Brockhaus Technologies AG

Hello and welcome to the Brockhaus Technologies AT Earnings Call Q3 2024. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. Let me now hand over to Marco Brockhaus.

Yeah, thank you and good afternoon, everyone. Welcome to Brockhaus Technologies Earnings Call for the first nine months of fiscal year 2024. Before we begin, I would like to point out that the slides we are presenting will afterwards be published in the Investors Relations section of our website, brockhaus-technologies.com. After our presentation, we will open the call for 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. 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 2023 on page 14 onwards of our quarterly statement 9 months 2024 for a discussion on alternative performance measures as well as the reconciliation of non- gap figures, non-gap figures. For information on risk factors that could cause actual results that differ materially from forward-looking statements, we can refer you to the section on risks and opportunities in the management report 2023, starting on page 65. Flipping over to page three, to the summary, nine months 2024, I would like to give you a brief summary of what we have achieved in the first nine months of this year. As a quick reminder, we rebranded our financial technology segment as HR Benefit and Mobility Platform last year. This change aligns with our strategic vision, especially in light of our acquisition of Probonio, an employee benefit software company. With this acquisition, Bike Leasing is taking a significant step in evolving into a comprehensive multi-benefit platform. This decision reflects our commitment to expanding our service offerings beyond bicycle leasing and delivering even greater value to our clients. We continue our success story in the first nine months of the year and confirm our annual forecast. The positive business development in nine months 2024 highlights the highly profitable growth momentum of our technology group, despite ongoing economic and geopolitical uncertainties. Bike Leasing continues to perform exceptionally well and IHSE has started the second half of the year strongly as expected. The pro bono rollout is progressing as planned with initial sales initiatives already launched in late August targeting a selected group of bi-season customers. For the fiscal year 2025, indications from a pilot customer survey suggest a realistic positive EBITDA contribution for Probonio in the mid-single-digit million range. Brockhouse Technologies generated revenue of €175 million in nine months 2024, which represents organic growth of €23 billion. compared to nine months of last year. Adjusted EBITDA grew by 16% to 68 million euro corresponding to an adjusted EBITDA margin of 39%. Adjusted EBIT also increased by 16% to 64 million euro corresponding to an adjusted EBIT margin of 37%. Before adjustments, EBITDA amounted to 64 million euros and EBIT to 46 million euros. Please have in mind, EBIT is especially influenced by PPA amortizations or purchase price amortizations. Based on this, we confirm our group forecast 2024 with revenue between 220 and 240 million euros and an adjusted EBITDA between 80 to 90 million euros. The strong results in 9M once again highlight that our business model enables significant revenue growth and very high profitability, even in ongoing economically challenging times. Lastly, we reduced the group's net debt relative to the adjusted pro forma EBITDA of the last 12 months from 0.9 times at the end of 2023 to 0.6 times. This equips us with significant non-dilutive financing capacity for acquisitions and future growth initiatives. But more on this later in the presentation. Let me flip over to free cash flow development. The next chart illustrates the development of our free cash flow before tax over the past few years, which grew at an impressive CAGR of 105%, increasing from 11 million in 2021 44 million in the last year. And again, this positive development continued in the current year with free cash flow of 26 million euros, outperforming last year's nine months by 60%. EPS development. On the income side, the strong performance across our business segments led to a doubling of adjusted performer EPS. From 64 cents in 2022 to to €1.29 in 2023, reflecting a compound annual growth rate of 77% over the last three years. This trend continued with an increase of 12% in adjusted EPS to €1.42 in nine months 2024, compared to last year's performer amount. Let me flip to revenue by quarter. Proceeding to the next slide, let us look at how revenue developed on a quarterly base. At IHSE, on the bottom of the page, the third quarter showed a strong uptick in sales to €10 million, outperforming the first two quarters of the year substantially. This is still below the revenue level of last year's Q3, but we are very positive with regards to the rest of the year. Yannick Moy Johnson, our head of operations, will tell you more about the promising order situation later in the call. Bike leasing, on the top of the page, continued its growth trajectory very nicely. Every quarter of 2024 outperformed the last year clearly, as you can see. The strong revenue growth, despite the decrease in number of bikes, was driven, on the one hand, by the rise in resale proceeds from bikes, at the end of the contract, that component of revenue relates mainly to the growth realized three years ago, and therefore is essentially independent of current developments. In addition, over the last year, Bike Leasing has converted some 90% of employees of corporate customers on the platform to a variable leasing sector that flows with the current interest rate environment. That means that all other things being equal, the monthly Leasing rate for a new bike is higher when market interest rates are higher and vice versa. As a result, bike leasing earns significantly more income per bike today compared to last year. I think it's very important. I will now proceed to the next page for the regional sales split. Revenue by region. First, the bike leasing. No surprises here, the company does business in Germany and off-chain growth in revenue was around 34%. ICC saw an impressive rebound in both EMEA and EPEC. Especially development in EPEC came as a positive news, since the Chinese market is still characterized by general decoupling tendencies. Despite that, the company managed to almost double HR revenue. Also, the 22% growth in EMEA to 15 million in top line demonstrates a more than solid development. The only challenging region remains to be in the U.S. this year, where we run against tough comparables. Last year's American revenue comprised a very large project, which ISSE could not catch up to SOCA this year. Turning to the segment P&L tables. KPIs by segment. In the first two columns, we see that bike leasing's gross profit margin was almost on last year's level at 67%. EBITDA and EBIT margins were a bit reduced, which was due to increased personnel and other operating expenses, expenses to support future strong growth. This cost base also includes operations of probonials, which we acquired in April. Proceeding to the next two columns, to the right, at ITSE, the gross profit margin was essentially in line with last year. What is not positive was the margin development at EBITDA level, where ITSE was down to 13.2%. This was caused, naturally, by the low top-line level in conjunction with the fixed cost and personal and other operating expenses, in other words, revenue picks up, EBITDA margin will pick up. Moving two further columns to the right, in the central function expenses were above last year's level, driven especially by consolidating fees in connection with the revenue of potential company transactions. In conclusion, and summing up on the consolidated group level, revenue was 175 million, showing a strong increase of 23%. Growth margin was at 68% and the trusted EBITDA margin was 39%, bringing our group to an adjusted EBITDA of 68 million euros. The group's adjusted EBIT of 64 million corresponds to a margin of around 37%. As a result, our growth rate plus EBITDA margin clearly overshoots our rule of 50, meaning 30% EBITDA margin and 20% top-line growth. Let me flip to the next page on leverage. I would like to run you briefly through our financial leverage structure. End of September, the debt from loans amounted to 76 million euros. When subtracting cash of 45 million, we are left with a net debt from loans of 32 million. Furthermore, adding 18 million from other financial liabilities and deducting 7 million of net assets from lease refinancings brings us to 42 million euros in total net debt. If you compare that to EBITDA of the last 12 months, this corresponds to a leverage of less than 0.6 times. This is a significant reduction compared to the beginning of the year when leverage was almost 0.9 times. As our limit for this KPI is some two and a half times, we consider our current financial position as more than conservative. With this, I would like to conclude the first part of our presentation, and I now hand over to Paul and Janik, and Paul is in charge of our acquisition team. Paul?

