Brockhaus Technologies continues profitable growth course in the second quarter of 2023

• Revenue increases by +29% to €84.1 million in the first half of the year
• Adjusted EBITDA of €28.8 million up +24% year-on-year; EBITDA margin at 34.3%
• Adjusted EBIT of €26,8 million up +23% year-on-year; EBIT margin at 31.8%
• Both segments with continued profitable growth in Q2:
  • Bikeleasing increases the number of newly facilitated company bikes by +31% to ~80,000 and cracks the 50,000 mark among its corporate customers
  • IHSE with continued rebound and particularly dynamic growth in North America
• Continued optimism for 2023 and subsequent years:
  • Forecast for fiscal year 2023 confirmed; planned revenue growth to between €165 and 175 million with EBITDA margin remaining high at 35%
  • Revenue to be increased to between €290 and 320 million and EBITDA margin to 40% by 2025

Frankfurt am Main, August 14, 2023. Brockhaus Technologies AG (BKHT, ISIN: DE000A2GSU42) continued its profitable growth path in the second quarter of 2023. BKHT achieved an increase in revenue of +29% to €84.1 million in the first half of the year 2023 (H1 2022: €65.1 million). Adjusted EBITDA increased by +24% to €28.8 million in the same period, corresponding to an adjusted EBITDA margin of 34.3%. (H1 2022: €23.2 million; 35.6% margin). Adjusted EBIT rose by +23% to €26.8 million (H1 2022: €21.9 million; 33.6% margin).

In the second quarter, the subsidiary Bikeleasing acquired two of its so far external sales agencies. The acquisitions followed the strategic interest in integrating the previously external sales platforms into the Group to be able to manage its sales activities in an even more targeted manner in the future and to access the know-how and network of the employees. As a result of these acquisitions, commission payments that were previously paid to these sales agencies for their sales performance will cease, which leads to an earnings improvement. From a pro forma perspective, i.e. as if the sales agencies acquired in Q2 2023 would have already belonged to Brockhaus Technologies since January 1, 2023, this leads to an adjusted pro forma EBITDA of €29.6 million (35.2% margin) or an adjusted pro forma EBIT of €27.5 million (32.7% margin).

Based on this positive development, the management board of BKHT confirms the full-year guidance for 2023 of revenue between €165 and 175 million (2022: €143 million) with an adjusted EBITDA margin of 35% (2022: 33.2%).

BKHT continues to have a very healthy balance sheet. The Group’s net debt at the end of the first half of the year was €36.8 million (December 31, 2022: €37.4 million) and in relation to the adjusted EBITDA of the last twelve months at 0.7x (end of 2022: 0.7x). The net leverage ratio was thus kept constant, despite the fact that in the second quarter approx. €8.5 million were used for the acquisition of the sales agencies, and the refinancing backlog at Bikeleasing increased by approx. €13.5 million to €27.8 million due to the seasonally strong business at the end of the first half of the year.

“We are very satisfied with the operational development of our subsidiaries Bikeleasing and IHSE. Both operate as technology and/or innovation leaders in growth markets and are expected to achieve sustainable profitable growth not only in 2023 but also beyond. Accordingly, we aim to increase our revenue to between €165 and 175 million this year and to between €290 and 320 million by 2025. The EBITDA margin is expected to remain at 35% initially and shall be improved to around 40% in the medium term,” comments Founder and CEO Marco Brockhaus on the development.

The trend toward bicycle leasing continues

The dynamic development at Bikeleasing (Financial Technologies segment) continued in the first six months of 2023. In the first half of the year, revenue increased by +32% to €66.4 million (H1 2022: €50.2 million) and adjusted pro forma EBITDA by +29% to €29.2 million. The adjusted pro forma EBITDA margin of 44.1% was thus only slightly below the previous year's level (H1 2022: 45.3%).

As of June 30, 2023, Bikeleasing has increased the number of companies connected to its platform to around 51,000 with approx. 2.9 million employees. End of March 2023, those numbers still stood at approx. 47,000 companies with 2.6 million employees. The trend towards bicycle leasing as a cost-effective financing option in the bicycle market, especially in times of high inflation, is therefore unbroken. As a result, the number of newly facilitated company bikes during the reporting period increased by +31% to approx. 80,000 (H1 2022: approx. 61,000). In addition to the continued dynamic growth in its core market of Germany, Bikeleasing also made further strong gains in Austria, where the company established itself as the clear market leader within two years. Bikeleasing also expects additional growth from the new connection of D2C brands to the Bikeleasing platform, which was launched in April with the manufacturer Canyon. In addition, Bikeleasing is continuously improving its customer service, for example in the last quarter by digitizing the framework leasing contracts for 100% paperless onboarding of corporate customers and by switching to a variable leasing factor in order to be able to act completely independently of the current interest rate level in the future.

