Brockhaus Technologies AG

Quarterly Report • Nov 14, 2022

Quarterly Statement 9M 2022

Brockhaus Technologies at a glance

BROCKHAUS TECHNOLOGIES

| QUARTERLY STATEMENT 9M 2022

Table of contents

Brockhaus Technologies at a glance	2
Significant developments	3
Financial information	9
Supplementary information	19

Significant developments

Group results of operations

In 9M 2022, the Group's revenue increased by 261% to €123,248 thousand. In particular due to group consolidation of Bikeleasing (Financial Technologies segment), total output rose by 245% to €124,882 thousand, cost of materials by 297% to €42,704 thousand, personnel expenses by 68% to €23,811 thousand, other operating expenses by 58% to €15,095 thousand and other depreciation of property, plant and equipment and amortization of intangible assets by 118% to €3,122 thousand. As a result of the initial consolidation of Bikeleasing at the end of November 2021, amortization of intangible assets identified in initial consolidation increased by 127% to €11,642 thousand. Other finance costs rose by 431% to €9,099 thousand, with the increase largely being driven by the acquisition financing of Bikeleasing. With €44,537 thousand, EBITDA was significantly above prior years EBITDA. Same holds for EBIT, which amounts to €29,773 thousand, whereas the prior year EBIT was €-4,134 thousand. After income taxes, the net profit was €19,483 thousand (previous year: loss of €8,790 thousand).

Segment results of operation

In 9M 2022, the Group's revenue before PPA increased by 268% compared with the prior-year period to €125.758 thousand. This was primarily due to the consolidation of the Financial Technologies segment, which is Bikeleasing, and was not yet a part of the Group in the prior-year period. Based on the operating segments that already existed in the prior-year period – Security Technologies and Environmental Technologies – revenue growth amounted to 12.1% in total. The Environmental Technologies segment significantly reduced the very high order backlog reported as of the end of H1 2022 and was able to fully compensate the revenue reduction in test rigs for testing the effectiveness of respiratory masks. For the Security Technologies segment, the order backlog as of the end of September 2022 remained at a very high level. There are continued supply bottlenecks which are affecting some of the business activities of the Group. Nevertheless, the operational development shows a high resilience of our business model to the generally challenging market environment.

Operating segments

			Reportable segments
€ thousand	Financial Technologies		Security Technologies		Environmental Technologies		Central Functions and consolidation		Group
	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021
Revenue before PPA	87,477	-	24,096	20,163	14,183	13,991	2	-	125,758	34,154
Revenue growth	n/a		19.5%		1.4%				268.2%
Gross profit before PPA	55,683	-	17,709	14,288	11,117	11,145	180	-	84,689	25,433
Gross profit margin before PPA	63.7%		73.5%	70.9%	78.4%	79.7%			67.3%	74.5%
Adjusted EBITDA	41,658	-	5,395	4,983	4,278	4,107	(3,705)	(3,995)	47,626	5,096
Adjusted EBITDA margin	47.6%		22.4%	24.7%	30.2%	29.4%			37.9%	14.9%
Adjusted EBIT	40,353	-	4,549	4,408	3,402	3,325	(3,800)	(4,069)	44,504	3,663
Adjusted EBIT margin	46.1%		18.9%	21.9%	24.0%	23.8%			35.4%	10.7%

BROCKHAUS TECHNOLOGIES

| QUARTERLY STATEMENT 9M 2022

Both the Group's adjusted EBITDA margin and the adjusted EBIT margin were well above the previous year's level. The adjusted EBITDA margin increased significantly to 37.9% in the first nine months of 2022. In 9M 2021, it was still 14.9%. The adjusted EBIT margin was 35.4%, whereas, in 9M 2021, the Group recorded an adjusted EBIT margin of 10.7%.

Financial performance was positively influenced by a strong second and third quarter, with the Financial Technologies segment, focusing on the bicycle market, in particular being dominated by seasonal effects and generally recording its highest volume of business in Q2 and Q3. By contrast, due to the muted demand for bicycles and ebikes in the cold months of the year, transaction volumes on the Bikeleasing platform are significantly lower in Q1 and Q4.

Financial Technologies | Revenue before PPA in the Financial Technologies segment (Bikeleasing) amounted to €87,477 thousand in 9M 2022. Comparative disclosures for 9M 2021 in accordance with IFRS are not possible, since Bikeleasing only generated financial information according to German GAAP until Brockhaus Technologies obtained control over the business in the acquisition at the end of November 2021. Nevertheless, the clear growth trend can be illustrated by operating KPIs. In 9M 2022, Bikeleasing increased the number of corporate customers connected to its platform by 11 thousand to a total of 43 thousand. These companies have a total of approximately 2.4 million employees. The number of new company bikes brokered through the Bikeleasing platform was approximately 99 thousand, which reflects an increase of approximately 43% compared to 9M 2021.

The gross profit margin before PPA was 63.7%, the adjusted EBITDA margin was 47.6% and the adjusted EBIT margin was 46.1%. Compared to the second quarter, higher revenue was generated from the sale of leasing objects, in particular consisting of returns after the end of the lease, in the third quarter. This revenue component generally has a low margin. Therefore, EBITDA margin in Q3 is below the level of Q2 2022.