Yes, thank you, Marco, and welcome, everyone, also from my side. As usual, let me start the operational deep dive with a look at spike raising. In the first nine months of 24, Bike Living achieved another record in terms of revenue, earnings, and cash flow, as you could see on the previous pages of the presentation already. Bike Living was able to further continue the high growth of its corporate customers. The number of corporates now stands at around 70,000 individual corporates, with around 3.7 million employees behind them. The growth has been especially strong within the SMEs. which is why the average size of new corporates on board last quarter was smaller than the quarters before. Despite the strong development in new customers, the number of facilitated bicycles was slightly below the previous year, with around 123,000 units. There are three main reasons why, one of which is an externally driven one, and two of which were active management decisions. Let me start with the external one. The weakened consumer behavior had a clear negative impact on the bicycle industry as a whole. From discussions with large retailers, we received insights that some of them are down 20 to 30% year-on-year, meaning the financing option of bicycle leasing, which we offer, despite lower units, has still expanded its relative market share in the first nine months quite significantly. As just mentioned, we took two active decisions, one of which was to adhere to a very strict rating management related to our customer base. The current, very challenging economic environment led to a broad rating downgrade within corporates across all sizes and segments in Germany. Instead of ignoring those downgrades for the sake of simply more volume, we took the decision to keep the quality of our financing volume higher, which has historically led to default rates of well below 1%. This is not only very important vis-a-vis our lawyer refinancing partners, but also relevant for the small percentage of business that we finance on our own balance sheet. The second active decision was the shift from a fixed to a floating leading factor at the beginning of last year. Since then, corporates with around 90% of the connected employees have already migrated to this new system. However, corporates that employ the remaining some 10% of employees have still not agreed to the new system, leading to a reduction in new orders from those specific customers. This, however, as was the topic before, a significantly higher unit economics and thus profitability, as you can see from our 9M figures.

