Welcome, ladies and gentlemen, to our Analyst Conference covering the first quarter of the current financial year, 2025, at Bechtle AG. Thank you very much for your interest. We are all currently living through turbulent times. We have almost become accustomed to irritating news from the U.S.A. , but the political scene in Berlin too seems to be good for a surprise, as we were reminded this week. Having said that, some other new developments do give us cause for optimism. A Ministry of Digital Affairs endowed with far-reaching powers is, I believe, an important first step in the right direction. What matters now are reliability and dependability. Only then will our customers be prepared to invest in the future and in their European locations. Unfortunately, uncertainty still dominated in the first quarter of 2025, and this is also reflected in our figures for Q1.
We will delve a little deeper in a moment. As usual, today's presentation is divided into three main sections. As usual, we'll start by looking at the key economic figures for the first quarter of the current financial year, followed by a few selected important events beyond the figures. As usual, we're going to conclude with an outlook on the current financial year at Bechtle AG. First, let's take a look at business development. Unfortunately, the first quarter of 2025 continued along the same lines as the previous quarters in 2024. Rarely have framework conditions been as taxing, and the first official moves of the U.S. administration have done nothing to ease the tension. As a result, we continue to see our SME customers and the public sector holding back on investments, particularly in our two largest markets, Germany and France. Alas.
In Germany, at least, we already saw the first slight improvements in March following the federal elections. However, in parallel to the very subdued top-line development, our costs have risen, not dramatically so, but nevertheless to a degree that is putting significant pressure on earnings. Let us first take a look at the aforementioned top-line development and then add revenue. Business volume was up slightly. Overall, however, the development clearly fell short of our expectations. Looking at individual months, we can see that January and February were very weak indeed, and that it was not until March that the slight recovery mentioned earlier began, driven in part by positive developments with public sector clients, especially in Germany. As we have repeatedly communicated on various occasions, our volume of framework agreements with public sector clients has reached a historic high.
These framework agreements have already been signed, the budgets have been approved, and the processes and workflows are in place. We are thus prepared for the call-off behavior of our customers to improve in the coming months. Internationally, we continue to see a positive trend in individual country markets. However, the situation in France remains extremely difficult and challenging. Let's now take a look at revenue development. Revenue continues to reflect mainly the positive development of our software business. The difference of 3-4 percentage points between business volume and revenue is in line with what we saw in most previous quarters. However, here too, a pickup in our business in the second half of the year is possible, and the initial signs from March and also April are pointing in the right direction. Q2 will show whether these trends prove to be sustainable.
A quick note at this point. Some of you may have noticed that we have deliberately refrained from breaking down the figures into our traditional segments. As we announced, we will be changing our segment logic, starting with the 2025 annual report, in line with the changes to our board functions. We are thus already paving the way, if you so will, for Bechtle to report primarily along the lines of regional segments. Having said that, in our official reports, so to speak, we are still using the old segment logic, as we can see in the next chart. Earnings development. In Q1, our earnings performance was unsatisfactory. We had already pointed out in advance that we do not expect an improvement of the overall situation during the first half of 2025 yet.
However, this was not fully reflected in market expectations, which is why we chose to issue an ad hoc pre-announcement of the key figures for our business development on the 24th of April. There are three main reasons for the Q1 EBIT development. One, personnel costs rose by around EUR 18 million. This is partly due to acquisitions, partly to wage increases, but also partly due to the effects of the increase of the Social Security contribution threshold in Germany, in particular. Two, we received lower bonus payments from our partners than in the previous year. Unfortunately, in 2025, we were unable to realize a carryover effect from a strong Q4, as was the case in other first quarters. Three, depreciation and amortization are also EUR 6 million higher than in the previous year.
Here too, we see effects from our acquisitions, but also from our ongoing investments in our own IT or in buildings. To conclude our review of the key figures, let's take a look at operating cash flow, as usual. Our cash flow is slightly negative, as you can see, however, from the chart. This is entirely reasonable for a first quarter and thus not to be considered a negative outlier. On a positive note, we are continuing to see high cash inflows from the reduction in trade receivables. Here, I would like to emphasize once again that this reflects our successful measures in terms of receivables management. However, there is also a strong cash outflow resulting from the reduction in trade payables. These had built up towards the end of last year, so what we are seeing now is a counter effect.
