003
H2APEX GROUP SCA
(UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
GROUP
MANAGEMENT
REPORT
004
1.
FUNDAMENTAL INFORMATION ABOUT THE GROUP .................................................................. 5
1.1.
STRUCTURE & REPORTING............................................................................................................... 5
1.2.
THE GROUP’S BUSINESS MODEL .................................................................................................... 6
1.3.
BRANCHES ........................................................................................................................................... 8
1.4.
OBJECTIVES AND STRATEGIES ....................................................................................................... 8
1.5.
INTERNAL MANAGEMENT SYSTEM ............................................................................................ 10
1.6.
RESEARCH AND DEVELOPMENT (“R&D”) .................................................................................... 11
2.
FUNDAMENTALS OF H2APEX SHARES........................................................................................ 12
3.
REPORT ON ECONOMIC POSITION´.............................................................................................. 12
3.1.
MACROECONOMIC AND SECTOR-SPECIFIC ENVIRONMENT.................................................. 12
3.2.
COURSE OF BUSINESS..................................................................................................................... 16
3.3.
RESULT OF OPERATIONS, FINANCIAL POSITION AND NET ASSETS..................................... 16
3.3.1. RESULT OF OPERATIONS ................................................................................................................ 16
3.3.2. FINANCIAL POSITION....................................................................................................................... 17
3.3.3. NET ASSETS....................................................................................................................................... 19
3.4.
FINANCIAL AND NON-FINANCIAL KEY PERFORMANCE INDICATORS .................................. 20
4.
REPORT ON EXPECTED DEVELOPMENTS AND ON OPPRTUNITIES AND RISKS................. 21
4.1.
REPORT ON EXPECTED DEVELOPMENTS................................................................................... 21
4.2.
RISK REPORT .....................................................................................................................................22
4.2.1. RISKS ...................................................................................................................................................22
4.2.2. RISK MANAGEMENT SYSTEM........................................................................................................29
4.3.
REPORT ON OPPORTUNITIES ........................................................................................................29
5.
INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT SYSTEM RELEVANT
FOR THE CONSOLIDATED FINANCIAL REPORTING PROCESS................................................ 31
6.
SUSTAINABILITY ...............................................................................................................................32
7.
CORPORATE GOVERNANCE STATEMENT ...................................................................................38
8.
LUXEMBOURG LAW ON TAKEOVER BIDS.....................................................................................39
005
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
MAKING
GREEN HYDROGEN
ACCESSIBLE
1. FUNDAMENTAL
With the merger agreement between the
INFORMATION ABOUT
Company and APEX, the accounting policies
THE GROUP
of the Company continued. According IFRS 10,
the transaction has been recorded as “reverse
acquisition”. For accounting purposes, APEX
1.1. STRUCTURE &
Group was determined to be the economic
REPORTING
acquirer in this “reverse acquisition”. Consequently,
these consolidated financial statements of the
H2APEX Group SCA (until 18 January 2024:
Company represent the continuation of the
“exceet Group SCA” and hereafter the “Company”)
consolidated financial statements of APEX Nova
is a company existing as a “Société en Com-
Holding GmbH and its subsidiaries (“APEX Group”)
mandite par Actions” under the laws of Luxem-
with the exemption of the capital structure, which
bourg and listed on the regulated market of the
has been adjusted to reflect the capital structure
Frankfurt Stock Exchange (WKN: A0YF5P / ISIN:
of H2APEX Group SCA as ultimate parent
LU0472835155) in the Prime Standard segment.
company.
Since the business combination with APEX Nova
Holding GmbH (hereafter “APEX”), which has been As of 19 January 2023 the Company entered into
closed on 19 January 2023, the investment focus
a definitive merger agreement with APEX and its
is on developing projects for the decentralized
shareholders. APEX, together with its subsidiaries,
supply of green hydrogen.
is a leading developer, manufacturer and operator
of green hydrogen plants for the de-carbonization
On 18 January 2024 the shareholders decided
of the industry and infrastructure.
at the Extraordinary General Meeting (EGM), that
the former exceet Group SCA will be renamed to
Under the merger agreement, the Company
H2APEX Group SCA. With the renaming a com-
agreed (i) to acquire 20.8% of the APEX shares
mon branding with APEX Group is finalized.
for a cash consideration in the amount of EUR
25,000,000 and (ii) to exchange the remaining
H2APEX Group SCA is managed by H2APEX
79.2% shares in Apex for shares in the Company
Management S.à r.l. (until 18 January 2024 “exceet by way of a contribution in kind. For this purpose,
Management S.à r.l.” and hereafter the “General the Company agreed to utilize its authorized
Partner”), a limited liability company under the law capital and increase its share capital from EUR
of Luxembourg (Société à responsabilité limitée
311,960.18 by EUR 252,424.73 to EUR 564,384.91
(S.à r.l.)), the shares in which are held indirectly by
by issuing 16,285,467 new shares to the
the founders of the Active Ownership Group (AOC) shareholders of APEX. In addition, the Company
Florian Schuhbauer and Klaus Röhrig (50% each).
agreed to adopt a long-term equity incentive plan
for the Board members and key employees of the
The H2APEX Group SCA Group (hereafter the
combined group allowing for the issuance of up to
“Group” or “H2APEX”) currently consists of 17
3,640,000 stock options which, subject to meeting
companies.
the agreed strike price and vesting conditions,
006
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
entitle the beneficiaries to subscribe to 3,640,000 1.2. THE GROUP’S
BUSINESS MODEL
new shares.
On 12 September 2023, the Company published
While the Group finished the business year 2022
a securities prospectus (the “Prospectus”)
as an empty shell without operating companies,
relating to the listing of certain shares (the “New
starting 2023 the business model is now focused
Shares”) of the Company on the Frankfurt Stock
on developing, manufacturing and operating of
Exchange (Prime Standard). The New Shares
green hydrogen plants for the de-carbonization
had been created by way of a capital increase
of the industry and infrastructure. The operating
through contribution in kind in connection with the business is driven by the acquired APEX Group.
business combination with APEX Nova Holding
GmbH earlier this year. Prior to its publication, the
APEX focuses on hydrogen plants with an
Prospectus was approved by the Luxembourg
electrolysis capacity of less than 1 Giga Watt.
Financial Supervisory Authority (Commission
These are used to decarbonize industrial value
de Surveillance du Sector Financier (“CSSF”)) on
chains and to produce green hydrogen and
the same day. The New Shares were admitted
hydrogen derivatives such as LOHC (liquid
to trading on the Frankfurt Stock Exchange with
organic hydrogen carriers) and e-fuels. They
simultaneous admission to the Prime Standard,
are used, for example, in the steel, chemical
the sub-segment with additional post-listing
and cement industries as well as other energy
requirements, on 13 September 2023 and were
intensive industries. In addition, APEX offers
included into the existing quotation of H2APEX
facilities for infrastructure and logistics, especially
shares on 15 September 2023.
for industrial use in warehouses, ports and
production facilities.
On 1 March 2023, Endurance GmbH & Co. KG,
a limited partnership established under German
APEX is a greentech innovator and a pioneer in
law with a business address at Körnerstr. 1, c/o
the green hydrogen market in Germany with its
Atlan Family Office GmbH, 22301 Hamburg,
headquarters in Rostock-Laage. APEX is one
Germany, entered in the commercial register of
of very few companies in the market that owns
the District Court of Hamburg under HRA 128782
and operates a grid-connected sector-coupled
("Bidder") has pursuant to Sections 35 (2), 14 (2)
green hydrogen plant. This reference plant is
sentence 1, (3) of the Securities Acquisition and
based at its industrial park in Rostock-Laage and
Takeover Act ("WpÜG") by publication of the offer
demonstrates the production of green hydrogen
document within the meaning of Sections 39,
powered by APEX’s own 11.5 MWp photovoltaic
11 WpÜG ("Offer Document" ) a mandatory offer
park, the storage of hydrogen in fiber composite
("Offer" or "Mandatory Offer") to the shareholders
pressure tanks as well as various possible uses
of the Company (and together with its subsidiaries for green hydrogen, including reconversion to
pursuant to Section 2 para. 6 WpÜG the Group) electricity in a fuel cell, a combined heat and
delivered. On 29 March 2023, the offer terminated power unit, refueling infrastructure for different
and 1,510,538 of Company’s shares has been
types of vehicles and a trailer filling station for
transferred by acceptance, representing 4.15% of
the transport of hydrogen. With regards to this
share capital and voting rights of the Company at
pioneer project, APEX is concluding offtake
that time.
agreements with customers. APEX believes that
upon start of operations in test mode at its green
hydrogen plant in May 2021, this was one of the
first projects of this type in Europe, and APEX has
gained vast experience in the set-up, operation
and maintenance of hydrogen plants in general.
007
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Based on its track record and the industrial park,
The Group covers the entire project phase, from
APEX intends to establish itself as an owner and
(pre-)feasibility studies and approval planning
operator of additional hydrogen plants in the
to design, engineering, construction and
future.
commissioning. Following the conclusion of the
contract, the basis of the project is established,
In addition to the afore-mentioned activities,
including the development of a concept. In a
APEX currently acts as general contractor and
next step, the design phase (typically divided into
system integrator for turnkey third-party green
a preliminary, final and detailed design) as well
hydrogen power plants.
as the approval planning with the securing of
regional permits and green energy begin. During
As a complementary business line, APEX has
this phase, orders for the main components
a separate team active in the development and
of the plant are also typically placed. Two
sale of hydrogen storage solutions. In contrast
major project milestones are the provision of
to production and conversion, the storage of
the planning results relevant for the approvals
hydrogen is still one of the key challenges in the
and interfaces as well as the preparation of
hydrogen ecosystem and APEX is at the forefront the execution planning. Once the design and
of technological advancement. APEX intends to
planning phase is completed, the Group and its
scale up its production for its pressure tanks in a
customer agree in writing on a design freeze, i.e.,
small series production line in Rostock-Laage in
design and planning specifications are fixed and
the short-term, with full capacity to be reached
no more fundamental changes are permitted.
end of 2024. APEX’s current R&D focus lies on
Following the receipt of major approvals, the
chemical storage solutions, for which it has made construction begins. Due to the size of the
significant progress in the recent past and has
projects, in which the Group is involved, it usually
submitted three international patent applications.
takes several months before main components
can be installed and the assembly can start. In
The business activities are reported according
addition to the integration of components from
to the following segments, which represent
other manufacturers, the Group can provide
the reporting structure: project development,
its customers with a self-developed energy
operations and storage.
management system, which is particularly
valuable for decentralized energy solutions with
PROJECT DEVELOPMENT
fluctuating power production and high storage
requirements. Functional tests, including tests
Project Development Segment includes all work
under operating conditions, are carried out once
related to project development and system
the machinery is installed. In a final step, the plant
integration for third-party hydrogen plants. The
is inspected and approved by the customer and
turnkey solutions for the supply of hydrogen
commissioned. For small and mid-size projects,
are modular, tech-agnostic and tailor-made to
the entire project phase from pre-feasibility
comply with complex and diverse customer
studies to commissioning takes approximately
requirements.
28 months.
The Group is one of the few players in this market OWN OPERATIONS
in Germany. The Group can cover a wide range of
different project and plant types, from industrial
Own Operations Segment includes the production
parks and other industrial solutions, grid and
and selling of green hydrogen as well as the
network solutions to residential and mobility
“derivatives” electricity and heat generated at its
solutions.
own hydrogen plants.
008
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
In the “own operations” model, the Group
The Group has developed stationery and
produces and sells green hydrogen as well as
portable tanks. While the stationary tanks,
the “derivatives” electricity and heat generated
which the Group developed and designed, are
at its own hydrogen plants. Through the
manufactured by third parties and are no longer
successful establishment of the industrial park
offered by the Group, these portable tanks are
in Rostock-Laage, the Group has demonstrated
produced in-house. Both the stationery and the
its capabilities regarding the installation and
portable pressure tank are type IV tanks, i.e.,
operation of a grid-connected hydrogen plant
fiber composite tanks with plastic lining used in
with various possible hydrogen uses and has
distribution and mobility.
already concluded its first offtake agreements
with customers. This reference plant is the
1.3. BRANCHES
nucleus for the Group’s planned future portfolio
of own hydrogen production plants, and the
realization of an additional hydrogen plant on
The Company is only acting through its
the same site with the help the EU Important
subsidiaries. Besides these legal entities, there
Project of Common European Interest (UPCEI)
are no branches.
funding applied for and provides the basis for
the launch of this pillar of the business model.
1.4. OBJECTIVES AND
In addition, the Group seeks to gain access to
STRATEGIES
the “own operations” market through its project
development business in order to build credibility,
improve the skillset and generate cash for
The strategy of the Group is defined in four
future growth. It also benefits from the ongoing
targets:
retrofitting of existing gas pipelines, which are
expected to be available for hydrogen transport
GROW PROJECT DEVELOPMENT BUSINESS
from 2027 on and which the Group would also
feed into.
Building on its track record from projects won in
2022 and 2023, respectively, the Group intends to
The Group intends to develop and build further
grow its business in the project development area
own hydrogen plants, which it will operate to
by capitalizing on its pipeline of hydrogen projects
benefit from a contracted and resilient revenue
for third parties (e.g., steel plants or other energy/
stream. It expects to at least partially rely on joint
emission intensive industries). While the Goup
venture partners, including utility companies or
is looking to gradually expand own hydrogen
offtakers, for the financing and construction of
production capacity, thereby increasing revenue
the plants and is already in initial discussions
contribution from more resilient hydrogen
in this regard. While these projects will require
offtake contracts, it believes that the third-party
a significant amount of capital expenditure,
project development operations will be a key
the Group expects to generate a majority of its
pillar to achieve this business shift and have a
revenues with this pillar of its business model in
symbiotic relationship, mainly for the following
the mid- to long-term.
reasons: (i) third party projects create profits and
positive cash flows from an early stage, which
STORAGE
is rare among hydrogen companies, helping
to reduce the cash burn from development of
Storage Segment includes the development and
large-scale own production capacity, which
manufacturing of different hydrogen storage
do not generate revenues until commissioning
systems.
and operation, (ii) they provide the blueprints
and required skillset to efficiently scale-up own
production plants, while reducing execution risk
009
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
for the Group and stakeholders involved in the
(either on a standalone basis or together with a
projects (e.g., shareholders, debt providers, power
partner) and marketing (i.e., securing offtake).
suppliers, offtakers, governmental entities), and
Its current project development business mainly
(iii) most customers in the third-party project
encompasses the “building” phase and some
development area pursue a staggered approach
aspects of the development phase, but the Group
of building-up hydrogen capacities, usually
intends to capitalize on its EPC track record and
starting with a smaller (e.g., 10 MW) plant, which
the relationships it has built in the past years, in
gets subsequently expanded. At the same time,
particular with regard to the capabilities required
most customers are not interested in owning
for these critical phases of a hydrogen project.
and operating a large-scale hydrogen plant.
While the construction will be intense in terms
Consequently, the Group expects that many
of capital expenditure, the Group will shift its
project development customer relationships
financial profile towards recurring and stable
will offer follow-on revenue potential and the
revenue generation from the offtake agreements
opportunity of (co-)owing and operating the
in connection with the operation of its own plants,
expansion plants.
in contrast to the one-off fees that the Group
receives for the system integration of third-party
The Group’s project pipeline includes several
plants.
smaller (up to 10 MW) and mid-size (10-50
MW) projects, which are mostly in an early
The Group is exploring various avenues to
stage (i.e., pre-feasibility study phase) or in
fund its own plants. It wants to make use of its
an advanced development stage (i.e., detail
perceived growing appetite for credit providers
planning phase). However, some of them are
to invest in hydrogen projects. In addition, the
more mature and already in the tender phase,
Group intends to partner with third parties
so the Group is optimistic that it will be awarded
as joint venture (JV) partners, such as utility
with further significant work soon. By leveraging
companies, offtakers or other financial investors,
on its experience and first-mover advantage, in
and is already in advanced conversations with
particular against the background of its industrial
several parties. In addition, by tapping into the
park in Rostock-Laage, the Group also intends
“owner-operator” market for hydrogen plants, it
to tackle larger-scale projects with attractive
intends to counter a potential commoditization
margins.
and subsequent downward price pressure in
the project development business. In the mid-
FOCUS ON EXPANDING PRODUCTION CA-
to long-term, the Group, therefore, expects to
PACITY AND SALE OF GREEN HYDROGEN
generate a majority of its revenues with this
business line.
The Group has developed and commissioned
one of the first European grid-connected green
KICK OFF SERIAL PRODUCTION FOR
hydrogen power plants, which demonstrates
VARIOUS STORAGE SOLUTIONS
the mechanism and impact of sector coupling
(Power-to-X) through different use cases,
The Group has a particular focus on the
including a fuel cell, a combined heat and power
development of different storage solutions. While
unit, a refueling infrastructure for buses, trucks
production and conversion of green hydrogen
and cars and a trailer filling station. On the
are, by and large, well explored and rather
back of this pioneer project, the Group plans to
straightforward, transport and storage continue
establish itself as an owner-operator of sizeable
to be key challenges in the (green) hydrogen
hydrogen plants in the next three to five years,
ecosystem. Since pipelines will not connect each
thereby covering the entire hydrogen project
and every location, efficient transport solutions
value chain from developing through building,
are constantly being investigated. The same
operating (and ensuring maintenance), owning
applies to storage solutions as they are especially
010
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
complicated in urban environments, which require opening new offices in strategic locations. The
high safety standards. Following the development Group believes that this approach will enhance
of stationary and portable pressure-based storage its market share in the green hydrogen industry
solutions together with long-term partners,
and, through its extended geographical footprint,
including the Fraunhofer Institute in Rostock, the
the Group expects to be able to also provide
Group has started the production of such storage a broader geographical market coverage in
solutions in small numbers at its own facilities
Germany.
and is searching for a strategic partner to enter
into serial production for these solutions in larger
numbers (up to 55,000 tanks per year). In addition, 1.5. INTERNAL MANAGE-
MENT SYSTEM
the Group focuses on research in chemical
storage solutions, in particular in cooperation with
the Leibniz-Institut for Katalyse e.V. (LIKAT). The
The aim of H2APEX management is to
carrier that the Group investigates together with
sustainably increase the Group's corporate
LIKAT for its chemical storage solution is non-
value and thus the value for shareholders. It is
toxic, unlike other carriers. The Group’s research
important that revenue growth is linked to above-
is at an advanced stage and also focuses on
proportional profitability and that H2APEX is able
identifying additional fields of application. LIKAT
to enhance its financial strength for investments
has already developed a prototype, which shall be and further, including inorganic growth. To achieve
scaled-up in size going forward.
this goal, an internal control system is used.
EXPAND GEOGRAPHICAL FOOTPRINT AND
The following aspects are in the foreground:
GROW EMPLOYEE BASE ORGANICALLY AND
-
Growth through the acquisition of projects and
THROUGH ACQUISITIONS AND ENGAGE IN
customers
EXCLUSIVITY AGREEMENTS WITH ELEC-
-
Project profitability
TROCHEMICAL ENGINEERING COMPANIES
-
Improvement of operational cash flow through
efficient working capital
The Group has grown rapidly in the past few
-
Liquidity for upcoming growth through
years and is currently involved in a significant
sufficient financing
number of award processes, which could result in
capacity constraints should the Group win many
The relevant key figures are in particular: revenue,
of them. The Group heavily relies on the profound EBITDA, net debt and operating cash flow. In
know-how of its key personnel for its project
addition to standardized controlling, these key
development business and requires qualified
figures are monitored in regular meetings with
professionals and industry experts. In addition to
regard to upcoming projects, tender modalities,
design and engineering personnel, the Group also ongoing projects and financing options. At the
needs to find additional sales team members to
same time, the cost items are subject to regular
scale up its operations and to attract expertise
budget control. At the end of each year, revenue
with regard to project financing and contracting
and cost items are budgeted for the following year.
for the planned expansion of its “own operations”
These budgeted values are then compared with
business line.
the actual values every month and deviations are
analyzed. H2APEX works with a dynamic budget
The Group has significantly grown its employee
model, which means that changes in one position
base organically in 2023 and intends to further
can be directly accompanied by any necessary
intensify its efforts to attract qualified employees. adjustments in other budgeted positions in order
However, since qualified personnel is often hard
to ensure planned profitability.
to find outside of metropolitan areas, the Group
will also focus on growing its employee basis by
011
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
1.6. RESEARCH AND
effectively developed with the cooperation
DEVELOPMENT (“R&D”)
partner, which represents an efficient and CO2-
neutral cycle.
The Group relies heavily on Research and
Development(R&D) for its hydrogen storage
-
SuME: The third project is a joint research
solutions business. Therefore, the Group does
project with LIKAT, Fraunhofer-Institut für
not invest in fundamental research but focuses
Keramische Technologien und Systems (IKTS),
on the advancement of products and solutions
Technische Universität Bergakademie Freiberg
to reinforce its competitive advantage in this
and other partners, in which the Group and
important sub-sector of the hydrogen ecosystem.
LIKAT co-develop a chemical synthesis route
Its targeted investments in R&D over the past
towards efuels. The role of the Group is to
years have resulted in several innovations and
provide hydrogen through electrolysis for the
patents. The Group has an R&D department,
synthesis of methanol. The methanol is further
which is mostly financed through public funding
refined through additional steps, which also
and includes five dedicated employees. This
involve utilizing the oxygen from electrolysis, to
R&D team is located in Rostock-Laage. Through
produce an e-fuel. The Group will either directly
the acquisition of Plant Engineering GmbH
submit the developments as its own patents
(Plant Engineering), the Group has not only
or will become the owner of the background
nearly doubled its capacities in the engineering
IP that is developed in the course of this joint
department. It has also secured further expertise
project. This project will run until 31 January
in the field of hydrogen technology.
2026.
The Group recently has been and is currently
-
MuWIN: The goal of MuWIN with the
involved in four main R&D projects, which all relate
main partners University of Rostock and
to cost and energy efficient storage:
Großmann Ingenieur Cnsult GmbH (GICON),
is to develop a modular, standardized, and
-
E2MUT: In the multidisciplinary project
scalable platform design that can be adapted
“E2MUT”, the partners explore emission-
for various floating offshore wind sites
free electric mobility for maritime urban
across Europe. The substation consists of
transport (i.e., navigation in coastal sea
a a daily parameterdependent load profiles
waters, inland waterways and large lakes). The
(Tagesparameterabhängige Lastprofile
Group participates in research regarding the
(TLP)) substructure, an interface station,
development of maritime infrastructure for the
and a topside station, each serving three
refueling of ships on a hydrogen basis at the
different functions: conversion of alternating
quayside. This project will run until 31.8.2024.
current, conversion of alternating current to
direct current and generation, storage and
-
H2Cycle: Currently used hydrogen storage
transport of hydrogen. This project will run until
methods often do not meet the requirements
September 30, 2025.
from the industry. Other methods, such as
certain chemical storage methods, are still
In addition to its close cooperation with LIKAT,
immature. In this project, a plant concept for a
where the Group even has its own laboratory and
CO2-neutral hydrogen storage system based
offices, the Group also enjoys close relationships
on formats and bicarbonates, and a test and
with other universities and research institutions,
demonstration plant will be built for further
such as the Fraunhofer Institute for Large
research. In the completed project, a prototype Structure in Production Engineering (IGP), the
for the chemical storage of hydrogen was
University of Rostock, the Wismar University of
successfully built and put into operation. For
Applied Sciences and the Stralsund University of
this purpose, a suitable catalytic process was
Applied Sciences.
012
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
2. FUNDAMENTALS OF
During 2023 H2APEX share price outperformed
H2APEX SHARES
against TECDAX and DAX until November
2023. With the upcoming discussion about
The Company’s share capital amounts to Euro
governmental household financing the share
564,384.91, represented by 36,359,162 Ordinary
price dropped down significantly based on the
Shares and one unlimited share with no par value. uncertainty about subsidies and support for
The Ordinary Shares are publicly traded on the
hydrogen projects. During January 2024 the share
Frankfurt stock exchange.
price recovered up to Euro 5.85 which represents
a market capitalization above Euro 200 million.
H2APEX shares trading started into the reporting
year from a price level of Euro 5.00, recorded on
3. REPORT ON ECONOMIC
30 December 2022. Based on this share price,
POSITION
the market capitalization of H2APEX amounted to
EUR 100.4 million. During 2023 H2APEX shares
3.1. MACROECONOMIC
traded between EUR 4.56 and EUR 7.20. The
AND SECTOR-SPECIFIC
share trading volume amounted to 1,290,000
ENVIRONMENT
shares at XETRA (2022: 356,134 shares) On 29
December 2023, the last trading day of the year
2023, the share price closed with EUR 4.56, the
MACROECONOMIC ENVIRONMENT
market capitalization of H2APEX amounted to
Euro 167.3 million.
Economic in the Euro area influenced by
financing conditions and Inflation
The trading volume on the Xetra trading platform
Several downward revisions to forecasts and
accumulated to 1,290,000 shares in 2023
negative economic surprises confirm a weak
compared to 356,134 in 2022.
economic outlook with substantial downside risks.
Share price development 2023
50%
40%
30%
20%
10%
0%
-10%
H2APEX GROUP SCA
DAX INDEX
TECDAX PERFORMANCE INDEX
013
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
The ECB/Eurosystem staff macroeconomic
of longer-term inflation expectations mostly stand
projections as well as other official and private
around 2%. Nonetheless, some indicators remain
sector forecasts were revised downwards for
elevated and need to be monitored closely.
several quarters in a row, reflecting a worsened
global economic environment, tighter financial
Economic output in Germany down further
conditions, lower aggregate demand and lower
The German economy is still navigating through
credit supply. Weak foreign demand and receding
choppy waters. Economic output declined slightly in
fiscal support are weighing on activity, too.
the third quarter of 2023. According to the Federal
According IMF outlook for the Euro area the GDP
Statistical Office’s estimate, real gross domestic
growth is expected to come in at 0.5% in 2023 and
product (GDP) was a seasonally adjusted 0.1%
0,9% in 2024. Eventually, the Euro area economy
lower that in previous quarter, during which it had
remains weak. Recent information suggests
increased somewhat, according to revised data.
that manufacturing output has continued to fall.
Industry also suffered in the third quarter from the
Subdued foreign demand and tighter financing
weak foreign demand and the fallout from the prior
conditions are increasingly weighing on investment energy price shock. Increasing financing costs
and consumer spending. The services sector is
continued to dampen investments. Furthermore,
also weakening further. This is mainly because of
the order backlog decreased further. The Federal
weaker industrial activity is spilling over to other
Constitutional Court (“the Court”) issued a far-
sectors, the impetus from reopening effects is
reaching ruling on the debt brake enshrined in
fading and the impact of higher interest rates is
Germany’s Basic Law. The ruling concerns central
broadening. But as inflation falls further, household
government’s second supplementary budget 2021.
real incomes recover and the demand for euro
It was up to the fiscal policymakers to adjust their
area exports picks up, the economy should
plans with this in mind. The expectation 2024 will
strengthen over the coming years.
be significantly influenced by the upcoming effects
based on the decisions for the German state
As the energy crisis fades, governments should
household, which has been significantly impacted
continue to roll back the related support measures.
by this decision of the court about the revised
This is essential to avoid driving up medium-term
refinancing and expenditures.
inflationary pressures, which would otherwise call
for even tighter monetary policy. Fiscal policies
Change in Labor Market
should be designed to make the euro area economy EU’s economic activity has so far been supported
more productive and to gradually bring down high
by the strength of the labour market. The unem-
public debt. Structural reforms and investments to
ployment rate stood at a historical low of 6.4%
enhance the euro area’s supply capacity – which
in August 2023 and ending by 5.9% at year end.
would be supported by the full implementation of
The robust labor market in Germany continued
the Next Generation EU programme – can help
to stabilise economic activity. Despite the slight
reduce price pressures in the medium term, while
decline in economic output, employment remained
supporting the green and digital transitions. To that
at a high level. The number of vacancies declined
end, the reform of the EU’s economic governance
slightly, but remained at a high level. That does
framework should be concluded before the end of
mean that the still very tight situation in the labor
this year and progress towards a capital markets
market – expressed by the ratio of vacancies
union and the completion of the banking union
to unemployed persons – eased only slightly.
should be accelerated.
