adesso SE (ADN1) Earnings Call Transcript & Summary

Good morning, everybody. This is Martin Mollmann of adesso IR speaking. First of all, I'd like you 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, you read that adesso continued its organic growth path with 13% increase in sales comparing the third quarter as well as the 9-month figures. Hence, sales went up to more than EUR 1.1 billion after 9 months. Operating profit improved even more strongly, rising by 17% to EUR 77.9 million. Thereof, the third quarter of 2025 alone contributed EUR 40.8 million in EBITDA, underlining the guided stronger earnings contribution in the second half of the year. Outlook remains largely positive. So adesso sees itself on track to meet the full year guidance. I'd now like to welcome as well our CFO, Michael Knopp, who will give us a deeper insight into the figures of the first 9 months and the outlook for the remainder of the current year. [Operator Instructions] Thank you. And Michael, please go ahead.

Thank you, Martin. Good morning and also from my side. And yes, as always, let's start with a look at our -- okay. Now it works. As always, let's start with a look at our revenues. After 9 months, we have achieved revenues of EUR 1.84 billion, which is an increase of 13%. If we look a little bit more in detail into that, we started with EUR 353 million and a growth rate of 11% in Q1, EUR 356 million, a growth rate of 13% in Q2 and now EUR 375 million growth rate, again, 13%. So growth during the year is a little bit accelerating. And Q3, EUR 375 million is our highest revenue per quarter ever. We are pretty happy with this development. These are very exceptional figures, especially if we look at our markets and also the development of our peers. And please keep in mind, the environment is still pretty challenging. adesso is generating 84% of its revenues in Germany. So we are highly dependent from this market. And actually, so far this year, there is not much change. In 2023, 2024, we have seen negative development of our gross domestic product. And this year, there's a slight increase, 0-point something, so not a big change. Actually, what has changed a little bit is the view on the future of Germany. I mean, if you look back a little bit, 3 months, 6 months, we all were kind of optimistic because of our new federal government, all the announcements, what should be changed. There were the additional budgets for the armed forces and the infrastructure. So far, we don't see any impact from that or not a significant impact from that. And if we look this week into the newspapers and read about all the parts which are already misused from this budget, I think the optimism has a little bit gone or is at least reducing day by day. So I would say the outlook, at least for Germany is a little bit more pessimistic than what we have seen a few months ago. On the other hand, I mean, we have coped with this situation so far, and we will do this in the future again. If we look at the development of our headcount on the 30th of September, adesso employed 11,111 full-time equivalents, which is a growth of 896 employees. 44% of this growth was generated with our foreign subsidiaries, especially in those countries where we build our shoring activities. If we look at the headcount, the average growth since the beginning of the year, this growth rate is 7% compared to last year. Actually, if we look at the beginning of this year, this growth rate was 6%. So we have a little bit accelerated our hiring efforts. We are still cautiously acting. So we still have always a view on our billable utilization, but we think it's the right step at the moment to increase a little bit our efforts. If we look at our sales, as always, we start with a view on our different industries, our 9 different industries. And I think the most important message from this slide is adesso is highly diversified and positioned in the right way. First of all, the most important, the biggest sector just contributes 90% of our revenues, which is public. We have our biggest 10 customers contribute slightly more than 20% of our revenues, and the biggest customer this year so far, 3.2%. So a very nice diversification. But also if we look at the sectors itself, insurance, banking, health, public, utilities, they are, let's say, dependent on our economic environment, a little bit less probably than all the other sectors, especially the manufacturing and automotive. They are not directly impacted by all the discussions, are the tariffs or what will be the percentage of the tariffs. So I think this is a very nice positioning at the moment. And if you look at the growth rate of these sectors, it underlines the statement. Insurance plus 20%; health plus 26%; utilities, 24%. So very, very nice growth rates. If we look into this a little bit in more detail, insurance is driven by a nice order entry and still a very strong pipeline. Banking, also nice progress, plus 8%. Health, 26%, driven by our normal bread and butter business, but also by one big project we won in Q2 with our car. Public, plus 7%. Actually, with public, you see a little bit our concerns. We started in Q1 with 11%. After 6 months, it was a growth rate of 9% and now it's 7%. It's still growing. And let's say, the delays, the pushouts from budgets after the German election probably the situation has normalized. However, we don't see the impact from these additional budgets for infrastructure or armed forces so far. If we look at automotive, minus 7%, it's not nice but not really