Bechtle AG — Earnings Release 2005

May 13, 2005

News Details

Corporate | 13 May 2005 08:04

Bechtle AG: First quarter of 2005 goes as forecast (Part 1/2)

Corporate-news transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— – Revenues up by 2.6 % in the first three months of 2005 – Earnings before tax up by 2.3 %, adjusted to take account of special item by IFRS. – Revenue and earnings forecasts confirmed for the whole year Neckarsulm, 13.05.2005 – Bechtle AG ended the first quarter in a restrained mood, as expected, but sees itself well on the way to further dynamic growth in the year as a whole. Bechtle managed to increase its revenues by 2.6 %, up to EUR 254.7 million, on the basis of acquisitions. On the profits side, the Group achieved earnings before tax (EBT) of EUR 8.1 million, putting it 2.3 % above the level of the previous year (around EUR 8 million). The EBT margin remained constant at 3.2 %. This comparison does not take into account a special item resulting from the changeover to the IFRS accounting standards applicable from this year onwards. In adjusting the previous year’s figures, the so-called negative goodwill incurred in the course of the acquisition of Swiss company ALSO COMSYT AG, amounting to EUR 7.4 million, is according to IFRS to be shown as other operating income, and hence in the earnings before tax. It thus raises the previous year’s EBT, adjusted according to IFRS, from EUR 7.9 million to around EUR 15.3 million. On the other hand, the negative goodwill, initially amounting to EUR 3.8 million according to U.S. GAAP, was offset in 2004 against the assets taken over, with a neutral effect on net income. The remaining negative goodwill, amounting to EUR 3.6 million, was then shown as extraordinary income, and so was not included in the EBT, but was only noticeable in the quarterly net income. In the quarter under review, Bechtle achieved earnings per share of EUR 0.24 (Q1 2004 / adjusted: EUR 0.23). The basis for this is a quarterly surplus of EUR 5.1 million, which surpassed the previous year’s results of EUR 4.8 million for the same period by 6.6 %. The Executive Board sees the Company on course for 2005, and so confirms the rise in revenues in April as well as its profits forecast. “In view of the unusual holiday situation in the first quarter, we are happy with the way business has developed. Following an unexpectedly strong December, we had anticipated a restrained start to the year. As a result, a weaker first quarter was already included in the forecast for the entire year,” says Ralf Klenk, Chairman of the Executive Board. Compared with the same period in the previous year, the first quarter suffered from the fact that there were fewer working days available than in 2004 as a result of the Easter public holidays and the associated scheduling of employees’ holidays. Against this background and in view of the limited orders being taken in the immediate context of CeBIT, the first three months went as forecast. In addition to which, at the end of 2004 some projects were brought forward from the first quarter, which explains the extraordinarily strong level of business in the final quarter. System house segment increases revenues – eCommerce profits grow The rise in Group revenues in the first quarter can be attributed exclusively to the larger IT system house segment. Consolidation effects arising from the companies acquired in the past financial year and the Swiss company CDC IT AG, which has been part of the Bechtle Group since February 2005, are also making their mark. Taking into account the companies already entirely consolidated since the first quarter of 2004, the organic growth amounts to 2.1 %; including acquisitions, the system house segment grew by 6.8 %, up to EUR 171.8 million (Q1 2004: EUR 160.9 million). The segment’s EBIT amounted to EUR 2.4 million; on a comparable basis for the previous year they were EUR 2.9 million. In the first three months of 2005 the IT eCommerce segment did indeed record a drop in revenues of 5.2 % compared with the previous year, down to EUR 82.9 million (Q1 2004: EUR 87.5 million), but increased its profits. The background to the reduction in revenues lay in the strong previous year’s quarter of Swiss subsidiary ARP AG which, as anticipated, could not be followed up in the current year. On the other hand the segment’s EBIT improved by 12.5 %, from EUR 5.1 million to EUR 5.7 million, as a result of the optimised cost structure. Overall trends were positive not only in business in Germany but in particular in direct dealings with public-sector clients. The Bechtle Group recorded a rise in shareholders’ equity ratio from 56.4 % to 63 % as of 31st March 2005. Shareholders’ equity amounted in total to EUR 221.6 million, compared with EUR 216.7 million on the key date for the financial statement in 2004. This already takes into account an adjustment of EUR 3.2 million to the shareholders’ equity as of 31st December 2004 arising from the changeover to IFRS. The background to this is once again the rise in balance sheet profit resulting from the inclusion of negative goodwill as income. Liquid assets and securities shown under current assets were reduced in the first quarter – particularly as a result of acquisition activity and the reduction of liabilities as scheduled – from EUR 65.8 million to a still high level of EUR 53.8 million. Forecast for the whole year confirmed The Bechtle Executive Board anticipates a significant revival in the order situation and above market average growth in the course of the financial year. “We are exploiting the continuing rapid consolidation process among the system houses and securing today our opportunities for growth tomorrow. What counts now is gaining market share. In the short term this may indeed be at the expense of income, but we consciously accept that in return for the long- term assurance of our corporate success. In the first quarter Bechtle was strengthened by the acquisition of Swiss system house CDC IT Group and the establishment of a new location in Bonn. The Swiss company DELEC AG and the German system house compartner systems GmbH were new additions to the Bechtle Group in April. Market researchers predict growth between three and four percent for the German IT market, but the companies’ inclination to invest has not yet improved as significantly as expected at the start of the year. “All the same we feel we are in a good position to be able to surpass average market growth in the system house market and in eCommerce,” says Klenk with conviction. The Executive Board is expecting a revenue volume of EUR 1.3 billion for 2005 (up 19.5 %) and in terms of EBT – Bechtle’s operational control figure – an increase in excess of 11.8 %, up to at least EUR 42 million (on an adjusted previous year base). *** Telephone conference for analysts and journalists today, 13th May 2005: 8:30 am to 9:30 am for analysts D: +49 (0) 30 726 130 557 10:45 to 11:30 for journalists +49 (0) 30 726 130 557 Participants include: Ralf Klenk, CEO, and Stefan Sagowski, CFO Second news with figuers will follow. End of announcement (c)DGAP 13.05.2005 —————————————————————————— WKN: 515870; ISIN: DE0005158703; Index: TecDAX Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 130804 Mai 05