3U HOLDING AG: Reliably Steering a Steady Course: 3U Forecast Confirmed

Marburg (pta006/11.08.2021/07:00 UTC+2) _
* Continued organic growth in key business areas as planned
* Cloud Computing concludes first contract for company acquisition at the beginning of July
* Difficult procurement situation in the construction industry, SHAC segment equipped for future growth with new distribution centre

In the first half of 2021, the consolidated revenue of 3U HOLDING AG (ISIN DE0005167902) declined compared with the previous year's period in line with the forecast. Consolidated revenue stood at EUR 27.34 million, down 10.1 % as against the year-earlier figure (H1 2020: EUR 30.41 million). Organic growth in key operational areas has not yet been able to compensate for the assets sold in 2020. The Lüdersdorf wind farm and ClimaLevel Energiesysteme GmbH left the group of consolidated companies in the fourth quarter of the financial year 2020. Their joint contribution to revenue in the first half of 2020 amounted to around EUR 4.22 million.

Other income of EUR 2.86 million was achieved in the first six months of 2021. Growth compared with the year-earlier period (H1 2020: EUR 1.11 million) is due in particular to the completion of the sale of parts of the Adelebsen property not used by the company.
Although the cost of materials had declined in comparison with the year-earlier period, the significantly lower share of revenue from the Renewable Energies segment resulted in the cost of materials ratio (cost of materials as a percentage of revenue) rising from 53.1% in the first half of 2020 to 55.2% in the period under review. This ratio reflects the sharp increase in purchase prices in the construction sector as a whole - especially in the second quarter - and therefore also for our SHAC segment. The relatively strong growth of the ITC segment whose operations incur lower material costs was unable to compensate for this effect in the first half of 2021.

As of 30 June 2021, the 3U Group had a workforce of 238 people (including Management Board members, temporary employees and part-time staff); (30 June 2020: 233 people). As a result, personnel expenses advanced slightly to EUR 6.49 million (H1 2020: EUR 6.45 million), and the personnel expenses ratio (personnel expenses as percentage of revenue) came in at 23.8% in the first half year, which is higher than in the year-earlier period (H1 2020: 21.2%). Other operating expenses stood at EUR 4.29 million (H1 2020: EUR 4.21 million). Their share in revenue of 15.7% exceeded the previous year's level (H1 2020: 13.8%). This is due in particular to increased expenditure in connection with company acquisitions in the cloud computing business.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortisation) of EUR 4.59 million was generated in the first six months of the financial year 2021 (H1 2020: EUR 4.69 million). The EBITDA margin (EBITDA as a percentage of revenue) in relation to slightly lower consolidated revenue nevertheless increased from 15.4% in the first six months of 2020 to 16.8% in the reporting period.

A marginally negative consolidated result of EUR -0.35 million was delivered in the second quarter of 2021 (Q2 2020: consolidated result of EUR -0.13 million). In terms of the first six months of 2021, a consolidated net income of EUR 1.47 million was achieved (H1 2020: EUR 0.74 million), which reflects growth of 99.7%. Net earnings per share amounted to EUR 0.04 (basic and diluted).

Segment results
The ITC segment (Information and Telecommunications Technologies) recorded significant organic growth as forecast. The telecommunications business area continued to see an increase in business compared to the strong first half of 2020. The ITC segment revenue rose by an overall 19.9% to EUR 10.83 million (H1 2020: EUR 9.03 million). Business in the area of cloud-based solutions expanded by more than 45% in the first half of 2021 compared with the year-earlier period. The share of cloud computing in segment revenue therefore rose for the first time to more than 40% (H1 2020: in excess of one third).

As part of the measures to combat the COVID-19 pandemic, in particular restrictions on contact, the demand for telecommunications services, also from private individuals, increased significantly in the financial year 2020. This phenomenon did not continue in the first half of 2021. Revenue generated by Voice Retail dropped to EUR 0.95 million, which is marginally below the revenue level achieved in the first half of 2019 (H1 2020: EUR 1.19 million; H1 2019: EUR 1.02 million).

By contrast, the other two areas of Voice Business and Data Centre Services and Operation continued to achieve revenue growth. Voice Business expanded its position as the strongest part of the segment to 72.2 %, lifting its revenue by 11.9% to EUR 3.77 million (H1 2020: EUR 3.37 million). ITC segment revenue rose by an overall 19.9% to EUR 10.83 million (H1 2020: EUR 9.03 million.

Personnel expenses increased thanks in view of ongoing strong growth in the Cloud Computing segment. Also, one-off costs were incurred for preparing and carrying out of company acquisitions. This led to a temporarily weaker earnings development. The EBITDA margin in weclapp SE decreased from 35.0% (H1 2020) to 28.7% (H1 2021).

