3U HOLDING AG: Nine-month figures: organic revenue growth of 5.0% - weclapp with ongoing dynamic expansion of around 50%

Marburg (pta006/10.11.2021/07:00 UTC+1)

• Following the disposal of two non-core subsidiaries in 2020, consolidated revenue down 9.6% in line with expectations
• Cloud Computing remains growth driver, flanked by e-commerce and telecommunications with organic revenue growth
• Guidance for the 2021 financial year further specified: In view of the global supply problems (SHAC) and weaker wind yield, the Management Board anticipates figures at the lower end of guidance

Marburg, 10 November 2021 – 3U HOLDING AG (ISIN DE0005167902) generated consolidated revenue of EUR 40.21 million in the first nine months of 2021, reflecting a decline of EUR 4.28 million (9.6%) compared with year-earlier revenue of EUR 44.49 million. The downturn is principally due to the disposal of parts of the business in the fourth quarter of the financial year 2020. At the time, the Lüdersdorf wind farm in the Renewable Energies segment and ClimaLevel Energiesysteme GmbH in the SHAC segment left the group of consolidated companies. Their joint contribution to revenue in the first nine months of 2020 amounted to EUR 6.21 million. The 3U Group therefore achieved organic growth of 5.0% in the period under review. This key figure stood at 6.4% in the third quarter of 2021.

The 3U Group delivered adjusted EBITDA of EUR 6.01 million in the first nine months of the financial year 2021. This figure does not take account of expenses amounting to EUR 0.46 million in connection with corporate acquisitions in the Cloud Computing business as well as preparations for a possible initial public offering of weclapp SE. Including these one-off expenses, Group EBITDA amounts to EUR 5.56 million (9M/2020: EUR 6.43 million). The EBITDA margin (EBITDA as a percentage of revenue) stood at 13.8% in the first nine months of 2021 compared with 14.5% in the year-earlier period. Adjusted EBITDA is equivalent to 15.0% of consolidated revenue.

The cost of materials decreased by 9.1% to EUR 21.70 million (9M/2020: EUR 23.87 million). The cost of materials ratio (cost of materials as a percentage of revenue) edged up to 53.9% (9M/2020: 53.6%). This ratio reflects the sharp increase in procurement prices in the construction sector as a whole – especially in the second quarter and third quarter – and therefore also for the SHAC segment. A countertrend emanated from growth in the ITC segment with its sparing use of materials.

Personnel expenses rose slightly by 3.3% to EUR 10.09 million (9M/2020: EUR 9.78 million). The increase was due in particular to hiring new staff in the context of the planned growth trajectory for the Cloud Computing business. The personnel expenses ratio (personnel expenses as percentage of revenue) climbed to 25.1% in the first nine months of 2021 (9M/2020: 22.0%). Other operating expenses advanced to EUR 6.53 million (9M/2020: EUR 6.11 million). As already mentioned, this increase was attributable to extraordinary expenses of EUR 0.46 million incurred in connection with M&A activities and a possible IPO of weclapp SE.

The 3U Group’s depreciation and amortisation amounted to EUR 3.07 million in the first three quarters of 2021 (9M/2020: EUR 3.84 million). The decrease is due in particular to the deconsolidation of the Lüdersdorf wind farm. Tax expenses rose to EUR 0.96 million (9M/2020: EUR 0.81 million), as expected. The consolidated result (net of minority interest) came in at EUR 0.94 million, reflecting a year-on-year increase of 55.8% (9M/2020: EUR 0.60 million).

Segment results

The ITC segment raised revenue considerably by 19.5% to EUR 16.56 million (9M/2020: EUR 13.86 million) and generated EBITDA of EUR 3.57 million, which marks a slight decline in comparison with the previous year’s period (9M/2020: EUR 3.66 million). Revenue in the Voice Retail business line returned to normal levels in the first nine months of 2021 compared with the financial year 2020 when the demand for telecommunications services from end consumers increased significantly in the wake of measures to combat the COVID-19 pandemic. By contrast, growth was once again achieved in the Voice Business Customers and Data Centres areas, which enabled Telecommunications to report a slight upturn in business overall, also compared with the strong year-earlier period. The business of weclapp SE, synonymous with the Cloud Computing business, expanded by 48.7% in the first nine months of 2021 compared with the same period in 2020. As an individual company, weclapp SE delivered an EBITDA margin of 24.7% despite the extensive, forward-looking recruiting of new staff and high one-off expenses in connection with company acquisitions and preparations for a possible initial public offering (IPO). The segment’s EBITDA margin contracted to 21.6% (9M/2020: 26.4%).

Revenue in the Renewable Energies segments decreased by 38.3% to EUR 4.39 million in the first three quarters of 2021 (9M/2020: EUR 7.12 million). Similar to the first and second quarter of 2021, the segment registered wind yield in the third quarter that was lower than anticipated based on the long-term average. Moreover, 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. Segment EBITDA dropped to EUR 3.22 million in the reporting period (9M/2020: EUR 5.61 million). The Renewable Energies segment’s EBITDA margin came in at 73.2% (9M/2020: 78.7%). 

