adesso SE (ADN1) Earnings Call Transcript & Summary

Good morning, everybody. This is Martin Mollmann of adesso IR speaking. First of all, I'd like to thank you for joining our Q3 and 9 months earnings call regarding our quarterly statement we have published today. Within our release this morning, adesso reported a huge step in profitability in the third quarter with EBITDA margin improving significantly to 11.8%. Sales over 9 months still grew fast by 15% to EUR 961.3 million. Operating result was up disproportionately by 24% to EUR 66.5 million. Outlook for full year 2024 remains largely positive since capacity utilization has improved and after Q3 as well, Q4 provides one more working day than previous year. Earnings contribution in Q3 was high, so the adapted full year guidance seems well achievable. I'd now like to welcome as well our CFO, Jorg Schroeder, who will give us a deeper insight into the figures of the first 9 months and the remainder of the current year. As you may have seen, our CEO, Mark Lohweber has also dialed into the conference. So I would also like to welcome Mark to give us some more light on the outlook. He and Jorg will be available to answer your questions after the presentation. As always, I'd like you to mute yourself during the presentation. Feel free to open up the channels for the Q&A session afterwards. Participants on phones may want to mute or unmute their microphones via the star key, followed by the #6 of their phones. Thank you so far, and Jorg, please go ahead.

