EQS-News: Brockhaus Technologies AG: Brockhaus Technologies continues dynamic and highly profitable growth in the first nine months; full year 2023 expected at the upper end of the forecast

Brockhaus Technologies AG: Brockhaus Technologies continues dynamic and highly profitable growth in the first nine months; full year 2023 expected at the upper end of the forecast

• Revenue increases by +31% to €142.7 million in the first nine months of the year
• Adjusted EBITDA up +33% year-on-year to €54.4 million; EBITDA margin at 38.1%
• Strong growth in both segments:
  • Bikeleasing increases the number of newly facilitated company bikes by +32% to ~131,000 and its corporate customers by +10,000 to around 56,000
  • IHSE significantly above previous year level especially due to strong growth in North America
• Net debt reduced to €20.4 million; cash and cash equivalents increase to €74.5 million
• Continued optimism for full year 2023 and the outlook until 2025:
  • Revenue in fiscal year 2023 expected at the upper end of the forecast of €165 - 175 million with an unchanged high EBITDA margin of 35%
  • Revenue to be increased to €290 - 320 million and EBITDA margin to 40% by 2025

Frankfurt am Main, November 14, 2023. After nine months, Brockhaus Technologies AG (BKHT, ISIN: DE000A2GSU42) is still on track to achieve new record figures for revenue and earnings in the 2023 fiscal year. Following a very positive business development in the third quarter, revenue increased by +31% to €142.7 million in the first nine months of 2023 (9M 2022: €109.1 million). Adjusted EBITDA increased by +33% to €54.4 million and the adjusted EBITDA margin rose to 38.1% (9M 2022: €40.8 million; 37.4% margin). Adjusted EBIT increased by +33% to €51.2 million and the corresponding margin to 35.9% (9M 2022: €38.6 million; 35.4% margin).

In the second quarter, the subsidiary Bikeleasing acquired two of its so far external sales agencies in order to be able to manage its sales activities in an even more targeted manner in the future and to access the know-how and network of their employees. As a result of these acquisitions, commission payments that were previously paid to these sales agencies for their sales performance will cease, which leads to an earnings improvement. From a pro forma perspective, i.e. as if the sales agencies would have already belonged to Brockhaus Technologies since January 1, 2023, this leads to an adjusted pro forma EBITDA of €55.1 million (38.6% margin) or an adjusted pro forma EBIT of €51.9 million (36.4% margin).

"We continue to deliver what we promised also for 2023: dynamic and highly profitable growth. The very positive development in the first nine months also means that we now expect to reach the upper end of our full-year guidance with revenue of €165 - 175 million. Also in the medium term, we expect continued strong organic revenue growth to between €290 and 320 million by the end of 2025. At the same time, we expect to be able to increase our adjusted EBITDA margin to 40%, which would correspond to around €120 million at the mid-point of the revenue range", founder and CEO Marco Brockhaus comments on the development.

Net debt significantly reduced - cash and cash equivalents increase to €74.5 million

BKHT will be able to drive further organic and inorganic growth on the back of its very healthy balance sheet. Net debt at September 30, 2023 was reduced by 45% from €37.4 million at the end of 2022 to €20.4 million and, in relation to the adjusted EBITDA of the last twelve months, was reduced to 0.3x (end of 2022: 0.7x), despite the fact that in the second quarter approx. €8.5 million were used for the acquisition of the two sales agencies in the Financial Technologies segment. At €74.5 million as at the quarterly reporting date, cash and cash equivalents were above the year-end 2022 figure of €70.8 million following a significant increase in the third quarter.

The trend toward bicycle leasing continues – great growth potential for subsequent years

Subsidiary Bikeleasing (Financial Technologies segment) is still on course for record growth after three quarters of 2023. Revenue increased by +33% to €113.2 million (9M 2022: €85.0 million) and adjusted pro forma EBITDA by +32% to €51.8 million (9M 2022: €39.1 million). At 45.8%, the adjusted pro forma EBITDA margin was slightly below the previous year's high level of 46.1%. This was due to one-off expenses of €1.8 million.

