adesso SE

Good morning, everybody.

This is Martin Mellmann of Adesso IR speaking. First of all, I'd like to thank you for joining our Q3 and nine months earnings call regarding our quarterly statement we have published today. Within our release this morning, you read that Adesso continued its organic growth path with 13% increase in sales comparing the third quarter as well as the nine months figures. Hence, sales went up to more than €1.1 billion after nine months. Operating profit improved even more strongly, rising by 17% to €77.9 million. Thereof, the third quarter of 2025 alone contributed €40.8 million in EBITDA, underlining the guided stronger earnings contribution in the second half of the year. Outlook remains largely positive, so ADESO sees itself on track to meet the full year guidance. I'd now like to welcome as well as CFO Michael Knopf, who will give us a deeper insight into the figures of the first nine months and the outlook for the remainder of the current year. As always, I'd like you to mute yourself during the presentation. Feel free to open up the channels for the Q&A session afterwards. Participants on phones may want to mute or unmute their microphones via the star key followed by the number six of their phones. Thank you so far. And Michael, please go ahead.

Thank you, Martin. Good morning and also from my side. And yeah, it's always a head start with a look at our... Just a moment. As always, let's start with a look at our revenues. After nine months, we have achieved revenues of 1,084,000,000, which is an increase of 13%. If we look a little bit more in detail into that, we started with 353,000,000 and the growth rate of 11% in Q1. 356 million, a growth rate of 13% in Q2, and now 375 million growth rate, again, 30%. So growth during the year is a little bit accelerating, and Q3, 375 million is our highest revenue per quarter ever. We are pretty happy with this development. These are very exceptional figures, especially if we look at our markets and also the development of our peers. And please keep in mind, the environment is still pretty challenging. Adesso is generating 84% of its revenues in Germany, so we are highly dependent from this market. And actually, so far this year, there has not much change in 2023, 2024, we have seen negative development of our gross domestic product and this year there's a slight increase, zero point something, so not a big change. Actually what has changed a little bit is the view on the future of Germany. I mean, if you look back a little bit, three months, six months, we all were kind of optimistic because of our new federal government, all the announcements, what should be changed, the additional budgets for the armed forces and the infrastructure. So far we don't see any impact from that or not a significant impact from that. And if we look this week into the newspapers and read about all the parts which are already misused from this budget, I think the optimism has lifted a gun or is at least reducing day by day. So I would say the outlook at least for Germany is a little bit more pessimistic than what we have seen a few months ago. On the other hand, I mean, we have coped with this situation so far and we will do this in the future again. If we look at the development of our headcount on the 30th of September, ADETSO employed 11,111 full-time equivalents, which is a growth of 896 employees. 44% of this growth was generated with our foreign subsidiaries, especially in those countries where we build our shoring activities. If we look at the headcount, the average growth since the beginning of the year, this growth rate is 7% compared to last year. Actually, if we look at the beginning of this year, this growth rate was 6%, so we have a little bit accelerated our hiring efforts. We are still cautiously acting, so we still have always a view on our billable utilization, but we think it's the right step at the moment to increase a little bit our efforts. If we look at our sales, as always, we start with a view on our different industries, our nine different industries. And I think the most important message from this slide is ADESO is highly diversified and positioned in the right way. First of all, the most important, the biggest sector just contributes 90% of our revenues, which is public. We have our biggest 10 customers contribute slightly more than 20% of our revenues and the biggest customer this year so far 3.2%. So a very nice diversification. But also if we look at the sectors itself, insurance, banking, health, public, utilities, They are, let's say, dependent on our economic environment a little bit less probably than all the other sectors, especially the manufacturing and automotive. They are not directly impacted by all the discussions on other tariffs or what will be the percentage of the tariffs. So I think this is a very nice positioning at the moment. And if you look at the growth rate of these sectors, it underlines the statement. Endurance plus 20%, health plus 26%, utilities 24%. So very, very nice growth rates. If we look into this in a little bit more detail, insurance is driven by a nice order entry and still a very strong pipeline. Banking also nice progress, plus 8%. Health, 26%, driven by our normal bread and butter business, but also by one big project we won in Q2 with our car. Public, plus 7%. Actually, with public, you see a little bit our concerns. We started in Q1 with 11%. After six months, it was a growth rate of 9%, and now it's 7%. It's still growing, and let's