SFC Energy AG (F3C) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the publication of Annual Report 2019 of SFC Energy AG. At our customers' request, this conference will be recorded. [Operator Instructions] May I now hand you over to Dr. Peter Podesser, CEO, who will lead you through this conference. Please go ahead, sir.

Thank you very much, Kai, for the introduction. Good morning, ladies and gentlemen. Let me welcome you in the name of my colleague, Gerhard Inninger and myself, who will lead you through this call today. And really thank you very much for joining us in these challenging days for all of us. I think against the background of the ongoing and increasing impact here of the COVID-19 pandemic situation, the review of previous year's numbers might appear less important. But nevertheless, I think we feel it is our obligation to give you a detailed view to give you the opportunity for a proper Q&A here. But at the same time, also give you an update -- an up-to-date view of our assessment here of the situation of the impact as well as now measures being taken from today on. So we have, I think, 2 key topics, naturally, really review the 2019 numbers and the assessment on it, but also look where we are today and from here forward. That's one, yes, we are seeing -- we have been experiencing, fortunately, a very dynamic start into the current financial year. We are, as we speak here, still producing at capacity level in all our production facilities, and still, we felt the obligation a couple of days ago to retract and withdraw our guidance for the current year simply because of the unclear impact of, a, COVID-19, but, b, also naturally negative development of oil prices here against the dispute here of the OPEC+ members and highly volatile environment. The key reason is, at the end of everything, long-term disability here for us, I think, same for most of the industries right now, and therefore, a cautious approach here. In the meantime, in the last couple of days, actually, we have implemented measures to cope with the situation with a clear priority here of keeping and protecting here the safety and health of our teams, of our customers as well as of our suppliers in the center of all decisions. At the same time, implementing cautious cash management as well as clear cost reduction measures have been on the agenda for the last couple of days, and Gerhard and myself will report on this to you. Let me now get back to 2019. 2019, on the business side, on the revenue side, we see 2 different developments. A, EUR 58.5 million revenue is a slight decline of about 5% to the year before to 2018 with more than EUR 61 million. And the key drivers here for the negative deviation is deviation in the sales of our products to the Defense & Security area, where we had a delay in program here in Germany, that at the end of the day, put us down more than 24% compared to the previous year here in Defense & Security. And in Oil & Gas, a cautious investment regime here in place, especially with our Canadian customers was the reason for a negative deviation and a decline in sales compared to 2018. Besides this, in the other 2 segments, we felt dynamic and agile demand here for our products, the Clean Energy & Mobility business, our civilian fuel cell business, up more than 25.7%; and also the Industrial business here on, let's say, robust single-digit growth path at the end led to a picture as we have it with a slight decline in sales. But let me go into some of the details here of the segment. In Canada, as mentioned here in our Oil & Gas business, mainly a lack of pipeline capacity and associated uncertainties regarding the regulatory environment and further investments in pipeline resulted in this reluctance of investment, with the sales declining to approximately EUR 22 million from EUR 26 million the year before. Major countermeasure we took apart from naturally adapting our structure here locally was to drive and to accelerate our push into the U.S. market regional expansion here with the conclusion of several local partnerships down to the southern part of the U.S. And in addition, with this, not only looking at the Oil & Gas applications, but really pushing also for business in Clean Energy & Mobility, civilian fuel cell applications, resulting overall and less dependent on Oil & Gas as such as an industry but also less dependency on the Canadian regional situation. Looking at the segment, I think it's absolutely important and worthwhile also to see the success we are having with our EFOY product in this segment. Again, in 2019, we saw further growth here. The overall content of fuel cell business in the Oil & Gas segment rose from 12% in 2018 to 16% in 2019, with a significantly positive impact also on the gross margin, and Gerhard will relate to this later. Let me now move on to the Industrial business. I mentioned a 5% growth -- 5.7% growth, distributed over existing customers, but also new customers. We see consistent adoption here of our newly developed modular product platform with a focus also to the laser industry. Full deployment of this, we expect now in the upcoming years and also the impact, including, I'd say, the profitability impact that was still actually here depending also on some of the start-up costs here for the new platform to be fully deployed in 2020 and the years after. But overall, consistent development of sales here in 2019. Defense & Security, a different picture between our business here in Germany and our internationalization efforts, whereas as mentioned, we have to accept late in the year a delay in a program in Germany, which overall brought the segment here down compared to the previous year's numbers. We could expand our international business here aggressively. We see about 70% of the sales here in the segment being now on an international level, where countries like India, Israel, U.K. are the key markets that we opened up and we expanded. And the growth of the international business, I think this is key and important did not only come because of the decline of the German business, but in absolute numbers, we almost tripled the business here internationally. And that's also the path here for the future. We will get back to this when we look into that -- the outlook. Clean Energy & Mobility. Definitely, let's say, the start here in the segment, a growth of more than 25% in the civilian fuel cell business here, a hard work in the consumer segment to show a turnaround of 6% growth and I'd say the industrial applications here driven by civilian security and surveillance applications and the wind industry being, I'd say, above 36% as the segment year-on-year. The good news here, this is a development that we could also conserve here in the first 3 months of the years, consistent demand out of different industries, but also out of different regions. So a very sound pattern here of business and growth. With this, the first overview here on the revenue and on the business side, and I would like to hand over to Gerhard here for the financial results.

