Bechtle : Continues to Record Profitable Growth in Third Quarter

Bechtle Continues to Record Profitable Growth in Third Quarter

• Business volume up 6.0 per cent to €1.91 billion
• EBT increases by 6.4 per cent to €93.9 million
• EBT margin climbs to 6.3 per cent
• Operating cash flow significantly improved

Neckarsulm, 10 November 2023 - In the third quarter of 2023, Bechtle AG continued to grow and significantly increased its profitability. The business volume increased by 6.0 per cent to €1,911.5 million. One of the areas that again performed very well was the software business, though according to IFRS 15, it may only be reported as revenue in the amount of the margin. Therefore, the revenue only increased by 1.0 per cent to €1,479.2 million. Earnings before taxes (EBT) increased by a disproportionately high rate of 6.4 per cent to €93.9 million. The EBT margin underwent a year-on-year increase from 6.0 per cent to 6.3 per cent. As of 30 September 2023, Bechtle had 14,840 employees, a year-on-year increase of 1.051.

In the third quarter, the incoming orders of Germany's largest IT system house saw an excellent increase of 18.3 percent. "Although our medium-sized customers, in particular, are still rather reluctant to invest, we are able to compensate this situation by means of the positive performance of our software and service business as well as the stable demand of our large customers and public-sector clients. Moreover, the trend observable in incoming orders supports our positive outlook for the coming months", says Dr. Thomas Olemotz, Chairman of the Executive Board of Bechtle AG.

Digitisation Projects Drive Growth

In the IT System House & Managed Services segment, the business volume increased by 10.8 per cent, with a significantly growing share of software and service projects. The revenue underwent almost entirely organic growth of 5.8 per cent to €996.2 million. All in all, the demand of large customers and public-sector clients remained high. Especially complex digitisation projects for the transformation of IT architectures are driving the system house business. This is also obvious from the earnings: EBIT increased by 13.8 per cent to €66.3million, and the EBIT margin went up from 6.2 per cent to 6.7 per cent.

E-Commerce Affected by Reluctance to Invest

The business volume in the IT E-Commerce segment receded by 3.5 per cent, and the revenue declined by 7.5 per cent. Especially medium-sized customers are still postponing projects involving the renewal of their conventional IT infrastructure. The high investments made during the COVID-19 pandemic, the still tense macroeconomic situation, and the great uncertainty among customers with regard to the further economic development are curbing the demand. Although EBIT dropped by 3.3 per cent, the EBIT margin increased to 6.2 per cent (prior year: 6.0 per cent).

Access to Qualified Employees via Acquisitions

Above all due to the acquisition of businesses, the headcount at the more than 100 locations throughout Europe increased by 7.6 per cent as of 30 September. Without acquisitions, the headcount increase would have amounted to 3.9 per cent. As of the training start in September, Bechtle proudly achieved a new record of 299 young people who embarked on apprenticeships and integrated degree programmes. In total, Bechtle currently has 865 trainees.

Operating Cash Flow Significantly Improved

In the first nine months of 2023, the cash flow from operating activities amounted to €190.2 million, much more than in the prior year (-€230.7million). Bechtle achieved significant improvements, especially with regard to the inventories and trade receivables. At €225.4million, the total liquidity remains at a very comfortable level that enables the financing of further organic growth and acquisitions.

Annual Forecast Confirmed

The company's performance in the first nine months of 2023 was fully in line with our expectations for the year as a whole. We expect large customers and public-sector clients to continue to invest intensively in IT solutions. The demand among medium-sized businesses is expected to go up again as soon as the mood in this customer segment improves. Bechtle remains optimistic with regard to the last quarter. Therefore, we confirm the forecast we had published in March: In the year as a whole, we intend to increase our revenue and earnings significantly and keep the margin more or less at the level of the prior year. "Although we currently still lack positive economic impulses spanning all business segments, we are ready to accompany our customers in all aspects of the digital transformation. Our acquisitions in recent months have further strengthened our market position and our competitive position in Europe. I am therefore convinced that, despite the challenging economic framework conditions that exist at the moment, we will continue to grow and gain market shares", says Dr.Thomas Olemotz.

Bechtle KPIs for the Third Quarter and Nine-Month Period of 2023

		Q3/2023	Q3/2022	+/-	9M/2023	9M/2022	+/-
Business volume	€k	1,911,470	1,803,366	+6.0%	5,613,066	5,095,231	+10.2%
Revenue	€k	1,479,155	1,463,872	+1.0%	4,527,599	4,260,627	+6.3%
Germany	€k	914,638	917,677	-0.3%	2,770,185	2,648,842	+4.6%
International	€k	564,517	546,195	+3.4%	1,757,414	1,611,785	+9.0%
IT System House	€k	996,198	941,8831	+5.8%	2,974,725	2,639,9361	+12.7%
IT E-Commerce	€k	482,957	521,9891	-7.5%	1,552,874	1,620,6911	-4.2%
EBIT	€k	96,402	89,395	+7.8%	273,491	254,520	+7.5%
IT System House	€k	66,279	58,248	+13.8%	186,016	159,136	+16.9%
IT E-Commerce	€k	30,123	31,147	-3.3%	87,475	95,384	-8.3%
EBIT margin	%	6.5	6.1		6.0	6.0
EBT	€k	93,878	88,193	+6.4%	267,357	250,751	+6.6%
EBT margin	%	6.3	6.0		5.9	5.9
Earnings after taxes	€k	66,758	63,414	+5.3%	189,620	179,979	+5.4%
Earnings per share	€	0.53	0.50	+5.3%	1.50	1.43	+5.4%
Cash flow from operating activities	€k	125,258	-28,298		190,237	-230,710
Employees (as of 30 September)		14,840	13,789	+7.6%

¹ Figures adjusted

		30.09.2023	31.12.2022	+/-
Liquidity2	€k	225,439	289,590	-22.2%
Equity ratio	%	48.7	44.6

² Including time deposits and securities

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The quarterly statement for the third quarter of 2023 is available for download at bechtle.com/reports.