say the delays, the push-outs from budgets after the German election, probably the situation has normalized. However, we don't see the impact from these additional budgets for infrastructure or armed forces so far. If we look at automotive, minus 7%, it's not nice, but not really surprising. This industry at the moment is really struggling, and this also has an impact on their IT spending. Yeah, and if we look at utilities, plus 24%, we have a very strong market position. with SAP in this sector, and this is the main contributor to this nice growth rate. If we look at the regions, Germany contributes 84% of our revenues. If we add Switzerland and Austria, we arrive at 95% for the German-speaking regions. Germany itself revenues by 14%, so this is a little bit more than what we have seen for the whole group, where we have seen this growth rate of 13%. Abroad, ADESA has grown with a growth rate of 8%, so on the first few, this growth rate is probably not really sufficient. On the other hand, if we dig a little bit more in detail into this, Switzerland contributes around about 50% of our revenues abroad. And if you look at Switzerland, revenues decrease by 5% in this region. Actually, the situation already has improved. After six months, it was minus 7%, and we expect further improvements in Q4 as utilization has already improved. But if you exclude Switzerland from this view, then we arrive at a growth rate for all the other foreign countries of 26%. Revenue has grown there from 68 million to 86 million, and this is a nice growth rate. And actually, that's what you also can see on this slide, Austria plus 29%, Netherlands plus 16%, Italy, a company, a country where we have support growth with an acquisition some years ago, 26%, and also Turkey contributing Yeah, let's have a look at our EBITDA. After nine months, the EBITDA is 77.9 million compared to 66.5 million, which is an increase of 17%. If we dig a little bit more in detail into this, million in the first quarter, second quarter 19.3 million, and now in the third quarter 40.8 million, which is an increase of 1.9 million compared to Q3 last year. Actually, Q3 last year was a pretty strong quarter. Q3 is always our strongest quarter, but last year it was exceptionally strong. And therefore, the improvement is maybe a little bit smaller as we have wished for. However, it's still a nice development. What are the key drivers for our improved EVTA? First of all, the capacity utilization. We started with a very strong improvement in Q1, a nice improvement also in Q2. Q3 was a little bit more flat. Only a small improvement, not really worth the mention, but that's because utilization in Q3 last year was pretty strong as well. We have seen a slight recovery so far this year with our IT solutions business, also supported by some license sales for our Injure product line in Q2. last year benefited from a release of an accrual for warranties, a release in Q1 last year as a result of the tax audit. And we also have seen some higher material costs. This is actually caused by our role as a general contractor and some of our projects, as projects are growing quite often from the size perspective, we quite often have partners with that. And if we take the role as a general contractor, then our revenues goes via our P&L, but also the material cost related to that. Let's have a look at our EBITDA margin. EBITDA margin improved to 7.2% compared to 6.9% last year and 6.4% in 2023. It's an improvement. It's still a significant way to go until we arrive at our goal, which is between 11 and 13%. We are happy about this improvement, but actually we are really working on that, that we will see further improvements in the future. If we look at some other key figures, we already had a look at our employees, 10,699 in average for the first nine months this year, sales close to 1.1 billion. Gross profit grew by 10%, so a little bit less than sales, which is caused by the increase in material costs. Personal costs increased by 11%, so a little bit less than sales. Other operating expenses, an increase of only 3%. More or less all expense lines have slightly increased, especially expenses for hiring and travel. We have seen an opposite development with expenses for external consultancy and legal fees. If we look at the key profit drivers, utilization, as I already pointed out, utilization has improved this year, especially in the first half of the year. Q3 was, let's say, flat and only a little bit improved. Daily rates, as you might remember, we have started last year in Q4. internal projects to improve our daily rate and actually there have been some nice improvements in Q1 and Q2. Q3 was a little bit more slack, also caused by the market environment at the moment. We noticed that competition is really increasing and so this makes it difficult to increase our daily rates. License and maintenance. We have seen an improvement here as well, especially license sales in Q2 contributed to that. We are still optimistic that we will see some further license sales in Q4. However, at the end of the day, customer needs to sign the purchase order, so we are still negotiating and waiting for that. Personal cost increase of 3%. There are some key contributors to that. First of all, we have an increase in our salaries. Second, we have hired more senior people or the percentage of senior people has increased within our hiring efforts and therefore this has also an increasing impact on our personal On the other hand, we have increased our hiring efforts