Blue Cap AG defies the economic environment with a good first quarter of 2024 - significant improvement in earnings

• Adjusted EBITDA increases by 21% to EUR 5.8 million compared to the same period of the previous year
• Adjusted EBITDA margin at 8.3% (compared to 6.2% in the previous year)
• Group revenue of EUR 66.5 million below previous year as planned
• Visible results from turnaround measures in the portfolio
• Management Board confirms outlook for 2024: revenue expected to be in the range of EUR 270 to 290 million and EBITDA margin (adj.) between 8.5% and 9.5%

Munich, 08th May 2024 – In the first quarter of the year, Blue Cap AG (“Blue Cap”) benefited noticeably from the turnaround and efficiency improvement measures initiated in the previous year, thus defying the ongoing difficult economic environment. At EUR 5.8 million, the operating result (adjusted EBITDA⁽¹⁾) increased by 21% compared to the same quarter of the previous year (EUR 4.8 million). This was achieved despite the fact that, as expected, revenue of EUR 66.5 million was below the previous year's level of EUR 75.8 million. Accordingly, the adjusted EBITDA margin improved significantly from 6.2% to 8.3%.  The development in the Plastics and Adhesives & Coatings segments was pleasing, while Business Services had to contend with noticeable declines. The successful restructuring at Neschen had a particularly positive impact on earnings.

Blue Cap's balance sheet and financing structure remained solid as at March 31, 2024. At 35%, the equity ratio was slightly lower than at the end of 2023 (36%). By contrast, the net gearing ratio (including lease liabilities) improved slightly from 2.5 years as at December 31, 2023 to 2.4 years and thus remains well within the target corridor of less than 3.5 years. Net financial debt remained almost stable at EUR 58.8 million. This also applies to net working capital, which amounted to EUR 46.8 million.

Investment portfolio with significant growth in Plastics and Adhesives & Coatings

As at March 31, 2024, Blue Cap's continuing portfolio included seven majority shareholdings, which are allocated to the Plastics, Adhesives & Coatings, Business Services and Others segments, as well as one minority shareholding.

The Plastics segment benefited from a high order backlog in the logistics area at the start of the year. This more than compensated for the slight decline in revenue at H+E. Overall, segment revenue rose by 6% in the first quarter compared to the previous year. Thanks to consistent cost management, however, earnings in Plastics increased by 29% to EUR 2.8 million. The margin was correspondingly high at 9.3% compared to 8.3% in the same quarter of the previous year.

The Adhesives & Coatings segment reported hardly any change in revenue in the quarter under review. While Neschen posted a slight increase, Planatol reported a slight drop in revenue. Adjusted EBITDA saw a massive improvement to EUR 2.5 million (previous year: EUR 0.1 million). This primarily reflects the aforementioned restructuring success at Neschen. The margin climbed accordingly to 11.3% (previous year: 0.6%), a level not seen for many years. 

In contrast, the Business Services segment suffered a sharp decline in revenue due to a significantly weaker order situation at HY-LINE. Transline, on the other hand, was able to achieve almost the same level as the previous year and reported a slightly higher result due to improved cost structures. Nevertheless, the segment result of EUR 0.7 million in the first quarter was well below the previous year's level of EUR 2.7 million.

In the Others segment, project postponements at Blue Cap's smallest investment, nokra, continue to have a negative impact. At the minority holding INHECO, the first successes from the extensive turnaround program were realized, which is why an improvement in earnings was achieved despite weaker revenue due to lower demand. 

Segment key figures (continued) at a glance

Note: Rounding differences are possible
(*)bps=base points; (**)The Others segment includes nokra, the Group's holding and real estate management companies.
 

Outlook 2024: Focus on value realization and growth through M&A

Developments in the first quarter have confirmed the cautiously optimistic expectations of the Management Board. However, the outlook is still hampered by an exceptionally high level of forecasting uncertainty. An effective recovery in business activities, from which a trend could be derived, is still lacking in the majority of portfolio companies. The forecast communicated at the end of April is confirmed for 2024 as a whole: Revenue between EUR 270-290 million and adjusted EBITDA margin between 8.5% and 9.5%.

In the existing portfolio, Blue Cap is concentrating on realizing value in those portfolio companies that it has already developed to exit readiness. In view of the process duration, the Management Board expects to be able to communicate details on this in the summer. Secondly, the transformation programs initiated in the portfolio will continue to be implemented.

On the buy-side, Blue Cap expects an increase in opportunities in the third quarter. The relevant M&A market for special situations is generally benefiting from the macroeconomic environment. However, the subset of attractive buy candidates in line with Blue Cap's investment criteria has been limited to date, resulting in management canceling many opportunities at an early stage in the first quarter.

Dr. Henning von Kottwitz, CEO of Blue Cap AG, comments on the development as follows: “The start to 2024 was pleasing considering the significant increase in profitability. The development is in line with our expectation of being able to increase profitability even without major revenue growth. At the same time, we are making good progress with our M&A activities. Even if such processes take time, we are confident that we will soon be able to show results.” Henning Eschweiler, COO of Blue Cap, adds: “The good first quarter is the result of the value enhancement projects in 2023. A team effort that was only possible together with the managing directors and employees of the portfolio companies involved. 2024 will now be characterized by value creation - mainly through the indicated sell-side transactions, but also through improved cash flows within the portfolio.”

Important note

On the occasion of the published figures, a virtual conference call with the Management Board of Blue Cap AG will take place today at 12:00 noon. You can register via this link.

The presentation will be available after the virtual meeting on our website at https://www.blue-cap.de/investor-relations/praesentationen/.

Note: The information in this release always refers to continuing operations unless otherwise stated. Continuing operations include all portfolio companies with the exception of the Knauer-Uniplast Group, which was sold in June 2023.

(1) Adjustments: Adjusted for extraordinary, prior-period and other effects from reorganization measures and one-off effects as well as effects arising from purchase price allocations

About Blue Cap AG

Blue Cap AG is a Munich-based investment company founded in 2006 and listed on the capital market. The company acquires medium-sized companies from the B2B sector in special situations and supports them in their entrepreneurial development with the aim of selling them profitably at a later date. The acquired companies are headquartered in the DACH region, generate sales of between EUR 20 and 200 million and have a sustainably stable core business. Blue Cap mostly holds majority stakes in eight companies from the Adhesives & Coating Technology, Plastics Technology, Production Technology, Life Sciences and Business Services sectors. The Group currently employs around 1,200 people in Germany and other European countries. Blue Cap AG is listed on the open market (Scale, Frankfurt and m:access, Munich; ISIN: DE000A0JM2M1; ticker symbol: B7E). www.blue-cap.de

Contact:

Blue Cap AG
Annika Küppers
Corporate Affairs
Tel. +49 89 288909-0
ir@blue-cap.de