Bechtle AG (BC8) Earnings Call Transcript & Summary

Thank you, and welcome to our Bechtle Analyst Conference on the first quarter 2026. I am delighted by your interest. Ladies and gentlemen, today, we are reporting on a strong start to the year for Bechtle AG. We are showing top line and bottom line double-digit growth rates. This is all the more remarkable given that the operating environment remains challenging. Well, with regard to the IT market, I've often said, size matters, and we are seeing this again very clearly now. Bechtle is one of the largest and most important VARs in Europe. Vendors work closely and trustingly with us. And this is paying off, especially in times like these when the IT market is characterized by the so-called memory shortage and the supply chain bottlenecks and clear price increases. As usual, today's presentation is divided into three main sections. As usual, we start with the essential key financial highlights of the first quarter of the 2026 financial year, which Christian Jehle, our CFO, will present for the first time in the context of the Q1 presentations. Then latest news that is important strategic and developments beyond the figures, and I'm going to present those to you. And also the third part of the presentation, the outlook for 2026, our objectives and the overall economic development, which we expect for the next 3 quarters. But first, let's look at business performance. Mr. Jehle, please.

Thank you, Dr. Olemotz. The first quarter was characterized by difficult geopolitical framework conditions, amongst them, the war in the Middle East and the memory shortage that Dr. Olemotz already mentioned. On the other hand, we also saw high demand from customer groups in all segments. In many talks with our customers and vendors, we were able to find solutions in this respect. A company like Bechtle that stands for customer proximity and cooperation with vendors can benefit from such a situation. And as I said, we started out into the year 2026 excellently. Let's, first of all, take a look at order intake and the order book. In Q1, order intake went up by 17%, which meant that our order book grew further. This means that Bechtle was able to benefit from the high level of demand. High order intake numbers also give us certainty for the development of Q2, and we see in April already that the development continues. Let's now take a look at the top line. Business volume grew by over 13%. In organic terms, we're at a very good level, 11%, which means that our core business is healthy and intact. And our acquisitions are, of course, an important contribution. We are managing framework conditions well. Revenue and revenue growth is below the business volume as usual due to IFRS 15 and also the growing software business. Let's now take a look at our segments. All segments made a contribution to our growth, either in the double-digit or high single-digit range. The development in France is remarkable. We're back on a growth path having managed the turnaround. In the rest of Europe, we're growing at 17%, almost 30% when we include our acquisitions. And the good news is that growth is based on a very broad foundation and all customer segments. So this seems to be a sustainable trend. Let's now take a look at our earnings situation. EBT is growing in double-digit terms. In Q1, we see growth in the top line, a stable profit margin, which makes us feel very confident. Investment into our own IT infrastructure continues, and our measures in cost management are showing the first success. So we still have a very positive message. So our gross margin and our profit margin are healthy in Q1. Let's now take a look at the segments. Again, the trend is broad-based. All segments make a contribution to our development. We still see a higher share in the classic product business, which you can also see reflected in the margin. In Germany, we have the widest portfolio, established processes, professional management teams and decentralized services. Our specialists also work from a broad basis, and that also is mirrored in profitability. But of course, we're also working towards getting the international segment at the same level of margins. So to conclude this part, let's take a look at operating cash flow. Operating cash flow in Q1 developed well after a decline the year before. We're now back in the green despite the positive and the important growth we've seen. Inventory has seen a buildup, but it's based on customer demand, and we see that our performance has increased. Also in terms of DSO after the last quarter of 2026 (sic) [ 2025 ], we were at 28 days, and this number used to be 39. Now let's now take a look at our staff. The staff expansion we saw in Q1 is due to acquisitions only. In organic terms, we see a decline by 1.7%. Here as well, we take very conscious decisions, and we are exercising a moderate approach. By the end of March, 729 young people received training or went through dual study training courses at Bechtle. Now let's now come to the latest news. Dr. Olemotz, please.