in our choring countries. Our colleagues there have lower average salary, which has almost a little bit of the increase, so it's a mix of different items. At the end of the day, it's a 3% increase. If we look at our earnings per share, 99 euro cents after three quarters, which is a nice improvement compared to last year, where we have seen 16 euro cents at that time of the year. Especially Q2 contributed to that, but also Q3 had a positive impact of 20 euro cents in addition to what we have seen last year. If we look at the depreciation, depreciation increased, this is mainly for drive and use items, which is based on IRFL 16 and which is our office leases and company costs. The depreciation from purchase price allocation is slightly decreasing. Income from investments at equity is also a little bit more negative here. Financial result, interest, a little bit less interest to pay due to lower interest rates, so it's minus 8 million. Earnings before taxes might increase from 7.3 to 12.9 million. Because we have a higher pre-tax income, we have higher income taxes. However, the tax quota has improved from 67% to 52%. It's still comparatively high, but there are always certain items which are not tax deductible, and at some group companies which generate losses, we don't put tax assets on our balance sheet. Let's have a look at our working capital, at our balance sheet and especially our working capital. Cash improved slightly compared to last year. Financial debt and net debt, we see an increase of close to 40 million. There are three main drivers for that. First of all, we have increased our shareholdings in PV, subsidiary PV from 70 to 100% in Q1 and same with Adesso Business Consulting from 71 to 100%. This was a cash out of 27 million. We did a share buyback last year in Q4 and also Q1 this year, which was another $10 million. And then we have seen an earn-out payment in June and July this year, another $3.4 million. So in total, around about $40 million, which has increased our financial debt and therefore also our net debt. If we look at our operating cash flow, it's $30 million worse compared to last year. This is caused by our net increase in net working capital by 15%. Revenue grew by 13%, net working capital by 15%. So we are not overly happy with this figure. I would have hoped to see a lower growth rate. at this point in time in the year, but we expect significant improvement as always in Q4 this year and actually in October the development already shows that we are on the right track for that. If we look at our equity, equity decreased by around about 10 million. Therefore, our equity ratio reduced to 22.8%. There are two reasons for that. First of all, the share buyback last year. This 10 million is directly deducted from the equity, and as our revenues are growing, working capital has increased, so the total amount of our balance sheet has increased, and therefore the ratio was also negatively impacted. Operating cash flow, after this line, below this line we have capex and also lease repayments. These repayments are related to IFS 16 and based on the recommendation of the IFRS Foundation, these lease repayments related to company cards and office leases are also shown as capex and therefore We have a free cash flow of minus 69 million compared to minus 30 million last year. Actually, this mainly reflects the increase in working capital. Yeah, let's have a look at our guidance. I mean, at the beginning of the year, our guidance was based on the assumption that IT services will be still an ongoing demand in a recessionary environment. And yes, this still applies. It's still right. And the environment is tough, but different to the past, where quite often IT services was the first thing which was cut. This time it's different. There's still a demand for IT services despite the fact that competition at the moment is increasing. If we look at our guidance, we assume that we will improve our margins, especially driven by a higher utilization. That's right, we have improved our utilization and it's still on the right track, even if the improvement in Q3 was lower than what we have seen in the first half of the year. For the second half of the year, we will see an additional contribution compared to the first half of the year. Actually, that's what we already see in the results of the third quarter. Highest revenues this year so far and also in terms of earnings, EVTA. And only the last one probably is a little bit different than what we expected. Initially, we thought we would see a positive impact by an increased IT spending in the public sector starting in Q3. So far, this didn't happen, but despite that, we were so far able to achieve our goals. If we now look at our guidance a little bit more in detail, we guided for revenue growth to 1.35 to 1.45 billion, which is an increase between 4 and 12 percent. So far we are really good on track. Our achievement of this guidance is between 75 and 80% and we are pretty optimistic that we will end at the upper end of this corridor. If we look at the EBITDA, 77.9 million after nine months. We want to get to our range of 105 to 125 million. So far we achieved 62 to 74 percent. Also, this is on track. Therefore, we confirm, yes, we will achieve our guidance. And EBITDA margin 7.2%. Last year for the whole year it was 7.6%. It's our goal to get at 8% plus X and also this should be still realistic. So at the end of the day we can confirm our guidance and Q4 will probably bring the necessary sales and EVTA together.

