CHAPTERS : 2024 Interim Report
CHG.DE
Interim Report
06
2024
>800
employees
>€198 MM
invested capital
6
platforms
46
operating
companies
>€58 MM
revenue
>€13 MM
EBITDA
Letter to the shareholders
Development of the Group and key figures
Overview of operating companies
Combined interim management report
Condensed consolidated interim financial statements Condensed interim financial statements CHAPTERS Group AG
02
04
07
08
30
53
Letter to the shareholders
Dear shareholders,
dear friends of the company,
in the first months of 2024, we made significant strides on the way to building the "home for mission-criticalbusinesses".
Our operating model is built around empowering decentralized platforms with autonomy. As presented at our AGM in July 2024, we believe that autonomy requires authority. And authority requires accountability.
In March 2024, Marc Maurer joined the team of CHAPTERS Group AG as COO for Vertical Market Software. While we remain committed to operating as a decentralized organization, Marc and his team, in collaboration with the leaders of our VMS platforms, are developing a set of best practices and enhancing the level of peer accountability across the group to allow the organization to continue to scale
The first months of 2024 were also marked by the evolution of our corporate structure:
around the first investment in GBS Europa GmbH, which also took place in June, Altamount is building a group focused on
mission-criticalcybersecurity, Governance, Risk Management and Compliance, as well as financial services software.
CHAPTERS Group AG - INTERIM REPORT 2024 Letter to the shareholders
field of access solutions, fire protection, and security technology in German- speaking countries. After acquiring five companies in 2022 and 2023, ENTRO has secured a new partner to support its continued growth. The group will remain under the leadership of its managing directors and co-founders and will be supported by the NGC management team.
*****
As of mid of October 2024, 45 operating companies are part of the group (excluding the eight companies that have found a new home at Software Circle plc). We are proud of the group's remarkable growth and extend our sincere thanks to the teams within both the platform and operating companies for their invaluable contributions to this success.
To continue on this path, we completed a capital increase in August 2024, raising an additional 85 million in equity. This funding enables us to further back our platforms in pursuing their inorganic growth ambitions.
*****
Page 3
We were delighted to welcome so many of you to our AGM in July 2024 in Hamburg, and we look forward to seeing you again next year. We value the personal exchange with you, dear shareholders, and we sincerely thank you for your continued support and trust in the company's development.
Sincerely,
. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Jan-Hendrik Mohr
Marlene Carl
Development of the Group and key figures
As a holding company, CHAPTERS Group AG is the sum of its subsidiaries. Two factors are critical for long-term economic success and performance: the growth of the group through the acquisition of additional operating companies by the platform companies and the operational development of these companies.
Growth of the Group
newly added to the Group
Companies
Direct subsidiaries of
CHAPTERS Group AG
Operating portfolio companies at the end of the period
thereof minority interests
Invested capital4
thereof for the acquisition of / investment in minority interests
2019-22
2023
H1 2024
10
5
0
14
8
1
2
5
0
0
0
3
0
0
1
2
0
0
261
412
46
2
13
1
€ 100.7 MM
€ 165.8 MM
€ 198.6 MM
€ 9.4 MM
€ 15.5 MM
€ 20.7 MM
The invested capital includes the total amount invested for the acquisition of group companies (including external financing, seller loans, and equity contributions from minority shareholders) as well as funds provided by CHAPTERS Group AG to establish the business operations of its subsidiaries. As far as minority interests are concerned, only the amount invested by CHAPTERS Group AG is considered.
Development of the operating portfolio companies
For the overview below, all operating companies (including the minority interest to the extent not publicly traded) that are part of the group as of June 30, 2024, are considered with their full results for the entire period, regardless of the time of acquisition or the share of CHAPTERS Group AG. To calculate the amounts attributable to CHAPTERS Group AG, the relevant pro-rata share of CHAPTERS Group AG in the respective operating company as of June 30, 2024, is applied to each operating company's results, taking into account minority interests at various levels of the legal structure.