Both revenue and profitability developed dualistic in 9M 2022. In addition to the seasonally lower volume of new business, the first quarter was affected by a very low forfaiting ratio. The major portion of newly generated leases in Q1 2022 was securitized as "Green Bond" and refinanced through a big German insurance company. This structure allows Bikeleasing to refinance much cheaper, quicker and more flexible and therefore promotes a strong growth. In spite of unchanged cash inflows at point of selling the securitized leasing receivables, this source of financing does not meet the requirements for derecognition of the securitized lease receivables, which therefore remain on the Group's balance sheet. The reason for this is that based on the contractual terms, not essentially all risks and rewards related to the leasing receivables are transferred. Income from the leases is therefore recognized over their term, generally 36 months, employing the effective interest method. Even though this process is identical from a liquidity point of view, in the accounting perspective, this refinancing option is in contrast to a forfaiting transaction with derecognition of the lease receivable, which involves the realization of nearly all income from the corresponding lease at the time of the respective forfaiting. Therefore, lower income was reported in Q1 2022 to the benefit of higher income in the future. As a result, both revenue and EBITDA in Q1 of the reporting period were down significantly on the second and third quarter.

By contrast, the majority of the newly generated leases were conventionally forfaited or sold on a nonrecourse basis in Q2 and Q3. This does not result in the recognition of financial liabilities in the statement of financial position, and income is generally recognized immediately. With the goal of achieving an efficient capital structure, in line with its transaction-based business model, Bikeleasing intends to focus in the future on financing options with disposals on the balance sheet wherever possible.

Due to the high level of free cash flow, Bikeleasing made voluntary early repayments of €5,660 thousand in Q2 and €15,000 in Q3 on one of the acquisition loans from the acquisition of the company. These payments result from a strong operating cashflow and underline the strong performance of Bikeleasing in the reporting period.

Security Technologies | After the revocation of many COVID-19 related travel restrictions and social distancing – especially in western industrialized countries – resulting in an increase of customer demand, the Security Technologies segment (IHSE and kvm-tec) generated growth of revenue before PPA of 19.5% to €24,096 thousand. The primary reason for this was the positive sales market development in Americas, which generated revenue growth of 79.5% versus the prior-year period to €8,124 thousand in 9M 2022. EMEA recorded revenue growth of 4.2%, from €11,911 thousand to €12,409 thousand in 9M 2022. In the APAC region, revenue was down 4.4% year-on-year and came to €3,563 thousand. This decrease mainly results from COVID restrictions in China, which were still in place. Revenue attributable to kvm-tec, which was acquired in 2021, amounted to €2,885 thousand in 9M 2022.

At 73.5%, the gross profit margin before PPA was higher than in the prior-year period (70.9%). In the 9M 2021, there were adverse shifts in the product and customer mix in addition to foreign currency-related effects, which impacted the gross profit margin accordingly. High fluctuations in the gross profit margin during the year can be observed for IHSE regularly. This is explained by both different gross profit margins for large deliveries (customer and product mix) as well as significant reporting date-related fluctuations in changes in inventory.

At 22.4%, the adjusted EBITDA margin was below the level of the prior-year period (24.7%). This is caused by higher other operating expenses in particular. This was a result of the resumed increase in trade fair, direct sales and marketing activities, which did not happen because of the COVID-19 pandemic in the prior-year comparative period. Additionally, higher personnel expenses negatively impacted the EBITDA margin. These are mainly attributable to the consolidation of the still relatively small kvm-tec at the end of the 2021 fiscal year.

The revenue of IHSE is still below target. Because of this aspect, in combination with the current cost base, IHSE remains below the long-term target of a 35% EBITDA margin.

As of the half-year point, the order backlog at the end of September was at a very high level of €10.3 million, driven by a strong order intake of €28.2 million in 9M 2022. Much of this order backlog is expected to be reduced in the fourth quarter and realized as revenue.

Environmental Technologies | At €14,183 thousand, revenue before PPA was 1.4% above the level of the prior-year period in the Environmental Technologies segment (Palas). Compared to prior year, 9M 2022 was shaped by a lower revenue volume from test rigs for testing the effectiveness of respiratory masks. This was still a major revenue driver in the prior-year comparative period. However, there is strong continuous growth in demand for conventional products of Palas for the certified measurement of fine dust in ambient air. For the conventional products in Palas' core business, 9M 2022 revenue was up 27% year-on-year. Thereby, the decline in the mask test rig business was compensated for entirely in 9M 2022.

Much of the very high order backlog at Palas as of June 30, 2022, amounting to €5.7 million, was reduced in the third quarter and amounted to €3.2 million at the end of September. As a result, Palas recorded its strongest quarter in terms of revenue of the reporting period in Q3. With this, Palas was able to fully compensate the revenue reduction of test rigs for testing the effectiveness of respiratory masks as per End of 9M 2022.

