Bechtle AG — Earnings Release 2005

Nov 11, 2005

News Details

Corporate | 11 November 2005 07:30

Bechtle AG: Nine-months-results

Corporate-news transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Bechtle AG increases turnover and proceeds in third quarter; Forecast corresponds to market consensus – Group turnover grew by 8.9% in the first nine months – Pre-tax earnings improved by 4.5% – Market economy continues to underachieve – Board adjusts earnings and turnover forecasts based on previous business development Neckarsulm, 11/11/2005 – Due to acquisitions, Bechtle AG have increased turnover from January to September 2005 by 8.9% to 817.9 million Euros (previous year: 751.2 million Euros) despite a difficult trade environment. As far as proceeds are concerned, the IT retail and service company were able to increase pre-tax earnings (EBT) by 4.5% to 25.0 million Euros in the first nine months (previous year’s results adjusted for changeover effects in accordance with IFRS: 24.0 million Euros). On a quarterly basis, turnover increased by 11.2% to 288.1 million Euros (previous year: 259.1 million Euros), EBT gained an above-average 18.6% at 11.9 million Euros (previous year: 10.0 million Euros). The Bechtle Group achieved Earnings per Share of EUR 0.76 (basis: 21.2 million shares) after the first nine months and thereby reached the adjusted level of the previous year (basis: 21.0 million shares). The basis for this is net income for the period of 16.1 million Euros, which surpassed the previous year’s results of 15.9 million Euros for the same period by 1.7%. As the market economy in the third quarter was poorer than expected and Bechtle had also chosen not to increase turnover at the expense of profit, organic growth is altogether absent in the first nine months. The Board has therefore adjusted the turnover forecast from 1.3 thousand million Euros for the current financial year in accordance with the underlying conditions and now expects revenue within a target range of 1.15 to 1.18 thousand million Euros. Compared to the previous year (1.09 thousand million Euros), turnover would increase by 5.5 – 8.3% due to acquisitions. Despite an upturn in demand since the end of September, the propensity of companies and the public sector to invest in IT did not improve as strongly by the first half of November as had been expected. The positive trend will probably not suffice to compensate for the low level from the first and second quarters. Even the positive stimuli from the increase in number of incoming orders, which also included organic growth of around three per cent in October with 112 million Euros (previous year: 100 million Euros), are too weak for this to work. This improvement may generally indicate a pick-up in the order situation in the final quarter but has still not shown the expected dynamic effect. Against this background, the Board consider the original increase forecast with pre-tax earnings of at least 42 million Euros for the current financial year to be too ambitious. EBT in the region of 40 million Euros are now expected for the whole financial year, which is exactly the same level as the consensus estimate. This would be the equivalent of an increase of 6.4% compared to the previous year (adjusted in accordance with IFRS: 37.6 million Euros). Based on this, the expected EBT margin gains compared to the previous forecast of 3.2% to 3.4 – 3.5%. “With the current state of the market, it is inadvisable to try and generate turnover at all costs. We will remain consistent and continue with the profit-oriented growth strategy.” according to Ralf Klenk, Chairman of the Board at Bechtle AG. Notes on business development in the first nine months and in the third quarter Segment development With 565.7 million Euros between January and September, the Bechtle system houses have exceeded segment turnover for the comparative period by 12.7% (previous year: 501.8 million Euros). This increase in turnover was caused purely by the acquisitions. The EBIT has reduced by 10.0% from 10.5 million Euros to 9.5 million Euros in the nine-month period. This decline can for the most part be explained by the costs for setting up an industry-focused sales structure and integration expenses for the four system houses acquired in 2005. The IT e-commerce segment recorded a slight increase in turnover of 1.1% in the nine-month period, with 252.2 million Euros (previous year: 249.4 million Euros). This was pure organic growth. Thus the positive business development of the Bechtle direkt business was able to compensate for the contribution of the subsidiary company ARP, which was (as expected) lower than in the previous year. The income situation in the retail segment improved once again despite sustained pricing pressure: EBIT increased by 15.2% between January and September. It amounted to 15.6 million Euros, surpassing 13.5 million Euros for the same period the previous year. Financial situation Liquid funds, including current asset securities, amounted to 37.5 million Euros on the reporting date, 30th September 2005, (31st December 2004: 65.8 million Euros). Combined with open lines of credit of 48.3 million Euros, Bechtle has sound total liquidity reserves of 85.8 million Euros, which allow plenty of scope for further acquisitions and future expansion. On the base of a reduced balance sheet total, Bechtle recorded a rise in the equity ratio from 57.1% to a solid 61.9%. Employees The number of employees belonging to the Bechtle Group increased in the first nine months of 2005 by 567 to a total of 3745 people. This 17.8% growth in staff is mostly due to the acquisitions made this year. Outlook Based on the adjusted target range of 1.15 to 1.18 thousand million Euros, a share of the revenue at 28.9 – 30.7% of the total turnover is assumed for the fourth and final quarter. In the previous year, Bechtle attained 31.0% of total revenue in an outstanding final quarter. This dynamic cannot, however, be assumed for the current financial year. Nonetheless, the Board expects an improvement of 10.3% in the fourth quarter compared to the previous year (4th quarter 2004: 13.6 million Euros, 4th quarter 2005e: 15.0 million Euros). Telephone conference for analysts and journalists, today, 8:30 am for analysts and 10:30 am for journalists – dial-in number for both: +49 (0) 89 2030 3241, dialogue partners: Ralf Klenk, CEO, Stefan Sagowski, CFO. Contact: Bechtle AG, Sabine Emich, Investor Relations, Tel.: +49 (0) 7132/981- 4115, Fax: +49 (0) 7132/981-4116, sabine.emich@bechtle.com The nine-month report is available at http://www.bechtle.com End of announcement (c)DGAP 11.11.2005 —————————————————————————— WKN: 515870; ISIN: DE0005158703; Index: TecDAX Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart