Brockhaus Technologies AG

Hello, ladies and gentlemen, and welcome to the Brockhaus Investor Update Call. 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 turn the floor over to Marco Brockhaus.

Yeah, thank you very much, and good afternoon, everyone. Welcome to Brockhaus Technologies' earnings call for the first nine months of the fiscal year 2025. Before we begin, I would like to point out that the slides we are presenting will afterwards be published in the last six relations sections of our website, brockhaus-technologies.com. After our presentation, we will open the call 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 six of our consolidated financial statements for 2024 on page 93 onwards of the annual report 2024 and page 13 onwards of our quarterly statement for the first time month of 2025. for discussion on alternatives, performance measures, as well as reconciliation of non-GAAP figures. For information on risk factors that could cause actual results to differ materially from forward-looking statements, we kindly refer to the section on risk and opportunities in the Management Report 2024, starting on page 64. So, turning to page two, let me briefly summarize what we achieved in the first nine months of 2025. Despite the continued downturn in the economic and consumer climate, we were able to hold our ground. Bright Leasing continues to invest in its long-term growth strategy, transforming from the single-product company, focused on company Bright Leasing, into a multi-benefit platform. As part of its international expansion strategy, Bright Leading has also taken a stake in the U.S. company right-hander, seeing this as an opportunity to create variable synergies and to leverage its own expertise in company Bright Leading in the United States. IHSE is driving the continuous development of its technology and increased its gross profit margin in the third quarter of 2025 through an improved product mix and customer mix primarily resulting from the growing defense business. For the current fiscal year 2025, we expect an organic revenue growth of 10% to 15% between €225 million and €230 million. We already described the persistently challenging economic environment as said before. Against the backdrop of investments in bike-using's long-term growth, we expect an adjusted EBITDA of €50 million to €55 million for the fiscal year 2025. Walkout technologies generate revenue of €182 million in the first nine months of the 2025 fiscal year, corresponding to an organic growth of 3.6% compared to the prior year period. Adjusted EBITDA and EBIT turns out to be investment in its long-term growth strategy. Shifting to the next slide, let us look at how revenue developed on a quarterly basis. At ISFE, on the bottom of the page, the first quarter was below last year's Q1. In the second quarter, we saw positive development in revenue exceeded prior year by 13%. The third quarter was down by 30% compared to Q3 2024 due to project related shifts and a general reluctancy to invest in money industries. Buy believing on the top of the page in the third quarter was up by 11% compared to Q1 2024. In the second quarter revenue was moved to the same level as in the second quarter of 2024. up by 12% compared to Q3 2024. The key factor for growth was a significant increase in revenue from the sale of bikes at the end of the leasing term. In addition, the new partner participation model, which went live in the beginning of August, also had a positive effect on revenue in the third quarter of 2025. I will now proceed to the next page for the regional sales list. First, Valdivian. No surprises here. The company is based in Germany and Austria and growth in revenue was 6%. Overall, IHSE revenue was below the previous year's level compared to the first nine months of 2024. In EMEA, revenue was down by 14% due to generally subdued investment activity in the market. The same applies to APEC, where revenue was down by 49%. In contrast, revenue in Americas region rose by 17%, driven by the growing defense business. Turning to the profit and loss table. In the first two columns, we see that bike leasing's gross profit margin was below last year's level at around 61%. The main reason for this was the increased revenue share of resale proceeds, which generally had significantly lower gross profit margin than the segment's other revenue components. EBITDA and EBIT margins were below prior year's level in addition to the lower gross profit margin. This is due to plan, hire, personal and other operating incentives related to the long-term goals strategy of bike leasing aimed to transforming the business from a similar product company like bike leasing provider into a multi-benefit platform. Strictly prior to life growth initiatives in this regard, manifested in higher marketing expenses. The rise in expenses is primarily attributable to the acquisition of Probonium and the establishment of Bike2Future for marketing and broking used bicycles via B2B and B2C channels and the associated growth modules. Proceeding to the next two columns to the right at IHSE, at 83% the gross profit margin was significantly above the comparative period's level of 74%. The rise in own work capitalized had a positive effect on the gross profit margin. This was primarily attributed to an increase in development investment in the new product generation comprising hardware and software from IHSE and KPMG. Even excluding capitalized own work, the segment's gross profit margin reached 74%, up well above the prior year's period when it was at 69%. The main contributing factor was an improved product and customer mix, particularly driven by ISSE's growing defense business, which had a positive impact on the segment's gross profit margin. The adjusted avatar amounted to 3 million with an adjusted avatar margin of 12%. The main reason for this decline was lower revenue while fixed costs, particularly personal expenses and other operating costs, remained largely in line with the prior year period. In the third quarter of 2025, the management had already implemented significant measures to reduce fixed costs across personal and other operating expenses, which are expected to take effect primarily in the fiscal year 2026. Moving two further columns to the right in the central functions, Expenses were lower compared to the first nine months of 2024, primarily due to lower fiscal and other operating expenses. In conclusion, and summing up on the consolidated group level, revenue was 182 million euros and gross profit margin was at 64%. Adjusted average margin was 27%, bringing our Group 2 and Cons to an adjustment at the bar of 49 million euro. The group's adjusted EBIT of 43 million euro corresponds to a margin of 24%. Pre-cash flow before taxes was 18 million euro and below the prior year level due to lower operating income and an increased refinancing backlog. On the next page, I would like to run you briefly through our financial level structure. End of September the debt from loans amounted to 69 million Euro. When subtracting cash of 38 million Euro we are left with a net debt from loans of 31 million. Adding 19 million from other financial liabilities and subtracting 5 million of net debt from use refinancing brings us to 45 million Euro in total net debt. If we compare that to adjusted EBITDA of the last 12 months this corresponds to a leverage ratio of around 1x. As our limit for this KTL is some 2.5x, we consider our current financial position as more than conservative. This concludes the first part of our presentation and I now hand over to Paul, who is in charge of our acquisition team. Paul?