Revenue in the SHAC segment decreased by 16.7% to EUR 19.95 million in the first nine months of 2021 (9M/2020: EUR 23.95 million). This development was mainly due to ClimaLevel Energiesysteme GmbH leaving the consolidated group in the fourth quarter of 2020. Continued operations, i. e. 3U’s e-commerce operations, reported organic growth of 7.9%. Business in the SHAC segment was negatively impacted by the shortage of commodities and materials in the entire construction industry and the resulting delivery bottlenecks and drastic price hikes for commodities, components and systems. This applied not only to third party products, but also to the segment’s proprietary brand products. Difficulties in procuring commodities and components were exacerbated in the third quarter. The SHAC segment nevertheless succeeded in holding its ground well despite numerous challenges in the sector. In the first nine months of 2021, the SHAC segment’s cost of materials ratio rose slightly year on year to 79.5% (9M/2020: 77.4%). Segment EBITDA improved to EUR -0.30 million (9M/2020: EUR -0.38 million).

Revenue of EUR 1.06 million was reported under Other Activities in the period under review (9M/2020: EUR 1.47 million). This revenue largely consists of income from management services; the decline is due to the disposal of property in the financial year 2020 and the lack of the associated rental income. In the first nine months of 2021, both personnel expenses and other operating expenses remained unchanged from the previous year’s period. Segment EBITDA improved considerably to EUR -0.96 million in the reporting period (9M/2020: EUR -2.38 million).

Sound balance sheet and financial ratios despite higher investment

The cash outflow from operating activities amounted to EUR 3.43 million in the first nine months of the financial year 2021 (9M 2020: cash inflow of EUR 2.55 million). The 3U Group disbursed EUR 11.66 million in investments in the period under review (9M/2020: EUR 4.62 million). Cash inflow from completing the sale of non-core parts of the Adelebsen property were offset in the reporting period 2021 by cash outflow for completing the construction of the new distribution centre in Koblenz, as well as weclapp SE’s acquisition of ITscope GmbH in particular. Free cash flow came in at EUR -15.08 million in the reporting period due to the high level of investment (9M 2020: EUR -2.07 million). The total amount of cash and cash equivalents stood at EUR 10.23 million at the end of the third quarter (December 31, 2020: EUR 26.42 million).

Total assets had increased to EUR 105.02 million as of 31 September 2021 (31 December 2020: EUR 85.90 million). The balance sheet extension is especially attributable to the takeover of ITscope GmbH. Offsetting the lower level of cash and cash equivalents, the assets side shows a significant increase in intangible assets, and the liabilities side an increase in financial liabilities and equity. The substantial increase in inventories is due to progress made in building InnoHubs in Würzburg. As part of the property developer model, InnoHubs GmbH is making headway with the successful marketing of space in the building complex

Principally due to acquiring ITscope GmbH, the 3U Group reported net debt (cash and cash equivalents minus current and non-current financial liabilities) of EUR 9.51 million. The debt-to-equity ratio had increased to 76.4% by 30 September 2021 (31 December 2020: 65.2%).

The 3U Group disclosed positive working capital amounting to EUR 19.88 million and continued to have a sound equity ratio of 56.7% as of 30 September 2021 (31 December 2020: 60.5%). 

Guidance for 2021 further specified

The Management Board further specified guidance issued in March for the financial year 2021. Given the global supply problems that are impeding the procurement of goods in the SHAC segment, and weak revenue in the Renewable Energies segments due to the weather conditions, the 3U Group anticipates consolidated revenue at the lower end of guidance. Revenue is therefore expected in a range of between EUR 58 million and EUR 63 million. The Management Board also expects EBITDA to settle at lower end of guidance, namely between EUR 11 million and EUR 13 million, especially when taking account of the extraordinary expenses incurred by M&A activities and by preparations for a possible IPO of weclapp SE. Furthermore, as is already known, earnings in the single-digit million range from the disposal of assets have been incorporated into planning. Profit of the 3U Group is therefore expected in a range of between EUR 2 million and EUR 4 million.

"Creating value for our shareholders – this was and is our corporate purpose. We continue to see huge growth potential in the years ahead in the three megatrends in which we are successfully operating, namely in cloud computing, e-commerce and renewable energies," explains Michael Schmidt, spokesman of 3U HOLDING Ag’s Management Board. "Our subsidiary weclapp SE in particular delivered impressive growth of around 50% in the first nine months of 2021. The successful acquisitions of ITscope and FinanzGeek enrich our cloud-based business and will serve to accelerate growth. We can and want to reap further value potential through a possible launch of our subsidiary weclapp SE on the stock exchange."

Quarterly statement

The quarterly statement on the first nine months of the 2021 financial year will be published today, 10 November 2021. It can be downloaded from the company’s website (www.3U.net) under the "Investor Relations/Reports" heading. 

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