surprising. This industry at the moment is really struggling, and this also has an impact on their IT spending. Yes. And if we look at utilities, plus 24%, we have a very strong market position with SAP in this sector, and this is the main contributor to this nice growth rate. If we look at the regions, Germany contributes 84% of our revenues. If we add Switzerland and Austria, we arrive at 95% for the German-speaking regions. Germany itself grew revenues by 14%. So this is a little bit more than what we have seen for the whole group, where we have seen this growth rate of 13%. Abroad, adesso has grown with a growth rate of 8%. So on the first view, this growth rate is probably not really sufficient. On the other hand, if we dig a little bit more in detail into this, Switzerland contributes around about 50% of our revenues abroad. And if you look at Switzerland, revenues decreased by 5% in this region. Actually, situation already has improved. After 6 months, it was minus 7%, and we expect further improvements in Q4 as utilization has already improved. But if you exclude Switzerland from this view, then we arrive at a growth rate for all the other foreign countries of 26%. Revenue has grown there from EUR 68 million to EUR 86 million. And this is a nice growth rate. And actually, that's what you also can see on this slide, Austria, plus 29%; Netherlands, plus 16%; Italy, a company -- a country where we have supported growth with an acquisition some years ago, 26% and also Turkey contributing 30% growth. Yes, let's have a look at our EBITDA. After 9 months, the EBITDA is EUR 77.9 million compared to EUR 66.5 million, which is an increase of 17%. If we dig a little bit more in detail into this, we started with EUR 17.8 million in the first quarter; second quarter, EUR 19.3 million and now in the third quarter, EUR 40.8 million, which is an increase of EUR 1.9 million compared to Q3 last year. Actually, Q3 last year was a pretty strong quarter. Q3 is always our strongest quarter, but last year, it was exceptionally strong. And therefore, the improvement is maybe a little bit smaller as we have wished for. However, it's still a nice development. What are the key drivers for our improved EBITDA? First of all, the capacity utilization. We started with a very strong improvement in Q2 -- Q1, a nice improvement also in Q2. Q3 was a little bit more flat, only a small improvement, not really worth to mention, but that's because utilization in Q3 last year was pretty strong as well. We have seen a slight recovery so far this year with our IT Solutions business, also supported by some license sales for our in|sure product line in Q2. Last year benefited from a release of accrual for warranties, a release in Q1 last year as a result of the tax audit. And we also have seen some higher material costs. This is actually caused by our role as a general contractor in some of our projects as projects are growing quite -- from a size perspective, we quite often have partners with that. And if we take the role as a general contractor, then revenues grows via our P&L, but also the material cost related to that. Let's have a look at our EBITDA margin. EBITDA margin improved to 7.2% compared to 6.9% last year and 6.4% in 2023. It's an improvement. It's still a significant way to go until we arrive at our goal, which is between 11% and 13%. So we are happy about this improvement, but actually, we are really working on that, that we will see further improvements in the future. If we look at some other key figures, we already had a look at our employees, 10,699 in average for the first 9 months this year. Sales, close to EUR 1.1 billion. Gross profit grew by 10%, so a little bit less than sales, which is caused by the increase in material cost. Personnel costs increased by 11%, so a little bit less than sales. Other operating expenses, an increase of only 3%. More or less all expense lines have slightly increased, especially expenses for hiring and travel. We have seen an opposite development with expenses for external consultancy and legal fees. If we look at the key profit drivers, utilization, as I already pointed out, utilization has improved this year, especially in the first half of the year. Q3 was, let's say, flat and only a little bit improved. Daily rates. As you might remember, we have started last year in Q4 internal projects to improve our daily rate. And actually, we have seen some nice improvements in Q1 and Q2. Q3 was a little bit more flat, also caused by the market environment. At the moment, we noticed that competition is really increasing. And so this makes it difficult to increase our daily rates. License and maintenance, we have seen an improvement here as well, especially license sales in Q2 contributed to that. We are still optimistic that we will see some further license sales in Q4. However, at the end of the day, customer needs to sign the purchase order. So we are still negotiating and waiting for that. Personnel cost increase of 3%. There are some key contributors to that. First of all, we have an increase in our salaries. Second, we have hired more senior people or the percentage of senior people has increased within our hiring efforts. And therefore, this has also an increasing impact on our personnel costs. On the other hand, we have increased our hiring efforts in our shoring countries. Our colleagues there have lower average salary, which has lowers a little bit the increase. So it's a mix of different items. At the end of the day, it's a 3% increase. If we look at