Ladies and gentlemen, a warm welcome to our 2026 Analysts Conference here in Frankfurt. We hope that you've had time to eat a snack. My name is Martin Link, and me and my team are responsible for investor relations. Next to me is Thomas Olemotz. All of you know him. For the very first time, we don't have just one board member, but two here today. Our new CFO, Christian Jehle, is also here. Not all of you has had the opportunity to get to know him, which is why I would like to kindly ask him to introduce himself.
Thank you very much, and I'd also like to introduce, to warmly welcome all of you and ever since the 1st of January 2026, I'm a CFO, the CFO of Bechtle AG.
The last 25 years, I was also in an IT software company and worked for companies like Fujitsu, Siemens, Accenture, and also for a long time for SAP. Ten years ago, I moved to London and then worked for companies like Experian, Finastra, and the last few years for Computacenter. I came back to Germany, and ever since the first of January, I've been in the position of CFO at Bechtle. That is, I deal with the topics that formerly Dr. Olemotz dealt with, so I have big shoes to fill, but it's a lot of fun because I've known Bechtle for a long time, both as a customer and as a partner.
It's a company with a great success and growth story over many years, a great corporate culture, lots of people with green blood as I've come to learn, people with a lot of passion for their jobs and who identify greatly with their company. It was the perfect decision to make, and I look forward to everything that's ahead of me.
Thank you very much, Mr. Jehle. There are some technical details concerning this conference. First, we will hear the presentations by Mr. Jehle and Mr. Olemotz, and then we've got our Q&A here in Frankfurt. Once all questions have been answered, we will take the questions asked over Internet. First, the question from the non-German-speaking audience, and then at the end, the questions of the German-speaking participants.
As you've come to know from Bechtle, our conference language is German, and there is simultaneous translation into English, and the questions asked in English will be answered in English. If you'd like to ask a question, please press asterisk followed by a one on your telephone or device. So much by way of introduction. Now the presentation by Mr. Olemotz.
Thank you very much, Mr. Link. Ladies and gentlemen, I'd also like to extend a warm and cordial welcome to all participants here at our press conference, whether they're connected via Internet or here in person. Like every year, I'm delighted to have you. There's probably a lot to discuss today, and in the talks we conducted in the run-up to today's conference, we've already broached a few subjects. I'd like to delve right in without further ado, and today's presentation is structured as follows.
Immediately after me, my colleague, Christian Jehle, will present the key financial figures for the financial year 2025. He's also going to talk about the dividend as well. We will have a look at important strategic events and developments which go beyond the figures, if you want to put it like that. These are also developments which are of importance for the development of our company of Bechtle. At the end, we're going to provide you with an outlook and a vision for this year and the future based on the newly phrased out vision and the associate mission statements. Mr. Jehle, the stage is yours.
Yes. Thank you, Mr. Olemotz. Well, if you look at 2025, it's fair to say that it was a difficult year for all of us, not just for Bechtle AG, but for the entire industry. If you look at the economic cycle and the geopolitical situation, there were significant challenges we had to face indeed. In sum total, it's fair to say that we started rather slowly, but then we shifted into high gear and delivered a truly spectacular final spurt. If you look at the top line, we can be satisfied overall with what we have achieved in 2025. We made progress not only in terms of figures and P&L, balance sheet, and cash flow, but also when we look at the structural side and contents, we expanded our expansion in Europe.
Productivity was also pushed forward in the context of our IT projects, our internal projects we started and we roll out. I'm sure you've seen it in the press releases that we've made progress in the board structure as well. All in all, 2025 was a year of progress for Bechtle. If you look at the figures in greater detail at the top line, that's business volume, with a growth of 8%, which is above the guidance. Well, we started slowly, but then we had a very strong fourth quarter and all in all, it was a solid year. If you look at revenues, you know the difference between it's driven by the software. Software which due to the accounting standards, can only be reflected and recorded in the margin. We see a growth of 2%.