Our liquidity situation, however, remains very comfortable. Total liquidity, including time deposits and securities, amounts to as much as EUR 616 million. This gives us sufficient scope for our M&A activities and investments in Bechtle's future viability. This brings us to the latest trends regarding our employees. As of the 31st of March of the current financial year, 2025, Bechtle had a total of 15,729 employees. That is 484 people, or 3.2% more than in the same quarter last year. 370 new colleagues joined Bechtle through our acquisitions, thus accounting for 76% of the total increase. In purely organic terms, our employee numbers only grew by 0.7%. On the other hand, you can also see that the number of employees has fallen slightly compared to the 31st of December 2024.
We are very much aware of the current challenges in the economy and, in particular, of the pressure caused by personnel costs. We have therefore made greater use of regular staff turnover than in previous quarters in order to ease the situation of personnel costs somewhat. As usual, let's now move on to the specific events in Q1 that we consider to be non-financial.
Due to the early stage of the current year, this time these current reports relate to two very important areas for us. One, an important trade fair appearance that emphasizes our sales activities and, very essential for us due to the sheer relevance of this sector, successes in business with the public sector clients. Let's start with our sales activities.
At the Hannover Messe from the 31st of March to the 4th of April, Bechtle presented for the first time a comprehensive integrated IT solutions portfolio for the digitization requirements of the industry. Bechtle presents combined the offerings of the companies Bechtle PLM Germany and Bechtle Additive Manufacturing, which specialize in engineering and manufacturing with customized industrial solutions from the Bechtle IT system houses. Though it is not new, it is not an everyday occurrence for us to have our own large booth at a trade fair. However, it was extremely important for us for two reasons, especially in the current situation. First of all, especially in times of greater restraint on the part of customers, it makes sense to show presence as an IT partner, to emphasize the relevance of IT, and to make appropriate offers. Secondly, Bechtle is known as a full-service provider.
Nevertheless, it is always important to emphasize the wide range of our portfolio and to focus on that. That is exactly what we have been able to show at the Hannover Fair, and quite impressively so. The second message concerns our successful business with public sector clients. The procurement office of the Federal Ministry of the Interior and Bechtle have concluded a framework agreement for the delivery of IT security products from the manufacturer Trend Micro, as well as the provision of services and training related to the products used. The total volume of the agreement amounts to EUR 216 million and has a term of five years, with an option for a two-year extension.
In addition to the delivery of products for the production of end devices, servers, networks, and email systems, Bechtle will provide services for the implementation of the new systems, managed services during operation, and German language first and second-level support. I've already referred to the historically high volume from existing framework agreements. However, we are of course not resting on our laurels here, but we want to continue to successfully expand our business with public sector clients. Finally, ladies and gentlemen, let's take a look at our expectations for the current business year 2025. As expected, the start into the new year was subdued. However, this was already part of our planning at the beginning of the year. It should therefore come as no surprise that we are confirming our forecast for March.
Uncertainties remain high and have unfortunately increased due to the rather erratic tariff policy of the U.S. administration. In this respect, our forecast is of course subject to a positive development of the general conditions in the second half of the current financial year. We already registered an initial, albeit still cautious, recovery in the public sector in Germany at the end of the quarter in March, and according to initial preliminary figures, April was also heading in the right direction. These are good signals that give cause for optimism despite all the geopolitical and economic upheavals. Nevertheless, we remain cautious with regard to the current second quarter. We do not expect to see a broad-based recovery until the second half of the year. We are still running against high competitive EBIT figures in the second quarter.
Specifically, this means the range of possible scenarios remains very wide, both for the economy at large and for Bechtle in particular. The actions of the U.S. government pose major risks and uncertainties. Tariffs and an associated trade war, unfortunately, are not off the table. There are some bright spots, especially in domestic politics. The formation of a government has created calm and cautious optimism, particularly among our public sector clients, and we feel this today. The creation of a digital ministry with far-reaching competencies is at least an important sign and a step in the right direction. Our guidance remains the same. We want to slightly increase the volume of business. We expect sales to develop below the business volume due to the continued positive software business.
EBIT could decline by up to 5% over the course of the year, but there are also opportunities for more positive development. We therefore expect the EBIT margin to be slightly lower to stable. So much, ladies and gentlemen, for our performance in the first quarter of 2025 and the outlook for the rest of 2025. Thank you very much so far for your attention, and I'm looking forward to your questions.