Negotiated wages were up even more sharply.
The most recent wage agreements again
Most measures of underlying inflation continue
contained large pay rises for the most part of
to decline. At the same time, domestic price
employees. The trade unions also made high wage
pressures are still strong, reflecting also the
demands for the sectors that were in negotiations
growing importance of rising wages. Measures
at the end of 2023..
014
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Capital Markets
major indices are possible. “Investor sentiment is
Following Reuters, investment banks and asset
at its lowest point. If the bad news clears up just
managers have wildly varying stock market and
a little, there is enormous potential for positive
currency calls for 2024, reflecting deep division
surprises. This speaks in particular for favorable
over whether the U.S. economy will enter a long-
European cyclicals”. Despite the positive outlook
heralded recession and drag the world with it.
for stocks, there is no promise of success across
The lack of consensus among forecasters is a
the board: “The targeted regional and sectoral
stark contrast to a year ago, when most predicted
stock selection becomes a success factor in the
a U.S. recession and rapid rate cuts that failed to
investment strategy.” At the industry level, DZ BANK
materialise. The world's largest economy expanded Research recommends energy stocks and insurers.
by 3.1% in the year 2023.
SECTOR-SPECIFIC ENVIRONMENT
The big picture, which Schwab Center of Finacial
Research (“Schwab”) foresees for 2024 a shallow
The Group develops, builds and operates green
U-shaped recovery in global economic and
hydrogen electrolysis plants for the decarbonization
earnings growth, rather than the V-shape seen in
of industry, infrastructure and mobility and
the last two global recessions of the financial years therefore covers the entire hydrogen plant value
2008-09 and 2020.
chain. The global hydrogen generation market in
terms of revenue was estimated analysts to be
Global economic and earnings growth ultimately
worth about USD 160bn in 2022 and is poised to
may be sluggish for much of next year. That
reach about USD 260bn by about 2027, growing at
could mean stock prices are more determined by
a CAGR of 10.5% from 2022 to 2027.
valuations than earnings.
Green hydrogen is hydrogen generated by
As with the economic picture, looking too closely
renewable energy or from low-carbon power.
at the performance of just a few U.S. stocks can
Green hydrogen has significantly lower carbon
keep investors from seeing the bigger picture
emissions than grey hydrogen, which is produced
of international outperformance. As the global
by steam reforming of natural gas, which makes up
economy transitions to a new cycle, markets are
the bulk of the hydrogen market. Green hydrogen
experiencing new leadership. In 2023, the average
can help decarbonise sectors such as shipping
international stock outpaced the average U.S. stock and transportation, where it can be used as a fuel,
through late November. The reason many investors as well as in manufacturing industries such as
haven't noticed the outperformance of international steel and chemicals, where it can constitute an
stocks is that the seven mega-cap stocks, which
important raw material as well as a fuel.
make up about 30% of the cap-weighted S&P
500, have prevented the S&P 500 index from
The major factors driving the hydrogen generation
underperformance in 2023.
market growth is mostly due to ongoing unprece-
dented revolutions under the net zero emissions
Schwab does not expect a V-shaped economic
scenario, where global output of hydrogen is
recovery, nor do they expect an inverted V-shape
expected to reach 200 million metric tons in 2030.
due to the path for interest rates, so they continue
In 2030, around 70% of the hydrogen production
to favor "quality" companies with strong cash flow.
is projected to be done through low carbon
Stocks with low price-to-cash flow ratios may
technologies such as electrolysis. By 2050, the
continue to outperform in 2024.
production of hydrogen is estimated to increase
to about 500 million metric tons. The increase in
DZ-Bank expects that the weak economy and
the investment of the government toward different
competition from bonds will continue to influence
technologies to improve the efficiency of hydrogen
prices in 2024. Despite of, new records for the
extraction is projected to drive the market growth.
015
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Energy efficiency, electrification, renewable energy,
been pledged for hydrogen technology.
hydrogen and hydrogen based fuels, and carbon,
Global hydrogen demand is expected to grow
capture, utilization and storage are some of the
to 140 Mt in 2030 (i.e., 4.5% compound annual
major technology pillars to decarbonize the world
growth rate since 2021). After 2030, the demand
energy system.
for hydrogen is expected to grow significantly in
particular in the mobility segment. In 2050, the
Hydrogen is a central component of the strategy
largest hydrogen markets together, i.e., China,
for achieving the EU climate targets for 2030 and
Europe, and North America, are expected to
is particularly relevant for Germany as an industrial
account for 60% of the global hydrogen demand,
hub. Within this framework, by 2030 at least 40
which is expected to amount to 660 Mt. Due to
GW of electrolysis capacity is to be available in the
the losses of energy in the supply chain as stated
EU and up to 10 million tons of green hydrogen are
above, to fulfill this demand 690 Mt of hydrogen will
to be produced annually in the EU. The investment
be needed.
volume for this is estimated at around EUR 300
billion and will be supported to a considerable
The expected global hydrogen demand by segment
extent by state subsidies. In Germany, 10 GW of
until 2050 is shown in the following diagram :
1)
electrolysis capacity is to be created by 2030 –
subsidies amounting to EUR 9 billion have already
660
660 MT
Power generation
New industry feedstock
Mobility
Existing industry use
hydrogen required
p.a. in 2050
Building and industry heat
385
for net-zero
22%
1. IEA net-zero scenario with 340 EJ
140
final energy demand in 2050. HHV
of global final
90
energy demand1
assumed. Excluding power. HHV:
Higher Heating Value
2020
2030
2040
2050
The following graphic shows the expected
hydrogen demand by region in 2030 and 20501):
1 Source: McKinsey & Hydrogen Council, Hydrogen for Net-Zero
016
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
3.2. COURSE OF BUSINESS
Overview key figures:
With signing and closing the business combinaton
January -
December
agreement with APEX on 19 January 2023, the
(in EUR 1.000,
Company started with new operating business.
expenses in parentheses)
2023
2022
APEX Group is a leading developer and operator
Income Statement
of “green” hydrogen electrolysis plants for the
decarbonization of industry, infrastructure and
Net Sales
15,3
3,8
mobility.
Gross Profit
1,2
1,3
APEX's goal is to become an internationally
EBITDA *
(18,0)
(9,2)
established developer and operator of hydrogen
plants. In its core business, APEX develops, builds,
EBIT
(22,2)
(10,5)
and sells or operates green hydrogen electrolysis
plants for the decarbonization of industry,
Net Loss for the period
(24,6)
(13)
infrastructure and mobility, covering the entire value
chain for hydrogen plants. Water (H2O), with energy
- per ordinary share
Euro
0,7
0,4
of renewable origin such as photovoltaics or wind
Adj EBITDA *
(16,1)
(9,2)
power, is separated into hydrogen (H2) and oxygen
(O2) in APEX's electrolysis plants. This "green"
hydrogen, obtained exclusively from renewable
31.Dec 23
31. Dec 22
energies, can then be stored, used directly as a
source of energy or transported to the place of use.
Backlog in Mio EUR **
34
34
Hydrogen electrolysis thus solves the core problems
of renewable energies by making them storable,
Employees (Average
81
46
transportable and being available in a versatile
headcount) ***
energy carrier.
Rounding differences can occur
* Unaudited
** Fixed orders
3.3. RESULT OF OPERATIONS,
*** Without employees of General Partner
FINANCIAL POSITION
AND NET ASSETS
Revenue increased in the financial year 2023 to
3.3.1 RESULT OF OPERATIONS
EUR 15.3 million (2022: EUR 3.8 million) due to
proceeds from the project development segment,
H2APEX Group SCA financials has been integrated while in prior year the revenues were mainly
into APEX Group financials. Comparative figures
caused by the sale of a filling station. Other income
reflect the history of APEX Group only.
increased to EUR 1.0 million (2022: EUR 0.5 million).
The directly attributable costs related to these
revenues amounted to EUR 14.1 million (2022: EUR
3.1 million). Gross Profit remained stable with EUR
1.2 million (2022: EUR 1.3 million).
017
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Personnel costs and other operating expenses
received for deposits and interest expenses for
financing loans.
increased due to the ramp-up of the business
and hiring employees. The number of employees
Unaudited EBITDA in 2023 amounted to EUR -18.0
as of 31 December 2023 was 81 employees
million (2022: EUR -9.2 million), unaudited Adj
(Headcount) (31 December 2022: 46 employees
EBITDA amounted to EUR -16.1 million for 2023,
(Headcount)). Personnel costs subsequently
reflecting the elimination of the expenses for the
increased to EUR 6.9 million in 2023 (2022: EUR
SOP in an amount of EUR 1.9 million in 2023
3.7 million). Other operating expenses in 2023
(2022: nil).
amounted to EUR 13.8 million compared to EUR
6.8 million in 2022 mainly caused by the increase
The net loss in 2023 amounted to EUR 24.6 million
of legal and consulting costs by EUR 2.2 million
(2022: loss of EUR 13.0 million).
and research costs by EUR 1.9 million and Stock
Option Program (SOP) costs of EUR 1.6 million.
The calculation of basic earnings per share (EPS)
Depreciation and amortization increased 2023 to
on 31 December 2023 is based on the net loss
EUR 4.2 million (2022: EUR 1.3 million) because
attributable to the shareholders of H2APEX Group
of higher investments in property, plant and
SCA.
equipment during the year. The financial result in
2023 amounted to EUR -1.8 million (2022: EUR
-3.4 million). The financial result includes interests
2023
2022
Profit / (Loss) for continued operations for the year (EUR 1,000)
Ordinary Shares
(24,635)
(12,953)
attributable to equity holders of the Company
Weighted average number of ordinary shares outstanding
Ordinary Shares
35,556,043
20.073.695
Basic earnings / (loss) per share (Euro/share) on total group
Ordinary Shares
(0.69)
(0.65)
Diluted weighted average number of ordinary shares outstanding
Ordinary Shares
36,470,016
20,073,695
Diluted earnings / (loss) per share (Euro/share) on total group
Ordinary Shares
(0.69)
(0.65)
3.3.2 FINANCIAL POSITION
(in million EUR)
31.12.2023
31.12.2023
Balance sheet
Non-current Assets
60.8
38.2
Current Assets
61.7
23.5
Equity
57.9
8.0
Non-current liabilities
34.6
51.6
Current liabilities
30
18.2
018
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
As of 31 December 2023, the total assets
At the end of the reporting period, H2APEX
amounted to EUR 125.5 million , compared to
Group’s equity amounted, to EUR 57.9 million,
EUR 61.7 million as of 31 December 2022. The
versus EUR -8.0 million as of 31 December 2022.
significant increase is related to the higher cash
This translates into an equity ratio of 46.7%
position, as a result of the consolidation of the
as at 31 December 2023. The share capital
Company within the financial statements of APEX represents the share capital of H2APEX Group
Group based on reverse acquisition accounting
SCA with EUR 0.6 million as of 31 December
principles. The figures as of 31 December 2022
2023 (31 December 2022: EUR 0.03 million
only reflect APEX Group.
related to Apex Group). The increase reflects the
capital increase of H2APEX Group SCA based
Non-current assets increased by EUR 22.6 million on the transaction with APEX Group according
to EUR 60.8 million (31 December 2022: EUR
to the capital increase by contribution in kind.
38.2 million). The significant increase results
The number of shares increased by 16,285,467
from tangible assets related to additional land
shares, the capital amounts to EUR 564,385 (31
and buildings, which were acquired in 2023
December 2022: EUR 311,960). The amount of
respectively first time consolidated. Deferred
the share premium includes effects from reverse
tax assets amounted to EUR 1.1 million (31
acquisition in the amount of EUR 40.4 million.
December 2022: EUR 1.1 million).
The non-current liabilities decreased to EUR 34.6
Current assets amounted to EUR 61.7 million,
million (31 December 2022: EUR 51.6 million).
compared to EUR 23.5 million at year-end 2022.
While other non-current financial liabilities
The increase of the cash position from EUR
decreased to an amount of EUR 33.1 million (31
0.2 million as of 31 December 2022 up to EUR
December 2022: EUR 41.1 million) because of
44.5 million as of 31 December 2023 has the
becoming current liabilities and the bond has
strongest effect, while other current receivables
been repaid completely (31 December 2022:
decreased to EUR 0.9 million (31 December
EUR 9.1 million). Deferred tax liabilities amounted
2022: EUR 13.4 million) because of first time
to EUR 1.1 million (31 December 2022: EUR 1.1
consolidation of RLG GmbH & Co. KG in 2023 and million).
consequently the consolidation of intercompany
transactions.
The increase of the current liabilities to EUR 30.0
million as of 31 December 2023 (31 December
Contract assets increased by EUR 3.2 million
2022: EUR 18.2 million) is mainly due to the
to EUR 5.9 million (31 December 2022: EUR 2.7
decrease of non-current financial liabilities by
million). This is due to the advance payments
EUR 8.0 million and the increase of other current
made as part of project development.
financial liabilities by EUR 1.3 million. Trade
payables amounted to EUR 5.2 million as of 31
In addition, inventories decreased by EUR 1.8
December 2023 (31 December 2022: EUR 6.0
million to EUR 4.7 million (31 December 2022:
million), while other current liabilities increased
EUR 6.5 million). Trade receivables increased to
to EUR 2.1 million (31 December 2022: EUR 0.3
EUR 5.7 million (31 December 2022: EUR 0.7
million). Provisions increased to EUR 10.9 million
million) in line with increasing revenue during the
(31 December 2022: EUR 1.2 million) mainly due
last quarter of 2023.
to provision for outstanding invoices by EUR 8.0
million.
019
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Financial situation
Operating Cashflow
As of 31 December 2023, the cash and cash
Operating Cashflow is the measure for cash
equivalents amounted to EUR 44.5 million (31
generation out of the business, which can be
December 2022: EUR 0.2 million). The cash
used for investments and improving the financing
position increased due to the cash, which former
situation. Operating Cashflow is derived from the
exceet Group contributed as a result of the
cashflow statement.
business combination with APEX.
Financial liabilities summed up to EUR 43.7
ENVIRONMENT
million (31 December 2022: EUR 61.0 million). The
decrease in 2023 is based on the repayment of
Corporate responsibility
APEX’s bond and financial loans. The net cash
H2APEX contributes actively to environmental
position amounted to EUR 0.7 million as of 31
protection through its careful handling of natural
December 2023, while as of 31 December 2022
resources as well as the avoidance or recycling
net cash position was EUR -60.8 million.
of waste. Additionally the business model at all is
set up to improve the environment by replacing oil
and gas energy usage though hydrogen energy.
3.4. FINANCIAL AND
NON-FINANCIAL KEY
SOCIAL RESPONSIBILITY
PERFORMANCE
Sustainability
INDICATORS
With its Group portfolio, H2APEX provides
The Group is controlled by financial and non-
and targets innovative products and solutions
financial key performance indicators:
worldwide that secure sustainable success
for its customers and therefore, contributes
FINANCIAL INDICATORS
continuously to global sustainable development.
This is based on a responsible corporate
Revenue
management geared to long-term value creation.
Revenue is currently the most important indicator Recent investment in green hydrogen underpins
to show the growth of the business, supported by this strategy.
backlog.
Development and technology investments
EBITDA
The availability of qualified development
EBITDA is the important performance measure
capacities and state-of-the-art production
for the profitability of the business and to
technologies is crucial for the sustainable
monitor the cost structure. EBITDA is defined as:
business development of H2APEX’s business
Earnings before interest, taxes, depreciation and
activities. Focus was and is strongly technology
amortization.
oriented.
Net Debt
Social responsibility
Net Debt is used to monitor the liquidity of the
Social responsibility is important for the
company and to assist in presenting the Group’s
management and the employees of H2APEX
financial capacities at balance sheet date. Net
Group, not only in the area of customers and
Debt is calculated as financial debt adjusted for
sustainable products.
cash and cash equivalents.
020
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Corruption
risk profile is observed in every decision-making
With regards to corruption and bribery the
instance. The risk policy is oriented on the
Group has a zero-tolerance approach. Since the
objective of securing and enhancing H2APEX’s
Group is mainly active in countries with a stable
position in its markets in order to achieve a
political and regulatory environment (Switzerland, long-term increase in the Group’s value. The
Germany, Luxembourg), corruption is not
General Partner and the Supervisory Board have
regarded as a priority issue.
established an internal control system for the
diverse organizational, technical and commercial
Internal Control System
processes within the Group which is documented
The Supervisory Board and the General Partner
by regular reporting. A central component of
are aware that a well-functioning internal control
H2APEX’s risk policy is to take risks only if there
system including a regular detailed reporting
is a high probability that the associated business
essentially helps to prevent and detect cases of
activities will provide added value for the Group.
corruption and bribery.
The underlying requirement is that the risks must
always remain transparent and manageable.
4. REPORT ON EXPECTED
4.1. REPORT ON EXPECTED
DEVELOPMENTS AND
DEVELOPMENTS
ON OPPRTUNITIES AND
RISKS
Hydrogen is a central component of the strategy
H2APEX is providing an outlook for the year
for achieving the EU climate targets for 2030
2024 for the expected business development.
and is particularly relevant for Germany as an
Nevertheless H2APEX is exposed to different
industrial hub. Within this framework, by 2030
risks and opportunities in connection with its
at least 40 GW of electrolysis capacity is to be
business activities. The terms “opportunity”
available in the EU and up to 10 million tons of
and “risk” include all influences, factors and
green hydrogen are to be produced annually
developments that can potentially influence the
in the EU. The investment volume for this is
achievement of H2APEX’s corporate goals. The
estimated at around EUR 300 billion and will
basic principle is that inherent opportunities
be supported to a considerable extent by state
should outweigh inherent risks. H2APEX's risk
subsidies. In Germany, 10 GW of electrolysis
policy is intended to ensure that opportunities
capacity is to be created by 2030 – subsidies
that arise are realized promptly in a way that
amounting to EUR 9 billion have already been
increases the company's value, while at the same pledged for hydrogen technology. Green hydrogen
time reducing risks through countermeasures.
is of particular importance here: it contributes
Risks that threaten the continued existence of
to the decarbonization of the economy and the
the company must be avoided. In addition to IT
decreasing costs for hydrogen electrolysis plants
finance and controlling, risk identification and risk due to economies of scale make hydrogen an
control also extend to the areas of sales, project
attractive option for industry, infrastructure and
management, development and operational
mobility.
security.
For the current fiscal year 2024, the Group
H2APEX adopts a comprehensive risk
expects its growth course to continue and to
management strategy through the Group for early more than double its revenue from the previous
detection and control of risks and to benefit from
year in a range between EUR 35 million to EUR
opportunities resulting from operating activities
40 million. This development will be supported by
and improved market conditions. A balanced
revenues from the planning and construction of
hydrogen plants for third-party companies, from
021
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
the operation of hydrogen plants and from the
The sector and market risks are dedicated to the
sale of hydrogen storage tanks, for which fully
hydrogen business and are depending on the
automated series production will begin in the
development in this sector, which is driven by
fiscal year 2024. The majority of the revenues
governmental support to proceed with climate
expected in 2024 have already been contractually change policy. The current use of hydrogen in
secured.
the fight against global warming is very limited.
Therefore, the hydrogen market and in particular
The Group’s strategy remains focused on
the market for green hydrogen produced by water
achieving profitable growth as quickly as possible, electrolysis with renewable electricity on which
which is reflected in two medium-term target
H2APEX is focused, is an emerging market with
figures communicated by the Management
limited volumes as of today. Growth assumptions
Board: H2APEX expects to generate a positive
and estimates may not be correct and, as a result,
operating cash flow starting in the fiscal year
the global hydrogen market may grow slower
2025 and a positive adjusted EBITDA starting in
and/ or smaller than expected due to a number of
the fiscal year 2026.
factors beyond H2APEX’s control.
The EU funding approved in February 2024 for
our 100 MW H2ERO plant, for which the company One of the key steps in the development of
has applied for funding totaling EUR 167 million,
the market for green hydrogen is the further
confirms our leading position in the planning and
reduction in the costs for green hydrogen, so
construction of large-scale plants. Further growth that it becomes equivalent or lower than that
potential is in the EU's funding approval for the
for grey hydrogen and other sources of energy
IPCEI hydrogen projects because these projects
which green hydrogen could substitute. The
will require project developers such as H2APEX to major cost driver for green hydrogen is the price
implement them.
for electrolysers, which is expected to decrease
with the growth in production due to economies
of scale and technical progress. However, there
4.2. RISK REPORT
is no guarantee that production volumes of
electrolysers will increase as long as the demand
for green hydrogen does not grow.
4.2.1 RISKS
Another key factor for the production of green
SECTOR- AND MARKET-RELATED RISKS
hydrogen from renewable electricity is the
development and access to such electricity.
Sustained weak economic development or a
State support for the development of renewable
downturn of the economy as well as upcoming
energy sources may expire and may even
trade barriers can have a negative impact on
intensify the lack of renewable energy which
H2APEX’s business or strategy. This would
may lead to higher prices and consequently also
result in decreasing sales and margin pressure
increase the price of green hydrogen. In parallel,
on companies. H2APEX counters these risks
this also applies to the Group’s customers
by way of constantly monitoring the situation
for which the Group develops and integrates
and evaluating comprehensive activities. In
hydrogen production plants in case there is no
addition, H2APEX is constantly working on strictly direct connection to a wind or solar farm or such
managing its costs and focussing on the core
electricity does not cover the demand.
competences of its activities.
022
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Moreover, the development of a centralized
Paris Agreement since 2015, many countries try
hydrogen market requires the establishment of
to reduce their greenhouse gas emissions by
a transport infrastructure to connect the place
shifting their energy sources from fossil fuels to
of hydrogen production with its consumers,
alternative sources. Especially huge economies
which may represent a significant investment.
with strong demand for energy may not be
While in the short term a decentralized approach
able to satisfy such demand with their own
to industrial hydrogen supply may suffice, with
local energy sources and may, therefore, also
growing demand the hydrogen consuming
elaborate national import strategies. In Germany,
industrial plants will have to be connected to a
for example, decision-makers are currently
broader hydrogen network infrastructure. In order considering strategies to import green hydrogen
to transport hydrogen by pipeline with the same
rather than focusing on technologies for own
energy density as gas, a very high pressure is
production facilities. In case green hydrogen
required due to the low density of hydrogen. Such can be imported in large quantities on favorable
pressure can only be generated by compressors prices, it may become less attractive to invest into
installed along the pipelines if sufficient hydrogen local production sites in Germany like APEX does.
is available.
As a result, H2APEX, via its operational subgroup
APEX, business (apart from its storage business)
Furthermore, the industrial transition from
may, to some extent, become redundant in
fossil energy to green hydrogen may require
import nations, such as Germany.
substantial investments for the construction of
production, transport, distribution and delivery
BUSINESS RISK
tools. Financing sources may be public or private.
Hydrogen market players likely will compete with
In order to successfully grow its business in the
other players in renewable energy for access to
evolving market for green hydrogen, H2APEX
these financings and may not be able to secure
relies on its ability to recognize evolving market
sufficient financial resources for the development trends early and further develop its technolo-
of a vibrant market for green hydrogen.
gies to address these trends with its products
and services properly and in a timely manner.
Green hydrogen technology may be
The absorption of such growth, which cannot be
outperformed and replaced by other (new)
assured, depends, in part, on H2APEX’s ability to
technological solutions based on other energy
anticipate and manage its growth efficiently.
carriers. Competing technology may be superior
in terms of energy-efficiency, may be easier to
Future growth may require the implementation
implement on an industrial scale and, ultimately,
or development of advanced internal controlling
be more profitable.
measures in order to ensure proper risk manage-
ment, adequate business planning and reliable
In the mid-term, H2APEX, via its operational
financial reporting. In the event such internal con-
subgroup APEX, business is focused on the
trols fail or are not progressed in line with busi-
market for green hydrogen in Germany. Since
ness growth, H2APEX may, among other things,
many countries across the world committed
not be able to prevent or detect errors, such as
to keep the increase in the global average
miscalculations of resources and capacities and
temperature below 2°C above pre-industrial levels accounting errors, or fraud.
and to pursuing efforts to limit the temperature
increase to 1.5°C above pre-industrial levels at the If H2APEX cannot manage its growth properly,
UN Climate Change Conference in Paris, France,
it may be unable to take advantage of market
in 2015 (“Paris Agreement”) or acceded to the
opportunities, execute its business strategies or
respond to competitive pressures. Any failure to
023
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
effectively manage H2APEX’s growth could
Similar risks may also arise in the course of
materially and adversely affect H2APEX’s busi-
H2APEX’s own operations, such as the
ness and prospects.
construction of an up to 600 MW green
hydrogen plant in Lubmin at the Baltic Sea near
The evolving green hydrogen industry is
the German-Polish border, which will be operated
competitive and, due to H2APEX’s diversified
by H2APEX itself on site after its planned
business model, H2APEX faces competition by
completion in 2027. In particular, H2APEX may be
different market players depending on the
unable to identify adequate locations for addi-
respective business area. Some of H2APEX’s
tional own green hydrogen plants, which shall be
current and potential competitors may be larger
close to the hydrogen end-user, on the one hand,
and may have substantially greater resources
and, on the other hand, suitable for the produc-
than H2APEX has and expects to have in the
tion of or access to sufficient renewable energy
future. They may also be able to devote greater
required for the electrolysis.
resources to the development of their current
and future technologies or the promotion of their
The business risks are controlled by project
offerings or offer lower prices. The supervisory
management and financial controlling. In regular
board and the GP are taking the risk into
management meetings and supervisory board
consideration while defining the strategy for the
meetings business risks and risk controlling are
Group.
monitored.
H2APEX acts as a developer and system integra-
tor for large third-party green hydrogen projects.
LEGAL RISKS
H2APEX covers the entire project phase, from
(pre-)feasibility studies and approval planning to
Legal risks in connection with acquisitions,
design, engineering, construction and commis-
divestments, product liability, warranties or
sioning. During the entire project phase, which
employment law are comprehensively analysed
can take up to approximately 28 months for small by management and, where required, with
and mid-size projects, H2APEX devotes signifi-
external specialist consultants. H2APEX is thus
cant time to its projects and allocates financial
in a position to adequately counter potential risks
resources to these activities.
in a timely manner. Despite these measures, the
outcome of current or future actions cannot be
During such projects, H2APEX may encounter
predicted with certainty.
difficulties inherent in any large projects, such as
unexpectedly long delivery times for, or shortages H2APEX relies upon a combination of the
of, key equipment, parts and materials, labor
intellectual property protections afforded by
disputes and work stoppages, health, safety and/
patent, copyright, trademark and trade secret laws
or environmental accidents/incidents or other
in Germany, as well as contractual protections, to
safety hazards, disputes with suppliers, adverse
establish, maintain and enforce rights in H2APEX’s
weather conditions or any other force majeure
proprietary technologies. Despite H2APEX’s
events, and delay in obtaining regulatory approv-
efforts to protect its proprietary rights, third
als or permits. These difficulties, among other
parties may attempt to copy or otherwise obtain
things, could result in delays or additional costs
and use H2APEX’s IP without its consent.
that could make projects less lucrative than
initially planned. H2APEX could also be exposed
If H2APEX is not able to establish or adequately
to contractual penalties for failure to complete the protect IP, in order to prevent infringements, it may
project in a timely manner.
have to file infringement claims. However, there
can be no assurance that any such claims will be
successful. Unauthorized use of IP may seriously
harm H2APEX’s business, damage its reputation
and decrease the value of its property.