Yes. Good morning, ladies and gentlemen. Please let me give you an overview on the revenue of the company on the margins and earnings situations as well on balance sheet and cash. And this is all based on the audited figures. A quick addition to what Peter said, also positive in consumer business meeting Clean Energy in the path, which is consumer business. Also there, we had an increase of 6%, which is a very positive thing. I know nothing is exploring as to figures from last year, especially in turbulent times like now. But of course, we have the obligation to give you an overview. First of all, I can tell you that there was no change on the figures during the audit. So at least I can tell you the same I told you 6 weeks ago, figures are unchanged to the preliminary [ fumigate ]. The revised guidance 2019 is fulfilled. The revenue was EUR 58.5 million is between -- is within the range of EUR 58 million to EUR 62 million. And even the EBIT adjusted before IFRS 16 was round about EUR 130,000 between minus EUR 0.5 million plus EUR 1.5 million and on EBITDA adjusted before IFRS 16 was EUR 1.3 million. This is within the range of EUR 0.5 million to EUR 2.5 million. With overview on the revenue, Peter discussed the segments with you. The consolidated sales number is EUR 58.5 million compared to EUR 61.7 million in the year before. This is minus 5%. For completeness, let me quickly walk you through the revenue per company 2019 versus 2018. On Simark we had, this was the shortfall, the EUR 22 million compared to EUR 26 million the year before. It means in 2018, this is minus 15%. On SFC, absolutely stable, EUR 19.3 million compared to EUR 19.4 million the year before, means in 2018. And on PBF, very positive, EUR 17.2 million in 2019 compared to EUR 16.3 million in the year before. On the gross profit, positive thing. We achieved -- in the whole group of the group we achieved 34.2% in 2018, and we could increase this to 34.4% in 2019. So -- and the positive thing, even with the lower revenue, I mentioned this 6 weeks ago, usually lower revenue leads to lower margin because we want to sell whatever is possible here. We could keep the level of margin and even increase a little bit. Looking into the individual segments on Clean Energy. And as Peter said, this was really the star. We improved from 39% to 43.2%, so an increase of 4%. This is a lot. We know how difficult it is to increase margins 4% is tremendous. On Industry, very stable, 30.7% in 2018; and in 2019, we have 30.4%, also could see this in the quarter 4 where we had an increase from 34% -- to 34%. They're almost stable. Fortunately, there's good momentum. We will see what we have in quarter 1. On Oil & Gas, and what was very helpful here for the increase from 28% to 29% was the last quarter, quarter 4 where we have a tremendous number of EFOY in revenue. So only looking on quarter 4, we could increase from 28% to 32%. So the absolute star in Simark business are Oil & Gas business. The EFOY which increased, we mentioned this from 12% to 16%. And Defense & Security, of course, if the revenue from the German army is missing, then this goes down. We have 50.9% in 2018, where we had a lot of revenue in from the Deutsche Bundeswehr and this went down to 44.7% in 2019. This was the overview on the margins. Fortunately, the quarter 4 was very strong. Here, we could improve from 36.8% to 38.1%. This was the best quarter in the whole year, like always, and usually, this should be a good starting point even with the