These developments resulted in slightly higher earnings also in the ITC segment as a whole. Segment EBITDA of EUR 2.55 million was generated in the first half of 2021 (H1 2020: EUR 2.38 million). The EBITDA margin declined from 26.4% in the first six months of the financial year 2020 to 23.6% in the reporting period.

Several effects have resulted in lower key financials for the Renewable Energies segment in comparison with the year-earlier period. The deconsolidation of the Lüdersdorf wind farm and the lower rate for electricity fed back into the grid from wind turbines no longer subject to subsidies under the German Renewable Energy Sources Act (EEG) also pared down revenue in this segment. In addition, after little wind in the first quarter, the second quarter was also characterised by weaker solar irradiation compared with the first six months of 2020, along with lower wind yield than would normally be expected based on the long-term average.

Whereas, in the strong first half year of 2020, segment revenue of EUR 5.48 million was generated, revenue in the period under review came in at EUR 3.12 million, down 43.1%. Despite the lower level of depreciation and amortisation following the deconsolidation of the Lüdersdorf wind farm, along with a slight improvement in the financial result and lower taxes, the segment result dropped to EUR 0.37 million (H1 2020: EUR 1.55 million).

Revenue generated by the SHAC segment (Sanitary, heating and air conditioning technologies) decreased from EUR 16.11 million in the first six months of 2020 to EUR 13.84 million in the period under review. This development is largely attributable to the disposal of Clima Level Energiesysteme GmbH that left the consolidated group in the fourth quarter of 2020 - this company contributed EUR 3.62 million to segment revenue in the first half of 2020. Continued operations, essentially in 3U's online trading, reported organic growth of 10.8%.

However, business in the SHAC segment was impacted by the shortage of commodities and materials observed across the entire construction industry, which resulted in the price of raw materials and components surging. This affected not only other brand products but also the segment's proprietary brand products. Suppliers had already issued warnings prior to their massive and currently worsening difficulties in procuring raw materials and components. The relocation to the new distribution centre also contributed to enabling deliveries from the online retailing business to customers to continue where possible. By the second quarter of 2021, however, delivery problems of manufacturers resulted in the processing of a notable number of existing orders being delayed. The SHAC segment's cost of materials increased again in the first half of 2021, from 78.6% to 79.9%, mostly due to these external circumstances.

EBITDA nevertheless increased, from EUR -0.56 million in the previous year's period to EUR -0.22 million in the first half of 2021. In the first six months of 2021, personnel expenses declined, both in absolute and relative terms: The personnel expenses ratio (personnel expenses as a percentage of revenue) decreased from 13.2% (H1 2020) to 10.2%. Other operating expenses settled at the year-earlier level. An improved, albeit negative, segment result was delivered in the first half of 2021 (H1 2021: EUR -0.48 million; H1 2020: EUR -0.80 million).

Revenue of EUR 0.73 million was reported under Other Activities in the first half of 2021 (H1 2020: EUR 1.00 million). This revenue largely consists of income from management services.

Both the personnel expenses and other operating expenses in Other Activities/Reconciliation exceeded the year-earlier level in the first half of 2021. Expenditure for employees in the holding company stood at EUR 1.52 million (H1 2020: EUR 1.48 million). Other Activities' other expenses amounted to EUR 1.41 million (H1 2020: EUR 1.34 million). EBITDA came in at EUR -0.18 million (H1 2020: EUR -1.66 million).

Key financial figures remain at a good level
The cash inflow from operating activities totalled EUR 2.61 million in the first half of 2021 (H1 2020: cash inflow of EUR 0.91 million). Investing activities resulted in a cash outflow of EUR 0.70 million (H1 2020: cash outflow of EUR 1.72 million). Cash inflow from the disposal of parts of the Adelebsen property not used by the company was offset by cash outflow in the first half of 2021 for the completion of the new distribution centre in Koblenz and for the construction of a property in Würzburg.

In addition to payments for the redemption of financial loans and leasing liabilities amounting to EUR 1.34 million (H1 2020: cash outflow of EUR 1.47 million), the distribution of dividend to the shareholders of 3U HOLDING AG and to minority interest of EUR 1.78 million (H1 2020: cash outflow of EUR 1.41 million) led to a cash outflow from financing activities of EUR 2.54 million (H1 2020: EUR 2.88 million. Free cash flow in the first six months of the 2021 financial year reached EUR 1.91 million (H1 2020: negative free cash flow EUR 0.81 million).

Total assets came in at EUR 87.21 million on 30 June 2021, reflecting an increase of EUR 1.31 million compared with 31 December 2020 when they amounted to EUR 85.90 million. The balance sheet extension is mainly due to the completion of the new distribution centre in Koblenz capitalised under property, plant and equipment. A countereffect emanated from the position comprising assets held for sale (Adelebsen) of EUR 3.16 million which is no longer included. Changes in current assets are largely business or reporting-date related.