Ladies and gentlemen, we now start with the Q&A session. If you want to ask a question, please press Star and One on your telephone. If you wish to withdraw your question, press Star followed by Two. If you want to ask a question, please press Star and One. We start with the question from the German room. One moment for the first question, please. The first question, Knut Wöller, Baader Bank, please. Thank you very much.
I've got three questions. Dr. Olemotz, the first question. Would you assume that the bonus payments are in line with your business trends in 2025? That is more focused on H2. Secondly, to get some idea about how the general momentum is going to pick up in or picked up in March and April, can you tell us whether we were even above the guidance or the upper range of the guidance? Another question about the framework agreements that simply need to be called off, as you said. Do you still require any approvals, or do you still only expect somebody to press a button and that's the go? You said that you think this is going to revive volume trends.
Thank you, Mr. Wöller.
I'll start with the last question because, as I mentioned several times already, it's going to be decisive with a view to our future performance in the course of the year. Namely, the question of whether we in Q2 will be successful in using the potential of already one framework agreement and translate that into revenue. In technical terms, this is what happens. The most decisive factor in the context of this call-off of existing framework agreement volumes is, first of all, a performance portfolio agreed between the customer and Bechtle, meaning in concrete terms, and it becomes transparent when you take a look at this example. In infrastructure, you need to agree on a basket of goods. Now the situation is such that these framework agreements were, of course, won in previous times, and technology advanced meanwhile.
In many cases, this means that compared to the situation when we were awarded the tender, we have higher performing new devices or software products in the market. That, on the other hand, makes it necessary to talk to our customers and agree on whether the customer allows us to use the newer products with a better margin, usually, just as an aside, to include them in the framework agreement. These discussions are decisive when it comes to the technical requirements so that at the end of the day, the framework agreements can be exploited. Of course, the customers, the procurement office in the case of public clients, are however prepared and also in a position to authorize these orders. When you're talking to the customers, you need to take the vendors on board as well.
You need a pricing specified, then the manufacturer must be able to deliver. That is what I meant when I said that the preconditions in order to tap this potential are already in place in terms of processes and coordination. To put it in a nutshell, especially when it comes to the large framework agreements that we also communicated externally, both we and the vendors are ready to get going as soon as possible, as soon as the customer calls off certain services. That is it for framework agreements and the preconditions that must be met for them to translate into revenue. Now coming to your first question, bonus payments. It is true that generally speaking, there is going to be a shift to H2, but it may also be the case, and that is the effect that I referred to when I spoke about the Q1 numbers.
It may be that this even goes beyond that because, as a rule, there is a six-month delay before the performance claims actually get paid out. We are not always entitled to show these coming claims already in our figures. That means for the backend money, we have at least a three-month delay, sometimes even more than that. That is something that hit us hard in Q1. It may happen that it actually exceeds the year under review, and it only shows in the next year. For example, in Q1, we had the weak backend margin, and this was mostly due to the fact that Q4 of last year was relatively weak. Now, compared to the rest of 2024, it was relatively good as a quarter, but compared to previous Q4s, it was a rather weak one. That translated into weak Q1 this year.
This is a connection that will continue to show its effect even in the course of this year so that the payout of these outflows or cash flows are expected towards the end of the year. This is assuming a linear growth of growth rates. As far as the operational development in March and April is concerned, we are, I would say, in the medium range of our guidance. As far as the top-line development is concerned, we're not falling short dramatically, and we're not above it much either. Looking at order intake, I would even say that it is a couple of percentage points better. Looking at the operations figures in April, for the first time in a long time, we now saw an almost double-digit growth in incoming orders. That is what I meant when I said there are the first cautious positive signals.
will have to wait and see a couple of weeks before we can say whether they are sustainable or not. As far as the big framework agreements in the public sector are concerned, and since we talked to our clients in this field last week, we are very confident that this trend is going to show in the second half of the year, and that would mean that we would actually end up within the range of the guidance. Martin Link, it has been said already, but I just want to stress it once again. We are talking about top-line figures here. This is positive. It is a good thing. We said in Q2, the bottom line, on the other hand, will still be under pressure. I will remind you that we wrote back EUR 7 million in provisions last year.
