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.