meeting on 26 June 2014 granted authorisation to increase the share capital by up to EUR 4,325,109.00 (Authorised Capital 2014/I). On this basis the Management Board resolved on 25 March 2015, with approval by the Supervisory Board on the same date, to increase the share capital by EUR 391,520.00 to EUR 10,991,944.00 in order to settle its liabilities from the additional purchase price claims of the former shareholders of Heliocentris Fuel Cell Solutions GmbH (formerly: FutureE Fuel Cell Solutions GmbH) from the share purchase agreement. The capital increase was entered in the commercial register on 14 April 2015. With this capital increase, all outstanding purchase price elements in the context of the take-over of Heliocentris Fuel Cell Solutions GmbH have been settled. The total number of Heliocentris shares issued for the purchase of the shares in Heliocentris Fuel Cell Solutions GmbH and loans granted to it is 1,248,424.
Furthermore, on 24 April 2015 the Management Board resolved to increase the Company’s share capital by up to EUR 3,250,289.00 by issuing up to 3,250,289 new shares against cash contributions with pre-emptive rights for existing shareholders. The resolution was approved by the Supervisory Board on the same date. All new shares from this cash capital increase were placed. The share capital thus increased from EUR 10,991,944.00 to EUR 14,242,233.00. The gross proceeds of EUR 18,689,161.75 will be used to repay liabili-ties and finance the further growth of Heliocentris Energy Solutions AG. The new shares carry full dividend rights as of 1 January 2014.
On 28 April 2015, the Company applied for the existing and new shares to be admitted for trading in the regu-lated market (Prime Standard). The admission was granted by the Executive Board of the Frankfurt Stock Exchange on 19 May 2015. The first day of trading was 20 May 2015.
Capital reserves
The share premiums from the capital increases in the first half of the 2015 financial year totalling EUR 17,396,472.75 were entered in the capital reserves.
Transaction costs for issued share capital amounting to EUR 1,490,187.41 (first half of 2014: EUR 38,012.03) were deducted from the proceeds of the issue and netted against the capital reserve. The tax effect on the transaction costs amounted to EUR 449,664.05 (first half of 2014: EUR 11,468.32).
13. SHARE-BASED PAYMENTS
During the first six months of 2015, expenses arising from cash-settled share-based payments in the amount of EUR 36,792.80 (prior-year period: EUR 6,102.53) have been recognised in general and administrative ex-penses. The carrying amount of the corresponding liability relating to the virtual stock options at 30 June 2015 is EUR 139,711.14 (31 December 2014: EUR 102,918.34). Furthermore, expenses arising from equity-settled share-based payments in the amount of EUR 206,390.76 (prior-year period: EUR 138,497.40) have been recognised in the statement of profit or loss.
14. TRANSACTIONS INVOLVING NON-CONTROLLING INTERESTS
The contribution in kind of all of the Group’s shares in Heliocentris HPS GmbH to HPS Home Power Solutions GmbH in return for receiving an interest of 48.57% in HPS Home Power Solutions GmbH (see note 4) did not lead to a loss of control from the Group’s perspective. Rather, it reduced its shareholding in Heliocentris HPS GmbH while simultaneously acquiring shares in HPS Home Power Solutions GmbH.
HPS Home Power Solutions GmbH was founded in December 2014. Objective of the company is the develop-ment, production, distribution and operation of fuel cell based home power energy systems and energy man-agement systems as well as software managed controller units for the self-sustaining supply of energy and heat in dwellings based on renewable energies. Intended purpose of the contribution in kind of all of the Group’s shares in Heliocentris HPS GmbH to HPS Home Power Solutions GmbH is the bundling of the product development and distribution activities for self-sustaining home power supplies in a separate entity, which can be financed by external investors.
The carrying amounts of the assets and liabilities of Heliocentris HPS GmbH totalled EUR 30,699.50 on the date of the share swap. In exchange Heliocentris received 28,334 shares at nominal value resulting in a loss from the pro rata sale amounting to EUR 1,216.58. This was taken directly to equity.
By way of the share swap Heliocentris simultaneously acquired 48.57% of the assets and liabilities of HPS Home Power Solutions GmbH. The fair values of the identifiable assets and liabilities on the date of the share swap totalled EUR -36,974.99 and are made up as follows:
The acquisition of negative net identifiable assets of HPS Home Power Solutions GmbH resulted in an amount of EUR 32,530.93 recognised as goodwill. Goodwill is allocated entirely to Industry Segment.
Transaction costs of EUR 45,470.00 have been charged to the general and administrative expenses in the statement of profit and loss.
