Brockhaus Technologies AG

Ladies and gentlemen, and welcome to the Brockhaus Technologies update call regarding the first nine-month results in 2022. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Marco Brockhaus.

Yeah, thank you very much, and good afternoon, everyone. Welcome to our earnings call for the first nine months. of 2022. Before we begin, I would like to point out that the slides we are presenting will afterwards be published, as usual, in the investor relations section of our website, rockhouseminustechnologies.com. After our presentation, we will be open to questions from your side. To be fair to everyone, please limit yourself to one question plus one follow-up. Thank you very much in advance. Before we present our results, I encourage all listeners to review the legal notice on page two of our presentation, which explains the understanding of forward-looking statements. Additionally, please refer to note seven of our annual report 2021 on page 86 for discussion on alternative performance measures, as well as reconciliations of non-GAP figures. Especially revenue before PPR, purchase price allocation, adjusted EBITDA, and adjusted EBIT. Please note that our EBITDA and EBIT adjustments only comprise share-based compensation, cost of the acquisition of subsidiaries, cost of equity transactions, as well as accounting effects from purchase price allocations. For information on risk factors that could cause actual results to differ materially, from forward-looking statements, we kindly refer you to the section on risk and opportunities in the management report, 2021, page 56. With that, flipping to page three and into our usual summary. After a record first half of the year, we are very proud to say that Q3 continued this momentum, resulting in new record levels with respect to all key performance indicators in the first nine months of 2022. We generated revenue before PPA of 125.8 million Euro in the first nine months of 2022, which represents growth of 268% compared to the first nine months of 2021. adjusted EBITDA grew overproportionately by 835% to 47.6 million euro. This corresponds to a continued high adjusted EBITDA margin of 37.9% and a margin expansion by 23 percentage points compared to the previous year. At the same time, adjusted EBIT increased by 1,115% to €44.5 million and free cash flow pre-tax also grew by over tenfold to €27 million compared to €2 million last year. Before adjustments, preliminary revenue was €123.2 million with EBITDA of €44.5 million and EBIT of €29.8 million. There you see EBIT is affected especially by purchase price amortization. A deep dive into the individual business segments will follow over the next slides. On the back of the strong operational development and continued profitable growth across all business segments, Within the first nine months, we announced last week that we expect to exceed the previous four-year forecast. We now expect revenue before PPR, purchase price allocations, of between 150 to 155 million euros versus the previous forecast of 140 to 150 million euros for fiscal year 2020. This corresponds to growth of between 19% to 23% as compared to the pro forma revenue of 2021. The previous forecast growth was expected to be between 11% and 19%. With regards to the adjusted EBITDA margin, we confirm the current forecast of 35%. In addition, we are looking at an unchanged strong balance sheet quality of Brockhaus Technologies, with cash and cash equivalents of €22.9 million as of end of September, despite bike-using having made several early voluntary repayments on one of the acquisition loans in the total amount of around €21 million this year. This was only possible to the strong organic cash flow of that company. In view of the very challenging market environment, including the continued pandemic measures, especially in China and lockdowns, war in Ukraine, the energy crisis and inflation and rising interest rates, our operating development clearly shows the high resilience of our business model. Even though the share price development in this current environment does not reflect the outstanding operational development, we are proud of and convinced by the value of our technology group, which is also observable in the analyst estimates. Ladies and gentlemen, with this brief summary, turning over to the next page and handing over to my colleague Harald, who heads our finance team.

Thank you very much, Marco, and welcome everyone from my side too. Let us jump right into the quarterly revenue analysis, starting at the top with bike leasing indicated by the light green bars. And here we see a further very strong Q3 with a revenue of 35 million euros, which is essentially in line with second quarter. There is one significant difference between the top line mix, however, that I would like to share some detail on. In Q3, the number of bike contracts facilitated through the bike using platform was 38 million euros. and therefore a bit lower than in Q2, which was 41,000. Still, Q3 had slightly more revenue, which is due to the sale of leasing assets returning after lease ends, as well as sale of some legacy non-bike business of our leasing subsidiary. As you might recall, Hofmann Leasing, so the leasing entity Hofmann, was only acquired by Bike Leasing shortly before we acquired Bike Leasing themselves and Hofmann Leasing has some legacy business that does not relate to bikes but to other leasing assets. Such revenue from the disposal of leasing assets is by nature low margin and that is why Bike Leasing's EBITDA margin was a bit lower in Q3 as compared to Q2. but all the details on that you can find in our 9M report on page five. Still, the chart shows meaningfully the seasonality that you would expect from numbers of bikes distributed during warm months versus cold months of the year. Proceeding to IHSE, As you can see, the company continued to outperform every last year's respective quarters and also shows increasing top line during the current year throughout. This adds up to a year-to-date growth of almost 20%. Most pleased, I think, we are with the recent performance of Pallas, though. As you might recall, we are facing really tough comparables here with substantial sales from COVID mask test rigs in last year. In Q3, however, Pallas saw such high volumes from the conventional fine dust products that the COVID product decline was completely compensated in the year-to-date view. In 9M 2022, the company therefore is back to a slight growth at some plus 1.2%.