But more on this on the next page. As just touched upon,

our active decisions, especially the shift to a floating leasing factor at the beginning of last year, led to a significant increase in the revenue per sold-off leasing contract. As you can see on the left chart here on this page, the revenue per contract increased by some 43%, which is also one of the key reasons our revenue has significantly grown despite a slightly lower number of units brokered. To summarize it with very round numbers as an example, if one earns around 40% more per contract, but units are down some 5%, this still leaves you with a delta of plus 35%. The second reason for a significant increase in revenue is the resale business related to bicycles that return to bike leasing after end of leasing contract. Those bicycles are usually sold off to their users, meaning employees, in some 95% of the cases, with the remaining 5% being sold off to used bicycle platforms retailers, as well as since this month actually also B2C. This revenue component, however, has a substantially lower gross margin as compared to our brokerage business. While the brokerage business stood at a gross margin of around 92% in the first nine months, the gross margin of the resale business stood at around 12%, as you can see here. However, given our effort with Bike2Future, our newly founded facility for the management and sale of those returning bicycles, We were able to not only increase the gross profit in absolute, but also in relative terms, increasing the gross margin from 8% in the first nine months last year to 12% just mentioned this year. This concludes my section, and I'm handing over to Yannick, our head of operations, for a similar update on IHSE.

Thank you, Paul. Good afternoon from my side as well. So, speaking to our other subsidiary, IHSE. While IHSE's revenue was down by 19% in the first six months of 2024, we saw the anticipated rebound in Q3 with a significant increase to 10 million euros. Although this reflects a drop of 16% compared to Q3 of 2023, it is the fifth highest quarter in terms of revenue generated in the history of IHSE. Keep in mind that in 2023 we had revenue generated from the record order received in the air traffic control segment. This year, we see an overall increase in new customers and more smaller project sizes, showcasing an unchanged demand for ISSE as a global technology leader in KPM technology. We believe that the growth tailwind in its markets remains intact with a continuing rebound. As shown earlier in the regional split, ISSE is on a successful trajectory in the IMEA region, where we still see an unchanged market potential for the solutions ISSE is offering. This trend is continuously driven by projects that ITSE was able to win as a result of the compliance with standards for highly security-critical applications and cutting-edge technology upgrades in our products. While we are also very happy with the positive momentum we generated in APAC, there is still a lot of future potential in the Americas region. Overall, the orders received in the second quarter accumulated to 8.5 million euros, stemming from multiple regions, customers and verticals, further strengthening the customer base of ITG. The existing backlogs and additional orders received are providing a very healthy order backlog of over 8.3 million euros as of end of September 2024, which gives us continuously high utilization of our facilities for the fourth quarter of 2024. This concludes the operating update and I'm happy to answer any questions you might have later on in the Q&A section.