In just nine months, Bikeleasing has increased the number of companies connected to its platform from 46,000 to around 56,000 with approx. 3.2 million employees. As such, 5,000 new corporate customers were onboarded compared to the previous quarter Q2. The demand for bicycle leasing as a cost-effective financing option in the bicycle market, continues to be very high. As a result, during the first nine months of 2023 the number of newly facilitated company bicycles reached around 131,000 and thus rose by 32% compared to the previous-year period (9M 2022: approx. 99,000). Bikeleasing made further strong gains in both its core market of Germany as well as in Austria. The expected growth in the coming years will be driven by further market penetration and the continuous acquisition of additional corporate customers as well as an increase in usage rates among existing customers. Additional growth is also expected from the new connection of D2C brands to the Bikeleasing platform. This also applies to the planned expansion of the platform to include additional employee benefits in addition to bicycles and the further internationalization of the business beyond Germany and Austria.

IHSE with strong revenue and earnings growth after nine months

The Security Technologies segment (IHSE and kvm-tec) was able to accelerate its growth momentum in the third quarter as expected, with revenue up +22% to €29.5 million after nine months (9M 2022: €24.1 million) and adjusted EBITDA of €7.8 million (9M 2022: €5.4 million). The adjusted EBITDA margin of 26.4% is significantly above the previous year's level of 22.4%. The main driver for the strong revenue growth was the very positive development in the Americas region with a revenue increase of nearly +90%.

The EMEA region saw solid development, while the sales markets in Asia continued to suffer from the difficult conditions in China. Due to the high order backlog of €9.6 million as of September 30, 2023 the company also expects a strong final quarter. In the coming years, IHSE and kvm-tec shall benefit from the global trend towards increased digitalization and connectivity as well as the need to create protection against the increasing number of cyberattacks worldwide.

Growth potential far from exhausted: revenue to be increased to €290 to 320 million and EBITDA margin to around 40% by 2025

In view of the great growth potential in both segments, the management board of Brockhaus Technologies is optimistic to achieve further strong and profitable growth despite continuing geopolitical and economic uncertainties.

In view of the good performance in the first nine months, revenue for the full year 2023 is expected to be at the upper end of the forecast range of €165 - 175 million. The adjusted EBITDA margin is expected to remain unchanged at 35%. Accordingly, adjusted EBITDA of around €61 million (2022: €50 million) is expected to be reported. By 2025, revenue - excluding the inclusion of further significant acquisitions of new technology companies - is expected to increase to €290 - 320 million and the adjusted EBITDA margin to around 40%. This would double adjusted EBITDA to more than around €120 million in 2025.

The already today available financial resources in combination with future cash flows are to be invested in the further organic growth of the subsidiaries as well as for selective inorganic growth initiatives.

The report for the first nine months of 2023 and further information can be found here:
https://ir.brockhaus-technologies.com/websites/brockhaustechnologies/English/3000/publications.html

The earnings call for 9M 2023 in English will take place today, Tuesday, November 14, at 4:00 pm (CET). Interested parties can register for the call under the following link: https://webcast.meetyoo.de/reg/NcgvCMrZVu7J

Contact information

For investors:

Paul Göhring
Phone:  +49 69 20 43 40 978

Fax:  +49 69 20 43 40 971

E-mail:  ir@brockhaus-technologies.com

For media:

GFD - Gesellschaft für Finanzkommunikation
Phone: +49 69 97 12 47 33

Fax:  +49 69 97 12 47 20

E-mail:  dietz@gfd-finanzkommunikation.de

Consolidated key figures for the first nine month of 2023 (pro forma)*

* Note on prior-year comparison: With regard to the definition of alternative performance indicators, please refer to page 85 et seq. of our Annual Report 2022 and page 19 of our Half Year Financial Report 2023.

About Brockhaus Technologies

Based in Frankfurt am Main, Brockhaus Technologies AG (BKHT, ISIN: DE000A2GSU42) is a technology group that acquires high-margin, high-growth technology and innovations champions with B2B business models in the German Mittelstand. With a unique platform approach and a long-term horizon, Brockhaus Technologies actively and strategically supports its subsidiaries in achieving profitable long-term growth, both across industries and internationally. At the same time, Brockhaus Technologies offers a gateway into these non-listed German technology champions, which are otherwise inaccessible to capital market investors. For more information, please visit: https://www.brockhaus-technologies.com/en/