adesso SE

First of all, I'd like to thank you for joining our Q4 and full year earnings call regarding our annual report we have published today. Within our release this morning, you found ADESA confirming the preliminary full year 2025 figures published in February. ADESA showed another year of extraordinary growth. Sales reached 1.47 billion euros and was up by 14% purely organic. EBITDA of Euro 123.6 million rose by 30% and reached the upper end of the guided range, so targets were fully met. Outlook for 2026 sees further growth in sales and earnings for the company, although macroeconomic situation remains challenging. I'd now like to welcome as well our CFO, Michael Knopp, who will give us a deeper insight into last year's figures, the dividend proposal, and the guidance for 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 6 of their phone. Followed by the number 6 of their phone. Thank you so far. And Michael, please go ahead. Good morning, everybody.

I will guide you now through our annual financials for 2025. And before I start, I need to highlight that we have restated our figures for 2024. I will explain this later to you. As always, we start with our sales. Sales last year came in with 1,466,000,000. That's an increase of 40% compared with our previous year, 1,286,000,000. We are very, very satisfied with these figures. I mean, this is a very strong growth, purely organic. within a tough market environment. And if we a little bit look back at the beginning of the year, at our expectations, 2023, 2024, Germany was in a recession, and Germany is our most important market. We generate 84% of our revenues in Germany, and therefore the economic situation in Germany is pretty important to us. We expected for 2025 a little improvement. Again, slight growth of our gross domestic product. We knew that the German election, which might have an impact on our revenues in the public services sector, because there's always a slowdown before the election and also after the election and through the new government, a new coalition is formed. At the beginning of Q2, we became a little bit more optimistic. because we hoped to get a little bit of a tailwind from the additional budgets which were approved at that time regarding the infrastructure and armed forces. However, during Q3 and Q4, it turned out that There are no impacts visible so far. And therefore, it was just what we initially expected. Tough market environment, but in general, a market which will support our business and the IT services. Let's have a look at our headcount. The average figure of FTE grew by 8%. That's a little bit less what you might have seen in previous years, but that's also what we targeted for, to be a little bit more cautious in adding headcount. At the end of 2025, on the 31st of December, We employed 11,298 headcounts. This is an increase of 978 compared to 10,320 at the end of 2024. If we look at this growth, around about 60% of the new headcount was added in Germany, around about 40% abroad. And from these 390 employees, around about 300 were added in those countries where we do shoring, in Romania, Bulgaria, and especially in India. In India, we increased our headcount from around about 100 at the beginning of the year to 300 employees at the end of 2025. important goal for us to grow our activities in India, and we were pretty successful in doing that. Let's have a look at the sales split. And this slide, I think, shows you that we have a very diversified business, which is especially in these days very important. because it shows that Adesso in terms of revenue has a very resilient business. If we look at our different sectors, none of our sectors contributed more than 20%. If we look at our top 10 customers, they contributed 22% of our revenues and our, in terms of revenue, most important customer contributed 3.2%. So we are not dependent on a single sector, on a single customer. This is a very nice status. And actually, if you look at the different sectors, it explains a little bit why we were able to grow our revenues by 40%. because we are very strong in insurance, banking, health, public, and also utilities. I mean, yes, all these sectors also are dependent on the development of our economy, but they are probably a little bit less impacted by all these tariff hiccups, by volatile energy prices, and therefore it's a good positioning Insurance was pretty strong last year in sales, but also in order entry. We have seen very strong order entry, especially in Q4. Banking, a nice development as well, plus 9%. Health, again, plus 30%, driven by our bread and butter business, but also by one big project win in Q2. in the statutory health sector, where we won with one of these companies the building of a customer portal public. I was complaining a few minutes ago about the missing tailwind from the government. However, despite that, we were able to grow it by 11%. We hoped to grow more, but I think 11% is a very strong figure. Automotive, minus 