Yeah, thank you, Yannick. Let me come to our forecast 2024 and with this to the last two pages of our today's presentation. Our forecast for the fiscal year 2024 as well as our medium-term outlook for 2025. As already briefly mentioned in my opening remarks, we could confirm that our group forecast for 2024 on the back of the highly profitable growth trajectory in the nine months this year. We expect revenue between 220 to 240 million euro and adjusted EBITDA between 80 to 90 million euro in the fifth year 2024, which corresponds to a growth corridor of 18 to 29% compared to the 187 million euro in revenue achieved in 2023. In terms of EBITDA, this reflects a growth corridor between 29% and 45%. Our medium-term outlook for 2025, as communicated back in June 2023, remains unchanged. We remain optimistic based on the strong fundamental development of our subsidiaries and continue to expect revenue between €290 to €320 million and an adjusted EBITDA margin of 14%. Please note, and that's very important, that this outlook assumes that there will be no further change in the scope of consolidation within Brockhaus Technologies. The reason for this approach, again, is the difficulty in predicting the nature and scope of future acquisitions. We do not believe that any estimates in this respect are sufficiently reliable, even though we are constantly working towards finding the next hidden gem in the market. That concludes our presentation and we are now happy to answer your questions. For that, I would like to hand over to the operator. Thank you very much for listening.

Ladies and gentlemen, if you would like to ask a question, please press 9 and star on your telephone keypad. In case you wish to withdraw your question, please press 9 and star again. Please press 9 and star to register for a question. And first up is Stefan Augustin from Barbrook Research. Over to you.

Yes, thank you. I have a question on the declined bikes on the leasing side. So I understand that you continue to onboard more companies and so customers and employees which would be eligible to lease a bike and at the same time we have declined some requests and now What I would like to know or get a feeling on is, first of all, how much is that decline? And the second is that I have the idea that when the recipient does not get the bike leaving, he simply either buys the bike or steps away from it. So it's not really... an option that these bikes return, or is that contractually somehow different? And let's say in Q4 you could make the decision that 1,000 bikes or so that were declined in Q3 appear in Q4. How does this work?

Many questions in one, and you correct me if I'm missing something.

Your question was regarding the mechanism behind that, so if we could reverse the decisions that we've done to let it trigger more unit brokers in the last quarter. We could, but why should we? The decisions that we took, I mean, on net-net turned out to be the right decision, and you would, by turning them around again, you would somehow, let's say, damage the message you have given to the market. Just imagine, we have turned around corporates with around 90% of the employees to the new, future, sustainably floating leasing factor, and we are working on corporates with the last 10%. it would now turn around and, of course, technically we could. We turn around and say the last 10% can just continue as we've been doing in the past. This would, let's say, hurt the relationship with the remaining customers that employ 90%. So while you could technically do that, it doesn't make any sense from a management and customer relations perspective. On the rating management side, Of course, we could technically change that to just accept the order from those customers that had experience rating downgrades. But what would that mean? That would mean we would get business from customers with a worth rating, which would on the same side lead to statistically higher default rates, which we would also need to factor in our balance sheet. And you have a factor that, I mean, our refinancing partners love our business. Why? Because it's nicely growing, it's green, and it has a default rate of well below 1%. If you would change that, this would, of course, at least tackle one of the three things I just mentioned, meaning higher default rates. So also, again, here, while we could technically do this, we don't see a reason why we should do it.

No, fully understood. The idea was, let's say, to understand better if it is simply a management decision to have the volume return, even if it has good sense to be very prudent on it and how much the scope of this, let's say, voluntary decline has been. Those are two major ideas behind my question.

Okay, we are not commenting on the exact units that have, let's say, not come in because of those two decisions. They were active management decisions. But, I mean, who is ordering bicycles? It's the employees of our corporate customers. So, of course, theoretically, if we would turn around the decisions we did, those employees would need to walk to the retailer again and order their bicycles, and then they would come through. But it's not as if automatically you would have the orders in the book already.

Okay. Thank you very much.