our earnings per share, EUR 0.99 after 3 quarters, which is a nice improvement compared to last year, where we have seen EUR 0.16 at that time of the year, especially Q2 contributed to that, but also Q3 had a positive impact of EUR 0.20 in addition to what we have seen last year. If we look at the depreciation, depreciation increased. This is mainly for right-of-use items, which is based on IFRS 16 and which is our office leases and company cars. Depreciation from purchase price allocation is slightly decreasing. Income from investments at equity is also a little bit more negative here. Financial result, interest, a little bit less interest to pay due to lower interest rates. So it's minus EUR 8 million. Earnings before taxes, a nice increase from EUR 7.3 million to EUR 12.9 million because we have a higher pretax income, we have higher income taxes. However, the tax quota has improved from 67% to 52%. It's still comparably high, but there are always certain items which are not tax deductible and at some group companies, which generate losses, we don't put tax assets on our balance sheet. Let's have a look at our working capital and our balance sheet and especially our working capital. Cash improved slightly compared to last year. Financial debt and net debt, we've seen an increase of close to EUR 40 million. There are 3 main drivers for that. First of all, we have increased our shareholdings in KIWI subsidiary KIWI from 70% to 100% in Q1 and same with adesso business consulting from 71% to 100%. This was a cash out of EUR 27 million. We did a share buyback last year in Q4 and also Q1 this year, which was another EUR 10 million. And then we have seen for an earn-out payment in June and July this year, another EUR 3.4 million. So in total, around about EUR 40 million, which has increased our financial debt and therefore, also our net debt. If we look at our operating cash flow, it's EUR 30 million worse compared to last year. This is caused by our net increase in net working capital by 15%. Revenue grew by 13%. Net working capital by 15%. So we are not overly happy with this figure. I would have hoped to see here a lower growth rate at this point in time in the year, but we expect a significant improvement as always in Q4 this year and actually in October, the development already shows that we are on the right track for that. If we look at our equity, equity decreased by around about EUR 10 million. Therefore, our equity ratio reduced to 22.8%. There are two reasons for that. First of all, the share buyback last year, this EUR 10 million is directly deducted from the equity. And as our revenues are growing, working capital has increased. So our -- the total amount of our balance sheet has increased, and therefore, the ratio was also negatively impacted. Operating cash flow after this line -- below this line, we have CapEx and also lease repayments. Lease repayments are related to IFRS 16. And based on the recommendation of the IFRS foundation, these lease repayments related to company cars and office leases are also shown as CapEx. And therefore, we have a free cash flow of minus EUR 69 million compared to minus EUR 30 million last year. Actually, this mainly reflects the increase in working capital. Yes. Yes. Let's have a look at our guidance. I mean at the beginning of the year, our guidance was based on the assumption that IT services will -- there will be still an ongoing demand in a recessionary environment. And yes, this -- it still applies. It's still right. And the environment is tough, but different to the past where quite often IT services was the first thing which is cut. This time, it's different. There is still a demand for IT services despite the fact that competition at the moment is increasing. If we look at our guidance, we assume that we will improve our margins, especially driven by higher utilization. That's right. We have improved our utilization, and it's still on a on the right track, even if the improvement in Q3 was lower than what we have seen in the first half of the year. For the second half of the year, we will see an additional contribution because we have just -- we have 7 additional working days compared to the first half of the year. And actually, that's what we already see in the results of the third quarter, highest revenues this year so far and also in terms of earnings, EBITDA. And only the last one probably is a little bit different than what we expected. Initially, we thought we will see a positive impact by an increased IT spending in the public sector starting in Q3. So far, this didn't happen. But despite that, we were so far able to achieve our goals. If we now look at our guidance a little bit more in detail. We guided for a revenue growth to EUR 1.35 billion to EUR 1.45 billion, which is an increase between 4% and 12%. So far, we are really good on track. Our achievement of this guidance is between 75% and 80%, and we are pretty optimistic that we will end at the upper end of this corridor. If we look at the EBITDA, EUR 77.9 million after 9 months, we want to get to right to our range of EUR 105 million to EUR 125 million. So far, we achieved 62% to 74%. Also, this is on track. We -- therefore, we confirm, yes, we will achieve our guidance. And EBITDA margin, 7.2%. Last year, for the whole year, it was 7.6%. It's our goal to get at 8% plus X and also this should be still realistic. So at the end of the day, we can confirm our guidance and Q4 will probably bring the necessary sales and EBITDA to get there. Thank you very much.

