adesso (ADN1) H1 2024 earnings summary

Executive summary

• Sales increased 16% year-over-year to €631.1 million in H1 2024, driven almost entirely by organic growth, with all industries and regions contributing positively.

• EBITDA rose 10% to €27.7 million, but consolidated earnings were negative at -€9.9 million, with EPS at -€1.51, reflecting margin pressure and higher costs.

• The IT services segment performed well, while the IT solutions segment underperformed due to weak license sales and ongoing investments.

• International expansion continued, including acquisitions in Sweden, Romania, Italy, India, Saudi Arabia, and Turkey, with employee headcount outside Germany up 12% year-over-year.

• The company maintains a profitable growth strategy, aiming to grow at least twice the market rate and to continuously increase dividends.

Financial highlights

• Revenue reached €631.1 million, up 16% year-over-year, with Germany growing 17% and DACH region accounting for 95% of volume.

• EBITDA increased to €27.7 million (+10%), but EBITDA margin fell to 4.4% (down from 4.6%).

• Consolidated earnings for H1 2024 were negative at -€9.9 million; EPS was -€1.51.

• Net debt improved to -€115.4 million from -€143.4 million year-over-year; net working capital decreased by 17%.

• Free cash flow improved year-over-year, reaching record levels, supported by factoring.

Outlook and guidance

• Full-year 2024 sales guidance of above €1.25 billion reaffirmed; EBITDA guidance lowered to €80–110 million from €110–130 million.

• H2 earnings expected to be stronger due to improved utilization and five additional working days.

• IT solutions segment expected to remain weak in 2024, with recovery anticipated in H2 2025.

• Hiring pace reduced, but investments in talent and product development continue.

• Opportunities for higher license sales in H2, especially in IT Solutions.