|
Author: Cornelia Wels-Maug
On Friday, German systems house Bechtle AG reported first half results for FY 2006. Sales grew by 8.5% to €574.8m from €529.8m, although growth was fuelled solely by acquisitions. EBIT grew by 8% to €14.1m; EBT increased by 9.1% to €14.3m with a constant EBT margin of 2.5% compared to the first half-year results of 2005. Earnings per share grew 11.2% to €0.44.
Bechtle's system house business, which is its major source of revenues, accounted for 66.1% or €379.9m in the first half of 2006, and generated an EBIT of €3.7m, up 8.5%, and an EBIT margin of just 1%, compared to 0.9% in the first half of 2005. The other revenue stream, its "IT-eCommerce" segment, accounted for the remaining 33.9% and comprises the online reselling of hardware, software and accessories. The IT-eCommerce segment grew by 15.6% to €194.9m, whilst generating an EBIT of €10.5m, up 7.9% and an EBIT margin of 5.4%, down from 5.8% compared to the first half of 2005.
65% of revenues were generated in Germany, where revenues were up 5.1%. Revenues outside Germany grew by 15.6% compared to the same period in 2005.
CEO Ralf Kenk confirmed the guidance for 2006, which aims at a revenue growth between 6% to 10% or €1.25bn to €1.3bn, with EBT of around €41.2m. Bechtle's has ambitious goals for 2010 to generate revenues above €2bn whilst increasing profitability.
Comment: Bechtle's growth was exclusively due to its four acquisitions in 2005 (see EuroView Daily 17 February). Those acquisitions, in addition to one newly set-up subsidiary, led to integration costs and made changes in the organisation as well as in the management structure necessary to improve overall profitability. These additional costs have taken a toll on Bechtle's earnings and are hopefully short-lived. However, they do not come as a surprise and CEO Kenk has already stated at the beginning of the year that he foresees for 2006 healthy revenue growth above market average, but stable profitability.
We think that Bechtle's strategy of refocusing its system house on higher-value services - particularly managed services for mid-sized companies - is an important step in the right direction. To offer support services to this segment is an excellent entry strategy into the managed services market for a local player, when most larger players have a hard time to make profits from smaller customers.
|
