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 Investor Relations section 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 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 of our consolidated financial statements for 2024 on page 93 onwards of the annual report 2024 and page 13 onwards of our quarterly statements for the first nine months of 2025 for a discussion on alternative 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. Turning to page three, 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. BikeLeasing continues to invest in its long-term growth strategy, transforming from a single-product company focused on company bike leasing into a multi-benefit platform.
As part of its international expansion strategy, BikeLeasing has also taken a stake in the US company Ridepanda, seeing this as an opportunity to create valuable synergies and to leverage its own expertise in company bike leasing 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%-15% between EUR 225 million and EUR 235 million, despite the persistently challenging economic environment, as said before. Against the backdrop of investments in BikeLeasing's long-term growth, we expect an adjusted EBITDA of EUR 50 million-EUR 55 million for the fiscal year 2025.
Brockhaus Technologies generated revenue of EUR 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 turned out to be 28% and 33% lower than last year, which was mainly driven by BikeLeasing's investment in its long-term growth strategy. Flipping to the next slide, let us look at how revenue developed on a quarterly basis. At IHSE, on the bottom of the page, while the first quarter was below last year's Q1, in the second quarter, we saw a positive development, and 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 many industries.
BikeLeasing, on the top of the page in the first quarter, was up by 11% compared to Q1 2024. In the second quarter, revenue was mostly on the same level as in the second quarter of 2024. The third quarter was 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 split. First, to BikeLeasing. No surprises here. The company does business 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 APAC, where revenue was down by 49%. In contrast, revenue in America's region rose by 17%, driven by the growing defense business. Turning to the profit and loss table. Excuse me. In the first two columns, we see that BikeLeasing'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 has a 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 planned higher personnel and other operating expenses related to the long-term growth strategy of BikeLeasing, aimed at transforming the business from a single-product company-like BikeLeasing provider into a multi-benefit platform. Strictly prioritized growth initiatives in this regard manifested in higher marketing expenses. The rise in expenses is primarily attributed to the acquisition of Probonio and the establishment of Bike2Future for marketing and brokering used bicycles via B2B and B2C channels and the associated growth measures. 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 investments in the new product generations comprising hardware and software from IHSE and KVMTEC.
Even excluding capitalized own work, the segment's gross profit margin reached 74%, up well above the prior year period when it was at 69%. The main contributing factor was an improved product and customer mix, particularly driven by IHSE's growing defense business, which had a positive impact on the segment's gross profit margin. The adjusted EBITDA amounted to EUR 3 million, with an adjusted EBITDA margin of 12%. The main reason for this decline was lower revenue, while fixed costs, particularly personnel 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 personnel and other operating expenses, which are expected to take effect primarily in the fiscal year 2026.
Moving to further columns to the right, in the central functions, expenses were lower compared to the first nine months of 2024, primarily due to lower personnel and other operating expenses. In conclusion, and summing up, on the consolidated group level, revenue was EUR 182 million, and gross profit margin was at 64%. Adjusted EBITDA margin was 27%, bringing our group to an adjusted EBITDA of EUR 49 million. The group's adjusted EBIT of EUR 43 million corresponds to a margin of 24%. Free cash flow before taxes was EUR 18 million 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 leverage structure. End of September, the debt from loans amounted to EUR 69 million.