Thank you Marco and good afternoon everyone. As usual, let me start the operational update with a brief look at buy-cleasing. Bike Living continues to grow its customer base throughout Q3. The number of corporate customers onboarded to Bike Living's digital platform now stands at around 81,000 firms, with around 3.9 million employees behind them, representing a year-over-year growth of 15% and 7%, respectively. As in the previous quarter, the growth was particularly stemming from SMEs, as you can see here. At around 111,000, the number of brokered bicycles in 9M was below the previous year's level, primarily due to extreme discounts within retail and an increasing number of blocked customers due to deteriorating credit scores in Germany. I have already explained during our last earnings call why severe discounts are negatively affecting newly leased bicycles, but let me repeat it once again as it is not necessarily obvious at first sight. Irrationally, a lot of retailers are not discounting bicycles that go into leasing programs anymore to counteract the conditions of leasing platforms. Consequently, if you get offered, for example, 50% discount on cash per service compared to 30% savings on the non-discounted price through leasing, it of course makes more sense to buy than lease, at least if you have the disposable income to do so. This dynamic is observable when looking at the average price of a bike time through bike leasing, which has not seen a large decrease over the last month, in contrast to the overall market, meaning that heavily discounted bikes are in fact not being leased. In addition, to remind you of the strong seasonality of bike leasing business, the nine-month period has usually accounted for 80% plus in the last year, even increasing its rate to 89% in 2024, as you can see on the right-hand side. Finally, the growth of corporate customers at Probonio, the company we acquired in April last year for multi-benefit management, is also continuing its positive momentum. Since we acquired Probonio in April last year and started upselling at the end of August last year, we have grown the number of corporate customers by nearly fourfold from around 800 to now 3,100 by the end of September. Nevertheless, just looking at the number of bike leasing customers we have, you can see that there is clearly some significant way ahead of us. Moving to the next page. Since the acquisition of bike leasing in 2021, just a reminder, we kept our four strategic pillars for growth unchanged. First, increasing the number of corporate customers onboarded to our platform. Just as a reminder, we started with 25,000 corporate customers and we now have 181,000 customers. Second, increasing the usage rate within employees of already onboarded corporates. Third, adding other non-bike benefits to the offering, meaning pro bono. And four, internationalizing the business. After having started internationalizing with the first organic step to Austria in 2022, where bike leasing holds a leading market position today, We are very happy to announce the next step with our investment in Ride Thunder in the United States. Ride Thunder today is the leading provider of micro-mobility employee benefits in the US. Through its digital platform, Ride Thunder enables its corporate customers to offer their employees the flexible subscription of bikes, e-bikes and e-scooters. In contrast to corporate bicycle leasing in Germany, as we do it here with bike leasing, The US does not allow to finance the monthly rate by way of salary sacrifice, which is why Rite Thunder customers sponsor the monthly rate for their employees. Those customers you can see here on the page as well and include the likes of Amazon, Meta, Google and also public entities like the city of Seattle. Bike Leading acquired a minority stake of around 7% in Rite Thunder and is looking to apply its expertise from the more mature German and Austrian markets now also to the US. With this, turning over to IHSE for a similar update. As presented earlier, revenue at IHSE was down 12% year-over-year. However, despite the revenue decrease, gross profit of IHSE was broadly stable in absolute terms, resulting from a significantly increased gross margin. You can also see that when looking at the gray part of the chart on the right-hand side here. This gross margin increase was significantly affected by IHSE's growing share of defense revenue which reached around about 45% in the first nine months of 2025. As you might remember, some three years ago, we took the strategic decision to obtain specific decentralized certifications and also invest into business development activities in that market, which now start to bear fruit. Geographically, both India and Asia-Pacific were down year-over-year, but America again benefited from our decision to invest heavily into the defense vertical. This concludes my section, and handing back to Marco.

