Good morning, everybody. Very warm welcome to our conference call today relating to the first quarter results 2024-2025 of All for One Group. Last week, we had already announced the results, and today you could also download the quarterly report. Welcome. As always, you can ask questions in the Q&A session, and we will then answer them at the end of the session. Today we really want to focus on the numbers and explain you a bit more about the changes that we are going through. Just a few words, All for One, last year, more than EUR 500 million revenues, EUR 511 million revenue.
We've grown strongly over the last 15 years. On the one hand side, very strong organic growth, on the other hand, also very high M&A activities. Compound annual growth rates of around 15%. Strong cash flow generation, that is continuing, and what is also, I think, especially for an IT company, very good. Around half of our revenues are recurring, and the share is increasing over time. Another move which is quite important for us is the cloud, move to the cloud. 28% currently of our revenues are cloud subscriptions, and we do have around 2,800 people working in our company.
What Stefan will focus on today is explaining the change. We used to be a pre-seller or a reseller, basically, of licenses focused on SAP. Today, we are an international cloud-based IT service company. What does that mean? In the past, we did generate revenues by selling licenses, doing the consulting, and also having classical hosting business. We've undergone some change. Today, there's the move towards the cloud. It is now less licenses.
It is now cloud subscriptions. Also when we generate our revenues, it's about commission fee that we do generate. Of course, what is getting more and more important is also the consulting part. It means, like when we do the SAP S/4HANA transformations, but then also afterwards to basically digitalize the business of our customers. Of course, also we do have the managed service business, be it in our own centers or being it then now in hyperscalers, for example. What is the results?
Changing revenue streams. It's hopefully, and that is what we also predicted, higher profitability, and that's what we've already shown also in the first quarter. It's about customer retention. It's about proactive services and also bringing the speed of innovation that you can get in the cloud to our customers. Now more about all that. I'm really happy to have Stefan Land with me, our CFO. He will explain you about the figures, the effects on the figures, but especially also what is really changing in our business model. Welcome, Stefan. Thank you.
Thank you. Thank you, Nicole. Good morning to all of you. Let's move into the quarter. There have been quite a lot of influences, different ones, and I would like to bring you closer to that. Let's start with some key results and key facts. We are very proud to welcome a lot of new customers, especially of bigger ones, as we are addressing since some years now. In the upper midmarket, we got a lot of new customers out of the installed base of the worldwide SAP base. We had a very strong high margin business and improvement in our core segment.
This relates to the move to the cloud, what Nicole just said before. On the other hand, we have been influenced by a low utilization in our line of business segment. Companies and leads are quite nervous and have a lot of respect what is showing up in the next few months and quarters. We see a weakness there in our segment. I will come closer to this in some moments. As mentioned by Nicole before, EBIT was before M&A effects at 8.2%, adjusted by severance payments in that quarter due to the move to the cloud. We have to do some changes also in the management levels.
Margin was at 8.9% already. Growth, as you can see on the right side, was more or less zero. We achieved EUR 134.2 million in revenues and an EBIT before M&A effects of another EUR 11 million as the year before. Let's step into the development of revenues. Why do we not grow according to IFRS figures? I would like to bring you in the next few minutes a little bit closer to that. Very important to understand is always the same issue. What do we mean with recurring revenue? What is the content of recurring revenues?
It's real recurring revenues. It includes subscriptions, managed services, and support contracts. We are not including, as very often seen in the market also, recurring consulting revenues. We have really a pure revenue stream of roughly 50% growing year- by- year a little bit, as you can see. In the first quarter, it was growing by another 3% organically to EUR 66.9 million. I would focus you a minute on the change of the revenue streams, as mentioned by Nicole before. In the overview. The red line shows you the old model, the resell model, we call it.
Customers are buying a license and getting a support contract in the same moment. We have a high revenue on one hand and a high impact also on our material expenses, because in the same moment, we are purchasing also the material, the license, and the support contract at SAP. On the other hand, now we have the cloud model. The cloud model is only a provision and subscription model. We are incentivized, especially by SAP, but also by Microsoft, and we are doing the same with our own additional solutions.
We are just getting a subscription by the customer, or we only get a commission of the subscription from SAP or Microsoft. There's a much lower revenue stream, but a higher margin, which comes into our profit and loss scheme. This slide is very important to understand, please be aware these are best guess figures. The old models and the new models are so different. The cloud software cannot fully compare to an on-premise software in the past.