There are going to be negative effects from the changes initiated by Microsoft. We are confident, yes, but it will, first of all, relate to the top line, not so much to the bottom line. Thank you for your explanations, says Mr. Wöller. Next question by Florian Draisch of Kepler Cheuvreux.
Good morning, and thank you very much for taking my questions. It's basically a follow-up to your comments on Q2 EBIT. Now, if we assume a slight growth and the positive factors that are probably not going to repeat, the EBIT in Q2 will probably not be much above the level of Q1. That will mean that you'll probably have the best second half of the year ever. My question is, where do you expect this extreme lever to come from?
Will it be including the profits from Q1 and Q2, which were negative, and the next quarters are going to remain negative? Or how are you going to deliver this extreme lever, taking into account the backend margin? Many things have to go really well for this to become true.
First of all, it is correct, and Mr. Link has highlighted this again in response to Mr. Wöller's question. It is true that in Q2, also because of the special effect we saw last year, there is going to be tremendous pressure on the bottom line. That is definitely true. On the other hand, Ms. Treisch, as far as the headcount numbers and personnel costs are concerned, we're not going to relent.
As a growth company, we're active in a very future-oriented company, and this puts us in a bit of a dilemma because the current crises, challenges, disruptions of various types notwithstanding, we're still talking about an industry of the future. We're still talking about a thrust of digitalization that we're going to need for our public clients in particular, and we're going to see this as well, I'm convinced. Now, the question is, how do you deal with personnel costs in such an environment? It is difficult in our industry, but let me tell you, we're going to focus on the headcount and thus on personnel costs a lot, especially in Q2, but also for the rest of the financial year. Now, where do we get our confidence from?
We have always been honest here and said that we need an extremely strong H2 to make up for H1, but we also did our calculations. Beyond that, even, it is also true that in the past, we made this happen in very concrete terms. I can only say, yes, it is possible. Now, to give you some initial figures, of course, in H2, for the top line with a given profitability and then also the seasonality effect that we must not forget, here we would require growth of around 10% or more in the top line. We all remember well that this is exactly where we started out many years ago with our growth. It is something we lost sight of over the past two years, unfortunately, but it is something that has been true for us.
Historically speaking, there are second halves of the year in the past that have shown that it is possible for us to achieve our guidance in the large range that we have come up with. What am I trying to say, Ms. Treisch? It is not just possible when you do the math, but also telling from experience. Of course, the framework conditions were different at the time, but we as a company have proven that we can do it. At the end of the day, that gives us confidence in connection, and that is important, in connection with the first positive signals that we have seen regarding the top line in March and also in April this year. This has not materialized in the bottom line yet, but the preconditions for us to actually come up with the numbers we are going for is, of course, dependent on high top-line growth.
When we look at the KPIs, we look at incoming orders first and foremost as the most important ratio we have in order to make things happen in the future. This is the big picture, so to speak, regarding your question of our confidence with regard to the guidance and whether we think we can achieve these targets. It is going to be ambitious, yes, and many things need to go much better than in the first quarter of the year and probably also in large parts of Q2. That goes without saying. This is why the pressure our guidance is under this year is particularly high. This is a fact we need to accept. As I said, it's not wishful thinking.
We've seen quarters and six-month periods in the past where we showed the performance that is now necessary in order to achieve our guidance, not just in one year, but in several years, in fact.
Thank you for the honest answers. And don't get me wrong, I would wish to see you able to see this and to go back to quiet waters in 2026.
Ask me. Trust me, Ms. Treisch, I feel exactly the same.
Yes. A follow-up question. The new federal government will hopefully have a positive impact on the business behavior of your public sector customer and the new digital ministry. Do you have great expectations linked to that?
I mean, you have an expert from industry as a minister there. In the short run, and that is why I said it's a step in the right direction. In the short run, no.
Anyone expecting that this online access act will boost everything and that the digitization of the federal government and that this will lead to billions in turnovers? Sorry, that's just wishful thinking. That is why in the short run and the mid-run, we focus on the framework contract we have on our books. That is the central message for you. The potential exists. I expect attractive growth rates in our sector here. In the mid to long run, we hope, like all other market participants, that the focus on digitization will increase. It is a fairly small ministry, but if you look at the matrix, there are strong areas of influence, also approvals of IT projects, at least, is what you can learn from the communications so far.