Performance metrics by quarter

		2021				2022
€ thousand	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Financial Technologies
Revenue before PPA	-	-	-	16,332	17,457	34,652	35,368
Gross profit before PPA	-	-	-	15,607	9,165	24,377	22,140
Gross profit margin before PPA				95.6%*	52.5%	70.3%	62.6%
Adjusted EBITDA	-	-	-	13,702	5,871	18,763	17,024
Adjusted EBITDA margin				83.9%*	33.6%	54.1%	48.1%
Adjusted EBIT	-	-	-	13,593	5,525	18,415	16,413
Adjusted EBIT margin				83.2%*	31.6%	53.1%	46.4%
Security Technologies
Revenue before PPA	6,053	6,665	7,445	8,761	7,245	7,639	9,211
Gross profit before PPA	3,917	4,770	5,601	6,328	5,707	5,402	6,600
Gross profit margin before PPA	64.7%	71.6%	75.2%	72.2%	78.8%	70.7%	71.6%
Adjusted EBITDA	696	1,442	2,845	3,054	2,081	912	2,402
Adjusted EBITDA margin	11.5%	21.6%	38.2%	34.9%	28.7%	11.9%	26.1%
Adjusted EBIT	506	1,251	2,650	2,832	1,811	624	2,114
Adjusted EBIT margin	8.4%	18.8%	35.6%	32.3%	25.0%	8.2%	22.9%
Environmental Technologies
Revenue before PPA	4,778	4,979	4,234	7,288	4,082	3,990	6,111
Gross profit before PPA	3,897	3,848	3,400	5,950	3,186	3,193	4,738
Gross profit margin before PPA	81.6%	77.3%	80.3%	81.6%	78.1%	80.0%	77.5%
Adjusted EBITDA	1,599	1,470	1,039	3,221	939	901	2,438
Adjusted EBITDA margin	33.5%	29.5%	24.5%	44.2%	23.0%	22.6%	39.9%
Adjusted EBIT	1,328	1,215	782	2,925	660	612	2,130
Adjusted EBIT margin	27.8%	24.4%	18.5%	40.1%	16.2%	15.3%	34.9%
Group
Revenue before PPA	10,831	11,645	11,678	32,383	28,785	46,282	50,691
Gross profit before PPA	7,814	8,619	9,000	28,051	18,104	33,018	33,567
Gross profit margin before PPA	72.1%	74.0%	77.1%	86.6%	62.9%	71.3%	66.2%
Adjusted EBITDA	803	1,753	2,540	16,744	7,582	19,354	20,689
Adjusted EBITDA margin	7.4%	15.1%	21.7%	51.7%	26.3%	41.8%	40.8%
Adjusted EBIT	315	1,282	2,064	16,084	6,658	18,396	19,450
Adjusted EBIT margin	2.9%	11.0%	17.7%	49.7%	23.1%	39.7%	38.4%

* The high margin of the Financial Technologies segment in Q4 2021 essentially results from the cash-neutral derecognition of lease receivables due to a contract amendment for the forfaiting of those lease receivables.

At 78.4%, the gross profit margin before PPA was slightly below the prior-year value of 79.7% in 9M 2021. In the previous year, higher changes in finished goods and work in progress led to a higher gross profit margin.

At 30.2%, the adjusted EBITDA margin was slightly above the level of the prior-year period (29.4%). The same applies to the adjusted EBIT margin, which rose from 23.8% to 24.0%.

Central Functions | In the Central Functions, a decrease in costs was recorded. This was a result primarily of lower due diligence activities compared with the 9M 2021 prior-year period.

Segment KPIs attributable to BKHT

The following table shows performance metrics of the segments with their corresponding shareholding stake which the ultimate parent company Brockhaus Technologies AG holds directly and indirectly in the respective segment entities.

For this presentation, the Financial Technologies segment is disaggregated into the operating entities including the senior acquisition loan (BLS Group) and the intermediate holding company BCM Erste Beteiligungs GmbH, which holds a subordinated acquisition loan (BCM Erste).

For information on the item "modification for NCI put effect", please refer to Note 40 to our 2021 Consolidated Financial Statements.

Segment KPIs attributable to BKHT (partially simplified)

€ thousand	BLS Group	BCM Erste	Financial Technologies	Security Technologies	Environmental Technologies	Central Functions & consolidation	Group	Attributable to BKHT
Revenue before PPA	87,477	-	87,477	24,096	14,183	2	125,758	79,597
Gross profit before PPA	55,683	-	55,683	17,709	11,117	180	84,689	54,679
Adjusted EBITDA	41,685	(26)	41,658	5,395	4,278	(3,705)	47,626	26,375
Adjusted EBIT	40,379	(26)	40,353	4,549	3,402	(3,800)	44,504	24,141
Adjusted earnings (before NCI put effect)	30,661	(3,240)	27,421	2,291	2,258	(6,297)	25,673	10,474
Modification for NCI put effect							1,698	2,321
Adjusted earnings							27,371	12,795
Attributable to BKHT	52.1%	94.9%		100.0%	70.0%	100.0%

Net assets

With total assets of €649,007 thousand, the Group's assets are split between 83% non-current assets and 17% current assets as of the reporting date. The largest items quantitatively are intangible assets, including goodwill (€390,175 thousand), lease receivables (€144,557 thousand), trade receivables (€31,316 thousand), cash and cash equivalents (€22,925 thousand), property, plant and equipment (€16,582 thousand) and other financial assets (€25,597 thousand). Intangible assets relate primarily to the customer base, basic technologies and trademarks identified in the course of purchase price allocation for the subsidiaries (PPA assets) as well as goodwill. Property, plant and equipment consist largely of land and buildings at IHSE's headquarters in Oberteuringen at Lake Constance. Significant factors driving the increase in other financial assets are high claims for value added tax refunds and receivables from refinancing partners at the end of the third quarter. In this context, a significant amount for receivables from refinancing partners is reported for the first time in other financial assets. These are amounts from forfaiting, which already require the recognition on the balance sheet due to the contractual basis as of the reporting date, but which have not yet been processed cash-wise.

