Brockhaus Technologies AG

Hello, ladies and gentlemen, and welcome to the Brockhaus Technologies ACO update call. At this time, all have been placed on remote. 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 fiscal year 2025. Before we begin, I would like to point out that the slides we are presenting will be published afterwards in the Investors' Relations section of our website, brockhaus-technologies.com. After our presentation, we will open the call to questions from your site. 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 two of our presentation, which explains the understanding of forward-looking statements. Additionally, please refer to note six, seven, and eight of BKHT's consolidated financial statements for 2025 on page 84 onwards, of our annual report 2025 for a discussion on alternative performance measures as well as the 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 2025 starting on page 57. Turning to page 3, let me give you an update on the sale of our stake in bike leasing. With the resolution passed by the Extraordinary General Meeting on February 26, we have satisfied a key condition for the closing of the transaction. We are pleased with the strong support from our shareholders and are confident that Decathlon Pulse, as an internationally renowned company, will fulfill the remaining regulatory requirements as part of the ownership control procedures in a timely manner. All documents have been submitted and the closing of the transaction is now subject only to BaFin's pending approval. With the expected cash inflow of approximately 240 million euros from the sale of our stake in bike leasing after preliminary transaction cost, we are significantly increasing our financial flexibility. We have not yet made a decision regarding the use of the proceeds from the sale. What is clear, however, is that these proceeds are to be deployed in a targeted manner to further increase shareholder value. Determine how this objective can best be achieved is a key question which we are assessing with due care. In close coordination with the supervisory board, we are carefully and comprehensively evaluating all strategic options to ensure that any measures taken are fully compliant with legal requirements and in the best interest of the company and its shareholders. In particular, we are evaluating measures to enhance the attractiveness of our shares, such as dividend payments or a share buyback program, to enable shareholders to participate more directly in the company's success. Further acquisitions are also conceivable in order to continue fulfilling our corporate purpose of acquiring, holding and managing equity investments, as well as a combination of different measures. Each of these options is subject to specific legal and accounting requirements and entails particular advantages and disadvantages. For example, any distributions to our shareholders require that we first report distributable profits on the basis of which the Annual General Meeting can resolve on dividend payments. As all strategic options require careful assessment from both a legal and strategic perspective, we expect to present our initial considerations to our shareholders at our Annual General Meeting on June 11th, 2026 at the latest. On the next slide, you will find a summary of what we accomplished in fiscal year 2025. Even in a continued challenging macroeconomic environment, we performed well in 2025 and increased group revenue organically by 10% to 225 million compared to the previous year. The smaller increase in gross profit despite higher revenue was mainly due to a larger share of revenue from the resale of bikes at the end of the leasing term, which involves significantly higher material cost than other revenue components. Adjusted EBITDA amounted to 46 million Euro, corresponding to an adjusted EBITDA margin of 21%. The margin was particularly impacted by a lower gross profit margin as well as higher personal and other operating expenses to support bike leasing's long-term growth. For better comparability with prior years, the key performance indicators mentioned include both the continuing operations, IHSE and holding company, and the discontinued operation, bike leasing. However, in the consolidated income statement for the fiscal year 2025, the revenue as well as the other income and expenses of the former HR benefit and mobility platform segment Bike Leasing are presented separately as a discontinued operation due to its disposal on December 23rd, 2025. Accordingly, Bike Leasing's revenue for the fiscal year 2025 is no longer included in group revenue. Bike leasing's result is only included in the consolidated income statement as a separately disclosed result from discontinued operations within net income. Proceeding to the next slide, let us look at how revenue developed on a quarterly basis. Starting with IHSE, shown at the bottom of the page, while the first quarter came in below last year's level, we saw a strong recovery in the second quarter, with revenue exceeding the previous year by 13%. In the third quarter, revenue declined by 30% compared to Q3 2024, primarily reflecting project-related timing effects and a general reluctance to invest across many industries. In the fourth quarter, however, revenue rebounded and increased by 19% year over year. Turning to bike leasing, shown at the top of the page, we started the year on a positive note, with Q1 revenue up 11% compared to last year. In the second quarter, revenue remained largely stable year over year. Growth accelerated again in the third quarter with revenue increased by 12% compared to Q3 2024. A key driver was the significant increase in revenue from the resale of bikes at the end of the leasing term. In addition, the new paid partner participation model, which went live at the beginning of August, also contributed positively to revenue in the third quarter. This positive momentum continued in the fourth quarter when revenue increased significantly by around 60% year over year, marking the strongest quarterly growth of the year. I will now proceed to the next page for the regional sales split. First to bike leasing. No surprise here, the company does business in Germany and Austria and growth in revenue was 13%. IGC revenue was below the previous year's level compared to full year 2024. In EMEA, revenue declined by 11% year over year due to overall subdued investment activity in the market. The same applies to the APEC region. In contrast, revenue in the Americas exceeded the prior year level by 63%, driven by a growing defense business. Turning to the P&L table. In the first two columns, we see that bike leasing's gross profit margin was below last year's level at around 59%. The main reason for this was the increased revenue share of resale proceeds, which generally has a significantly lower gross profit margin than the segment's other revenue components. EBITDA and EBIT margins were significantly below prior year's level. In addition to the lower gross profit margin, this is due to planned higher personal and other operating expenses related to the long-term growth strategy of bike leasing aimed to transforming the business from a single product company bike leasing provider into a multi-benefit platform. Proceeding to the next two columns to the right, at IHSE, the gross profit margin of 75% was above the comparative periods level of 72%, mainly driven by an improved product and customer mix resulting from higher defense-related revenue. The adjusted EBITDA amounted to 3 million euro with an adjusted EBITDA margin of 11%. This was primarily due to the higher gross profit margin as well as lower fixed cost and personal expenses. In the third quarter of 2025, management initiated comprehensive measures to reduce fixed costs, which are expected to be reflected in key financial figures, particularly in fiscal year 2026. Moving two further columns to the right, in the central functions, expenses were higher compared to the full year of 2024, primarily due to increased consulting services. In conclusion and at the consolidated group level, revenue was 225 million euro and gross profit margin was at 61%. Adjusted EBITDA margin was 20%, bringing our group to an adjusted EBITDA of 46 million euro. The group's adjusted EBIT of 38 million euro corresponds to a margin of 17%. Free cash flow before taxes was 31 million euro, and below the prior year level due to higher expenditures related to investments to enable the expected long-term growth of bike leasing. On the next page, I would like to run you briefly through our financial leverage structure. At the end of December, debt from loans amounted to €66 million. When subtracting cash of €39 million, we are left with a net debt from loans to 27 million. Adding 18 million from other financial liabilities and 3 million of net debt from lease refinancing brings us to 48 million euro in total net debt. If you compare that to adjusted EBITDA of the last 12 months, this corresponds to a leverage ratio of around one times EBITDA. As our limit for this KPI is some two and a half times, 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 Goering, who's in charge of our acquisitions team. Paul?