At least it should be possible that there's an increasing awareness for IT topics and digitization topics in the public sector. The budgets exist. That's the positive message here. Even prior to the new government, we have tremendous headroom for future budgets also in IT, not only in IT, but there. The framework conditions for this part of the business are quite positive. In the industrial sector, unfortunately, due to the current economic situation, not only in Germany, but also in other European countries, unfortunately, we are a step or two behind. There too, we hope for the back end of the year that we'll see at least an incremental improvement of the framework conditions. Because there too, we see general conditions that speak in favor of a positive investment climate. Just imagine the following case. Tariffs might be concluded in a topical way.
We have the replacement cycle, which is overdue post-COVID, post-Corona, and we still have the Windows 11 migration in the second half of the year. It might be possible that even in the industry, we might see a smaller improvement than in the public sector, but an improvement compared to the current status. That is also what the manufacturers tell us. Three days ago, we talked to the CEO of HP Inc. He was our guest here at Bechtle, and he firmly expects the classical client business to be pushed in the second half of the year due to replacement and Windows 11, not as strongly as expected six months ago, but he expects first positive signs here. In a nutshell, please bear with me that I have given you a comprehensive answer or a detailed answer.
There are good reasons really to expect a considerably better second half of the year. Thank you. The next question, Martin Jungfleisch, BNP Paribas.
Good morning. Two questions. One, referring to the framework contracts. You said that the public sector still has large contracts. The federal army, EUR 700 million, other big contracts. Could you qualify the sales or the revenue? Which part of the public sector spending is covered by framework contracts? Mr. Jungfleisch, let's start with the federal army, with the armed forces. I mean, this is a contract that receives a lot of attention because for competitive reasons, we announced this very strongly. I assume that this contract will start in Q2. There's a considerable backlog there.
Something atypical might happen, which we did not assume in our planning, that in the current year, we might have a higher call-off volume than would normally happen throughout a year. Normally, in the first year under contract, and that brings me back to Mr. Wöller's answers, first of all, you have to grade the foundation so that the framework contracts will be called off and affect revenue and profit. All this has happened. In the past months, nothing has happened in that regard. It might be possible that we'll have an overproportionate growth starting in the second quarter of this business year. You've just said it. This contract alone accounts for EUR 700 million. Based on all product basket we have, it might be even slightly more throughout the term. Now, planning, that was the second part of your question.
As a rule, we do not plan specific call-offs of individual contracts. When we talk about assumed growth, we look at the total volume. The total volume of our framework contracts, which we have in our books, is not only Germany, but group-wide, because we are also working strongly with the European institutions in Brussels to report that again. That accounts for EUR 5 billion. EUR 5 billion, that is the contract volume. EUR 2 billion alone refers to German federal institutions, which as a rule source via the procurement office of the Ministry of the Interior. That is why I focused on this institution in particular. During the last quarters, I have already pointed out that we see a consolidation at the customer side. Different from the past, we no longer have 100 small institutions, public tenders. No, we see pooling effects. We see big buying centers.
The procurement office of the Ministry of the Interior is such an authority. This accounts for EUR 2 billion across a term of four to five years with extension options, just to give some specific figures. To clarify matters, the EUR 5 billion refers to the entire term. This offers some leeway for the individual years. As Mr. Olemotz said, it is no consistent call-off behavior. You cannot just simply divide it by four or five. It might be an approximation, sorry. A follow-up question: What was the performance in the public sector in Q1? Now the government has been cited. When have you seen the pickup after government has been formed? Was it in the following months or the quarter after that? Performance public Germany in the first quarter was flat. We have not seen growth, but no significant decline either.
I mean, there are smaller shifts here and there, but no dip. That's the positive announcement. No further deterioration, which we saw in the year before. It was flat-ish in the first quarter. Traditionally, the prerequisite for this business is an adopted budget. That is why I was so pleased to see that the new government wants to approve the budget prior to the summer break. That's an important prerequisite for the performance in the second half of the year, which we need, as we've said several times, to achieve our guidance. On the other hand, we have to say that even if the budget is approved, the essential impetus of this business will be seen at the back end of Q3 or Q4 in particular. That's where we see the biggest growth rates in this business. Because we have the budget adopted, but then we have the summer break.