whole corona stuff we have now. Let me give you an overview on the earnings situation. And this is the last time that we will mention this IFRS 16 because now it's in the normal term. We started with this in 2019. This is the rule that we have to apply to this, and impact was on EBIT overall of EUR 2.3 million. That means that lease expense turn into depreciation, which are not considered for EBITDA and a little bit impact on EBIT. This was around EUR 150,000. We had underlying positions in 2019 of -- in total EUR 1.6 million. This was almost complete in connection with the stock appreciation rights that is given to management. And looking on this, I made on overview where we can see how the real result developed over the year from '18 to '19. And at least with -- I took out the impact from IFRS 16 and also the impact from the Stock Appreciation Rights, and here we can that the cost basis is round about EUR 2 million higher than the year before. And this is caused from investments we did for future growth. Sounds a little bit funny, if I say this well that this was the situation end of the year before corona, but of course, we increased our sales force to be ready to deliver the revenue, which is in our budgets at the end of 2019. Let me quickly also mention on the EBITDA. The group EBITDA decreased year-to-year from EUR 2.4 million to plus EUR 2 million and IFRS 16 this year included. EBITDA adjusted for nonrecurring effects was stable with EUR 3.7 million and this year EUR 3.6 million. That means the negative earnings impact from this EUR 2 million was fully compensated by IFRS 16. The group EBIT decreased from EUR 1.3 million positive to minus EUR 1.3 million. Here you can see there's a minus of EUR 2.6 million because the IFRS 16 has no impact on EBIT. And the underlying EBIT went from EUR 2.5 million to round about EUR 300,000, also minus EUR 2 million. This was the impact on the earnings or what I told you before, what was related to the EUR 2 million what we invested in future growth. Quick look on the balance sheet. The balance sheet as for the capital increase we did last year looks much different because we have a much better equity ratio. This is partly compensated by the negative effect means higher balance sheet start from IFRS 16, but at least the equity ratio improved to 55%. The cash position, and that's very positive at the end of 2019, is round about EUR 21 million. And in addition, we have credit lines from 2 German banks with exactly EUR 9 million. Means end of the year, this was up to EUR 30 million in total. So this will bring us -- and I think that's one of the most important things, will bring us in a very solid liquidity situation also in this turbulent times. So the money is available, and we also can compensate some expenses we have or some shortfall in revenue that can happen. This will not threaten the company. On employees, we had -- at the end of the year, we had 282 employees, almost the same as end of 2018 with 279. We had some reductions. This was a reaction on the shortfall in Oil & Gas. So only an increase of 3 employees. And what else -- the backlog was pretty stable compared to the year before. So it was round about is EUR 15 million, the year before -- EUR 15.4 million exactly, and the year before was EUR 14.1 million. And the positive thing was that we could see an increased backlog in Oil & Gas business at the end of the year. With this, I may hand back to Peter, who will give you an overview on outlook 2020. Thanks a lot.

Thanks, Gerhard. Talking about the outlook, I think we are talking about the most difficult part here right now. As I said before, in the intro, yes, there was a good reason why we felt obliged to withdraw our guidance that we had out there since beginning of February in the market. The simple reason is that the visibility is not high enough for a -- what we call stable and sufficiently reliable guidance here in quantified numbers for the year. But at the same time, naturally, we made now our assessments, and we took also actually the last 2 weeks -- the last couple of days to assess the situation in the different businesses. And looking into the segments, I think we have the most difficult situation in oil and gas, where COVID-19 is overlapped also by the negative price development of oil and gas. So we expect this situation really to continue to be difficult throughout the year. As said, regional activities after naturally a slowdown, especially in Q2 also in other businesses in other regions, regional expansion to Canada as well as to outside oil and gas applications this year, a clear path forward. In the Industrial business, well, we are seeing also our key customers naturally being challenged here by supply chain interruptions by preliminary or intermediate closures of facilities. Means, here, we are expecting a slowdown in Q2 and going into Q3. For the time being, we are expecting Q4 being the time when the demand comes back. But we also have very specific developments here, where, for example, our biggest customer is very active in laboratory and testing equipment. So we might see also some positive impact out of this year in the industrial part of the business. Slightly different judgment we have on the core fuel cell business here, civilian, in Clean Energy & Mobility, but also in the Defense & Security business. Starting with Defense & Security, well, also here, going into Q2, we are seeing partial shutdowns or full shutdowns of procurement activities, which is last days, we were informed by our Indian partners that we are experiencing a full shutdown here means a real delay to be expected. Also in Germany, we see [ partial ], I'd say, protective measures here for the respective people employed in the organization of where we see shutdowns. So this is definitely slowing down activity now until midyear. What comes after this? Well, the business as such is traditionally a year-end business, which might help us in this respect. So the overall and generic expectation here is that we will see and there's a solid possibility of a rebound of the Defense business in the second half of the year, be it on national level or international level. And in Clean Energy & Mobility, as said before, we continue to see the consistent growth and demand that we experienced back in 2019, but simply the fact that dealerships in our consumer business are shut down now in the most part here of Europe that installation teams cannot go out and do the installation of our fuel cells here for our industrial customer base will impact us in Q2, whether this is already then I'd say, going back and being reduced in terms of also legislative and regulatory measures slowing this down. For the time being, I think it's difficult to judge, but we expect here an increase of activity than in Q3 and as well as Q4. Overall, against the background of the uncertainty here and I'd say, the constant monitoring, we expect here -- well, and not taking into account a massive recession as basis of this assessment, we expect revenues and profitability to be negatively impacted and be overall for the year, significantly under the previous year. To what extent? That's too early to judge for us right now, but a constant monitoring and therefore, then calibrating of, let's say, cost base and measures is now the daily work. So let me go into the measures. Well, the overall measures right now, as I said, primary focus here is really safety and health of our teams, of, let's say, also customers and suppliers coming in also into our facilities still. So what we implemented is a massive home-office initiative. We have between 60% and 70% of our teams working remote and from home offices, depending on location. We have operations open and running, as I said, still at full pace in all locations incoming and outgoing goods, running quality inspection, running -- the planning rate now is that we will make use of accumulated over time, accumulated holiday days to be simply taken and reduced especially now in the upcoming month of April. And we are preparing in Germany and also in the countries where this is possible for what we call abbreviated work time. So a short time work, which is a government subsidized measure to make sure we can keep our highly qualified workforce during a period of 3, maybe 6 months and some of the costs here are then burdened to the government and still people keep their jobs, which is our primary focus here. Talking about cost and cost measures implemented already. Well, overall cash conservation mode. Although we feel we are in a stable position as Gerhard pointed this out from financing. This is the time now to spend nothing that is not absolutely necessary and this is implemented. We have a hiring freeze in place. I would say the only exception here is if we get an outstanding software engineer for one of our R&D labs, we will still hire this person. This is the liberty of, let's say, agile and still small organization. And well, calibration of the overall organization now to the needs is happening as we speak. These are all what I call defensive measures. But at the same time, we are not only thinking now of, let's say, the next 3 to 6 months, we do not slow down and we intentionally decided to keep on driving our key R&D projects here, next generation of EFOY system, next-generation of JUPITER systems. We want to be ready with this new generation of products here after this difficult time and after this crisis situation. So there is no slowdown in this area. And we also have started to massively change to online initiatives here, marketing our products here through, I'd say, not the traditional marketing and sales channels that we have been using over time. Key areas here is all what we do in surveillance, security and especially also public health applications, we just yesterday, we're able to announce that we are actively supporting together with our partner in Singapore authorities also in their precautionary measures against COVID-19. A very interesting combination of fuel cells, thermal cameras for fever detection and robots, and we are assessing here also the opportunities of rolling this out to other countries in an adapted format as naturally Singapore has a specific situation. So this means very clear, we keep the situation -- we keep monitoring the situation closely. We adapt in a quick way. We are looking to reduce spending as much as we can, but we also keep our clear view here ahead and make sure we are prepared also for the time after this challenging period. With this, I would like to conclude here. Thank you very much for the attention so far. And I would hand over to Kai and open the floor here for questions and answers.