024
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
There can be no assurance that H2APEX’s know-
In addition, before the Group releases any product
how and trade secrets will provide H2APEX with
to market, it needs to subject it to numerous
any competitive advantage, as the know-how
field tests. These tests may encounter problems
and trade secrets may become known to or be
and delays for a number of reasons, many of
independently developed by others, including
which are beyond the Group’s control. If these
H2APEX’s competitors, regardless of measures
tests reveal technical defects or reveal that the
taken to try to preserve the confidentiality.
Group’s products do not meet performance
goals, including reliability, the commercialization
H2APEX is subject to several regulations
schedule could be delayed, and potential
surrounding the security of supply and pricing
customers may refrain from purchase or use of
of electricity as well as regulations relating
the Group’s systems and products.
to chemical and hazardous substances. In
particular, regulation on the production, storage,
Since the Group offers highly customized green
distribution, and sale of green hydrogen and
hydrogen production plant solutions in the
access to renewable energy sources to produce
course of its project development business, the
this hydrogen is currently evolving and H2APEX
Group envisages the development of a mass
may face risks associated with changes to these
market only in its storage business with regard to
regulations.
pressure tanks, which may never develop, or not
within the expected timeframe. If a mass market
From time to time, H2APEX may be involved in
fails to develop or develops more slowly than
legal, governmental or arbitration proceedings
anticipated, the Group may be unable to recover
related to the ordinary course of business,
the losses it will have incurred in the development
including personal injury litigation, intellectual
of its hydrogen tanks and may never achieve
property litigation, contractual litigation,
profitability in this business area.
environmental litigation, or tax as well as other
proceedings. Such disputes may be time-
The Group’s solutions for the supply of green
consuming and may entail significantly higher
hydrogen are modular, tech-agnostic and
operating expenses by additional legal and other
tailor-made to comply with complex customer
related costs.
requirements. Due to the complexity and novelty
of the developed projects, the Group’s concepts
H2APEX has a own legal department to avoid,
may contain miscalculations, misjudgments,
mitigate and control legal risks, supported by
design mistakes and other errors. Errors and
external advisors.
defects may also occur during the integration
phase. Once the electrolysis plant is fully
TECHNOLOGY RISKS
operational, the Group may fail to properly
maintain and service it, which may lead to
H2APEX cannot guarantee that it will be able to
defects. Furthermore, customers may claim
develop commercially viable storage solutions
contractual penalties or compensation for
for hydrogen and large-scale green hydrogen
damages. The Group may be liable under product
production facilities in the timetable anticipated,
liability laws.
or at all. In its storage business, the Group has
developed and designed a pressure tank which
Controlling and mitigating technology risks is
has not been put into serial production yet.
the main task of the developing department and
In addition, the Group is currently developing
after development mainly the task of quality
a chemical storage solution. However, only a
ensurance.
prototype exists so far and marketability has
yet to be confirmed. The Group may not be
able to develop the technology or achieve its
commercialization.
025
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
CUSTOMER RISKS
SUPPLIER RISKS
H2APEX’s business success depends to a
H2APEX’s business activities depend significantly
large degree on, among other things, entering
on a limited number of third-party suppliers for
into customer contracts with large companies.
key components, such as electrolysers, including
H2APEX’s negotiating power with new customers stacks, aggregates for water purification and
may be limited and, therefore, H2APEX may
components for the compression of hydrogen for
be unable to enter into customer contracts on
filling or transportation purposes. Since the green
favorable terms with appropriate prices.
hydrogen market is about to develop, only few
suppliers exist worldwide. Its reliance on the few
In the project development business, the Group
existing suppliers exposes H2APEX to volatility in
develops and offers highly customized solutions,
the prices and availability of supply.
which may not meet potential customers’
demand.
If any of H2APEX’s suppliers cannot or do not
meet their obligations under purchase orders or
Moreover, even if H2APEX enters into lucrative
supply agreements, including due to production
customer agreements, customers may not
capacity limitations, supply chain bottlenecks,
comply with payment terms resulting in payment obligations to other customers or otherwise,
default. Competitive pressure and challenging
or if supply chains are disrupted due to natural
markets may increase credit risk through
disasters or military conflicts, H2APEX may
sales to financially weak customers, extended
be unable to locate suitable alternative supply
payment terms and sales into new and immature sources or channels, may be forced to pay higher
markets. H2APEX’s internal policies, procedures
prices to obtain the necessary components
and controls relating to customer credit risk
from other suppliers or via different logistic
management and outstanding customer
routes on short notice or change suppliers and
receivables may prove to be insufficient or not
logistic providers. Should H2APEX not be able to
be adjusted properly in line with the growth of
obtain the necessary components in time, non-
the business. If H2APEX is unable to collect
performance by its suppliers may also result in
outstanding amounts payable, this may result in
contractual penalties of H2APEX, cancelation of
write-offs. Furthermore, capital reserves may turn projects or loss of reputation.
out to be insufficient.
Moreover, cyber incidents or suppliers’ financial
For mitigating customer risks sales department
difficulties or insolvencies may cause supply
and legal department are working together to
chain disruptions.
define possible risk factors. Payment default
will be monitored by controlling and fiance
H2APEX controls the risk by staying in touch
department based on external ratings and other
with the supplier to be informed about changes
sources.
in the supply chain. Second source policy is
implemented and will be practiced as much as
possible.
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H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
PERSONNEL RISKS
IT RISKS
H2APEX’s success depends to a certain extent
The availability and efficiency of IT infrastructure
on the continued service of its management and
and applications is crucial for the economic
other key personnel, including employees with
performance of H2APEX’s companies. IT risks
extensive know-how in hydrogen technology
consist of the possible failure of operational and
and related research and development (“R&D”)
administrative IT systems which could impair
expertise as well as know-how in the development business transactions.
and design of green hydrogen plants. The loss
of the services of one or more members of
H2APEX’s IT systems are critical for its business
H2APEX’s management team or other key
and its planning and design processes. Moreover,
personnel could have an adverse effect on its
IT systems facilitate its sourcing, enterprise
business.
resource management, controlling, finance,
customer relations, and quality and order
H2APEX’s success also depends on its continuing management, among other things. H2APEX may
ability to attract, retain and develop highly qualified face significant challenges in maintaining the
personnel, including scientists and engineers with security and integrity of its systems, the security
the requisite technical background. Competition
of third-party systems used in its business
for such skilled personnel is intense. There can be and the data stored on, or processed by, these
no assurance that efforts to retain and motivate
systems.
management and key employees or attract
and retain other highly qualified personnel in
In addition, a breach of H2APEX’s IT security
the future will be successful, also in light of the
protocols or cyber-attacks (phishing attack,
Group’s operational being in Rostock-Laage, a
intrusion into information systems, etc.) could lead
town in a rural area in the northeast of Germany.
to a personal data breach within the meaning of
If the Group is unable to attract and retain such
the applicable regulations or could lead to the theft
personnel in the future, this may have a material
of sensitive data, exposing H2APEX to the risk of
adverse effect on its business, results
administrative, criminal or financial sanctions, and
of operations and prospects.
a significant loss of confidence in the security of
its information systems on the part of customers
There is a process for hiring qualified people by
but also by suppliers and subcontractors.
using different approaches. Key employees are
Unauthorized access by third parties, the misuse
mainly searched with the support of external
or unintended disclosure of confidential data
advisors. H2APEX is supporting employees as
by H2APEX’s employees to disclose sensitive
much as possible, who wants to work (partly)
information in order to gain access to sensitive
from home office or by using flexible working
data may result not only in the disclosure
hours. A good team spirit in the Company is an
of business secrets, but also violate privacy
additional advantage to retain the employees.
provisions, and, thus, constitute administrative or
criminal offences and subject H2APEX to damage
claims and lead to administrative fines.
Keeping a strong IT environment and investing in
IT security is one of the main targets to mitigate
such risks.
027
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
FINANCIAL RISKS
Group’s competitors could benefit from public
funding. This could adversely affect the Group’s
a) Market risks (Interest, Currency, Price risk)
competitive position, business, and prospects. In
case the Group is granted public funding, such
As part of the financing of its projects, H2APEX
funding may be significantly delayed and, as a
uses a leverage effect to limit its equity capital
result, the Group may have to bear significant
contribution.
costs when they occur before receiving any public
funds. Further, the granting of public funding may
If a project company, or its holding company,
be conditional and require compliance with certain
were to fail to meet its payment obligations
obligations, and it may also restrict The Group
under its financing agreements or fail to comply
in the use of funds. In case the Group does not
with certain minimum debt service coverage
comply with such conditions, it may have to return
ratios, such default could render the project debt
granted fundings, in part or in whole.
immediately due. In the absence of a waiver or
a restructuring agreement on the part of the
In the past, APEX has received subsidies in the
lenders, the lenders may be entitled to seize
form of funding for personnel expenses for the
the assets or securities pledged as collateral
development of a chemical hydrogen storage
(including H2APEX’s interest in the subsidiary that solution and has applied for further public funds.
holds the facility).
Applications are reviewed on a case-by-case basis
by the authorities to determine the feasibility of the
H2APEX’s business and growth plan require
underlying project. Aids or grants are the subject
significant financing and refinancing through
of a contract between APEX and the public entity
the use of equity and external debt. In particular,
and are systematically subject to objective criteria,
H2APEX will have to invest significantly in
such as the relevance of the project throughout
connection with the awarded contracts. The ability the contract concluded or compliance with certain
to raise additional funds will depend on financial elements of profitability. If APEX were to accept
and economic conditions, as well as other factors, a refusal in its request for aid, this could also call
which may be beyond H2APEX’s control.
into question the viability of a project and lead to
its abandonment.
In the EU, and particularly in Germany, several
projects support the decarbonization through
Moreover, existing public policies could be
green hydrogen. In Germany, for example, green
changed or even reversed, due to a law or a
hydrogen flagship projects are supported with a
regulatory or administrative regulation which
EUR 700 million funding volume, being the largest seeks to favor certain traditional sources of
funding initiative ever provided by the German
energy or alternative renewable energy sources
Federal Ministry of Education and Research
or because of budget constraints entailing
(Source: BMBF, National Projects). On EU level,
a reduction in public funds available for the
Important Projects of common European interest
implementation of such policies which support
(“IPCEI“) are promoted, including several green
decarbonized solutions, including green hydrogen.
hydrogen projects. In the context of the hydrogen
hub “doing hydrogen”, an initiative which seeks to
b) Credit risk
connect different hydrogen projects throughout
Germany to form a hub linking production,
Credit risks exist regarding financial institutions
transport, storage and consumption of hydrogen,
and customers. The credit risk with respect to
the Group has applied for IPCEI funding in an
financial institutions predominantly arises from
amount of EUR 166 million. However, the Group
liquid funds. In order to minimize a possible risk of
may only partially be granted the amount of
default, financial instruments are mainly entered
public funding applied for, if any. Instead, the
into with counterparties with prime credit ratings.
The credit risk with respect to customers consists of granting terms of credit and the associated risk of default. Credit risk is managed on a group- wide basis. Credit risks arise from cash and cash equivalents, and deposits with banks and financial institutions. Credit exposures to customers, including outstanding receivables and committed transactions, are managed by the individual groupcompanies. The monitoring of the credit risks is supported by an internal monthly reporting.
c) Liquidity risk
Cash requirements have so far been assured through tools such as shareholder loans, bank borrowing, capital increases, issuance of bonds and conditional grants and advances. With regard to short-term debt financing, H2APEX is exposed to the risk of changes in interest rates in the event of a renewed short-term financing, which could increase its financing cost and, undercertain circumstances, lead to a reduction of its return on capital. It cannot be ruled out that credit institutions may in general limit their willingness togrant H2APEX such short-term financing due to several different developments.
Furthermore, equity raisings by H2APEX, such as the issue of new shares to shareholders and new investors may not be successful or feasible on favorable terms.
Lack of ability to obtain sufficient funding in the future could have a material adverse effect on H2APEX’s growth opportunities, business and financial condition and could, in the future, result ininsolvency or liquidation of H2APEX.
EVALUATION OF THE OVERALL RISK
SITUATION
Risks that could threaten the continued existence of the Group are currently not present.
4.2.2 RISK MANAGEMENT
SYSTEM
H2APEX manages company risks with a group- wide risk management system, which is an integral component of the business processes and a significant element of the decision-making in the Company. This allows timely identification of potential risks arising in connection with business activities, as well as risk monitoring and limita- tion using suitable control measures. At the same time, the risk management system serves as a tool to help seize opportunities in the best possible manner in terms of the Group strategy. The risks relevant can be divided into external, i.e. market and sector-specific risks, as well as internal risks. The latter include strategic, financial, operational and company-related risks. The risks defined are documented in the regular reporting of the Com- panies. If relevant, adhoc reporting is defined and specific measures will be implemented. Addition- ally, defining investment opportunities and select- ing the possible investments is controlled and monitored in detail, too.
Adaptation of the systems to H2APEX’s risk profile is managed individually by specifically analyzing each of the risks and their conditioning factors and taking into consideration their nature, origin, possibility and probability of occurrence and the significance of their impact. Management meas- ures (such as hedges, mitigation, opportunity, etc.)
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
028
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H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
that are viable for each risk are also considered.
ATTRACTIVE GROWTH MARKET UNDER-
Controls are based on the approval of manage-
PINNED BY SOLID FUNDAMENTALS
ment policies and include mechanisms to set and
control operational limits, as well as authorization With green hydrogen demand expected to reach a
and supervision processes, together with opera-
market share of 20% by 2030 (Source: McKinsey
tional procedures.
& Hydrogen Council, Hydrogen for Net-Zero), the
Group is active in an attractive growth market.
While grey hydrogen had a share in the overall
4.3
REPORT ON
hydrogen production of 98% in 2020 (Source:
OPPORTUNITIES
Alpha report), it is bound to be phased out in the
next decades due to several trends and activities.
FIRST MOVER ADVANTAGE BASED ON
Governmental decarbonization efforts result
HYDROGEN INDUSTRIAL PARK IN ROSTOCK- in increasingly stringent regulations, such as
LAAGE
emission trading schemes or the carbon border
adjustment mechanism, an EU mechanism
In contrast to many other hydrogen companies,
for payments on imports of carbon-intensive
the Group has more than 20 years of experience
products. Aiming in the same direction, public
in the renewables energy market and has
support schemes bolster the development of
specifically concentrated on the hydrogen
green hydrogen deployment through funding,
market for several years. Its own grid-connected
e.g., the IPCEI on hydrogen, which was initiated
hydrogen power plant, which was inaugurated
in December 2020, or REPowerEU, a set of
in 2020 and became fully operational (in test
measures proposed by the EU Commission to
mode) in May 2021 is one of the first fully
reduce energy consumption, generate renewable
integrated and sector-coupled green hydrogen
energy and diversify European energy production.
production facilities in an MW scale in Germany
Such support schemes do not only exist in the
(and Europe). The Group’s management believes
EU, but also in the US and China. The anticipation
that this track record of being a first mover in
of funding has led to strong recent growth in the
the hydrogen space has, to a certain degree, set
hydrogen market, in particular regarding capacity
the Group apart from most of its competitors,
announcements, the maturing of hydrogen
as the gathered experience and operational data
projects and the deployment of electrolyzers.
collected has created a unique selling proposition (Source: McKinsey & Hydrogen Council, Hydrogen
and provides credibility that the Group has the
Insights)
capabilities to successfully complete projects in a
nascent market.
In addition to the megatrend relating to
decarbonization and the increased use of
renewable energy sources, the decline of
electrolyzer costs will also foster the market
growth in the green hydrogen market.
Electrolyzers are a key component for the
production of green hydrogen and the costs of
electrolyzers are a major expense item. Scaling
and automation of electrolyzer production is
expected to result in a significant decline of
electrolyzer costs even though there might be
shortages of electrolyzers in the mid-term.
030
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
The hydrogen market itself is also developing
electrolysis purposes, first pilot lines exist for
positively due to new hydrogen-related
the use of sea water in hydrogen production, so
technologies and applications. The market is
the close proximity of the Group’s location to
still very dynamic, especially with regard to the
the Baltic Sea is also a long-term advantage, in
storage and transport segment. With regards
particular as desalination costs are expected to
to applications, the green hydrogen market is
have a low impact on overall hydrogen production
currently primarily focused on the chemicals,
costs (Source: Hydrogen Council, Sufficiency,
ammonia and refining industry (Source: IEA,
sustainability, and circularity of critical materials
Global Hydrogen Review), which are also focus
for clean hydrogen).
segments of APEX. However, other end-use
segments are entering the green hydrogen market, The Rostock region is also a node for gas pipelines.
such as the power segment (regarding mid- and
For example, the Nordstream twin pipeline system
long-term storage), road mobility and export
ends in Lubmin, which is just 130 km away from
(requiring reliable transport solutions) (Source:
Rostock and where the Group is currently in the
Alpha report). While it remains to be seen how
draft planning stage for an own grid injection plant
likely a shift to green hydrogen for these segments with an electrolysis capacity of up to 600 MW.
will be, a diversification could be an opportunity,
The existing pipelines, which are currently used
in particular for small and mid-sized project
for the transport of natural gas, can be retrofitted
developers.
for the transport of hydrogen, so that the Group
can rely on an existing infrastructure and an
ADVANTAGEOUS LOCATION AND GEOGRAPH- economically viable solution also for long-distance
IC FOCUS TO CAPTURE GROWTH
transmission. There are already several projects
for the conversion of existing hydrogen pipelines,
The Group’s operational headquarters and its
which are in different development stages, with the
industrial park are located in Rostock-Laage
first retrofitted pipelines expected to be available
in the north of Germany at the Baltic Sea
for hydrogen transport from 2027 on. One of these
coastline. Due to the access to the Baltic Sea
projects is “Flow – making hydrogen happen”,
and the high capacities regarding onshore and
which intends to create a north-south transport
offshore wind energy generation, this region
route for green hydrogen from Lubmin to Stuttgart,
offers multiple sources for the production of
thereby connecting large areas in Eastern Germany,
green energy. The federal state Mecklenburg-
including the Halle/Leipzig chemical triangle as well
Western Pomerania, to which Rostock belongs,
as the Rhine-Main and the Rhine-Neckar region.
is one of the pioneers with its green energy and
With its expected feed-in capacity of up to 20 GW,
green hydrogen strategy, providing financial
such pipelines are designed to create additional
support for research institutions and companies.
supply security, especially for consumers with large
In addition to green energy, water is the base
hydrogen requirements.
material for the production of green hydrogen
and is readily available in high quality both at
the Group’s operational headquarters and at the
locations where the Group is doing business. As
the Group will continue to focus on the EU for its
operations in the mid-term, there is a very low
risk that high-quality water will become scarce
in the geographies where the Group currently
is and intends to be present in the mid-term.
Moreover, while sea water is not yet used for
031
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
The reporting, management and controlling of
5. INTERNAL CONTROL
risks are structured hierarchically. The Finance
SYSTEM AND RISK
department implements the requirements of the
MANAGEMENT SYSTEM
accounting process. Risks of errors in accounting
RELEVANT FOR THE
are largely eliminated or minimized through the
following processes:
CONSOLIDATED
FINANCIAL REPORTING
-
Uniform IFRS accounting guidelines,
PROCESS
supported by standardized reporting forms or
files that are mandatory when collecting data
The internal control system (ICS) is an integral
and consolidating them. Consolidation
part of the H2APEX Group's corporate risk
software is used significantly here.
management system. The internal control system
refers to the principles, regulations and procedures
-
The authorization concept for the central
introduced by management and aimed at the
accounting systems is uniformly regulated.
organizational implementation of management
Access to the systems and the competence
decisions. What must be ensured is the protec-
regulations are limited.
tion of assets from loss, misuse and damage, the
achievement of organizational goals, the ensuring
-
Group reports are reviewed within the Finance
of proper, economical, efficient and effective
department and additionally by other internal
processes, the reliability of operational informa-
and external persons before they come to at-
tion, in particular the reliability of accounting, and
tention of the management board or
compliance with laws and regulations including
supervisory board for second level review.
accounting standards.
-
Expert external persons are consulted for com-
The ICS has both a preventive and an audit func-
plex issues such as option programs, purchase
tion and supports the flow of company processes.
price allocations or other accounting issues.
The ICS is implemented through work instructions
as well as through the establishment of processes The ICS is still under development at H2APEX,
and controls. These processes can be manual, IT- as growing business and higher complexity of the
supported or completely IT-led. When introducing
business increase the need for an efficient ICS
and implementing the ICS, the cost/benefit effect
and the demands on the ICS. H2APEX strives to
must be taken into account; risk and control must
continue to implement standardized processes
be in balance. The following principles generally
and specifications, which are largely IT-based or
apply: transparency, the “four-eyes principle”, sepa- at least IT-supported.
ration of functions and minimum information. The
management of all group companies is obliged to
comply with these requirements and to align the
relevant internal processes accordingly. Internal
and external audits document compliance and
violations and evaluate potential for improvement.
032
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
6. SUSTAINABILITY
This system is not a response to regulatory
demands; it reflects our culture of transparency,
In the journey for a sustainable tomorrow, the
accountability, and ethical business practices.
world's energy landscape is undergoing a pro-
A cornerstone achievement in this journey was
found transformation. At the forefront of this
the communication of the Group-wide Code
evolution in Germany stands H2APEX, a visionary of Conduct in October 2023. This document
leader in the sector of hydrogen.
guides our employees in making decisions that
Sustainability isn't merely a buzzword for us; it is
align with our ethical, social, and environmental
the cornerstone of our existence. We recognize
values. Complementing this, the introduction and
the pressing need to transition to a low carbon
communication of the whistleblower system in
economy to mitigate the environmental challenges October 2023 represents our commitment to
facing our planet. Hydrogen, with its unparalleled
transparency and integrity. Since its inception, no
potential as a clean energy carrier, emerges as a
significant incidents were reported, reinforcing the
beacon of hope in this transition. However, har-
trust and confidence placed in us by our employ-
nessing the power of hydrogen must be accompa- ees and stakeholders.
nied by a steadfast dedication to sustainability at
Looking ahead, we are dedicated to further
every step of the journey.
strengthening our foundation of ethical excel-
As we embark on the path towards a hydrogen-
lence. A comprehensive compliance training pro-
powered future, we invite you to join us in our
gram is set to be rolled out in early 2024, covering
pursuit of sustainability excellence. Together, let us critical areas such as anti-corruption, antitrust
chart a course towards a cleaner, brighter tomor- law, conflict of interest, and information security.
row, where the promise of hydrogen fuels not only This initiative reflects our holistic approach to
our energy needs but also nurtures the vitality of
ESG and compliance, ensuring that all employees
our planet and its inhabitants.
are not only informed but empowered to uphold
our standards of integrity.
SUSTAINABILITY THROUGH GOVERNANCE:
THE INCEPTION OF ESG & COMPLIANCE
MANAGEMENT
In the pursuit of embedding sustainability and ethi-
cal governance into the core of our operations, the
past year marked a significant milestone for our
organization. In September 2023 we established
the position of ESG & Compliance Manager, a
role specifically designed to navigate the complex
terrain of environmental, social, and governance
(ESG) issues. This strategic decision underscores
our commitment to not only adhere to the legal
frameworks governing stock exchange listings but
also to exceed the expectations of our stakehold-
ers, particularly our customers, who hold us to the
highest standards of ethical conduct.
Reporting directly to the Chief Financial Officer
(CFO), the ESG & Compliance Manager is tasked
with the role of integrating a state-of-the-art sus-
tainability and compliance management system.
033
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
TURNING DNA INTO ACTIONS: THE ROAD TO Adhering to the emerging Corporate Sustainability
OUR ESG STRATEGY
Reporting Directive (CSRD), we adopted a double
materiality approach, meticulously examining
In 2023, we embarked on our sustainability jour-
risks, opportunities, and impacts. Our inclusive
ney, translating our deeply ingrained commitment approach extended beyond mere consultation, as
to sustainability into tangible actions. Our first piv- we actively involved our management team and
otal step involved crafting a materiality matrix, a
department leaders in the discussions. This dual
comprehensive process that involved identifying,
engagement strategy ensured that our analysis
assessing, and prioritizing the most pressing en-
benefited from both top-down strategic insights
vironmental, social, and governance (ESG) issues
and bottom-up operational perspectives. Through
pertinent to our operations. This endeavour was
this concerted effort, we laid the groundwork for
characterized by a collaborative effort, engaging
informed decision-making and strategic align-
both internal and external stakeholders to ensure
ment as we charted our course towards a more
a holistic perspective.
sustainable future.
Materiality Matrix
034
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
With our sustainability strategy firmly grounded in
and fostering an inclusive, supportive, and
three key pillars—environmental responsibility, be-
empowering work environment is paramount
ing an engaged employer, and being a trustworthy
to our success.
business partner—we have formulated strategic
•
Being a trustworthy partner: As a responsible
goals that will serve as guiding lights for our sus-
corporate citizen, we are committed to uphold-
tainability program in the years ahead.
ing the highest standards of integrity, transpar-
•
Environmental Responsibility: Our commitment
ency, and ethical conduct in all our dealings.
to environmental stewardship drives us to mini-
mize our ecological footprint and maximize our
positive impact on the planet.
•
Being an engaged employer: We recognize that
our employees are our most valuable asset,
By aligning our sustainability strategy with these
three pillars and setting clear, actionable goals
within each, we are poised to make meaningful
progress towards a more sustainable and respon-
sible future, while simultaneously driving value for
our company and stakeholders.
035
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
ENVIRONMENTAL RESPONSIBILITY: THE
have chosen to report on average metrics rather
PATH TO A GREEN FUTURE
than absolute numbers, providing a more accu-
rate reflection of our workforce trends amidst our
In the realm of environmental stewardship, our
growth journey. Additionally, we remain commit-
commitment to a sustainable future expands to
ted to understanding and addressing the factors
every aspect of our operations. As a company that contributing to our fluctuation rate, ensuring a
produces green hydrogen, we rely 100% on elec-
stable and engaged workforce that drives our col-
tricity coming from renewable sources. In 2023
lective success. Based on comprehensive feed-
our total energy consumption at our headquarter
back gathered through our 2023 employee survey,
location in Laage, Germany was 0,88897 GWh for we are pleased to report an engagement score
both production and office consumption.
of 72%, a result that validates our organizational
Through our Apex Solarpark, located also in
efforts to being an engaged employer.
Laage, we achieved the generation of 1,511 GWh
In the year 2023, our organization employed an
in 2023. This output not only satisfied our internal
average of 60 individuals, a testament to our
energy needs but also enabled us to distribute
dedication to growth and productivity. 16 of these
surplus energy to our clients or back to the grid,
were female employees, highlighting our proac-
contributing to a more sustainable and resilient
tive efforts to foster gender diversity and inclusion
energy ecosystem. Furthermore in 2023, we used within an industry historically challenged in at-
87128,70 m3 of natural gas for heating purposes.
tracting and retaining female talent. Furthermore,
In the upcoming year, we are looking at enhanc-
we have seen 12 departures in the last year.
ing our environmental management protocols by
embarking on the implementation of a compre-
hensive system aligned with ISO 14001 standards.
Concurrently, we are formulating our climate
strategy, which includes a meticulous assessment
of our scope 1, 2, and 3 emissions, reaffirming our
steadfast commitment to mitigating our envi-
ronmental footprint and advancing sustainability
practices.
