3U HOLDING AG: Cloud computing and e-commerce drive growth at 3U

Marburg (pta013/07.11.2019/08:00 UTC+1) _
* Marked Group revenue increase in the first nine months of 2019 - as expected
* Debt further reduced, equity ratio 54.25 %
* Expenses for optimizing logistics burden third quarter results as expected
* Earnings effects from the sale of a property will notably improve Group profits in the fourth quarter
* Forecast for the 2019 financial year confirmed

As expected, 3U HOLDING AG (ISIN DE0005167902) significantly increased its consolidated revenue in the first nine months of 2019. It grew by 8.5 % to EUR 38.21 million (9M 2018: EUR 35.21 million). The growth rate in the third quarter of 2019 was 3.2 % and was thus at the same level as in the second quarter (3.4 %). Weaker wind yield and the expected further decline in revenue in the telephony business with private customers were again offset by the main growth drivers in the Cloud Computing and Online Trading business areas in the first nine months. They increased their respective revenues before consolidation by 53.3% and 23.7%, respectively.

In the first nine months of 2019, other income of EUR 1.46 million was generated (9M 2018: EUR 3.81 million). The higher other income in the first nine months of 2018 included income of EUR 2.20 million from the sale of the data centre property in Hanover. The lower income from the sale of assets had an impact on the overall earnings situation. The sale of a property in Marburg agreed in August 2019 was completed in October 2019. The positive earnings effects of around EUR 5 million and the cash inflow of EUR 9.7 million will be recognised accordingly in the fourth quarter. Excluding the increased expenses in the course of the expansion and optimisation of logistics in the SHAC segment, EBITDA margins - adjusted for income from the sale of properties - continued to improve slightly at Group level.

The cost of materials rose more slowly than sales and increased by 1.8 % year-on-year. The cost of materials ratio (cost of materials as a percentage of sales) fell from 60.0% in the first nine months of 2018 to 56.2% in the first nine months of 2019. Personnel expenses by contrast increased by 12.5% to EUR 8.56 million (9M 2018: EUR 7.61 million), in particular due to the further increase in cloud computing personnel. The personnel expense ratio (personnel expenses as a percentage of revenue) was 22.4% in the first nine months (9M 2018: 21.6%) and 23.5% in the third quarter. At 14.7 %, the share of other operating expenses in sales was at the previous year's level (9M 2018: 14.5 %).

In the first nine months of fiscal 2019, the Group generated EBITDA of EUR 4.43 million (9M 2018: EUR 5.72 million). The fact that earnings before interest, taxes, depreciation and amortization were lower than in the first nine months of 2018 is mainly due to lower income from the real estate activities of the Holding company in the first nine months of the current financial year.

As a result, the consolidated loss for the third quarter of 2019 amounted to EUR 0.32 million (loss in Q3 2018: EUR 0.20 million). For the first nine months of 2019, the Group generated a net profit of EUR 0.14 million (9M 2018: EUR 1.96 million).

Segment results

The ITC (Information and Telecommunications Technology) segment recorded an 8.3 % decline in revenues from EUR 11.29 million to EUR 10.35 million. Sales in the Voice Retail business area decreased further as expected. On the other hand, the other business models recorded a positive development. Sales of cloud-based solutions in particular recorded the expected strong growth of more than 50 %. The decline in revenues at segment level was offset by a significant improvement in margins. The EBITDA margin rose from 12.7 % in the first nine months of fiscal 2018 to 18.6 %, corresponding to a segment EBITDA of EUR 1.92 million in the first nine months of 2019 (9M 2018: EUR 1.43 million).

In addition to the increasing share of the high-margin cloud computing business, the stabilisation and improvement of profitability in the telephony segments are responsible for the pleasing earnings development.

After the strong wind yield in the first quarter of 2019, income from wind turbines was significantly lower in the second and third quarters due to the weather conditions but remained at a good level. Segment revenue in the renewable energies segment rose by 20.2 % from EUR 4.59 million in the first nine months of 2018 to EUR 5.52 million in the reporting period. Segment EBITDA also improved from EUR 3.58 million in the prior-year period to EUR 4.35 million in the first nine months of 2019.