Thank you very much.

Thank you, Michael, for the helpful insights. We're now heading for the Q&A session, and I see there are already questions from Mr. Spang from Chico's Capital. Please go ahead.

Yes. Hi. Good morning, gentlemen. I would like to start with a margin improvement or margin decline in Q3 quarter over quarter. You already mentioned that Q3 2024 was a very strong quarter. But maybe you can please go a little bit more deeper into the quarter-over-quarter development. Why were you not able to improve the margin in Q3 2025 versus last year? So what were the main factors?

If we look at Q3, we have grown revenues by 13%, which is a strong growth rate. And if we look at EBITDA, EBITDA just grew from 38.9 million to 48.8 million, so obviously less than this 13%. What is the key factor? The billable utilization did not improve in the same way. If we look a little bit more in detail into this quarter, in July actually figures looked very nice. They were pretty well on track to get further improvements there. August was a very challenging month. some more vocation than assumed, and September was better, but also there we have seen some more vocation than compared to last year. So there is not a specific reason. Last year we have not seen license sales in Q3, same Q3 this year. It's really that the utilization should have been slightly higher or let's say less vacation for the overall hours.

But you would say that this is a temporary or a quarter specific topic, not a fundamental topic?

Not so far. I would say it's a special topic for Q3. Okay. I mean, the competition at the moment is tough. And what we notice, for example, there are a lot of peers which, let's say, in the past had a stronger focus, for example, on automotive. who are now people which are not utilized or not fully utilized. So they look for alternatives. They try to get into the market, the public sector, for example. So it's a tough competition at the moment. So it's, for example, really difficult to increase our average daily rate. But, I mean, that's something. which happened also the first half of the year maybe it's at the moment a little bit stronger but it's not a general problem at the moment so it's not let's say a kind of a change under the overall trend okay

Thanks for that. Then if I look into the IT solutions segment in Q3, you did not really mention it in your presentation, but after the first half, you still had a growth in IT solutions, and after nine months, the revenue did decline. So Q3 standalone was a very bad quarter over year. What was behind that negative development in Q3 in the IT solution segment?

It's the same what applies also to the IT consulting, IT services business. The utilization was there slightly lower. This part of our P&L is a little bit more project driven. This also has kind of an impact. And we have, let's say, one subsidiary, which also at the moment is a little bit struggling. It's not only this year the injured business product line, because for this part of the company we have seen some improvements. There's another company at the moment which has some problems where we also had to change our management in Q2, and this also had a negative impact on our business. development in this sector. Actually, what's key is that we get some lighting sales, which would also help to improve our margins there again. At the moment, the situation for our IT solutions, or especially the Injura product line, is in a way that we have ongoing revenues from projects, but to get to a more profitable level, all slides and sales are needed, at least at the moment.