[Operator Instructions] And the first question received is from Karsten Von Blumenthal, First Berlin Equity Research.

Peter, Gerhard, happy to hear that you're in good health. Greetings from home office here from Berlin. My first question is regarding your order situation. You had a very positive year-on-year development in the order backlog, plus 9% after seeing declines during the year. That is a very good turnaround. So currently, do you already see any order cancellations? And how was the order entry in March? Do you already see anything recession and SARS-CoV-2 related in your order development?

Karsten, we're also happy to hear you are in good health conditions and working from home. I think we have to confess, this is the first time here, Gerhard and myself sitting in the same room, but still separated here by a good 1.5 to 2 meters, speaking into different mics. Well, we are here in a fortunate situation. As said before, not only we are producing at full pace still and, let's say, intend to continue as long as there's no, let's say, mandatory shutdown or a corona case in one of the production facilities where we then have to quickly react and do what is needed. We also have seen and we are monitoring this on a daily basis, the same activity here in order intake, including our Oil and Gas segment here until the March time frame. So I think we will see a delayed -- or we have to assume a delayed impact here because it's -- as mentioned before, people are not going out to install our system, some of our government customers have a shutdown. So therefore, we are preparing -- or we are expecting and preparing for a slowdown during April and then going into, let's say, short-term work where it's needed. We do not assume we will have a full shutdown of operations. We will do this according to needs and possibilities.

On our Clean Energy business, the backlog was in the same range as end of September -- sorry, end of December as end of February now, and the same in our Industry business. And as Peter said, on Oil & Gas, we have to consider the situation there.

Okay. Regarding your...

Sorry. For cancellation, I can say we didn't have a single cancellation so far as of today.

Okay. That is good to hear. In your Industry segment, you reported about more efficient purchasing and sales strategy. Could you explain what do you exactly mean by that?

Well, we introduced this new platform, semi-modular semi-standardized some time ago and did our first, let's say, pilot programs here with core industrial customers. And having now been through this phase, we do not expect a lot of more customization here for the core modules. So therefore, less start-up costs here and naturally, then simply with more volume getting, I'd say, procurement into a standard electronics procurement regime, not talking about, let's say, initial pilots, low numbers, higher pricing. So that's more or less a scaling effect, which we still expect to happen under the still -- or before the background of corona impact.

All right. I understand this, and that is clear, so it is basically standardization and higher volume. Regarding your Defense business, you reported about partial or full closure of purchasing activities. On the other hand, I'm pretty sure we will see a lot of government activity to restart the global economy. So could you imagine that in Q3, Q4, a lot of defense organizations and governments will order more to bring the business in line again.