From the date of acquisition, HPS Home Power Solutions GmbH has contributed no revenue and EUR -69,486.16 to the profit (loss) before tax of the Group. If the combination had taken place at the beginning of the year, revenue of the Group would have been EUR 5,627,470.96 and the result for the Group would have been EUR -10,658,980.72.
FAIR VALUE OF IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED
Trade and other receivables 8,770.27 8,770.27
Prepaid expenses 1,256.73 1,256.73
Cash and cash equivalents 677,813.09 677,813.09
Provisions -1,000.00 -1,000.00
Interest-bearing loans and borrowings -720,000.00 -720,000.00
Trade payables -1,259.84 -1,259.84
Other liabilities -2,555.24 -2,555.24
Analysis of cash flows from the acquisition of HPS Home Power Solutions GmbH:
As a result of the transaction minority interests in the assets and liabilities of Heliocentris HPS GmbH and HPS Home Power Solutions GmbH amounting to EUR 4,444.06 are recognised directly in equity.
15. FAIR VALUES
The liabilities as at 31 December 2014 from the additional purchase price claims of the former shareholders of Heliocentris Fuel Cell Solutions GmbH (formerly: FutureE Fuel Cell Solutions GmbH) are valued at fair value through profit and loss. All other financial assets and liabilities are valued at amortised cost.
The investment in Blacksquared GmbH held by the Company (carrying amount EUR 50,337.70) is measured at cost in accordance with IAS 39 because they do not have a quoted price in an active market and its fair value cannot be measured reliably.
CASH FLOWS ON ACQUISITION OF HPS HOME POWER SOLUTIONS GMBH:
Movement in provisions -1,000.00
Working capital adjustments:
In-/decrease in trade and other receivables and prepayments 10,027.00
In-/decrease in trade and other payables -3,815.08
Net cash fl ows from / used in operating activities 5,211.92
Purchase of intangible assets 32,530.93
Acquisition of subsidiary net of cash 677,813,09
Net cash fl ows from / used in investing activities 710,344,02
Proceeds from borrowings -720,000.00
Acquisition of non-controlling interests 4,444.06
Net cash fl ows used in / from fi nancing activities -715,555.94
All other financial assets and liabilities approximate their carrying amounts.
The Group uses the hierarchy according to IFRS 13 for determining and disclosing the fair value of financial instruments by valuation technique.
The Group applied quoted prices in active markets (Level 1) to the liabilities from additional purchase price claims.
There were no transfers between Level 1 and Level 2 fair value measurements during the first six months of 2015.
16. EARNINGS PER SHARE
The weighted average number of ordinary shares outstanding is 11,692,320 (first half of 2014: 8,650,218).
17. EVENTS AFTER THE REPORTING PERIOD
No significant events with a material impact on the Group’s interim condensed consolidated financial statements occurred after the end of the financial quarter.
18. RELATED PARTY TRANSACTIONS
The group of related parties has changed since preparation of the consolidated financial statements as at 31 December 2014 owing, firstly, to changes in the subsidiaries of Heliocentris (see note 4) and, secondly, with respect to the composition of the Supervisory Board members (see note 15). The contribution in kind of Helio-centris Home Power Solutions GmbH to HPS Home Power Solutions GmbH followed by the merger of the two companies (see note 4) is disclosed as a transaction with related parties, particularly as Dr Henrik Colell is a managing partner of HPS Home Power Solutions GmbH as well as a member of the Heliocentris Energy Solutions AG Management Board. Apart from this there have been no significant related party transactions in the first half of 2015 or in the first half of 2014 respectively.
19. EMPLOYEES
As at the reporting date the Heliocentris Group employed the following employees:
20. MANAGEMENT AND SUPERVISORY BOARD
There have been no changes with respect to the composition of the Management Board compared with 31 December 2014.
Mr Klaas de Boer was elected as a new member of the Supervisory Board at the Annual General Meeting on 16 June 2015. Klaas de Boer is Managing Director of Entrepreneur Fund Services Ltd., London, and Managing Partner of Entrepreneur Fund Management LLP, London. He also sits on the Supervisory Boards of General Fusion Inc., Lifeline Scientific Inc., Optinose Inc. and vasopharm GmbH. Mr de Boer takes over the position from Mr Oliver Krautscheid, who resigned his Supervisory Board post as of the end of the Annual General Meeting.
30 June 31 December 30 June
2015 2014 2014
Executive Board / Managing directors 5 4 5
Employees 201 176 140
Workers 8 7 6
temporary personnel / trainees / students 27 37 31