Thank you, Martin, and thank you, everybody, for participating in today's Q3 earnings call. I will run you through the facts and figures, as Martin pointed out. You might have read the corporate news of today's morning. We continue to grow strongly also in Q3. For the full 9 months of '24, we see 15% growth compared to the 9 months of the previous year. And this is pretty much completely driven by organic growth. We have like 0.1 percentage points by organic growth -- unorganic growth. We only did 1 M&A transaction this year, and so the growth really comes from the organically growing business. That, of course, pretty much correlates with the head count growth that you see with 14%, which is an average figure. If you just look at year-over-year growth of headcount, this is going down a little bit further. So we are already discussing how we can continue to grow in the future. Mark will point out to that because we will need to step up in recruiting stronger than we did in the last quarter since we are now more back on the profitability road again. First, let's talk more about sales. We have the sales split by industry. Basically, the good news is we grow everywhere. So there's not a single industry that we could point out where we are not growing. We had to have a couple of industries, though that have a rougher year only single percentage figures of growth. You see that reflected in the column of delta year-over-year. Insurance is only growing by 4% compared to last year. We have Banking plus 7%; Manufacturing plus 7%; and Retail plus 9%. All these industries have their ups and downs. Insurance, we have talked in the last quarterly earnings calls about our product business that is still lacking a little bit behind. Mark will also reflect on that a little bit. In the Manufacturing industry, it's not so easy. We have our largest customer coming from that industry, but besides that, it's not so easy. And in Retail, it's pretty much similar or comparable situation to manufacturing with 2 larger customers and not so much left and right from that. But there's also good news in all other industries that we are active in, we grow double digits in the cross industry sector plus 13%, even in the automotive sector, plus 13%. The public sector, which had a difficult Q1 of this year, we are back on track with plus 14%. And then the spectacular news here are the utility sector, which is largely driven by a lot of S/4HANA transformation that we do in that field, plus 43% and the winner after 9 months so far is the healthcare sector with plus 48%, which is spectacular, probably not continuable in all the coming quarters. But so far, we are very happy about that development. If we look at the sales split by region, we see that in Germany, we even grew disproportionately higher than in the rest of the adesso field, 17% plus in Germany alone. So the rest on average, grew by only 8%. That comes to an overall growth rate of 15%. And in the countries, there are also a couple of countries that are doing really good in terms of growth. Like you see here in Austria, like you see in Italy, like you also see in Turkey, which is the domestic revenue in Turkey. And we do have a couple of ones who grow slower or the really slow -- the really smaller countries still have a tough environment or are not on the growth track where we usually want to see them. But as you also see here, we are still a very German company with 83% of the business done in Germany, 10% Switzerland, 2% in Austria. So we are still 95% the DAS area region company, and this is also reflected here in the 9 months figures. Now coming to the earnings. The good news is that EBITDA now grew faster than the revenue growth, which was 15%. EBITDA grew by 24% to EUR 66.5 million. There are a couple of reasons for that. First, Q3 is usually our strongest. It has just most working days and our business is pretty simple and pretty much a function of how much time is available to charge our services to customers. Q3 is, in particular, very good in that regard. So that helped. And we also see an increase of the capacity utilization, which was very bad in the first half year. And as we pointed out in the last calls, we do have our back-to-profit program. And as it seems a couple of things already turned around and utilization improved, not to spectacular levels already, but it improved slightly. So we see a little bit of better development there, and that also helped in the service segment that we see here in Q3. Yes, we had 1 additional working day in Q3 compared also to '23. So that also helped. We also want to point out that we still have burdens from the IT investments in the segment of IT solutions. So IT solutions didn't have a spectacular Q3. But overall, it's less than 10% of the overall business, but drags us down a little bit still, and it has a longer time horizon when we will see a turnaround there. Mark will reflect on that later on. So if we look at margins, EBITDA margin, still not very good. 6.9% is well below what we usually expect, but we cannot rescue the bad first half year. After 9 months, we are at least better than last year, 6.9%, last year was 6.4%. If we look at the key profit drivers, we see that utilization overall for the whole year still is not good just by improving a little bit in Q3 because the first half year was rather bad. We see an increase in daily rates, a couple of percentage points. This continues, and we also expect that to continue in the future. The license sales this year was pretty much nonexistent. But will also talk about that a little bit. But so far, after 9 months, we don't have any license that is to talk about. And the personnel cost per FTE is plus 2%. Of course, we see a little bit of wage inflation in the market, in the industry, but we can cope with that pretty much through the increase of the daily rates. So this continues. Then if we go down further in the P&L statement, we see that EBIT and also the pretax earnings increased even more than EBITDA plus 51% increase also for EBIT and also for EBT. Because the items in between just grew a little bit slower, we have a little bit more interest payments. We do have a little bit more lease repayments, but less CapEx because we don't invest into new office locations this year, at least not bigger ones, just a few minor ones. And we pretty much didn't do any M&A deal, just 1 small 1 or PPA depreciation actually went down, so this helped here, which also is then reflected in a positive net income. You see the consolidated earnings at EUR 2.5 million, which isn't a spectacular number. We won't overdo it here. But of course, it's much better than last year. And so we are back on track in that regard. If we look at financial KPIs, first, some balance sheet items. We see that net working capital is reduced further by 15% compared to last year's balance sheet. We also see the net debt reduced by roughly EUR 33 million. So the balance sheet is pretty much intact and the leverage did increase. It went down a little bit, so we are generating more cash, which is the cash flow statement that you see here coming from our operating cash flow, which has improved. Less CapEx, as I already told you, the lease repayments are higher, which is also a function of that new headquarter building that we just started in summer last year. So this full year is completely reflected in that regard. But continuing from here, we are not starting big new office locations anywhere. So the free cash flow has improved to last year. If you just look at the last 12-month figure of free cash flow and then per share, it's at the highest figure that we ever had, there is one caveat in there because we increased also our factoring position. The figure for factoring after 9 months of '23 was roughly EUR 35 million. And this year, we are at the limit that we can use at this point in time, which is EUR 60 million. So the effect just from factoring is roughly EUR 25 million. But even if you exclude that factor, we have improved on cash flow items. Okay. Then coming to the guidance. We can confirm the guidance, of course. We had a good Q3. We still see a market demand for our kind of services. The order entries are growing. So we don't expect anything bad out of that. There might be certain industries where we see ups and downs. But overall, we see a strong need for digitalization, software engineering projects. So this will continue. We see now in Q3 an improved capacity utilization and slower hiring pace, which helped on the profitability side, we will probably start hiring more. So that growth doesn't come down too much. But we hope that we -- and actually, we are pretty confident that we can continue with the utilization that we have right now, which still is not spectacular, more on average levels that we had in the past years. We will also see ongoing investments in the IT Solutions segment. And just looking at Q4 now for '24, we again have 1 more additional working day compared to Q4 2023, which will also be beneficial for the overall results. So if you look at the sales results, we have EUR 961 million after 9 months. We wanted to be above EUR 1.25 billion. This is pretty much in reach, and also for EBITDA. After the half year report, we only had EUR 27.7 million. We are at EUR 66.5 million now. So we expect to be good in that corridor of EUR 80 million to EUR 110 million EBITDA at year-end. Okay. Yes, just one last remark for me. We started a share buyback program for the first time in adesso's history. We discussed that our belief is that the intrinsic value of the company is higher than the market capitalization that we see right now. And that was our thought to think about good use of capital allocation and doing a share buyback program at this point in time. And we started that -- we started buying at 17th of October. And right now, I think we have bought like EUR 3 million in terms of shares already back. The maximum volume that we can do here is EUR 10 million. And so it will stay on for a couple of weeks or months to continue. And you find the link here on the side, you find more information on that and detailed information on our adesso Group site, if you are interested in more details. So far, that's for me, and I will hand over to Mark to have a view on the CEO outlook.

Yes. Thank you, first of all. Thank you for being here. Such a large crowd. Thank you, Jorg, for presenting the numbers, which are looking better than the last ones we presented, which is very good. But first of all, I want to thank Jorg next to the information about our numbers. I will also announced today that Jorg will leave us in April next year. So first of all, Jorg, I want to thank you for the good work of the last years, especially was made a lot of fun to work together. And times were not always easy in -- especially this year in the environment. So thank you very much from our side also from the rest of the Board here officially. And as, yes, we discussed or you will be strongly connected to the company in the future also. So thank you for that. That was just upfront. Then talking a little bit about the situation based on the numbers, but also the overall situation, a year ago, we came together in the same call. It was clear we will focus more on profitability. But the start in 2024 was quite rough for the whole industry. All of our -- I talk a lot to our peers. It was quite surprising the reluctancy of customers to sign contracts to start in the year. Usually, we have a little bit lower utilization in January. That's normal in our industry. But this year, it was really stretched until March, April, that was unusual. So that was an additional challenge for us. We initiated a back profit program. By the end of last year, we executed, but we had this additional challenge in the beginning of this year. This was quite strong for the whole team, but everybody was executing quite well, staying on track, being -- they're also not overreacting because we want to stay on track with our culture, with our growth story. This is also important for the future. So you have to be careful that you don't overreact in the situation sectors that was well managed by the team. And now we see the positive results in Q3. We are quite positive on the rest of the year. We even see in the license part, quite a probability that we will sign deals this year. I'm still cautious because there is quite a shift in the industry. I'm rather a little bit cautious, but it looks good. And if this would not work out this in Q4, those deals would be then probably just jump into the next year, but it's a positive outlook. We see positive things on the international side, Italy, Austria, Turkey performing well for us. We managed last year to keep our personnel costs below -- the raise of the personnel costs, which is our main production part below 2%. This is something we'll continue to have a focus on the wages because we want to set the stage also for further growth. That's a little bit of a look on the year. It was a rough year for everybody here at adesso. It was not a pretty year, but looking back, we managed that rather well. We're looking positive into 2025. We will be -- continue to stay cautious. The macroeconomic environment is not easy. Germany is not on the leading path right now. A lot of our customers are here, but it also -- there are a lot of chances for us because we can take business from competition. And this is going to be one of our main driver in next year to look around and see who is underperforming and where can we take business from the competition also in Germany. And so the outlook for 2025 is positive. Nevertheless, we have to also be aware that we have to continue on a monthly base to look on what is happening, this is something we are doing. Anyways, yes, this is the overall picture for us. We have invested into our solutions. There will be -- most of the investments are -- will be finished by at the latest mid-next year. So there's also -- we're also through that. So I cannot say nothing else than just a positive outlook in a cautious manner.

Thank you, Jorg, and thank you, Mark. Thank you for the presentation and the helpful outlook. We're now handing over to the Q&A sessions. And as you may know, participants on phones can mute or unmute their microphones via the star key followed by the #6 of their phones. Okay. Do we have questions?

If I may start, Adam Jakubowski speaking. Yes, indeed, I have some questions. To start with, maybe you could elaborate a little bit on the improvements in utilization. What [indiscernible] most interested in is how much or how far are you away from the average levels we achieved in the past? And maybe you could give us some impression of effect of this possible improvement on your revenues [indiscernible] analysis? The second question is, you named that you're starting with accelerating the hiring again. Is there any target number -- target growth number in hiring for this year and next year? And the last question is what's driving the health industry business this year? It's really impressive?

Okay. I'll give you a touch and Mark can continue. So first about utilization. Q3 was much better than the first half of the year. Still not spectacular. The utilization numbers in Q3 were roughly actually, I'm guessing a little bit, but it's around 82%. And if you just look at the last 6, 7 years, on average, we had like 82.5%. This doesn't sound like much for us. Utilization is key since we are a professional service provider. So this helped. And we also see that this continues. So we have at least the October figures and utilization is actually improving even a little bit from that level. So we are coming into the range where we normally are. And that, of course, is a good development. And this is also what we, as Mark pointed out, prospect into the future, just coming back to ordinary levels reverting to the mean somehow. In terms of hiring pace and the target, we don't have a specific target, so we don't do that. We want to grow. So the adesso story stays intact. We want to grow profitably. And in order to grow, we need to recruit people because that's the most important function. Without capacity, we cannot grow. So we need more people. If it stalls too much, we will hurt the growth pace. But we don't have a specific targeted number in mind. We don't have a guidance for '25 yet. We are still in the budgeting process. But you can pretty much see us probably growing next year, at least twice the rate of the market. That will be our goal. And the exact figures will then be presented when they are ready. And for the health care sector, yes, since I'm close to that sector, it's even a little bit surprising for me that it turned out that good. We know that business in healthcare develops nicely. We have a very good sales approach there. We have a very good relationships to our customers. So it's not that there is one new customer, which breaks everything. It's just that with all the customers that we have in the healthcare sector, we are just doing more business. And so this worked out pretty nicely in '24, much more nicely than we expected, of course, and sometimes you also get a little bit lucky. And as I also pointed out, you cannot expect to continue that in every quarter in the coming times. So that will not be sustainable, at least not on that level of 48%. But we are doing a good job there, and we are happy about that.

Yes. Maybe I would like to add there on the healthcare because it's the same on the public side. I think we always -- even ourselves underestimate the effect we have by becoming the largest German digitization company. So, the next decade will be the decade of digitization. Public & Healthcare has something to do. There is something open. And compared to other industries like banking insurance, where we have strong international competition via Capgemini, via Accenture in the public sector, in the healthcare sector, being a native German vendor helps a lot and gives us a lot of potential for the future because now we have the size for the large projects, and we have a German core. So that will help and continue doing more business in Germany, and we have the same situation already in Switzerland and in Austria, where we are strong in the public sector. The same effect that being a domestic player of a relevant size with a focus on digitization, just opens a lot of business. And of course, everything Jorg said is also correct. We have a strong sales approach, focused on that. This helped also, but we are getting to get more and more business just by being what we are, which is by being the largest German IT service provider for digitization. So that helps even without doing something very much better than others. That's a position thing.

Are the questions answered, Mr. Jakubowski?

Maybe if I may, I think we will see each other on [indiscernible] but I would like to use the opportunity, and thank you for the collaboration, which I've always enjoyed very much. And I really regret that, that you are leaving [indiscernible] our ways will meet again.

I much appreciate it and relay to that, and thank you, too.

So then we have of Mr. Wolf of Warburg Research in line for the next question.

Yes, congratulations on the quarter and the strong profitability that you have shown. I would have some follow-on questions on this -- on the strong top line development that adesso has been able to achieve. Apart from being a local hero, are there any further arguments that convince clients to carry out projects right now because we've seen many companies wanting a second time in the third quarter. It seems like adesso is standing out to some extent from competition. And then what would be the implications for the strategy going forward? Would you then try to become a local hero in the respective countries instead of trying to reach out in various geographies that would be point of the implication of Mark's insights that he just provided. And then if we also look at your expansion to India, we've seen among other players, a certain cost pressure, demand from clients for lower price, price tax for capacity. Do you see that continued? Do you see the pressure to move here faster apparently not since you displayed strong growth at the top line, but maybe you could provide some insights here on how you're proceeding in India. And then just to be sure, Mark, did I understand it correctly that by the middle of next year, most of the inshore investments will be completed? Did I get this right? That would be helpful to understand.

Yes, it was mine.

Okay. And I guess the other 2 are for Jorg or Mark, you can decide.

I think, yes, Mark can answer these things.

Yes. I hope I get everything together. The first thing is what do we do better than others. It's always a little bit difficult to explain. We continue how we are. We are very strong in the topics. We are a very strong industry focused with a lot of business knowledge, even though we are an IT company. This is what we get back from our customers. This is what makes us different. We don't come with technology information first. Even though we are a tech company, we understand what the customers are doing with the software. This has been from the beginning, our USP. And this is, I think, something -- that is our core, and this is what makes us different. I think the rest you can always discuss because we are -- at the end, we are the same like others. I mean we do the same business. What you said on becoming -- having such a strong footprint in Germany as being a German company, we have set in our strategy that we want to become a global local player, meaning we want to copy the same what we do in Germany in all of our countries, meaning we want to be a local player in the countries. We don't want to have a subsidiary doing it the way we do it. There is a certain adesso floor they have to follow, but we want them to adjust to the domestic market. And the proof of that is that we are in Switzerland and Austria, we are -- our biggest industries are public, which is usually for an international player uncommon. This is the latest we are doing. And this always is a sign. And we try to do the same thing country by country we have right now. But we also decided on the internalization, we will focus on Middle East as a new area. But on the other side, we are now focusing to really grow the existing countries like Italy, Sweden, Netherlands, we have and Spain in a decent size to really be a local player with then having a German touch. This is something which helps us abroad, that we are then a local acting player. But we do -- it's positive that we are made in Germany in a way that helps us in those countries. This doesn't help us in Switzerland and Austria, but in Italy, in Spain, Netherlands, Sweden, that's something helping us, and this is how we are creating our story there. And finally, the question on India. We will do an India push next year. That means we decided to push more -- building up more resources in India next year. This has to do exactly what you said. There is a cost pressure. But we -- this is -- we need this capacity to take more business from others because we have another thing, another which is coming to the Indian players with a strong focus on India. The increase of usage of artificial intelligence. We are not that convinced in software development, but some parts around it, especially which are outsourced to India will decrease in the future, meaning we have to offer new ways of doing the same projects with the combination of on-site resources. We have them a lot, some Indian resources, but plus introduction of artificial intelligence in those projects. But if we want to take away these projects from the large Indian vendors or international vendors, we do have to have some Indian capacity because it's all about costs in those areas. But today, we are very limited competing with them because we -- if it comes to a pure cost efficiency software development program, we are usually not the right partner. But by the, let's say, increase of usage of artificial intelligence, combined with some Indian capabilities, we can acquire more projects for now. It's not -- we're not going to change the world in the next 2 years, but it's another area of growth for us.

Next in line is Mr. Spang from Tigris Capital.

First question is about the current political situation in Germany, and you have this big part of revenues in the public sector. So first question is related to this topic, what is your expectation for the next month in the public sector regarding this current political situation? Yes, let's do it one by one.

Yes. I can start out. So we don't know exactly what to make out of that. Of course, it's probably not helpful. But as Mark talked about, we usually work in projects that are not designing some kind of website or something. So we are really doing usually core business process work. And we also do that for Ministries and German government. So we don't expect that everything stops now and nothing continues, projects will continue. There will be some hiccups probably. We don't know to which extent. So public will have rougher times ahead than we had this year. But I wouldn't think that the herd will be too severely. And we also don't only work for German government or the federal level. We also work on state level, and we also work on communities. So -- and these budgets are not prone to action right now. So we expect some things to happen, but probably not with a real major impact.

Okay. Good to hear. Then Mr. Lohweber, you said regarding the license deals in Q4, there are some chance to realize Q4 license deals. And if we remember the last call, I think the buildings were more cautious in this regard that license deals will more be realized towards H2 2025. So is there anything changed in the last months that you are now getting a little bit more optimistic in this field?

Yes. Also to give the situation on the license side, it's -- it is -- I mean, this year, a lot of the large specialty insurance customers who are waiting and waiting that -- I mean they're also looking at the economy and decisions are not made, but we see now an increase in RFIs, RFPs, some of the things we had been discussing become more -- decisions were made faster than expected. So we see, let's say, light at the end of the tunnel with even a chance that we will be able to sign deals this year. This was, yes, it was faster than we expected. But overall, we are very cautious right now because it's -- we now again have an impact in the political situation. So this is a little bit what's happening year after year, not on the political side. Some impact comes, which then, of course, everybody, it's just people that make the decisions. And if you have uncertainty, then maybe it's moved to the next month. So that's why -- that's what's happened to us very often and big deals is that just people say, okay, let's wait for the Board meeting in January. So that's why I'm a little bit cautious on the end of the tunnel because they are all humans and we have a high uncertainty. And this is something which we have to cater with or cater for, for a longer time because this will not change that we somehow have more, yes.

And then the third question is regarding the IT Solutions segment. If we look to the EBIT line, we saw that the EBIT loss in Q3 was reduced, but it was still a loss in Q3. So -- what is your outlook for the next quarters in the IT Solutions business? And if we look on EBIT or you can also take it on EBITDA, if you like, when will this business will be profitable again?

Yes. So maybe I can take that first. And I think Mark pointed out the outlook in general terms of business, which, of course, can only be cautious. Your point is correct. Q3 is not a worsening of the situation. The segment report is included in the Q3 statement and the report. So the full year will pretty much be a reflection of that. With the additional chances that Mark already pointed out, so we do have opportunities in Q4 to close license deals, and we have to be very cautious because you never know what really happens. But there are more opportunities than threats in Q4. And Q4 will most likely be the best for that business with every caution that we can take here. And so for '25, I think Mark pointed out that the first half year will -- investments will continue. And so we expect the turnaround to happen in the second half of '25. And of course, we wouldn't continue the business if we wouldn't believe that we can turn that around into a profitable business again.

Okay. Then I'd like to read out one question from the chat from [indiscernible] from Harald. Could you comment on your initial thoughts on the impact of AI on the development process practices in adesso. Are the losses in the IT Solutions divisions are due to the investment in the insure product? And how do you expect that to change once it is completed in mid-2025?

I think, Mark, you want to have a take?

Yes. First of all, on the -- I will answer on the AI -- on the AI side. First of all, I have to say I'm a banker and a lawyer, and I'm now talking about artificial intelligence, just to be careful. Nevertheless, it's a very important part for us. And of course, we are discussing that. There is -- everybody was quite surprised seeing what is capable in artificial intelligence and coding seem to be one of the areas where it could also -- everything should be done by artificial intelligence to complete coding. But we also -- of course, we are following this for a long time. We are introducing artificial intelligence into our software development processes. We are introducing modules into the software we are building. We have quite some experience now with what is coming. And as you know, one of our main stakeholders as a university professor [indiscernible] for software development is very close to that. And we have a clear picture that it would rather increase the need of the people we have, which are highly skilled and trained software developers, it's not simple coders. And the introduction of what will come more -- usage of more artificial intelligence inside of those projects will require more skilled people than less. And this will have an impact on some parts of, let's say, rather simple coding areas, which these are usually projects which are outsourced to India. But what we do are usually -- it's usually software development with complex architectures, new build software with a strong business impact where you need to interact between software developers and business. And this is far away from being able to be replaced by an artificial software coding engine. This will, of course, probably be possible someday, but not in the near future. So we see rather an increase in demand for our people than a decrease. But I could not explain exactly how artificial intelligence is used in the software development project. I just -- I couldn't give you the information. But of course, this is an area we are discussing quite frequently in the Board because we have to watch that. What we are -- we don't expect any impact on that on our business for the next 3 to 5 years, meaning there is a negative impact, meaning we are not using -- we are not needing software developers. A positive impact, of course, more projects using that, giving us more options to build software for areas where it was not possible before because if you're only on an algorithm base? Or you just have to do simple software development, then it's difficult to replace some areas of usage where humans are used. So we get more -- we actually get more areas where we can build software.