Yeah, okay. And forwarding into the topic of insurance, Insure, what is the pipeline currently going into or already into Q4? Is it bigger than one year ago? How big would you say that the opportunity is that you can close some, or I don't know how many deals there are in the pipeline, but that you can close 10 deals?

The pipeline with our indoor product line is much more difficult to predict than the pipeline for other areas of the companies. It's just because it's not a pipeline of, let's say, 10, 20 or 30 license deals. It's less, let's say, less license deals which could be closed in two quarters here. So there are two more significant ones and we are still in negotiations there. We are kind of optimistic that we can close at least one of these deals. But it's not in a way that the pipeline looks in a way that if you don't close these two, then there are two other ones you can close, because the pipeline is much shorter than what we see in other areas.

Okay, thank you.

Okay, thank you, Mr. Spang. Next in line is Dr. Jakubowski from SMC Research and afterwards Mark Granaton from Babel Research.

Mr. Jakubowski. Yeah, hello. Thank you. Thank you for taking my questions. Can you hear me? Yes. Great. I have one follow-up question regarding the EBITDA margin. Is it fair to assume that you can achieve the same margin in Q4 as last year or even to improve it, taking into account what you have talked about the development in your daily rates and employer costs?

To be honest, I have not calculated the percentage margin for Q4 itself, but I can tell you is that I did my math on the overall development for the year, and at the moment, We still see a good chance to improve our margins to a level 8 plus X percent for the whole year. That's what we wanted to achieve. And despite, let's say, reduced margin in Q3, we think this is pretty realistic.

So we don't have to be afraid at the moment that the development in Q3 was a reversal in the margin trend.

I mean Q3 last year was a pretty strong quarter. So it was, if you grow revenues by 30%, it was really a challenge to exceed that. And Q4 is also, last year was not that bad, especially if we look a little bit more detail this October and November were pretty strong month. We expect to grow revenues again significantly. The question is how much EBTA will we see at the end of the year. But again, we are sure that we will be better than 8%.

Okay, and maybe you could give us some details on the profit contribution from your foreign markets outside of Austria and Switzerland.

I mean, Switzerland, despite the fact that revenues were a little bit shrinking, is still the main contributor from our foreign subsidiaries. This year, Austria is doing particularly well, very nice growth and also very nice growth of EBTA. Actually, the same applies to Italy. Italy, we are very happy with this company, very nice development. If we look at other countries like the Netherlands, Spain, also the Scandinavian regions, these countries are still loss-making. However, they are showing nice improvements this year, so they are all on a turnaround path. Other countries like Bulgaria, Romania, India and also partially Turkey, I think you need to have a different view as these companies are strongly linked, especially to Germany as they are doing shoring. So they are not focusing on the local markets. They are, let's say, more dependent on winds of project in Germany or Switzerland.

Okay, but all the profit burden from your expansion, international expansion in European countries is declining, yes? That's your point.

Yeah, I mean, first of all, the total of all of them is contributing a positive EBITDA, so it's not that we are producing losses abroad. What's true is that we have certain subsidiaries in certain countries, for example, Netherlands, Spain, the Scandinavian region, where we are at the moment generating losses. But all of them are on a good way of turnaround.

okay thank you and then finally i have one uh detail question um there's an item in your income statement uh which almost tripled compared to uh to last year and there was also a steady increase over the course of a year it's the result from the change in impairment on financial assets maybe you could give some details on this item yeah um

You mean the 1,371,000? Yes. That's actually related to our, mainly related to our receivables. If you have an increase of receivables, then we have this lump sum allowance during the year. Actually, this figure should change again if receivables are reduced at the end of the year, so there is no special impact. It's mainly caused by what we call a Germany Einzelpauschalwertberichtigung.

Okay, okay. Thank you very much.

Thank you, Mr. Grabowski. Now we have Mr. Ton from Warburg Research and after that Mr. Specht from Berenberg Research. And just a small reminder for the people listening on their phones, you can unmute your microphone via the star key followed by the number 6 of your phone. Okay, Mr. Ton.