Thank you, Paul. Flipping over to the last page of today's presentation, our outlook for the fiscal year 2025. As mentioned at the beginning, we expect revenue between 225 and €235 million, corresponding to solid organic growth of 10% to 15% compared to fiscal year 2024. For adjusted EBITDA, the group plans a range of €50 million to €55 million. As part of the ongoing transformation of bike leasing from a single product provider to a multi-vendor platform, the fiscal year 2025 is expected to include significantly higher expenses for personal and other operating costs. These increased expenses are primarily driven by strategic growth initiatives, particularly the rollout of the digital multi-benefit platform, probonio.de, and the development of the use-buy-save platform, buy-to-future.de, established in 2024. As part of this international expansion strategy, BikeScreen has also taken a stake in the U.S. company RidePanda, seeing this as an opportunity to create valuable synergies and to bring the experience gain from bipartisan business model into the United States. ICC is and will remain well positioned for the long term due to its leading technology position in the Acadian sector. With a fully packed pattern of new product innovations, ICC is focused on the future, in particular the government defense segment is currently performing well. I would say our technology group continues to be well-positioned for the future by using this scalable and cash-generated business model. Thanks to regular distributions, even also this year, we have been able to daily repay acquisition loans and expect to reach cash compounding notes starting next year. The development of the share price is disappointing and at the same time difficult to comprehend when comparing the current market capitalization of our company with the value of our subsidiaries. I am convinced that despite a very challenging economic environment, especially in Germany, we have set the right course to achieve sustainable growth and create long-term value. Please note that this forecast assumes that there will be no future change in the scope of consideration within Bronco Technologies. The reason for this approach 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 trend in the market. That concludes our presentation and we are now happy to answer your questions. For that, I would like to hand over back to the operator. Thank you.

Thank you very much. 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 3 and star. Please press 9 and star now to register for a question. At the moment, there seem to be no questions, so please press nine and the star key if you would like to raise a question. And we have a question coming from Sebastian from Palladium Asset Management.

Over to you.

Yeah, hi, good afternoon and thanks for taking my question. So, Marco, you mentioned the share price and even after the goodwill write-downs, the auditor recognizes valuations of bulk-eating and either far above the current half price, more than double, I think. So what are you planning to do to finally close this up? Because we have this now since a few years. And how do you think about to unlock the underlying value for these two companies for shareholders? Thank you.

Yeah, thank you for the questions.

Well, to continue drive earnings and to invest into the future of the companies, right, as we do with Bike Leading, as we do with IHSE. And as you talk, I think, frequently, if not every week, with our investors relations manager, Florian, you know well about what we do and what we plan to do in terms of, as I said, investing in the future of the companies. which we did and which we will do and I do not understand that market doesn't see the lack of valuation it's pretty obvious as you just mentioned but what can I say to the market that's a good question it is what it is we can't you know rise the share price we can buy buy back shares what we did at saying 2 euro a share a year ago or two years ago and that unfortunately did not pay out and we most probably will rethink that situation once we allow to do.

Yeah, thanks.

I mean, we saw an M&A inbound in Q4, right, and maybe when there's a possibility to unlock the value, maybe it would make sense to think about it, but another point, so on LinkedIn, yeah, yeah, please.

Sure, I mean, we did very well with Palace, where we made quite a fortune on that investment, and I think we were very happy, and I think we did very well, right, I mean, what we invested and what we achieved with the company was amazing. We doubled sales and EBITDA within four years and more than three-fold the investment. However, you know, I mean, if there is opportunities, we will look at it, but this is for now what I can say.

I mean on LinkedIn I saw very interesting so in the Brock household you have hired Alexander and previously he was a CFO group Germany at Volaris and Volaris is part of Consolidation Software so maybe you can say something what does this addition mean for your organization?

to back up the financial manager, Yannick Reuter. It's just nothing to, that means, if you mean in terms of Constellation Group, we saw the business to Constellation Group a couple of years ago on the front, but I wouldn't conclude any strategic shift or so by his high amount. Okay, thanks.

So maybe one operational question. So you mentioned the transition to the multi-benefit platform and in the case it's Probonia. So you now reported 3,100 corporate customers. So maybe you can give us a number how many employees these clients represent and how And for the moment, what is the annualized recurring revenue from these 3,100 customers?

As you know, we don't guide on each company. So with 3,100 corporate customers, we did well, but we believe that the investment we just did will hopefully bring more customers to Probrunnen and with that more paying employees or paid employees for the software, right? Using the software. So this is where we stand and we don't guide Probrunnen.

Just to add on there and also the employee number, We don't disclose. We can think about if we want to do that in the future. But there's also a difference between employees behind those companies and activated employees. Because we only earn, of course, fees on activated employees and not everyone. But maybe a hint, if you look into our revenue splits that we have in the reports usually, there is a line called South Revenues, if I'm not mistaken. And there is no entity within Rockhouse earning sales revenues than Pro Bono.

Yeah, I saw this and I was surprised that this number was much lower than I would expect it. So maybe 3,100 customers times 30 entries times 40 euros per entry would mean... four million revenue for pro bono so annualized but the number was quite smaller because of this I'm asking so how many employees and what revenue is behind this 3100 corporate customers.

I think we are going in circles here. The revenues you can see from our revenues in the report, and if you have had a look at this, you know the revenues, and on the employee number, or actually not the employee, but the activated employee number, which is the relevant one where we earn revenue on, we don't get that.

Okay, but to get it here, so are all

3,100 customers are paying once or do some companies have kind of a free plan?

There might be a couple in there from history where they are for some modules not paying something, but it's definitely the exception. But the difference is that even if you have a company with 100 employees and they just offer it maybe to 25 people in the beginning, you only earn on those 25 and not 100.

Okay, thanks for the moment.

I will now go back into the line. Maybe I will join later again. Thanks.

The next question comes from Lasse Stuhlen from Barenburg. Over to you.

Hi, good afternoon. I would have a question on the EBITDA guidance for this year. Just given what you've achieved in the nine months, it seems reasonably conservative, but maybe you could just help us understand the dynamics in the fourth quarter on EBITDA. The second question would be on Pro Bono. Would you be willing to share the number of customers that are new customers versus which portion you've essentially upsold from bike leasing? And the final question is just on Ride Panda. I guess, you know, with the 7%, I think you said 7% stake, what do you, can you give some more color on kind of how that relationship looks and what you're trying to get out of that in the future? Thank you very much.

Maybe I'll start with the first question and, Paul, you can take in the other two. I think it's conservative here, maybe, but Many costs of back-using related to the initiatives in pro bono back to future and so on in marketing are bed-loaded in Q4. And as you know, Q4 and Q1 is always weaker than Q2 and Q3. We see our guidance as it is, and we believe that for now, this is what we see for 2025. Paul, maybe you take the other two questions.

Then on the pro bono question, we actually don't have the split at hand for who was upsold and who is completing new. Actually, there's also a third piece, right, where we win a customer simultaneously for both bike leasing and pro bono, or the other way around where we just win a pro bono customer and they are later on upsold to bike leasing. So there are very different directions in which you can think, but we don't have the split at hand. And the last question on RidePanda, it's a percentage-wise small investment for us, but the market potential in the U.S. is, of course, pretty big. I mentioned on my slides earlier that their model is unfortunately not as beneficial as in Germany, so you don't have the salary sacrifice option for leasing bikes or subscription bikes over there. So you always need to find employers that are willing to subsidize the monthly rate for the employees. hence also the very big names who can afford doing so. So given that the market is not as favorable as Germany or Austria, Flypanda has done a tremendous job in onboarding those corporates over there already, and we want to support them on, let's say, all fronts where we can help, so be it in relation to operations or be it in financing or insurance. I mean, we have experience there quite a lot. And by this also learn more about the market. Because you can hire two or three people over there that try to fight windmills, if one says, like this, and be a satellite office without doing any revenue, or you support a leading player on the ground. And we decided for the second option. So we are supporting the leading player in that market. We want to learn something from that. We can support them with our expertise.

And let's see how the market develops in the future, right? Great. Thank you.