When subtracting cash of EUR 38 million, we are left with a net debt from loans of EUR 31 million. Adding EUR 19 million from other financial liabilities and subtracting EUR 5 million of net debt from lease refinancing brings us to EUR 45 million 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. 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, who's 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 BikeLeasing. BikeLeasing continued to grow its customer base throughout Q3. The number of corporate customers onboarded to BikeLeasing'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 quarters, 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 commissions of leasing platforms. Consequently, if you get offered, for example, a 50% discount on cash purchases compared to a 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 financed through BikeLeasing, which has not seen a large decrease over the last months 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 BikeLeasing's business, the nine-month period has usually accounted for 80% plus in the last years, even increasing its weight to 89% in 2024, as you can see here on the right-hand side. Finally, the growth of corporate customers at Provonio, the company we acquired in April last year for multi-benefit management, is also continuing its positive momentum. Since we acquired Provonio in April last year and started upselling at the end of August last year, we've 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 BikeLeasing 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 BikeLeasing in 2021, just to remind you, 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 stand at 81,000 customers. Second, increasing the usage rate within employees of already onboarded corporates. Third, adding other non-bike benefits to the offering, meaning Provonio. And fourth, internationalizing the business. After having started internationalizing with the first organic step to Austria in 2022, where BikeLeasing holds a leading market position today, we are very happy to announce the next step with our investment in Ridepanda in the United States. Ridepanda today is the leading provider of micromobility employee benefits in the U.S. Through its digital platform, Ridepanda 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 BikeLeasing, the U.S. does not allow to finance the monthly rates by way of salary sacrifice, which is why Ridepanda customers sponsor the monthly rates for their employees. Those customers, you can see here on the page as well, and they include the likes of Amazon, Meta, Google, and also public entities like the City of Seattle. BikeLeasing acquired a minority stake of around 7% in Ridepanda and is looking to apply its expertise from the more mature German and Austrian markets now also to the U.S. 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 45% in the first nine months of 2025. As you might remember, some three years ago, we took the strategic decision to obtain specific defense-related certifications and also invest into business development activities in that market, which now start to bear fruits. Geographically, both EMEA and Asia-Pacific were down year-over-year, but Americas, 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 EUR 225 million and EUR 235 million, corresponding to solid organic growth of 10%-15% compared to fiscal year 2024. For adjusted EBITDA, the group plans a range of EUR 50 million-EUR 55 million. As part of the ongoing transformation of BikeLeasing from a single product provider to a multi-branded platform, the 2025 fiscal year is expected to include significantly higher expenses for personnel and other operating costs. These increased expenses are primarily driven by strategic growth initiatives, particularly the rollout of the digital multi-benefit platform provonio.de and the development of the huge bike sales platform bike2future.de, established in 2024.
As part of its international expansion strategy, BikeLeasing has also taken a stake in the US company Ridepanda, seeing this as an opportunity to create valuable synergies and to bring the experience gained from BikeLeasing's business model into the United States. IHSE is and will remain well-positioned for the long term due to its leading technology position in the KVM sector. With a fully packed pipeline of new product innovations, IHSE is focused on the future. In particular, the government defense segment is currently performing well. From an eagle-eyed view, I would say our technology group continues to be well-positioned for the future. BikeLeasing is a scalable and cash-generative business model. Thanks to regular distributions, even also this year, we have been able to gradually repay acquisition loans and expect to reach cash compounding mode 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'm 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 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 champion 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 nine and star on your telephone keypad. In case you wish to withdraw your question, please press three and star. Please press nine 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. We have a question coming from Sebastian Weidhüner from Paladin Asset Management. Over to you.
Yeah, hi. Good afternoon, and thanks for taking my question. Marco, you mentioned the share price, and even after the goodwill write-downs, the auditor recognized valuations of BikeLeasing and EVEL far above the current share price, more than double, I think. What are you planning to do to finally close this gap? We have this now since a few years, and yeah, how do you think about to unlock the underlying value for these two companies for shareholders? Thank you.
Yeah, thank you for the question. To continue to drive earnings and to invest into the future of the companies, right, as we do with BikeLeasing, as we do with IHSE. As you talk, I think frequently, if not every week, with our investor relations manager, Florian, you know well about what we do and what we plan to do in terms of what I just said, investing in the future of the companies, which we do, which we did, and which we will do. I do not understand that Marco does not see the lack of valuation. It is pretty obvious, as he just mentioned, but what can I say to the market? That is a good question. It is what it is. We cannot raise the share price.