BEING AN ENGAGED EMPLOYER AND A
TRUSTWORTHY PARTNER FOR OUR SUPPLI-
ERS
Our employees play a pivotal role not only in
developing our business but also in advancing our
sustainability agenda. By fostering a workplace
culture that prioritizes employee well-being, pro-
fessional development, and inclusivity, we demon-
strate our dedication to nurturing a workforce that
is not only passionate about our mission but also
empowered to drive positive change within our
organization and beyond.
As a company experiencing rapid growth and set
to continue on this trajectory in the coming years,
we acknowledge the dual dynamics of significant
workforce expansion and a notable fluctuation
rate. In response to these evolving dynamics, we
036
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
Occupational health and safety of our employees
holds great importance within our organization, as
such, we carefully monitor key performance indi-
cators related to occupational health and safety,
recognizing their pivotal role in safeguarding our
employees and maintaining a secure work envi-
ronment. In 2023, we had 2 reported injuries that
resulted in a lost time injury rate of 17,1 (calculated
on 1 mil working hours) and 3 absentee days.
In the upcoming year, we're focusing on strength-
ening our employee program by prioritizing devel-
opment opportunities and enhancing our employer
brand. In parallel we implemented an Occupational
Health and Safety Management System aligned
with ISO 45001 standards to ensure the well-being
of our workforce and gained certification in Octo-
ber 2023.
DEEPENING SUPPLY CHAIN INTEGRITY
A significant focus for our future sustainability
GOVERNANCE: STRENGTHENING ETHICAL
endeavors will be the establishment of a robust
FOUNDATIONS AND COMPLIANCE
supply chain compliance management system. In
a voluntary commitment to the principles of the
In the domain of governance, our commitment to
German Supply Chain Act, we recognize the impor- establishing and maintaining the highest stand-
tance of ensuring that our supply chain operations ards of ethical conduct and compliance has been
reflect our values and standards. This commit-
unwavering. This dedication is reflected in the
ment will materialize through the introduction of
significant strides we have made in reinforcing our
various measures designed to foster transparency, governance frameworks, particularly through the
accountability, and ethical practices among our
implementation of our compliance management
suppliers. Initiatives such as the Supplier Code of
system, a robust whistleblower system and com-
Conduct, supplier self-assessments, and compli-
prehensive compliance training for all employees.
ance audits will be instrumental in this process.
The implementation of our whistleblower system
Our approach will be risk-based, concentrating on
marks a significant step forward in enhancing
strategically relevant suppliers to maximize impact our governance structure. While the absence of
and efficiency.
reported compliance incidents since its inception
could be seen in various lights, it's essential to
focus on the system's role in cultivating a secure
and transparent environment for raising concerns.
This initiative reflects our dedication to foster-
ing an organizational culture where integrity and
ethical business conduct are paramount, and
037
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
every employee feels supported and empowered
IMPLEMENTING A COMPREHENSIVE ESG
to voice concerns without fear of reprisal. Our
STRATEGY
emphasis is on the system's accessibility and the
robustness of the processes in place for address-
The implementation of our ESG strategy repre-
ing and investigating concerns, demonstrating our sents a cornerstone of our future sustainability ef-
unwavering commitment to ethical standards and forts. Central to this strategy is the development
accountability.
and execution of a climate strategy that aligns
Understanding the importance of not just estab-
with global efforts to combat climate change.
lishing but also ingraining ethical practices in our
Moreover, we are dedicated to enhancing our
daily operations, we have rolled out mandatory
corporate culture and operational environment
compliance training for all employees. This train-
through a far-reaching employee program. This
ing encompasses critical topics such as anti-
program will introduce 25 individual measures
corruption, bribery, antitrust law, data privacy, and
aimed at improving working conditions, fostering
information security. By covering these areas, we
employee development, and positively influencing
aim to equip our workforce with the knowledge
our corporate culture.
and tools they need to navigate complex legal and
ethical landscapes, thereby ensuring that our busi- ADVANCING INFORMATION SECURITY AND
ness practices not only comply with legal require-
DATA PROTECTION
ments but also exceed them.
Recognizing the evolving landscape of risks and
challenges, particularly in projects related to criti-
OUTLOOK
cal infrastructure, the further development of our
systems in terms of information security and data
FUTURE DIRECTIONS IN SUSTAINABILITY:
protection will be a priority. We are acutely aware
AN INTEGRATED ESG OUTLOOK
of the increased risks and are committed to im-
plementing rigorous measures to safeguard our
As we look to the future, our commitment to
data and information systems. This commitment
sustainability and responsible business practices
not only reflects our dedication to operational
remains steadfast. Our approach is both proac-
excellence but also our responsibility towards our
tive and comprehensive, ensuring that we not
stakeholders and the communities we serve.
only meet but exceed the expectations set forth
by our stakeholders and regulatory frameworks.
LOOKING AHEAD WITH RESPONSIBILITY
In line with this commitment, the forthcoming
AND INNOVATION
period will publish several key ESG policies that
will further solidify our dedication to environmen-
As we move forward, our sustainability journey
tal stewardship, employee well-being, and ethical
will be characterized by a continuous commit-
conduct. These policies will encompass critical
ment to innovation, responsibility, and ethical
areas such as environmental protection, health
business practices. Our proactive approach to
and safety, diversity and inclusion, and the man-
ESG, from enhancing supply chain integrity to
agement of hazardous substances.
implementing strategic sustainability initiatives,
will drive our efforts to create lasting value for
our stakeholders and contribute positively to the
global community.
038
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
The authority and the responsibilities of the
7.
CORPORATE
Supervisory Board and the General Partner are
GOVERNANCE
further set out in the Articles. The Company has
STATEMENT
no diversity policy in place. The company
currently does not have a diversity policy in
The Company recognizes the importance of
place. It operates in an environment that is highly
corporate governance. The corporate governance concentrated in terms of experts in the hydrogen
rules of the company are based on Luxembourg
area, i.e., there is only a small number of
law (the “Law”) and its articles of association (the
specialists who might be engaged for the
“Articles”).
company's business purposes. However, the
company is actively seeking to diversify its
Electronic copies of the Articles can be download- workforce in the future, contingent upon suitable
ed from the website of H2APEX Group SCA:
candidates being available.
https://ir.h2apex.com/fileadmin/downloads/ir/
The Supervisory Board is composed by the
corp_govern/2024-01-18_H2APEX_Group_SCA_
following members:
Koordinierte_Satzung.pdf
•
Roland Lienau (Chairman)
•
Georges Bock
The main characteristics of H2APEX’s internal
•
Florian Schuhbauer
control and risk management systems, as far
•
Thomas Terschluse
as the establishment of financial information is
•
Prof. Dr. Matthias Beller
concerned, can be found under section 5 of this
•
Prof. Dr. Heinz Jörg Fuhrmann
report.
(since January 2024)
THE SUPERVISORY BOARD AND THE
COMMITTEES OF THE SUPERVISORY
GENERAL PARTNER
BOARD
The Supervisory Board is responsible for the
The Supervisory Board has appointed an Audit
supervision of all transactions of the Company
Committee, which is responsible for oversight of
and assumes the function of the audit committee the financial reporting process and audit matters,
of H2APEX. In particular, the Supervisory Board
selection of the independent auditor, and receipt
is to provide opinions on any matters which the
of audit results both internal and external. The
General Partner may submit to it and to resolve
Audit Committee is chaired by Georges Bock.
matters exceeding the scope of the General Part-
ner’s powers, such as related party transactions.
AUDITOR
The members of the Supervisory Board are Ro-
land Lienau (Chairman), Jan Klopp and Georges
BDO Audit, Société Anonyme, Luxembourg, rep-
Bock. The management of the business as such
resented by lead auditor Anke Schelling, has been
is ensured by the General Partner.
the statutory and group auditor of H2APEX Group
SCA and the H2APEX Group, respectively, since
The role of H2APEX Management S.à r.l. as Gen-
the financial year 2022. The auditor is elected by
eral Partner is to manage the Company whereby,
the annual general meeting of the shareholders of
subject to applicable laws and the Articles, the
the Company for the term of office of one year.
General Partner is vested with the broadest
power to act in the name of the Company and to
take any action necessary or useful to fulfil the
Company’s corporate purpose.
039
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
A copy of the Articles can be accessed at https://
8. LUXEMBOURG LAW ON
ir.h2apex.com/fileadmin/downloads/ir/corp_
TAKEOVER BIDS
govern/2024-01-18_H2APEX_Group_SCA_
Koordinierte_Satzung.pdf
The following disclosures are made in accord-
ance with article 11 of the Luxembourg Law of
RIGHTS AND OBLIGATIONS ATTACHED TO
19 May 2006 on takeover bids, as amended (the
THE SHARES
“Takeover Law”):
Each Share entitles the holder thereof to one vote,
SHARES AND STRUCTURE OF SHARE
with the Unlimited Share having a veto right with
CAPITAL
respect to decisions regarding the interests of the
Company vis-à-vis third parties and with respect
The Company’s issued share capital as of 31
to changes to the Articles. All Shares carry equal
December 2023 was set at EUR 311,960.18 and
rights as provided for by Law and as set forth in
represented by 20,073,696 voting shares including
the Articles, including rights to receive dividends (if
one unlimited share kept by H2APEX Manage-
declared) or liquidation proceeds.
ment S.à r.l. As of 19 January 2023, following a
share capital increase, the share capital has been
RESTRICTIONS ON VOTING RIGHTS
increased by EUR 252,424.73 to EUR 564,384.91
and is accordingly represented by 36,359,163 vot-
The Unlimited Share has a veto right in the general
ing shares and one registered unlimited share (the
meeting with respect to resolutions regarding the
“Unlimited Share”) held by the General Partner, with interest of the Company vis-à-vis third parties, and
the Unlimited Share having a veto right in case of
amendments of the Articles.
shareholder resolutions affecting the interest of the
Company vis-à-vis third parties or on the amend-
The Articles do not provide for any voting restric-
ment of the Articles. The Ordinary Shares are
tions. Shareholders’ votes are exercisable by the
freely transferable and admitted to trading on the
persons who are shareholders on the record date
regulated market of the Frankfurt Stock Exchange
as further set out in article 12 of the Articles, and
within the “Prime Standard” segment, whereas the
proxies must be received by the Company a
Unlimited Share is a registered share, and can-
certain time before the date of the relevant
not be freely traded, requiring, for the transfer and
shareholder meeting, as set out in article 11.8 of the
resulting replacement of the General Partner, a
Articles. In accordance with the provisions of the
majority of 85% of the votes validly cast at a
Articles, the General Partner may determine any
general meeting convened for such purpose.
such other conditions to be fulfilled by the share-
holders willing to take part in any meeting of share-
The Company is a partnership limited by shares
holders of the Company in person or by proxy.
(société en commandite par actions (SCA)). The
general partner of the SCA is H2APEX Manage-
The Company recognizes only one holder per
ment S.à r.l., a limited liability company under the
Share. In case a Share is owned by several per-
laws of Luxembourg (société à responsabilité limi-
sons, they must designate a single person to be
tée (S.à r.l.)), the shares in which are held indirectly
considered as the sole owner of such Share in
by the founders of the Active Ownership Group
relation to the Company. The Company is entitled
(AOC) Florian Schuhbauer and Klaus Röhrig (50%
to suspend the exercise of all rights attached to a
each).
Share held by several owners until one owner has
been designated.
040
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
In accordance with article 28 of the Transparency
SHARE TRANSFER RESTRICTIONS
Law the exercise of voting rights related to the
Shares exceeding the fraction that should have
The Ordinary Shares of the Company are freely
been notified under the respective provisions as
transferable, subject to the provisions of the Law
set out above is suspended. The suspension of the and the Articles. The Unlimited Share is only trans-
exercise of voting rights is lifted the moment the
ferable to a new unlimited shareholder liable for all
shareholder makes the relevant notification.
liabilities of the Company which cannot be met out
of the assets of the Company. All rights and obliga-
SPECIAL CONTROL RIGHTS
tions attached to any Share are passed to
any transferee thereof.
The Unlimited Share is held by the General Partner,
who is vested with the broadest power to act in the The transfer of the registered Unlimited Shares
name of the Company and to take any action nec-
becomes effective towards the Company and
essary or useful to fulfil the Company’s corporate
third parties either (i) through a declaration of
purpose, with the exception of the powers reserved transfer recorded in the register of shares, signed
by Law or by the Articles to the general meeting of and dated by the transferor and the transferee or
shareholders.
their representatives, or (ii) upon notification of a
transfer
The following actions and transactions in relation
to, or upon the acceptance of the transfer by
to the Company’s daily management require an
the Company, both being subject to the
express decision of the General Partner:
aforementioned approval of 85% of the votes
validly cast at the general meeting convened for
(i) any listing or public transactions in relation to
such purpose.
the Company or its affiliates; and
(ii) any material change to the business or
AUTHORISATIONS REGARDING OPERATIONS
activities of the Company or its affiliates,
ON SHARES
including entering into material new lines of
business, discontinuing of a material activity or
On 16 May 2019, the general meeting of the
adopting any material change in strategic
shareholders of the Company (at the time in the
direction.
form of an SE) has granted (at the time) the board
of directors, the authorisation to repurchase a
The general meeting of shareholders may only
maximum of shares issued by the Company not
adopt or ratify acts affecting the interests of the
exceeding 10% of the total number of shares
Company vis-à-vis third parties or amend the Arti-
composing the issued share capital at the time of
cles with the consent of the General Partner.
the acquisition in accordance with the conditions
set forth in article 430-15 of the law of 10 August
There are no special control rights attached to the
1915 on commercial companies, as amended, for
Ordinary Shares.
a purchase price to range between the nominal
value per share and ten percent (10%) above the
average listing price per share during the calendar
month preceding the relevant buy-back
transactions, with such authorization remaining
in place for 5 years.
Under the authorised share capital, which has
been approved by the extraordinary shareholder
meeting on 29 June 2022 pursuant to article 5.4
041
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
of the Articles of Association of the Company, the
CONTRACTUAL TRANSFER RESTRICTIONS
General Partner is authorised to issue ordinary
shares to persons and terms as they shall see fit
On the Annual General Meeting on 2 May 2023 the
and specificalls to proceed to such issue without
shareholders approved a Stock Option Program
reserving a preferential right to subscribe to the
amounting to 3,640,000 shares of the Company,
shares issued for the existing shareholders.
with each Stock Option corresponding to one
share.
CONTRACTUAL TRANSFER RESTRICTIONS
As of 31 December 2023, 2,200,000 of Stock
Other than the restrictions set out in the Articles as Options have been already granted as follows:
aforementioned, H2APEX Group SCA is not aware
of any factors, including agreements between
•
1,000,000 Stock Options have been granted to
shareholders, which may result in restrictions on
the Chairman of the Supervisory Board.
the transfer of Shares or voting rights attached
thereto.
As consideration for Roland Lienau’s (Chairman of
the Supervisory Board) contribution to the busi-
SIGNIFICANT SHAREHOLDINGS
ness combination between the Company and
the German APEX Group (in particular, the deal
At 31 December 2023, the following shareholders
sourcing, relationship management, support of
kept 5% at least of the Shares:
the key negotiations and your laborious assistance
throughout the entire M&A process), 660,000
Active Ownership Fund SICAV-SIFSCA
33,63%
Stock Options have been granted to Lien HoldCo
(related party to Roland Lienau). The Exercise Price
APEXAFO GmbH & Co. KG
21,50%
for each of these Options shall be EUR 5.50. These
Stock Options are fully vested as of the acceptance
Eundurance GmbH & Co. KG
8,21%
and must be exercised until 31 December 2027
("Expiry Date").
The direct and indirect ownership of the Company
and, as the case may be, the control over voting
In addition, as consideration for Roland Lienau’s
rights attaching to the Ordinary Shares, in each
continuing to hold the office of chairman of the
case, to the extent it is of at least 5%, is available
supervisory board, 340,000 Stock Options have
at https://ir.h2apex.com/en/voting-meetings/
been granted to Lien HoldCo, too. The Exercise
notification-of-voting-rights under "Voting &
Price for each of these Options shall be EUR 5.50.
Meetings". "Notifications of Voting Rights" and is
These Options shall be considered fully vested on
updated regularly. The information made available
31 December 2025 (accelerated vesting) and
by the Company in that respect is solely based
cannot be exercised before 15 July 2024.
on information provided to the Company by its
shareholders for the purpose of Articles 8, 9, 12
•
1,200,000 Stock Options have been granted to
and 12bis of the Luxembourg Law of 11 January
key employees. The Exercise Price for each of
2008 on transparency requirements for issuers, as
these Options shall be EUR 5.50. These Options
amended.
shall be considered vested over a four-year
period (1/16 for each full quarter).
042
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
APPOINTMENT AND REMOVAL OF THE
POWERS OF THE SUPERVISORY BOARD
GENERAL PARTNER AND SUPERVISORY
BOARD MEMBERS, AMENDMENTS TO THE
The Supervisory Board may be consulted by the
ARTICLES
General Partner of the Company on such mat-
ters as the General Partner may determine and
The General Partner may be removed as general
may authorise any action that may, pursuant to
partner at any time by a decision of the general
Law or regulation or under article 19 of the Arti-
meeting of shareholders approved by a majority
cles, exceed the powers of the General Partner. In
of at least eighty-five percent (85%) of the votes
particular, the Supervisory Board has to sign off
validly cast at such general meeting. The sole
on any decision of the General Partner regarding
General Partner may only be removed if a
any transaction between the General Partner and
replacement general partner is appointed at the
the Company, or between the Company and an
same time.
affiliate of the
General Partner (for the avoidance of doubt,
The appointment and replacement of the
excluding the Company and its subsidiaries) before
members of the Supervisory Board are governed
the General Partner itself brings such matter to the
by Law and article 19 of the Articles. The Super-
vote.
visory Board is composed of a minimum of 3
members which are appointed by the general
EFFECT OF A TAKEOVER BID ON
meeting of shareholders, with one member
SIGNIFICANT AGREEMENTS
being selected from a list of candidates proposed
by Active Ownership Investments Limited. The
The Company is not party to any significant
members may be removed at any time, with or
agreements which terminate upon a change of
without cause, by decision of the general meeting control of the Company following a takeover bid.
of shareholders at a majority of two thirds of the
No other significant agreements are known which
votes validly cast at such meeting.
take effect, alter or terminate in that case.
The Articles are amended in accordance with the
Law and article 14 of the Articles, i.e. the amend-
The Group follows the Frankfurt Stock exchange
ment requires a majority of at least two-thirds of
and insider trading policy in regard to the disclo-
the votes validly cast at a general meeting where
sure of insider dealing, which require all Board
at least half of the share capital present or
Members to notify the Company with regards
represented plus the affirmative vote of the Gen-
to all transaction in the shares in the Company.
eral Partner. In case the quorum is not met, a sec- Following the rules of the notrificaiton, the Com-
ond meeting may be convened in accordance with pany notifes both stock exchanges via appropriate
the Law, which may deliberate regardless of the
regulatory filing.
proportion of the capital represented and at which
resolutions are taken at a majority of at least
AGREEMENTS WITH DIRECTORS AND
two-thirds of the votes validly cast plus the
EMPLOYEES PROVIDING COMPENSATION
affirmative vote of the General Partner.
No agreements exist between H2APEX Group SCA
and the members of its Supervisory Board or its
employees that provide for compensation if the
members of the Supervisory Board or employees
resign or are made redundant without valid reason,
or if their employment ceases due to a takeover
bid for the Company. The remuneration policy
for the Management Board and the Supervisory
Board does not include such compensation, too.
043
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
RESPONSIBILITY
STATEMENT
In accordance with article 3(2) c) of the Trans-
parency Law the undersigned declares that, to the
best of his knowledge, the consolidated financial
statements prepared in accordance with Interna-
tional Financial Reporting Standards as adopted by
the European Union (EU) give a true and fair view
of the assets, liabilities, financial position and profit
or loss of the Company and of the undertakings
included in the consolidation taken as a whole.
The undersigned further declares that, to the
best of his knowledge, the Management Report
includes a fair review of the development and
performance of the business and the position of
the Company and the undertakings included in the
consolidation taken as a whole, together with the
description of the principal risks and uncertainties
they face.
Grevenmacher, 29 April 2024
H2APEX Management S.à r.l. in its capacity as
General Partner
Klaus Röhrig, Jan Klopp
On behalf of the Board of Managers of H2APEX
Management S.à r.l.
H2APEX Group SCA
044
H2APEX GROUP SCA (UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
FORWARD-LOOKING
STATEMENTS
This Annual Report contains statements that refer
to the future. Forward-looking statements are
generally characterized by terms such as “could”,
“will”, “should”, “potential”, “intend”, “expect”, “seek”,
“attempt”, “predict”, “estimate”, “overestimate”, “un-
derestimate”, “believe”, “may”, “forecast”, “continue”,
“plan”, “project” or similar terms and formulations.
Forward-looking statements are based on certain
assumptions, outline future expectations, describe
future plans and strategies, contain predictions
on the earnings and financial position or express
other forward-looking information. The possibili-
ties of predicting results or the actual effects of
forward-looking plans and strategies are limited.
Even though the company assumes that the
expectations expressed by these forward-looking
statements are based on appropriate assumptions,
the actual results and developments may deviate
significantly from the information presented in
the forward-looking statements. These forward-
looking statements are subject to risks and
uncertainties and depend on other factors, based
on which the actual results in future periods may
deviate significantly from the forecast results or
communicated expectations. The company does
not intend, nor shall it undertake, to update the
forward-looking statements on a regular basis, as
these are based solely on the conditions present at
the date of publication.
FINANCIAL CALENDAR
Date
Publication
28 May
Q1 Quarterly Statement 2024
13 June
Annual General Meeting of
H2APEX Group SCA in
Luxembourg
29 August
Interim First Half Year Report 2024
28 November Q3 Quarterly Statement 2024
045
H2APEX GROUP SCA
(UNTIL 18 JANUARY 2024 “EXCEET GROUP SCA”)
All comments within the accompanying notes are in EUR 1,000, if not stated otherwise.
046
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in EUR 1,000)
Notes
31.12.23
31.12.22
ASSETS
Non-current assets
Intangible Assets
6
Property, Plant and equipment
7
Right-of-use assets
7
Investments
8, 9
Deferred tax assets
10
Total non-current assets
Current assets
Inventories
11
Contract assets
12
Trade and other receivables
13
Other loans and receivables
13
Cash and cash equivalents
14
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share Capital
15
Share Premium
15
Retained earnings
15
(29,336 )
(15,962 )
Profit for the year
15
(24,689 )
(12,939 )
(8,020 )
Non-controlling interests
15
Total Equity
(8,017 )
Non-current liabilities
Financial liabilities
16
Financial liabilities bonds
16, 17
Other financial liabilities
16
Other non-current liabilities
18
Deferred tax liabilities
10
Total non-current liabilities
Current liabilities
Financial liabilities
16
Other Financial liabilities
16
Provisions
19
Trade payables
16, 20
Contract Liabilities
21
Other current liabilities
24
Total current liabilities
Total liabilities
Total equity and liabilities
047
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
01.01.2023-
01.01.2022-
(in EUR 1,000)
Notes
31.12.2023
31.12.2022
Revenues
25
Own work capitalized
Other Income
Cost of materials
26
(13,684 )
(3,118 )
Employee benefits expense
27
(6,889 )
(3,746 )
Depreciation, amortisation and impairment expense
6, 7
(5,237 )
(2,080 )
Other expenses
28
(12,732 )
(5,960 )
Financial results
Income/Loss from equity investments
8
(275 )
Income from other securities, interest and similar income
29
Interest and similar expenses
30
(2,456 )
(3,877 )
(2,052 )
(3,364 )
Income taxes
10
(429 )
Profit / (Loss) for the year
(24,635 )
(12,953 )
Total comprehensive income attributable to:
- Owners of the Company
(24,689 )
(12,944 )
- Non-Controlling Interests
(9 )
Profit / (Loss) for the year
(24,635 )
(12,953 )
048
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in EUR 1,000)
2023
2022
Profit/(Loss) for the period
(24,635 )
(12,953 )
Items not to be reclassified to income statement:
Expenses directly offset with equity (related to capital increase)
(1,092 )
Currency translation differences
(1,281 )
Items not to be reclassified to income statement
(2,373 )
Items to be reclassified to income statement:
Expenses directly offset with equity (stock option program)
Items to be reclassified to income statement
Total comprehensive income for the period
(25,062 )
(12,953 )
Attributable to:
Shareholders of the parent company
(25,185 )
(12,956 )
Minority interests
Total comprehensive income for the period
(25,062 )
(12,953 )
049
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOW
audited
audited
(in EUR 1,000)
01.01. - 31.12.2023
01.01. - 31.12.2022
Profit / Loss before income tax
(24,206 )
(13,888 )
Adjustment for non-cash transactions
Amortisation and impairment on intangible and tangible assets
Change of provisions
Financial expenses
Other non-cash expenses
Operating net cash before changes in net working capital
(7,742 )
(6,015 )
Changes to net working capital
- inventories
(3,868 )
- receivables
(3,127 )
(654 )
- accrued income and contract assets
(4,636 )
- liabilities
(1,783 )
(2,688 )
- accrued expenses and contract liabilities
(1,222 )
Tax paid
(429 )
(114 )
Interest paid
(2,159 )
(1,942 )
Cashflows from operating activities
(14,810 )
(15,281 )
Acquisition of subsidiaries, net of cash acquired
Purchase of tangible assets
(11,677 )
(1,592 )
Cash paid for granted loan, net
(2,070 )
Acquisition of financial assets
(154 )
Cashflows from investing activities
(3,662 )
Proceeds/(Repayments) of borrowings
(9,395 )
Proceeds/(Repayments) of financial liabilities
(8,031 )
Cash payments related to increase in majority Stake
Cashflows from financing activities
(17,426 )
Net changes in cash and cash equivalents
(430 )
Cash and cash equivalents at the beginning of the period
Net changes in cash and cash equivalents
(430 )
Effect of exchange rate gains
Cash and cash equivalents at the end of the period
050
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued
"sharehol-
and
Non-
ders
p a i d - i n
con-
of the
share
Capital
Retained
trolling
parent
(in EUR 1,000)
capital
reserves
earnings
Subtotal
interests
company"
BALANCES AT 1 JANUARY 2023
(28,902 )
(8,020 )
(8,017 )
Profit / Loss for the period
(24,689 )
(24,689 )
(24,635 )
Other comprehensive income:
Expenses directly offset with equity (related to capital increase)
(1,092 )
(1,092 )
(1,092 )
Expenses directly offset with equity (stock option program)
Currency translation differences
(1,281 )
(1,281 )
(1,281 )
Effects from reverse acquisition
Effects from change in scope of consolidation
(8 )
(8 )
Capital increase
Changes in capital reserves
BALANCES AT 31 DECEMBER 2023
(54,025 )
BALANCES AT 1 JANUARY 2022
(15,958 )
(1,933 )
(1,921 )
Profit / Loss for the period
(12,944 )
(12,944 )
(9 )
(12,953 )
Changes in share premium convertible debt
BALANCES AT 31 DECEMBER 2022
(28,902 )
(8,020 )
(8,017 )
1. GENERAL INFORMATION
H2APEX Group SCA is established for an unlimited period of time and moved its regis- tered office from
1
7
,
r
ue de Flaxweiler,
L
-
6776
Grevenmacher
to 19, rue de Flaxweiler,L-6776 Grevenmacher (Luxembourg) in November 2023 and is registered with the Register of Commerce and Companies of Luxembourg under the section B number 148.525.
On 18 January 2024 the shareholders decided at the Extraordinary General Meeting(“EGM”), that the former exceet Group SCA will be renamed into H2APEX Group SCA. With the re- naming a common branding with APEX Group is finalized.
The Articles of Association have been modified on 18 January 2024 for the last time.