The SHAC (Sanitary, Heating and Air Conditioning Technology) segment (9M 2018: EUR 19.07 million) also achieved strong revenue growth of 18.0% to EUR 22.49 million. The increase is mainly attributable to the strategically important Online Trading business. EBITDA deteriorated from EUR 0.13 million in the previous year to EUR -0.14 million in the first nine months of 2019. While the online trading business of the Group company Selfio generated an EBITDA margin of 2.2 %, the segment EBITDA is currently impacted in particular by expenses for the expansion and optimization of the supply chain. The measures introduced could lead to an improvement in margins in this segment in the future as planned.

Cash and cash equivalents and equity at a good level

Cash flow from operating activities continued to develop positively, reaching EUR 3.00 million from January to September (9M 2018: cash inflow of EUR 0.50 million). At EUR 0.36 million, the cash inflow from investing activities in the first nine months of 2019 was significantly lower than in the first nine months of 2018 (EUR 8.38 million), which was characterised by the sale of the properties in Hanover and the outflow of liquidity in connection with the acquisition of the Klostermoor wind farm.

Cash flow from financing activities was negative at EUR -4.05 million (9M 2018: EUR -7.28 million). This was mainly due to payments for the repayment of loans (EUR -2.62 million) and leasing liabilities (EUR -0.51 million) as well as for the distribution of dividends to the shareholders of 3U HOLDING AG. Cash and cash equivalents decreased by EUR 0.09 million from EUR 8.38 million to EUR 8.29 million as of September 30, 2019.

Total assets increased to EUR 75.14 million as of September 30, 2019 (December 31, 2018: EUR 74.49 million). The balance sheet extension is mainly due to the first-time application of the new accounting standard IFRS 16 (Leasing). Capitalised rights of use amounting to EUR 3.15 million are offset by leasing liabilities amounting to EUR 3.18 million. In line with the business development, inventories increased to EUR 7.90 million (31.12.2018: EUR 6.99 million).

Current loan repayments led to an 11.3 % decline in non-current and current financial liabilities to EUR 20.57 million (31.12.2018: EUR 23.19 million). Net debt (financial liabilities minus cash and cash equivalents) was reduced by 17.9 % to EUR 8.94 million (31.12.2018: EUR 10.89 million). Equity reached EUR 40.76 million (31.12.2018: EUR 41.44 million). The equity ratio decreased slightly to 54.25 % (31.12.2018: 55.63 %), mainly due to the balance sheet extension.

Raised forecast for 2019 confirmed

Following the sale of a property in Marburg, on 13 August 2019 the Management Board raised the earnings forecasts for the 2019 financial year given at the end of February 2019 and confirmed it with the publication of the quarterly report for the third quarter and the first nine months of the 2019 financial year. For the 2019 financial year, the Management Board expects consolidated sales of between EUR 51 million and EUR 55 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) are expected to be between EUR 10 million and EUR 12 million (2018: EUR 6.7 million). This will result in a consolidated net profit of between EUR 4 million and EUR 5 million (2018: EUR 1.9 million).

"We are active in three megatrends, and in each of them we operate successful business models," emphasizes Michael Schmidt, CEO of 3U HOLDING AG. "We are increasingly concentrating on the growth areas of cloud computing and online trading, and the third quarter of 2019 once again confirms that we are on the right track with this growth strategy. This also includes the increasing focus on the development of algorithms for machine learning, which give us and our customers additional competitive advantages. To this end, we will also create optimal external conditions: The acquisition of a site in Würzburg, which was agreed in October, the planned construction of an artificial intelligence cluster there and the intensified cooperation with Würzburg university are important steps on the way to achieving this goal."

Quarterly report

The quarterly report on the third quarter and the first nine months of financial 2019 will be published today, November 7, 2019. 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 6421 999-1200
Fax.: +49 6421 999-1222
E-Mail: IR@3U.net

About 3U:
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