We might assume that we'll see effects in September at the earliest, maybe late August, depending on the summer holidays in the different federal states. The essential prerequisite is the adoption of a budget prior to the summer break. Martin Link again, this is business volume. It's flat referred to business volume. Just to remind it, flat doesn't sound so nice at the beginning, but we had a very strong March. January, February were a week. Elections hadn't taken place, so nothing happened in the public sector. The strong March helped us to have flat figures for the public sector in Germany. This trend, I assume, of a clearly improved March continued in April as well. Okay, thank you. Just to remind you, should you want to ask a question, press star and one. Next question last from Klaff, Deutsche Bank.
Thank you. Good morning. I've got two smallish questions. One, first of all, I heard that for some products, Microsoft is somewhat coming back to paying commissions. Can you confirm that, or is the situation as strict and harsh as before? Dr. Olemotz, I cannot confirm this. We still have a lot of sales pressure put on our customers to motivate them to migrate them to CSP contracts, cloud-based, because otherwise we're going to lose the incentive. So we cannot confirm that Microsoft would be making any concessions in this field, neither with regard to this point nor with another one, namely the Windows 11 migration. It will become very expensive for all customers not to migrate. Thank you. Second question, maybe I didn't pay close attention to whether you want to report Germany and international figures in the future.
Have you told us already from when on you're going to report according to regions for profitability? And can you give us the numbers for 2024 in that sense as well? Let me restate that. We're not going to be able to give you the numbers in the course of this year. In the middle of the year, segment reporting is something that we are trying to map in our own ERP systems as we speak. The actual switch is going to come when we publish our year-end figures. Only then will we be able to make statements regarding the previous years in that sense. What we wanted to do at this point is announce this change. We wanted to prepare the ground, so to speak. We did that with our press release as well.
We want to already prepare the market for us reporting regionally and not so much according to the two segments. Because at the end of the day, this is the major reason why we've already taken this step internally by changing our board functions, because we believe we can better penetrate the markets and map what is happening if we don't make a distinction between these two different sales channels, so to speak. In the future, the responsibility for the different sales channels is to be bundled in one pair of hands in order to use the potential better in the future. That is the reason why we do it at the end of the day. As soon as we have these numbers, we will make them available actively, says Mr. Link. Now, to keep things simple, we showed the numbers for Germany and international.
In the future, we're going to have a segment Germany, one segment France, another segment Benelux maybe, and then one for the rest of Europe. Dr. Olemotz, just to explain things and explain to you why we cannot say anymore at this point, there are static requirements according to IFRS reporting. Right now, we are trying to match them in a way that makes sense with our decisions internally with regards to management. We cannot tell you anything about the final segments, but they're going to be more granular than just domestic abroad. Thank you. Thank you so much. Next question, Andreas Wolf, Warburg Research. Good morning. I have a few questions. First question regarding the call-off behavior of public sector clients. We didn't see a budget flash in Q4. In some cases, these budgets have lapsed.
My question, I suppose, would be whether that also pertains to the framework agreements that you have concluded. Can it be the case that the public sector will maybe act a little more dynamically in the future? Second question on bonuses. Are they more geared towards market shares than in the past? I think we saw something happening along these lines last year already. That would be helpful. Thank you. The third question on receivables management. Could you give us some insight into what areas you're focusing for your improvements? Are these those projects where you try to achieve an earlier acceptance amongst customers, for example, or better payment terms, what have you? That would be helpful. Answer now, Mr. Wolf, concerning the public sector. If I understood you correctly, the question is, do we expect a different behavior with regard to unutilized budgets?
We know that usually what had not been spent by the end of the year would just lapse. Now, it all depends on the new budget, of course. We'll just have to wait and see. There is a special situation in that, again, and we had the same situation last year already, albeit for different reasons, that we are going to see a very late budget in the current year. All expenses are just deemed preliminary at this point. Now, the decisive question is whether the budgets that had not been fully utilized last year, although in Q4 we had seen a hockey stick to some extent, but a relatively good Q4 at any rate, but not to the same extent as in the years before. The decisive question is going to be whether the institutions will be authorized to take this unutilized budget and use it this year.
