morning, everybody. This is Matti Momann of Adesto IR speaking. First of all, I'd like to thank you for joining our q two and half year one earnings call regarding our half year report we have published today. Within our release this morning, you read that Adesto continued its rapid organic growth with a 12% increase in sales to €709,500,000. This is particularly remarkable in a difficult macroeconomic environment such as the current one.
Operating profit improved even more strongly, rising by 34% to €37,200,000. After a solid second quarter, Adesto sees its original forecast assumptions confirmed and is well on track to achieve its full year forecast. This represents another step back towards better profitability. I now like to welcome as well our CFO, Michael Knopf, who will give us a deeper insight into the figures of the first half of the year and the outlook for the remainder of the current year. As always, I like you to mute yourself during the presentation.
Feel free to open up the channels for the q and a session afterwards. Participants on phones may want to mute or unmute their microphones via their star key followed by the number six of their phones. Thank you so far. Michael, please go ahead. Thank you, Martin.
Yeah. Good morning also from my side. And, yeah, today, we have published our figures. And in the next few minutes, I will guide you through the major results. And let's start as always with our revenues. Revenues have grown by 12% to €709,000,000. That's a very nice increase. And and, actually, if we look at q one q one, we have seen revenues of 353,000,000, which was an increase of 11%.
In q two, growth has slightly accelerated. We have seen revenues of 366,000,000, which is growth of 13%. Total for the half year is 12%. And if we, look at q two, q two is always a pretty challenging quarter for us because, yeah, we have the all the holidays, Easter break, and also the whole Easter break was this year in in q two. We have all the bank holidays, bridge days.
And despite that, we were able to grow our revenues by 13%. And compared to last year, there was also one working day less. So we are pretty satisfied with this growth. If we look at our environment, I mean, there has not much changed since the beginning of the year. The beginning of the year, we were pretty optimistic that maybe economy will turn around.
We will slight slight growth of our gross domestic product. However, now it turned out it will be for sure the third year in a recession. And in this difficult environment, we have achieved a growth of 12%, so we are pretty happy with that. If we look at the market, if we look at our peers, it shows as well this is a very exceptional result. If we look at our headcount, headcount growth of the average FTE, first half last year with first half this year, we have seen a growth of 6%.
This is reduced growth rate compared to prior years. However, this was our decision last year to slow our growth of the of the headcount a little bit down to improve our margins. So, therefore, also, this figure is actually within our plans and expectations. If we look at our headcount at the June, it was 10,794 FTEs compared to June. That's a growth of 693, and almost half of this growth was achieved abroad, especially in those countries where we increase our shoring capabilities.
At the moment, the tenth almost 10,800 employees, 2,200 are abroad, and 8,600 are in Germany. Let's have a look at our sales split. And as always, we start with sales by industry. And we look at our different industries. Almost all of them were able to increase revenues, some of them quite significantly.
The only industry where we see slight decrease is automotive. That's not really surprising. I mean, the market for these companies, for our customers is pretty challenging, and, therefore, they are a little bit reluctant to award new orders. However, 7% is still okay, and it's one of our smaller sectors, so it does not have a tremendous impact on the overall figure. Insurance, pretty strong growth, 17%.
If you look at last year's q two, it was comparatively weak quarter for insurance. So this is this accelerated growth rate for insurance is mainly due to that. The growth was also supported by some license sales for our insurer product line. Banking, growth of 6%. Health continues strong growth of 27%.
Already last year, we have seen strong growth. This growth continues. It's mainly our bread and butter business. However, we are also able to win a strategic customer for the statutory health insurance in in Germany, a strategic win, which does not have an impact on these figures but will have a nice impact in the future. Public growth rate at 9%.
That's our most important sector. In the first three for the first three months, it was 11%, so it has a little bit slowed down. And, actually, what we see is that orders and and and new budgets are still pushed out. Originally, we thought that after the German election in q one, there will be a slight delay with awarding new orders, but then it will pick up at the end of q two, '3. Obviously, that's not the case.
It takes a little bit longer. So we are pretty optimistic that we will see increased activity for this industry in q three, q four. By the way, 9% is still a nice growth rate. Manufacturing, increase of 7%. Retail, 2%.
Utilities continues to see strong growth rates, 22%, mainly driven by our SAP business. We have a very smart strong market position in the SAP area for utilities. Overall, I want to highlight that this is a very diversified portfolio, a very diversified customer structure. If you look at the first 10, top 10 customers in the first half of the year, they have generated slightly more than 20% of our revenues, and the most important customer in the first half of the year has generated 3.3% of our revenues. So it's highly diversified.
And if you also look at the sectors, there's no sector which contributes more than 20%. So this is a very good positioning, not not being dependent on one sector or one technology. If we look at our sales split, actually, on the first view, it's maybe boring because Germany always has this 84%, 83%. But if you look a little bit more in detail into it, it's pretty pretty interesting. I mean, Germany, growing by 14%, even more than what we have seen, for the whole group where we have seen sales growth of 12%.
If you look at Switzerland, Austria, Germany, they contribute 96% to our revenues. So on the first view, the only disappointing thing is if you look at the sales growth of our foreign activities activities because that's only 6% to 140 14,000,000. However, if you look a little bit more in detail into this, it's it's a different story because 50% of our foreign revenues are contributed by Switzerland, and Switzerland is showing a decrease by 7%. So if you exclude Switzerland from our foreign activities, actually, they are showing a sales growth of 25%, and that's a totally different story, and it's exactly what we would like to see. Switzerland is a challenging environment, a little bit comparable to Germany.
Our economy is also a little bit sluggish at the moment also for the because of the currency exchange rates. We have won some very nice orders in the first half of the year, but, were not able, to generate revenues, to at least keep, the level of revenues. But if you look at Austria, Netherlands, Italy, and Turkey, all of these countries show very, very nice growth rates. Let's have a look at our EBITDA. EBITDA increased to 37,200,000.0.
That's an increase of 34%. And if you you look a little bit at the split of the two quarters, first quarter was 17,800,000.0. Second quarter now is 19,300,000.0, so it's even higher than what we have seen in the first quarter. This is a very nice result, especially as pointed out, where it was one working day less than compared to last year. Last year, q two only contributed 9,900,000.0 compared with nine 19,300,000 for this quarter.
So it's a very nice improvement. Why did we improve it that much? Key driver, improved billable capacity utilization. That's what we have already seen in the first quarter this year. It continued in the second quarter.
We have seen a slight recovery of our product business. So at the beginning of the year, we forecasted that we will see a turnaround of this business and that figures will improve step by step. That's happening now. It was supported by the sale of some licenses. Last year, license revenues for the first half of the year came in with 4,400,000.0 with 1,500,000.0, this year with 4,400,000.0, and the difference of 3,000,000, these are licenses for our insurer products.
Last year, actually, we got an additional contribution of 2,600,000.0 by the reversal of an accrual from warranty provisions. This was a result of a tax audit. So despite this favorable input impact on on the figures, This year, we were able to achieve this very nice growth compared to last year. And, also, I would like to highlight material costs increased because one reason of that is we have reduced our hiring activities. And the other reason is we are working there's an increased collaboration with external partners and and consortiums as as as we have increased number of projects which are growing bigger where you don't do the work.
Just Adesut. You always have partners then involved. Let's have a look at the some other key figures. As we have improved our EBITDA, EBITDA margin improved as well. It's 5.2%.
Q two, it was 5.4% compared to 5.1% in q one. So it's a nice improvement, especially also compared to last year where we have seen 4.4%. It's still far away from figures we have seen in the past. You see on the left side of this of the screen, 9.3%, 11.8. So there's still some way to go, but the important message is we are making progress on that.
Sales growth, 12%. Gross profit. Personal cost grew by 10%, so that's more or less in line with the sales growth. Other operating expenses, there we have only a growth rate of 4%. Main drivers there for this increase are increased hiring expenses and more travel expenses, partially offset by less consultancy and legal fees.
Now what are the main profit drivers? As already pointed out, key is an increased billable utilization. We were able to increase our daily rates. As mentioned in our last call, we have started an initiative last year in q four to work, with several product project teams on our daily rates going through the customer contracts, talking with the customers, and, this has shown some results. And the improvement was at least able to, cover the increase in personal cost per employee as we have the normal salary increases.
And we have seen some slight improvement in license and maintenance sales. As pointed out, we sold some insurer licenses. Let's have a look at some other key figures of our p and l. EBITDA improved to 37,200,000.0. Depreciation also increased a little bit.
