Bechtle AG — Interim / Quarterly Report 2018

May 9, 2018

QUARTERLY STATEMENT AS OF 31 MARCH 2018 Q1

KEY FIGURES OF THE BECHTLE GROUP AT A GLANCE

	01.01– 31.03.2018	01.01– 31.03.2017	Change in %
Revenue €k	955,389	803,129	19.0
IT system house & managed services €k	658,182	563,326	16.8
IT e-commerce €k	297,207	239,803	23.9
EBITDA €k	44,504	38,725	14.9
IT system house & managed services €k	31,246	28,484	9.7
IT e-commerce €k	13,258	10,241	29.5
EBIT €k	35,718	31,823	12.2
IT system house & managed services €k	24,072	22,792	5.6
IT e-commerce €k	11,646	9,031	29.0
EBIT margin %	3.7	4.0
IT system house & managed services %	3.7	4.0
IT e-commerce %	3.9	3.8
EBT €k	35,400	31,475	12.5
EBT margin %	3.7	3.9
Earnings after taxes €k	24,849	22,098	12.4
Earnings per share €	0.59	0.533	12.4
Return on equity1 %	13.8	13.7
Cash flow from operating activities €k	13,939	−16,954
Number of employees (as of 31.03)	8,627	7,708	11.9
IT system house & managed services	7,044	6,256	12.6
IT e-commerce	1,583	1,452	9.0

	31.03.2018	31.12.2017	Change in %
Cash and cash equivalents2 €k	115,653	174,827	−33.8
Working Capital €k	476,561	492,865	−3.3
Equity ratio %	57.6	53.9	7.0

1 Annualised

2 Incl. time deposits and securities

3 Adapted to share split

REVIEW BY QUARTER 2018

	1st Quarter 01.01–31.03	2nd Quarter 01.04–30.06	3rd Quarter 01.07–30.09	4th Quarter 01.10–31.12	2018 FY 01.01–31.03
Revenue €k	955,389				955,389
EBITDA €k	44,504				44,504
EBIT €k	35,718				35,718
EBT €k	35,400				35,400
EBT margin %	3.7				3.7
Earnings after taxes €k	24,849				24,849

EARNINGS POSITION

At the beginning of 2018, the Bechtle Group increased the growth rate it had exhibited in the prior year.

As of 31 March, the order backlog amounted to €548 million (prior year: €468 million). Of this amount, the IT system house & managed services segment accounted for €472 million (prior year: €400 million), and the IT e-commerce segment for €76 million (prior year: €68 million).

From January to March, the revenue increased 19.0 per cent. At 18.4 per cent, Bechtle's organic growth accounted for the major part of the growth.

The highly dynamic growth was evenly distributed over the companies in Germany and abroad. The German companies recorded growth of 18.8 per cent, and the companies abroad went up 19.2 per cent.

0 125 250 375 500 625 750 875 1,000 563.3 239.8 Q1/2017	REVENUE BY SEGMENTS					€m
						Total
						803.1
297.2 Q1/2018				658.2		955.4 (+19.0%)

IT system house &managed services IT e-commerce

At an impressive 23.9 per cent, the revenue growth was especially strong in the e-commerce segment. However, with growth of 16.8 percent, the IT system house & managed services segment also made an excellent start into the year. The mood in the European economy, and thus the willingness to invest, remained high throughout the first quarter.

REVENUE – GROUP AND SEGMENTS €k

4

	Q1/2018	Q1/2017	Change
Group	955,389	803,129	+19.0%
Domestic	653,733	550,163	+18.8%
Abroad	301,656	252,966	+19.2%
IT system house & managed services	658,182	563,326	+16.8%
IT e-commerce	297,207	239,803	+23.9%

Due to the strong growth, material costs underwent a disproportionately high increase of 20.3 per cent. The below-average increase of 10.3 per cent in personnel expenses, which are included in the cost of sales, could not compensate for this effect. Gross earnings went up 15.4 per cent, and the gross margin declined from 15.0 per cent to 14.6 per cent.

The personnel expenses in the two functional areas sales and administration also increased at a disproportionately low rate, resulting in growth rates below the revenue growth. The expense ratios remained at the prior-year level. Other operating income did not exhibit any unusual developments.

Year on year, EBITDA went up 14.9 per cent. The EBITDA margin was 4.7 per cent, just slightly less than in the corresponding prior-year quarter (4.8 per cent).