There was another question from [indiscernible] are the losses in the IT Solutions divisions all due to the investments in the insure product? And how do you expect that to change once it is completed in mid-2025?

Yes, I think we reflected on that already a little bit. So the major part, of course, is insurer, which is like 90% of the segment. We do have some other smaller products in there [indiscernible] platform for the automotive industry. We do have [ Richburg ], which is actually profitable. We do have [indiscernible], which is a runoff company for life insurance things. Most of them also have their issues. [ Richburg ] is profitable. The other ones are also investments, but the big chunk really is made of insure. So if we turn around that, the segment will turn around.

Yes. Just a small reminder to the participants on phones. If you want to put your questions, please unmute your microphone via star 6. Do have any more questions?

[indiscernible] I have 3 additional ones, if I may. First, on market shares, you're managing -- taking market shares from competitors. Are there special verticals or industry segments you're thinking of here? Second question would be on your order book. Can you give us some insight how the duration looks like? So how long does this current book takes you into 2025? And then regarding workforce flexibility. What are your thoughts on shifting coders and consultants from sectors. Is that possible in case one of the other sector weakens and/or the other factor strengthening?

Mark, do you want to take that?

No, I start with -- first of all, you asked market share. We are discussing that just on an overall level. So if we look at the market share in Germany, the only ones we have in front of us right now is Accenture, Capgemini and IBM. They do a lot of more business with outsourcing and old applications. So this is -- there is a gap we have to close with some part of our portfolio, but we also have to be a little bit careful because you need different people for that type of business. It's also a long-term thing you have to think about. So that is what we are discussing market shares. And then in the different industries, it's always a little difficult to discuss that. And not everybody is giving the clear numbers what they are having in Germany or in the different countries. So we are not just not discussing that. We know we are strong players in our industry now. Sometimes we are missing out in one segment in an industry because there we are not strong enough yet, but we are filling those gaps then, but we wouldn't discuss it on that. And the workforce flexibility is very strong because we still -- the core of adesso is a big, big group of software developers, and we keep them in the verticals. So the design of adesso is that we have a vertical. There is all consulting in there because this is, of course, completely vertical related. And then we have a strong part of our software development, especially with Java focused also in the vertical. This has the reason that we want to repeat them in the same industry so they get more business knowledge when they're doing. But a Java developer and this is completely open inside of adesso, moves between the industries also is because we have today already utilization, sometimes utilization is under pressure in this industry, then we moved into another industry. Sometimes people are asking for it, I want to work in another industry for a project. So this is for us, common business. So -- and this is also -- people live that already. And we have no issues if one industry goes down, the others are helping in the way that we just try to place them in projects from other industries. That's normal and common for us.

And finally, on the duration of your order book. Can you give us an idea there?

There's no difference to the years before it.

Usually, the question is around the visibility and there's really no change. So what we see is usually the contracts are normally for a quarter or for a year. We also have like for a couple of days. We also have framework contracts for over 4 years. But there is no major shift or change in terms of order entries. They're good. They're growing. So it's not that there's no demand. The demand will not be the bottleneck of growth for next year.

But also, I mean, there is -- we stay in a complex economic environment and the start into 2025, we are highly alerted as we should be as a whole industry. And -- so we are not leaning back and saying we have our order books full. Nothing can happen because that's what happened to the industry this year. So -- you will see a lot of discussions inside and management to make sure that we have a good start into 2025. So that's -- we are highly alerted because this year, it was unusual that we had so much difficulties in the beginning, not adesso, the whole industry so that we are aware and we are focusing on that. We're starting already now, of course.

Do we have more questions at this point in time. No? So this does not seem to be the case. And that's where I thank you for your interest in our call today, and your participation. I wish you all the best and hope to see you in person, maybe on the German Equity Forum. For now, goodbye. See you soon.

Bye.