3U Group remains on its growth path and delivers a sound operating performance in the first nine months of 2024

3U Group remains on its growth path and delivers a sound operating performance in the first nine months of 2024

• Having lifted revenue by 11.6 %, 3U moves ahead with growth in the period under review
• Segment development attests to resilient business model
• Marginal improvement in EBITDA despite growth -related start-up costs and non-recurrent items
• Management Board specifies outlook for 2024

Marburg, 12 November 2024 – The performance of 3U HOLDING AG (DE0005167902; identifier: UUU) held steady in the third quarter of 2024, following on from the first half-year. From a cumulative standpoint, consolidated revenue rose by 11.6 % year on year to EUR 42.1 million in the first nine months of 2024 (9M 2023: EUR 37.8 million). In the actual reporting quarter, 3U achieved a moderate increase in earnings of 3.9 % to EUR 13.2 million (Q3 2023: EUR 12.7 million).

The ITC (Information and Telecommunications Technology segment) proved to be the strongest driver of growth. After the weak construction activity last year, the SHAC (Sanitary, Heating and Air Conditioning Technology) segment also recorded a substantial increase in revenue again in the first nine months of 2024. By contrast, the weather conditions and prices prevented the Renewable Energies segment from matching its good year-earlier performance.

“We are generally satisfied with the course of business to date against the backdrop of a challenging environment. The development of the individual segments is very disparate, but our resilient business model nevertheless safeguards the Group in phases of economic weakness,” says Christoph Hellrung, 3U HOLDING AG’s CFO, commenting on the actual results. “The ITC segment performed well in line with expectations. In our SHAC segment we achieved successful growth contrary to the market. In our most profitable segment of Renewable Energies, wind conditions and market prices presented us with challenges. The impact of these factors was unfortunately not fully compensated,” says Hellrung, summarising the situation.

Along with revenue growth, the increase in other operating income in particular contributed to a significant improvement in gross profit which rose by 15.1 % to EUR 17.6 million (9M 2023: EUR 15.3 million). Compensation for downtime due to technical failure and selling the company’s gold holdings had an especially positive impact on the results. Despite personnel expenses which were higher mainly down to acquisitions, and the necessary other operating expenses due to maintenance and repairs carried out on the wind turbines, EBITDA rose slightly compared with the previous year’s figure. In the first nine months of 2024, the Group generated earnings before interest, taxes, depreciation and amortisation of EUR 3.5 million, reflecting moderate growth of 2.0 % (9M 2023: EUR 3.4 million). EBITDA came in at EUR 0.8 million in the third quarter of 2024, unchanged from the previous year’s figure. The 3U Group’s EBITDA margin amounted to 8.2 % in the reporting period compared with 9.0 % in the first nine months of 2023.

Depreciation and amortisation totalled EUR 3.0 million from January to September 2024 (9M 2023: EUR 2.5 million). 3U generated a positive financial result of EUR 0.5 million over the same period (9M 2023: EUR 1.8 million). Tax expenses stood at EUR 0.2 million (9M 2023: EUR 0.7 million). The proportion of the consolidated result attributable to the shareholders of the parent company amounted to EUR 0.8 million in the period under review (9M 2023: EUR 1.6 million), and the Group’s earnings per share posted EUR 0.02 (basic and diluted) following on from EUR 0.04 the year before.

Resilient business model secures growth

In the first nine months of 2024, the ITC segment raised its revenue substantially year on year, by almost 40 % to EUR 14.6 million (9M 2023: EUR 10.4 million). Organic growth clocked up 7.8 % in the reporting period. The decline anticipated in the Voice Retail business was offset by significant growth in the area of Managed Services and Voice Business. Segment EBITDA rose by 19.4 % to EUR 3.3 million (9M 2023: EUR 2.8 million). The EBITDA margin posted 22.8 % in the reporting period compared with 26.6 % in the first nine months of 2023.

Given the unfavourable meteorological conditions and downtime due to technical failures, the Renewable Energies segment’s electricity yield was dropped considerably below that of the year-earlier period. In addition, work on decommissioning seven wind turbines in the Langendorf Wind Farm as part of the repowering measures already communicated commenced in the third quarter, as scheduled. The electricity produced by 3U power plants declined accordingly in the first nine months of 2024, by almost one fifth to 33.6 GWh compared with 41.9 GWh the year before. The Adelebsen Solar Park generated power of 8.5 GWh in the reporting period, thereby also not matching the year earlier figure of 9.0 GWh. In conjunction with the lower feed-in rates, the Renewable Energies segment’s revenue declined by 39.0 % to EUR 3.7 million (9M 2023: EUR 6.0 million). Consequently, segment EBITDA also fell significantly to EUR 2.3 million (9M 2023: EUR 4.4 million). At 62.9 %, the EBITDA margin remains high while nevertheless falling short of the year-earlier level of 73.3 %.

