Brockhaus Technologies AG

Hello, ladies and gentlemen, and welcome to the Brockhaus Technologies AG Investor Update Call. 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 Marco Brockhaus.

Thank you, and good afternoon, everyone. Welcome to Brockhaus Technologies' earnings call for the first quarter of fiscal year 2023. Before we begin, I would like to point out that the slides we are presenting will afterwards be published in the investor relations section of our website, rockhouse-technologies.com. After our presentation, we will open the call to questions from your side. To be fair to everyone, please limit yourselves to one question plus one follow-up. Thank you very much in advance. And before we present our results, I encourage all listeners to review the legal notice on page 2 of our presentation, which explains the understanding of forward-looking statements. Additionally, please refer to note 6 of our annual report 2022 on page 85 for a discussion on alternative performance measures, as well as the reconciliation of non-GAAP figures, especially adjusted EBITDA and adjusted EBIT. Please note that our EBITDA and EBIT adjustments only comprise share-based compensation, cost of the acquisition of subsidiaries, income from the sale of real estate, as well as accounting effects from purchase, price, location. 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 2022 page 59. Flipping over to page 3 and into the usual summary. After a record year 2022 for Bauhaus Technologies, we are very happy to say that our growth trend has also been unchanged in Q1 of 2023. We generated revenue of €33 million in Q1 2023, which represents organic growth of 41% compared to Q1 of last year. Adjusted EBITDA grew over proportionally by 70% to €9.6 million, corresponding to a high adjusted EBITDA margin of 29%. Adjusted EBIT also increased by 72% to €8.6 million corresponding to an adjusted EBIT margin of 26%. Margins on group level have thus expanded by around 5 percentage points as compared to Q1 last year. Before adjustments EBITDA amounted to €10.4 million and EBIT to €5.8 million. EBIT is especially influenced by PPA amortization. On the back of this strong development, starting into the year, we confirm our group forecast 2023 with revenue between €165 million and €175 million and adjusted EBITDA margin of 35%. The operating development in Q1 as well as the growth forecast for the full year clearly underline the resilience of our business models in the market environment with so many uncertainties as is currently the case. Lastly, due to our positive margin development in Q1, we further reduced the net leverage ratio within the group to 0.7 times adjusted LCM EBITDA. This equips us with significant non-diluted financing capacity for future acquisitions. A potential share repurchase et cetera. But more on this later in the presentation. With this brief summary, turning over to the next page and handing over to Harold, who has our finance department.

Yes, thank you, Marco, and welcome, everyone. Let us jump right into the quarterly revenue analysis on page four, starting at the top with bike leasing and an increase in top line by more than 50%. The main driver, of course, was the higher number of new bikes facilitated over the company's digital platform. That was some plus 40%. However, we also had a base effect in last year's Q1 when accounting for a green bond securitization had a negative, however, cash-neutral P&L effect. and this did not reoccur this year. Proceeding to ISSE on the bottom chart, as you can see, we are more than 14% above last year, but the interesting part on that comes in the regional sales grid, so let's discuss that on the next page. Here, however, first to buy season, top chart, As you might know, so far the company has been focusing on Germany only, with first steps of expansion to Austria, where bike leasing became market leader quite quickly after the market entrance. Therefore, all revenue here relates to the India region, of course. At ISIS-E, the material driver was the very strong performance in the US market, where revenue essentially doubled. This shows the impressive rebound in the American market, which was heavily impacted by the pandemic in the past. EMEA and APAC showed a minus in top line of 0.2 and 0.6 million euros. However, management sees those decreases as typical fluctuations during the year and not as a structural issue. So in all three regions, the demand situation indicates a significant upswing now that COVID is over. Turning to the QNL table by segment, in the first two columns, we see that bike leasing converted the high top line growth also into a significant uptick in margins. Growth profit margin is plus nine points and EBITDA is plus seven percentage points above last year. Proceeding to the next two columns to the right, as I just see the growth profit margin was a bit down on last year. However, as in revenue fluctuations in growth profit margin during the year can be observed as I just see quite regularly. On EBITDA level, the margin decreases more significant. This result is primarily from increased costs for trade shows and travel combined plus half a million euros. In addition, the company is working on migrating to a new ERP software system, which accounted for additional 120,000 euros. Also personal expenses increased due to commission payments resulting from the positive business development and the adjustment of salaries in response to the increased cost of living. This accounted for the personal costs accounted for some further 400,000 euros. Let it be noted too that this is a strong base effect in it. So the comparison as well for the last year sucks. In last year's Q1, EBITDA margin of IHSE was extraordinarily high, and this of course makes the comparison with the prior year period more difficult. We put the quarterly margin development in our quarterly statement as well. Please bear in mind that this development is completely in line with ICSE's internal budget, and we expect margin to level out over the remaining fiscal year on a clearly higher level. So this expectation is also backed by the very positive order situation, but Paul will tell you more on that later on. Lastly, to further counter the right central functions cost, were essentially in line with the 2022 level, so no significant changes to be reported there. In conclusion and summing up on the Controlled Debt Group level, revenue was 33 million euros showing a substantial increase of 41%. Growth profit margin was at some 63% and adjusted EBITDA margin was 29%. bringing the group to an adjusted EBITDA of 9.6 million euros. The group's adjusted EBIT of 8.6 million euros corresponds to a margin of 26%, as stated before by Marco. When you compare the last figure here to the number which you might have in your model or in your report, please bear in mind that following the sale of TALA, end of 2022, the P&L items need to be reclassified retrospectively. So according to alphabet five, all revenue and cost contributions of Pallas must be excluded from the respective line items of the P&L and are shown in one total under the name of income from discontinued operations. Since this has to be done for the numbers of the prior year, too, you have a nice, like-for-like presentation of the results, but also a difference to historical reports. Please also note that last year we adjusted for the effect of purchase price allocation, or PPA, in buy-to-usings revenue. which was quite substantial in fiscal year 21 and 22. This PPA effect by its nature is diminishing over time. And in order to avoid differences between our KPIs and IRS, we no longer make this adjustment currently and going forward. For your financial modeling purposes, if you might need that, the amount of the decreased earnings due to the value setup will still be reported, of course. In this Q1 statement, you find the figure on page 13. Last but not least, our cash balance at the end of Q1 amounted to more than 65 million euros. And that brings us to the next page on financing structure. Going left to right in the chart, our net debt from loans. end of March amounted to 87 million euros. Subtracting cash with a net debt from loans of 21 million, adding to that 14 million from other financial liabilities as well as 2 million from a net debt of lethal financing brings us to 38 million euros in total net debt. If you compare that to the current last 12 months EBITDA, This corresponds to leverage of 0.7 times, and since our target corridor reaches up to 2.5 times, this is a very comfortable level in our view. This concludes the financial update. I'm happy to answer your questions later on, and now hand over to Paul, who is in charge of our acquisition team.