Yeah, thank you, and good afternoon, everyone. Let me start the operational update with a brief reminder of the role that Brockhaus Technologies has played in the development of bike leasing over the last years. Our contribution has clearly gone well beyond providing just capital. Over the last years we supported the professionalization of the finance function, including reporting, consolidation, and the transition to IFRS. We also deeply strengthened the technology side by hiring a CTO and deciding on the internalization of software development, which was mostly done externally before our acquisition. In addition, we completed four add-on acquisitions, thereby also internalizing the company's sales activities that have also been mostly external before, and strategically expanded the management team around the two founders. With the acquisition of Pro Bono in 2024, we also started the transformation of bike leasing towards a broader multi-benefit platform. More recently, this has been complemented by the establishment of Bike2Future as a used bike sales platform. as well as by the strategic investment in RidePanda as a satellite for bike leasing in the U.S. market. Overall, this slide illustrates the value creation approach behind Brockhoff Technologies. We identify attractive B2B technology and innovation leaders, actively support the operational development, and help broaden the strategic options over time. This operational progress is also clearly visible in the key performance indicators of bike leasing. Comparing the nine M-figures at the time of acquisition with those at signing, revenue increased from around 51.5 million to 160.3 million euros, which means it more than tripled. Over the same period, adjusted EBITDA increased from 24.2 million euros to around 50.8 million euros, so more than doubled, despite the substantial growth-related investments, especially last year that we mentioned before. At the same time, the number of connected corporate customers increased by more than three times from around 25,000 to 81,000 as of 9M last year, representing access to around 3.9 million employees in Germany and Austria. As you might remember from our very first presentation of the bike leasing acquisition in 2021, this was always one of the key strategic priorities we followed and communicated. So in our view, this transaction once again demonstrates our ability to identify, acquire, and operationally develop technology and innovation leaders in attractive B2B news.