The SHAC segment’s revenue increased gratifyingly by 12.2% to EUR 24.5 million in the first nine months of 2024 (9M 2023: EUR 21.8 million) but did not meet the company’s own more upbeat assumptions, however. Expanding the product portfolio along with the healthy demand for photovoltaic modules, inverters and electricity storage and full PV systems had an especially positive impact on the e-commerce business.  In addition, the segment reported a slight uptrend in the demand for components for floor heating systems and air conditioning technology, particularly in the final weeks of the quarter. The SHAC segment’s gross margin improved notably to 19.3 % over the reporting period, up from 17.1 %. Against the backdrop of an increase in operating expenses due to expansion, EBITDA improved marginally to EUR –0.5 million (9M 2023: EUR –0.9 million).

Sound balance sheet ratios as a foundation for further growth

As of 30 September 2024, total assets amounted to EUR 119.6 million, thus remaining virtually unchanged from the level posted on 31 December 2023 (EUR 119.3 million). On the assets side, the Group recorded an overall increase in intangible assets of EUR 11.6 million to EUR 17.1 million. This change is to be seen in the context of the Bitcoin investment totalling more than EUR 12 million in the second and third quarter of the year. As a long-term reservoir of value, this exposure is recorded on the assets side under the intangible assets item. The increase of EUR 27.0 million in property, plant and equipment to EUR 35.5 million is to be seen mainly in the context of disbursements for the Langendorf repowering project and for the construction of new company headquarters in Marburg. Other current assets declined by EUR 3.2 million to EUR 1.7 million in the period under review, which was mainly attributable to selling the company’s gold holdings. The downturn of EUR 18.0 million in cash and cash equivalents to EUR 37,4 million is largely associated with the increase in inventories, investment in property, plant and equipment, along with acquiring Bitcoin in the period under review. Equity had dropped to EUR 87.9 million by the end of the third quarter compared with EUR 89.1 million as of 31 December 2023. The equity ratio stood at 73.5 % on 30 September 2024, marking a slight decline to below the level of 74.7 % posted at year-end 2023.

Management Board revises outlook for 2024

Developments in the Renewable Energies and SHAC segments necessitated that adjustments be made to the guidance for the financial year 2024. Meteorological conditions, for instance, along with restrictions on the availability of wind turbines and the development of monthly market values for onshore wind energy, also in the final quarter of 2024, are having a significant impact on the results of the Renewable Energies segment. Sluggish demand in the SHAC business is also likely to fall short of original expectations through to the end of the year. Management nevertheless assumes that business in the ITC segment will continue to develop as expected over the remainder of 2024. In the current year, the target parameters envisaged are therefore anticipated below the range communicated in March 2024. Consolidated revenue has been estimated at a minimum of EUR 55.0 million (previously: EUR 58.0 to EUR 62.0 million). In terms of profitability, management now assumes that the EBITDA margin will settle within a range of between 4 % and 5 % (previously: 7 % to 8 %). Upside potential could emanate from a revaluation of Bitcoin which increased to a new record level after the results of the US election were announced.

“Against the backdrop of the current developments, adjusting our guidance for 2024 had become necessary. We nevertheless remain on track as far as our strategy is concerned. True to our 3U MISSION 2026+ we continue to forge ahead full steam in realising our medium-to long-term growth plans,” explains Uwe Knoke, Board member responsible for strategy and business development at 3U HOLDING AG. Our operational focus is currently on sharpening our competitive edge in particular, as well as on implementing the steps envisaged for expanding our SHAC e-commerce business in preparation for a potential IPO,” Knoke comments further.

3U financials

3U HOLDING AG’s 9M 2024 Earnings Call will take place today at 10:00 CET, together with CFO Christoph Hellrung and Uwe Knoke, Board member responsible for Strategy and Business Development.

Please register here to participate in the web cast:

https://montegaconnect.de/event/3j7lgshn0bgpswanmh0avlf6kzjlnhbw

A recording of the web cast will be available for viewing after the event at  www.3u.net/newsroom/mediathek/.

The Quarterly Announcement as of 30 September 2024 is available for downloading at www.3u.net/en/investor-relations/publications/

 About 3U:

3U HOLDING AG (www.3U.net), based in Marburg, Germany, was founded in 1997. As the operating management and investment holding company, it heads up 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 shares are traded on XETRA, Tradegate and on German regional stock exchanges (ISIN: DE0005167902; identifier: UUU).