We did our best, there's a fair enough overview, I would say, which shows you the real development in our growth, organic growth in the first quarter. The red figures, giving you the situation that we improved revenues to EUR 141.9 million, roughly. This is a growth of 6% organically. If you see the different lines, then you see the impact of the move to the cloud coming from the resale model, actually. Cloud service have been improved by roughly 5%. Software licenses and commissions would have been increasing due to the wave of migrating to the new systems by 34% again.
Software support would also be up by another 3%. Due to the cloud, the white figures, and due to IFRS, of course, the white figures are the real correct revenues to be booked. The red figures are just showing you what would have happened, it should explain you why we are currently very weak in our organic growth. It will return, of course, within the next quarters already. Compared to the figures of this year, we will see next year, of course, the real organic growth again.
Just to make sure that you exactly know that we are still growing, we are still getting nice market share, we are welcoming a lot of new customers from our competition. This makes us very proud and positive to achieve our goals, not only this year, also in the future, to provide more margin and more growth to our shareholders. Finally, I would give you a typical life cycle of a customer. Here you see the movement of consulting revenues.
It's just one customer for an example. The customer has, in the beginning, on the left-hand side, a certain level of consulting revenues with us. He's doing changes, upgrades in his system, new contacts, interfaces, and so on. In the moment he is changing his mind from on-premise to the cloud, in that moment, the customer stops investment into his existing ERP system. That's where we are declining, customer by customer, in consulting revenues. This makes life a little bit difficult.
Before a customer is not signing a new contract, raising into the cloud by RISE or by GROW, and getting into the situation that he starts the project, we have a very weak phase with the customer on the consulting level. That's also a reason the past three to four quarters, we had a weak time in consulting revenues. Before we are starting to improve revenues through consulting, because we are implementing the system, we are migrating the systems on a global base. Finally, after the peak, we come to additional cloud services.
Customer is ending in the cloud, customer ends into an hybrid world very often with different systems on different levels within the cloud, on-premise installations, and so on. He needs to have a very high level of compliance and security and availability. That's where we are placing our additional services currently, very successfully. We are very happy due to the conversations and the first customers who raise these additional services now. In the total, just to let you know, we are the number one of migrating mid-sized businesses to SAP S/4HANA.
We have done more than 100 customers already globally under contract, and we have already closed 60- 65. They are finalized within RISE or GROW into the cloud. In parallel, we have currently 30- 40 running contracts, finally. We are moving forward to getting more contracts in within the next few months. The development of margins. We have, on one hand, the CORE segment, just to give you a brief overview here on this slide. You see we had a very nice development now of the margin.
It was dropping in 2022, 2023, due to the one-time restructuring expenses. This year, in Q1, we already achieved in the segment CORE 8.5% versus 8% last year. If we already adjusting it by severance payments we had to pay to some of our managing levels within the first quarter, one-time severance payments, the margin would already been 9.2%. This is a very good development. It gives you, as investors, also the sign that the wave has already started. We are just ramping up as fast as we can.
Growth is not very exciting. I tried to explain it to you some moments ago, but it will recover. Within the next quarters and in the next year, you will see a strong organic growth, of course, and margin is something to contribute. We will see an improving margin step by step. As you can see, that's roughly 89% of our business, so the CORE segment. In the lines of businesses, we have a different situation. As you all know, we are typically running in Europe and in Middle Europe with our revenues and customers.
We have a very weak situation in the economy, and therefore, customers are quite nervous in executing new digitalization projects, especially on the customer experience side. Also it's not easy in HR-related processes and also in analytics. The strong issue here is currently with customer experiences. Nobody wants really to invest into that processes at first because people saying in the outside world, 'Let's invest into our CORE at first before we are coming back into lines of businesses.' A lot of the channel are currently delayed quarter- by- quarter. We try to manage this as good as we can.
As you see, revenue only dropped by 1%, but this is not very exciting. This is a real drop, of course. It's not the cloud which is influencing that business. As soon as economy does a little bit better, we are pretty sure that we come into a very strong growth phase. As you can see, margin was dropping to 4% versus 8.1% in the first quarter last year. We are working hardly to get this under control to keep margin a little bit higher in the next few quarters, but it is currently a difficult situation. We are driven by the outside world, by the economy, especially in Germany and in Middle Europe.