4%, tough market environment, and only a decrease by 4%. That's OK cards as well. Manufacturing, nice growth of 8%. And if we look at utilities, 24%. This was, again, driven by our strong foothold in this business in the SAP area there. um let's have a look at the sales split by regions um our overall growth last year 14 in germany we even grow 15 and it shows again germany is our main market we are very strong there actually last year we became the number one um it service provider with a purely german origin um there are three other companies accenture capgemini ibm who have IRM use in Germany, but they are not German origin, but we are the biggest German company now in this area. And if we look at our sales development abroad, It's plus 7%. On the first view, this is disappointing. But if you dig a little bit more in detail into this, you will notice that Switzerland has shown a decrease of 3%. Switzerland contributes a little bit more than 50% to our revenues abroad of roughly 240 million. If you exclude Switzerland, growth rate abroad was 21%, which is fine for us. We have seen strong growth and also very profitable business in Austria. Same in Italy. Netherlands also a nice growth rate. And coming back to Switzerland, we started with minus 7% at the beginning of the year. We recovered to minus 3% for the whole year. So it's already a nice turnaround during the year. We have seen strong order entry in Switzerland in Q4, but also now in Q1. So we will return to the growth path this year. And also important to mention, to avoid any misunderstanding, Switzerland is highly profitable. Let's have a look at our EBITDA operating earnings. EBITDA came in with 123.6 million, with an increase of 30% compared to 94.8 million. And if we look at the main contributors, number one contributor is the capacity utilization. As hoped and expected, it was improved, especially in the first four to five months. It was significantly higher than what we have seen in 2024. For the remainder of the year, it was slightly better. Overall, we are satisfied with this development. We have improved our capacity utilization. As expected, we have seen a recovery in our IT solutions business with the main contributor, our insurance business with the AFIDA and ADESO insurance solutions. This was supported by a nice license base in Q2 and Q4, where we achieved a high single-digit million number in terms of revenue. That's what we, let's say, forecasted, what might be possible, and finally we got it. I was waiting until the middle of December to get it in, but we got the orders. So we are very happy with that. If you compare 2024-2025, it's important to mention that in Q1 2024, we got 2.6 million earnings from the reversal of warranty accrual as a result of a tax audit. And we have also a disproportional increase of material costs. We will look at this in a few seconds when we look at the development of our gross profit. So some other KPIs. Let's start with the EBITDA margin. We targeted for an improvement there, 8% plus something. Finally, we arrived at 8.4%, which is what we wanted to achieve last year. It's a nice improvement compared to 2024 and 2023. But, and that's also important to highlight, it's not where we want to be. We are targeting and having a BTA margin in a range between 11 and 13%. So we have done some steps, but some important steps have to be done in the future. 11 to 13 is possible. We have shown it in the past and we work hard to get back to this level. If we look at EBIT, EBIT margin last year was 3.4% compared to 2.1% in 2024. Yeah, key figures. We already have talked about the employee growth and our sales. Let's have a look at gross profit. gross profit came in with a plus 12 percent compared to plus 14 in sales. That's because material costs have increased. There are several reasons for that. One reason is we have one more bigger project where you work with third party suppliers. We are quite often within a consortium where we are the general contractor. Therefore, the cost goes through our books and we also have other third party supplies, for example, cloud consumption or licenses, which also increase our material cost. If we look at our personal costs plus 11%, driven first of all by employee growth. In average, employees were 8% higher than compared to 2024. We have also the impact of salary growth from increasing salaries in line with inflation, and then a little bit of change of mix of our headcount. We hired, especially in Germany, let's say a little bit more senior people. On the other hand, we have also added people abroad and these countries where we do shoring. So we have a little bit changed the mix also of our salary composition. Other operating expenses plus 8%, nothing special in there. Most of these lines have increased slightly. So let's have a look at the key profit drivers. Utilization, we have already spoken about that. Daily rates. Daily rates are also important for us. We have started an initiative at the end of 