Yes, thank you for taking my questions as well. The first one would be on the sales development in Q4, and you already said that you are targeting the upper end of your full year guidance range. Nevertheless, that would mean, let's say, at least a certain amount of slower growth in the fourth quarter. Is it just a cautious assumption, or are there any, let's say, technical effects which would lead to Q4 growth being slower than in the previous quarter from working day effects or holidays, which may play a role here? That would be the first question.

Amen. Q4, normally Q4 is in terms of revenue generation and EBTA contribution, always shows less than what you see in Q3. Because if you look at the calendar this year, the 19th of December is Friday and after this Most companies are more or less going into a kind of sleep mode until the third week of January. That causes always some headache in December. As we are mainly an IT services company, not really generating license revenues, so in the past something like this could have helped, but that's not something at Adesso which is, let's say, important. We believe that we will get at the upper end of this revenue guidance, which would be 1.45 billion in revenues. And at the moment, it's fair to assume that our EBTA in Q4 might be a little bit less than what we have seen in Q3. Could be changed if we have significant license sales. This would have an impact if we have some more license sales in the Indra product line. But, I mean, Q3 is our strongest quarter, and therefore, let's say, it's a little bit more gorgeous what we see in Q4 than what we have seen in Q3.

And secondly, also with regard to the sales dynamics, you mentioned, I think, that you have seen the public sector with the delays there, let's say with the growth rate coming down in the course of the year. When would you expect the trend to reverse and, let's say, growth rates accelerating again for that customer group? And secondly, do you see any signs of stabilization in the demand from the auto industry, or do you expect that to remain weak for the time being?

I think it's fair to assume that the overall situation for the public sector will slightly improve. On the other hand, competition in this area is increasing, but I think the overall perspective is probably more positive than before. in the past or in this year. Automotive, yeah, it is very difficult. I mean, we still win some projects, but it's really a challenging environment. It's difficult to say when there will be a change. The pipeline is, let's say, doesn't look like a significant change in the near future.

And in the past, lastly, more strategically, and probably it's a mix of all the elements, but when you look at the target, let's say, around 8% or 8% plus X EBTA margin for this year and your strategic goal of more than 11%, which would you, let's say, expect that the first initial policy positive driver to be in this direction? Would it be more of a utilization? Is it pricing? Is it reduction on the personal cost side? Would you use a smart share, a smart short share increasing? What would be, let's say, the parts which you would see, let's say, has been contributing the most and probably the earliest in this process?

And actually, there is not just one contributor, it's probably a mix of all. I mean, key driver is always the billable utilization. There is still some way for improvement, at least if we look at the situation in 2022 or earlier years. So if we want to get there, we need to improve our utilization. We need to continue with our turnaround for the IT solutions business, especially for our insurance product line, intro product. That's also key. I mean, it's still loss making. It was already highlighted in this call that the situation improved a little bit, but not that much. So there's still some way to go, but this has also a significant impact if we are successful with our turnaround. Improving daily rates, working continuously in our daily rates is a key ingredient for that. And, yes, we also have already spoken about that today. We need to make further progress with those companies where we are lost making abroad. This will also help. And something which is also important, we need to look at one or the other cost item on our P&L. It's probably not one of the, let's say, key strengths of Adesso. We are more growth-focused. On the other hand, there's also probably one or the other item where we can achieve some improvements. So it's a mix of all. Perfect. Thank you very much.

Thank you, Mr. Thorn. And now Mr. Specht from Burenberg.

Yes, good morning. Three additional ones from my end. First, again, on utilization, the key topic. It is obvious that you have some people sitting on the bench while they're still in need of a lot of freelancers from outside the organization. So, what type of qualifications are missing for dedicated projects that you cannot serve with your current workforce that would be interesting and have you a dedicated program to fill that gap and then on the public sector you gave some cautious statements there everybody's hoping for for the big budgets to come next year, but do you already see, let's say, in the last week, some more RFPs circling in the sector, or is it still wishful thinking of the industry as a whole? The final question would be to the networking capital position that is up strongly. Can we expect some improvements in the final quarter of the year?