Working capital (current assets minus current liabilities) amounted to EUR 30.50 million (31 December 2020: EUR 31.51 million).

Non-current and current financial liabilities were reduced slightly by EUR 0.21 million. As of 30 June 2021, they still stood at EUR 16.89 million compared with EUR 17.10 million on 31 December 2020. Non-current and current leasing liabilities amounted to EUR 2.69 million on 30 June 2020, down EUR 0.35 compared with year-end 2020 (31 December 2020: EUR 3.04 million). By the end of the first half year, the provisions of EUR 1.55 million had dropped only marginally below the 2020 balance sheet date (EUR 1.65 million).

After accounting for the dividend payment and thanks to consolidated net income for the period of EUR 1.47 million, consolidated equity amounted to EUR 51.94 million (31 December 2020: EUR 52.00 million). At the end of the first six months of 2021 the equity ratio therefore remained virtually unchanged at 59.6% (31 December 2020: 60.5%). The gearing ratio rose slightly to 67.9% as of 30 June 2020, up from 65.2% on 31 December 2020.

Forecast confirmed
In spite of the aforementioned challenges in the SHAC segment, the Management Board reaffirms its forecast for the financial year 2021 published in March 2021 and anticipates consolidated revenue at the year-earlier level. The lack of revenue from the sold participations in ClimaLevel Energiesysteme GmbH and the Lüdersdorf wind farm is not expected to be fully compensated for by the strong organic growth of the remaining business areas. In 2021, sales revenues in the range of EUR 58 million to EUR 63 million are expected to be generated. In addition, income in the single-digit million range from the sale of assets has been included in the planning. With regard to EBITDA, the Management Board expects a slightly higher result before interest, taxes, depreciation and amortisation of between EUR 11 million and EUR 13 million in view of the measures introduced to strengthen earnings and the increasing share of higher-margin business. Net earnings of the 3U Group are therefore expected in a range of between EUR 2 million and EUR 4 million.

Events since the end of the interim reporting period
Since the end of the reporting period, Group company weclapp SE concluded an agreement with the shareholders of Karlsruhe-based ITscope GmbH on 8 July 2021. Under this agreement, weclapp acquires all the shares in ITscope. At the time when this interim financial report was being drawn up, the completion of the transaction was contingent on conditions precedent, the entering of the capital increase into the commercial register in particular. This, in turn, depends on the expert opinion of the court-appointed auditor of the non-cash contribution

On 26 July 2021, taking account of current capital market developments and other factors, weclapp SE's Management Board decided to determine a date for a potential launch of the company on the stock exchange, set rather more in the second half of the period announced in April 2021, specifically over the course of the first half of 2022. The decision has no impact on the forecast of the 3U Group.

"We are resolutely implementing our growth strategy, working rigorously on increasing the company's value for you, and in the first half of the financial year 2021 we have achieved further milestones,"1underlines Michael Schmidt, Speaker of the Management Board 3U HOLDING AG. "The recently acquired ITscope GmbH offers an ideal addition to weclapp's range of services; we are making suitable preparations for the possible IPO of weclapp SE; the move to the new distribution centre is already proving to be a benefit during extremely turbulent times throughout the construction industry. In these exciting times, with many challenges and many steps in the right direction, we are reliably steering a steady course and are implementing our growth strategy and our commitments step by step: We confirm our forecast for the current financial year."

Half-year financial report
The interim financial report for the first six months of the 2021 financial year will be published today, 11 August 2020. It can be downloaded from the company's website (www.3U.net) under "Investor Relations/Reports".

Further information:
Dr Joachim Fleïng
Investor Relations
3U HOLDING AG
Tel.: +49 (0) 6421 999-1200
Fax: +49 (0) 6421 999-1222
E-mail: IR@3U.net

About 3U:
3U HOLDING AG (www.3U.net) 3U HOLDING AG (www.3U.net) has its headquarters in Marburg, Germany, and was founded in 1997. It is the operating management and investment holding company at the head of the 3U Group. It acquires, operates and sells companies in the three segments of ITC (Information and Telecommunications Technology), Renewable Energies and SHAC (Sanitary, Heating and Air Conditioning Technology). The 3U Group has successful and profitable business models based on megatrends in all three segments. It continues to expand its business activities dynamically, particularly in its strongest growth areas of cloud computing and online trading, in which it is striving to achieve leading positions in the market.
3U HOLDING AG's shares are traded on XETRA, Tradegate and on the German regional stock exchanges (ISIN: DE0005167902; identifier: UUU).

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Emitter:	3U HOLDING AG Frauenbergstraße 31-33 35039 Marburg Germany
Contact Person:	Dr. Joachim Fleing
Phone:	+49 6421 999-1200
E-Mail:	IR@3U.net
Website:	www.3u.net
ISIN(s):	DE0005167902 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate