Bechtle 'optimistic' for FY24 despite Q2 revenue dip
The German reseller is now being “cautious” on hiring in view of the economic challenges
Bechtle continued to feel the pinch of "adverse macroeconomic conditions" in its second quarter 2024 results that saw revenues dip 2.3 per cent to €1.4bn.
The German reseller said Q2 was "more strongly affected" by the unfavourable circumstances than at the beginning of the year, but still managed to increase business volume by one per cent to €1.8bn.
Meanwhile EBT did not reach the very high benchmark figures of the previous year, totalling €83.8m (previous year: €93.8m). The EBT margin fell from 6.2 per cent to 5.7 per cent.
"We are comparing our second quarter with a very strong previous year. However, there was less demand from SMEs throughout the quarter and particularly in June this year," said Dr Thomas Olemotz, CEO, Bechtle (pictured).
"In addition, public-sector customers in Germany were still being unusually cautious as a result of the lengthy budget debate. But even though the second quarter did not live up to our own expectations, we continue to see very good growth opportunities for Bechtle in the medium and long term."
Recruiting caution
Compared to the previous year, the number of employees at the Bechtle's more than 120 locations across Europe had increased by 5.5 per cent as of 30 June 2024.
Almost 70 per cent of the 801 new employees came to Bechtle through acquisitions with organic growth totalling just 1.6 per cent. Compared to 31 March 2024, the increase was only 61 employees.
Excluding acquisitions, Bechtle even recorded a slight decline compared to the previous quarter.
"In view of the economic challenges, we are currently cautious when it comes to expanding our workforce. Our focus is much more on efficiency gains in our internal business processes, which we'd like to achieve through digital transformation and artificial intelligence," Olemotz explained.
Future growth opportunities
To generate stronger growth in the second half of 2024 and beyond, Bechtle sees the replacement cycle for traditional IT infrastructure driven by the end of support for Windows 10 in particular as an opportunity.
Moreover, the European NIS2 Directive is driving cybersecurity forward and, with more than 500 specialists, Bechtle claims it is very well positioned in this business segment.
In addition, digital transformation, the expansion of multi-cloud and managed cloud services and the use of AI in various fields of application continue to be major business drivers.
"SMEs and public sector clients have considerable catching up to do when it comes to modernising their IT. Although investments are currently being postponed, they will come—and Bechtle is well-prepared for them," said Olemotz.
Board adjusts forecast
Bechtle said the first half of 2024 was characterised by adverse economic conditions and a high level of uncertainty regarding future macroeconomic developments.
This has had a particular impact on the investment behaviour of SME customers who continue to put off projects to modernise outdated traditional IT infrastructures in the workplace.
While Bechtle's executive board continues to expect an upturn in the second half of the year, the shortfall compared to the forecast published in March has considerably increased after the first six months.
Bechtle accordingly adjusted its forecast for the current fiscal year in mid-July. The board now expects business volume, revenue, EBT and EBT margin to remain at the previous year's level.
In the medium and long term, however, the outlook for Bechtle remains optimistic, with the board confirming the continuation of its European M&A strategy.
"The first half of the year was below our expectations, but we have dealt with this by adjusting our forecast for the year as a whole, as already announced. In principle, however, we remain confident about the development of our company," Olemotz added.