Bechtle results: Managed services carry German reseller success in Q2
Business volume increased by 9.2 per cent and revenue grew by 6.5 per cent
German reseller Bechtle has reported another successful quarter in 2023 driven by its IT system house and managed services segment.
Bechtle's business volume increased 9.2 per cent to €1.82bn (£1.56bn) and revenue grew 6.5 per cent to €1.51bn (£1.3bn) in Q2.
EBIT also performed well, increasing seven per cent to €96.1m (£82.8m).
EBIT margin was 6.4 per cent, a slight uptick from last year's 6.3 per cent.
As of 30 June 2023, Bechtle reported having 14,505 employees, 1,306 more than in the prior year.
In the IT e-commerce segment, on the other hand, Bechtle felt the saturation of many customers who had invested heavily in conventional IT infrastructure, such as PCs, in recent years.
"The reference figures from the prior year were very challenging especially in terms of the revenue, but also with regard to the earnings," explained Dr Thomas Olemotz, chairman of the executive board of Bechtle.
"The fact that we achieved substantial growth and were able to keep our high prior-year margin stable despite difficult economic framework conditions sends a strong signal."
Digitisation projects still in demand
In the IT system house and managed services segment, revenue climbed 13.7 per cent to €985.0m (£848.8m).
As in the prior quarter, this performance was mainly driven by the sales achieved with public-sector clients and large customers.
Moreover, the demand for complex digitisation projects for the transformation of IT architectures remained high.
In this way, Bechtle said it managed to more than compensate the higher cost base in this segment.
EBIT increased 18.3 per cent to €63.8m (£54.98m). The EBIT margin improved from 6.2 per cent to 6.5 per cent.
PC demand weakens e-commerce
The revenue in the IT e-commerce segment dropped by 4.8 per cent.
Bechtle said medium-sized customers are postponing upcoming renewals in their conventional IT infrastructure.
In this area, the great uncertainty among customers with regard to future macroeconomic performance is having a detrimental effect on investment.
The budgets are rather spent on complex IT projects, which benefits the other segment to a greater degree.
Against this backdrop and due to the higher cost base, EBIT declined 9.9 per cent, and the EBIT margin amounted to 6.2 per cent (prior year: 6.5 per cent).
Forward-looking
The growth rates of the revenue and earnings in the first six months were in line with the company's expectations for 2023 as a whole.
Assuming an improvement of the mood among medium-sized companies, Bechtle expects the demand to gradually go up in the second half of the year.
Bechtle said in the year as a whole, it intends to increase revenue and earnings significantly and to keep the margin more or less at the prior-year level.
"Of course, we at Bechtle notice the difficult framework conditions and the associated uncertainties," added Olemotz.
"At the same time, however, the need for digital transformation of IT architectures is still on hand, underlining the importance of IT investments for many of our customers.
"Thus, despite the tense mood that currently prevails, there is no reason for us to change our optimistic outlook on the second half of the year and on 2023 as a whole."
The positive results come just as Bechtle has been under expansion from an acquisition point of view. Earlier this month announced it was acquiring IAM specialist Sastema, and developing a Bechtle Competence Centre for Identity & Access Management.
In July 2023, it was completed its 110th acquisition in its 40-year history when it took over French IT service provider Apixit.