Due to the numerous investments in prior years, depreciation and amortisation went up 27.3 per cent to €8.8 million. As previously, depreciation of property, plant and equipment accounted for the largest share of depreciation and amortisation. This item amounted to €7.7 million.

EBIT went up 12.2 per cent to €35.7 million. The margin dropped from 4.0 per cent to 3.7 per cent.

EBT underwent a similar development. This KPI increased 12.5 per cent to €35.4 million. The EBT margin was 3.7 per cent.

The tax rate remained at 29.8 per cent.

Earnings after taxes went up 12.4 per cent to €24.8 million. EPS amounted to €0.59.

At the segment level, the earnings situation was as follows:

EBIT in the IT system house & managed services segment increased by 5.6 per cent. In this segment, the company was able to staff numerous vacancies in the reporting quarter, resulting in an aboveaverage increase in personnel expenses. This item was also affected by the higher bonus payments for employees due to the strong fiscal year 2017. Depreciation and amortisation also underwent a disproportionately high increase in this segment. The EBIT margin was 3.7 per cent, compared to 4.0 per cent in the corresponding prior-year quarter.

EBIT in the IT e-commerce segment climbed 29.0 per cent. Though the material costs increased above average due to the robust revenue growth and the product mix, personnel expenses progressed merely at a below-average rate. The EBIT margin increased from 3.8 per cent to 3.9 per cent.

EBIT – GROUP AND SEGMENTS			€k
	Q1/2018	Q1/2017	Change
Group	35,718	31,823	+12.2%
IT system house & managed services	24,072	22,792	+5.6%
IT e-commerce	11,646	9,031	+29.0%

ASSETS AND FINANCIAL POSITION

Particularly for reasons relating to the reporting date, the balance sheet total of the Bechtle Group as of 31 March 2018 amounted to €1,392.9 million, some 3.5 per cent below the figure of 31 December 2017.

In the non-current assets category, the company's property, plant and equipment increased €11.5 million due to the takeover of two buildings, among other reasons. The goodwill went up by €8.7 million, due especially to acquisitions. For project-related reasons, the trade receivables dropped by €2.7 million.

Among the current assets, the inventories went up €54.0 million due to the higher number of large projects. Following the high level at the end of the year, the trade receivables declined by €80.4 million in the first quarter. Over the same period of the previous year, our average DSO (days sales outstanding) as of 31 March 2018 increased slightly from 41.4 days to 41.9 days. As a result of the higher prefinancing needs associated with the growth and due to acquisitions, cash and cash equivalents dropped €52.2 million in the first quarter of 2018.

Despite the high revenue growth, the working capital as of 31 March 2018 declined slightly compared to 31 December 2017, reaching a figure of €476.6 million. While the inventories went up, trade receivables dropped considerably. The trade payables remained more or less stable.

On the equity and liabilities side, the current liabilities underwent the greatest changes. Due to maturities associated with the reporting date, financial liabilities dropped €44.2 million. Other liabilities dropped €34.8 million, also for reasons related to the reporting date. This was due mainly to the lower personnel liabilities due to variable compensation components paid out in the first quarter and reduced VAT liabilities.

Owing to the higher earnings, equity climbed €25.0 million. Our equity ratio increased from 53.9 per cent as of 31 December 2017 to 57.6 per cent as of the reporting date. The extrapolated return on equity increased slightly from 13.7 per cent as of 31 March 2017 to 13.8 per cent as of the reporting date.

In the first quarter, the cash flow from operating activities was again positive and amounted to €13.9 million. Though the cash outflow from the increase in inventories was higher, this effect was compensated for by the increased reduction of trade receivables and the lower reduction in trade payables.

In the first quarter of 2018, the net cash used for investments was mainly affected by the higher outflow for acquisitions and investments in intangible assets and property, plant and equipment. In the subsequent quarters, investments in intangible assets and property, plant and equipment are expected to return to a lower level. Among other things, the cash flow from financing activities was impacted by a higher cash outflow from the scheduled repayment of financial liabilities.

EMPLOYEES

8

As of the reporting date of 31 March 2018, the Bechtle Group had a total of 8,627 employees, including 521 trainees. Compared to 31 March 2017, the headcount thus went up by 919, an increase of 11.9 per cent. In the first quarter of 2018 alone, 274 new colleagues joined Bechtle. While the increase in the number of employees is also the result of acquisitions, new recruitment accounted for the largest share. The increase in the system house segment (12.6 per cent) was slightly higher than in the e-commerce segment (9.0 per cent).