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

And the follow-up question comes from Sebastian from Paladin. Over to you again. Hi, thanks. It's me again.

So the average price per bike, does it remain for the moment by 4,000 gros?

Yeah, around about that level.

Okay, thanks. And What happened to the bicycle dealers who have not yet agreed to the new partner program? Where are these dealers still able to sell bikes via bike leasing? Do you have a transitional phase or where they are blocked?

The transitional phase is already behind us. So if you have not agreed to the new partnership model, then you can't use our platform anymore. But to also say that this is really applying to a very, very low percentage.

All right.

And in case of the gross profit margin, so in the pure by-profit business, this stands at 90.7%. It's down 92.1% in the prior year. And given the introduction of the DDA fee, I would have expected a little increase. So could you explain why the margin...

decline from 92 to 90.7.

I wouldn't interpret too much into that, to be honest. I think it's not a systematic deviation, it's more a seasonal deviation. So what we of course have is that certain parameters fluctuate upwards or downwards on a quarterly basis. So for example, the leasing capital can work for or against you on a quarterly basis. because that's only adjusted on quarter to quarter, while refinancing rates are more short-term adjusted. So there's no real big reason for it.

It's just normal fluctuations. Okay. And in the bike leasing segment, the OPEX, so the difference between gross profit and adjusted EVTA, increased 7 million year-over-year. And in the Q3 report you mentioned, I think that 7 million relates to pro bono and bike future. So around 10 million are... relating to the core brokerage bike business, right? But why are costs rising here so much while, I mean, drop-bought is reduced in headcount by 20% and the bike volumes are declining too?

I couldn't follow your calculation, to be honest. First of all, you have a gross profit effect. I'm not sure if you had that in your calculations right now. If you start with a lower gross margin, you already have say lower basis to start from then you have the additional cost as you mentioned from pro bono and back to future which is an additional i think 6.5 around about 7 million on top of that and bike using also continues to to grow and invest right and so it's not only the new ventures but also on bike using we are investing a lot into our product And this is, of course, also having an effect on the personnel basis, for example, if you hire a lot of IT people. You're absolutely right that the market leader is apparently reducing headcount. But also, this is only apparently half the reality, because also on their returning bike business, they are hiring like crazy people. I think they have reported on one entity and not on the whole roof, but it's their cup of tea. We do what we think is best for bike using. And of course, we have also the unit numbers in mind, right? We have the customer onboarding numbers in mind, utilization rates in mind, the actual bikes that are ordered in mind. So you can be sure we have that on our radar.

Yeah, I took the difference between gross profit and adjusted EVPA, so OPEX. plus 70 million year over year. And you mentioned 7 million are going to Pro Bono and Daiichi Future and then 10 million are remaining for bike-eating.

Okay, and maybe one to IHSE.

So on one side, the high defense and government revenue is good. But the business, they reported a revenue decline, a huge revenue decline. So this maybe suggests problems in other verticals. Can you do a deep dive here? So do you see this only market-driven or are there any structural issues and have you lost any market share or is this intact?

I think there are two factors for that.

One is, of course, project-related shifts that sometimes happen in a quarter and sometimes shift to a next quarter or next year. And the second thing is the market environment out there. I mean, defense is having quite a lot, and would we not have taken the decision a couple years ago to go into that vertical, it would be, let's say, even worse. But if you look at everything non-defense, I think it's fair to say that it's not, let's say, very flowery times out there. So if you can see that in the EMEA development especially, that we had a revenue decrease there. So those two factors I would name.

And how is the situation in the aviation business, for example? I mean, we don't go on individual industries here, please, but

You have air traffic control, you have broadcast in post-production as very big verticals. So if everything except for defense is not going as smoothly as in the past, that means the other markets all have their slides or more issues.

I mean, we have some other companies like Frequencies on the stock exchange and the aviation business looks not so bad there.

good for them. I mean, it's one of our partners, so we do business with them together, but I can't comment on how their business is developing, to be honest. Okay.

The last one, what further expenses do you expect for the ERP program? So since Q2, I think 8 million have been incurred. How long does it go?

Hi, this is from the finance department. So these expenses I expect to go down significantly in 2026. There will be some smaller portions still remaining, but it will go down significantly.

Thank you. There are no further questions. All right.

If there appear no more further questions, thank you very much for attending today's early fall of Blockhouse Technologies. I would like to use this stage in order to thank our employees for outstanding work and performance as well as our shareholders for their continued trust and support. Goodbye and have a great day. Thank you very much. Goodbye.