Bechtle Ag Unsp/Adr

Ladies and gentlemen, a very warm welcome to the Bechtle AG's conference call. We would like to point out that you are in a listen-only mode, and the session is being recorded. After the presentation, you may ask questions. If you'd like to ask questions, please press the star key followed by zero for operator's assistance. If you need operators assistance, please press star key followed by zero. Now I'd like to turn the conference over to Dr. Thomas Olemotz. Yes, thank you very much and welcome to our press and analyst conference for the Bechtle AG second quarter and first half of 2026. I'm very delighted by your interest shown in our conference call. Certainly, you've all seen our ad hoc announcement of July 28th, in which we already announced the key figures for our operational performance in the second quarter and, in particular, an increase in our guidance. Today, we would like to take a closer look and analyze this very positive development in greater depth. Because I would like to say something upfront, the framework conditions have not improved. They remain challenging. Despite these challenging conditions Bechtle has performed very positively. We have a traditional proximity to our customers and a close partnership with all relevant technology vendors and this is paying off. Our business model is broadly diversified geographically and also across customer groups in our portfolio and this contributes to our success that we would like to talk about today. Let us have a look at our agenda. We have three main sections. We're going to start with an intense, more detailed look at our business performance and development and the key figures of the second quarter of the current fiscal year and also the first half of this year. And this will be presented to you by my colleague Christian Jehle. The second part is going to Thank you very much. Thank you, Dr. Olemotz. Well, Q2 saw double-digit year-on-year growth in almost all relevant key performance indicators.

This shows that Bechtel continues to manage the storage crisis very successfully. The customers still have a very high demand for consultancy and support discussions and the encouraging performance is broadly supported across all customer segments and also across all regions. And we've also been successful in terms of cost management and as a result, gross margin and EBT margin remain stable. Let's first take a look at the trend in our order intake and order backlog. Order intake Thank you very much. On the one hand, we have longer delivery times for certain hardware products, in particular service and storage. And the project startup sometimes takes longer due to the need for discussions regarding increased prices or the allocation of the available IT budget. Let's now look at our top line performance. Business volume rose by 18%. Organic growth was also very strong at 13% and part of the growth was driven by higher hardware prices and sales also performed well, driven by a higher proportion of hardware. Nevertheless, software has also recorded consistently high growth and organic sales increased by 10%. So overall, a very strong performance from Bechtle at top line. Let's now look at the performance over the course of the year. If you look at the two quarters, we can see that momentum picked up in the second quarter, but price effects are also playing a role here. June in particular was very strong. Discussions with customers to initiate projects are currently rather long drawn out compared to the past, though some were successfully concluded in June. For the first half of the year, business volume stands at 15%. Thank you very much. So, we have a very sound and broad basis. It's not driven by individual segments. France continues to perform well, albeit at a lower level. And other Europe, we see a key growth driver at 51%. This includes growth from M&A in Spain, Italy and Portugal. But we also see strong organic growth at 22%. The good news here is, as I've said before, growth is broadly supported by all customer segments and all regions, which is a clear indication of a sustainable trend. And I'm sure you followed the press releases, and if you look at the growth of our competitors, the smaller and the bigger ones, and if you focus on Germany, well, we can safely say that we have gained market share above all in the first quarter. This brings us to the earnings performance. If you look at the earnings, we can see that gross margin remains at a high level. So we are still able to manage the current difficult situation effectively. And Dr. Olemotz has mentioned the difficult situation. Cost of materials shows slightly disproportionate increase, but gross margin remains at a high level. This, of course, reflects our successful cost management. Let's look at the trend in operating profit. EBT is also seeing double-digit growth in the second quarter by 20%, which means that the first half year increases 16%, which is well above our previous expectations, further reasons for the forecast upgrade. The stable gross margin is the basis, but cost management measures are also having a positive impact. So, in a nutshell, the positive message here is the EBT margin remains stable. Now, let's look at the different segments. Here too, growth is broad-based with all segments showing strong growth. So, particularly strong in the segment Other Europe. This is not only driven by acquisitions, but also by very good Thank you very much. Operating cash flow was under pressure in Q2. The reasons are obvious. Operative cash flow reflects our strong operational performance, and as I've said before, June in particular was very strong, hence significant defects relating to the reporting date. On the one hand, order-related inventories rose, and on the other hand, contract assets plummeted. Thank you very much. Thank you. So, all in all, we are fully confident and assume a positive trend in OCF for the financial year 2026. So, let's look at our employees now. Thank you very much. Let us now turn as is customary to look at our non-financial special events. I shall hand back to Dr. Thomas Olemotz.