Thank you, Michael, for the helpful insights. We're now heading for the Q&A session. And I see there are already questions from Mr. Spang from Tigris Capital.

I would like to start with the margin improvement or margin decline in Q3 quarter-over-quarter. You already mentioned that Q3 2024 was a very strong quarter. But maybe you can please go a little bit more deeper into the quarter-over-quarter development. Why were you not able to improve the margin in Q3 2025 versus last year? So what were the main factors?

If we look at Q3, we have grown revenues by 13%, which is a strong growth rate. And if we look at EBITDA, EBITDA just grew from EUR 38.9 million to EUR 40.8 million. So obviously, less than this 13%. What is the key factor? Actually, the billable utilization did not improve in the same way. We look a little bit more in detail into this quarter in July, actually, figures looked very nice. We were pretty well on track to get further improvements there. August was a very challenging month, some more vacation than assumed and September was better. But also there, we have seen some more vacation than compared to last year. So there is not a specific reason. Last year, we have not seen license sales in Q3, same Q3 this year. It's really that the utilization should have been slightly higher or let's say, less vacation for the overall hours.

But you would say that this is a temporary or quarter-specific topic, not a fundamental topic.

No, so far, I would say it's a special topic for Q3. I mean the competition at the moment is tough. And what we noticed, for example, there are a lot of peers, which, let's say, had in the past, a stronger focus, for example, on automotive who have now people which are not utilized or not fully utilized. So they look for alternatives. They try to get into the market, public sector, for example. So it's a tough competition at the moment. So it's, for example, really difficult to increase our average daily rate. But I mean that's something which happened also the first half of the year, maybe it's at the moment a little bit stronger, but it's not a general problem at the moment. So it's not, let's say, kind of a change in the overall trend.

Okay. Then if I look into the IT Solutions segment in Q3, you did not really mention it in your presentation. But after the first half, you still had a growth in IT Solutions and after 9 months, the revenue did decline. So Q3 stand-alone was a very bad quarter year-over-year. What was behind that negative development in Q3 in the IT Solutions segment?

It's the same. What applies also to the IT consulting, IT services business. Utilization was there slightly lower. This part of our P&L is a little bit more project driven. This also has kind of an impact. And there's -- we have, let's say, 1 subsidiary, which also at the moment is a little bit struggling. It's not only this year, the in|sure business -- product line because for this part of the company, we have seen some improvements. There's another company at the moment, which has some problems where we also had to change in our management in Q2. And this also had a negative impact on our development in this sector. Actually, what's key is that we get some license sales, which would also help to improve our margins there again. At the moment, the situation for our IT solutions or especially the in|sure product line is in the way that we have ongoing revenues from projects, but to get to a more, let's say, more profitable level, also license sales are needed at least at the moment.

Okay. And forwarding into the topic of insurance, in|sure, what is your pipeline currently going into -- already into Q4? Is it bigger than 1 year ago? And how big would you say that the opportunity is that you can close some -- or I don't know how many deals they are in the pipeline but that you can close deals?

This -- the pipeline with our in|sure product line is much more difficult to predict than the pipeline for other areas of the companies. It's just because it's not a pipeline of, let's say, 10, 20 or 30 license deals. It's less -- let's say, less license deals, which could be closed in Q4 this year. So there are, let's say, 2 more significant ones, and we are still in negotiations there. We are kind of optimistic that we can close at least one of these deals. But it's not in a way that the pipeline looks in the way that if you don't close these 2, then there are 2 other ones you can close because this pipeline is much shorter than what we see in other areas.

Okay. Next in line is Dr. Jakubowski from SMC Research and afterwards, Marc-René Tonn from Warburg Research.

Can you hear me?

Yes.

Great. I have one follow-up question regarding the EBITDA margin. Is it fair to assume that you can achieve the same margin in Q4 as last year or even to improve it, taking in account what you have talked about the development in your daily rates and employee costs?

I mean to be honest, I have not calculated the percentage margin for Q4 itself. What I can tell you is that I did my math on the overall development for the year. And at the moment, we still see a good chance to improve our margins to a level 8 plus x percent for the whole year. That's what we wanted to achieve. And despite, let's say, reduced margin in Q3, we regard this as pretty realistic.

Okay. So don't have to be afraid at the moment that the development in Q3 was a reversal in the margin trend.

I mean Q3 last year was a pretty strong quarter. So it was -- if you grow revenues by 30%, it was really a challenge to exceed that. And Q4 is also last year was not that bad, especially if we look a little bit more detail this October and November were pretty strong month. We expect to grow revenues again significantly. The question is how much EBITDA growth at the end -- will we see at the end of the year. But again, we are sure that we will be better than 8%.

Okay. Okay. And maybe you could give us some details on the profit contribution from your foreign markets outside of Austria and Switzerland.

I mean Switzerland, despite the fact that revenues were a little bit shrinking, still is the main contributor from our foreign subsidiaries. This year, Austria is doing particularly well, very nice growth and also very nice growth of EBITDA. Actually, same applies to Italy. Italy, we are very happy with this company, very nice development. If we look at other countries like the Netherlands, Spain, also the Scandinavic regions, these countries are still -- these companies are still loss-making. However, they are showing nice improvements this year. So they are all on, let's say, on the turnaround path. Other countries like Bulgaria, Romania, India and also partially Turkey, I think you need to have a different view as these companies are strongly linked especially to Germany as they are doing shoring. So they are not focusing on the local markets. They are more focused -- they are, let's say, more dependent on wins of projects in Germany or Switzerland also.

Okay. But all in all the profit burden from your expansion, International expansion in European countries is declining, yes. That's the trend.

Yes. I mean, first of all, the total of all of them is contributing a positive EBITDA. So it's not that we are producing losses abroad. What's true is that we have certain subsidiaries in certain countries, for example, Netherlands, Spain or the Scandinavian region where we are, at the moment, generate losses. But all of them are on a good way of turnaround.

Okay. And then finally, I have one detailed question. There's an item in your income statement, which almost tripled compared to last year. And there was also a steady increase over the course of the year, it's the result from the change in impairment on financial assets. Maybe you could give some details on this item.

Yes. Do you mean the EUR 1,371,000?

Yes, yes.

Yes. That's actually related to our -- mainly related to our receivables. If you have an increase of receivables, then we have this lump sum allowance during the year. Actually, this figure should change again if receivables are reduced at the end of the year. So there is no special impact is mainly caused by what we call in Germany [Foreign Language].

Thank you, Mr. Jakubowski. Now we have Mr. Tonn from Warburg Research. And after that, Mr. Specht from Berenberg Research. [Operator Instructions] Okay, Mr. Tonn.