With an increase of total assets by 6% to €649,007 thousand, the change in assets since the beginning of the fiscal year was attributable in particular to the increase in lease receivables due to the growing business volume in the Financial Technologies segment. For further information on this, please refer to the segment-specific disclosures under "Financial Technologies".

With the aim of an efficient capital structure in line with its transaction-based business model, Bikeleasing intends to focus on financing options in the future that allow leasing receivables to be derecognized from the balance sheet. In addition, we continuously work on faster processes and more efficient solutions to refinance the business in order to ensure scalability for further growth of the platform.

After the 24 months before the end of the second quarter of the reporting year were characterized by increasing inventories as a reaction to supply bottlenecks, Brockhaus Technologies aims for tighter working capital management again, in order to reduce capital intensity.

Financial position

The Group's cash and cash equivalents at the reporting date amounted to €22,925 thousand. With senior loans of €57,336 thousand, subordinated loans of €53,966 thousand and real estate loans of €5,642 thousand, the net debt from loans amounted to €94,019 thousand (December 31, 2021: €105,290 thousand). Including other financial liabilities (€8,156 thousand) and financial liabilities from lease refinancing (€153,969 thousand) deducted by lease receivables (€144,557 thousand), net debt amounted to €111,586 thousand (December 31, 2021: €119,027 thousand). The decline is driven by the high cash flow from operating activities.

The deferred tax liabilities of €46,475 thousand relate mainly to the customer bases, basic technologies and trademarks identified in the course of purchase price allocation for the acquisitions of the subsidiaries (PPA assets) and will be reversed through profit or loss, but with no effect on cash flow, in the future as these PPA assets are amortized.

Group equity at the reporting date was €277,909 thousand, equal to 42.8% of total assets. The equity ratio is slightly above the level with the figure as of December 31, 2021, when equity of €254,920 thousand accounted for 41.5% of total assets.

Cash flow from operating activities amounted to €21,529 thousand (9M 2021: €932 thousand) or €28,756 thousand before income taxes paid (9M 2021: €3,270 thousand) and was mainly driven by the operating payment surplus of the subsidiaries, in particular Bikeleasing.

Cash flow from investing activities was €-1,755 thousand (9M 2021: €-1,294 thousand) and included positive inflow of €400 thousand from the sale of a 0.32% co-investment stake in BCM Erste Beteiligungs GmbH (the levered holding company of Bikeleasing Group) to a commercial and technical due diligence advisor which advised Brockhaus Technologies in market and technology topics in course of the Bikeleasing acquisition.

Cash flow from financing activities was €-26,765 thousand (9M 2021: €-5,251 thousand) and was composed essentially by regular payments of principal and interest on senior loans and real estate loans as well as the voluntary early repayment of part of its acquisition financing by Bikeleasing amounting to €20,660 thousand. The last item is the main reason for the increase of cash outflow.

At €27,002 thousand, free cash flow before tax was up significantly on the prior-period figure of €1,976 thousand.

Forecast

On the back of the strong operational development within the first nine months of the year, management expects to exceed the previous forecast. Management now expects revenue before PPA of between €150 and 155 million (previous forecast: €140 – 150 million) for fiscal year 2022, which corresponds to growth of between 19% and 23% as compared to the pro forma revenue of 2021 (previous forecast: growth between 11% and 19%). With regards to the adjusted EBITDA margin, Brockhaus Technologies confirms the current forecast of 35%.

Because of the strong seasonality resulting from high demand for bicycles in the warm months, the second and third quarters produce very strong results in the Financial Technologies segment. For the fourth quarter, we are expecting – merely seasonality driven – significantly lower volumes at Bikeleasing than in Q2 and Q3, since fewer bikes are sold in autumn and winter compared with the summer period. As in the prior years, we are expecting the Security Technologies and Environmental Technologies segments to post a comparatively strong fourth quarter. For Palas, this expectation results from the experience of a corresponding seasonality gained in previous years. For IHSE, the Q4 expectation is driven by the current high order backlog and positive prospects of its realization.

Disclaimer

This Quarterly Statement contains forward-looking statements that are based on management's current estimation of the future performance of the Group. This estimation was made on the basis of all information available as of the preparation date of this Quarterly Statement. Forward-looking statements are subject to uncertainties – as described in the risks and opportunities section of our 2021 Combined Management Report and our 2022 Interim Group Management Report – that are beyond the Group's control. These relate in particular to the Russian invasion of Ukraine, the persistent supply bottlenecks, the current acute energy crisis, COVID-19, the rising inflation, and the significant rise in interest rates. If the assumptions on which these expected developments are based are not accurate, or if the risks or opportunities described were to materialize, actual results may differ significantly from the statements made in the report on the forecast. If the underlying information changes in such a way that a deviation from the forecast is more likely than not, Brockhaus Technologies will notify this in accordance with the statutory disclosure requirements.