Thank you, Christian. The following selected current updates show examples, just examples that contribute to our sustainable and profitable growth. We will have a look at a successful acquisition, three important milestones in our AI activities. A sales success in our public sector business, a very successful capital markets transaction, and last but not least, another step in implementing our sustainability strategy. Let us start with M&A. With the acquisition of Interforce that we've already announced, we are once again expanding our market presence in the Netherlands. Interforce is one of the established managed service providers for medium-sized companies in the Netherlands and employs 38 people. Interforce's business model is based on a high degree of automation, and this explains the relatively low number of employees, and it focuses on integrated cloud and managed service solutions for small and medium-sized customers. With this acquisition, we strengthen our own managed service offering portfolio, further increase our share of recurring revenue, and we gain an experienced team with strong technological expertise. The plan is to bring Interforce a standardized solution also to other European country markets in the future. Let us now focus on three particular success stories in our AI business. First, we are expanding our cooperation with NVIDIA, and this strengthens our position as a provider of AI infrastructure. We're achieving the highest partner level with NVIDIA, and this confirms Behle's comprehensive expertise in designing, deploying, and scaling high-performance AI solutions. Second, Together with Dell and, yes, NVIDIA again, we're also opening a central Dell AI factory, which will include a demonstration and proof-of-concept environment, as well as a competence center for consulting and workshops. The aim is to help customers with validated reference architectures to bring AI into productive use more quickly. A remarkable success has also been achieved by our subsidiary, Planet AI. This is our AI research and development company, and it has won the world's most demanding competition for document-based AI systems. Planet AI came in first, both in the overall ranking, but also in seven out of eight competition categories. Quite impressive. Let us now have a look at our public sector business, ladies and gentlemen. In the second half of the year, this will be especially critical for our business performance. Bechtle has been awarded the contract by the Bavarian State Ministry of Justice for the operation and further development of central IT services. The framework agreement centers on the operation of the central bi-tech This is essential for digital workplaces and IT services for the Bavarian justice systems. Managed services, project and consulting services, and provision of IT hardware are included in this framework agreement. The contract commences on January 1, 2027 and has an initial term of six years. The maximum contract volume amounts up to 250 million euros. This project also includes the support of two data centers and 220 locations in Bavaria with a total of more than 17,500 IT workplaces. This is a long-term contract. And through this, Bechtle will support the courts and public prosecutor's offices in Bavaria to further advance digitalization and providing employees with a secure, modern and high-performance IT working environment. But also on the capital market, as I already announced, we've been quite successful. In May and June this year, we successfully placed our second promissory note transaction since 2018. The demand was very high, so the originally target volume of 250 million euros was increased to 450 million. The order book was oversubscribed several times and was closed early for new orders. In the final, the binding phase, the order book was approximately 3.5 times the original target volume. A total of 84 domestic and international investors participated in the transaction. The promissory note bonds have maturities of three, five and seven years in six clusters. This is how they were issued. And with this transaction, we're optimizing the maturity profile of our financing structure and we're strengthening the company's long term financing. particularly with regard to our M&A strategy. Last but not least, let us have a look at some progress with regard to our sustainability strategy. Bechtle AG has joined the Responsible Business Alliance as an affiliate member. This supports the vision and objectives of one of the world's largest industry initiatives for promoting social, environmental, and ethical standards in global supply chains with a focus on electronics and IT industry. By joining this alliance, we commit to progressively implementing the code of conduct of Responsible Business Alliance in our own business processes and also to Involving our direct suppliers in compliance with these requirements. Dirk Muller-Niessner as well as the growth expectations for the IT markets in Germany and France. However, the first half of this year was extremely successful. We have a record order backlog ahead of us, so we look confidently towards the second half of this year. So what does that mean specifically for our outlook? We are raising our guidance from March 2026, our forecast, The demand for future-proof IT solutions and the corresponding consulting services remains high, and our proximity to customers is a major asset here. In the public sector, we expect a seasonal pattern and further positive momentum in the second half of the year. We know that in the second half of the year, and particularly in the fourth quarter, we're facing very high comparative figures. Nevertheless, we're convinced that we can maintain our successful course. For the overall fiscal year, we expect a business volume growth of more than 10% and revenue and EBT growth in the range of 5 to 10%. The EBT margin is expected to decline slightly, mainly due to investments in our own IT infrastructure. Ladies and gentlemen, This concludes the review of our performance in the second quarter and first half of 2026 and our outlook for the remainder of the fiscal year 2026. Thank you very much for your attention. And now I'm happy to take any of your questions.