3U HOLDING AG: 3U planning strong organic revenue growth in 2023

Marburg (pta006/29.03.2023/07:00 UTC+2)

• Forecast as specified in the financial year 2022 fully met – revenue as well as EBITDA and the consolidated result all in line with the expectations last announced
• Operating EBITDA margin of continuing operations reaches 16.9 %
• Other income from divestments totals around EUR 176 million
• Dividend proposal of EUR 3.20 enables shareholders to participate in above-average increase in value
• Strong organic revenue growth anticipated from continuing operations
• High level of liquidity creates headroom for strategic acquisitions

Marburg, 29 March 2023 – 3U HOLDING AG (ISIN DE0005167902) is reporting on the consolidated financial statements and the results of the financial year 2022.

According to the audited consolidated statements of 3U HOLDING AG for which an audit opinion has not yet been issued, consolidated revenue rose by EUR 6.71 million (12 %) to EUR 62.66 million in the financial year 2022, up from EUR 55.94 million in the previous year.

As expected, consolidated revenue increased by EUR 6.71 million (12.0 %) to EUR 62.66 million in the financial year 2022, up from EUR 55.94 million in the previous year. In accordance with IFRS 5, a distinction is made in the consolidated financial statements of 3U HOLDING AG as at 31 December 2022 between the development of continuing operations and that of discontinued operations. These separate disclosures have also necessitated significant adjustments to the figures reported in the 2021 consolidated financial statements. This applies in particular to the disclosure of the real estate development activities under InnoHubs GmbH whose income and expenses in the 2022 consolidated financial statements and the year-earlier figures reported here are no longer shown net.

The presentation of discontinued operations comprises all sales and earnings, along with all balance sheet items and cash flows attributable to the regular and extraordinary business transactions of the subgroup of weclapp SE that was sold effective 30 September 2022. The revenues of these discontinued operations came in at EUR 12.34 million (full year 2021: EUR 11.17 million). Continuing operations generated revenues of EUR 50.32 million, reflecting growth of EUR 5.55 million (12.4 %; 2021: EUR 44.77 million).

All three operating segments contributed in differing degrees to the organic revenue growth. The ITC segment lifted revenue by 0.5 %. The SHAC segment was hampered in the previous year by supply bottlenecks in the construction sector. Given that the supply situation gradually improved in 2022, 3U's e-commerce operations recorded strong growth again and raised revenue by 16.9 % year on year. The Renewable Energies segment reported revenue growth of 14.5 %.

Other income of EUR 175.70 million was generated as follows: EUR 162.48 million from discontinued operations (in connection with the sale of weclapp SE) and gains of EUR 13.22 million from continuing operations (in particular from the realisation and sale of the InnoHubs construction project). In 2021, income from continuing operations stood of EUR 17.67 million was achieved. Own work capitalised was incurred in the reporting year and in the previous year solely in discontinued operations.

The cost of materials rose by 12.5 % in comparison with the previous year. The expansion of the SHAC segment's business resulted in a slight increase in the cost of materials ratio (cost of materials as a percentage of sales) in continuing operations to 64.8 % (2021: 64.5 %). Also across the Group, this ratio only edged up in a year-on-year comparison, posting 52.6 % as against 52.3 % in the year-earlier period.

The Group's gross profit of EUR 206.63 million considerably exceeded that of the previous year (2021 gross profit: EUR 45.38 million). This increase was predominantly due to the sale of participating investments. The gross profit of continuing operations declined by 7.5 % to EUR 31.33 million (2021: EUR 33.86 million). Higher other earnings associated with the divestiture of the cloud computing business and of the InnoHubs construction project are offset by the high level of non-recurrent expenses in connection with the sale of, which are reflected especially in the personnel expenses as well as in other expenses of discontinued operations.

The personnel expenses of continuing activities decreased slightly, from EUR 8.60 million in the financial year 2021 to EUR 8.25 million in the period under review. Accordingly, the share of personnel expenses in revenue (personnel expenses ratio) in these areas also declined, from 19.2 % in 2021 to 16.4 % in the financial year 2022. By contrast, personnel expenses from discontinued operations rose substantially: Whereas, in the financial year 2021, personnel expenses still stood at EUR 6.38 million, this figure came in at EUR 11.35 million in 2022. The ratio includes expenses for profit-sharing bonuses for the staff and management, also of 3U HOLDING AG, amounting to EUR 2.28 million.

By contrast, other operating expenses from continuing activities also dropped slightly to EUR 14.59 million in the financial year 2022 compared with EUR 16.04 million in the previous year. This decline was attributable to the lower level of costs in the real estate development business. In the previous year, revenues from real estate development were shown netted with the corresponding construction expenses under other income. The previous year's comparative value was therefore adjusted in the same way as for other income. The effect of impairment carried out on current assets increased expenses. In view of the limited personnel resources in the Renewable Energies segment, new priorities were also set regarding projects to develop wind farms in Brandenburg to be continued if appropriate. In this context, project development costs of EUR 1.59 million reported under current assets were written down (2021: no impairment on current assets).

Other operating expenses in discontinued operations include consultancy costs of EUR 2.32 million in connection with the sale of weclapp SE. All in all, other operating expenses came in at EUR 6.85 million (2021: EUR 3.09 million).

The event-driven higher expenses for personnel and for legal and other consultancy services are offset by extraordinary other income from discontinued operations. As a result, exceptionally high earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR 165.59 million was generated at Group level in the financial year 2022 compared with the previous year (2021: EUR 11.27 million). Consequently, the consolidated EBITDA margin (EBITDA in relation to total output (revenue plus other income plus inventory changes plus own work capitalised)) of 69.1 % was extremely high compared with the 2021 figure of 15.1 %.

Conversely, EBITDA from continuing operations entered into decline due to a non-recurrent write-down on wind energy projects. EBITDA posted EUR 8.49 million in the financial year 2022 (2021: EUR 9.21 million), reflecting an operating EBITDA margin (EBITDA as a percentage of revenue from continuing operations) of 16.9 % (2021: 15.1 %). Net of this write-down on current assets, adjusted EBITDA would have amounted to EUR 10.08 million, corresponding to an adjusted EBITDA margin of 20.0 %.

The result attributable to minority interest decreased to EUR 0.41 million compared with the previous year's period (2021: EUR 1.13 million). The decline is largely due to the minority shareholders in weclapp SE and in InnoHubs GmbH leaving the Group.

In the financial year 2022, the portion of the consolidated result due to shareholders of the parent company stood at EUR 158.99 million in accordance with the revised guidance (2021: EUR 2.92 million). A result for the period (included therein) from continuing operations was attributable to the shareholders of the parent company in an amount of EUR 3.15 million (2021: 2.10 million).

Dividend proposal: EUR 3.20

The Management Board has applied to the Supervisory Board to submit a proposal to the company's Annual General Meeting to use the profit of EUR 117.48 million available for distribution almost fully to pay dividend of EUR 3.20 per share. The Supervisory Board will decide on this motion immediately after receipt of the annual financial statements and the pertinent audit opinion.

Result of the segments' operations

Continuing operations in the ITC segment contributed 24.1 % (2021: 27.0 %) to the revenues of continuing operations, while the Renewable Energies segment delivered 14.3 % (2021: 14.0 %) and the SHAC segment 62.6 % (2021: 60.2 %). The difference between the sum total of segment sales revenue and 100 % of consolidated sales revenue is attributed to Other Activities.

ITC (Information and Telecommunications Technology) segment

In a year-on-year comparison, the ITC segment lifted its revenue by 0.5 %, from EUR 12.08 million to EUR 12.14 million in the financial year 2022. Telecommunications generated EUR 11.25 million in sales revenue, unchanged from the year-earlier level (2021: EUR 11.13 million).

The Telecommunications business line nevertheless considerably improved its profitability. Consequently, segment EBITDA rose overall to EUR 3.14 million (2021: EUR 2.38 million). The EBITDA margin (EBITDA as a percentage of revenue) increased accordingly from 19.7 % to 25.8 %.

Renewable Energies segment

Following a first quarter with strong winds, the electricity generated by the existing wind farm portfolio approached the long-term average as the year 2022 progressed. In the summer months, strong solar irradiation resulted in above-average electricity yield. Improved conditions for power purchase agreements for the Roge and Klostermoor wind farms had already been negotiated for the financial year 2022. Against this backdrop, segment revenue advanced from EUR 6.29 million in 2021 to EUR 7.20 million in the reporting year.

In view of the limited personnel resources in the Renewable Energies segment, new priorities were set regarding projects to develop wind farms in Brandenburg to be continued if appropriate. In this context, project development costs of EUR 1.59 million reported under current assets were written down (2021: no impairment on current assets). This development contributed to a substantial increase in other operating expenses which rose from EUR 2.03 million in 2021 to EUR 3.75 million in the period under review. This figure also includes costs for preparing the application for repowering in the Langendorf wind farm, however. EBITDA therefore declined as a result of these developments, from EUR 4.63 million in the previous year to EUR 3.40 million in the financial year 2022.

SHAC (Sanitary, Heating and Air Conditioning Technology) segment

Segment revenue rose from EUR 26.96 million to EUR 31.51 million. The gradual improvement in the supply situation over the course of the financial year, coupled with ongoing healthy demand for the products from 3U's online business, raised sales substantially by 16.8 %. Revenue from the Group companies Selfio GmbH and especially PELIA Gebäudesysteme saw strong growth. Despite generally improved goods availability, procurement prices nevertheless increased. It was, however, not possible to pass on these price increases in full to customers. Segment EBITDA posted EUR 0.12 million in the financial year 2022 compared with year-earlier negative EBITDA of EUR –0.53 million.

Other Activities/Reconciliation

The result of Other (continuing) Activities/Reconciliation contributed EUR 1.05 million to the consolidated result in the financial year 2022 (2021: EUR 0.75 million).

Cash flow and financials

In the financial year elapsed, the operating cash flow was positive thanks to the extremely strong result for the period and the gratifying development of business and stood at EUR 16.54 million (2021: cash outflow of EUR 7.80 million). The slight improvement in the result for the period compared with the previous year is increased by depreciation and amortisation of EUR 4.50 million in the financial year (2021: EUR 4.50 million) and adjusted for gains from the disposal of assets allocated to investment activity. The sale of space in the InnoHubs building complex (ownership interest in the land), capitalised under inventories, resulted in a decline in inventories and the respective cash inflow.

The cash flow from investing activities was largely determined by the divestitures. The resulting incoming payments of EUR 158.81 million were offset by disbursements of EUR 9.82 million, which includes investments in the Würzburg construction project (disbursements 2021: EUR 6.02 million).

The cash flow from financing activities generated a cash inflow of EUR 12.63 million (2021: cash inflow of EUR 9.23 million). Disbursements in an amount of EUR 2.47 million (2021: EUR 3.69 million) for the scheduled and unscheduled payment of loans and leasing liabilities, as well as to shareholders of 3U HOLDING AG and to minority interest in an amount of EUR 1.97 million (2021, EUR 2.03 million), are offset by incoming payments from taking out bank loans worth EUR 16.43 million (2021: EUR 14.95 million). Free cash flow amounted to EUR 164.36 million (2021 negative free cash flow: EUR –23.22 million).

Total assets stood at EUR 243.60 million on 31 December 2022 (31 December 2021: EUR 119.05 million) and have therefore risen by EUR 124.56 million compared with the year-earlier reporting date. The balance sheet extension is essentially attributable to the sharp increase in cash and cash equivalents thanks to the successful sale of the cloud computing business and the InnoHubs construction project. At the same time, derecognition of the respective assets and liabilities resulted in particular in a decline of EUR 28.25 million in intangible assets and of EUR 12.45 million in current trade receivables. On the liabilities side, non-current financial liabilities were reduced by EUR 14.12 million.

Non-current assets of EUR 34.15 million (31 December 2021: EUR 69.85 million) especially comprise property, plant and equipment in an amount of EUR 28.41 million (31 December 2021: EUR 33.55 million) largely in connection with the power plants worth EUR 13.06 million in the Renewable Energies segment (31 December 2021: EUR 14.67 million).