EMPLOYEES IN THE GROUP

As of the reporting date of 31 March 2018, the system house segment had a total of 788 colleagues more than on 31 March 2017, an increase of 12.6 per cent. Due to acquisitions, the growth in the foreign system houses was higher. In the e-commerce segment, the number of employees went up 9.0 per cent compared to 31 March 2017, the growth rate abroad being slightly higher than the domestic growth rate.

In the first quarter of 2018, the average number of employees in the group amounted to 8,581, some 896 more than in the corresponding prior-year period, an increase of 11.7 per cent.

EMPLOYEES BY SEGMENTS

0	1,000	2,000	3,000	4,000	5,000	6,000 6,256	7,000 1,452	8,000	9,000	Total 7,708
Q1/17							6,853	1,500		8,353
Q4/17
Q1/18							7,044	1,583		8,627 (+11.9%) vs.Q1/17

IT system house &managed services IT e-commerce

As of 31 March 2018, Bechtle had 521 young trainees, 42 more than in the prior year, an increase of 8.8 per cent.

FORECAST

We confirm our forecast for the fiscal year 2018 as presented on pages 112 to 118 of our annual report 2017.

9

CONSOLIDATED INCOME STATEMENT

		€k
	01.01– 31.03.2018	01.01– 31.03.2017
Revenue	955,389	803,129
Cost of sales	815,877	682,271¹
Gross profit	139,512	120,858¹
Distribution costs	56,856	48,584
Administrative expenses	49,223	42,627
Other operating income	2,285	2,176¹
Earnings before interest and taxes	35,718	31,823
Financial income	252	235
Financial expenses	570	583
Earnings before taxes	35,400	31,475
Income taxes	10,551	9,377
Earnings after taxes (attributable to shareholders of Bechtle AG)	24,849	22,098
Net earnings per share (basic and diluted) in €	0.59	0.532
Weighted average shares outstanding (basic and diluted) in thousands	42,000	42,0002

1 Prior year figures adjusted 2 Prior year adjusted due to issuance of bonus shares

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		€k
	01.01– 31.03.2018	01.01– 31.03.2017
Earnings after taxes	24,849	22,098
Other comprehensive income
Items that will not be reclassified to profit or loss in subsequent periods
Actuarial gains and losses on pension provisions	1,089	–105
Income tax effects	–211	19
Items that will be reclassified to profit or loss in subsequent periods
Unrealised gains and losses on securities	1	–1
Income tax effects	0	0
Unrealised gains and losses on financial derivatives	–2	–700
Income tax effects	1	207
Currency translation differences of net investments in foreign operations	0	0
Income tax effects	0	0
Hedging of net investments in foreign operations	1,173	–179
Income tax effects	–348	53
Currency translation differences	–1,571	769
Other comprehensive income	132	63
of which income tax effects	–558	279
Total comprehensive income (attributable to shareholders of Bechtle AG)	24,981	22,161

CONSOLIDATED BALANCE SHEET

ASSETS €k 31.03.2018 31.12.2017 31.03.2017 Non-current assets Goodwill 202,198 193,538 193,979 Other intangible assets 50,494 48,721 38,243 Property, plant and equipment 146,321 134,865 115,878 Trade receivables 27,565 30,235 15,762 Deferred taxes 4,078 4,004 4,851 Other assets 3,860 3,833 3,379 Time deposits and securities 4 0 7,006 Total non-current assets 434,520 415,196 379,098 Current assets Inventories 265,316 211,319 210,174 Trade receivables 501,519 581,919 441,688 Income tax receivables 1,552 1,340 1,128 Other assets 74,352 58,783 54,292 Time deposits and securities 5,462 12,444 5,371 Cash and cash equivalents 110,187 162,383 121,688 Total current assets 958,388 1,028,188 834,341 Total assets 1,392,908 1,443,384 1,213,439