And the next question comes from Lasse Stieben from Bernberg. Over to you.

Hi, Graf Lund. Just to follow up on the previous question, the remaining 10% that have not gone on the variable factor, I think that was also the number that you had at Q2. So what's kind of the outlook for getting those converted, if at all? And then the other question is on IHSE. It's been, I understand Q3 was a lot better. But we're still really, I don't know, you know, we haven't seen kind of a full recovery, I suppose. And just looking at the backlog, I think you said it was 8 million, if I'm not mistaken. It's still reasonably, it's still a bit lower than historically. So I'm just wondering kind of how you're thinking about, you know, growth in the fourth quarter and also into 2025. Thank you very much. And the final question, actually. Anything you could say on the acquisition pipeline or the deals you're seeing in the market at the moment?

Thank you.

Yeah, starting with the first question and the remaining 10%. I mean, we are always communicating here round numbers, right? So while we have progress in the migration of further customers, It hasn't changed the picture in a big way, but we are continually each week migrating more customers from this, let's say, remaining 10% employee bucket to the 90% bucket. but we are not doing exact numbers here, as you can also see from, I think the first number we communicated was last year, some 80%, so we are using wrong numbers here. Will we get 100% of them converted? Probably not, right? You cannot change all, because for some reason there will be some corporates that simply don't want to accept it. And this is the name of the game in that sense. But our goal is to get as close to the 100% as possible. But as you can also imagine, the ones that remain unchanged right now are the hardest ones to convert because they have like some 12 months time already to migrate in the system. And they haven't done this for a reason, whatever the reason might be. There might be some contact partners, contact persons that simply deleted the emails they received, right? So we need to phone them up and be behind them. There might be some of which were small companies where the managing director just says, he or she is not planning to purchase a new bicycle or lease a new bicycle in the next year, so they don't see a reason to change the new system. Then you need to educate them and say, look, it's not only relevant for you as an individual person, it's also relevant for your employees who want to order bicycles. There are ones that say it's too expensive for them. Some believe... They have different topics right now on the table than employee benefits, but they are rather thinking about the economic situation. So there are a variety of different reasons why some haven't changed yet, but we are confident to further progress on that side and get as close to the 100% as possible. But reachable will never be technically 100%. The other question was regarding IHSE, and the last one was regarding M&A. but maybe because Emily also lies here within my talking. Let me answer that as a first question. We, as also said in the presentation, we have a deal flow that is still very good. But it still splits and it's become a bit better but as we said in the past it was quite black and white. Black meaning very heated, very expensive M&A options that go through especially for software or software related businesses. And you have the other side of businesses, usually not software businesses, that are that were in transaction situations, but given a gap between price expectations from buyers and sellers, the transactions didn't go through. Since post-summer, there has been an increase in deal flow again from very interesting transaction situations, where we also spend time and effort on, as you heard earlier in the presentation, where the situations are... not, let's say, plain vanilla, I would say, and I give you a couple of examples just now, but it's brilliant businesses, very interesting markets, very interesting technologies and innovations, but there are certain, let's say, complexities that you need to solve as part of a transaction. One being, just to give you an example, we're currently looking at a business in the wound care space. Very cool company, product, market, but it's a carve-out, and whenever you talk carve-out, you have significant carve-out complexity involved. Will we be able to solve that? Not sure yet. We are working towards it and seeing if we can structure it in a way that it works for us, but we cannot promise it yet. Another example was a software-hardware combination business in the public transport space where, unfortunately, the deal is not closed yet, but it seems like they have decided for someone with a higher price expectation than us. But in that case, we also had a complexity, and that's probably also the reason why the deal hasn't closed yet, where the business is a family business and there needs to be a lot of structuring on the HR side to make it a sustainable HR base and not only a family business that's only run by family members. A third example maybe is also a very brilliant company in the field of Let's call it digital platforms in a wider sense because they're not pure software. They have been growing some 100% in the last years with a 50% EBIT margin, so very, very effective. However, their solution is built on top of reporting standards, so meaning IFRS, German GAP, and there's always a regulatory risk involved, not regulatory, a Reporting standards change risks involved with that because we are talking about a specific type of financing solution. They are, again, brokering through their platform. Whenever reporting standards might change, this would significantly risk them being not competitive anymore. So those are three fundamentally brilliant companies that would tick our boxes, and we have or are still looking at them. But we are first trying to structure out any complexity there might be before we continue with it.