This is due to the increased number of right of use assets, which is the lease contracts for our buildings and our company cars. Depreciation from purchase price allocations stays almost the same. Financial result, the interest we pay, a slight decrease. Income taxes is slightly higher. So at the end, we we have consolidated earnings after tax of minus 6,000,000 compared to minus 9,900,000.0 last year.
Therefore, earnings per share improved to minus 88 compared to €1 minus €1.51 last year. It's still not nice because, actually, we also want to see in q one and q two positive earnings per share, but, it's at least a significant improvement compared to last year. Let's have a look at some items on our balance sheet. Cash decreased slightly to 44,900,000.0. Financial debt increased by 20,000,000.
Net debt increased by 27,600,000.0. Actually, this increase is due to the increase of our shareholdings of two subsidiaries. We increased our shareholding in Kiwi from 70 to 100% and from by that are just a business consulting from 71 to 100%. This cost a cash out of 27,000,000. In addition, we have done a share buyback in the q four and q one q four last year, q one this year, in total 10,000,000.
So if we look at these two items, it's a cash out of 37,000,000 in total, and this explains the increase of net debt by 27,000,000. Operating cash flow, well, it's negative. It's not surprising. It's always in the first half of the year, and it's also caused by the increased revenue, which also caused a higher net working capital, which increased a little bit less than our revenues. However, the structure of our net working capital is a little bit more favorable than what we have seen last year.
If we look at customer and receivables, they increased by 19%. If we look at contract asset, which means days which were not we were not able to invoice to our customers, also related to fixed price project. This figure only increased by 7%. So, therefore, the the chance to get cashed in earlier is significantly higher than last year. Goodwill, more or less unchanged.
Equity, less than last year, 10,000,000 reduced. This is due to share buyback, which we have done in q four and q one. That's the main contributor there. Equity ratio also reduced a little bit. This should come in higher in the second half of the year as then we will see positive after tax earnings, which will increase also our equity ratio.
Operating cash flow minus 44,000,000. We have seen done some CapEx. We also consider lease repayments due to the interpretation of the IFRS foundation as CapEx. That's related to IFRS 16. So if we take those two items, free cash flow was minus 81,000,000.
Yeah. Let's have a look at our guidance. I mean, most items already were there most reasons for our guidance are already there at the beginning of the year. We still see an increasing demand for IT services despite the challenging environment, especially in Germany. And as Germany contributes 84% of our revenues, that's important that the economy in Germany is favorable to us.
But despite that, we were able to grow, and that's what we also have guided. We have also expected to improve our margins due to a higher utilization. That's still the case. And, also, that's the expected turnaround of our solutions business will happen. And, yes, figures have improved.
We also have seen some license sales. There's still some way to go, some more way to go, but we are on a good way. For the second half of the year, it's important to mention that we have seven working days more compared to the first half of the year. So this will really help to achieve our our guidance. And we also it's delayed.
Yes. But we still believe that, IT spending in the public sector will pick up in the second half of the year. So if we look at our guidance, seven hundred ten million in revenues, it's between 4953% of our guidance. We have guided to achieve revenues of 1.35 to 1,450,000,000.00, which is an increase compared to last year between 412%. And as we have already achieved roundabout 50%, we are on a very good way to achieve that, especially if we consider that we have seven working days more in the second half of the year.
EBITDA, it's a little bit you need some more thoughts to to to come to our guidance. And we have $7,037,000,000 in EBITDA in the first half of the year. That's significantly better what we have seen last year, but it's still only between 3035% of our guidance. However, if we look at the calendar, the seven additional working days and all the other assumptions and also we look at the ratios which we have seen last year and the year before that, this should be a very good starting point to achieve our guidance, which is 105 to $12,025,000,000, which is a nice would be a nice improvement to our last year's EBITDA of 98,000,000. Last but not least, the margin.
Last year, we have seen an EBITDA margin of 7.6%. We have the goal to increase that above the 8% threshold in the first half of the year. That's already an increase of 4.8%. So, also, this seems to be a reasonable goal, and, therefore, we are pretty optimistic that we also achieve an EBIT EBITDA margin with is above the 8% level. Yeah.
Thank you for your attention. And now I think I hand over to Martin.
Yes. Thank you, Michael, for all these helpful explanations. And we're now heading for our q and a session. And the first one waiting in line is Mr. Wolff.
Good morning. Thank you for taking my question, and congratulations on a strong Q2. My first question is regarding the insurance license deals. Have any of the transactions anticipated for the second half already been recognized in the second quarter? Or does the H2 pipeline remain intact and therefore, offer potential of additional potential in H2?