IHSE expects accelerated growth momentum in the second half of the year

The Security Technologies segment (IHSE and kvm-tec) continued its rebound in the second quarter, reporting a +19% increase in revenue to €17.7 million (H1 2022: €14.9 million) and an adjusted EBITDA of €3.5 million (H1 2022: €3.0 million) at the end of the first half-year. The adjusted EBITDA margin of 19.9% is almost at the previous year's level of 20.1%. The temporary margin effect due to planned expenses for sales and trade fair activities as well as for a Group-wide IT project in the first quarter of 2023 have thus already been compensated for with a view to the half-year. The main driver for the strong revenue growth was the very positive development in the Americas region with a revenue increase of +83%. However, a positive development in the EMEA region (+10%) also contributed to this. By contrast, the Asia region continues to be impacted by difficult conditions in China. Due to the high order backlog of €10.6 million at the end of June and in view of the fact that IHSE generally develops more strongly in the second half of the year than in the first six months, the company is also confident of closing the full year 2023 with a significant increase in turnover. The high order backlog also includes an order from a large federal aviation authority, which, with a volume of over €7 million, represents the largest individual order since the company was founded.

In terms of customer acquisition, IHSE und kvm-tec are benefiting from the high level of innovation and the trend toward increased digitization and connectivity, as well as the need to safeguard against a growing number of cyberattacks. In this context, the receipt of additional federal certifications in accordance with the highest IT security standards is crucial to the company's success and, in particular, the very positive development in the Americas region at present. Here, the segment's new NIAP and EAL4+ security certifications are meeting with a very positive market response.

Continued profitable growth: Revenue to increase to between €290 and 320 million and EBITDA margin to around 40% by 2025

Despite continuing geopolitical and economic uncertainties, the management board of Brockhaus Technologies is optimistic for the full year 2023 and for subsequent years. Revenue growth to between €165 and 175 million (2022: €143 million) and an adjusted EBITDA margin of 35% are forecast for 2023, due to continued growth in both segments. By 2025, revenue is expected to increase to a value of between €290 and 320 million, excluding further significant acquisitions of new technology companies. Profitability is also expected to increase steadily and the adjusted EBITDA margin shall be raised to around 40% by 2025. As a result, adjusted EBITDA would climb from €50 million (financial year 2022) to a figure in excess of around €120 million by 2025.

The available high financial resources are to be invested in the organic growth of the subsidiaries and for selective inorganic growth initiatives. To this end, the company is in promising discussions.

For the half-year financial report H1 2023 and more information on the company, please visit: https://ir.brockhaus-technologies.com/websites/brockhaustechnologies/English/3000/publications.html

The earnings call for the first half of 2023 in English will take place today, August 14, at 4:00 pm (CET). Interested parties can register for the call under the following link: https://webcast.meetyoo.de/reg/WlWLObmEPPZJ

Contact information

For investors:

Paul Göhring
Phone:  +49 69 20 43 40 978

Fax:  +49 69 20 43 40 971

E-mail:  ir@brockhaus-technologies.com

For media:

GFD - Gesellschaft für Finanzkommunikation
Phone: +49 69 97 12 47 33

Fax:  +49 69 97 12 47 20

E-mail:  dietz@gfd-finanzkommunikation.de

Consolidated key figures H1 2023 (pro forma)*

* Note on prior-year comparison: With regard to the definition of alternative performance indicators, please refer to page 85 et seq. of our Annual Report 2022 and p. 19 of our Half Year Financial Report 2023.

About Brockhaus Technologies

Based in Frankfurt am Main, Brockhaus Technologies AG (BKHT, ISIN: DE000A2GSU42) is a technology group that acquires high-margin, high-growth technology and innovations champions with B2B business models in the German Mittelstand. With a unique platform approach and a long-term horizon, Brockhaus Technologies actively and strategically supports its subsidiaries in achieving profitable long-term growth, both across industries and internationally. At the same time, Brockhaus Technologies offers a gateway into these non-listed German technology champions, which are otherwise inaccessible to capital market investors. For more information, please visit: https://www.brockhaus-technologies.com/en/