2024, beginning of 2025 to work on our daily rates. We have seen some nice improvements in the first half of the year. In the second half of the year, the development was more flat. The economic environment is tough, so it was difficult to convince customers to agree to higher daily rates. Sometimes we were successful with that, but also sometimes customers negotiated a little bit lower prices. So at the end of the day, daily rates are slightly higher than in 2024. License sales, I already mentioned the nice license sales with Addison & Jules solutions. In total, 13.5 million compared to 3 million in 2024, so a very nice improvement. Maintenance revenue also increased. And what's also important, the level of software as a service revenue is increasing from around about 1 million in 2024 to 3.9 million in 2025. Yeah, and personal costs, I explained this already, FTE increasing slightly. Now we will come to our restatement. Preparing our annual closing, we noticed that we needed to reclassify two fixed-price projects, because actually what we are doing there is building a software-as-a-service platform for our customers, which means we will run certain things for them on this platform, but we are the owner of the platform, not the customers. And therefore, we needed to reclassify that. If you have a fixed price project under IKS, you have a percentage of completion method, you have some progress in the project, then you show additional revenues and hopefully additional margins. But as we now have identified, these are not express projects. Instead, we are building intangible assets. We have to account the development costs and development costs. The accounting is without any margin. So what's the impact on that? The impact is that in 2024, revenues had to be decreased by 11 million, and as the margin disappeared, EBITDA was reduced by 3.6 million. Under German law, German accounting standards, intangible assets built by yourself cannot be put on the balance sheet, therefore it's an expense. And this increases, let's say, the loss. So you have more net operating, not net losses carried forward. And if you cannot put them on your balance sheet as a default tax asset, then the tax expenses increase. And so the consolidated earnings had a hit of 6.1 million in 2024. What are the impacts on our balance sheet? An increase of intangible assets, a decrease of our equity. And if we look at cash flow, cash flow does not have any impact. It's just a reclassification. Operating cash flow, there's an increase of seven and a half million. Investing cash flow, as we now invest in intangible assets, there's an increase there, cash out of seven and a half million. Everything is explained on page 82 in our annual report. There is also some impact in the years of 2022 and 2023, but this is everything included already in the figures starting on the 1st of January 2024. Now let's have a look at our earnings per share. Earnings per share came in with €3.83, which is a nice improvement to the previous years. If we look at some other items on our P&L, depreciation increased slightly. This is mainly driven by the right of use assets under IFRS lease contracts for our offices and as well as company cars. are put on the balance sheets as an asset, and therefore you have depreciation from that that's included in there. So if you look at the 65.9 million, 42.2 million are from these right-of-use assets. 7.1 million is depreciation related to purchase price allocation from acquisitions we have done in the past. This figure will decrease over time until we do another M&A project. Income from investments, that's what we show at equity result, and financial result is the interest rates are a little bit lower, so therefore there was a positive impact on that. On the other hand, the loans we needed during negative impact, but overall there are little savings in the line interest. earnings before tax 36.4 million income taxes 18.9 million so tax rate is 52 percent compared with 69 percent in the previous year normally you would expect to see as a german company a rate of around about 33 percent in this line however our tax rate is a little bit higher as certain items are not tax deductible And, for example, based on local trade tax, certain interest payments are not tax deductible. And you also have a negative impact if you have net operating losses carried forward and you cannot put them as an asset on your balance sheet. So there are two reasons for that high tax rate. Let's look at our net working capital and some other items on our balance sheet. Networking capital increased by 28% to 199 million. This development actually is a little bit disappointing for us. We have targeted a different figure there. If your revenue is increased by 40%, the increase in this line should be 40%, at least 40% as well. We see an increase of 38%. So we needed a 20%. million more in financial debt than what you normally would expect. That explains a little bit the development in the line