EQUITY AND LIABILITIES			€k
	31.03.2018	31.12.2017	31.03.2017
Equity
Issued capital	42,000	42,000	21,000
Capital reserves	124,228	124,228	145,228
Retained earnings	636,036	611,055	550,036
Total equity	802,264	777,283	716,264
Non-current liabilities
Pension provisions	12,962	13,002	20,141
Other provisions	7,338	7,190	6,809
Financial liabilities	69,106	69,917	54,557
Trade payables	59	96	222
Deferred taxes	21,753	21,069	19,924
Other liabilities	4,690	2,292	5,843
Deferred income	12,799	13,701	12,759
Total non-current liabilities	128,707	127,267	120,255
Current liabilities
Other provisions	7,484	7,129	6,484
Financial liabilities	14,757	58,930	9,580
Trade payables	235,086	237,160	176,998
Income tax payables	11,384	10,733	8,439
Other liabilities	96,310	131,118	86,549
Deferred income	96,916	93,764	88,870
Total current liabilities	461,937	538,834	376,920
Total equity and liabilities	1,392,908	1,443,384	1,213,439

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
---------------------------------------------	--	--	--

						€k
			Retained earnings
	Issued capital	Capital reserves	Accrued profits	Changes in equity outside profit or loss	Total	Total equity (attributable to shareholders of Bechtle AG)
Equity as of 1 January 2017	21,000	145,228	529,180	–1,305	527,875	694,103
Earnings after taxes			22,098		22,098	22,098
Other comprehensive income				63	63	63
Total comprehensive income	0	0	22,098	63	22,161	22,161
Equity as of 31 March 2017	21,000	145,228	551,278	–1,242	550,036	716,264
Equity as of 1 January 2018	42,000	124,228	612,242	–1,187	611,055	777,283
Earnings after taxes			24,849		24,849	24,849
Other comprehensive income				132	132	132
Total comprehensive income	0	0	24,849	132	24,981	24,981
Equity as of 31 March 2018	42,000	124,228	637,091	–1,055	636,036	802,264

CONSOLIDATED CASH FLOW STATEMENT

		€k
	01.01– 31.03.2018	01.01– 31.03.2017
Operating activities
Earnings before taxes	35,400	31,475
Adjustment for non-cash expenses and income
Financial earnings	318	348
Depreciation and amortisation of intangible assets and property, plant and equipment	8,786	6,902
Gains and losses on disposal of intangible assets and property, plant and equipment	−17	30
Other non-cash expenses and income	93	−553
Changes in net assets
Changes in inventories	−54,053	−29,508
Changes in trade receivables	85,298	57,801
Changes in trade payables	−3,482	−65,060
Changes in deferred income	1,805	12,885
Changes in other net assets	−49,533	−21,935
Income taxes paid	−10,676	−9,339
Cash flow from operating activities	13,939	−16,954
Investing activity
Cash paid for acquisitions less cash acquired	−8,282	5
Cash paid for investments in intangible assets and property, plant and equipment	−20,297	−14,443
Cash received from the sale of intangible assets and property, plant and equipment	895	485
Cash received from the sale of time deposits and securities, and from redemptions of non-current assets	7,001	10,000
Interest payments received	127	82
Cash flow from investing activities	−20,556	−3,871
Financing activities
Cash paid for the repayment of financial liabilities	−77,434	−2,031
Cash received from the assumption of financial liabilities	32,450	4,679
Interest paid	−219	−552
Cash flow from financing activities	−45,203	2,096
Exchange-rate-related changes in cash and cash equivalents	−376	2
Changes in cash and cash equivalents	−52,196	−18,727
Cash and cash equivalents at beginning of the period	162,383	140,415
Cash and cash equivalents at the end of the period	110,187	121,688

FINANCIAL CALENDAR

QUARTERLY STATEMENT 1ST QUARTER 2018 (31 MARCH) Wednesday, 9 May 2018

ANNUAL GENERAL MEETING

Tuesday, 12 June 2018, 10.00 a.m. Konzert- und Kongresszentrum Harmonie, Heilbronn

HALF-YEAR FINANCIAL REPORT 2018 (30 JUNE)

Friday, 10 August 2018

QUARTERLY STATEMENT 3RD QUARTER 2018 (30 SEPTEMBER)

Tuesday, 13 November 2018

See bechtle.com/financial-calendar for further dates and changes.

Publisher/Contact

Bechtle AG Bechtle Platz 1 74172 Neckarsulm Germany

Investor Relations

Martin Link Julia Hofmann Phone +49 7132 981-4149 Phone +49 7132 981-4153

martin.link@bechtle.com julia.hofmann@bechtle.com

The Quarterly Statement Q1/2018 was published on 9 May 2018.

Bechtle AG Bechtle Platz 1, 74172 Neckarsulm

Phone +49(0)7132 981-0 ir@bechtle.com bechtle.com

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