This really does not matter as far as our framework agreements are concerned, because these budgets have already been approved. The fact that they were not utilized in the past would be due to two reasons. One, there were some situations where the people responsible, because of the level of uncertainty on the political side and the breakdown of the former coalition, more specifically, so due to the higher uncertainty, they cut spending. Secondly, towards the end of the year, we had something like an unofficial guidance concerning the spending of unutilized budgets. There was an overlap here. Just coming back to the example of the EUR 700 million of the framework agreements, they remain EUR 700 million. They are not affected by the new budget either. The problem simply is that they can only be called off once the new budget has specified certain indications.
That has not happened yet. The announcement in it by itself that the new budget will come before the parliamentary summer break, by signing the coalition agreement alone, a lot of this uncertainty that I just mentioned just evaporated. That has led to a relief on the part of our public clients. That is how I see it, the general picture. In the short and medium term, we just look at the framework agreement volume that we already have on our books. As far as the bonus earnings and discount agreements are concerned, the major share, especially in the current situation, mean that growth or market share are the overarching criterion when it comes to measuring back-end money. On the other hand, there are singular events where we have portfolio-related incentives. Let me give you a concrete example.
You may remember that HP in the periphery area were acquired poorly. Now the poorly portfolio is going to be pushed into the market, that is, cameras, what have you. There are some incentives to do that, but they're basically always geared towards growth. The share of wallet of a manufacturer with Bechtle, absolute growth with relation to the market and with relation to our competitors, remains the central criterion to determine back-end payments and also discounts at the end of the day. As far as receivables management and its potential are concerned, I have to say that, to be honest, the potential is already almost fully exploited. If you take a look at the cash flow over the past two quarters at Bechtle, it becomes clear that we have already covered most of the way.
This does not mean that there is no further potential at all. As far as the processes and the management of working capital is concerned, I believe everything we need is in place. We must not forget that, say, if our public revenue surges, there is going to be more pressure on DSOs because our public clients are not generally known for paying quickly. On the other hand, they offer no default risk for us. The system is in place. It is highly performing. With the view to our cash flow development, we have shown that this is the case. Going forward, we need to show the necessary growth and do not relent as far as existing processes and receivables management are concerned.
But going forward, I would not expect any further big improvement potential because over the past two to three years, we already tapped that potential. That's great. Thank you very much for the answer. Ladies and gentlemen, we will now change over into the English-speaking room. Just bear with us, please.
The next question comes from Christopher Tong from UBS. Please go ahead.
Morning, Chris from UBS. Thank you for taking my question. Two from my side. On the EUR 500 billion German infrastructure funds, do you have any expectations of a tailwind on your business? Secondly, last call, you mentioned that there was sort of an acquisition in process. Is there any update to this? Thank you.
Yeah, thanks, Chris, for your question. I'll start with the third question. Any tailwind coming from the EUR 500 billion? Medium and long term, I would say yes.
Short term, no, to be open. That depends mainly on the processes behind the €500 billion. The key question is, when will specific projects occur in the market and to which degree will we see IT as part of that budget in general? Unfortunately, short term, no tailwind. Mid to long term, I would say definitely yes, directly and indirectly. Regarding the acquisition, our funnel still looks good. I expect perhaps, I would say, one to two smaller acquisitions already in the second quarter, latest in the third quarter. The regional focus is on Germany on the one hand side and on the Netherlands on the other hand side. We still have a closer look at Spain, Italy, and Poland, as already mentioned as well.
Yep, that's perfect. Thank you.
Welcome.
The next question comes from Barat Nagare from Kanto Officerage. Please go ahead.
Good morning. Thank you for taking my questions. I just have three of them. The first one is on a follow-up to what was just said on the €500 billion infra fund fiscal stimulus in Germany. What specific areas in the mid to long term, specifically in terms of the areas of focus within IT, do you expect to benefit there in the mid to long term? Maybe I'll go one by one if that's okay.
Yeah. What is said regarding that program is that we talk about a general, let's say, logistic and infrastructure-oriented budget. Part of that will be IT and digitization as well. That is what we already know. Part of the budget, part of the program will address specific digitization projects. That is what we expect. Industry projects as well regarding the general logistics all over Germany.
We are prepared to see some positive effects directly regarding the IT part of that program. We expect, on the other hand, some of our customers to benefit from the program. That is what I mentioned before when I said, okay, we see a direct and an indirect effect regarding our figures, medium and long term.
May I add, we still have to wait to see what budgets, what funds the newly established Ministry for Digitalization will have. We expect, we hope to see some positive effects coming from that new ministry as well. The same, as Mr. Olemotz mentioned already, mid and long term. Everything we discussed right now will have, unfortunately, no impact in 2025, but will have impacts in 2026 and 2027.