Yes. Thank you, Mr. Jehle. The latest news, which we've compiled here, highlights a lot of the key future areas of IT in which we are strategically well positioned, thereby underpinning once again Bechtle's readiness for the future. We look at the topic of quantum computing, an important project in the health care sector. And of course, digital sovereignty is an essential topic here, but we're also looking at a further success in our business with public sector clients and the presentation of many future-oriented topics at the Hannover Fair. Let's start with quantum computing. We are currently implementing a highly forward-looking project at Heilbronn University of Applied Science. This involves the integration of a so-called IQM Spark quantum computer with which we are creating a platform for teaching, research and practical development. The system by the Finnish manufacturer IQM Quantum Computers will go live later this year and will be supported and further developed by Bechtle over a 3-year period. installation at the tech campus will provide direct access to superconducting quantum hardware for students, researchers and partners. The aim is to embed quantum computing in education and application at an early stage and to integrate it with the traditional IT and AI environments. The project is also an impressive example of Europe's technological sovereignty as European hardware operations and expertise are closely integrated and the regional innovation ecosystem that has emerged in Heilbronn in recent years is being further expanded. The functioning innovation ecosystem is also at the heart of the following project in the health care sector. As consortium leader, Bechtle is playing a key role in the WebMedX project. This project aims to make care for people with cardiac insufficiency more digital, more connected and easier to use in everyday life. Together with Würzburg University Hospital and other technical and academic partners, a cross-sector telemedicine platform is being developed to better connect all parties involved. The aim is to close gaps in care in the post-hospitalization phase, prevent readmissions and to sustainably improve care. The digital network is intended to serve as a model for other regions and other conditions and is thus truly relevant for us beyond this individual project. Bechtle brings comprehensive industry experience in the field of digital health care to the consortium through a team specializing in health care solutions. As consortium leader, Bechtle is responsible for the overall implementation of a viable technological framework for the platform, thereby supporting the transformation of a medically highly relevant care concept into a practical digital solution. Aspects of digital sovereignty also play a major role here, an area that Bechtle has also been active in from an early stage. Since March, we have been actively promoting the Bechtle Index of Sovereignty, BIoS in short, offering a specific implementation model for customers who wish to take a structured approach to digital sovereignty. BIoS is a proprietary software solution designed for the systematic assessment of the level of digital sovereignty within companies and public organizations. We combine the systematic assessment of key business processes with comprehensive consultancy from certified IT business architects. This enables customers to determine their individual maturity level of digital sovereignty based on data and to track developments on an ongoing basis. The assessment analyzes data sovereignty, technological independence and capabilities across key business and administrative processes. Bechtle is initially piloting the BIoS assessment in Germany, Austria and Switzerland. However, marketing in other European countries will follow in due course. In terms of sales, too, the topic of digital sovereignty has now become highly relevant as the following example clearly illustrates. A recent report published just yesterday by GovTech Deutschland highlights a significant sales success for Bechtle in the public sector. We are very happy to have been awarded the contract for the multi-cloud broker within the GovTech framework. With a strong partner network comprising international hyperscalers and European providers, we are creating a centralized, standardized platform for cloud and AI services. This enables public authorities to have fast, secure and flexible access to modern infrastructures and it provides a concrete contribution to digital sovereignty as well as to the successful implementation of the MEDI:CUS health care platform and the so-called Deutschlandplattform. The framework contract is worth EUR 250 million over a 2-year term with two options to extend for a further year each. Further, digitalization using platform-based ecosystem is playing an increasingly significant role, not only in public administration and medicine, but of course, above all in industrial value creation. At the Hannover Fair, Bechtle demonstrated thus how companies can approach the digitalization of their industrial value chain in a consistent and end-to-end manner. The guiding principle behind the exhibition stand was the intelligent integration of various dimensions of modern industrial digitalization. To this end, Bechtle brought together the expertise of various specialized units within the group and together with partners, presented practical application examples and innovations. This year, Bechtle further expanded its presence at the world's largest industrial trade fair. At the Bechtle Group stand, visitors were able to view an integrated portfolio spanning the fields of engineering, OT security and manufacturing, the industrial Internet of Things and business integration. Ladies and gentlemen, so much on the strategically relevant news in the past months of the financial year. Let us now turn to the outlook. We have started the year with a good first quarter. This is very encouraging and makes us confident as regards to the remainder of the year. As I've mentioned at the start, this is all the more remarkable given that, unfortunately, the economic conditions have not improved significantly. The fact that we are coping well with these difficult conditions is a very positive sign. Against this backdrop, we are confident regarding the developments in the second quarter above all in view of the tremendous order intake. And according to the first preliminary figures, April is showing as positive a picture as the previous months. On the other hand, uncertainties remain in connection with the geopolitical situation and also regarding the IT-specific situation. Our vendor partners have already announced further price increases. Visibility as regards the second half of the year remains limited. Customers -- being close to customers and vendors are particularly relevant here, and that is the strength of Bechtle. Well, in concrete terms, this means for our outlook, we confirm our guidance from March 2026. In the first quarter, we demonstrated that we can grow profitably even under difficult conditions, and we expect this to hold true for the full year as well. We will continue to closely monitor the dynamic developments, particularly in the IT market and regularly review whether our guidance still accurately reflects the situation. Nevertheless, I would like to remind you, as does Christian Jehle, that we have planned significant investment in our own IT for this year, which will be reflected in the bottom line, of course. However, this does not change the fact that we remain convinced of the positive development of the Bechtle Group even at difficult times as these. That, ladies and gentlemen, concludes our review of the first quarter of 2026 and the outlook for the rest of the 2026 financial year. Thank you so much. And we are now ready to take your questions. [Statements in English on this transcript were spoken by an interpreter present on the live call.]