Let's finally come to some other KPIs, which are very important for you guys, is cash has been reduced by EUR 13.6 million, but it's still on a very nice level of EUR 49 million. This is typically because in the first quarter, we pay out the bonuses to all of our employee of last business year. We are in very good shape there as well. Cash will return to a higher level in the second half year of our business year. We have a little bit higher net debt due to that lower cash situation. We have a low operating cash flow due to the fact that we reduced some trade payables in the first quarter, but this was a one-time impact, this will recover as well in the next few quarters.
We will see a very nice operating cash flow as it used to be year- by- year. We had an improved equity ratio. We already achieved 35% coming from 32% on September 30. Relating to our employees, you see that we are close to 2,800 employees, 25% already in Poland, in Türkiye, and also in Egypt. We are working more and more and providing more and more services from these territories, which is very important also to improve our margin in the coming years. There's a lot of space for improvement. Employee retention is doing quite well.
We are ahead of the market with 91.4%. Last year, we have been at 90.2%. Health index is also recovering a little bit. There was a long phase of COVID some years, and after COVID phase, and now we are back to 96.6%. I remember that the best thing we achieved was 97%, and you see last year we did more than 1.2% up from 95.4%. This is doing well, there's a high motivation in our folks, and we are really looking forward to this improvement and see that all the measurements and all the activities we are doing are well-known and recognized by our colleagues.
Finally, let's see how the earnings and the dividends are developing. As you see, the red line are showing the earnings per share. It dropped in our transformation period two times relating to one-time expenses. You see that we are also having a very robust dividend policy and strategy. Since more than 12 years now, we are increasing step by step the dividend per share, and we are proposing to the annual shareholder meeting in March EUR 1.6 per share, which is an up by 15%, roughly 10%-11% versus last year. Let's come to the outlook.
What could you expect this year? As mentioned on November 22, in our guidance for this business year, we see sales will raise organically in the range between EUR 525 million and EUR 540 million. On the other hand, EBIT before M&A effects, which is very close to EBITA. We just deduct one-time costs relating to M&A projects successfully or not successfully. There is a lot of competition outside. There's a lot of due diligence we have to do, and therefore, that's the real measurement, that's the real operating EBIT margin in our terms.
We would like to increase it again from EUR 34 million last year to EUR 36.5 million-EUR 40.5 million this year. It was a nice development, of course, according to our long-term strategy, as announced some years ago. You can expect that this will happen. Organic revenue growth will be somehow in the mid-digit range also for the next years. It will recover a little bit due to the fact that we compare to cloud figures more and more, it will be more easy to show organic growth again. Inorganic revenue growth will return.
As mentioned now, since six months, we are right in the market and trying to focus on the right targets. We would like to grow business also regional. We are focusing on some territories in Europe, especially North, Northwest area of Europe, as well. Of course, we try to execute also an improvement in our workbenches in order to get productivity further up in the next year, because we see quite a very strong demand in front of us. If the economy comes back in Europe, we want to be in the right position. Profitability will further grow.
For next year, we expect an EBIT margin before M&A effects of 8% or a little bit more. You see our business year is already starting in the beginning of October, we are coming very close to this scenario, as mentioned already now since one and a half, two years ago. That's it from my side, from our side, Nicole and myself. I would be happy to get some questions out of you guys. Please come back to us and I will hand over to Nicole. She is already in the background and seeing that there are some questions coming up and showing up, I'm really happy to come back to this.
Thank you. Yeah. Everybody who hasn't put questions in the Q&A, feel free, I will already start with the first questions. Will there be comparable migration incentives from SAP in 2024-2025 as we've seen it in 2023-2024?
That's typically an annual question, of course. What will happen this year? I would assume yes, but they are definitely differently. We have already seen some announcements this very week, but we expect more in the coming weeks. We are in a, let's say, in a progress. According to our sales force, I get the feedback that things are running better because the profitability out of the project, it's not coming down again. It's looking more smart in the future.
We don't need that very exciting programs again. Of course, hopefully we get some back, or some backup by SAP very soon. I'm pretty sure they will do something in order to make it more efficient to come over into the new models. We have, as you know, very good relations, so they will show up with some news very soon.
Thank you. Next question. Should we expect any further one-off effects in 2024-2025? Because we've seen so far EUR 1 million.
Yes, we will see some. We have to do something in our segment lines of businesses a little bit. Maybe also some left in CORE. It was not that big. It is already in our guidance. Also relating to growth and relating to EBIT, we always mention these figures, therefore we will achieve these figures. That's the situation right now. This does also include some one-time impacts. We just wanted to let you know, because some of you saying, "Why is margin not going up?"