Events after September 30, 2022

There were no significant events between September 30, 2022, and the date this Quarterly Statement was published.

Financial information

(unaudited)

€ thousand	9M 2022	9M 2021
Revenue	123,248	34,154
Increase/ (decrease) in finished goods and work in progress	492	1,184
Other own work capitalized	1,143	856
Total output	124,882	36,194
Cost of materials	(42,704)	(10,761)
Gross profit	82,178	25,433
Personnel expenses excluding share-based payments	(23,233)	(13,975)
Personnel expenses from share-based payments	(578)	(207)
Other operating expenses	(15,095)	(9,536)
Impairment loss on trade receivables	9	(0)
Other operating income	1,256	715
Amortization of intangible assets identified in initial consolidation	(11,642)	(5,130)
Other depreciation of property, plant and equipment and amortization of intangible assets	(3,122)	(1,433)
Finance costs from NCI put	(1,698)	(2,676)
Other finance costs	(9,099)	(1,714)
Finance income	4,477	4
Financial result	(6,320)	(4,386)
Earnings before tax	23,453	(8,520)
Income tax expense	(3,970)	(270)
Profit or loss for the period	19,483	(8,790)
of which attributable to BKHT shareholders	7,773	(8,788)
of which attributable to non-controlling interests	11,710	(1)
Foreign currency translation adjustments*	2,636	892
Total comprehensive income	22,119	(7,898)
of which attributable to BKHT shareholders	10,409	(7,896)
of which attributable to non-controlling interests	11,710	(1)

Information on our alternative performance measures can be found on page 14.

Weighted average number of shares outstanding	10,946,393	10,385,755
Earnings per share** (€)	0.71	(0.85)

* Other comprehensive income that may be reclassified to profit or loss in subsequent periods

** Basic earnings per share is equal to diluted earnings per share.

Consolidated statement of financial position

€ thousand	Sep. 30, 2022	Dec. 31, 2021
Assets
Property, plant and equipment	16,582	16,156
Intangible assets and goodwill	390,175	398,872
Non-current leasing receivables	132,508	82,142
Prepayments	7	9
Deferred tax assets	607	544
Non-current assets	539,879	497,723
Inventories	15,891	12,568
Trade receivables	31,316	20,022
Contract assets	357	155
Current leasing receivables	12,049	37,617
Other financial assets	25,597	15,280
Prepayments	992	811
Cash and cash equivalents	22,925	30,327
Current assets	109,127	116,778
Total assets	649,007	614,501

€ thousand	Sep. 30, 2022	Dec. 31, 2021
Equity and liabilities
Subscribed capital	10,948	10,387
Capital increase not yet implemented	-	13,003
Capital reserves	240,130	227,688
Other reserves	969	452
Currency translation differences	2,218	(418)
Net accumulated losses	(21,297)	(29,069)
Equity attributable to BKHT shareholders	232,968	222,043
Non-controlling interests	44,941	32,878
Equity	277,909	254,920
Non-current financial liabilities excluding leasing	118,409	123,945
Non-current financial liabilities from lease refinancing	145,159	115,654
Other provisions	6,417	4,765
Other liabilities	-	4,570
Contract liabilities	42	36
Deferred tax liabilities	46,475	52,189
Non-current liabilities	316,502	301,159
Current tax liabilities	9,880	5,556
Current financial liabilities excluding leasing	6,691	16,987
Current financial liabilities from lease refinancing	8,810	12,525
Trade payables	13,975	11,305
Other liabilities	13,680	10,531
Contract liabilities	1,435	1,394
Other provisions	125	123
Current liabilities	54,596	58,422
Liabilities	371,098	359,581
Total equity and liabilities	649,007	614,501

Consolidated statement of changes in equity

€ thousand	Subscribed capital	Capital increase not yet implemented	Capital reserves	Other reserves	Currency translation differences	Net accumulated losses	Equity attributable to BKHT shareholders	Non-controlling interests	Equity
Jan. 1, 2022	10,387	13,003	227,688	452	(418)	(29,069)	222,043	32,878	254,920
Transactions with shareholders
Capital increases	-	-	-	-	-	-	-	-	-
Cost of capital increases	-	-	-	-	-	-	-	-	-
Entry of the capital increase	561	(13,003)	12,442	-	-	-	-	-	-
Profit or loss for the period	-	-	-	-	-	7,773	7,773	11,710	19,483
Other comprehensive income	-	-	-	-	2,636	-	2,636	-	2,636
Equity-settled share-based payment transactions	-	-	-	516	-	-	516	-	516
Transactions with non-controlling interests	-	-	-		-	-		353	353
Sep. 30, 2022	10,948	-	240,130	969	2,218	(21,297)	232,968	44,941	277,909
Jan. 1, 2021	10,387	-	227,688	256	(1,705)	(13,188)	223,438	(1)	223,437
Transactions with shareholders
Capital increases	-	-	-	-	-	-	-	-	-
Cost of capital increases	-	-	-	-	-	-	-	-	-
Profit or loss for the period	-	-	-	-	-	(8,788)	(8,788)	(1)	(8,790)
Other comprehensive income	-	-	-	-	892	-	892	-	892
Equity-settled share-based payment transactions	-	-	-	146	-	-	146	-	146
Sep. 30, 2021	10,387	-	227,688	402	(813)	(21,976)	215,687	(2)	215,686