That's my first question. The second is regarding the increase in purchased services, which grew more strongly than revenues. What drove the decision to rely on external staff rather than making permanent hire hires? Does this approach reflect the strategy to remain flexible in the current economic environment? And the third is on the daily rates.
If I look at the daily rates that I calculated with publicly available data, then it has improved to roughly €570 per day per employee per per chargeable day. Yeah. Per day was a factor double here. But per chargeable day, so 570, that's an increase by 9% year on year. Where might this daily rate go during the course of the year and maybe next year? Thank you.
Okay. Let's start with the license deals and the question regarding that. We are pretty happy that we have seen some license sales already in q two. Originally, we stated that license sale will be expected for the second half of the year. We still expect license sales in the second half of the year.
We have some deals in the pipeline, yes, especially one which could be able to bring in a higher number than what we have seen in in q two this year. So there's no reason and no no change in the statement that we will see license sales, that we have a high chance to see license sales still also in the second half of the year. If we look at purchase services, there are two components. I mean, first of all, we have reduced a little bit our hiring momentum, also increased relying on on external staff. We already changed this a little bit by increasing our hiring efforts again.
And on the other hand, please keep in mind, even if you want to staff it with own people, sometimes you only find external staff which have the right capabilities. The second point is that we are we are a company. The company is growing, and the projects we are doing are growing, and they're quite often our projects which we cannot do alone. So where we enter into a con consortium, sometimes we are the general contractor, and then we pass through the revenues of our partners via our p and l, which also causes higher material costs. So this is also a reason for increased purchased services.
And, I mean, we to the third question, we don't comment on the daily rate and and because it's a little bit more complex as different countries, different customers, different daily rates. We have also included shoring now, which also all has an impact on our daily rates. However, let's say, in these words, daily rates have at least increased in the way in the same way how our personal expenses have increased.
Thank you. Thank
you. We have another question from one person who signed up as Adesto. Please go ahead.
Hello. Not sure with which name I signed in, but can you hear me?
Yes. Yes.
Yeah. Good morning. Three additional ones from from my end. First, on your order book and and pitching activity, have there been lots already coming from the, let's say, new government digitalization funds, or are we still talking about, let's say, past past lots coming to the market, what you're currently doing? And then on the shoring side, to to what extent are shoring capacities already contributing to your to your sales line, and what are your plans for the remainder of the year?
And the third question would be on on the utilization. Can you inform my times? You sometimes gave us some percentage figures here or at least the change to year on year or to the prior quarter. Can you give some more meat to the bone here? Thanks a lot.
Okay. Coming to the first questions question so far, we don't see any activity significant activity related to the additional budgets for infrastructure and forces on other budgets from from from the government. We believe that we will show more and it's more that we will see a more significant impact at at the beginning of next year. And as far as what I've read from our peers, it seems that this is, in general, the expectation. At the moment, we are all a little bit disappointing as it that everything takes a little bit longer.
The second question was regarding shoring. I mean, we at the moment, we are building our shoring capabilities, especially especially at ramping up our Indian workforce at the moment. I mean, these these people, these these colleagues are already part of our project, so they are generating revenue. However, ramping up, increasing the staff, building the infrastructure on this. This is an investment.
And if you ask, are they contributing also EBITDA, not at that level at at this point in time because they are it's kind of an investment at the moment. So we need to grow that. We are on our way to have around about 200 people, for example, in in in India. And the moment, we are pretty happy with the development, but it takes some some time. If we look at the utilization, the first half last year, utilization was pretty weak, especially in q one.
Q two or we have also last year, we have seen already some improvement. This year, q one was much stronger than q one last year due to the weak starting point. Q two utilization was higher than q two last year. And q three, at least what we see for at the moment that we see July and our our forecast, we expect that utilization might be slightly higher than what we have seen last year.
Okay. Thanks a lot.
So are there any more questions at this point in time? Just a small reminder, participants on phones may want to unmute their microphones by the star key followed by the number six of their phones. So no more questions? I'm waiting a little bit. No.
It doesn't seem to be the case that there are no more questions. So thank you very much for your interest in our call today and your participations. I wish you all the best and hope to see you soon in person, maybe on one of the September conferences Adesto is attending. Thank you. For now, goodbye.
Thank you.