Well, we definitely, I think, can expect that some of those stimulus packages that are now discussed on a more macro level will trickle down to procurement here. And at the end, whether this is a strict, let's say, defense-related business or what I would rather see, let's say, public safety and health authorities here going into procurement, there is a need for clean and silent and efficient off-grid and emergency and backup energy. So what we did, and I mentioned this before, one of our initiatives here in the online activities is addressing, I'd say, all public safety and health authorities now in Germany and subsequently in other countries with, I'd say, our offering. This is happening as we speak. And I think as soon as there will be budget available, we have a good chance to be visible enough. Such specific applications, like we support them now in Singapore, and we are having further costs, this evening -- this afternoon with the partner and his users there, where we, I'd say, combine our fuel cells with specific thermal camera and detection systems either on stationary basis or robot-based, naturally, the logical thing here is now to see in which country, in which legislation can such systems be used here just to help the control and combat or precautionary measures here against this pandemic situation. I think we are realistic enough this is not maybe possible in every country. And in Germany, we naturally have a specific situation here because of, I'd say, the personal data protection, but pretty positive and pretty, I would say, optimistic that we will find the one or the other new users here. And government spending in this areas going up with stimulus packages, yes, should be absolutely helping and will make -- well, I think, simply create a certain tailwind.

All right. So let's hope that there is some light at the end of the tunnel in H2, which could help you significantly. Regarding your cost-cutting measures, you mentioned already a lot. I'm interested in the situation at Simark in Canada because this segment looks there to be most severely hit because of the very, very low oil price, not only Western Texas, but also Canadian Select, the differential is even higher. And so my question is, what exactly have you done there already? And what further plans do you have to get costs in line?

Well, we have set up a scenario-based planning here and also a package of measures, where now initially -- well, if you see the situation of COVID and oil price development, I'd say there are not so many alternatives. Naturally, we have implemented also a first head count reduction. Well, as a matter of fact, we have to cut costs there already. Last year, we did a 10% headcount reduction more or less in autumn time, and we were not able to build up, let's say, too much of a cost structure since then. But besides not feeling some of the plant positions, you might recall, we had planned 10% to 15% growth. We scaled further back. We scaled back, let's say, cost here, including, I'd say, rents for buildings. So we are talking to everybody here, and we go really bottom up. And I think Gerhard, who is driving this, can give you, I'd say, a better feel for it.

Yes, Karsten, especially on the rental costs, the 2 contracts we have for the plan -- for the factory and for the office building, both would expire now. That means we have an option to prolongate, but now we're starting the complete procedure and we're talking already to other landlords, but we will stop these discussions now again because it's now the time for renters. And of course, we need new office on that, at least 10% lower or even more because it's not the time to pay too high rents now at the moment. So we are just checking these options out, and I expect some savings also from that side.

So it really goes across the board. Personnel, direct cost out of, I'd say, material sales marketing naturally, I'd say there's no travel in place. So there is a natural reduction. No marketing activities like trade shows, which goes beyond the oil and gas part. So this is part of the overall, let's say, cost saving program here. But yes, there's no other way than simply to address this realistically and implement.

Karsten, we have the same situation in our factory in Cluj. Even there, we talked already about prolongation of the contract with the landlord, and we will start these discussions now brand-new, with a different expectation.

Yes, understood. Yes, absolutely necessary and tough times for everyone. But I think given your balance sheet strength, and happily, you did the capital increase last year, you are very well prepared to weather this crisis. And yes, stay healthy and talk to you soon.

[Operator Instructions] And we received a further question. It's from Doris (sic) [ Lotte ] Timmermans from ABN AMRO.

Lotte Timmermans, ABN AMRO. First of all, a question on Oil & Gas. How can we compare the downturn -- the current downturn in 2020, which was expected due to downturn in 2016? And what kind of CapEx constraints were there? And do you see diminishing demand already?

Lotte, Peter. Good to hear you. Hope you are in good health conditions out of the home office. Oil & Gas, well, this was the initial reaction. Actually, we simply took a one-to-one comparison here to where we ended after the year 2015 and '16. And I think that's also where we have to put, let's say, at least the -- where we put, let's say, our first scenario on saying, what is it that we need it by then and what did we have to expect, and this is what we prepare for. Overall, demand, as said, well, luckily or also unfortunately, we -- well, luckily, we saw a real pickup in demand in December, January to get us to a backlog that helps us to start strongly into the year means, so far, we are running there at full pace. As I said, no cancellations yet, but it's very clear. You see oil and gas companies publishing minus 35% of CapEx here for the remainder of the year. So if you blend this with, let's say, a good Q1, you can see, let's say, that the expectation will be significantly below in terms of CapEx overall for the 12-month period. And therefore, we prepare for a scenario like we had it then from today's point of view. And we have set ourselves now a new milestone end of April to judge the situation. But as I said, we are, I'd say, in communication on a daily basis, and we are reviewing it on a weekly basis to see where we are. So the milestone at the end of April to see whether we are on 2016 path or we have to embark on a different path. What is the difference in our business here and which definitely helps us from a profitability point of view. At that time, we just started business development with our EFOY business. And nowadays as we reported last year, it was 16% of the business. For this year, we have planned 20% of the business in EFOY. And EFOY, a lot of it is also not strictly oil and gas related, but surveillance related. So I think we have, let's say, a positive impact in a crisis scenario here just by our fuel cell business.

Okay. Then on M&A, we spoke about targets last conference calls. And I presume that now the downturn is there that this will be suspended or what's your view on that?

I think we don't even have to suspend it actively. There is a natural impact right now in some of those processes because naturally the focus goes back in now managing the operational part of the business and make sure you weather through this storm here. But from a mid- to long-term perspective, this is not off the radar screen. I think the next 2 quarters, we have different priorities. But I think then we go back and revisit this topic, and I would expect also a different cost levels or price levels in terms of expectations.

Okay. Then on the mid-term outlook, I saw that you reiterated the mid-term outlook of EUR 100 million revenues. This implies about a 40% CAGR. And if you look into 2020 and assume that there will be a revenue decline, it is about 25% CAGR, what's your view on that? Is it relatively ambitious or...

Yes. I think the baseline here is that we actually now retracted our guidance for this year just because of the imminent -- of the immediate and imminent impact here of the fact as mentioned here, COVID-19 and also oil price in Canada. The generic demand here for a clean, emission-free technology like ours, be it methanol or hydrogen-based here our fuel cells, on the civilian part of the business, but also on the government part of the business does not go away. I think we are seeing naturally a delay here. We are preparing ourselves for a very difficult Q2, for a difficult Q3 and hopefully, a somewhat normal Q4. Looking mid-term, we definitely expect here stimulus packages and government activities here also in our sector in, I'd say, clean and alternative energy supply to again help us to accelerate. But therefore, we also keep the span open that we say it's a 3- to 4-year period. I think this flexibility we need right now because we see a delay in 2020. There's no doubt. But the overall demand for, I'd say, that the replacement of other technologies, of conventional technologies, the need of CO2 reduction, the decentralization of energy supply, this is not going away. Naturally, the next 6 months, we have definitely more immediate threats and needs to satisfy, but the generic part of our overall strategy and the basis of the overall demand is not going away because this is a priority and still will remain a priority here for society.

And then on the Singapore Oneberry contract I saw yesterday, there was in the press release that the CEO of Oneberry saw a 30% increase in demand. From what point should I take that? Is that from last year or what does this number imply?

Well, I think he's talking current business. I have to admit, I did not specifically you know discuss this number with him personally, but we are in constant exchange. I think he's seeing immediate further needs, and this is really the ongoing discussions we are having. So it's really, I'd say, from current levels. As we mentioned yesterday, we did a significant shipment already in Q1, which is more than we did the entire last year, and he still sees further demand and pretty immediate.

And he immediately paid the open invoices as those are...

[Operator Instructions] As there are no further questions, I hand back to Dr. Podesser.

Thank you very much. So with this, we conclude for today. I think the key message is, we are well prepared and determined here to weather through the storm. We are also fully determined to be one of the, I'd say, healthy survivors here. Taking the last point, we wish you all the best. Take care and watch for your health. Thank you very much for your time.

Goodbye.

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.