3U paves the way for anticipated growth spurt

  • 2023 financials accord with the guidance adjusted last November
  • Segment development affirms intact business model
  • Proposal for profit distribution provides for dividend of EUR 0.05 per share
  • 2024 to be marked by significant revenue growth and investments to forge ahead with MISSION 2026

Marburg, 28 March 2024 – As already communicated when the preliminary figures were published, 3U HOLDING AG (ISIN DE0005167902; identifier: UUU) has delivered proof of its strong resilience thanks to its well-diversified business model in an environment characterised by economic and regulatory challenges.

Consolidated revenue rose by 4.0 % overall to EUR 52.4 million in the financial year 2023 (previous year: EUR 50.3 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at EUR 5.2 million in the period under review (previous year: EUR 8.5 million). The Group’s EBITDA margin came in at 10.0 %, following on from 16.9 % in the year-earlier reporting period that was heavily influenced by special items. Net of minority interest, earnings after taxes for the 3U Group in 2023 totalled EUR 2.6 million (previous year: EUR 3.2 million), therefore settling at the upper end of the forecast corridor last adjusted in November 2023.

As Uwe Knoke, Management Board member responsible for strategy and business development, states: “Our strong resilience and well-diversified investment portfolio forms an excellent basis for reaping sustainable benefit from several megatrends in the coming years. The year 2024 will see some important strategic steps as we want to prepare for imminent expansion in the Renewable Energies segment and in the SHAC segment by making the necessary upfront investments. We will also continue to focus on the topic of external growth. In these endeavours, we will be filling the key prerequisites for pursuing our value creation goals under our MISSION 2026 growth strategy.”

Well-balanced business model ensures positive development in a difficult environment

In 2023, the ITC and Renewable Energies segments generated revenue growth in the double-digit percentage range on the back of upbeat developments, while also considerably improving earnings. Against the backdrop of weak online retail prevailing Germany and the massive slump in construction activities, the SHAC segment sustained a decline in revenue while nevertheless significantly outperforming the relevant market.

The ITC segment raised revenue by 26.3 % overall to EUR 15.3 million in 2023 (previous year EUR 12.1 million). Organic growth stood at 10.3% and is principally attributable to success in winning new customer business. The strongest growth was achieved by Managed Services. The share of this business in revenue was raised successfully from 27.1% to 37.4% in accordance with the business strategy and underpinned by acquisitions. Voice Business came second best in terms of performance. The comprehensive offer of network infrastructure, termination, including value-added services for business customers, continued to generate the lion’s share of 53.8% in the 3U Group’s ITC segment. Revenues from call-by-call solutions and preselection telephony in the end customer segment declined in line with expectations. The share of the retail business in segment revenue decreased from 13.4% to 8.9%. As a result of the profitable product mix, segment EBITDA increased by 24.7% to EUR 3.9 million (previous year: EUR 3.1 million). The EBITDA margin of 25.5% remained at a high level (previous year: 25.8 %).

Despite the temporary downtime of a wind turbine in Roge in the first quarter of 2023, the Renewable Energies segment delivered a higher energy yield than in the previous year, boosted by favourable meteorological conditions. All in all, the electricity produced by 3U’s power plants rose by 5.5 % to 73.2 GWh (previous year: 69.4 GWh). In mathematical terms, the electricity generated by the 3U Group was therefore sufficient to cover the average power consumption of around 20,000 four-person households in Germany while saving more than 30,000 tons of climate damaging carbon dioxide. Sales revenues advanced from EUR 7.2 million to EUR 8.1 million in the reporting year. Owing to the gratifying production figures and the advantageous feed-in rates, segment EBITDA increased significantly from EUR 3.4 million to EUR 5.8 million, reflecting growth of 71.6 %. The Renewable Energies segment’s EBITDA margin rose from 47.2 % to 72.4 % in 2023 although profitability was still impacted by unscheduled repair costs at the Roge Wind Farm.

The SHAC segment was unable to decouple from the general economic environment: revenue generated by e-commerce and by the DIY trade declined significantly. Rising interest rates resulted in difficult framework conditions in the construction industry and caused building permits for single family homes to plunge. In addition, the lack of planning reliability arising from political debate concerning the amendment of the German Building Energy Act (GEG) proved to be a huge constraint on growth. Although business in the SHAC segment outperformed the industry environment in the reporting period, the segment nevertheless sustained a decline in revenue and earnings. Segment revenue stood at EUR 29.6 million period under review, down 6.0 % (previous year: EUR 31.5 million). Due to the development in revenue and upfront investment in personnel and equipment associated with the ThermCube launch, segment EBITDA posted EUR –1.2 million (previous year: EUR 0.1 million).