Maybe it's a tough point on your question about IHSV. Of course, we do not guide by segments, but two things to keep in mind. The first, if you compare the order backlog of the beginning of Q4, it's higher or it was higher than the respective 2023 beginning of Q4. And secondly, of course, we're still working with a lot of customers, with a lot of partners, and continuing business and continuing projects. And depending on the complexity, projects can have a time from order to execution and delivery of, let's say, low at one week. So Q4, still, ISAC is heavily engaged, which means at the end of the day, the order backlog, what we had at the beginning. can be also subsidized and supported by additional business and projects that we work on. Of course, not all will be short term on short notice. More complex projects take a couple of months, but there will and are still some standard projects that you have also in a short, recurring time.

Understood. Very clear. Thanks. Good.

And the next question comes from Lucas Fang from Secrets Capital.

I have two questions. The first is relating to the buy season business. Can you share any insights from the start into Q4? So we have now more or less six weeks into Q4. Should we expect also for Q4 another decline in new contracts or what is the current development here? And the second question is related to Provolio. It's now more but then half of the year in part of the Prokof family. So how do you progress in terms of winning new customers after you have now completed the technology issue and should now focus on winning customers for Prokof. Thank you.

Sure.

The first one, how is Q4 running? We are not guiding on running quarters, but we will do so as always with the next earnings release, because that would make it a bit too granular to start commenting on operational KPIs, not even financial ones, intra-quarter. The second one regarding Probonio, to give a bit more flavor here, yes, we own the business since more than half a year now, but please keep in mind the first months were characterized by the integration, more on the organizational side, but also on the technical side. And the first, let's say, cross-selling outreach started, if I remember correctly, end of August, where we approached a first, let's say, small group of customers regarding actually converting to Probonio. This is also going well. We've clearly seen the interest from those clients, which led to the whole sales team and sales department of Probonio being booked out for web demos right away. So we needed in parallel to ramp up the Probonio sales team to be able to actually process the interest that we received. And we also see a clear increase in the registration rates of new customers. but it's still too early to say how many or to give a fixed percentage that we might expect. It has kicked off and is going well, but so far nothing to report on that side.

Thank you.

And next up is Christoph Hoffmann from Montega AT.

Yeah, hi, good afternoon. Three questions from my side today. So firstly, in regard of the gross margin of the resale business of bike leasing, I'm wondering what led to the strong increase in the margin and do you think you will be able to achieve this margin in the future? Secondly, I would like to speak about the further internationalization of bike leasing. So, is an entry into further markets likely to happen in 2025? And if so, anything changed in the way you will proceed? And lastly, in regard of your capital allocation next year, are you also considering an early repayment of the EASA acquisition loan in 2025? And how do you think about further buybacks, especially after the recent development of the share price? Thank you.

Yeah, again me.