financial debt and net debt. Cash is almost the same. Goodwill is the same. And equity, I already explained this a little bit on the previous slide. Equity was a little bit reduced in 2024 due to the restatement. However, we recovered that. And we are now back again at a level slightly above 190 million equity. Equity ratio is 22.7%. If we look at two KPIs, return on net working capital, there you put the EBIT and the net working capital into a relation, it's 25.4% compared to 17.5% in the previous year. Return on equity, it's the income, the net income in relation to the equity, it's 9.1% compared to 2.3% in 2024. Cash development, here you can see the negative impact of our higher networking capital operating cash flow reduced to 85.6 million. Then we have a capex and also these repayment as pointed out under IFS 16. These payments for offices and company cars are treated as an asset, therefore it's shown under the interpretation according to the IFRS foundation in the cash flow statement in the line invest. And therefore, pre-cash flow is 1.5 million in the end. Dividend, in the last 13 years we have always increased our dividend slightly, so therefore the dividend proposal this year is 78 cents. This is in line with the improvement of our consolidated earnings, the development of our earnings per share. And if you look at the total amount, it's 5 million compared to 4.8 million last year. Now let's have a look at our guidance. The market demand in general for IT services, IT solutions will continue to be good. Despite the weak macroeconomic environment, we were expected to see a positive development of our gross domestic product in Germany. And this is important because that's our main market. However, there might be a negative impact due to the war in the Middle East. It's very difficult to predict what the impact will be. The only thing which I think is for sure, it will not be a positive one. We already see increasing energy prices. fertilizer prices, shortages of certain products like helium. So it's very difficult to say what the impact will be. At the time we have prepared our guidance, this was not a topic at all. However, it's still expected that the German gross domestic product will grow and therefore at the moment we think we can cope with that. I think what's very important is the market development in general. And there has been a tremendous shift in the last few months. Last year in Q4 at our last roadshow, We also talked about AI and I explained that there is an impact, but it's difficult to foresee. We now believe the situation has changed over the last few months. We believe there is a good chance for a nice push on our business. I'll just give you one example, agent-based application modernization. What does it mean? There are a lot of companies out there with old, big, monolith architectures, legacy systems, difficult to adapt to new needs. In the past, it was difficult to get these things changed and maybe rebuilt with a new architecture. But that's something which is now possible because AI provides now tools since the beginning of the year, which are that are sure that you can work with that within these big projects. And that was very, very well positioned within this environment. I mean, since our the inception of the company in the late 90s, developing these So these solutions, it's core of our business. We are very good at software engineering. We have all the skills which are needed. We have the domain knowledge. We built a lot of these systems in the past. And we have the domain knowledge. We know what the customer needs, what he needs for his business. And we have experience with the usage of AI because we are working with that since six years. So we have all the ingredients which are needed for customer projects. And these customer projects, you can analyze certain things today with AI. You can decide, do you want to retain this old platform or better for us, maybe you will re-host it. So you make maybe a shift to the cloud. You will re-architecture this, rebuild this. So there are so many options and this will be a huge market despite the general win in efficiency. We expect for 2025 stabilized utilization, so no further significant improvement there. We have still continued reduced hiring speed, which means bringing less people on board. We work on improved profitability and expect improved profitability and this is supported by two additional working days in the second half of this year in Germany. It's also worth to mention we had a slow start to the year this year. Competition is very tough at the moment. However, since March, everything is on track. And therefore, we are very happy with our guidance at the moment. We expect to grow our revenues to a range between 1.6 and 1.7 billion, which is an increase of 9% to 60%. And our EBITDA to a range of 130 to 150 million. EBIT margin, we expect only a little improvement there in 2026, but we are working on that. Okay, that's all for the moment.