Consolidated statement of cash flows

€ thousand	9M 2022	9M 2021
Profit or loss for the period	19,483	(8,790)
(Income taxes paid)/ income tax refunds	(7,227)	(2,338)
Income tax expense/ (income tax income)	3,970	270
Expenses for equity-settled share-based payment transactions	516	145
Amortization, depreciation and impairment losses	14,756	6,563
Financial result excluding lease refinancing	12,024	4,386
(Gain)/ loss on sale of property, plant and equipment	(190)	-
Other non-cash expenses/ (income)	(207)	252
Additions of lease receivables	(233,088)	-
Payments from lessees	37,004	-
Disposals/ reclassifications of lease receivables at residual value	176,195	-
Interest and similar (income)/ expenses from leasing	(6,824)	-
(Increase)/ decrease in lease receivables	(26,712)	-
Addition of liabilities from lease refinancing	61,457	-
Payment of annuities from lease refinancing	(35,165)	-
Disposal of liabilities from lease refinancing	(810)	-
Additions/disposals of liabilities from forfaiting	2,765	-
Interest expense for liabilities from lease refinancing	1,276	-
Increase/ (decrease) in liabilities from lease refinancing	29,523	-
(Increase)/ decrease in leased assets under operating leases	1,240	-
(Increase)/ decrease in inventories, trade receivables and other assets not attributable to investing or financing activities	(23,711)	(1,344)
Increase/ (decrease) in trade payables and other liabilities not attributable to investing or financing activities	(1,997)	1,742
Increase/ (decrease) in other provisions	62	45
Cash flow from operating activities	21,529	932

Consolidated statement of cash flows (continued)

€ thousand	9M 2022	9M 2021
Payments to acquire property, plant and equipment	(943)	(878)
Proceeds from sale of property, plant and equipment	198	-
Payments to acquire intangible assets	(362)	(42)
Capitalized development costs	(1,047)	(378)
Acquisition of subsidiaries, net of cash acquired	-	-
Proceeds from the sale of shares in subsidiaries	400	-
Interest received	-	4
Cash flow from investing activities	(1,755)	(1,294)
Proceeds from loans raised	10,350	-
Repayment of loans and other financial liabilities	(34,043)	(3,122)
Repayment of lease liabilities	(941)	(486)
Interest paid	(2,131)	(1,642)
Proceeds from issuance of shares	-	-
Cost of capital increases	-	-
Cash flow from financing activities	(26,765)	(5,251)
Change in cash and cash equivalents	(6,990)	(5,613)
Effect of exchange rate changes on cash and cash equivalents	533	203
Funds of financial resources at the beginning of the period	29,331	123,544
Funds of financial resources at the end of the period	22,874	118,133
Funds of financial resources
Cash and cash equivalents	22,925	118,133
Overdraft facilities used for cash management	(51)	-
Total	22,874	118,133

At a glance Significant developments Financial information Supplementary information

Disclosures on financial information

1. Alternative performance measures

For definitions and detailed explanations of the alternative performance measures, please refer to Note 7 to our 2021 Consolidated Financial Statements. In addition to the adjustments explained there, the Group has adjusted the following matter for the first time in the reporting period.

A portion of the consideration transferred for the acquisition of kvm-tec is composed of a future conditional purchase price payment (earn-out). This liability consisting of future expected earn-out payments must be remeasured at each reporting date. The change in the carrying amount is reported as income or expense in the consolidated statement of comprehensive income. These income and expenses from earn-out are adjusted in the determination of adjusted earnings and earnings per share. In past reporting periods, such effects were not material and therefore a separate disclosure was not made.

Calculation of adjusted EBITDA

€ thousand	9M 2022	9M 2021
Earnings before tax	23,453	(8,520)
Financial result	6,320	4,386
Amortization, depreciation and impairment losses	14,764	6,563
EBITDA	44,537	2,429
Decreased earnings due to value step-up	2,510	-
Share-based payments	578	207
Cost of acquisition of subsidiaries	-	1,311
Cost of equity transactions	-	1,148
Adjusted EBITDA	47,626	5,096
Adjusted EBITDA margin	37.9%	14.9%

Calculation of revenue before PPA

€ thousand	9M 2022	9M 2021
Revenue	123,248	34,154
Decreased earnings due to value step-up	2,510	-
Revenue before PPA	125,758	34,154

Calculation of gross profit before PPA

€ thousand	9M 2022	9M 2021
Gross profit	82,178	25,433
Decreased earnings due to value step-up	2,510	-
Gross profit before PPA	84,689	25,433
Gross profit margin before PPA	67.3%	74.5%