Current assets stood at EUR 209.46 million as of 31 December 2022 (31 December 2021: EUR 49.20 million), reflecting a significant increase compared with the year-earlier reporting date. The change is due in the main to the sharp increase in cash and cash equivalents. Inventories of EUR 10.78 million (31 December 2021: EUR 13.59 million) concern the measurement of the status of partly finished project developments in the ITC segment and of merchandise in the SHAC segment. The share of cash and cash equivalents in non-current assets stood at 90.6 % as of 31 December 2022 (31 December 2021: 25.8 %).

The key financials remained at a good level at the end of the financial year 2022. Owing to the aforementioned developments, the debt-to-equity ratio declined from 91.7 % as of the reporting date in 2021 to currently 15.4 %. Cash and cash equivalents exceeded the financial liabilities by EUR 173.16 million as of 31 December 2022 (31 December 2021: net debt of EUR 18.16 million). At the same time, working capital rose sharply and, by the reporting date, had reached a level of EUR 196.94 million (31 December 2021: EUR 34.21 million).

Exceptionally high consolidated profit made a definitive contribution to lifting the equity ratio. As of 31 December 2022, this ratio stood at 86.7 % (31 December 2021: 52.2 %). The absolute amount of equity advanced by EUR 149.06 million to EUR 211.17 million (31 December 2021: EUR 62.11 million). The departure of the minority shareholders in weclapp SE and in InnoHubs GmbH respectively resulted in a significant decline in the shares of minority interest to EUR 0.81 million (31 December 2021: EUR 6.87 million). Equity amounting to EUR 210.36 million (31 December 2021: EUR 55.25 million) is therefore attributable to the shareholders of 3U HOLDING AG.

Plans for strong organic revenue growth

The Management Board anticipates strong organic growth in consolidated revenue from continuing operations in 2023 compared with the year-earlier revenue. Sales revenue in 2023 is expected in a range of between EUR 55.0 million and EUR 60.0 million. In view of expectations for other income at a lower level and a significantly greater proportion of lower margin retail business, the Management Board expects lower EBITDA of EUR 6.0 million to EUR 8.0 million. Profit of the 3U Group is therefore expected in a range of between EUR 2.5 million and EUR 3.5 million.

The actual operating result may be higher or lower than forecast here due to the acquisition or sale of the Group's operating units. The resulting effects can only be planned for to limited extent, however.

In harmony with the corporate strategy, the Management Board is addressing a series of investment undertakings. Along with purchasing companies or customer bases in the financial year 2023 this pertains notably to repowering the Langendorf wind farm. Options for further, very promising investments are meticulously assessed on a running basis.

Christoph Hellrung, Uwe Knoke and Andreas Odenbreit, members of 3U HOLDING AG's Management Board, place emphasis on the following: "Even after paying out dividends, we still have substantial financial resources. This will enable us to promote our organic growth while also initiating and implementing strategically viable company acquisitions. We will have opportunities for acquisitions in SMB digitalisation as well as in the market for specialised e-commerce offerings. Sustainable profitable growth, on the one hand, and creating value in the interest of our shareholders and all stakeholders, on the other, remain our guiding principles. We are confident that we will be able to present you with good news going forward, as: We are and will remain successful in embracing mega trends!"

Annual report

The publication of the full Annual Report on the financial year 2022 has been delayed due to necessity of transferring to the ESEF data format, which is the precondition for the subsequent approval and adoption of the financial statements by the Supervisory Board. The report will be made available on the company's website at www.3U.net under the "Investor Relations/Reports" heading.

For further information:
Dr. Joachim Fleïng
Investor Relations
3U HOLDING AG
Tel.: +49 (0)6421 999-1200
Fax.: +49 (0)6421 999-1222
email: 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. With a view to increasing the value for the shareholders, employees, customers, suppliers and all stakeholders, the company 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 operates successfully and profitably with its business models in mega trends in all three segments and is striving to attain market leadership in particular with its e-commerce business model.
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