"Why you're so defensive?" We are a reliable management, Michael and myself, as you always know, we want to have a substantial, nice, robust business. We still have some works to do, finally. The transformation is behind us, that's something we would like to open and to disclose to you, that was the reason why we are showing this, so that you have a certain feeling where we are. At the end of the day, the guidance has been set on November 22, and this is something we would like to achieve.
Okay, thank you. Next questions. Relating to the operating cash flow. The operating cash flow in the first quarter was relatively weak because we've seen a decrease in trade payables towards the quarter end. What's the expectation for the full year?
This is a one-time impact. It was a little bit bigger than last year. I think last year the cash flow was close to zero. We dropped a little bit in liabilities. This will recover. We will see a nice cash flow. I can't remember the exact operating cash flow last year, but we will probably come more or less on the same level, maybe a little bit ahead or above. We will see within the next one to two quarters. Don't be nervous. It will recover.
We've shown the cash flow number on the first slide, it was EUR 41 million-
Yes.
...for the full year last year. Next question. Could you give us more details, please, and possibly quantify the order intake and backlog regarding SAP S/4HANA transformations?
Yeah. What is allowed to disclose. We did a lot of new customers in the area of customer size between EUR 1 billion and EUR 2 billion, roughly. This is our strategy, as you all know, since more than three, four years already. We see that customers showing up more and more to us, and we are getting these very nice customers on board, which will help us to roll out our business model also through the workbenches in some other territories to get more additional service package into the market.
This is really good to see because the sizes of the customers, the sizes of the projects are showing up. We have a very nice funnel in CORE, but also in lines of businesses. In lines of businesses, the funnel is somehow difficult. We don't know if they're really executing. The execution rate on CORE is very good. We had a lot of order intake for migrations. We will see a lot of projects raising currently, and we see a very nice utilization of our consulting staff, in the coming months.
Therefore we are really positive on this and trying to grow the workforce as good as we can, which is not easy. We are all fighting for good talents on SAP S/4HANA and trying to educate everyone. We don't have any problems on our order income flow, especially in CORE. In the LOB is still a very weak situation and a very difficult situation to show growth in this area.
Next question. Do you expect the typical seasonality again this year? Last year, second quarter and especially third quarter were relatively soft.
Yes. Last year we had this impact, what I have been showing to all of you before, of these customers who returned to the new situation and said, "Well, I have to go to the cloud." At that moment, a lot of ABAP development, a lot of old ECC consulting, we were decreasing last year. This will not happen again because we have now a nice basis of S/4HANA migrations into our belly. Utilization seems to be very nice, also currently. The weaknesses of Q3 especially, should not happen again. In Q2, as you mentioned, it was also not a very good quarter, we strongly believe that utilization this quarter will much better than the year before, and we are looking forward to achieve the guidance.
Thank you. Just to everybody, if there are more questions, just put them in the Q&A. One more. You've been talking about potential M&A. What's your view on that?
Well, market is very hot. Some of you maybe recognized already. Also competitors or other companies in the SAP market are acquired by private equity and strategic investors. Of course, in that project where we try to enter in, we are not alone, typically. This makes life very difficult for us to be successful. We have plans, we have ideas. We are working constantly, week by week on this. We have a couple of guys internally trying to moving forward there, and hopefully we see some progress, and I'm pretty sure we will be successful in 2025.
Good.
Sorry, maybe I had something, Nicole, I missed this. In which areas? As you all know, we have the regional ones and the portfolio ones. From a kind of portfolio, we are looking good, so there's no hurry to do something. If we find something on the portfolio area, we would like to add it, of course, doing some cross-selling, getting more customers in the ABAP mid-market into our system.
This could happen, but we're also focusing very much on the territory. Because we have the workbenches in the different countries, we have the organization established working in a matrix organization. We have a very easy job now to integrate new countries and getting the global corporate support functions into that. This is something where we're looking for the next few quarters and years, probably.
Good. I think nothing more to say. Growth perspective in terms of revenues and margins. Thank you, everybody to participate, and last word to you.
Perfect. Thank you. Thank you, Nicole, for hosting, and the technical guys in the room as well, and it was a pleasure to be with you. Thank you for your time and hopefully see you next quarter. Have a good time. Thank you. Bye-bye.