Let me now turn to IHSE.

As shown on this slide, the core business remained broadly stable despite a software reported revenue number. Revenue was still down some 4.7% year over year, which, however, was mainly driven by normal project-related fluctuations. At the same time, it is important to keep in mind that 2023 that you see on the right-hand side here included the largest single order in IGSE's history. Excluding this one-off effect, the underlying revenue base has remained broadly stable over the last years. From a regional perspective, as mentioned before, EMEA and APEC were down year over year, while the Americas developed very strongly with growth of 62.5%, increasingly supported by defense-related demand. Most importantly, EBITDA increased despite the lower revenue level. This reflects structural margin expansion as a result of a change in customer mix towards defense, as well as a cost program initiated in H2 last year. But more on this on the next slide. The operational stabilization of IGSE after a more turbulent fiscal year 2024 has been completed, and that operating leverage is already becoming visible. First, the management transition has been completed. Frank Breitenfelder started as CFO in April 2025, and a new CEO, who we will announce in due time, has been appointed and will start in May 2026, ensuring continuity for the next growth phase to come. Second, a cost program has been executed as briefly mentioned before. While the related one-off effects that you always have with such programs still impact fiscal year 2025, the structural benefits should start to materialize and show from 2026 onwards. This development is already reflected in the OPEX ratio, which came down from 81% in Q4 of 2024 to 63% roundabout in the fourth quarter of last year. Finally, IHSE has sharpened its focus on the core product suite and reduced its exposure to non-core activities, including KVM tech. Finally, on this slide, let me highlight a strategic development that is becoming increasingly important for IHSE. IHSE is more and more evolving from a diversified high-end KVM provider into a mission-critical defense and security KVM provider. In fiscal year 2025, more than 40% of revenue came from government and defense, which marks a record level for the company. This is the result of a deliberate strategy pursued over the last years, investing in secure solutions, obtaining relevant certifications, and building dedicated business development activities for defense-related applications. As a result, IHSE now has access to NATO and allied programs via certified secure solutions. The company's products are positioned for deployment in classified environments supported by the NATO NIAPC listing and Common Criteria EAL4 Plus certification. In addition, the solutions are also aligned with NIAID PP4 requirements. In practical terms, this enables secure operation across multiple classification levels and further strengthens IHSE's position in highly attractive security-critical markets. This shift towards defense is also an important driver of the margin expansion discussed on the previous slides. This concludes now my section, and handing over back to Marco.

Yeah, thank you, Paul. Flipping over to the last page of today's presentation, our outlook for the fiscal year 2026. As mentioned at the beginning, the revenue and earnings forecast for the fiscal year 2026 relates to the group's continuing operation consisting of IHSE and the holding company. Due to the signed sale agreement regarding the stake in bike leasing, this business is no longer included in the forecast. We expect revenue of 30 million to 32 million in the fiscal year 2026 corresponding to organic growth of 0 to 5%. Adjusted EBITDA is expected to range from 0 million to 2 million. This implies an increase in adjusted EBITDA of 3 million to 5 million compared to the fiscal year 2025. In addition to the moderately higher revenue, this development is primarily driven by a planned lower fixed cost in personal and other operating expenses in the security technology segment. Please note that this forecast assumes that there will be no further change in the scope of consolidation within Brockhaus 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 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. Ladies and gentlemen, if you would like to ask a question, please press star, nine and the pound key on your telephone keypad. If you would like to cancel your question, please press star three and the pound key on your telephone keypad. Please press star nine and the pound key if you would like to ask a question or if you are in the browser and you're using the web dial and you can raise your hand if you would like to ask a question. And we have a first question from Os Jobber.

The floor is yours.

We can't hear you at the moment. Maybe you have to unmute yourself.

Is that okay?

Yes.

Can you hear me now? Oh, good. Apologies, apologies. Gentlemen, nice to hear from you again after so many years. Ross John from Edison. I'd like to ask a question about your pipeline. You talk about continuing to look for the next champions.

So the question is, how would you characterize

sorry you are breaking up maybe there's a problem with the connection so maybe you can dial in again and um again for all of the other please press star nine and the pound key if you would like to ask a question So at the moment, we have no questions. So again, star, nine, and the pound key if you would like to ask a question. And there is one more question from Sebastian Vaituna from Paladin Invest. The floor is yours.