Okay, let's start with the easiest one. It's the third one. Yes, we will send improvement. Actually, this is part of our working capital. It's part of our, let's say, normal development within calendar year. We start with cash outs in Q1, Q2, and also Q3, and then Q4, everything turns around. So yes, working capital will improve. We will probably see similar improvements what we have seen last year in Q4 compared to Q3. If we look at the public sector, I mean, my statement today was, let's say, I wanted to make sure that we are a little bit less optimistic than what we were in the past. Three or six months ago we expected a certain impact because of an additional spending from our government. also caused by these additional two budgets. We still believe that this will have an impact, but it seems today, I would say it seems that this impact will be a little bit lower than what we initially expected. So far, we don't see a lot of requests for proposal or tenders on the market. There are some tenders out there. Also, some of them are important for us in Q4 and Q1. But so far, let's say, I would probably say it's more or less a normal course of business, not a dramatic change. The last one was regarding the... Utilization.

Utilization.

Are there certain qualifications missing in your... First of all, I mean you're right, there are sitting people on the bench, but that's a normal part of our business because we have different sectors, we have specialists for banking and if there for example is If there are less banking projects, then you cannot always use this skill for, let's say, automotive, because we are organized in verticals to be closer to the customer and customer needs. And therefore, you cannot just switch people around. Then you have, sometimes, if you have someone who's specialized in Java, It doesn't help if you have a lot of demand for SAP. So it's always that you have people sitting on the bench. I think the key thing is that you look at this bench, that you manage your bench, that if you hire new people, that you hire them in the right area. External resources, freelancers or whatever, quite often have a special skill. That's why you hire these people. I mean, freelancers quite often are freelancers because and those things they are doing and that's why they are freelancers and don't want to get on a payroll from a company. And please keep in mind, that's what I also mentioned today, ADESO is growing and the projects we are working on are getting bigger and bigger. And so we build consortiums, sometimes we are the general contractor, and so all the other participants of this consortium invoice us and we invoice the customer. So therefore material costs go up, but these are, let's say, costs which you cannot replace by using your own people. So that's also... It's right that utilization should be higher, but we are not talking about, let's say, three, four, five percentage points. This corridor is much smaller and already one percentage point or half of a percentage point has a tremendous impact on our DBTA.

So the improvement utilization would be rather below a full percentage point this year as a whole.

No, at the moment it's higher because we have started pretty strong in the first half of the year and last year it was Q1 and Q2 were much weaker. Please keep in mind, I mean, if you have 10,000 people and 1% is just 100 people, so we are talking, let's say, about 100 colleagues to improve your billable utilization by one percentage point. We are not talking about hundreds of people who make the difference. We are talking about maybe 100, maybe 150, 200 people. It's not more.

Okay.

Okay, thank you. Are all questions answered? Or do we have more questions?

Thank you, Mr. Specht. Do we have more questions from the audience at this point in time? Mr. Schlange again?

Yes, thank you. Just one follow-up on the working days. You mentioned that the last let's say real working day before christmas is the 19th and in general q4 this year has one working day um more than last year q4 so is my interpretation out of your um explanation about q4 right that you don't really um expect an positive impact in q4 this year um despite a higher one day more working day?

That's a really good question. Actually, this additional working day probably is in the Christmas week, so the impact is probably less than then it would, if it's just a normal working day. If you look at last year's calendar, I think it was 15 days in the three weeks before Christmas, And then in the Christmas week and the week after this, it's one day less. And this year, it's, I think, the most important days for invoicing are the 22nd and the 23rd of December. And I don't think the impact is that much. Okay, thank you. Well, let's say there is an impact, but less than what you normally would expect.

Okay, do we have more questions?

No, this doesn't seem to be the case. So I'd like to thank you very much for your interest in our call today and your participation. I wish you all the best and hope to see you soon in person, maybe on the Equity Forum. For now, goodbye.