SUNEX Q1 2024 Results: Revenue Drops Sharply, Acquisitions Planned for Growth

• The SUNEX Group’s revenue amounted to PLN 35.7 million in Q1 2024 compared to PLN 100.5 million y/y
• Net loss in Q1 2024 was PLN 8.8 million compared to a net profit of PLN 9.7 million y/y
• Results were impacted by the weak macroeconomic situation in Germany and delays in granting subsidies to customers in that market
• In anticipation of market improvement, SUNEX is pursuing acquisitions in Germany and Austria

– We expect a revival in our key German market in the second half of the year due to the later implementation of subsidy programs. After the end of Q1 2024, we received signals from contractors about the possibility of them placing orders. We are seeing growth, but its scale is not as we expected. Preparing for a more dynamic market improvement, in April we signed a letter of intent to purchase an Austrian installation company. In the coming months, Drolsbach, a German heating installation company, will be contributed to SUNEX. Acquiring both entities will allow us to scale our existing success in German-speaking markets. We are also finalizing the acquisition of a property in Racibórz along with some employees from Mavex-Rekord. In the Polish market, we expect an improvement in the situation due to the gradual launch of funds from the National Recovery Plan, said Romuald Kalyciok, President of SUNEX.

The Austrian company being acquired will complement the activities of Krobath (SUNEX’s Austrian subsidiary) and will contribute to greater market penetration in Austria. The acquisition of the German company Drolsbach will strengthen the Group’s position in Germany and create synergies with SUNEX’s existing subsidiary there.

Finalizing the negotiations for the purchase of the property adjacent to SUNEX from Mavex-Rekord will allow the company to expand its production infrastructure (the acquired plant would produce parts for tanks, including composite tanks) and will help reduce operational costs by eliminating the need to rent one of the halls from an external entity. The company is also discussing the acquisition of some employees from Mavex-Rekord.

The launch of very attractive subsidies for the replacement of heating systems in Austria at the beginning of 2024 resulted in record orders in this market – the second most important market for SUNEX after Germany. In the German market, the company observes stabilization in anticipation of market growth with increasing demand for eco-friendly heating solutions. In Q1 2024, SUNEX recorded consolidated revenues of PLN 35.7 million, 64.5% less than in the same period last year, which was a record quarter in terms of sales. Gross profit from sales amounted to PLN 4.7 million in Q1 2024 compared to PLN 20.1 million y/y. The operating loss (EBIT) was PLN 6.8 million compared to an operating profit (EBIT) of PLN 13.8 million a year earlier. The net loss was PLN 8.8 million compared to a net profit of PLN 9.7 million a year ago. The results were negatively affected by, among other things, a decrease in sales and prices, as well as delays and uncertainties in subsidy programs for heating devices in the German market and issues related to the ZUM list in the Polish market. In the public market, tenders for RES devices are being delayed.