You hear me? I'm clear.

Okay, perfect. Yeah, thank you. So, yeah, we are very disappointed that Borghaus did not meet its full year guidance again, and we are a little bit surprised that this hasn't become clear sooner for you because the bike season was already behind us. Maybe you can walk us a little bit through the process here, and would you also please help us to better understand these effects you mentioned in the press release on both companies maybe i would like to start with bike leasing you mentioned especially a lower than expected result from the retail of returned bikes what exactly was the issue here was it lower volumes of return bikes or where prices only weaker than expected despite enough or planned volumes thank you

Hi, this is Janik from the finance department. Covering your first question regarding the forecast. So the main reasons why we didn't reach EBITDA because revenue was reached are two main topics. First one is the resale of bikes which was lower than expected for Q4. This was not planned. And the second one are higher consulting services in Q4. in the whole group. So these are the two main topics which were not in forecast before.

Maybe on the timing of that, I mean, you need to do, let's say, an inventory analysis, et cetera. And you can only do that in hindsight, right? So the result of the resale business in Q4 is, of course, something that we only get quite late in the process. So that's why there is some, let's say, uncertainty always towards the end of the year.

And maybe on either, could you please elaborate on the development across the key markets? I mean, defense and government, then air traffic management and broadcasting. What trends did you observe in these segments in the past financial year and what are your expectations for the current year? And in each of these kind of verticals, is either keeping pace with the market or are there verticals where either is losing market share?

I think we had this question already in one of our last calls. It's always, it's a niche market, so it's hard to get market data exactly on how specific niche KVM verticals have developed each year. What we know is that we have gained quite a lot of traction in the defense market, which was a hypothesis already a couple of years ago when we invested in the certifications and business development activities there. So that's also what you can see in our revenue share that we mentioned before. On the other verticals, they have, of course, been a bit softer. I mean, if you just look at the absolute revenue level and see the strong development of defense, that means that the other verticals have automatically developed weaker. But is there a, let's say, big shift in the other remaining verticals? Not really. So air traffic control broadcasting still remain key verticals within IHSE. while the remaining verticals, and you might remember that they are quite diversified across different end markets, are significantly smaller than that. Do we know if our relative market share towards customers in specific verticals has increased or decreased? Hard to say, because there's no public peer that we can look at. We are, again, the only ones that provide this transparency here. What we know is that our market share in defense has, of course, grown. Because previously there was no one except for one competitor and now we are there as the second one as well.

Hopefully that helps Thanks, and I mean now you are adjusting optics But you started with it with it in the last year, but in general you adjusted optics They are quite quite late. So I think before that you had the basis of and what I saw you, you was expecting and recovery. So what has changed that this isn't happening now? Is it only the macro trends or is it something specific on either or? Yeah. Maybe you can say something here.

Sorry, I didn't get the question really. What OPEX adjustment do you mean?

Sorry, you started in Q3 or Q4 to adjust OPEX by even to reduce OPEX base, right? Because the gross margin is, yeah.

And why we did that or why we didn't do that earlier? What do you mean?

Yeah, why you didn't do it earlier?

I mean, because you might have remembered that 2024 and by this going into 2025 was a bit turbulent at the company. And we started the cost program H2 last year, but of course that also needs a bit of preparation, right? So the point is that we've, let's say, resized the cost base to the revenue level we see right now, refocused on the core product portfolio. And there are, of course, always one-off effects associated with that. So it's a bit, let's say, hard to see this year, but hopefully from this year onwards you should see the effects. Why haven't we done it earlier? You can always ask that question, but this is a management decision in the end in sparing with us. How long do you, let's say, give a company to reach certain growth targets or goals? versus when do you need to, let's say, revise that opinion and do something different.

Okay, thank you.

Finally, allow me one question on compensation. So, according to the compensation report, both board members received a short-term bonus in 2025, and as I said, the guidance was not met again. In addition, the compensation system was rejected by 77% of shareholders in the AGM in November. So we are very critical here on that. And Marco and Marcel, so why do you as members of the board consider this appropriate given that the targets have been missed again?

Hi, this is Marcel speaking. As you know, the remuneration of the executive board is always the decision of the supervisory board. So we are the wrong ones to address, too. However, this compensation you just mentioned is part of achieving two out of four spot awards, which are part of the new system. This has nothing to do with the budget or anything else.