Thank you, Michael. That was very helpful, I think. We are now heading for the Q&A session. And since we're participants on phones, I'd like to remind you, you can unmute your microphones via the star key followed by the number six of your phone. Okay. I see we have the first question from someone dialed in as a vessel.

Hello, it's probably me. Can you hear me?

Yeah, I think.

Yeah. Hello. Mr. Dessel. I'll start with three questions before going back into the queue. First, on working capital and cash collection, definitely not a bright spot in the 2025 filings. Michael, could you give us some idea what measures you put in place to improve that during 2026? That would be my first question. And then on IT solutions, we still got a negative contribution here. Could you expect that we see in positive EVTA in this segment in 2026 or is there still a lot of restructuring work to be done before the segment turns positive? And then probably on the order book or order intake, You only give a, let's say, qualitative statement here. Can you share some information? Is the order book up year on year reflecting your sales growth ambitions, or do you still need a lot of new projects to come in? And are there already tendering processes from the public sector that are visible for you?

Okay, let's start with the first question regarding networking capital. Actually, that's a development which started somewhere in Q3 and accelerated a little bit in Q4. That development was pretty unfavorable. We have seen an increase, a disproportionate increase in the lines accounts receivable and contract assets. I mean, at the end of the year, it's something which sometimes can happen. um however it turned out that this is um also a little bit structural problem because we have seen that certain customers pay a little bit later which does not mean that we have now a lot of overdue receivables that's definitely not the case but within this range a customer is normally pays we see a little shift pay some days later Currently, we are analyzing if this is just something which happens accidentally in December or if this is a new structure we will face also in the future. um but it's a little bit too easy to say but this actually caused we have calculated that an impact is 20 billion impact and which is really not nice yeah um if we look at it solutions we have made some progress um there we also had one company in 2025 which was a little bit of a burden but this company company reach bird which is our influencer business It was restructured, also has a new managing director now. It's gone a good way, so from there we will get no headwind. As pointed out in the past, this is a long way off, a turnaround for 2026. We don't expect to see a positive PTA contribution, but hopefully further improvement. This is also a little bit depending on license sales. We have seen a very nice impact in 2025 and therefore hopefully we will see some license sales in 2026 again. Regarding order intake, if we look at our order intake in 2025, It has shown the growth rate, which is needed to support the assumption that we grow our business also in the future. Actually, this was also part why we have guided in this way. However, you always need order intake starting Q2, Q3, Q4 to achieve your revenues because certain order intake from the last year was already revenue last year and some of the orders, for example, we got one very significant order in the insurance business. This is an order entry which will show up in revenues for the next few years. We need additional order entry, but so far everything is on track this year, and therefore we are at the moment happy with our timing.

Thanks a lot. Thank you. The next question comes from Mr. Ziering from Minchmeyer-Pettersen Capital Markets, respectively, Warburg Research.

Great. Thank you for taking my questions. I would have three at this stage. The first one is on daily rates. So maybe you could talk about your expectation for daily rate growth in 2026. Do you think that you can regain the 2% minimum target? And also on daily rates, we saw a 2% decline in fixed price daily rates. Is it rather a mix effect? So do you see more smart show hours in the project or is it really price pressure that you see here? So that would be on the fixed rates. And then the second one would be again on a free cash flow and on cash conversion. Maybe you could talk about your expected peak investment level for the SaaS platforms and also the capitalized development costs that we have seen. Maybe also here to quantify how much relates to the insurer versus other platforms. That would be very helpful. And then the last one is on the restatement. So thank you very much for the explanations. Maybe some more detail if you're able to provide it would be helpful. Can you quantify the P&L impact on the 2025 EBITDA? And also if on the 2026 EBITDA, if this is on a like-for-like basis or... If we have to expect any further reclassification, that would be helpful. Thank you.

Let's start with the daily rates. As actually expected, we have been able to increase our daily rates in January and February because that's quite often if you negotiate with the customer, The customer doesn't agree to increase the daily rate immediately. Quite often you agree that we can do that, but let's start on the 1st of January. So we have seen an increase in January. The question for the future is, are we able to see further increases despite the tough market environment and some price pressures? So far, everything is on track and we have budgeted for that. But at the moment, it's really, really difficult. to get higher daily rates because there's a lot of price pressure there. If you, for example, look at all the consulting companies in the automotive sector and they had a lot of consulting companies there providing services. They are now looking for different work in other sectors and this creates this pressure. Fixed price projects and general circulation is always a little bit complex. But you are right with the assumption that as we have around about 1,000 people in the shoring area in Turkey and Romania, also India, that this has, let's say, also an impact on the daily rates that are slightly reduced, which does not mean that our margins are reduced. It's just a different level. But it's necessary to be price competitive because all the big IT companies or competitors are able to, like Accenture, Supersteria, Capgemini, they have lots of people in India and so we need to compete with them. But it does not mean, lower daily rates does not necessarily mean, if you look at shoring, that you have lower margins. If you look at fixed price projects, the rates at fixed price projects are lower. There are different reasons for that. One can be that, for example, last year there was one significant contributor to that. We have one fixed price project and we knew already initially that we will accept here lower margins because it was strategic for us. That's important. So you have lower margins and lower daily rates can also be impacted if you have an overspend project. So there are different reasons. It's difficult to explain in detail and to say that's the only reason, because it's a mix of all. If we look at cash conversion, I mean, yes, we are working on that. improve this back to the level we have seen in 2024. The invest in platforms in terms of cash, that's something we have done in 2024, 2023 as well. It's just a different way how to show it in the cash flow statement, but it's still the cash also, there is nothing being changed in terms of the reclassification. If we look what have we invested in these platforms at all, it's currently 53 million and 39 million is related to those two platforms in the insurance sector. Actually, we have one platform which was reclassified. It was called a property and casualty insurance. all insurances which are not health and life insurance and we have also one platform for the insurance business a so-called runoff platform there's also press release from 2022 and on this platform which is still in the building status we have already 400 000 customer contracts And these platforms will in the future create software as a service revenues. And this will increase this year month by month because the more contracts you have on these platforms, the more revenues you will get. And yeah, we don't have, maybe something I need to mention there, at the moment there is no other platform, despite these three platforms described, and the report has also one platform in the automotive sector, which we have since quite a long time there. And we also don't expect any further restatement. I mean, if we would know about a restatement, we would already have done it.