Calculation of adjusted EBIT

€ thousand	9M 2022	9M 2021
Earnings before tax	23,453	(8,520)
Financial result	6,320	4,386
EBIT	29,773	(4,134)
Decreased earnings due to value step-up	2,510	-
Share-based payments	578	207
Cost of acquisition of subsidiaries	-	1,311
Cost of equity transactions	-	1,148
PPA amortization	11,642	5,130
Adjusted EBIT	44,504	3,663
Adjusted EBIT margin	35.4%	10.7%

At a glance Significant developments Financial information Supplementary information

Calculation of adjusted earnings and adjusted earnings per share

€ thousand	9M 2022	9M 2021
Profit or loss for the period	19,483	(8,790)
Decreased earnings due to value step-up	2,510	-
Share-based payments	578	207
Cost of acquisition of subsidiaries	-	1,311
Cost of equity transactions	-	1,148
PPA amortization	11,642	5,130
Deferred taxes attributable to decreased earnings due to value step-up and PPA amortization	(4,088)	(1,409)
Financial result from NCI put	1,698	2,676
(Income) and expenses from earn-out	(4,452)	-
Adjusted earnings	27,371	274
of which: attributable to BKHT shareholders	12,795	275
of which: non-controlling interests	14,576	(1)
Number of shares outstanding	10,946,393	10,385,755
Adjusted earnings per share (€)	1.17	0.03

Calculation of cash flow from operating activities before tax and free cash flow before tax

Free cash flow before tax	27,002	1,976
Cash flow from investing activities	(1,755)	(1,294)
Cash flow from operating activities before tax	28,756	3,270
Income taxes paid/ (income tax refunds)	7,227	2,338
Cash flow from operating activities	21,529	932
€ thousand	9M 2022	9M 2021

2. Operating segments

	Reportable segments
	Financial Technologies		Security Technologies		Environmental Technologies		Total		Central Functions		Consolidation		Group
€ thousand	9M 2022	9M 2021*	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021	9M 2022	9M 2021
Revenue before PPA	87,477	-	24,096	20,163	14,183	13,991	125,756	34,154	437	225	(435)	(225)	125,758	34,154
Gross profit before PPA	55,683	-	17,709	14,288	11,117	11,145	84,508	25,433	437	-	(257)	-	84,689	25,433
Adjusted EBITDA	41,658	-	5,395	4,983	4,278	4,107	51,331	9,091	(3,718)	(3,995)	13	-	47,626	5,096
Trade working capital**	13,717	-	12,599	9,996	7,910	6,360	34,226	16,356	(994)	(232)	-	-	33,232	16,124
Cash and cash equivalents	12,517	-	4,859	12,365	1,605	3,512	18,981	15,877	3,945	102,256	-	-	22,925	118,133
Financial liabilities excluding leases	60,357	-	41,352	38,760	12,400	15,394	114,108	54,154	17,755	309	(6,764)	(3,377)	125,100	51,087
Financial liabilities from lease refinancing	153,969	-	-	-	-	-	153,969	-	-	-	-	-	153,969	-
Revenue by region
EMEA	84,967	-	12,409	11,911	7,735	9,752	105,111	21,663	437	225	(435)	(225)	105,113	21,663
Germany	84,117	-	3,352	2,539	2,325	4,467	89,794	7,005	437	225	(435)	(225)	89,796	7,005
Netherlands	-	-	2,824	4,282	2	8	2,826	4,290	-	-	-	-	2,826	4,290
United Kingdom	-	-	372	225	984	991	1,356	1,216	-	-	-	-	1,356	1,216
France	-	-	921	1,373	1,499	1,286	2,420	2,660	-	-	-	-	2,420	2,660
Italy	-	-	431	443	495	777	926	1,220	-	-	-	-	926	1,220
Other	850	-	4,509	3,049	2,430	2,223	7,789	5,272	-	-	-	-	7,789	5,272
Americas	-	-	8,124	4,525	2,344	1,781	10,468	6,306	-	-	-	-	10,468	6,306
U.S.A.	-	-	8,029	4,499	1,805	1,349	9,835	5,848	-	-	-	-	9,835	5,848
Other	-	-	95	26	538	432	633	458	-	-	-	-	633	458
APAC	-	-	3,563	3,727	4,104	2,458	7,667	6,185	-	-	-	-	7,667	6,185
China	-	-	1,437	1,112	1,877	1,462	3,313	2,574	-	-	-	-	3,313	2,574
Other	-	-	2,126	2,615	2,227	996	4,353	3,610	-	-	-	-	4,353	3,610
Total***	84,967	-	24,096	20,163	14,183	13,991	123,246	34,154	437	225	(435)	(225)	123,248	34,154

* The Group's Financial Technologies segment did not yet exist in the prior-year period.

** Trade working capital comprises inventories and trade receivables, less trade payables.

*** The revenue by region is unadjusted based on IFRS.

3. Financial result

Finance costs are composed of the following items.