Sound balance sheet ratios as a foundation for raising value in the future

Total assets stood at EUR 119.3 million on 31 December 2023 (31 December 2022: EUR 243.6 million). The contraction of the balance sheet is essentially attributable to the lower level of cash and cash equivalents as a result of the exceptionally high dividend distribution for the financial year 2022 following the successful sale of the weclapp investment. At the end of the reporting year, and despite record dividend, the 3U Group had cash and cash equivalents of EUR 55.4 million at its disposal (31 December 2022: EUR 189.7 million). The dividend payout is also reflected in equity which dropped to EUR 89.6 million at year-end 2023, compared with EUR 211.2 million as of 31 December 2022. Seeing as the 3U Group was in a position to reduce its liabilities in the financial year, the balance sheet continues to report a very sound equity ratio of 75.1 % (31 December 2022: 86.7 %). The key financials remained at a good level overall at the end of the reporting period. In line with expectations, the debt-to-equity ratio increased from 15.4 % to 33.2 % due to the significant changes in equity. The net cash position posted EUR 39.8 million on 31 December 2023 (31 December 2022: EUR 173.2 million). Working capital currently stands at EUR 68.9 million compared with EUR 196.9 million at the end of 2022.

Appropriate participation of the shareholders in the company’s success

The Group’s earnings after tax from continuing operations totalled EUR 2.6 million in 2023 (previous year: EUR 3.2 million). Earnings per share came in at EUR 0.07 (previous year: EUR 0.09). On this basis, the Management Board and the Supervisory Board propose to distribute dividend of EUR 0.05 per share to the shareholders. In tabling this proposal, management has also taken account of the fact that the performance anticipated by the shareholders in the reporting year was influenced by the partly difficult framework conditions. Pending approval by the Annual General Meeting on 28 May 2024, this proposal would correspond to a payout ratio of more than 70 % and a dividend yield at the 2023 year-end closing price of more than 2.4 %. The 3U Group has therefore enabled its shareholders to participate in profit in the form of paying out an attractive dividend for eight years in a row.

Outlook: rigorous implementation of the profitable growth strategy

The company anticipates further profitable growth in 2024. The Management Board assumes that the ITC segment will continue to perform well. At the same time, as part of its MISSION 2026 growth strategy, the Board will continue to concertedly implement the measures necessary to strengthen its competitiveness in its SHAC e-commerce operations. These measures include the realignment of the range on offer, flanked by expanding the proportion of profitable products and services, for instance, in the field of photovoltaics, along with streamlining low growth niche activities. As far as the Renewable Energies segment is concerned, 3U is opting for extensive investments to expand its own power generating capacities. Having obtained approval for the Langendorf Wind Farm repowering project, the Group can immediately move ahead swiftly in realising the project with the aim of raising installed capacity in Langendorf from 22.5 MW to 43 MW as planned over the period through to 2025. Depending on the general conditions in the construction industry, the Group is anticipating growth in the SHAC segment later on in the year. Accordingly, 3U expects overall revenue for 2024 – without acquisitions – to settle in a range of between EUR 58 million to EUR 62 million, which would correspond to a year-on-year increase of around 10 % and 18 % respectively. Owing to the necessary upfront investments in 3U’s future competitiveness, and in conjunction with repowering measures commencing at the Langendorf location, the EBITDA margin is anticipated in a range of approximately 7 % to 8 % in 2024. Net of these one-off effects, the return would improve further in 2024.

“Our funds have already enabled us to develop our resources in the ITC business very satisfactorily. As far as SHAC is concerned, we intend to strengthen our competitiveness and to continue screening intensively for acquisitions. In Renewable Energies, we are moving full steam ahead with repowering and concentrating on project developments in Brandenburg that have already resumed. In doing so, we are concertedly pursuing all the measures necessary for significantly raising the company’s value under our MISSION 2026,” adds CFO Christoph Hellrung.

3U key figures 2023

20232022+/-
Consolidated revenueEUR million52.3550.324.0 %
  ITCEUR million15.3412.1426.3 %
  Renewable EnergiesEUR million8.067.2011.9 %
  SHACEUR million29.6331.51-6.0 %
Group EBITDAEUR million5.238.49-38.4 %
  ITCEUR million3.913.1424.7 %
  Renewable EnergiesEUR million5.833.4071.6 %
  SHACEUR million-1.180.12
EBITDA margin%10.016.9
  ITC%25.525.8
  Renewable Energies%72.447.2
  SHAC%-4.00.4
Group resultEUR2.553.15-19.0 %
Earnings per share (basic)EUR0.070.09-22.2 %
Earnings per share (diluted)EUR0.070.08-12.5 %
31/12/202331/12/2022+/-
Equity ratio%75.186.7
Cash & cash equivalentsEUR million55.4189.7-70.8 %
Working capitalEUR million68.9196.9-65.0 %
Net cashEUR million39.8173.2-77.0 %
Free cash flowEUR million-7.4164.4
EmployeesFTE16412828.1 %

 

A webcast on 3U HOLDING AG’s 2023 annual financial statements together with CFO Christoph Hellrung and Uwe Knoke, Board member responsible for Strategy and Business Development, will be held on 28 March 2024 at 10:00 CET. The presentation will be conducted in German. Afterwards, participants will have the opportunity of asking questions.

Please register here here to participate in the web cast.

A recording of the web cast will be available for viewing after the event in our media library.

The Annual Report 2023 is available for downloading in the publications section.

 

Contact:
Thomas Fritsche
Investor Relations
3U HOLDING AG
Tel.: +49 (0)6421 999 – 1200
email: IR@3U.net

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).