CHAPTERS Group AG - INTERIM REPORT 2024
Development of the Group and key figures
Page 5
Revenue and EBITDA development of the operating portfolio companies
Sum of all companies that are part of the group since
2019-22
H2
2023
revenue
H1
2023
2024
Total
thereof from minority interests6
2019-22
EBITDA (rep.)
H2
2023
H1
2023
2024
Total5
thereof from minority interests 6
2019-22
H2
2023
EBITDA (adj.)
H1
2023
2024
Total5
thereof from minority interests 6 thereof attributable to CHAPTERS Group AG
12/2022
12/2023
06/20235
06/2024
€ 50.6 MM
€ 61.5 MM
€ 29.5 MM
€ 34.0 MM
€ 12.2 MM
€ 5.1 MM
€ 6.1 MM
€ 18.9 MM
€ 9.1 MM
€ 9.2 MM
€ 50.6 MM
€ 92.7 MM
€ 34.6 MM
€ 58.4 MM
€ 4.3 MM
€ 5.2 MM
€ 2.7 MM
€ 2.8 MM
€ 9.2 MM
€ 13.4 MM
€ 6.4 MM
€ 7.5 MM
€ 3.1 MM
€ 1.4 MM
€ 1.5 MM
€ 4.9 MM
€ 0.8 MM
€ 2.8 MM
€ 9.2 MM
€ 21.4 MM
€ 7.8 MM
€ 12.5 MM
€ 0.6 MM
€ 0.4 MM
€ 0.4 MM
€ 0.4 MM
€ 13.4 MM
€ 17.2 MM
€ 8.0 MM
€ 8.6 MM
€ 3.6 MM
€ 1.4 MM
€ 1.8 MM
€ 4.5 MM
€ 0.5 MM
€ 2.8 MM
€ 13.4 MM
€ 25.4 MM
€ 9.4 MM
€ 13.7 MM
€ 0.6 MM
€ 0.6 MM
€ 0.6 MM
€ 0.4 MM
€ 9.1 MM
€ 16.9 MM
€ 5.9 MM
€ 9.3 MM
The companies that became part of the group in the second half of the year 2023 demonstrated a very strong second half driven by - amongst other things - a strong revenue with (quasi-)public clients that is usually recognized in the second half of the year.
Base Value
As communicated at the AGM 2024, the company decided not to calculate the the Base Value going forward as a key figure.
Earnings per share
The company has been calculating earnings per share since the 2020 financial year. For this purpose, the net income attributable to CHAPTERS GROUP AG (adjusted for accounting-related purchase price depreciation and other consolidation-related effects) of all subsidiaries of CHAPTERS Group AG is added up. The net income of companies in which CHAPTERS Group AG holds a minority stake is only included if there are distributions. The result of CHAPTERS Group AG is included in full. At the level of CHAPTERS Group AG, the result from the securities portfolio (realized profits and losses from sales, interest/dividends, and depreciation at the end of the year) has a significant influence, so earnings per share without securities result is also calculated. A reconciliation of the reported consolidated net income to earnings per share can be found in the combined management report.
attributable to the ARUDI Group that is no longer part of the group.
