This article first appeared on GuruFocus .
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Revenue:EUR132.8 million for the nine-month period, up from EUR102.7 million year-over-year (30%+ increase).
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Adjusted EBITDA Guidance:Raised to EUR36 millionEUR38 million range.
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Adjusted EBIT Guidance:Raised to EUR25.5 millionEUR27.5 million range.
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Sales Guidance:Maintained within existing corridor of EUR166 millionEUR178 million (broad span retained due to supply chain clarifications and potential last-minute project upside).
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Profitability Growth:Adjusted EBITDA roughly tripled; adjusted EBIT approximately five times higher versus comparable prior-year period.
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European Power Management Gross Margin:Slightly improved despite declining revenue, driven by favorable product mix (large portion of high-margin semiconductor revenue and larger PENS business portion).
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Logistics Costs:Ukraine shipment processing/logistics costs came in lower than anticipated.
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Consulting Costs:Slightly lower in Q3 related to ERP introduction; costs shifted into Q4.
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Q4 Cost Outlook:Higher business development costs (defense) and ERP cost shift expected to weigh on Q4 EBIT/EBITDA margins at the low end.
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Capacity:New production line coming on stream in Swindon next year; sufficient capacity for next two to three growth steps.
Release Date: October 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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SFC Energy AG ( SSMFF ) reported 30% revenue growth to EUR132.8 million for the first nine months, with profitability improving over-proportionally.
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The company raised its EBITDA guidance to EUR36-38 million and EBIT guidance to EUR25.5-27.5 million, reflecting strong momentum.
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Defense business, particularly in Ukraine, accelerated significantly, driving a favorable product mix and higher margins.
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Gross margin in the European power management business improved due to a higher share of high-margin semiconductor revenue.
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SFC Energy AG ( SSMFF ) is expanding internationally with partnerships in Abu Dhabi (EDGE Group), the US (CRADA with US Army), and Singapore, positioning for future growth.
Negative Points
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Sales guidance was left unchanged at EUR166-178 million, indicating potential supply chain constraints and limited upside in Q4.
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Logistics and consulting costs were lower than expected, but ERP costs shifted to Q4, which may pressure margins in the quarter.
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The hydrogen business faces challenges as some customers opt for diesel generators due to lower CapEx, impacting adoption.
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CCTV business in the US is growing but volumes are below original plans, with scaling expected only in 2027.
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OEM business in Europe faces delays due to heavy loading in factories, affecting visibility for 2027.
Q & A Highlights
Q: For 2027, do you expect a return from another force from Ukraine or any associated army for a project of this size? A: CEO Peter Podesser said the base assumption is a continuation of business in Ukraine, though not at the same volume as 2026. For 2027, the company is planning EUR 3 million to EUR 24 million for the service and regeneration part within the National Guards. He noted three funding opportunities: Germany, EU funds, and the Ukrainian defense budget, where SFC is working to get on the so-called Korowai list. Additional projects in the Middle East, US, and OEM level in Europe are part of the 2027 growth plan but are not counted in planning.
Q: Could you give an update on India and whether you see some acceleration on that front? A: CEO Peter Podesser said SFC expects a ballpark figure of EUR 5 million to EUR 6 million in orders due for decision-making within India's fiscal year, which ends March 31. He expects those orders to come in either before Christmas or at least before the fiscal year end in India, and remains confident even after the experience of the last two years.
Q: What do you roughly expect for the defense revenue share in total revenue this year, and will it rise or fall next year? A: CEO Peter Podesser said defense is about one-third of total revenue this year, and about 40% at the segment level. Going into next year, the company intends to keep this within the one-third corridor, with upside if it is more successful in Ukraine than anticipated. He emphasized this is not just Ukraine but also international and OEM programs in the pipeline, which helps de-risk and limit cluster risk.
Q: You mentioned supply constraints in Q4. Where exactly are these constraints, do you see them ease in Q1, and will the new production line in Swindon help? A: CEO Peter Podesser said SFC has ramped up in Ukraine with fully automated two-shift production. The additional Swindon line will be set up next year, earliest coming into operation in the second half of the year. A first robot entity in Bruntal is up and running until the end of the year to free up capacity. In the supply chain, the company must work back especially for specific components like special pumps and parts of electronics to secure capacity for Q1. On the membrane side, additional suppliers have been qualified.
Q: How much more capacity will the new production line in Swindon bring to your Swindon operation? A: CEO Peter Podesser said the new line will double the potential capacity in total. However, it will be a step-by-step process of qualifying a second team or splitting the current team and training people, which will take two to three quarters to have everybody at the same level.
Q: On the energy management business, could you give an indication how big the high-margin semiconductor business with ASML currently is and how big it could grow? A: CEO Peter Podesser said it is still a development program with paid development, with 11 engineers exclusively working for this customer and a total volume of about EUR 3.5 million, similar next year. The customer's plan is to get this into real unit shipments apart from demonstrators, with a scaling step in 2028 and an outlook to reach EUR 5 million to EUR 10 million in annual recurring revenue.
Q: What are the implications of consolidation in the CCTV sector, and is your relative cost positioning versus diesel improving? A: CEO Peter Podesser said a lot of capital is flowing into CCTV, with the European market leader acquired by two large PE firms and the number two player being formed by a combination of players three and four. He sees a gap between 25% and 40% upside for SFC based on current penetration rates, with more than a third of newly installed systems equipped with SFC's fuel cells. On diesel competition, high diesel prices help on total cost of ownership, but some customers driven purely by CapEx still opt for diesel, which SFC has adjusted for in its expectations.
Q: How safe is it to have your workforce on the ground in Ukraine, and are you looking at M&A opportunities given the strong cash position? A: CEO Peter Podesser said safety is the first concern, and presence in Ukraine is voluntary, including himself. The company gathers information from official German and Ukrainian sources before traveling, and would postpone if there is over-proportional risk based on embassy safety briefings. On M&A, he said SFC is qualifying market access opportunities but nothing is imminent; the focus is on integrating the acquisition completed in July, with the sequence team moving to SFC in Munich. M&A is on the agenda for 2027, but no result is expected in 2026.
Q: What were the key drivers behind the raised EBITDA and EBIT guidance? A: CEO Peter Podesser said the significant expansion and acceleration of the defense business, particularly the program in Ukraine, drove a much more favorable product mix than initially anticipated. Cost-side assumptions also did not materialize, partly due to the Ukraine program. Additionally, the civilian power business in Europe showed good improvement. The sales guidance was left within the corridor of EUR 166 million to EUR 168 million, while EBITDA guidance was raised to EUR 36 million to EUR 38 million and EBIT to EUR 25.5 million to EUR 27.5 million.
Q: What were the cost impacts associated with the Ukraine business and the ERP project, and how do they affect Q4 margins? A: CFO Daniel Saxena said processing and logistics costs for shipping Ukraine revenues in two quarters were lower than anticipated. Consulting costs for introducing ERP in Q3 were also slightly lower, but these costs will shift into Q4. In addition, Q4 will see a much higher portion of business development costs in connection with the defense business, plus other smaller cost factors, which is why the lower end of the Q4 EBIT and EBITDA margin is expected to be lower.
Q: What is driving the gross margin improvement in the European power business despite declining revenues? A: CFO Daniel Saxena said the European power management business, which serves customers like ASML, saw a better-than-expected gross margin despite declining revenues. This was a function of product mix, with a large portion of high-margin semiconductor revenue and a larger portion of the pens business, which led
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