So starting with the gross profit development on the resale business, yes, it has improved quite significantly. Will it continue to improve over the next year? Hopefully. I mean, we have founded an own subsidiary for that with an own management team and own also workforce that only focuses on the topic of reselling businesses. We have just opened This month also a B2C flagship store close to Frankfurt, where also normal consumers come and purchase used buses that come out of our leasing contracts. So we are of course doing all this work and attention, and it also includes cost. I mean, allocating more people to that topic means more cost. Hopefully it comes hand in hand with an increasing gross profit margin. ever be not diluted to our brokerage world profit margin. Unfortunately not. It will always be significantly below that. But we are working towards improving that as much as possible because it helps the world profit margin. The second, regarding internationalization next year, nothing new to report here as well. I mean, we are always considering, always looking at it, but it's a question also on prioritizing different topics. And we, of course, have a lot of potentially very value-creating initiatives already on the table. We just talked about Pro Bono, for example. So management attention is limited, right? You cannot split across an indefinite amount of initiatives. But, of course, we are considering it, and I think we also discussed it in the past already. The systematic would probably be markets that are already covered with players would probably only make sense through M&A, because ramping up something organically there is hard. Markets that are not open yet are actually the more interesting ones in our view, because once they're open and you are already there, you are already on the ground with a team to capture the market that has just gone up, so opened. And also in that respect, pro bono will be a factor that flexibilizes our internationalization approach in the future, because we are not anymore limited by which country does offer bicycle leasing compared to the German system, but we can just look at which market is interesting, and if it's interesting, we can go there with the benefits that work. On capital allocation, when we repay the IHSE provision loan, Likely not an early repayment. Why is that? Because the interest is just too low. I mean, we acquired IGSE end of 2019, so you can imagine the interest rate, in that case fixed interest rate that we have there, is so low that it makes no economic sense from a capital allocation point of view to refinance it. But as you have seen also in Q3, we are of course working strongly into the direction of further early repayment of all subordinated acquisition loan at buy-freezing.

And maybe on the buyback topic, if you comment on that.

Maybe we are Mark Brockers here. We always consider that because we believe we are undervalued as the vocal reports show us to. So this is always an option. And maybe to add to your question regarding internationalization of bike leasing. as we know that competitors and management of competitors own stocks in our publicly traded podcast technologies, we would not tell this public when and where we want to internationalize organically with bike leasing because this is strictly confidential.

Okay.

Yeah, of course. Sure, thank you.

At the moment, there are no further questions. So if you have any additional questions, please press 9 and the star key now.

9 and star for any additional questions, please.

And we have one question coming from Akash Vankinat from P&R Investment Management. The floor is yours.

Hi, guys. So you've left the fiscal year 2025 guidance unchanged as before, and the leasing factor uplift that you've seen this year is one-off, of course. And given the weak macro environment, what gives you confidence that the bike leasing units will grow year-on-year in 2025?

So that's, I guess, what's implied in the guidance.

Maybe to first technically come down, it's not a guidance, it's a medium-term outlook that we gave out mid-last year in June, so it's already quite old, but it's more a technicality in that sense. What gives out our confidence that we can continue to grow with both our businesses? I mean, we're always talking about bike using because it's the significantly larger one, but because they're in good positions The change in the leading factor is one thing that is progressing, but of course, I mean, we have already changed 90% of the employees to this new system. So the effect going forward will be more limited. But remember, I mean, we are continuously onboarding new corporate customers with new employees. So starting into this year, we had some... I forgot the number, but some... 60 something thousand, I think 60,000 was the number that we started with, but don't feel me down on it. 60,000 corporate customers and we had only changed 80% of the employees behind that to the new floating rate system. So going out of this year, we were automatically starting to next year with a significantly larger customer base on the platform. Can we forecast what the market will be doing if it's going up or down and how it will develop alongside it? Hard to do, but we're starting to deal with a significantly larger pool of customers that run on the current system, on the current floating rate system. And this is one of the things, plus our operational initiatives, strategic initiatives, where we are confident to still go into our medium-term outlook.

Thank you. Good luck. Okay.

Yeah, I just want to add that ICC is also strategically as well as operationally very good positioned, especially on the critical, mission-critical installation side and And therefore, yeah, we, you know, despite, as I said it before in my little speech here, despite all economical and geopolitical uncertainties, I just recalculated. I think we grew and we grow now 12 quarters in a row like crazy. And yeah, it gives us a lot of confidence in what we're doing and what we believe will come up in the future.

nothing to add. Thank you. Thank you. Thank you.

Thank you. Thank you for listening and on this, I would like to say on this earnings call, again, to thank our employees, right, for the outstanding work and performance and as well as our shareholders for their continued trust and support. Goodbye and have a great day. Thank you.