Sure. Thank you. The second question is on the double-digit growth in incoming orders that you referenced earlier for April.
Is that mainly from public clients at the moment? In general, in March or April, has there been any increased activity among your SMB customer base yet given the switch to Windows 11? Could you shed some light on the conversations you're having with SMB customers?
If you look in the first step on Germany, SMBs are still very reluctant. We did not see improvements, let's see, in a broad range from our SMB customers in Germany. We have seen higher order income regarding the classical client business, but in our European subsidiaries, not in Germany. In Germany, the growth is mainly driven by public sector customers.
Okay. In your press release this morning, you referenced that internationally, there was a noticeable rise in the demand for traditional desktop computing. Was that mainly from pull-forward effect of demand due to the tariffs?
Secondly, is there anything positive for the desktop computing business in Europe at the moment at all? Thanks.
What I can say regarding discussions we led with our customers is that projects which have been on hold for the last months are still at the table, so to say. A lot of our customers start again the discussions we already led roughly 6 to 12 months ago. On the background of the difficult economical situation, they decided to put the projects on hold. Nowadays, we are still having discussions on that. That is what we wanted to mention in our press release, that we start again the discussions. I already mentioned in the German room, the Windows 11 and the replacement argument coming from the post-COVID argument.
We expect an increasing business on the SMB side coming from the client business in the second half of the year, yes. The main effect regarding the growth we need to fulfill our guidance will come, that is at least our expectation looking at the situation from today, from our public customers, mainly in Germany, but for example, in Belgium regarding the European Union institutions as well.
Thank you.
The next question comes from Aditya Buddhavarapu from Bank of America. Please go ahead.
Hey, good morning, Mr. Olemotz. Just two questions from my side on Q2. First question, how should you think about the revenue growth outlook for Q2? You said you started to see some positive signs on the top line. Should you think that the growth can improve from the -5% organic that you saw in Q1?
Just if you could offer any more specific color on that. Then second, just on the profit before tax, the PBT as well. Martin mentioned that you still have some headwinds in Q2 from last year having the reversal of provisions, the Microsoft unpackage, etc. Any additional color you can provide on how Q2 profits might evolve just to understand what that means for the rest of the year?
Regarding the expected growth, I would say we talk about, let's say, a situation in which we can perhaps see a first small single-digit growth regarding the top line, especially business volume, given that our public customers, and that is what we already mentioned, will use already existing framework contracts and will come back and order specific products, software products, and services. That is a precondition, so to say.
The best case would be a smaller single-digit growth in the second quarter. Regarding the profit, it's not easy to give you any insight, but what we expect is that the profit coming from the facts Martin already mentioned, what we expect is that the profit will be under pressure in the second quarter as well, mainly because of the personnel costs, but also because of some extraordinary effects we saw in the previous year. It's still pretty hard, and you know that, to give any forecast, even for the next two months, you all know the circumstances. I think Florian Treisch mentioned in his question that Q2 on the bottom line could be on the level of Q1. We can't give you any more color on that, but let's say hopefully, hopefully, the EBT Q2 will be in absolute figures better than Q1.
We really have to wait for May, for June, waiting for if the improvements we have seen amongst our public sector customers in Germany are really sustainable. If, as Mr. Olemotz mentioned, the small top line growth is enough for at least a small easing of the pressure that we do have on the earnings side.
Got it. Thank you. Just a quick follow-up on that one. You mentioned the small growth in business volumes. Does that mean that revenues could still be down given that that is what you have seen even now because of the impact of the software? That would be open, depends mainly on the development of our software business. That is, it is really impossible to predict to be open because we see several effects. It comes, as you know, from IFRS 15, the differentiation between business volume and revenue.
We are in the middle of a transformation process regarding our Microsoft business. That has highly affected the question of IFRS 15 as well. To be open, it is really not predictable. Thank you, Dr. Olemotz. Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Dr. Thomas Olemotz for any closing remarks. Yeah, vielen Dank. Okay, I just heard that I have to speak in English. Thanks a lot for your question, for the discussion. Always highly appreciated and welcome from our side. No question left so far. That is what we see. I wish everybody a nice weekend and see you in the future. Thanks a lot.