Great. Thanks a lot. One quick follow up, if you allow. Can you quantify the P&L impact on EBITDA in 2025? So the development cost that previously was running through the P&L that is now capitalized. Do you have a number there?

Actually, it was in 2015. it's not in the way that you in previous in previous years you have seen it in the p l and now it's capitalized and if you have a fixed price project only it goes through the p l but it's not a whole difference it's just the margin so if you look at 2024 the impact because you are not allowed to show the margin anymore it was last in 2024 3.6 million the overall impact on margins And we have not measured this, what it would have been doing it in the same way than originally in 2024. But I suppose probably a similar impact.

Okay, great. Thank you. Very helpful.

Thank you for all these questions. And we have another one from Lukas Mann from Tegel's Capital. Mr. Spang.

Mr. Spangen? Can you hear us?

Maybe the question was already answered. Do we have further questions at this point in time? Ah, yes, we have one from Sebastian.

Hi, can you hear me? Yes. Yeah, hi, Sebastian from HC Capital. One question, you mentioned AI as a positive factor going forward due to new projects that can be conducted. But basically, the market sees AI more as a threat for IT service companies, at least from what we see from the share price reactions. due to the fact that software development costs goes down and everything, how do you see that midterm? And what could be negative in tech from AI? So is the cake getting smaller because the productivity goes up and when you're getting charged by time and material so they can do more at the same time and maybe you can give us more light on that?

Yeah, that's actually a pretty difficult question because you are totally right. I mean, I described the chances, what we see for this year. However, I'm sure there's also a threat because the way how we work will change productivity significantly because these tools I use might have an impact on the project structure because projects might be done in a faster way. Maybe also calculated and built in a different way because it's not purely time and material anymore. To be honest, that's very difficult to predict how it will be in the future. We spent a lot of thoughts actually on that. So we see big opportunities, big chances, because we will be able to do projects which were impossible to do, at least if you look to do them in a way that customer can pay for that within a reasonable budget. That's what I explained. But if we move too slowly and don't adapt to the changing environment, then it's also a risk. And by the way, also the way how we work internally changes, the way how we do proposals, how we prepare ourselves for customer presentations. My departments in finance, controlling, also HR, everything will change how we do things because we use AI tools, we will get more efficient. to say um i i believe that what we at the moment what what we read from from all the um about the risk for software and i.t solutions companies yes yes these risks are there but i also believe it's too much exaggerated um they are all because the chances are disregarded

I mean, it's clear they want to raise a lot of money, so they have to sell something. But you mentioned actually in the call that you're hiring more senior people. Is that the first effects of AI, that you don't need so many juniors to help the seniors to generate revenues and they get more support from AI solutions? Is that already the first? Yeah.

