Industry Summary Articles

In the second quarter of 2024, Bechtle AG's business was more strongly affected by the adverse macroeconomic conditions than at the beginning of the year. Nevertheless, the business volume rose by around 1 per cent to €1,831.5 million. By contrast, revenue fell slightly by 2.3 per cent. Earnings before taxes (EBT) did not reach the very high benchmark figures of the previous year, totalling €83.8 million (previous year: €93.8 million). The EBT margin fell from 6.2 per cent to 5.7 per cent.

"We are comparing our second quarter with a very strong previous year. However, there was less demand from SMEs throughout the quarter and particularly in June this year. In addition, public-sector customers in Germany were still being unusually cautious as a result of the lengthy budget debate. But even though the second quarter did not live up to our own expectations, we continue to see very good growth opportunities for Bechtle in the medium and long term," says Dr Thomas Olemotz, CEO, Bechtle AG.

Operative cashflow developing strongly

Operative cashflow developed very positively again, totalling €141.2million in the first half of 2024(previous year: €65.0 million)—an improvement of €76.2 million. The reduction in trade receivables and inventories remained at a very high level and the lower reduction in trade payables also had a positive effect in the reporting period. At €72.8million, free cashflowalso showed a significant increase (previous year: -€65.8 million).

Moderate employee growth

Compared to the previous year, the number of employees at the Bechtle Group's more than 120 locations across Europe had increased by 5.5 per cent as of 30 June 2024. Almost 70per cent of the 801 new employees came to Bechtle through acquisitions with organic growth totalling just 1.6per cent. Compared to 31 March 2024, the increase was only 61employees. Excluding acquisitions, Bechtle even recorded a slight decline compared to the previous quarter. "In view of the economic challenges, we are currently cautious when it comes to expanding our workforce. Our focus is much more on efficiency gains in our internal business processes, which we’d like to achieve through digital transformation and artificial intelligence," explains Dr Thomas Olemotz.

Future growth opportunities

To generate stronger growth in the second half of 2024 and beyond, Bechtle sees the replacement cycle for traditional IT infrastructure driven by the end of support for Windows 10 in particular as an opportunity. Moreover, the European NIS2 Directive is driving cybersecurity forward and, with more than 500 specialists, Bechtle is very well positioned in this business segment. In addition, digital transformation, the expansion of multi-cloud and managed cloud services and the use of AI in various fields of application continue to be major business drivers. "SMEs and public sector clients have considerable catching up to do when it comes to modernising their IT. Although investments are currently being postponed, they will come—and Bechtle is well-prepared for them," says Dr Thomas Olemotz.

Executive Board adjusts forecast, but remains optimistic

The first half of 2024 was characterised by adverse economic conditions and a high level of uncertainty regarding future macroeconomic developments. This has had a particular impact on the investment behaviour of SME customers who continue to put off projects to modernise outdated traditional IT infrastructures in the workplace. While the Executive Board continues to expect an upturn in the second half of the year, the shortfall compared to the forecast published in March has considerably increased after the first six months. Bechtle accordingly adjusted its forecast for the current fiscal year in mid-July. The Executive Board now expects business volume, revenue, EBT and EBT margin to remain at the previous year's level. In the medium and long term, however, the outlook for Bechtle remains optimistic. The Board has also confirmed the continuation of its European M&A strategy. "The first half of the year was below our expectations, but we have dealt with this by adjusting our forecast for the year as a whole, as already announced. In principle, however, we remain confident about the development of our company. We are excellently positioned in all key IT growth areas and I am convinced that we will benefit from this when the overall economic environment improves along with an increasing willingness to invest in IT. We are also committed to acquiring attractive companies in key European markets as part of our growth strategy," summarises DrThomas Olemotz.

Bechtle key indicators for the 2nd quarter and 1st half of 2024

¹ Value adjusted

² Including time deposits and securities

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