Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brockhaus Technologies AG (XTER:BKHT, Financial) reported a strong revenue growth of 23% for the first nine months of 2024, reaching EUR 175 million.
- The company confirmed its annual forecast for 2024, expecting revenue between EUR 220 million and EUR 240 million, and adjusted EBITDA between EUR 80 million and EUR 90 million.
- The bike leasing segment showed significant growth, with a 43% increase in revenue per contract due to a shift to a floating leasing factor.
- The company reduced its net debt relative to adjusted EBITDA from 0.9 times at the end of 2023 to 0.6 times, enhancing its financial flexibility.
- Free cash flow before tax increased by 66% compared to the previous year, reaching EUR 26 million for the first nine months of 2024.
Negative Points
- The number of facilitated bicycles was slightly below the previous year, with around 123,000 units, due to weakened consumer behavior and active management decisions.
- ISE's revenue was down by 19% in the first six months of 2024, and although there was a rebound in Q3, it still reflected a drop of 16% compared to Q3 of 2023.
- The US market remains challenging for the company, with tough comparables from the previous year affecting revenue.
- The gross profit margin for bike leasing's resale business is significantly lower than its brokerage business, standing at around 12% compared to 92%.
- The company faces complexities in potential acquisition deals, such as carve-outs and family business structures, which could impact future growth opportunities.
Q & A Highlights
Q: Can you explain the decline in bike leasing units and whether these decisions can be reversed in the future?
A: The decline is due to strategic decisions, such as maintaining high-quality financing and shifting to a floating leasing factor. While technically reversible, these decisions are beneficial for long-term relationships and financial stability, so reversing them is not planned. - Marco Brockhaus, CEO
Q: What is the outlook for converting the remaining 10% of bike leasing customers to the variable factor?
A: Progress is ongoing, but reaching 100% conversion is unlikely due to various customer-specific reasons. We aim to convert as many as possible, but some resistance is expected. - Marco Brockhaus, CEO
Q: How is the acquisition pipeline looking, and are there any potential deals?
A: The market is showing more interesting opportunities post-summer, though many involve complexities such as carve-outs or family business transitions. We are actively exploring these opportunities. - Marco Brockhaus, CEO
Q: Can you provide insights into the Q4 performance of bike leasing and Pro Bono's customer acquisition?
A: We do not provide intra-quarter guidance. However, Pro Bono has seen strong interest and increased customer registrations since the sales outreach began in August. - Marco Brockhaus, CEO
Q: What led to the increase in gross margin for the resale business of bike leasing, and will this continue?
A: The increase is due to focused efforts on resale management, including opening a B2C store. We aim to continue improving margins, though they will remain below brokerage margins. - Marco Brockhaus, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
