Bechtle (BC8) Q4 2024 earnings summary

Executive summary

• Fiscal year 2024 performance was below expectations due to challenging economic conditions, especially in Germany and France, with both SME and public sector clients showing investment reluctance.

• Business volume increased by 2.0% year-over-year to €7,949m, while reported revenue declined by 1.8% to €6,306m due to accounting treatment of software sales.

• EBIT fell 8.1% year-over-year to €351.3m, with a group margin of 5.6%.

• Q4 showed the highest growth rate of the year at 4.4%, but this is not seen as a sustainable trend reversal.

• Operating cash flow reached a record €558.2m, and free cash flow was also at an all-time high of €377m.

Financial highlights

• Earnings declined by about 8% year-over-year, despite a record-high gross margin of 18.1%.

• International revenue rose 6.5% to €2,584m, while German revenue dropped 6.9% to €3,722m.

• IT E-commerce segment revenue increased 4.4% to €2,391m; IT SH & MS segment revenue declined 5.3% to €3,915m.

• Personnel costs increased by 7.6%, with organic workforce growth at 1.7% and acquisitions accounting for nearly 60% of new hires.

• Dividend proposed at €0.70 per share, maintaining the previous year's level, with a payout ratio of almost 36%.

Outlook and guidance

• Guidance for 2025 anticipates slight business volume growth, with revenue expected to lag due to continued strong software business.

• Forecast ranges: business volume 0% to +5%, revenue -3% to +3%, EBT -5% to +5%.

• EBT could decline by up to 5%, with opportunities for improvement mainly in the second half of the year, depending on public sector contract execution.

• No major recovery expected before the second half of 2025; macroeconomic and geopolitical uncertainties remain high.

• M&A is excluded from guidance, but at least one transaction is expected in H1 2025, and European M&A strategy will continue.