H2APEX Group SCA is managed by H2APEX Management S.à r.l. (until 18 January 2024 “exceet Group S.à r.l. and hereafter the “General Partner”), a limited liability company under the law of
Luxembourg
(Société à responsabilité limitée (S.à r.l.)), the shares in which are held indirectly by the founders of the Active Own- ership Group (AOC) Florian Schuhbauer and Klaus Roehrig (50% each).
The Group’s purpose is the investing and devel- oping of projects for the decentralized supply of green hydrogen. The Group develops and operates green hydrogen production plants, as well as offers solutions for adjacent areas such as storage, district heating, and mobility. The Group serves customers in
Germany
and Luxembourg.
With the merger agreement between H2APEX and APEX Group, the accounting policies of H2APEX did not change. According IFRS 10 the transaction has been recorded as “reverse acquisition”. Based on this, exceet Group SCA as the legal acquirer has been identified as the acquiree. The reverse acquisition is accounted for using the acquisition method. Conse- quently, the consolidated financial statements of H2APEX represent the continuation of the consolidated financial statements of APEX Group with the exception of the capital struc- ture, which has been adjusted to reflect the capital structure of H2APEX as ultimate parent company. The figures as of 31 December 2022 reflect APEX-Group only.
The acquisition transaction between exceet Group SCA (as from 18 January 2024: H2 APEX Group S.C.A.) and Apex Nova Holding GmbH has been accounted as reverse acquisition.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
51
2. BASIS OF PREPARATION
a STATEMENT
OF COMPLIANCE
The consolidated financial statements of H2APEX are based on the financial statements of the individual group companies drawn up according to uniform accounting principles at 31 December 2023. They were drawn up in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (“IFRS-EU”) as well as the interpretations issued by the IFRS Interpreta- tions Committee (“IFRIC”) applicable to the companies reporting under IFRS and comply with Luxembourg law.
The consolidated financial statements have been prepared under the historical cost.
The consolidated financial statements of the H2APEX as of 31 December 2023 were ap- proved for issuance by the Supervisory Board and the General Partner of H2APEX Group SCAon 25 April 2024.
b GOING CONCERN
The General Partner has considered the Group’s ability to continue as a going concern in the fore- seeable future. The General Partner highlights the financial stability of the Group as well as the expected development of its business which provides predictable cash flows in a regulatory environment. The General Partner adopted the going concern basis in preparing these consoli- dated financial statements.
c
COMPARATIVE
INFORMATION
In accordance with IAS 1, for comparison purposes the information contained in these notes to the consolidated financial statements for 2023 is presented alongside similar infor- mation for 2022. Based on reverse acquisition accounting principles, the comparative infor- mation and figures 2022 refer to APEX Group consolidated financial statements as of 31 December 2022.
ACCOUNTING ESTIMATES
AND KEY ASSUMPTIONS
AND JUDGEMENTS WHEN
APPLYING ACCOUNTING
POLICIES
The General Partner needs to apply relevant ac- counting estimates, judgements and assump- tions based on the Group’s accounting princi- ples when preparing the consolidated financial statements in line with IFRS-EU. A summary of the items requiring a greater degree of judge- ment, or which are more complex, or where the assumptions and estimates made are signifi- cant to the preparation of the consolidated financial statements is as follows:
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
52
IMPAIRMENT OF NON-CURRENT ASSETS (SEE NOTES 2. F)
In accordance with applicable accounting regu- lations, the Group performs annual impairment tests of its cash generating units to identify impairment indicators. These impairment tests imply an estimation of the future evolution of the businesses and of the most appropriate discount rates used in each case. The Group believes that its estimates in this regard are adequate and consistent with the current eco- nomic situation and that they reflect its invest- ment plans and the best available estimate of its future income and expenses and considers that its discount rates adequately reflect the risks corresponding to each cash generating unit.
USEFUL LIFE OF TANGIBLE ASSETS AND IN- TANGIBLE ASSETS (SEE NOTES 2.2 D AND E)
The General Partner determines the estimated useful lives and corresponding depreciation and amortization for its tangible assets and intangible assets. This estimate is based on the expected duration of each of the Group’s tangible assets and intangible assets and the forecast life cycles of the products it sells. The General Partner will modify the depreciation charges for these items when the useful lives are considered to differ from the lives previous- ly estimated and will depreciate or derecognize technically obsolete or non-strategic assets that have been abandoned or sold.
INCOME TAX/ DEFERRED TAX ASSETS (SEE NOTE 2.2 O, NOTE 8)
Due to the legal status of the tax regulation applicable to the Group companies, certain calculations are estimates and the ultimate quantification of the tax is uncertain. Tax is calculated based on Management’s best estimates according to the current status of the tax legislation and taking into account its foreseeable evolution.
When the ultimate taxable income amount is different to the amounts initially recorded, the effect of these differences is recognized in income tax in the year in which they are deter- mined.
PROVISIONS FOR RISKS AND EXPENSES (SEE NOTE 2.2M, NOTE 7)
Despite the fact that these estimates have been made based on the best information available at the close of the year ended 31 December 2023 and until to the end of the subsequent event period, it is possible that events may take place afterwards which will require them to be changed (upwards or downwards) in future years, which would be done on a prospective basis.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
53
e
THE ACCOUNTING
PRINCIPLES APPLIED
TO THE CONSOLIDATED
FINANCIAL STATEMENTS
AT 31 DECEMBER 2023
HAVE BEEN AMENDED
TO COMPLY WITH ALL
NEW AND AMENDED
IFRS STANDARDS AND
INTERPRETATIONS
ADOPTED BY THE EURO-
PEAN UNION (EU) WITH
EFFECTIVE DATE IN 2023
IFRS 17 INSURANCE CONTRACTS
IFRS 17 Insurance Contracts is a comprehen- sive new accounting standard for insurance contracts covering recognition and measure- ment, presentation and disclosure. IFRS 17 replaces IFRS 4 Insurance Contracts; IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance),regardless of the type of entity that issues them, as well as certain guarantees and finan- cial instruments with discretionary participa- tion features. A few scope exceptions will apply.The overall objective of IFRS 17 is to provide acomprehensive accounting model for insurancecontracts that is more useful and consistent for insurers, covering all relevant accounting aspects. IFRS 17 is based on a general model, supplemented by:
•
A specific adaptation for contracts with direct participation features (the variable fee approach)
•
A simplified approach (the premium allocation approach) mainly for short-dura-tion contracts
The new standard had no impact on the Group’s consolidated financial statements.
DEFINITION OF ACCOUNTING ESTIMATES - AMENDMENTS TO IAS 8
The amendments to IAS 8 clarify the distinc- tion between changes in accounting estimates, changes in accounting policies and the correc- tion of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates.
The amendments had no impact on the Group’s consolidated financial statements.
DISCLOSURE OF ACCOUNTING POLICIES - AMENDMENTS TO IAS 1 AND IFRS PRAC- TICE STATEMENT 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclo- sures that are more useful by replacing the requirement for entities to disclose their ‘signifi- cant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the con- cept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Group’s disclosures of accounting policies, but not on the measurement, recognition or pres- entation of any items in the Group’s financial statements.
DEFERRED TAX RELATED TO ASSETS AND LIABILITIES ARISING FROM A SINGLE TRANSACTION – AMENDMENTS TO IAS 12
The amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible tem- porary differences such as leases and decom- missioning liabilities.
The amendments had no impact on the Group’s consolidated financial statements.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
54
INTERNATIONAL TAX REFORM—PILLAR TWO MODEL RULES – AMENDMENTS TO IAS 12
The amendments to IAS 12 have been intro- duced in response to the OECD’s BEPS Pillar Two rules and include:
•
A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional imple- mentation of the Pillar Two model rules; and
•
Disclosure requirements for affected entities to help users of the financial statements better understand an entity’s exposure to Pillar Two income taxes arisingfrom that legislation, particularly before its effective date.
The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining disclosure re- quirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim periods ending on or before 31 December 2023.
The amendments had no impact on the Group’s consolidated financial statements as the Group is not in scope of the Pillar Two model rules as its revenue is less that EUR 750 million/year.
f
STANDARDS AND
INTERPRETATIONS
ISSUED BUT NOT YET
EFFECTIVE
The new and amended standards and interpre- tations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below. The Group in- tends to adopt these new and amended stand- ards and interpretations, if applicable, when they become effective.
LEASE LIABILITY IN A SALE AND LEASE- BACK - AMENDMENTS TO IFRS 16
In September 2022, the IASB issued amend- ments to IFRS 16 to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transac- tion, to ensure the seller-lessee does not recog- nise any amount of the gain or loss that relates to the right of use it retains. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must applied retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. Earlier application is permitted and that fact must be disclosed. The amendments are not expected to have a material impact on the Group’s financial state- ments.
CLASSIFICATION OF LIABILITIES AS CUR- RENT OR NON-CURRENT - AMENDMENTS TO IAS 1
In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for clas- sifying liabilities as current or non-current. The amendments clarify:
• What is meant by a right to defer settlement
•
That a right to defer must exist at the end of the reporting period
•
That classification is unaffected by the likeli- hood that an entity will exercise its deferral right
•
That only if an embedded derivative in a con- vertible liability is itself an equity instrument, would the terms of a liability not impact its classification
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
55
In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is classified as non- current and the entity’s right to defer settle- ment is contingent on compliance with future covenants within twelve months.
The amendments are effective for annual re- porting periods beginning on or after 1 January2024 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice and whether existing loan agreements may require renegotiation.
CLASSIFICATION OF LIABILITIES AS CUR- RENT OR NON-CURRENT - AMENDMENTS TO IAS 1 PRESENTATION OF FINANCIAL STATEMENTS
It aims to clarify its requirements on determin- ing whether a liability is current or non-current, and requires new disclosures for non-current liabilities that are subject to future covenants. The amendments are effective from annual reporting periods beginning on or after 1 Janu- ary 2024. The amendments are not expected to have a material impact on the Group’s financial statement.
SUPPLIER FINANCE ARRANGEMENTS - AMENDMENTS TO IAS 7 AND IFRS 7
In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrange- ments and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk.
The amendments will be effective for annual reporting periods beginning on or after 1 Janu- ary 2024. Early adoption is permitted, but will need to be disclosed. The amendments are not expected to have a material impact on the Group’s financial statement.
LACK OF EXCHANGEABILITY –
AMENDMENTS TO IAS 21
The Effects of Changes in Foreign Exchange Rates require disclosure of information that ena- bles users of financial statements to understand the impact of a currency not being exchange- able. They apply to annual reporting periods beginning on or after 1 January 2025 and can be applied earlier.
The amendments are not expected to have a material impact on the Group’s financial state- ments.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
56
g FUNCTIONAL AND
PRESENTATION
CURRENCY
The figures disclosed in these consolidated financial statements are expressed in Euro (“EUR”), the Group’s functional and presentation currency, rounded off to the nearest thousand, unless otherwise stated.
The following FX rates are assumed:
| 31/12/2023 | Average 2023 | 31/12/2022 | Average 2022 | |
| 1 CHF | 1.08 | 1.03 | 1.02 | 1.00 |
| 1 USD | 0.90 | 0.92 | 0.94 | 0.95 |
Items contained in the subsidiaries’ financial statements are recognized in the currency of the primary economic environment in which the respective subsidiary operates (“Functional Currency”). Each entity within the Group determines its own functional currency. In principle, the functional currencies of the sub- sidiaries included in the consolidated financial statements are their respective local curren- cies. Since exceet Group AG, Switzerland, sold its last remaining subsidiary by end of 2021 and remained without operating business the subsidiary exceet Group AG decided to change its functional currency from Swiss Franc to Euro in 2022.
Transactions in foreign currencies are translated at the exchange rate of the func- tional currency prevailing on the date of the transaction. All resulting foreign exchange differences are recognized in the consolidated income statement.
Monetary items denominated in foreign currencies are translated into the functional currency at the exchange rate prevailing at the balance sheet date. Exchange rate differences are recorded in the consolidated income statement. Non-monetary assets and liabilities are translated at the historical rate.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
57
h SCOPE OF
CONSOLIDATION
The following are the entities included in the parent’s company scope of consolidation:
| Ref. | Company | Country | Year of acquisition / first time con- solidation |
Segment | Activity | Directly controlled by (use numbers from 1st column) |
Share in the capital |
Share of the votes |
| 1 | H2APEX Group SCA | LUX | 2023 | C&O | Holding | N/A | N/A | N/A |
| 2 | exceet Holding S.à r.l. | LUX | 2023 | Holding | Corporate | 1 | 100% | 100% |
| 3 | exceet Group AG | SUI | 2023 | Holding | Corporate | 2 | 100% | 100% |
| 4 | RLG Holding GmbH | GER | 2023 | Holding | Corporate | 1 | 100% | 100% |
| 5 | RLG GmbH & Co.KG | GER | 2023 | Holding | Corporate | 4 | 100% | 100% |
| 6 | Northern Hydrogen Proper- ties GmbH |
GER | 2023 | Holding | Corporate | 5 | 100% | 100% |
| 7 | APEX CapitalGmbH | GER | 2023 | Holding | Corporate | 4 | 100% | 100% |
| 8 | APEX Nova Holding GmbH | GER | 2019 | Holding | Holding | 1 | 100% | 100% |
| 9 | HydroExceed GmbH | GER | 2022 | Storage | Production of pressure tanks | 8 | 100% | 100% |
| 10 | AKROS Energy GmbH | GER | 2020 | Storage | Development of chemical storage solutions |
8 | 100% | 100% |
| 11 | GHS 1 GmbH | GER | 2020 | Own Operations | Hydrogene Powerplant Laage | 8 | 100% | 100% |
| 12 | GHS 2 GmbH | GER | 2020 | Own Operations | Hydrogene Powerplant IPCEI | 8 | 100% | 100% |
| 13 | GHS 3 GmbH | GER | 2020 | Own Operations | Hydrogene Powerplant Laage (extention) |
8 | 100% | 100% |
| 14 | GHS 4 GmbH (*) | GER | 2023 | Own Operations | Hydrogene Powerplant Lubmin | 8 | 100% | 100% |
| 15 | APEX Energy GmbH | GER | 2006 | Project Developmet | Customer Projects | 8 | 100% | 100% |
| 16 | HYSENC Entwicklungsgesell- schaft mbH |
GER | 2021 | Own Operations | Hydrogene Powerplant control software |
15 | 100% | 100% |
| 17 | Plant Engineering GmbH | GER | 2023 | Project Developmet | Customer Projects | 15 | 90% | 90% |
* Still registered as Titan 128.VVG GmbH (renamed after balance sheet date)
The following are the changes the Group’s scope of consolidation:
| Ref. | Ref. | Share in the capital |
Share of the votes |
Company | Share in the capital |
Share of the votes |
| Year of acquisition / first time consolidation 2022 and before | ||||||
| 9 | HydroExceed GmbH | 100% | 100% | HydroExceed GmbH | 86% | 86% |
| 10 | AKROS Energy GmbH | 100% | 100% | H2 Automations GmbH | 100% | 100% |
| 11 | GHS 1 GmbH | 100% | 100% | GHS 1 GmbH & Co. KG | 100% | 100% |
| 12 | GHS 2 GmbH | 100% | 100% | GHS 2 GmbH & Co. KG | 100% | 100% |
| 13 | GHS 3 GmbH | 100% | 100% | GHS Verwaltungs GmbH | 100% | 100% |
| 15 | APEX Energy GmbH | 100% | 100% | APEX Energy Teterow GmbH | 100% | 100% |
| 16 | HYSENC Entwicklungsgesellschaft mbH | 100% | 100% | HYSENC Entwicklungsgesellschaft mbH | 51% | 51% |
| Year of acquisition / first time consolidation 2023 | ||||||
| 1 | H2APEX Group SCA | N/A | N/A | N/A | N/A | N/A |
| 2 | exceet Holding S.à r.l. | 100% | 100% | N/A | N/A | N/A |
| 3 | exceet Group AG | 100% | 100% | N/A | N/A | N/A |
| 4 | RLG Holding GmbH | 100% | 100% | N/A | N/A | N/A |
| 5 | RLG GmbH & Co.KG | 100% | 100% | N/A | N/A | N/A |
| 6 | Northern Hydrogen Properties GmbH | 100% | 100% | N/A | N/A | N/A |
| 7 | APEX CapitalGmbH | 100% | 100% | N/A | N/A | N/A |
| 8 | APEX Nova Holding GmbH | 100% | 100% | N/A | N/A | N/A |
| 14 | GHS 4 GmbH | 100% | 100% | N/A | N/A | N/A |
| 17 | Plant Engineering GmbH | 90% | 90% | N/A | N/A | N/A |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
58
i
ACQUISITION OF BUSINESS
i1 REVERSE ACQUISITION
OF EXCEET GROUP S.C.A.
The merger agreement between exceet Group S.C.A. (as from 18 January 2024: “H2APEX Group S.C.A.”) and Apex Nova Holding GmbH has been accounted as reverse acquisition: On 19 January 2023, exceet Group S.C.A. acquired 100 % of the voting shares of APEX Nova Hold-ing GmbH, an unlisted company with registeredoffice in Rostock, Germany, which is a one of the leading German providers for green hydro- gen projects and business. The objective of the acquisition is to participate in the expected growth for this market.
Under the merger agreement, exceet Group S.C.A. agreed (i) to acquire 20.8% of the APEX shares for a cash consideration in the amount of EUR 24,999,802 and (ii) to exchange the remaining 79.2% shares in Apex for shares in exceet by way of a contribution in kind (the “Transaction”). For this purpose, exceet Group S.C.A. agreed to utilise its authorised capital and increase its share capital from EUR 311,960.18 by EUR 252,424.73 to EUR 564,384.91 by issuing 16,285,467 new shares to the shareholders of APEX.
Based on this Transaction, exceet Group S.C.A. has been identified as acquired company fromaccounting perspective (“accounting acquiree”)and the legal subsidiary APEX Nova Holding GmbH is identified as accounting acquirer as by exchanging shares, APEX Nova Holding GmbH obtained the control over exceet Group S.C.A.. We considered the fact that the former shareholders of APEX Nova Holding GmbH received the largest portion of the voting rights in the new combined entity and that the relative
size of APEX Nova Holding GmbH is signifi- cantly greater than that of exceet Group S.C.A. In addition, members of the management of APEX Nova Holding GmbH were nominated to the governing body of the combined entity as well the operative management is led by the former management of APEX Nova Holding GmbH.
The partial consideration transfer in cash does not to prevent the accounting treatment as reverse acquisition as the 79.2% of shares in Apex were exchanged against shares exceet Group S.C.A. which is the majority of the con- sideration of this Transaction.
The accounting acquiree exceet Group S.C.A. is not considered to be a business in accord- ance with IFRS 3.B7 as its activities mainly consisted of managing cash balances as part of its holding activity (‘listed shell company’). Therefore, IFRS 3 does not apply and following the IFRIC March 2023 agenda decision, man- agement applied IAS 8 “Accounting Policies, Changes in Accounting Policies and Errors” to define this Transaction as a reverse acquisition in analogy of IFRS 3 and in accordance with IFRS 10. The reverse acquisition is accounted for using the acquisition method. The transac- tion price is allocated to the identifiable as- sets and liabilities of the listed shell company on the basis of their fair values at the date of purchase. Any excess of the transaction price over the fair value of the assets and liabilities of the listed shell company represents a cost for obtaining a listing. This is accounted for as an expense as it does not represent an asset under IFRS, and no goodwill is recognised.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
59
For purposes of the Transaction, exceet Group S.C.A. was valued with its net cash position of approx. EUR 117,100,000 (corresponding to EUR 5.83 per exceet share) and the APEX Group with an equity value of approx. EUR 120,000,000. Acquisition related expenses amounted to KEUR 2,993 (accrued already in 2022) and were fully expensed as other operat- ing expenses. Share issuance costs of KEUR 307 were recorded in equity.
Additionally, this Transaction was completed by a share-based payment transaction. The equity-settled transaction has been measured at fair value of the services provided by Lien Management & Holding GmbH, which is con- trolled by Roland Lienau, Chairman of the su- pervisory board, that received in July 2023 fully vested 660,000 stock options at an exercise price of EUR 5.50. This was a compensation for his contribution to the business combina- tion, in particular deal sourcing and assistance throughout M&A process.
From the date of the acquisition, the former exceet Group S.C.A. contributed KEUR 0 to the revenues and expenses of KEUR 4,169 to the EBITDA of the Group.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
60
i2 BUSINESS COMBINATIONS
| (in EUR 1,000) | APEX Capital and RLG GmbH & Co.KG |
Plant Engineering GmbH |
| Current assets | ||
| Cash and cash equivalents | 10 | 185 |
| Trade receivables | 32 | 249 |
| Contracted assets | 0 | 105 |
| Prepaid expenses, accrued income, other assets | 169 | 272 |
| Total current assets | 210 | 811 |
| Non-current assets | ||
| Property, plants & equipment | 12,730 | 64 |
| Right of use assets | 0 | 0 |
| Intangible assets | 0 | 1 |
| Total non-current assets | 12,730 | 65 |
| Total Assets | 12,940 | 876 |
| Current liabilities | ||
| Trade payables | 918 | 41 |
| Accrued expenses, deferred income and other liabilities | 12,021 | 19 |
| Provisions | 0 | 160 |
| Total current liabilities | 12,940 | 220 |
| Non-current liabilities | ||
| Contract liabilities | 0 | 31 |
| contract liabilities | 0 | 31 |
| Total liabilities | 12,939 | 250 |
| Total identifiable net assets at fair value | 1 | 625 |
| 90% Plant Engineering GmbH | 563 | |
| Goodwill arising on the acquisition | 0 | 3,746 |
| Purchase consideration transferred | 1 | 4,309 |
| Analysis of cash flows from the acquisition | ||
| Cash acquired with the subsidiary | 10 | 185 |
| Cash paid | 1 | 4,309 |
| Net cash inflow (included in Cash flow from investing activities) | 9 | (4,124) |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
61
APEX CAPITAL GMBH AND RLG
GMBH & CO. KG (RLG GROUP):
The acquisition is accounted for using the acquisition method. Goodwill is recognised as an asset from the acquisition date and is measured as the excess of the consideration transferred over the interest in the net fair valueof the identifiable net assets acquired.
The “trade receivables” relate to operational business as property company.
The position “prepaid expenses, accrued income and other assets” mainly comprises accruals associated with the ownership and leasing of property.
The position “property, plant and equipment” includes land in an amount of KEUR 5,441 and buildings in an amount of KEUR 7,289. The difference between acquisition costs and book value of net assets acquired amounted to KEUR 473 and has been allocated to the book value of land to come to the fair value.
“Trade payables” include liabilities from operational business.
“Accrued expenses, deferred income and other liabilities include operative costs, which refer to 2022 and have not been paid at year end 2022.
From the date of the acquisition, the RLG Group contributed KEUR 0 to the revenues and KEUR minus 36 to the EBITDA of the Group.
Acquisition-related costs of EUR 0 were recorded as other operating expenses in financial year 2023.
Acquisition of the APEX Capital GmbH and RLG GmbH & Co. KG
On January 19, 2023, exceet Group SCA acquired the shares in APEX Capital GmbH and RLG GmbH & Co. KG. RLG GmbH & Co. KG business is to invest in properties, which are rented to affiliates or third parties companies. APEX Capital GmbH is the General Partner of RLG GmbH & Co KG.
The purchase price allocation has been defined still as preliminary.
The consideration transferred for 100% in both companies amounted to EUR 1,402.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
62
PLANT ENGINEERING GMBH:
The acquisition is accounted for using the acquisition method. Goodwill is recognised as an asset from the acquisition date and is measured as the excess of the consideration transferred over the interest in the fair value of the identifiable net assets acquired.
The “trade receivables” with KEUR 249 refer to operational business.
The position “prepaid expenses, accrued in- come and other assets” with KEUR 272 mainly comprises clearing accounts associated with the former main shareholder and tax receiva- bles.
Contract assets with KEUR 105 include per- formed work related to customer contracts which are not yet invoiced. The contracted assets are valued with fair value.
The position “property, plant and equipment” includes KEUR 64 for office and IT equipment and intangibles, KEUR 1 for software licenses. The book values represent the fair values.
“Trade payables” include KEUR 41 from operations.
“Accrued expenses, deferred income and other liabilities” with KEUR 19 mainly include receivables due to VAT and operative costs, which refer to 2022 and have been not paid yet.
“Provisions” with KEUR 160 are due to expens- es which refer to 2022 and have been not paid yet.
From the date of the acquisition, Plant Engi- neering GmbH contributed KEUR 166 to the revenues and minus KEUR 130 to the EBITDA. Since Plant Engineering GmbH has been already consolidated since January 2023, the revenues would have been increased by KEUR 3,085 and the EBITDA impact would have been minus KEUR 640.
Acquisition-related costs of EUR 109 thousand were recorded as other operating expenses in financial year 2023.
Acquisition of the Plant Engineering GmbH With share purchase agreement as of May 16, 2023, APEX Energy GmbH acquired 90% of the shares in Plant Engineering GmbH, Leutesdorf. Plant engineering is an engineering and con- sulting company skilled in the development and the design of energy plants.
The purchase price allocation is preliminary. Currently, the difference between consideration paid and book value of net assets is accounted as goodwill. Especially the valuation of intan- gible assets as customer list, technology and backlog1 is still in progress.
The consideration transferred for 90% amount- ed to EUR 4,308 thousand.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
63
2.2 MATERIAL
ACCOUNTING POLICIES
a SCOPE OF
CONSOLIDATION
Investments in subsidiaries are fully consoli- dated. These are entities over which H2APEX di- rectly or indirectly exercises control. The Group controls an entity when the Group is exposed to, or has rights to receive, variable returns as a result of its involvement in it and has the ability to influence such return through the power it exercises over the entity.
Group companies acquired during the year are included in the consolidation from the date on which control over the acquired entity is trans- ferred to the Group, and are excluded from the consolidation as of the date the Group ceases tohave control over the entity. For the consolidatedentities, 100% of assets, liabilities, income and expenses are included. Intercompany balances and transactions are eliminated in full.
When a Group company loses control of a Group company, their assets and liabilities and any minority interest that may be held are derecog- nized. The resulting gains or losses are recog- nized in the consolidated statement of compre- hensive income. Shareholdings in subsidiaries for which control is no longer held are measuredat fair value on the date on which control was lost. Gains or losses on purchases of minority interests in companies in which a controlling interest is held, as well as sales of shareholdingswithout loss of control, are charged or credited to reserves.
The subsidiaries’ accounting policies have been adapted to Group accounting policies for transactions and other events in similar circum- stances.
b BUSINESS
COMBINATIONS
The Group accounts for business combinations under the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group.
The cost of an acquisition is measured as the aggregate of the consideration transferred, including contingent consideration, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. Acquisi- tion costs incurred are expensed and included in other operating expense in the consolidated income statement.
When the Group acquires a business, it assess- es the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, econom- ic circumstances and pertinent conditions as at the acquisition date. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
64
The Group recognizes the assets acquired, the liabilities assumed and any non-controlling interest at their acquisition-date fair value. The excess, if any, between the business combina- tion cost, plus the value given to non-controlling interests, and the value of net assets acquired and liabilities assumed, is recognized as good- will.
Goodwill is carried at cost less accumulated impairment losses, if any. The Group tests good- will for impairment at least annually and when- ever there are indications that goodwill may be impaired. Goodwill is allocated to the cash-gen- erating units. Such units represent the smallest groups of assets that generate cash inflows from continuing use that are largely independent of the cash flows of other assets or CGUs.
In a reverse acquisition, the company issuing securities (the legal acquirer) is identified as the acquired company for accounting purposes. Theentity whose equity shares were acquired (the legally acquired entity) must be the acquirer for accounting purposes in order for this transac- tion to be considered a reverse acquisition.