I mean, in theory, this probably might happen. That's something which is not only linked to the IT services business. You probably read some of our statements to law firms and so on. But I think that's something which is a very dangerous approach because we just look at certain work which more junior people have done and say AI can do it. then how we become these people more senior and can do the work in the future. So currently we have still our working students and yes, we are maybe a little bit more carefully, but we will not change that because that's our future without young people and working students hiring now. people are missing, which get the experience to run the AI tools in the future.

Thank you. Thank you. Thank you. And we have another try with Mr. Spang.

Mr. Spang? No, it's a

Seems to be a technical problem. So then suspect again.

Yes. One additional one from my end. If I read the outlook in your full report, there are some sentences on M&A ambitions, and it rather sounds there are limited ambitions to go for at least larger scale M&A. Is this a right interpretation? Yes. Do you currently prefer M&A? organic growth, or do you simply do not want to burden the organization with another, let's say, inclusion story or implementation work?

I mean, we are currently growing last year with a growth rate of 14%. This year, we expect to grow between 9% and 16%. This is a very high growth rate. And therefore we don't need that from the impact from M&A. And if you look at our EBITDA, EBITDA margin, EBIT margin, there's enough homework to do to also become more profitable, to cope with the challenges we've just spoken about that of AI. And therefore we believe it's well spent if we put all our management capacity, all our efforts into the existing business and grow this business organically. So no M&A on the agenda at the moment.

Thanks a lot.

Mr. Friedman? Mr. Friedman?

Do you hear me now? Yes. I am Mr. Knobel, Mr. Mermann. On this restatement topic also from my side, if I read through the balance sheet, I find that there have been 25 millions of additions to R&D assets, while there were only 2.5 million in amortization for that. Now, this can be a one-off. The question is, looking forward, is the run rate of 25 million additions for these platforms? Is that a good assumption or is it much less? And when is the amortization going to pick up?

Actually, it should decrease over time because the platforms are finalized. For example, the platform for the automotive industry, their development is flat if you look at the value in the balance sheet. We have this platform for the runoff platform for the insurance industry. There we have gone live with some contracts, having done, I think, three migrations so far. Others will follow. And therefore, this rate of adding something will reduce. So if you look at the amortization of these platforms, this will start when these platforms are, let's say, finished. So far they are in a status where they are still built. So also the amortization will increase in the future.

And are we going to see restatements in the quarterly results in 2026? So you restate the first?

Right. We will restate the 25 figures in terms of revenue and EBITDA. But this is more the way how it is calculated. shown within the quarters the total will not change because everything for 2005 is in line and actually these are very minor changes yeah that's understood thanks a lot so with another try with mr spanger i hope his technical problem is fixed it's a fun

or you can put your questions to the chat. I will read them out loud.

No, unfortunately, we can hear you. Do we have more questions? Well, this does not seem to be the case.

So Mr. Spang, can you give an update on federal spending?

Yeah, actually, I think the answer is we see more public tenders now in the first quarter this year. So the activity which we were already expecting in Q3 and Q4 is happening now. So more public tenders, more public spending. It seems to start. However, it's fair to assume that it's probably a little bit less than what we initially expected in Q2 last year. But the impact is now visible, yeah.

There is another question from Mr. Sprangen. You mentioned higher margin targets for the future, but margin is still muted for 2026, despite two more working days. What must happen to achieve the 11% to 13% midterms?

I also pointed out that we don't expect an improvement at the utilization. That's one of the reasons we need to improve. We need to see further progress in our capacity utilization. The turnaround, further steps of the turnaround in our solution sector is important. hopefully some higher daily rates. These are probably the three key ingredients and all of them, we see some improvements there, some of them, but especially daily rates and capacity utilization development is more or less flat and that's important that we are able to change that.

So it's not much time left, but IT Solutions, you mentioned that 2026 will be still negative. What can we expect when this business will achieve black numbers on EBITDA level?

Yeah, our initial target there that we started to turn around was to see in 2027 kind of a break even, and that's still the agenda.

Okay.

Thank you. Hopefully all your questions are answered. Thank you very much for your interest in our call today and your participation. I wish you all the best and I hope to see you soon in person again. For now, goodbye. Bye-bye.