We can buy back shares, which we did at EUR 22 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 are allowed to do.
Yeah, thanks. I mean, we saw an M&A inbound in Q4, right? Maybe when there's a possibility to unlock the value, maybe it would make sense to think about it. Another point, so on LinkedIn, I, yeah, yeah, please.
Sure. I mean, we did very well with Paladin, where we have 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 threefold the investment. However, I mean, if there are 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 Brockhaus Holding, you have hired Alexander. Previously, he was CFO Group Germany at Volaris, and Volaris is part of Constellation Software. Maybe you can say something. What does this addition mean for your organization?
Just to back up the financial manager, Yannick Walter. Just nothing does mean if you mean in terms of Constellation Software, we sold the business to Constellation Software a couple of years ago and the funds, but business, but that's I wouldn't conclude any strategic shift or so by his hire, not at all.
Okay, thanks. Maybe one operational question. You mentioned the transition to the multi-benefit platform, and I mean, in the case, it is Provonio. You now reported 3,100 corporate customers. Maybe you can give us a number, how many employees these clients represent, and for the moment, what is the annualized recurring revenue from these 3,100 customers?
I guess we don't guide on, yeah, Paul, you can jump in. We don't guide on each company. With 3,100 corporate customers, we did well. We believe that the investment we just did will hopefully bring more customers to Probonio and with that, more paying employees or paid employees for the software, right, using the software. This is where we stand, and we don't guide Probonio.
Yeah, but just to add on there and also the employee number, we do not disclose. We can think about if we want to do that in the future, but there is also a difference between employees behind those companies and activated employees because we only earn, of course, fees on activated employees and not everyone. Maybe a hint, if you look into our revenue splits that we have in the reports, usually there is a line called SaaS revenues, if I am not mistaking, and there is no entity within Brockhaus earning SaaS revenues than Probonio.
Yeah, I saw this, and I was surprised that this number was much lower than I would expect it. Maybe 3,100 customers times 30 employees times EUR 40 per employee would mean EUR 4 million in revenue for Probonio, so annualized. The number was quite smaller because of this I am asking. How many employees and what revenue is behind this 3,100 corporate customers?
I think we are going in circles here. The revenues you can see from our revenue splits in the report, and if you have had a look at this, you know the revenues. 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 do not guide that.
Okay, but to get it clear, are all 3,100 customers paying once, or do some companies have kind of free plan?
There might be a couple in there from history where they're, for some models, not paying something, but it's definitely the exception. 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 Stüben from Berenburg. 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 Provonio. Would you be willing to share the number of customers that are new customers versus which portion you've essentially upsold from BikeLeasing? The final question is just on Ridepanda. I guess with the seven, I think you said 7% stake. 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 start with the first question, and Paul, you can take then the other two. As a first report, no, I think it is conservative, yes, maybe, but many costs of BikeLeasing related to the initiatives in Probonio, Bike2Future, and so on in marketing are backloaded in Q4. As you know, Q4 and Q1 is always weaker than Q2 and Q3. We see our guidance as it is, and we believe, yeah, that for now, this is what we see for 2025. Paul, maybe you take the other two questions.
On the probonio question, we actually do not have a split at hand for who was upsold and who is completely new. Actually, there is also a third piece, right, where we win a customer simultaneously for both BikeLeasing and probonio, or the other way around, where we just win a probonio customer and they are later on upsold to BikeLeasing. There are very different directions in which you can think, but we do not have the split at hand. The last question on Ridepanda, it is a percentage-wise small investment for us, but the market potential in the US is, of course, pretty big. I mentioned on my slides earlier that their model is unfortunately not as beneficial as in Germany, so you do not have the salary sacrifice option for leasing bikes or subscription bikes over there.