In a reverse business acquisition, the balance sheet acquirer generally does not spend any consideration for the acquired company. In- stead, the company acquired on the balance sheet usually issues its equity shares to the owners of the balance sheet acquirer.
The consolidated financial statements show a continuation of the financial statements of the legal subsidiary with the exception of the capitalstructure. Consolidated financial statements prepared after a reverse company acquisition reflect the equity of the legal parent company (the company acquired on the balance sheet). Comparative information presented in these consolidated financial statements is also ad- justed retrospectively to reflect the legal equity of the legal parent (acquired entity).
In addition, it applies that:
•
the assets and liabilities of the legal sub- sidiary (the balance sheet acquirer) were recognized and valued at their book values valid before the merger;
•
the assets and liabilities of the legal par- ent company (the acquired company) have been recognized and measured in accord- ance with this IFRS.
c
FAIR VALUE
MEASUREMENT
The Group measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transac- tion to sell the asset or transfer the liability takes place either:
•
In the principal market for the asset or liability
Or
•
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is meas- ured using the assumptions that market par- ticipants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
65
it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observableinputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
•
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
•
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the consolidated financial statements at fair value on a recurring basis, the Group determineswhether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.
d INTANGIBLE
ASSETS
INITIAL RECOGNITION
Intangible assets acquired separately are meas- ured on initial recognition at cost or deemed cost. Expenses for research activities are recog- nized through the consolidated income state- ment in the period in which they are incurred. Development expenditures on the individual project are recognized as intangible assets from the date the group can demonstrate:
•
the product or process is technically and commercially feasible so that the asset will be available for use or sale
•
the Group has the ability and intention to use or sell the asset.
•
a future economic benefit is probable.
•
the Group has sufficient resources to com- plete the development and
•
the development costs can be measured reliably.
The costs capitalized include the cost of materi- als, direct labour and other directly attributable expenditure that serves to prepare the asset for use. Such capitalized costs are included in line item other intangible assets as internally gener- ated intangible assets.
Other development costs are expensed as incurred.
SUBSEQUENT MEASUREMENTS
After initial recognition, intangible assets are carried at cost less any accumulated amortiza- tion and any impairment loss.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
66
AMORTIZATION
The useful lives of intangible assets are as- sessed by the General Partner of the Group as either finite or indefinite.
Intangible assets with finite lives are amortized over the expected useful economic life and assessed for impairment whenever there is an indication that the other intangible asset may be impaired or at least annually. When there are no foreseeable limits to the period over the as- sets for generating net cash inflows, the assets are recognized assets with indefinite use life. Those assets are not amortized but tested for impairment loss at least annually.
The estimated useful life for current and com- parative year as following:
| Patents, licenses, trademarks and similar rights |
Computer software |
|
| Useful lifes | Finite | Finite |
| Amortisation method used | Amortised on a straight-line | Amortised on a straight-line |
| basis over the period of use | basis over the period of use | |
| Internally generated or acquired | Acquired | Acquired |
| Amortisation period | 8-10 years | 8-10 years |
Intangible assets under development are reported at cost and are allocated to intangible assets when they are completed and put into operational use, from which point onwards they are depreciated.
The Group reviews the residual value, useful life and amortization method of intangible assets at each financial year end. Changes to initially established criteria are accounted for as a change in accounting estimates.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
67
e
PROPERTY, PLANT
AND EQUIPMENT
INITIAL RECOGNITION
Property, plant and equipment are recognized at cost or deemed cost. Production costs and interests which related to the financing of acquisitions of tangible assets are capitalized in the consolidated financial statements.
SUBSEQUENT MEASUREMENT
After initial recognition of property, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses, only the costs incurred which increase capacity or productivity or which lengthen the useful life of the asset are capitalized. The carrying amount of parts that are replaced is derecognized. Costs of day-to-day servicing are recognized in consolidated statement of comprehensive income as incurred.
DEPRECIATION
Property, plant and equipment are depreciated by allocating the depreciable amount of the asset on a systematic basis over its useful life. The depreciable amount is the cost of an asset less its residual value.
The following useful lifes are assumed:
| Depreciation Method |
Estimated years of useful life |
|
| Buildings | Straight-line | 25 -40 |
| Technical installations and machinery | Straight-line | 5 - 20 |
| Other installations, equipment and furniture | Straight-line | 4 - 12 |
Assets under construction are reported at cost and are allocated to tangible assets when they are completed and put into operational use, from which point onwards they are depreciated.
The Group reviews residual values, useful lifes and depreciation methods on a regularly basis or by triggering events. Changes to initially established criteria are accounted for as a change in account- ing estimates.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
68
f
LEASES
The Group leases various offices, equipment and cars. Rental contracts are typically agreed for fixed periods of 5 years, but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased property assets may not be used as security for borrowing purposes.
Leases are recognized as a right-of-use as- set and a corresponding liability at the date at which the leases asset is available for use by the Group. The finance cost is charged to con- solidated statement of comprehensive income over the lease period so as to produce a con- stant periodic rate of interest on the remaining balance of the liability for each period.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value ofthe following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
•
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incrementalborrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
To determine the incremental borrowing rate, the Group:
•
where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received
•
makes adjustments specific to the lease, e.g. term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the leases liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between liability and finance cost. The finance cost is charged to profit or loss over the lease period.
Right-of-use assets are measured at cost compris- ing the following:
•
the amount of the initial measurement of lease liability
•
any lease payments made at or before the commencement date less any lease incen- tives received
•
any initial direct costs, and
•
restoration costs.
Right-of-use assets are depreciated on a straight- line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
•
Motor vehicles and other equipment 3 to 4 years
•
Office Space 2 to 5 years
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
69
The depreciable amount of a leased asset is allo- cated to each accounting period during the periodof expected use on a systematic basis consistentwith the depreciation policy for owned assets. If there is reasonable certainty that the Group will obtain ownership by the end of the lease term, the period of expected use is the useful life of theasset.
g IMPAIRMENT OF
NON-FINANCIAL ASSETS
The Group evaluates whether there are in- dications of possible impairment losses on non-financial assets subject to amortization or depreciation to verify whether the carrying amount of these assets exceeds the recover- able amount.
The Group tests intangible assets not yet avail- able for use for impairment at least annually, irrespective of whether there is any indication that the assets may be impaired.
The recoverable amount of assets is the higher of fair value less costs of retirement or disposaland value in use.
Negative differences arising from compari- son of carrying amounts of assets with their recoverable amounts are expensed, except in those cases in which the non-current asset is recorded at the revalued amount.
Recoverable amount is determined for each individual asset, unless the asset does not gen- erate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is deter- mined for the cash-generating unit (“CGU”) to which the asset belongs.
At the end of each reporting period the Group assesses whether there is any indication that an impairment loss recognized in prior periods may no longer exist or may have decreased. Impair- ments losses on goodwill may not be reversed. Impairment losses on assets other than good- will are reversed if, and only if, there has been a change in the estimates used to calculate the asset’s recoverable amount.
A reversal of an impairment loss is recognized in the consolidated statement of comprehensive income except when the non-current assets is recorded at its restated amount. The increase of the carrying amount of an asset attributable to a reversal of an impairment loss may not exceed the carrying amount that would have been deter- mined, net of depreciation or amortization, had no impairment loss been recognized.
h
FINANCIAL
INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments in the form of fi- nancial assets and financial liabilities are gener- ally presented separately. Financial instruments are recognized as soon as the Group becomes a party to the contractual provisions of the financial instrument. In the case of purchases or sales of financial assets through the regular market, H2APEX uses the transaction date as the date of initial recognition or derecognition. Upon initial recognition, financial instruments are measured at fair value.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
70
FINANCIAL ASSETS
Classification and measurement
The Group classifies and measures its financial assets, both current and non-current,as follows:
Assets at amortized cost
This category includes the financial assets that meet the following conditions:
•
The asset is held within the framework of a business model whose purpose is to hold financial assets in order to obtain contractual cash flows, and
•
The contractual conditions of the financial asset give rise, on specified dates, to cashflows constituting solely payments of principal plus interest on the outstanding principle.
These assets are initially measured at fair value, plus any transaction costs, and then sub- sequently at amortized cost. The interest ac- crued is taken to the consolidated statement of comprehensive income applying the effectiveinterest method. Nonetheless, financial assetsfalling due one year or less without a contrac-tual interest rate are initially and subsequentlymeasured at their nominal amount, if the effectof upgrading the cash flows is insignificant.
Impairment of financial assets at amortized cost
The Group recognizes value adjustments relat- ing to expected credit losses on financial as-sets measured at amortized cost and contractassets.
The Group applies the simplified approach of calculating the expected credit loss of its finan- cial assets.
The simplified approach considers expected credit losses for lifetime plus any additional provisioning if additional indicators for credit losses were indicated. The Group assumes that the credit risk of a financial instrument has not increased significantly since its initial recognition if the financial instrument has a low credit risk at the closing date.
(i) Definition of default
The group considers the following as constitut- ing an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
•
When there is a breach of financial cov- enants by the debtor
•
Information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, includ- ing the group, in full (without taking into account any collateral held by the group).
Irrespective of the above analysis, the group considers that default has occurred when a financial asset is more than 180 days past due unless the group has reasonable and support- able information to demonstrate that a more lagging default criterion is more appropriate.
(ii) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:
•
Significant financial difficulty of the issuer or the borrower
•
A breach of contract, such as a default or past due event (see (i) above)
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
71
The lender(s) of the borrower, for economic or contractual reasons relating to the bor- rower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider
•
It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation
•
The disappearance of an active market for that financial asset because of financial difficulties
(iii) Write-off policy
The group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or hasentered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over two years past due, whichever oc- curs sooner. Financial assets written off may still be subject to enforcement activities underthe group’s recovery procedures, taking into account legal advice where appropriate. Any re- coveries made are recognised in profit or loss.
Impairment losses and reversals of impair- ment losses on trade receivables and contractassets are recognized in depreciation, amortisa- tion and impairment expenses in the consoli-dated statement of comprehensive income.Impairment losses and reversals of impairmentlosses on other financial assets at amortized cost are recognized in depreciation, amortisation and impairment expenses the consolidated statement of comprehensive income.
SUBSEQUENT MEASUREMENT
Derecognition of financial assets
Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or have been transferred and substantially all the risks and rewards of ownership are considered to have been transferred.
On derecognition of a financial asset, the differ- ence between the carrying amount and the sum of the consideration received, net of transaction costs, including any new asset ob- tained less any new liability assumed and any cumulative gain or loss deferred in other comprehensive income, is recognized in consoli- dated statement of comprehensive income.
FINANCIAL LIABILITIES
Classification and measurement of financial li- abilities
Financial liabilities are classified at initial recog- nition and initially measured at fair value, plus or minus any transaction costs, and then sub- sequently at amortized cost using the effective interest rate method.
Financial liabilities are classified, at initial recogni- tion, as financial liabilities at fair value through profit or loss, loans and borrowings, payables as appropriate. The Group determines the classifica- tion of its financial liabilities at initial recognition.
Subsequent measurement
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised aswell as through the EIR amortisation process.
Derecognition of financial liabilities
Financial liabilities are derecognized where they are extinguished, i.e., when the obligation deriv- ing from the liability has been discharged or cancelled, or it has expired. When there is an exchange of debt instruments between the Group and the counterparty, provided that they have substantially different conditions, the original financial liability is eliminated, and the new finan- cial liability is recognized. Similarly, any substan- tial modification to the current conditions affect- ing a financial liability is recognized.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
72
i
CONTRACT BALANCES
CONTRACT ASSETS
A contract asset is initially recognised for rev- enue earned from customer projects because the receipt of consideration is conditional on successful completion of the project. Upon completion of the project and acceptance by the customer, the amount recognised as con- tract assets is reclassified to trade receivables.
CONTRACT LIABILITIES
Contract liabilities are recognized in relation to prepayments of customers where the delivery of the related service will happen over time.
j
GOVERNMENT GRANTS
Government grants are recognized at fair value if there is reasonable assurance that the grantwill be received, and group will comply with all attached conditions. Government grants include short allowance for the employee and non-repayable subsidy granted by the govern- ment whose purpose is to finance intangible assets.
Grants awarded for the purchase or the produc- tion of fixed assets (grants related to assets) are generally offset against the acquisition or production costs of the respective assets and reduce future depreciations accordingly. Grants awarded for other than non-current assets (grants related to income) are reported in the consolidated statements of comprehensive income under the same functional area as the corresponding expenses. They are recognized as income over the periods necessary to match them on a systematic basis to the costs that are intended to be compensated. Government grants for future expenses are recorded as deferred income.
In the financial year government grants are recognized in other income KEUR 484 (2022: KEUR 238) using the income approach.
k
EMPLOYEE BENEFITS
DEFINED CONTRIBUTION PLANS
The Group recognizes the contributions payable to a defined contribution plan in exchange for a service when an employee has rendered service to the Company. The amount of the contribu- tions accrued is recognized as an employee benefits expense.
SHORT-TERM EMPLOYEE BENEFITS
Short-term employee benefits are different from termination benefits that are expected to be set- tled in full before 12 months after the end of the reporting period in which the employees render the related services.
The Group recognizes the expected cost of profit-sharing and bonus plans when it has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made.
REDUNDANCY INDEMNITIES
Pursuant to current employment law, in certain circumstances the Group is liable to pay redun- dancy indemnities to employees whose services are discontinued.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
73
l
SHARE-BASED
PAYMENTS
Under the Stock Option Program (“SOP”) 2023, stock options are granted in 2023 to the following groups of participants:
i.
member of the supervisory board of the Company;
ii.
members of the management of affiliated companies; and
iii. key employees of affiliated companies
Stock options granted to a participant will vest in instalments over a four-year vesting periodas follows: The stock options shall vest by 1/16for each full quarter of a year following thegrant date subject to the condition that a periodof twelve (12) months following the grant date (the “cliff period”) has expired (each date on which stock options vest, a “vesting date”). TheCompany granted 1,740,000 stock options in 2023 under these terms and conditions.
Any time period in which the participant does not work for H2APEX Group and H2APEX Group does not owe the whole compensation agreed under the employment or service agree-ment to the participant, as applicable (e.g., inthe case of extended periods of illness, uncom-pensated release from duty to work, parental leave, excluding for the avoidance of doubt, ma- ternity leave) shall suspend the vesting of stock options for that time period and the four-year vesting period will be extended accordingly.
Additionally, the Company granted 660,000 stock options to the Chairman of the Supervi- sory Board, which have been vested immedi- ately at grant date. These stock options have to be exercised until 31 December 2027.
The exercise price for each of the granted stock options shall be EUR 5.50.
The fair value of the stock options is estimated at the grant date using the binomial option pric- ing model, taking into account the terms and conditions on which the stock options were granted. The stock options can be exercised after the vesting period. There are no cash set- tlement alternatives. The Group does not have a past practice of cash settlement for these stock options.
The Group accounts for the stock options as an equity-settled plan. The grant date fair value of equity-settled share-based payment arrange- ments granted to employees is recognized as an expense with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true- up for differences between expected and actual outcomes.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
74
m PROVISIONS
Provisions are recognized when the Group has a present obligation, legal or constructive arising of from a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obliga- tion, and a reliable estimate can be made of theamount of the obligation.
The amounts recognized in the consolidated statement of financial position as a provision is the best estimate of the expenditure requiredto settle the present obligation at the end of thereporting period, taking into account all risks and uncertainties surrounding the amount to be recognized as a provision and, where the time value of money is material, the financial effect of discounting provided that the expenditure tobe made each period can be reliably estimated.The discount rate is determined before taxes, considering money temporary value, as well asthe specific risks that have not been consid- ered in the future flows related to the provision at each closing date.
Single obligations are valued by the individual outcome that is most probable.
If it is not probable that an outflow of resources will be required to settle an obligation, the pro-vision is reversed. The reversal is made againstthe Consolidated statement of comprehensive income items in which the corresponding expense was recorded and the excess, if any, isrecognized under other income.
Contingent liabilities are possible obligations arising from past events and whose existence will be confirmed only upon the occurrence or non-occurrence of one or more uncertain fu- ture events not wholly within the control of the Group. Contingent liabilities are not recognizedbut only disclosed in the notes to the consoli- dated financial statements.
n
RECOGNITION
OF REVENUE
The Group is in the business of providing ser- vices and products in the field of regenerative energies. Revenue from contract with custom- ers is recognized when control of the goods and project services are transferred to the custom- ers. The Group assesses whether a transaction is comprised of different components, in order to apply the appropriate income recognition criteria to each one. Revenue from providing service and selling goods are recognized at the fair value of the consideration received or receiv- able.
REVENUE FROM PROJECT DEVELOPMENT
The Group recognises revenue from project development over time any other use of the developed project would burden the contrac- tor with considerable losses, no alternative use outside of the intended use can be attested for the service. The agreements made in project development contracts guarantee the Group ap- propriate remuneration for the services rendered in each case.
The Group uses an input method in measuring progress input-orientated according to the cost- to-cost method. The cost-oriented approach to performance measurement is based on the ratio of the fulfilment costs incurred up to the assess- ment date to the total costs expected for the provision of the services owed.
The Group regularly checks if the contract is onerous and make provision where appropriate.
REVENUE FROM OWN OPERATIONS
Revenue from own operations is recognized at the point in time when the delivery is made to the customer.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
75
o
BORROWING COSTS
Borrowing cost directly attributable to the ac- quisition, construction or production of assets that necessarily takes a substantial period to get ready for its intended use are capitalized aspart of the cost of the assets. All other borrow-ing cost are expensed in the period in which they occur.
p
INCOME TAX
The year’s income tax expense or benefit comprises current tax and deferred tax. Current and deferred tax are recognized as income or an expense and included in the Consolidated statement of comprehensive income, except tothe extent that the tax arises from a transac- tion or event which is recognized, in the same or a different year, directly in equity, or from a business combination.
The Group recognizes deductions for invest- ment by applying the recognition and meas- urement criteria of the assets for current or deferred tax, unless they have the nature of a grant. If the deductions have the nature of a grant, they are recognized, presented and val- ued by applying the corresponding accounting policy. For these purposes, the Group consid- ers that the deductions whose application is independent of the existence of a positive integral fee and that have substantive opera- tional conditions additional to the realization or maintenance of the investment are subsidized.
CURRENT TAX
Current income tax assets and liabilities are measured at the amount expected to be recov- ered from or paid to tax authorities using the tax rates and tax laws enacted or substantially enacted at the reporting date where the consol- idated entity is domiciled. Management periodi- cally evaluates positions taken in tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
The Companies of the H2APEX Group are sub- ject to German income tax respectively Luxem- bourg income tax.
DEFERRED TAX
Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are the amounts pay- able in the future as income tax related to taxable temporary differences while deferred tax assets are the amounts to be recovered as income tax due to the existence of deduct- ible temporary differences, taxable negative tax bases or deductions pending application. For these purposes, a temporary difference is understood as the difference between the book value of assets and liabilities and their tax base.
RECOGNITION OF DEFERRED
TAX LIABILITIES
The Group recognizes deferred tax liabilities in all cases except if:
•
they arise from the initial recognition of goodwill or an asset or liability in a trans- action that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable in- come;
•
they correspond to differences related to investments in subsidiaries, associates and joint ventures over which the Group has the ability to control the time of its re- versal and it is not probable that its rever- sal will occur in the foreseeable future.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
76
RECOGNITION OF DEFERRED TAX ASSETS
The Group recognizes deferred tax assets as long as:
•
it is probable that sufficient taxable income will be available against which they can be utilized or when tax legisla- tion envisages the possibility of convertingdeferred tax assets into a receivable from public entities in the future. However, the assets arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and at the date of the transaction does not affect either the accounting result or the taxable income, are not recognized; and they cor- respond to temporary differences related to investments in subsidiaries, associates and joint ventures insofar as the temporary differences will revert in the foreseeable future and positive future fiscal gains are expected to offset the differences.
It is considered probable that the Group has sufficient tax profits to recover deferred tax as- sets, provided there are temporary differences taxable in sufficient amount, related to the same tax authority and to the same taxpayer, the reversal of which is expected in the same fiscal year in which the deductible temporary differences are expected to reverse or in years in which a tax loss, arising from a deductible temporary difference, can be offset by previous or subsequent earnings.
In order to determine future tax profits, the Group takes into account tax planning opportu- nities, provided that it intends to adopt them or is likely to adopt them.
OFFSETTING OF TAX ASSETS
AND LIABILITIES
The Group only offsets current tax assets and liabilities if there is a legal right against the tax authorities and intention to settle the resulting tax due at their net amount or to realize the as- sets and settle the liability simultaneously.
q
CLASSIFICATION OF
ASSETS AND LIABILITIES
BETWEEN CURRENT AND
NON-CURRENT
The Group presents the consolidated state- ment of financial position classifying assets and liabilities between current and non-current. For these purposes, current assets or liabilities are those that meet the following criteria:
•
Assets are classified as current when they are expected to be realized or there is an intention to sell or consume them during the normal operating cycle of the Group, they are kept mainly for negotiation pur- poses, they are expected to be carried out within a period of twelve months after the closing date or it is cash or cash equiva- lents, except in those cases where they cannot be exchanged or used to settle a liability, at least within twelve months after the reporting date.
•
All other assets are classified as non-cur- rent assets.
•
Liabilities are classified as current when they are expected to be settled in the normal operating cycle of the Group, they are kept mainly for trading, they must be settled within a period of twelve months from the reporting date, or the Group does not have the unconditional right to defer the settlement of the liabilities during the twelve months following the reporting date.
•
Financial liabilities are classified as current when they must be settled within twelve months after the reporting date, even if the original term is for a period of more than twelve months and there is a refinancing or restructuring agreement for long-term payments that has concluded after the reporting date and before the consolidated financial statements are authorized for issue.
•
All other liabilities are classified as non- current liabilities.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
77
3. SEGMENT INFORMATION
For management purposes, the Group is organ- ised into business units based on its products and services and has four reportable segments, as follows:
PROJECT DEVELOPMENT
The Project Development Segment includes all project development and system integration for third-party hydrogen plants. The turnkey solu- tions for the supply of hydrogen are modular, tech-agnostic and tailor-made to comply with complex and diverse customer requirements.
OWN OPERATIONS
The Own Operations Segment includes the pro- duction and selling of green hydrogen as well as the “derivatives” electricity and heat generated at its own hydrogen plants.
STORAGE SEGMENT
The Storage Segment includes the development and manufacturing of different hydrogen storage systems.
OTHERS
Others Includes costs for the holding and prop- erty companies and the acquisition and manage- ment of properties mainly in connection with the production of green hydrogen.
The Executive Management Committee is the Chief Operating Decision Maker (CODM) and monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and perfor- mance assessment. Segment performance is evaluated based on profit or loss and is meas- ured consistently with profit or loss in the con- solidated financial statements. Also, the Group’s income taxes are managed on a Group basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
78
Consolidated statement of profit and loss and other disclosures by segment:
| 01.01.2023-31.12.2023 (in EUR 1,000) |
Notes | Project Develop- ment |
Own Opera- tions |
Storage | Other | Adjust- ments and elimina- tions |
Consolidated |
| Revenues | 25 | 15,851 | 477 | 0 | 0 | (1,032) | 15,297 |
| own work capitalized | 50 | 0 | 0 | 0 | 0 | 50 | |
| Other Income | 1,015 | 10 | 185 | 108 | (277) | 1,041 | |
| Cost of materials | 26 | (13,717) | (463) | (8) | 0 | 503 | (13,684) |
| Employee benefits expense | 27 | (5,903) | 0 | (670) | (316) | 0 | (6,889) |
| depreciation and amortisation expense | 6, 7 | (2,555) | (1,350) | (46) | (237) | 0 | (4,188) |
| other expenses | 28 | (7,555) | (229) | (622) | (5,889) | 513 | (13,781) |
| Financial results | |||||||
| Income/Loss from equity investments | 8 | (275) | 0 | 0 | 0 | 0 | (275) |
| Income from other securities, interest and similar income | 29 | 137 | 55 | 0 | 19,302 | (18,815) | 679 |
| Interest and similar expenses | 30 | (4,909) | 0 | (26) | (1,313) | 3,793 | (2,456) |
| (5,048) | 55 | (26) | 17,989 | (15,022) | (2,052) | ||
| Income taxes | 10 | (49) | 0 | 0 | (380) | 0 | (429) |
| Net income | (17,911) | (1,499) | (1,185) | 11,275 | (15,314) | (24,635) | |
| Total assets | 94,757 | 7,281 | 5,148 | 363,519 | (348,250) | 122,454 | |
| Total liabilities | 113,890 | 4,070 | 2,798 | 31,089 | (87,262) | 64,585 | |
| CAPITAL EXPENDITURES | 722 | 4,729 | 4,373 | 1,854 | 0 | 11,677 |
| 01.01.2022-31.12.2022 (in EUR 1,000) |
Notes | Project Develop- ment |
Own Opera- tions |
Storage | Other | Adjust- ments and elimina- tions |
Consolidated |
| Revenues | 25 | 3,780 | 189 | 0 | 0 | (120) | 3,848 |
| own work capitalized | 0 | 0 | 0 | 0 | 0 | 0 | |
| Other Income | 550 | 9 | 0 | 0 | (27) | 532 | |
| Cost of materials | 26 | (3,095) | (143) | (1) | 0 | 120 | (3,118) |
| Employee benefits expense | 27 | (3,722) | 0 | (24) | 0 | 0 | (3,746) |
| depreciation and amortisation expense | 6, 7 | (1,279) | 0 | (0) | 0 | 0 | (1,280) |
| other expenses | 28 | (4,440) | (875) | (13) | (1,457) | 26 | (6,760) |
| Financial results | |||||||
| Income/Loss from equity investments | 8 | 0 | 0 | 0 | 0 | 0 | 0 |
| Income from other securities, interest and similar income | 29 | 284 | 0 | 0 | 2,535 | (2,306) | 512 |
| Interest and similar expenses | 30 | (5,081) | 0 | 0 | 0 | 1,205 | (3,877) |
| (4,798) | 0 | 0 | 2,535 | (1,101) | (3,364) | ||
| Income taxes | 10 | 935 | 0 | 0 | 0 | 0 | 935 |
| Net income | (12,069) | (821) | (38) | 1,078 | (1,102) | (12,953) | |
| Total assets | 56,889 | 2,721 | 9 | 65,958 | (63,842) | 61,734 | |
| Total liabilities | 84,302 | 3,341 | 24 | 43,819 | (61,735) | 69,751 | |
| CAPITAL EXPENDITURES | 81 | 1,510 | 1 | 0 | 0 | 1,592 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
79
Inter-segment revenues are eliminated upon consolidation and reflected in the adjustments and eliminations’ column. All other adjustments and eliminations are part of detailed reconcilia- tions presented further below.
ADJUSTMENTS AND ELIMINATIONS
Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment properties including assets from the acquisition of subsidiaries. Inter-seg- ment revenues are eliminated on consolidation.
All revenues originate from Germany.
There are four customers (2022: 2), each with a share of over 10% in the Project Development segment. There is 1 customer (2022: 1) with a share of over 10% in the Own operations seg- ment.
4. EARNINGS PER SHARE
Earnings per share (EPS) is calculated by divid- ing the profit attributable to the ordinary share- holders of the company by the weighted averagenumber of ordinary shares outstanding during the period excluding ordinary shares purchased by the Company and held as Treasury Shares.