€ thousand	9M 2022	9M 2021
Interest on financial liabilities at amortized cost	8,983	1,285
Negative interest on bank balances	16	402
Interest on lease liabilities	100	27
Unwinding of discount on NCI put liability	106	97
Remeasurement of NCI put provision	1,592	2,579
Finance costs	10,797	4,390

5. Entry of the capital increase in kind

As of December 31, 2021, a capital increase of 560,829 new shares at a value of €13,003 thousand had not yet been entered in the commercial register and was thus reported under the item "Capital increase not yet implemented." The capital increase was entered in the commercial register on February 10, 2022. As a result, the amount of €560,829 was reclassified to the subscribed capital and the remaining amount of €12,442 thousand to the capital reserve. This increased the Company's subscribed capital by €560,829 from €10,386,808 to €10,947,637.

6. Financial liabilities

Financial liabilities are composed of the following items:

	Non-current		Current		Total
€ thousand	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2022	Dec. 31, 2021
Senior loans	52,289	64,335	5,047	15,644	57,336	79,979
Senior acquisition loans	42,289	64,335	5,018	5,644	47,307	69,979
Registered bond	10,000	-	29	10,000	10,029	10,000
Subordinated loans	53,966	49,696	-	-	53,966	49,696
Subordinated acquisition loans	37,783	34,571	-	-	37,783	34,571
Vendor loans	16,183	15,125	-	-	16,183	15,125
Real estate loans	5,242	5,540	399	402	5,642	5,942
Other financial liabilities	6,912	4,375	1,244	941	8,156	5,316
Lease liabilities	3,478	1,409	1,244	941	4,723	2,350
NCI put liability	2,036	1,581	-	-	2,036	1,581
Success fee liability Bikeleasing	1,397	1,385	-	-	1,397	1,385
Financial liabilities excluding leases	118,409	123,946	6,691	16,987	125,100	140,933
Lease refinancing	145,159	115,654	8,810	12,525	153,969	128,179
Securitized liabilities	77,669	65,000	137	110	77,806	65,110
Loans for lease financing	42,079	31,924	51	995	42,130	32,919
Financial liabilities from forfaiting	3,128	398	274	5,874	3,402	6,272
Buyback and servicing of third-party leases	22,283	18,332	8,347	5,546	30,630	23,878
Total financial liabilities	263,568	239,600	15,501	29,512	279,068	269,112

The finance income amounted to €4,477 thousand (previous year: €4 thousand) and consists almost exclusively of income from the revaluation of the earn-out liability from the purchase of kvm-tec.

4. Earnings per share

The following table presents the calculation of earnings per share, based on the profit or loss attributable to the shareholders of BKHT.

	9M 2022	9M 2021
Profit or loss for the period in € thousand	7,773	(8,788)
Weighted average number of shares outstanding	10,946,393	10,385,755
Earnings per share (€)	0.71	(0.85)

Adjusted earnings per share are shown in the following table. For more detailed information refer to Note 1.

Adjusted	9M 2022	9M 2021
Profit or loss for the period in € thousand	12,795	275
Weighted average number of shares outstanding	10,946,393	10,385,755
Earnings per share (€)	1.17	0.03

Calculation of net financial debt

€ thousand	Sep. 30, 2022	Dec. 31, 2021
Senior loans	57,336	79,979
Subordinated loans	53,966	49,696
Real estate loans	5,642	5,942
Cash and cash equivalents*	(22,925)	(30,327)
Net debt from loans	94,019	105,290
Other financial liabilities	8,156	5,316
Lease refinancing	153,969	128,179
Lease receivables	(144,557)	(119,759)
Net debt from leasing	9,412	8,420
Net debt	111,586	119,027

* Cash and cash equivalents are deducted from the loan in this presentation for purposes of analysis. There is no corresponding ring fencing in this case.

Supplementary information

Financial calendar

Jun. 21, 2023 Annual General Meeting 2023

Basis of reporting

This Quarterly Statement was prepared in compliance with section 53 of the Exchange Rules for the Frankfurter Wertpapierbörse. It does not constitute an interim financial report in accordance with IAS 34 or financial statements in accordance with IAS 1. It should be read in conjunction with the 2021 Consolidated Financial Statements and the 2021 Combined Management Report and the information contained therein. Those documents are available in the Investor Relations section on our website www.brockhaus-technologies.com.

The reporting entity is Brockhaus Technologies AG (BKHT or the Company), together with its consolidated subsidiaries Brockhaus Technologies or the Group. The reporting period for this Quarterly Statement is the period January 1, 2022 to September 30, 2022. The reporting date is September 30, 2022.

This report has been translated from German into English. In the case of any discrepancies between the two language versions, the German version takes precedence.

Rounding

The metrics appearing in this report have been rounded in line with standard commercial practice. Due to this rounding method, the individual amounts reported do not always add up precisely to the totals presented.

Contact information

Paul Göhring Phone: +49 69 20 43 40 90 Fax: +49 69 20 43 40 971 ir@brockhaus-technologies.com

Legal notice

Brockhaus Technologies AG Thurn-und-Taxis-Platz 6 60313 Frankfurt am Main, Germany Phone: +49 69 20 43 40 90 Fax: +49 69 20 43 40 971 info@brockhaus-technologies.com www.brockhaus-technologies.com

Executive Board: Marco Brockhaus (Chair), Dr. Marcel Wilhelm Chair of the Supervisory Board: Dr. Othmar Belker

Registry court: Frankfurt am Main Local Court Register number: HRB 109637 VAT ID: DE315485096