You always need to find employers that are willing to subsidize the monthly rates for their employees, hence also the very big names who can afford doing so. Given that the market is not as favorable as Germany or Austria, Ridepanda 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. Be it in relation to operations, or be it in financing or insurance. I mean, we have experience there quite a lot. By this also learn more about the market, right? Because you can, let's say, hire two or three people over there that try to fight windmills, if one says like this, and be, let's say, a satellite office without doing any revenue, or you support a leading player on the ground.
We decided for the second option. 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. If you have any additional questions, please press nine and the star key. Thank you. Nine and star for any additional questions, please. A follow-up question comes from Sebastian Weidhüner from Paladin. Over to you again.
Hi, thanks. It's me again. The average price per bike, does it remain for the moment by EUR 4,000 gross?
Yeah, around about that level.
Okay, thanks. 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 BikeLeasing? Do you have a transitional phase or were they blocked?
The transitional phase is already behind us. If you have not agreed to the new partnership model, then you can't use our platform anymore. To also say this, this is really applying to, say, a very, very low percentage.
All right. In case of the gross profit margin, in the pure bike brokerage business, this stands at 90.7% after 92.1% in the prior year. Given the introduction of the dealer fee, I would have expected a little increase. Could you explain why the margin declined 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. What we, of course, have is that certain parameters fluctuate upwards or downwards on a quarterly basis. For example, the leasing factor 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. There's no real big reason for it. It's just normal fluctuations.
Okay. In the BikeLeasing segment, the OpEx, so the difference between gross profit and adjusted EBITDA, increased EUR 7 million year-over-year. In the Q3 report, you mentioned, I think, that EUR 7 million relate to Probonio and Bike2Future. Around EUR 10 million are relating to the core brokerage bike business, right? Why are costs rising here so much while, I mean, JobRad is reducing headcount by 20% and the bike volumes are declining too?
I could not follow your calculation, to be honest. First of all, you have a gross profit effect. I am not sure if you had that in your calculations right now. If you start with a lower gross margin, you already have, let's say, a lower basis to start from. You have the additional cost, as you mentioned, from Probonio and Bike2Future, which is an additional, I think, EUR 6.5 million, so around about EUR 7 million on top of that. BikeLeasing also continues to grow and invest, right? It is not only the new ventures, but also on BikeLeasing, we are investing a lot into our product. This is, of course, also having an effect on the personnel basis. For example, if you hire a lot of IT people, you are absolutely right that the market leader is apparently reducing headcount.
This is only apparently half the reality because also on their returning bikes business, they are hiring like crazy people. I think they have reported on one entity and not on the whole group, but it is their cup of tea. We do what we think is best for BikeLeasing. Of course, we have also the unit numbers in mind, right? We have the customer onboarding numbers in mind, the utilization rates in mind, the actual bikes that are ordered in mind. You can be sure we have that on our radar.
Yeah, I took the difference between gross profit and adjusted EBITDA. So OpEx plus EUR 17 million year-over-year. You mentioned EUR 7 million are going to Probonio and Bike2Future, and then EUR 10 million are remaining for BikeLeasing. Okay, and maybe one to IHSE. On one side, the high defense and government revenue is good, but the business reported a huge revenue decline. This maybe suggests problems in other verticals. Can you do a deep dive here? Do you see this only market-driven, or are there any structural issues, and have you lost maybe 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 next quarter or next year. The second thing is the market environment out there. I mean, defense is helping quite a lot, and would we not have taken the decision a couple of years ago to go into that vertical, it would be, let's say, even worse. 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. You can see that in the EMEA development, especially, that we had a revenue decrease there. Those two factors I would name.
How is the situation in the aviation business, for example?
I mean, we don't go on individual industries here, please. You have traffic control, you have broadcasting, post-production as very big verticals. If everything except for defense is not going as smoothly as in the past, that means the other markets all have their slight or more issues.
Yeah, I mean, we have some other companies like Frequentis on the stock exchange, and in the aviation, 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. 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? Since Q2, I think EUR 8 million have been incurred. How long does it go?
Hi, this is Yannick from the finance department. These expenses, I expect it 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.