CHAPTERS Group AG - INTERIM REPORT 2024
Development of the Group and key figures
Page 6
Earnings per share
Net income (adj.) of the associated companies attributable to CHAPTERS Group AG
Net income of CHAPTERS Group AG
thereof from securities (including the accounting loss on the reissue of the perpetual bond)
12/2022
12/2023
06/2023
06/2024
€ 5,936.1 k
€ 3,448.7 k
€ 1,035.4 k
€ - 171.1 k
€ -5,119.7 k
€ 1,656.4 k
€ 646.3 k
€ 2,273.1 k
€ -5,342.7 k
€ 19.08 k
€ -224.2 k
€ 1,738.2 k
Number of shares at the end of the period
16,066,600
18,149,192
16,499,266
19,547,705
Adj. earnings per share
€ 0.05
€ 0.28
€ 0.10
€ 0.11
Adj. earnings per share without profit from securities
€ 0.38
€ 0.28
€ 0.11
€ 0.02
Two main factors drive the negative net income of associated companies for the first half on 2024: As explained above, the companies acquired in the second half of 2023 had a particularly strong second half of the year. However, the interest costs for the acquisition price for those companies (both for external financing but also for the shareholder loans) impacted the first half of 2024, resulting in a negative net income for these companies in the first half of 2024. Additionally, one-off legal expenses related to refinancings at acquisition company level were fully reflected in the net income for the first half of 2024. In addition, for the companies acquired in 2024 and the end of 2023, the usually established profit and loss transfer agreements between the acquisition company and the operating entity have not yet been established. As a result, interest expenses at the acquisition company cannot be offset against the operating income of the relevant subsidiary, leading to higher tax expenses.
The figure for the 2022 financial year includes an income of € 0.20 per share from the sale of operating portfolio companies, while the figure for 2023 includes an income of € 0.04 per share from the sale of operating portfolio companies
Overview of operating companies
Combined
interim management report
as of
June 30, 2024
Basis of the Group and CHAPTERS Group AG
Page 9
Economic report
Page 11
Risk and Opportunity report
Page 28
Outlook report
Page 29
CHAPTERS Group AG - CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2024
Combined INTERIM MANAGEMENT REPORT as of June 30, 2024
Page 9
A. Basis of the Group and CHAPTERS Group AG
Business activity and orientation
CHAPTERS Group AG (formerly MEDIQON Group AG) was establihshed in its current form in 2018. The name was changed to CHAPTERS Group AG in July 2023. The company has been listed on the Basic Board in the Open Market of the Frankfurt Stock Exchange (WKN 661 830) since June 3, 2005.
CHAPTERS Group AG aims to build a home for mission-criticalbusinesses. For us, "mission- critical" are those products and services that are essential for the end customers - be it an ERP system or a blocked account for the visa process.
We invest - usually with a majority stake and indirectly through our platform companies - in companies that have been established in their respective market segments for many years.
When it comes to our corporate investments, we - like the platform companies - follow an entrepreneurial and long-term approach. The development of the operating companies is driven forward sustainably and in partnership with the respective managing directors and employees. The sale operating companies to increase the Group's value in the short term are expressly not part of the strategy. Nevertheless, divestitures can occur, especially if they allow companies and managing directors to take the next step on their growth path.
CHAPTERS Group AG as a holding company
CHAPTERS Group AG invests in companies that have usually been established in their respective market segments for many years. CHAPTERS Group AG's investments in operating companies (the "portfolio companies") usually do not take place via direct participation of CHAPTERS Group AG. Instead, platform companies are established, in which CHAPTERS Group AG holds a majority stake. The platform companies, in turn, acquire ownership in the operating companies. CHAPTERS Group AG provides the equity capital required for the investments as the ultimate parent company.
As part of the corporate strategy, in individual cases, CHAPTERS Group AG also participates directly and with a minority stake in operating companies.
Goals and strategy
Increasing the company value by expanding the portfolio
CHAPTERS Group AG pursues the goal of sustainably increasing the Group's value in the long term. To this end, the existing portfolio of operating companies is to be further expanded in the coming years - both through acquisition-based growth of the existing platform companies as well as through the establishment of new or participation in existing platform companies or direct investments in operating companies.
The establishment of or participation in new platform companies or direct company investments by CHAPTERS Group AG does not follow a set investment strategy. Potential new platforms are characterized by the fact that there is growth and investment potential in the relevant market over the coming years and that, therefore, the business models can scale. Most importantly, there must
Disclaimer
Chapters Group AG published this content on October 18, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 18, 2024 at 05:56:05.370.