Thanks. So we have a next question from Dennis Watts. The floor is yours from Solventis AG. So Dennis Watts, we can't hear you at the moment. Maybe you have to unmute yourself.

Can you hear me?

Yes, we can hear you now.

Great. um yeah first question you mentioned uh the clothing conditions um if i get you right all documents has deployed to the bathroom so the time for the bathroom started and we have now a deadline for the process is that right it's myself speaking again so

The BaFin now has roughly 60 days for getting back to us with a result.

OK.

Sorry, business days, 60 business days.

OK. Thanks. And regarding the cash inflow for Prokhaus, you calculate a price based on net debt on 13 September. Did you do the math for the end of the year, 25? Are there any significant changes?

Yeah, we did a rough calculation. No significant changes there.

OK. And then regarding your special items, I saw one compliance cost, $3.5 million. It looks quite high. Could you elaborate a little bit what are these costs related?

Compliance costs should have been in connection with the annual report 2024, so not this year, but the year before, where you might remember that this was a bit of a turbulent process at the time, which took a bit longer with a lot of advisors involved, et cetera. So that's the adjustment there.

OK. But that does only include the advisor costs, no penalty or something?

No, that's only advisors, so no penalties involved.

But also to be clear, there was no penalty, right?

OK. Just to get clear. And other special item was the insolvency of one customer, I think, roughly a million, a little bit below.

Maybe you could say something about that. Can you repeat that again? Which adjustment do you mean? Insolvency, Carsten.

This is Mirka from the finance department. There are costs for order obligations in the amount of €380,000 and warranty provisions in the amount of €350,000. It was a customer of ESA, I think.

Yeah, for customers of Car4M Tech.

Okay, thanks. I have no further questions.

At the moment there are no further questions in the queue.

You can press star, nine and the pound key if you would like to ask a question. And we have one more question from , from . The floor is yours.

I hope you can hear me. A couple of questions on my side. First one being, can you provide a split of the EBITDA guidance for the year, maybe between IHSE and the central sections?

No, we only guide on group level marker here. Okay, thank you for that.

And second one is, have you seen any specific change that you wanted to highlight in the market environment that will justify to resume an active M&A strategy with the proceeds that you get? Anything specific to mention in terms of changing valuation, in terms of specific opportunities that have risen in the last few months?

Nothing in specific, but we see that the, let's say, number of transaction opportunities or the interesting opportunities that has always been there is actually a bit better this year. This does not mean that the prices will automatically come down massively, right? So what we've seen last year is that many transactions have also not closed because there was no equilibrium between buy and sell side. um but the the quality of companies that we see is good and this is just maybe a a operational highlight but i can't say that prices are let's say very very low so that's that's not observable yet yeah or maybe to add price expectations right many many funds have a lot of assets and no exits right and

Only exits bring cash in, right? So therefore, we believe that we are in a good position and awaiting the closing of the buy-cleasing transaction anytime soon in H1.

Okay, thank you. And maybe just one last one. Looking back at HTC, beyond the growth at the different sector that you add and the cost measures that are ongoing, can you highlight any strategic levers that you have more for to add some value creation at HTC today, apart from those two items?

I mean, there are a lot of things going on, right? We had to change the management completely. This is quite some time that flows in there from our side as well, to write the find team again. What is going on in parallel is something that we, I think, discussed in the 9M call in more detail, or H1, I forgot, excuse me, which is the complete, let's say, update of IHSE's technology stack. in their core business in the proprietary KVM field. So there's a lot of work still going in there because that should put IHSE from a technology perspective pretty much ahead of the pack. And that's something that's going on in parallel to the defense activities, of course.

Okay, great.

Andres, you mentioned Q3 or I don't know when it was in the conf call, but you mentioned last time some market consolidation trends that were happening in the sector. Can you comment on that, any evolution?

Marco, yeah. I think that must be mixed up with bike leasing. I would agree to that statement in terms of the German market job hard marked, there most probably will be a consolidation, but in the IHSE segment, no, I don't remember. Not to my knowledge, no.

Okay, thank you. Welcome.

And there are no further questions, so back to you.

Yeah, selbstverständlich. Yeah, if there are no more questions, thank you. Thank you all very much for attending today's earnings call of Podcast Technologies. I would like to use this stage and moment of thank our employees for their outstanding work and performance, as well as our shareholders for their continued trust and support. Goodbye and have a great day. Thank you.