BASIC EARNINGS PER SHARE
The calculation of basic EPS at 31 December 2023 is based on the profit attributable to the owners of the parent and the weighted aver- age number of Ordinary Shares outstanding of 36,359,162 Class A Shares (2022: 20,073,695 Class A Shares).
| BASIC EARNINGS PER SHARE | 2023 | 2022 | |
| Profit / (Loss) for continued operations for the year (EUR 1,000) attributable | Ordinary Shares | (24,689) | (12,953) |
| to equity holders of the Company | |||
| Weighted average number of ordinary shares outstanding | Ordinary Shares | 35,556,043 | 20,073,695 |
| Basic earnings / (loss) per share (Euro/share) on total group | Ordinary Shares | (0.69) | (0.65) |
| Diluted weighted average number of ordinary shares outstanding | Ordinary Shares | 36,470,016 | 20,073,695 |
| Diluted earnings / (loss) per share (Euro/share) on total group | Ordinary Shares | (0.69) | (0.65) |
DILUTIVE EARNINGS PER SHARE
Diluted EPS are calculated by increasing the av- erage number of shares outstanding by the totalnumber of potential shares arising from option rights. The Group has outstanding 2,400,000 share options from the Stock Option Program (SOP).
Should the share options of the Stock Option Program (SOP) be exercised, the total number of ordinary Shares would increase by 2,400,000 to 38,759,162 Ordinary Shares, having minor impact on the EPS. Share options from the SOP not exercised within the contractual time frame expire without any redemption and have no dilutive impact on the EPS.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
80
5. FAIR VALUE MEASUREMENT
The Group measures financial instruments at fair value at each balance sheet date. The fair value of non-financial assets is deter- mined for the purpose of the impairment test and for disclosure purposes. As per IFRS 13 definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction be- tween market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
•
In the principal market for the asset or liability, or
•
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic bene- fits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level of input that is significant to the fair value measurement as a whole:
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
81
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly ob- servable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The lifetime credit loss of trade receivables was determined for each customer based on data from an external rating agency.
The fair value measurement hierarchy as at 31 December 2023 as follows:
| Quoted | Significant | |||||
| prices | Significant | unob- | ||||
| in active | observa- | servable | ||||
| markets | ble inputs | inputs | ||||
| (IN EUR 1,000) | Date of valuation | At cost | (Level 1) | (Level 2) | (level 3) | Total |
| FINANCIAL ASSETS | ||||||
| Other financial investments | 31 December 2023 | 2,749 | 0 | 0 | 2,475 | 2,474 |
| Trade receivables | 31 December 2023 | 5,673 | 0 | 5,641 | 0 | 5,641 |
| Other financial assets | 31 December 2023 | 558 | 0 | 554 | 0 | 554 |
| Cash and cash equivalents | 31 December 2023 | 44,466 | 0 | 44,466 | 0 | 44,466 |
| Non-financial assets | ||||||
| Prepayments | 31 December 2023 | 4,669 | 0 | 4,574 | 0 | 4,574 |
| Inventories | 31 December 2023 | 912 | 0 | 210 | 0 | 210 |
| Contract assets | 31 December 2023 | 5,984 | 0 | 5,941 | 0 | 5,941 |
| Total assets | 65,028 | 0 | 61,385 | 2,474 | 63,859 | |
| Financial liabilities | ||||||
| Debts with credit institutions | 31 December 2023 | 164 | 0 | 163 | 0 | 163 |
| Trade and other payables | 31 December 2023 | 5,176 | 0 | 5,176 | 0 | 5,176 |
| Financial liabilities | 31 December 2023 | 43,557 | 0 | 43,557 | 0 | 43,557 |
| Total liabilities | 48,896 | 0 | 48,896 | 0 | 48,896 |
There were no transfers between Level 1 and Level 2.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
82
6. INTANGIBLE ASSETS
The composition and movements in intangible assets during year ended 31 December 2023 and 2022 are as follows:
| Patents, licenses, trade- | Computer | Intangible assets | |||
| (IN EUR 1,000) | marks and similar rights | software | under development | Goodwill | Total |
| COST: | |||||
| Balance at 1 January 2022 | 109 | 302 | 1,792 | 0 | 2,203 |
| Additions | 14 | 0 | 572 | 0 | 587 |
| Disposals | 0 | 0 | 0 | 0 | 0 |
| Transfers | 38 | 0 | (38) | 0 | 0 |
| Balance at 31 December 2022 | 161 | 302 | 2,327 | 0 | 2,789 |
| Balance at 1 January 2023 | 161 | 302 | 2,327 | 0 | 2,789 |
| Additions | 6 | 25 | 0 | 3,771 | 3,802 |
| Change in consolidation scope | 100 | 51 | 0 | 0 | 151 |
| Disposals | 0 | 0 | 817 | 0 | 817 |
| Transfers | 0 | 0 | 0 | 0 | 0 |
| Balance at 31 December 2023 | 268 | 378 | 1,509 | 3,771 | 5,925 |
| Patents, licenses, trade- | Computer | Intangible assets | |||
| (IN EUR 1,000) | marks and similar rights | software | under development | Goodwill | Total |
| ACCUMULATED AMORTISATION: | |||||
| Balance at 1 January 2022 | 99 | 91 | 0 | 0 | 190 |
| Amortisation | 8 | 70 | 0 | 0 | 78 |
| Disposals | 0 | 0 | 0 | 0 | 0 |
| Transfers | 0 | 0 | 0 | 0 | 0 |
| Balance at 31 December 2022 | 107 | 161 | 0 | 0 | 269 |
| Balance at 1 January 2023 | 107 | 161 | 0 | 0 | 269 |
| Additions | (0) | 75 | 0 | 0 | 75 |
| Change in consolidation scope | 108 | 42 | 0 | 0 | 150 |
| Impairment | 0 | 0 | 1,509 | 0 | 1,509 |
| Disposals | 0 | 0 | 0 | 0 | 0 |
| Transfers | 0 | 0 | 0 | 0 | 0 |
| Balance at 31 December 2023 | 216 | 278 | 1,509 | 0 | 2,003 |
| Carrying amounts: | |||||
| Balance at 31 December 2022 | 54 | 140 | 2,327 | 0 | 2,521 |
| Balance at 31 December 2023 | 52 | 100 | 0 | 3,771 | 3,922 |
On 31 December 2023, the Group has no com- mitments to acquire intangible assets.
TRANSFER TO RESEARCH EXPENSES.
Due to a clarification from public funding provid- ers, KEUR 817 were reclassified from intangibleassets under construction to development costsin the financial year 2023.
IMPAIRMENT ON INTANGIBLE ASSETS
The Impairment on intangible assets in the financial year 2023 is KEUR 1,509 which relate to assets that no longer meet the criterion of IAS 38.57 (c).
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
83
7. PROPERTY, PLANT AND
EQUIPMENT (INCLUDING
RIGHT-OF-USE ASSETS)
The composition and movements in tangible assets during the year ended 31 December 2023 are as follows:
| Other | Under | ||||||
| Technical ins- | installations, | construc- | Right | ||||
| tallations and | equipment | tion and | of use | ||||
| (in EUR 1,000) | Land | Buildings | machinery | and furniture | advances | Assets | Total |
| COST: | |||||||
| Balance at 1 January 2022 | 91 | 5,743 | 379 | 2,702 | 27,938 | 0 | 36,854 |
| Additions | 0 | 54 | 4 | 67 | 1,124 | 0 | 1,248 |
| Disposals | 0 | 0 | 0 | 0 | 1,953 | 0 | 1,953 |
| Transfers | 0 | 0 | 24,571 | 0 | (24,571) | 0 | 0 |
| Balance at 31 December 2022 | 91 | 5,796 | 24,954 | 2,769 | 2,538 | 0 | 36,148 |
| Balance at 1 January 2023 | 91 | 5,796 | 24,954 | 2,769 | 2,538 | 0 | 36,148 |
| Additions | 1,854 | 925 | 5,201 | 333 | 496 | 1,218 | 10,026 |
| Change in consolidation scope | 4,968 | 5,872 | 593 | 338 | 958 | 0 | 12,728 |
| Disposals | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Transfers | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| BALANCE AT 31 DECEMBER 2023 | 6,912 | 12,593 | 30,748 | 3,441 | 3,991 | 1,218 | 58,903 |
| Other | Under | ||||||
| Technical ins- | installations, | construc- | Right | ||||
| tallations and | equipment | tion and | of use | ||||
| (in EUR 1,000) | Land | Buildings | machinery | and furniture | advances | Assets | Total |
| ACCUMULATED DEPRECIATION: | |||||||
| Balance at 1 January 2022 | 0 | 652 | 336 | 434 | 0 | 0 | 1,422 |
| Depreciation during the year | 0 | 228 | 644 | 325 | 0 | 0 | 1,196 |
| Disposals | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Transfers | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Balance at 31 December 2022 | 0 | 879 | 980 | 759 | 0 | 0 | 2,618 |
| Balance at 1 January 2023 | 0 | 879 | 980 | 759 | 0 | 0 | 2,618 |
| Depreciation during the year | 0 | 423 | 1,592 | 256 | 0 | 333 | 2,604 |
| Change in consolidation scope | 0 | 90 | 11 | 281 | 0 | 0 | 382 |
| Disposals | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Transfers | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Balance at 31 December 2023 | 0 | 1,392 | 2,583 | 1,295 | 0 | 333 | 5,604 |
| Carrying amounts: | |||||||
| AS AT 31 DECEMBER 2022 | 91 | 4,917 | 23,973 | 2,011 | 2,538 | 0 | 33,530 |
| AS AT 31 DECEMBER 2023 | 6,912 | 11,202 | 28,164 | 2,145 | 3,991 | 885 | 53,299 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
84
INSURANCE
The Group has agreed an insurance contract to cover the risk of damage to its tangible assets. The insured asset value of industrial installa- tions, office buildings and electronic equipment amounts to KEUR 10,000 ( 2022: KEUR 10,000).In addition, there is automatic insurance cover- age for damages for the hydrogen powerplant including the hydrogen filling station of KEUR 9,803 (2022: KEUR 9,803) and an automatic insurance coverage for damages for the photovoltaic power plant of KEUR 6,398 (2022: KEUR 6,398).
TANGIBLE ASSETS PLEDGED
AS COLLATERAL
The Group does have tangible assets as at 31 December 2023 of KEUR 9,541 (2022: KEUR 9,541) that are pledged as collateral for investor and bank debts.
CAPITALIZED INTERESTS
The carrying amount as of the balance sheet date includes total interest capitalized amount- ing to KEUR 2,799 (2022: 2,943) which was incurred during construction and calculated with an average capitalization rate of 7.42%.
IMPAIRMENT ON TANGIBLE ASSETS
The annual impairment test was performed with the result that no impairment indicators were identified.
RIGHT-OF-USE ASSETS
The Group has lease contracts for various items of plant, machinery, vehicles and other equip- ment used in its operations. Leases of plant and machinery generally have lease terms between 3 and 15 years, while motor vehicles and other equipment generally have lease terms between 3 and 5 years. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased as- sets and some contracts require the Group to maintain certain financial ratios.
The Group also has certain leases of machin- ery with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
85
8. OTHER FINANCIAL
INVESTMENTS
| Amount of investment | |||||
| NAME OF ASSOCIATE | Registered office | Activity | % ownership | 31/12/2023 | 31/12/2022 |
| Nuventura GmbH | Berlin | Technology development | < 10% | 825 | 1,100 |
| Play Ventures Fund II | Singapore | Investment Fund | < 10% | 1,649 | 0 |
| Total | 2,474 | 1,100 | |||
In the financial year of 2023, the Group recog- nized an impairment loss of 25% of its investment in Nuventura GmbH.
The investment in Play Ventures Fund II is pre- sented for the first time in these consolidated fi- nancial statements based on the reverse acquisi- tion as of 19 January 2023. The total investment in this fund is committed for USD 2,500,000 and is called by tranches.
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9. FINANCIAL ASSETS
Classification of financial assets by category:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| FINANCIAL ASSETS | ||
| Other financial investments | 2,474 | 1,100 |
| Trade receivables | 5,641 | 724 |
| Other financial assets | 554 | 12,092 |
| Cash and cash equivalents | 44,466 | 149 |
| Total | 53,134 | 14,065 |
Cash and cash equivalents, trade receivables, loan and other financial assets are measured at fair value measured at initially fair value while the subsequent measurement is at amortised cost. During the year ended 31 December 2023, Impairment of KEUR 307 were recognized (2022: EUR 0.00).
Trade receivables have developed in line with revenue growth.
The lifetime credit loss of trade receivables was determined for each customer based on data from an external rating agency.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
87
10. INCOME TAX/
DEFERRED TAX ASSETS
The Group entities are taxable according to their applicable tax regulations. During the year ended 31 December 2023, the Company, is subject to the German statutory income tax rate of 27.69 % (2022: 30.18 %). The companies which are sub- jects to Luxembourg income tax rate of 24.94% (2022: 24.94%). The main tax expenses accrue within the companies under German tax law.
The income tax expense is presented follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| CURRENT TAX | ||
| Current period | 429 | 114 |
| Total current tax expense | 429 | 114 |
| DEFERRED TAX | ||
| Source and reversal of temporary differences | ||
| Intanible assets | 103 | (112) |
| Tangible assets | 40 | 68 |
| Right-of-use assets | (240) | 0 |
| Finance costs | 0 | 89 |
| PoC | 88 | (96) |
| Other | (1) | 4 |
| Deferred tax assets | 10 | 1,096 |
| Total deferred tax expense | 0 | 1,049 |
| Income tax benefit / (expense), net | (429) | 935 |
The tax reconciliation using the German tax rate of 27.69 % (2022: 30.18 %) is as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Consolidated income (loss) beforeincome tax | (24,635) | (13,888) |
| German tax at 27.69 % (2022: 30.18%) | (6,812) | (4,191) |
| Not usable | 6,392 | 4,077 |
| Luxembourg tax at 24.94% (2022: 24.94%) | (10) | 0 |
| Deferred taxes | 0 | 1,049 |
| Non-recognition of deferred taxes | 0 | 0 |
| Income tax (expense)/benefit | (429) | 935 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
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The company H2APEX has the main applicable taxes open to inspection by the German taxa- tion authorities for the years that are not statute barred.
The other Group companies have all years open to inspection in Germany that are applicable to each individual company in accordance with cur- rent local legislation.
Due to the existing loss carryforwards, the deferred tax liabilities will not have any future effect on income tax. For this reason, deferred tax assets were capitalised in line with IAS 12.35 in the amount of the deferred tax liabilities.
During the year, there are unrecognized deferred tax assets of KEUR 15,931 (31/12/2022: KEUR 6,897). The unrecognized deferred tax assets come from KEUR 62,380 tax loss (corporation tax) and KEUR 63,038 tax loss (trade tax) during the years 2018-2023 on which the necessary conditions were not met for future tax deductibility.
The declared tax loss carryforwards as of the dates indicated are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| DOMESTIC TAX LOSS CARRYFORWARDS | ||
| corporate tax loss carryforwards | 62,380 | 22,498 |
| trade tax loss carryforwards | 63,038 | 23,180 |
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11. INVENTORIES
The inventories are entirely composed of goods and prepayments. The fair values of inventories do not differ significantly from their carrying amount.
The classification of Inventories by category and class at 31 December 2023 and 2022 is as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Goods | 210 | 3,835 |
| Prepayments | 0 | 2,663 |
| 210 | 6,498 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
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12. CONTRACT ASSETS
Details of contract assets are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Contract assets | 5,941 | 2,740 |
Total contract assets are due to revenue from projects which are recognized over time by reference to the percentage of completion of the project.
During the year ended 31 December 2023 an impairment of KEUR 43 was recognized (31/12/2022: EUR 0.00).
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
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13. TRADE AND
OTHER RECEIVABLES
TRADE RECEIVABLES
Details of trade receivables are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Trade Receivables | 5,641 | 724 |
Trade receivables are measured at amortised cost. During the year ended 31 December 2023 impairments of KEUR 32 were recognized (31/12/2022: EUR 0.00).
OTHER CURRENT RECEIVABLES
Details of other current assets are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Project related advance payments done | 4,478 | 0 |
| Receivables from shareholders | 506 | 506 |
| Grants | 166 | 78 |
| Security and other deposits | 47 | 8 |
| Loan receivable | 0 | 10,900 |
| VAT receivable | 0 | 850 |
| Accrued interest | 0 | 678 |
| other | 197 | 354 |
| total | 5,395 | 13,375 |
Other receivables are measured at amortized cost. However, due to their short-term nature, the carrying value of these items approximates their fair value.
The movement of the loan receivable for the years ended 31 December 2023 and 2022 is explained by the fact that RLG GmbH & Co. KG
has been consolidated for the first time in 2023. For that reason the loan receivable has been eliminated as an intercompany receivable during the year ended 31 December 2023 as part of the initial consolidation of the RLG GmbH & Co. KG.
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14. CASH AND CASH
EQUIVALENTS
Details of cash and cash equivalents are as fol- lows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Cash on hand | 2 | 1 |
| Cash on bank | 44,464 | 148 |
| Total | 44,466 | 149 |
As of 31 December 2023 EUR 9,683,353.50 (2022: EUR 0.00) cash and cash equivalents were restricted.
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15. EQUITY
Under the merger agreement, H2APEX agreed (i) to acquire 20.8% of the APEX shares for a cash consideration in the amount of EUR 25,000,000 and (ii) to exchange the remaining 79.2% shares in Apex for shares in H2APEX by way of a con- tribution in kind. For this purpose, H2APEX agreed to utilise its authorised capital and increase its share capital from EUR 311,960.18 by EUR 252,424.73 to EUR 564,384.91 by issuing 16,285,467 new shares to the shareholders of APEX.
Development of the share capital:
| Euro | |
| Balance at 1 January 2023 | 311,960.18 |
| Issuance of Ordinary Shares - 19 January 2023 | 252,424.73 |
| Balance at 31 December 2023 | 564,384.91 |
| Balance at 1 January 2022 | 311,960.18 |
| Balance at 31 December 2022 | 311,960.18 |
The numbers of shares are as follows:
| Total Shares | Unlimited | Ordinary | |
| Shares | Shares | ||
| Number of shares issued as at 1 January 2023 | 20,073,696 | 1 | 20,073,695 |
| Issuance of Ordinary Shares - 19 January 2023 | 16,285,467 | 0 | 16,285,467 |
| Number of shares issued as at 31 December 2023 | 36,359,163 | 1 | 36,359,162 |
| Number of shares issued as at 1 January 2022 | 20,073,696 | 1 | 20,073,695 |
| Number of shares issued as at 31 December 2022 | 20,073,696 | 1 | 20,073,695 |
The Company’s share capital as of 31 December 2023 amounts to EUR 564,384.91 (2022: EUR 311,960.18), represented by 36,359,162 Ordinary Shares (2022: 20,073,095) and one unlimited Share with no par value. The unlimited Share is held by the General Partner. Ordinary Shares are listed in the Prime Segment of the Frankfurt stock exchange.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
94
Each share entitles the holder thereof to one vote. Each Share shall be entitled to receive the same amount. The Ordinary Shares are freely transfer- able, the Unlimited Share are only transferrable tounlimited shareholders jointly and severally liablefor all liabilities of the Company which cannot bemet out of the assets of the Company All rights and obligations attached to any share are passed to any transferee thereof.
Electronic copies of the Articles can be down- loaded from the website of H2APEX Group SCA: https://ir.h2apex.com/fileadmin/downloads/ir/ corp_govern/2024-01-18_H2APEX_Group_SCA_ Koordinierte_Satzung.pdf
On the extraordinary shareholder meeting on 29 June 2022, the shareholders approved an au- thorised capital in an amount of EUR 2,807,640, excluding the issued share capital, and to grant the authorisation to the General Partner to issue up to 184,715,055 Ordinary Shares.
On 19 January 2023 the shareholder approved the contribution in kind of the Company’s Sub- scribed capital by an amount of EUR 252,425 from EUR 311,960 to EUR 564,385 and of Share Premium by EUR 94,747,975 from EUR 103,578,029 to EUR 198,326,004 by issuing 16,285,467 new shares to the shareholders of APEX.
Based on the transaction of Contribution in Kind, the authorised capital decreased by EUR 252,425 to EUR 2,555,215.27.
On the Annual General Meeting on 2 May 2023 the shareholders approved the allocation of prior year results to the profit brought forward for an amount of EUR 13,877,538 and an allocation to the legal reserve amounting to EUR 22,437.
LEGAL RESERVE
Under Luxembourg law, 5% of the net profit of the year, net of any losses brought forward, must be allocated to a legal reserve until such reserve equals 10% of the issued share capital. This re- serve is not available for dividend distribution.
During the year, the Company has not acquired/ sold any own shares.
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95
16. FINANCIAL LIABILITIES
BY CATEGORY
Classification of liabilities by category
Below are their fair values and carrying amounts of the Group financial liabilities as at 31 December 2023 and as
at 31 December 2022:
| Non-current | Current | ||||||
| 31/12/2023 | Carrying | Carrying | Grand | ||||
| (in EUR 1,000) | Amount | Fair Value | Total | Amount | Fair Value | Total | total |
| Financial liabilities from bond issue | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Debts with credit institutions | 0 | 0 | 0 | 163 | 0 | 163 | 163 |
| Trade and other payables | 0 | 0 | 0 | 5,176 | 0 | 5,176 | 5,176 |
| Financial liabilities | 33,109 | 0 | 33,109 | 10,448 | 0 | 10,448 | 43,557 |
| Total financial liabilities | 33,109 | 0 | 33,109 | 15,787 | 0 | 15,787 | 48,896 |
| Non-current | Current | ||||||
| 31/12/2023 | Carrying | Carrying | Grand | ||||
| (in EUR 1,000) | Amount | Fair Value | Total | Amount | Fair Value | Total | total |
| Financial liabilities from bond issue | 9,131 | 0 | 9,131 | 0 | 0 | 0 | 9,131 |
| Debts with credit institutions | 192 | 0 | 192 | 1,606 | 0 | 1,606 | 1,798 |
| Trade and other payables | 0 | 0 | 0 | 6,000 | 0 | 6,000 | 6,000 |
| Financial liabilities | 41,140 | 0 | 41,140 | 9,077 | 0 | 9,077 | 50,217 |
| Total financial liabilities | 50,464 | 0 | 50,464 | 16,683 | 0 | 16,683 | 67,147 |
The carrying amount of current liabilities approximates their fair value.
Financial liabilities as at 31 December 2023 are due to loans and interests from Related parties KEUR 33,109 (31/12/2022: KEUR 31,313).
Financial liabilities include accumulated interest which were not paid as at 31 December 2023 of in KEUR 1,337 (31/12/2022: KEUR 2,042).
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
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17. FINANCIAL LIABILITIES
FROM BOND ISSUANCE
At 31 December 2023, the liabilities from bonds and notes issue are comprised of:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Bonds and notes outstanding, nominal | 0 | 8,900 |
| Unamortized issue costs | 0 | 0 |
| Net carrying amount | 0 | 8,900 |
| Effective interest rate | 0 | 0 |
| Accrued interest | 0 | 231 |
| Total | 0 | 9,131 |
Movement of financial liabilities from Bond issuance during the year ended 31 December 2023 is as follows:
| Issue incl. | conversion | Reim- | |||
| (IN EUR 1,000) | 31/12/2022 | Interests | into equity | bursement | 31/12/2023 |
| Bonds | 9,131 | 534 | 0 | 9,666 | 0 |
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97
18. OTHER NON-CURRENT
LIABILITIES
Details of other non-current liabilities are as fol- lows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Lease liabilities | 340 | 0 |
| Total | 340 | 0 |
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19. PROVISIONS
Details of provisions are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Provision for outstanding supplier invoices | 8,009 | 0 |
| Provision for outstanding other invoices | 1,000 | 0 |
| Tax provisions | 628 | 297 |
| Other provisions with personnel | 538 | 43 |
| Other provisions for legal disputes | 390 | 690 |
| Other provisions | 383 | 149 |
| Total Provisions | 10,949 | 1,179 |
Movement of provisions during the year ended 31 December 2023 is as follows:
| Provision | Other | |||||
| for out- | provisions | |||||
| standing | Other provisions | for legal | Other | |||
| (IN EUR 1,000) | invoices | Tax provisions | with personnel | disputes | provisions | Total |
| As at 31 December 2022 | 0 | 297 | 43 | 690 | 149 | 1,179 |
| Charges | 9,009 | 628 | 538 | 225 | 383 | 10,784 |
| Reversals | 0 | 0 | 0 | 25 | 0 | 25 |
| Use | 0 | 297 | 43 | 500 | 149 | 989 |
| Balance at 31 December 2023 | 9,009 | 628 | 538 | 390 | 383 | 10,949 |
The charge in other provisions with personnel is mainly due to deferred bonus payments.
Movement of provisions during the year ended 31 December 2022 is as follows:
| Provision | Other | |||||
| for out- | provisions | |||||
| standing | Other provisions | for legal | Other | |||
| (IN EUR 1,000) | invoices | Tax provisions | with personnel | disputes | provisions | Total |
| As at 31 December 2021 | 0 | 183 | 71 | 0 | 98 | 351 |
| Charges | 0 | 297 | 43 | 690 | 149 | 1,179 |
| Reversals | 0 | 0 | 0 | 0 | 0 | 0 |
| Use | 0 | 183 | 71 | 0 | 98 | 351 |
| Balance at 31 December 2022 | 0 | 297 | 43 | 690 | 149 | 1,179 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
99
20. TRADE PAYABLES
Details of trade payables are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Trade payables | 5,176 | 6,000 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
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21. CONTRACT LIABILITIES
Details of contract liabilities are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Contract liabilities | 1,284 | 0 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
101
22. FINANCIAL RISK
MANAGEMENT
FINANCIAL RISK FACTORS
MARKET RISK
As part of the financing of its projects, H2APEX uses a leverage effect to limit its equity capital contribution.
If a project company, or its holding company, were to fail to meet its payment obligations under its financing agreements or fail to comply with cer- tain minimum debt service coverage ratios, such default could render the project debt immediatelydue. In the absence of a waiver or a restructuring agreement on the part of the lenders, the lenders may be entitled to seize the assets or securities pledged as collateral (including H2APEX’s interestin the subsidiary that holds the facility).
H2APEX’s business and growth plan require sig- nificant financing and refinancing through the useof equity and external debt. In particular, H2APEXwill have to invest significantly in connection with the awarded contracts. The ability to raise addi- tional funds will depend on financial and econom-ic conditions, as well as other factors, which may be beyond H2APEX’s control.
Cash requirements have so far been assured through tools such as shareholder loans, bank borrowing, capital increases, issuance of bonds and conditional grants and advances. With regardto short-term debt financing, H2APEX is exposedto the risk of changes in interest rates in the eventof a renewed short-term financing, which could increase its financing cost and, under certain circumstances, lead to a reduction of its return oncapital. It cannot be ruled out that credit institu-tions may in general limit their willingness to grantH2APEX such short-term financing due to severaldifferent developments.
Furthermore, equity raisings by H2APEX, such as the issue of new shares to shareholders and new investors may not be successful or feasible on favorable terms.
Lack of ability to obtain sufficient funding in the future could have a material adverse effect on H2APEX’s growth opportunities, business and financial condition and could, in the future, result in insolvency or liquidation of H2APEX.
In the EU, and particularly in Germany, several projects support the decarbonization through green hydrogen. In Germany, for example, green hydrogen flagship projects are supported with a EUR 700 million funding volume, being the largest funding initiative ever provided by the German Federal Ministry of Education and Research (Source: BMBF, National Projects). On EU level, important projects of common European interest (“IPCEI“) are promoted, including several green hydrogen projects. In the context of the hydrogen hub “doing hydrogen”, an initiative which seeks to connect different hydrogen projects through- out Germany to form a hub linking production, transport, storage and consumption of hydrogen, H2APEX has applied for IPCEI funding in an amount of EUR 166 million,. However, H2APEX may only partially be granted the amount of public funding applied for, if any. Instead, H2APEX competitors could benefit from public funding. This could adversely affect H2APEX competitive position, business, and prospects. In case H2APEX is granted public funding, such fund- ing may be significantly delayed and, as a result, H2APEX may have to bear significant costs when they occur before receiving any public funds. Further, the granting of public funding may be conditional and require compliance with certain
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
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obligations, and it may also restrict H2APEX in the use of funds. In case H2APEX does not comply with such conditions, it may have to return granted fundings, in part or in whole.