The first one would be on the sales development in Q4, and you already said that you are targeting the upper end of your full year guidance range. Nevertheless, that would mean, let's say, at least a certain, let's say, certain amount of slower growth in the fourth quarter. Is it just a cautious assumption? Or are there any, let's say, technical effects, which should lead to Q4 growth being slower than in the previous quarter from working day effects or holidays, which may play a role here? That would be the first question.

Q4 -- normally, Q4 is in terms of revenue generation and EBITDA contribution always shows less than what you see in Q3 because if you look at the calendar this year, the 19th of December is Friday. And after this, the -- most companies are more or less going into kind of sleep mode until the third week of January. So that causes always some headache in December. As we are not -- I mean we are mainly an IT services company, not really generating license revenues. So this is in the past, something like this could have helped, but that's not something at adesso, which is, let's say, important. So therefore, we are -- we believe that we will get at the upper end of this revenue guidance, which would mean EUR 1.45 billion in revenues. And at the moment, it's fair to assume that our EBITDA in Q4 might be a little bit less than what we have seen in Q3. Could be changed if we have significant license sales. This would have an impact if we have some more license sales in the in|sure product line. But I mean Q3 is our strongest quarter. And therefore, let's say, it's a little bit more cautious what we see in Q4 than what we have seen in Q3.

And secondly, also, let's say, with regard to the sales dynamics, I mean you mentioned, I think, that you have seen, let's say, the public sector with the delays there, let's say, with the growth rate coming down in the course of the year. When would you expect the trend to reverse and let's say, growth rates accelerating again for that customer group? And secondly, do you see any signs of stabilization in the demand from the auto industry? Or do you expect that to remain weak for the time being?

I think it's fair to assume that the situation and the overall situation for the public sector will slightly improve. On the other hand, competition in this area is increasing. But I think the overall perspective is probably more positive than in the past in this year. Automotive, yes, this is very difficult. I mean we still win some projects, but it's really a challenging environment. So it's difficult to say when there will be a change. The pipeline is -- let's say, it doesn't look like a significant change in the near future.

And perhaps lastly, more strategically and probably it's a mix of all elements. But when you look at the target, let's say, around 8% to 8% plus EBITDA margin for this year and your strategic goal of more than 11%, which would you, let's say, expect, let's say, the first initial positive driver to be in this direction would be more, let's say, utilization? Is it pricing? Is it reduction on the personnel cost side with the Smart share increasing? Would be, let's say, the parts which you would see, let's say, as being contributing the most and probably the earliest in this process?

That's an interesting question. And actually, there is not this one contributor. It's probably a mix of all. I mean key driver is always the billable utilization. There is still some way for improvement, at least if we look at the situation in 2022 or earlier years. So if we want to get there, we need to improve our utilization. We need to continue with our turnaround in -- for the IT Solutions business, especially for our insurance product line, in|sure product. That's also key. I mean, it's still loss-making. We have -- it was already highlighted in this call that the situation improved a little bit, but not that much. So we -- there's still some way to go, but this has also a significant impact if we are successful with our turnaround, improving daily rates, working continuously in our daily rates is a key ingredient for that. And yes, we also have already spoken about that today, we need to make further progress with those companies where we are loss-making abroad this will also help. And something which is also important, we need to look at one or the other cost item on our P&L. It's probably not one of the, let's say, key strengths of adesso. We are more growth focused. On the other hand, there are also probably one or the other items where we can achieve some improvements. So it's a mix of all.

And now Mr. Specht from Berenberg.

Three additional ones from my end. First, again, on utilization, the key topic. It is obvious that you have some people sitting on the bench while you're still in need of a lot of freelancers from outside the organization. So what type of qualifications are missing in for dedicated projects that you cannot serve with your current workforce that would be interesting. I mean have you a dedicated program to fill that gap? And then on the public sector, you gave some cautious statements there. Everybody is hoping for the big budgets to come next year. But do you already see, let's say, in the last week, some more RFPs circling in the sector? Or is it still wishful thinking of the industry as a whole? And final question would be to the net working capital position. That is up strongly. Can we expect some improvements in the final quarter of the year?

Okay. Let's start with the easiest one. It's the third one. Yes, we will some improvement. Actually, this is part of our working capital. That's part of our, let's say, normal development within calendar year. We start with cash outs in Q1, Q2 and also Q3 and then Q4, everything turns around. So yes, working capital will improve. We will probably see similar improvements what we have seen last year in Q4 compared to Q3. If we look at the public sector, I mean, my statement today was, let's say, I wanted to make sure that we are -- let's say, that we are a little bit less optimistic than what we were in the past, 3 or 6 months ago, we expected a certain impact because of additional spending from our government, also caused by these additional 2 budgets. We still believe that this will have an impact, but it seems -- today, I would say it seems that this impact will be a little bit lower than what we initially expected. So far, we don't see a lot of requests for proposal or tenders on the market. There are some tenders out there. Also some of them are important for us in Q4 and Q1. But so far, let's say, I would probably say it's more or less a normal course of business, not a dramatic change. The last one was regarding the...

Utilization.

Utilization...

Certain qualifications missing in your...

First of all, I mean, you are right. There are sitting people on the bench. But that's a normal part of our business because we have different sectors. We have specialists for banking. And if there -- for example, if there are less banking projects, then this -- you cannot always use this skill for, let's say, automotive because we are organized in verticals to be closer to the customer and customer needs. And therefore, you cannot just switch people around. Then you have -- sometimes if you have someone who is specialized in Java, maybe you have less demand for Java. It doesn't help if you have a lot of demand for SAP. So it's always that you have people sitting on the bench. I think the key thing is that you look at this bench that you manage your bench, that if you hire new people that you hire them in the right area. External resources, freelancers or whatever quite often have a special skill. That's why you hire these people. I mean freelancers quite often are freelancers because they are very, very good in those things they are doing, and that's why they are freelancers and don't want to get on a payroll from a company. And please keep in mind, that's what I also mentioned today, adesso is growing. The projects we are working on are getting bigger and bigger. And so you build consortiums. Sometimes we are the general contractor. And so all the other participants of this consortium invoice us and we invoice the customer. So therefore, material costs go up. But these are, let's say, costs which you cannot replace by using your own people. So that's also -- you need to consider that as well. It's right that utilization should be higher, but we are not talking about, let's say, 3, 4, 5 percentage points. This corridor is much smaller and already 1 percentage point or 0.5 percentage point has a tremendous impact on our EBITDA.

So the improvement in utilization would be rather below a full percentage point this year as a whole?

No, at the moment, it's higher because we have started pretty strong in the first half of the year. And last year, it was Q1 and also Q2 were much weaker. Please keep in mind, I mean, if you have 10,000 people and 1% is just 100 people. So we are talking, let's say, about 100 colleagues to improve your billable utilization by 1 percentage point. So we are not talking about hundreds of people who make the difference. We are talking about maybe 100, maybe 150, 200 people, it's not more.

All questions answered. Or do we have more questions? Do we have more questions from the audience at this point in time? Mr. Spang again?

Yes. Just one follow-up on the working days. You mentioned that the last, let's say, real working day before Christmas is the 19th. And in general, Q4 this year has 1 working day more than last year Q4. So is my interpretation out of your explanation about Q4 right that you don't really expect a positive impact in Q4 this year despite a higher one way more working day? Or is this a misunderstanding?

Yes, that's a good -- really good question. Actually, this additional working day probably is in the Christmas week. So the impact is probably less than it would -- if it's just on a normal working day. If you look at last year's calendar, I think it was 15 days in the 3 weeks before the Christmas. And then in the Christmas week and the week after this is 1 day less. And this year, it's -- I think the most important days for invoicing on the 22nd and 23rd of December. And I don't think the impact is that much. Well, let's say, there is an impact, but less than what you normally would expect.

Okay. Do we have more questions? No, this doesn't seem to be the case. So I'd like to thank you very much for your interest in our call today and your participation. I wish you all the best and hope to see you soon in person maybe on the equity forum. For now, goodbye.