In the past, H2APEX has received subsidies in the form of funding for personnel expenses for the development of a chemical hydrogen storage solution and has applied for further public funds. Applications are reviewed on a case-by-case basis by the authorities to determine the feasibil- ity of the underlying project. Aids or grants are the subject of a contract between H2APEX and the public entity and are systematically subject to objective criteria, such as the relevance of the project throughout the contract concluded or compliance with certain elements of profitability. If H2APEX were to accept a refusal in its request for aid, this could also call into question the viability of a project and lead to its abandonment.
Moreover, existing public policies could be changed or even reversed, due to a law or a regu- latory or administrative regulation which seeks to favor certain traditional sources of energy or alternative renewable energy sources or because of budget constraints entailing a reduction in pub- lic funds available for the implementation of such policies which support decarbonized solutions, including green hydrogen.
CREDIT RISK
Credit risks exist regarding financial institutions and customers. The credit risk with respect to financial institutions predominantly arises from liquid funds. In order to minimize a possible risk of default, financial instruments are mainly entered into with counterparties with prime credit ratings. The credit risk with respect to customers consists of granting terms of credit and the associated risk of default. Credit risk is managed on a group- wide basis. Credit risks arise from cash and cash equivalents, and deposits with banks and finan- cial institutions. Credit exposures to customers, including outstanding receivables and committed transactions, are managed by the individual group companies. The monitoring of the credit risks is supported by an internal monthly reporting.
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103
The tables below show the ageing analysis of financial assets as at 31 December 2023:
| More than 3 | |||||
| months and | Between 6 | ||||
| 31/12/2023 | Less than 3 | less than 6 | months and | More than 1 | |
| (IN EUR 1,000) | months | months | less than 1 year | year | Total |
| Trade and other receivables | 838 | 3,830 | 972 | 0 | 5,641 |
| Other current financial assets | 554 | 0 | 0 | 0 | 554 |
| Cash and cash equivalents | 44,466 | 0 | 0 | 0 | 44,466 |
| Total assets | 45,858 | 3,830 | 972 | 0 | 50,660 |
Trade and other receivables are over about 20 debtors, while the biggest debtor amounts to KEUR 3,218.
The tables below show the ageing analysis of financial assets as at 31 December 2022:
| More than 3 | |||||
| months and | Between 6 | ||||
| 31/12/2022 | Less than 3 | less than 6 | months and | More than 1 | |
| (IN EUR 1,000) | months | months | less than 1 year | year | Total |
| Trade and other receivables | 724 | 0 | 0 | 0 | 724 |
| Other current financial assets | 826 | 0 | 1,641 | 9,625 | 12,092 |
| Cash and cash equivalents | 149 | 0 | 0 | 0 | 149 |
| Total assets | 1,699 | 0 | 1,641 | 9,625 | 12,965 |
LIQUIDITY RISK
Liquidity risk arises from the Group’s manage- ment of working capital and the finance charges and principal repayments on its debt instru- ments. It represents the risk that the group will encounter difficultly in meeting its financial obligation as they are fall due. The monitoring of the Liquidity risks is supported by an internal monthly reporting.
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The table below provides a maturity of the Group’s non-derivative third party financial liabilities as at 31 December 2023 and 2022. The amounts disclosed in the table are the contracted undis- counted cash flows.
| 31/12/2023 | Between 1 to 5 | |||
| (IN EUR 1,000) | Less than 1 year | years | Over 5 years | Total |
| Debt with credit institutions | 163 | 0 | 0 | 163 |
| Trade and other payables | 5,176 | 0 | 0 | 5,176 |
| Bonds and notes issued: | 0 | 0 | 0 | 0 |
| Other financial liabilities | 10,448 | 7,500 | 25,609 | 43,557 |
| Total liabilities | 15,787 | 7,500 | 25,609 | 48,896 |
| 31/12/2022 | Between 1 to 5 | |||
| (IN EUR 1,000) | Less than 1 year | years | Over 5 years | Total |
| Debt with credit institutions | 1,606 | 192 | 0 | 1,798 |
| Trade and other payables | 6,000 | 0 | 0 | 6,000 |
| Bonds and notes issued: | 0 | 9,131 | 0 | 9,131 |
| Other financial liabilities | 9,077 | 41,140 | 0 | 50,217 |
| Total liabilities | 16,683 | 50,464 | 0 | 67,147 |
The Board of Managers of the General Partner assesses and monitors cash flows of the Group to ensure the Group has sufficient cash on demand to meet expected normal operational expenses, including the servicing of financial obligations.
Interest rate risk
The group currently has no interest rate risk. T he debt with credit institution were paid in full in February 2024. Currently all the borrowing are agreed at fixed interest rate over the entire term. In general, interest rate risk could arising from if future long term borrowings intersts would fluctuate because of changes in market interest rates.
Foreign exchange risk
The Group companies operate mostly in Euro (EUR). In general foreign currencies are only kept if future payments are expected to be made in a particular currency. The Group is exposed to foreign exchange risks especially with regards to CHF/EUR and USD/EUR based on bank deposits or intercompany loans in foreign currency.
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105
23. OTHER FINANCIAL OBLIGATIONS/
COMMITMENTS AND CONTINGENCIES
23.1 RENTAL AND LEASE CONTRACTS
Description of rental and lease contracts (short term and below EUR 5)
| (in EUR 1,000) | 2023 | 2022 |
| OPERATING LEASE OBLIGATIONS (RENTAL) AS OF 31 DECEMBER | ||
| < 1 year | 0 | 0 |
| > 1 - 5 years | 0 | 0 |
| More than 5 years | 0 | 0 |
| Total | 0 | 0 |
| (in EUR 1,000) | 2023 | 2022 |
| FINANCE LEASE OBLIGATIONS AS OF 31 DECEMBER | ||
| < 1 year | 18 | 0 |
| > 1 - 5 years | 0 | 9 |
| More than 5 years | 0 | 0 |
| Total | 18 | 0 |
| Future finance charges on finance lease | 0 | 0 |
| Present value of finance lease liabilities | 18 | 0 |
The present value of finance lease liabilities is as follows:
| (in EUR 1,000) | 2023 | 2022 |
| < 1 year | 18 | 0 |
| > 1 - 5 years | 0 | 9 |
| More than 5 years | 0 | 0 |
| Present value of future finance lease liabilities | 18 | 0 |
In the financial year 2023, the rental and leasing expenses for short term (up to 12 month) are KEUR 18 (2022: KEUR 0).
23.2 LETTER OF GUARANTEE
In connection with the sale of its subsidiary exceet Secure Solutions GmbH in 2021, the Company granted to the purchaser an independent guarantee to fulfil any and all payment claims of the purchaser against the seller (being the indirect subsidiary exceet Group AG) under the share purchase agreement up to an amount of EUR 4,912,409 in case the seller has not paid such claims to the purchaser when due and payable under the share purchase agreement. The guarantee expires seven years after the closing date, which was 30 April 2021.
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24. OTHER CURRENT
LIABILITIES
Details of other current liabilities are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Tax liabilities other than income taxes | 897 | 0 |
| Lease liabilities | 528 | 0 |
| Deposits received | 384 | 0 |
| Social security, wages and salaries | 168 | 249 |
| Other liabilities | 32 | 80 |
| Total other current liabilities | 2,010 | 329 |
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107
25. REVENUE
Details of revenues by category of activity are as follows:
| (in EUR 1,000) | 2023 | 2022 |
| Revenue from project development - PoC | 14,819 | 3,476 |
| Revenue from own operations - Point of time | 478 | 372 |
| Total revenue | 15,297 | 3,848 |
The increase in revenue from project develop- ment can be attributed to the start of processing 3 additional projects as well as the project progress within the ongoing projects in the financial year ended 31 December 2023.
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108
26. MATERIAL COSTS
Details of material costs by category of activity are as follows:
| (in EUR 1,000) | 2023 | 2022 |
| Material and external services | 12,410 | 3,061 |
| Personnel costs for project | 1,270 | 0 |
| Other supplies | 3 | 57 |
| Total material costs | 13,684 | 3,118 |
The increase in material costs correlates with the development of sales in the financial year ended 31 December 2023.
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109
27. PERSONNEL COSTS
Details of employee benefits expense are as follows:
| (in EUR 1,000) | 2023 | 2022 |
| Wages and salaries | 6,679 | 3,180 |
| Other social charges and taxes | 1,155 | 566 |
| Stock Option Program 2023 | 316 | 0 |
| Other employee welfareexpenses | 9 | 0 |
| Thereof Personnel costs for projects | (1,270) | 0 |
| Total personnel costs | 6,889 | 3,746 |
The average headcount by category of the Group employees for the year ended 31 December 2023, is 81 (31 December 2022: 46).
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28. OTHER OPERATING
EXPENSES
Details of other operating expenses are as follows:
| (in EUR 1,000) | 2023 | 2022 |
| Legal and consulting fees | 4,516 | 2,297 |
| Research costs | 1,967 | 76 |
| Supervisory Board fees | 1,933 | 0 |
| Bank and otherfees | 939 | 0 |
| Marketing costs | 860 | 827 |
| Building and premises costs | 817 | 670 |
| Costs for settlement agreement | 643 | 525 |
| Repairs and maintenance | 582 | 305 |
| Operational Leasing | 0 | 149 |
| Insurance premiums | 150 | 142 |
| Other expenses | 325 | 968 |
| Total other operating expenses | 12,732 | 5,960 |
The costs for the Supervisory Board fees in the financial year 2023 includes in KEUR 1,630 for the Stock option program 2022: EUR 0.00). We refer to note 33.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
111
29. FINANCIAL INCOME
Details of financial income are as follows:
| (in EUR 1,000) | 2023 | 2022 |
| Interest bank accounts | 345 | 0 |
| FX gains | 80 | 0 |
| Other financial income | 254 | 513 |
| Total financial income | 679 | 513 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
112
30. FINANCIAL EXPENSES
Details of financial expenses are as follows:
| (in EUR 1,000) | 2023 | 2022 |
| FX losses | 109 | 0 |
| Interest on amounts owed to credit institutions | 79 | 231 |
| Interest on other Financial liabilities | 2,160 | 3,253 |
| Interest on bonds issued | 0 | 231 |
| Reversal of capitalized Interests | 0 | 160 |
| Other financial charges | 108 | 1 |
| Total finance expenses | 2,456 | 3,876 |
Reversal of capitalized interests is due to trans- fer assets from construction to inventory which no longer satisfy of the requirement of capital- ized interest cost.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
113
31. RECONCILIATION OF
FINANCIAL LIABILITIES
FROM FINANCING ACTIVITIES
Movement in liabilities classified as financing activities in the consolidated statement of cash flows, excluded from the equity headings, for the years ended 31 December 2023 and 2022, is as follows:
| Issue incl. | conversion | ||||
| (IN EUR 1,000) | 31/12/2022 | Interests | into equity | Payments | 31/12/2023 |
| Bonds | 9,131 | 534 | 0 | 9,666 | 0 |
| Contract liabilites and capital grants | 47,538 | 0 | 0 | 3,981 | 43,557 |
| Bank borrowings | 1,798 | 0 | 0 | 1,635 | 163 |
| Total | 58,468 | 534 | 0 | 15,282 | 43,721 |
| Issue incl. | conversion | ||||
| (IN EUR 1,000) | 31/12/2022 | Interests | into equity | Payments | 31/12/2023 |
| Bonds | 0 | 9,131 | 0 | 0 | 9,131 |
| Contract liabilites and capital grants | 40,616 | 25,322 | 6,600 | 11,800 | 47,538 |
| Bank borrowings | 5,941 | 0 | 0 | 4,143 | 1,798 |
| Total | 46,558 | 34,454 | 6,600 | 15,943 | 58,468 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
114
32. RELATED PARTIES
Ultimate controlling parties and related-parties transactions
As of 31 December 2023 H2APEX has not been informed by any shareholder, that a shareholder has interests of more than 50%.
H2APEX Group S.C.A. is managed by H2APEX Management S.à r.l. (hereafter the “General Part-ner”), a limited liability company under the law of Luxembourg (Société à responsabilité limitée (S.à r.l.)), the shares in which are held indirectly by the founders of the Active Ownership Group (AOC) Florian Schuhbauer and Klaus Röhrig (50% each).
RELATED ENTITIES
The following entities are to be considered related parties:
H2APEX Management S.à r.l. (General Partner)
Active Ownership Fund SICAV-SIF SCS
Active Ownership Capital S.à r.l.
Active Ownership Corporation S.à r.l.
Active Ownership Investments Ltd.
Active Ownership Advisors GmbH
Active Ownership L.P.
Active Ownership Management Ltd.
APEX AFO GmbH & Co.KG
APEX AFO Series C GmbH & Co. KG
Endurance GmbH & CO. KG
Atlan Capital GmbH
Atlan Management GmbH
Atlan GP GmbH
Endurance Fund Ltd
RELATED PERSONS
Supervisory Board H2APEX Group SCA (as from 23 January 2020)
Due to the change of the legal form of the Com- pany to a partnership limited by shares under the laws of Luxembourg (Société en Commandite par Actions (SCA)), the extra ordinary general meeting on 23 January 2020 appointed the fol- lowing members of the Supervisory Board of the Company:
•
Roland Lienau (Chairman)
•
Georges Bock
•
Florian Schuhbauer (as of 02 May 2023)
•
Thomas Terschluse (as of 02 May 2023)
•
Prof. Dr. Matthias Beller (as of 02 May 2023)
MEMBERS OF THE MANAGEMENT BOARD
On 23 January 2020 the extraordinary general meeting of H2APEX Group S.A. adopted the change of the legal form of the Company to a partnership limited by shares under the laws of Luxembourg Société en Commandite par Actions (S.C.A.)) and the creation and issuance of one unlimited share to the general partner H2APEX Management S.à r.l. The Managers of H2APEX Management S.à r.l. are Klaus Röhrig, Jan Kopp and Bastian Bubel.
The remuneration of members of the Supervi- sory Board and the Board of Managers of the General Partner is disclosed in note 32.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
115
Details of account balances with related parties by category are as follows:
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Assets | ||
| Loans and accrued interests on shareholder loans | 0 | 11,064 |
| Other receivables | 506 | 827 |
| Total | 506 | 11,891 |
| (in EUR 1,000) | 31/12/2023 | 31/12/2022 |
| Liabilities | ||
| Loans and accrued interests on shareholder loans | 33,109 | 31,313 |
| Other payables | 0 | 320 |
| Total | 33,109 | 31,633 |
The following are income and expense items with related parties:
| (in EUR 1,000) | 2023 | 2022 |
| Income | ||
| Interest on shareholder loans | 0 | 346 |
| Rent income | 0 | 18 |
| Other income | 0 | 39 |
| Total | 0 | 403 |
| (in EUR 1,000) | 2023 | 2022 |
| Expense | ||
| Interest on loans from shareholders | 1,128 | 1,227 |
| Other expenses associates | 0 | 50 |
| Total | 1,128 | 1,277 |
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
116
MANAGEMENT AT THE LEVEL
OF THE COMPANY
The Company did not grant any emolument, loans or advances to members of its manage- ment during the year ended.
Transactions other than ordinary business or under terms differing from market conditions carried out by the management of the company.
During the year, the managers of the Company have not carried out any transactions other than ordinary business or applying terms that differ from market conditions with the Company or with other companies in the Group.
CONFLICTS OF INTEREST CONCERNING THE MANAGEMENT
The managers of the Company and their related parties have had no conflicts of interest requiring disclosure.
CONTINGENT LIABILITIES TOWARDS
RELATED PARTIES
No contingent liabilities towards related parties (2022: EUR 0).
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
117
33. KEY MANAGEMENT
PERSONNEL EXPENSES
The Company is managed by H2APEX Manage- ment S.à r.l. (hereafter the “General Partner”), a limited company under the law of Luxembourg (Société à responsabilité limitée (S.à r.l.)). For thefinancial year 2023, an amount of EUR 303,126 (2022: EUR 0) has been recognized in the consolidated statement of comprehensive income for remuneration of the Supervisory Board. The amount of KEUR 180 (2022: EUR 0) has been recognized in the consolidated state- ment of comprehensive income as a manage- ment fee for the General Partner.
Share-Based Payments
On the Annual General Meeting on 2 May 2023 the shareholders approved a Stock Option Program amounting to 3,640,000 shares of the Company, with each Stock Option correspond- ing to one share.
As of 31 December 2023, 2,200,000 of Stock Options have been already granted as follows:
•
1,000,000 Stock Options have been granted to the Chairman of the Supervisory Board (see Note 15).
•
1,200,000 Stock Options have been granted to key employees. The Exercise Price for each of these Options shall be EUR 5.50. These Options shall be considered vested over a four-year period (1/16 for each full quarter).
As consideration for Roland Lienau’s (Chairman of the Supervisory Board) contribution to the business combination between the Company and the German APEX Group (in particular, the deal sourcing, relationship management, sup- port of the key negotiations and your laborious assistance throughout the entire M&A process), 660,000 Stock Options have been granted to Lien HoldCo (related party to Roland Lienau). The Exercise Price for each of these Options shall be EUR 5.50. These Stock Options are fully vested as of the acceptance and must be exer- cised until 31 December 2027 (“Expiry Date”).
In addition, as consideration for Roland Lienau’s continuing to hold the office of chairman of the Supervisory Board, 340,000 Stock Options have been granted to Lien HoldCo, too. The Exercise Price for each of these Options shall be EUR 5.50. These Options shall be considered fully vested on 31 December 2025 (accelerated vesting) and cannot be exercised before 15 July 2024.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
118
The expenses recognized for stock option services during the year is shown in the following table:
| (in EUR 1,000) | 2023 | 2022 |
| Expenses arising from equity-settled transactions | 1,946 | 0 |
There were no cancellations of modifications to the awards in 2023.
The following table illustrates the number and exercise prices of stock options granted, the movements in share options during the year:
| 2023 | 2023 | 2022 | 2022 | |
| (in EUR) | Number | excercise price | Number | excercise price |
| Outstanding at 1 January | 0 | 5.50 | 0 | 0 |
| Granted during the year | 2,400,000 | 5.50 | 0 | 0 |
| Forfeited during the year | 0 | 5.50 | 0 | 0 |
| Exercised during the year | 0 | 5.50 | 0 | 0 |
| Expired during the year | 0 | 5.50 | 0 | 0 |
| Outstanding at 31 December | 2,400,000 | 5.50 | 0 | 0 |
| Exercisable at 31 December | 660,000 | 5.50 | 0 | 0 |
The weighted average remaining contractual life for the stock options outstanding at 31 December 2023 was 2.6 years.
The exercise prices for all outstanding stock options at the end of the year was EUR 5.50.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
119
The following table lists the inputs to the model used:
| Model inputs | |
| Weighted average fair values at the measurement date | 1.81 |
| Dividend yield (%) | 0% |
| Expected volatility (%) | 40% |
| Risk-free interest rate (%) | 3.29% |
| Expected life of options (years) | 4 |
| Share Price Grant Date | 6.65 |
| Model used | Binomial |
| weighted average remaining contractual life | 2.66 |
The expected life of stock options is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
120
34. EVENTS AFTER
THE REPORTING PERIOD
On 18 January 2024 the shareholders decided at the EGM (Extraordinary General Meeting), that the former exceet Group S.C.A. will be renamed into H2APEX Group S.C.A.. With the renaming a common branding with APEX Group is finalized.
There are no other subsequent events after 31 December 2023 to be reported.
H2APEX GROUP SCA CONSOLIDATED FINANCIAL STATEMENTS
121
Tel. 352 45 123-1
1, rue Jean Piret
www.bdo.lu
Boîte Postale 351
L-2013 Luxembourg
REPORT OF THE REVISEUR D’ENTREPRISES AGREE
To the Shareholders of
H2APEX Group SCA
19, rue de Flaxweiler
L-6776 Grevenmacher
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of H2APEX Group SCA (until
18 January 2024 “exceet Group SCA”) and its subsidiaries (the “Group”), which comprise the
consolidated statement of financial position as at 31 December 2023, and the consolidated
income statement, the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flow for the year then ended,
and notes to the consolidated financial statements, including material accounting policy
information and other explanatory information.
In our opinion, the accompanying consolidated financial statements give a true and fair view of
the consolidated financial position of the Group as at 31 December 2023, and of its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance
with IFRS Accounting Standards as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of
23 July 2016 on the audit profession (“Law of 23 July 2016”) and with International Standards on
Auditing (“ISAs”) as adopted for Luxembourg by the “Commission de Surveillance du Secteur
Financier” (“CSSF”). Our responsibilities under the EU regulation N° 537/2014, the Law of
23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the
« Responsibilities of “réviseur d’entreprises agréé” for the audit of the consolidated financial
statements » section of our report. We are also independent of the Group in accordance with the
International Code of Ethics for Professional Accountants, including International Independence
Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as
adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to
our audit of the consolidated financial statements, and have fulfilled our other ethical
responsibilities under those ethical requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of the audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
BDO Audit, Société Anonyme
R.C.S. Luxembourg B 147.570
TVA LU 23425810
BDO Audit, a société anonyme incorporated in Luxembourg, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
Reverse acquisition
a)
Why the matter was considered to be one of most significant in the audit?
We refer to the Note 2.i1 “Basis of preparation - Reverse acquisition of exceet Group SCA” in the
consolidated financial statements of H2APEX Group SCA.
On 19 January 2023, exceet Group SCA acquired Apex Nova Holding GmbH (unlisted entity
incorporated in Germany). The accounting for the reverse acquisition is a key audit matter due
to the effect of the arrangement which is accounted for as Apex Nova Holding GmbH being the
accounting acquirer of exceet Group SCA as legal acquirer in accordance with IFRS 10 and in
analogy with IFRS 3. As part of this accounting treatment, the General Partner needed to assess
whether the transaction is a business or asset acquisition. In addition, as part of the
consideration of the transaction, the legal acquirer issued a share-based payment for the assets
acquired in the Company and listing status.
Determining the accounting treatment for this transaction as well as the fair value of
consideration is complex and incorporates numerous assumptions and parameters (notably
determination of accounting acquirer and accounting acquiree, the exchange value of shares as
part of the consideration for the acquisition as well as the calculation of the share-based
payment) relevant to measurement that involve considerable estimation uncertainties and
judgment.
There is a risk that the estimates and judgements made in the recognition of the transaction as a
reverse acquisition may be inappropriate and the exchange of shares in Apex Nova Holding GmbH
for shares in exceet Group SCA and by way of a share-based payment, when aggregated, could
result in a material misstatement.
b) How the matter was addressed during the audit?
Our audit procedures on the accounting of the reverse acquisition as disclosed in Note 2.i1 of the
consolidated financial statements included, but were not limited to:
•
We obtained an understanding of the transaction including an assessment of the
accounting acquirer and whether the transaction constituted a business or asset
acquisition.
•
We assessed management’s proposed accounting treatment in accordance with
applicable IFRS accounting standards.
•
We checked the calculation of the purchase consideration and considered the legally
required report on the contribution in kind in accordance with article 420-10 of the
amended Law of 10 August 1915 on commercial companies that indicated that the value
of consideration corresponds at least to the number and nominal value per shares of the
shares that were issued in consideration of this acquisition.
•
We involved our own valuation expert and considered the appropriateness and
consistency of the assumptions used by management in the valuation of the share-based
payment and challenged the underlying key assumptions and parameters against
comparable transactions and market data.
•
Further we assessed the adequacy and completeness of the acquisition journals at
acquisition date and of the disclosures of this reverse acquisition in the notes to the
consolidated financial statements are in accordance with the Basis of preparation as
disclosed in note 2.i1 for the reverse acquisition.
BDO Audit, Société Anonyme
R.C.S. Luxembourg B 147.570
TVA LU 23425810
BDO Audit, a société anonyme incorporated in Luxembourg, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
Other information
The General Partner is responsible for the other information. The other information comprises
the information included in the consolidated management report and the Corporate Governance
Statement but does not include the consolidated financial statements and our report of “réviseur
d’entreprises agréé” thereon.
Our opinion on the consolidated financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to
report this fact. We have nothing to report in this regard.
Responsibilities of the General Partner and Those Charged with Governance for the
consolidated financial statements
The General Partner is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRS Accounting Standards as adopted by the European
Union, and for such internal control as the General Partner determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
The General Partner is responsible for presenting the consolidated financial statements in
compliance with the requirements set out in the Delegated Regulation 2019/815 on European
Single Electronic Format (“ESEF Regulation”).
In preparing the consolidated financial statements, the General Partner is responsible for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the General
Partner either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting
process.
Responsibilities of the “réviseur d’entreprises agréé” for the audit of the consolidated
financial statements
The objectives of our audit are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue a report of “réviseur d’entreprises agréé” that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as
adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
BDO Audit, Société Anonyme
R.C.S. Luxembourg B 147.570
TVA LU 23425810
BDO Audit, a société anonyme incorporated in Luxembourg, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
Our responsibility is to assess whether the consolidated financial statements have been prepared
in all material respects with the requirements laid down in the ESEF Regulation.
As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016
and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the General Partner.
•
Conclude on the appropriateness of General Partner’s use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our report of “réviseur
d’entreprises agréé” to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our report of
“réviseur d’entreprises agréé”. However, future events or conditions may cause the
Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of
the entities and business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision
and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or safeguards applied.
BDO Audit, Société Anonyme
R.C.S. Luxembourg B 147.570
TVA LU 23425810
BDO Audit, a société anonyme incorporated in Luxembourg, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We describe these matters in our
report unless law or regulation precludes public disclosure about the matter.
Report on Other Legal and Regulatory Requirements
We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the
Shareholders on 2 May 2023 and the duration of our uninterrupted engagement, including
previous renewals and reappointments, is two years.
The consolidated management report is consistent with the consolidated financial statements
and has been prepared in accordance with applicable legal requirements.
The Corporate Governance Statement is included in the consolidated management report. The
information required by Article 68ter paragraph (1) letters c) and d) of the law of
19 December 2002 on the commercial and companies register and on the accounting records and
annual accounts of undertakings, as amended, is consistent with the consolidated financial
statements and has been prepared in accordance with applicable legal requirements.
We confirm that the audit opinion is consistent with the additional report to the audit
committee or equivalent.
We confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014
were not provided and that we remained independent of the Group in conducting the audit.
We have checked the compliance of the consolidated financial statements of the Group as at
31 December 2023 with relevant statutory requirements set out in the ESEF Regulation that are
applicable to financial statements.
For the Group it relates to:
•
Consolidated financial statements prepared in a valid xHTML format;
•
The XBRL markup of the consolidated financial statements using the core taxonomy and
the common rules on markups specified in in the ESEF Regulation.
BDO Audit, Société Anonyme
R.C.S. Luxembourg B 147.570
TVA LU 23425810
BDO Audit, a société anonyme incorporated in Luxembourg, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
In our opinion, the consolidated financial statements of H2APEX Group SCA as at
31 December 2023, have been prepared, in all material respects, in compliance with the
requirements laid down in the ESEF Regulation.
Luxembourg, 30 April 2024
BDO Audit
Cabinet de révision agréé
represented by
Anke Schelling
BDO Audit, Société Anonyme
R.C.S. Luxembourg B 147.570
TVA LU 23425810
BDO Audit, a société anonyme incorporated in Luxembourg, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.