Above all, when you look at the last years, this is not in line with the usual Bechtle standards. We used to have stronger growth, but we also see the impact of the software business over the years, and the software share is gaining ground. Here again, the two key figures are diverging. In sum total, we can say we can be happy with what we have achieved in terms of top line. Let's look at the timeline. Here you see in the chart what I have just mentioned with a modest start, but then we really hit the accelerator and the fourth quarter was really impressive, a growth which we don't expect. Of course, there's always seasonality, which was pretty much back-end loaded, but this scale is something we haven't seen.
December alone was really the first month ever in Bechtle's history where we achieved over EUR 1 billion in business volume. You might imagine the challenge that implied for the team as such. Against the backdrop that we had such a strong December and such a fourth quarter, we're quite confident also that the company is high-performing in the future as well. If you look at the segments now, you can see on the one hand the growth in Germany, strong. We've outperformed the market. The main home market, Germany, extraordinary good performance. You see the challenges we have in France, above all due to the economic situation in France. That is a challenge which is reflected in the figure two.
If you look at Benelux and the rest of Europe, you can see how our strategy really pays off, the internationalization strategies. Positive figures here, a challenging environment in France, as I've said, and the figures show that, but a strong performance above all in Germany. If we look at the bottom line now, here you see EBIT and EBT is decline year-on-year, and that is something we're not happy with, of course. We have to admit this. Why did it happen? Well, we had cost increases in 2025, which we only partly compensated with the growth in top line. You see the impact of internationalization and then the product mix in 2025 also had its share.
The 324, well, is still a good result considering everything, but something where we say internally we're not happy with that, admittedly, and this will be a focus topic in the future. If you look at EBT and look at it across the quarters, we can see a rather modest start. First quarter and second quarter, a decline year-on-year. Then we turned the ship around in Q3 and in particular in the fourth quarter. We managed costs very closely. We pushed our projects to increase efficiencies. Here again, very strong performance in particular in Q3 and Q4.
If we change perspective and look at the segments, what you can see here is the sheer relevance of the German segment, the German market, a clear increase here year-on-year , and you can also see the proportion that shows the relevance of Germany as a segment. You see the benefit of the maturity of the situation, the product range we have, and we have seen the impact here. You see the pressure we feel abroad due to the economic cycle and the geopolitical situation in the different segments. Another KPI we always focus on is cash flow. We have operative cash flow EUR 290 million. This morning, the question cropped up, "Well, you sound happy with the result. How is that possible?
I mean, there's a clear drop year-on-year . Yes, if you look at the figure, that's the case. What we see is what's hidden behind these figures. On the one hand, I've mentioned it, we had a very strong seasonality in Q3 and Q4 with the impact on cash flow. You have to ensure that you are able to invoice the warehouse. The quality of the EUR 290, that is relevant. That is what we are focusing on. If you look at the DSO, we've improved that in 2025. That decreased from 38 to 36 days. If you look at working capital as well against the business volume has also improved from 7% to 6%. All this taken together, we are quite happy with the EUR 290 you see here in terms of cash flow.
Now, employees. If you see the overview, we have a growth of just under 4%. You have to take a closer look because organic growth is -2%. I've mentioned this at the beginning. We managed costs very closely, which you see here. The growth you see here is solely driven by acquisitions. The second aspect that is also important is we continue to have a clear focus on training because our training ratio is at 6%. That is a very impressive figure. If you look at it in absolute terms, we have more than 800 young people that are undergoing training at Bechtle. That's a clear investment in our future. The next topic, dividend and profit sharing for our shareholders. If you take an outside view, let's look at our policy here.
You've seen it over the past years. The dividend policy is always focused on reliability and consistency. There's also a certain expectation, of course. We propose EUR 0.70 per share. If you look at the timeline here again, you can see it reflected on this chart that the message is clear. There's no year where the dividend was lower than in the previous year. There's always a clear expectation, and we've always delivered here. If you look at the payout ratio, we had almost 40%. Our rule of thumb was, well, we want to have, pay out at least one third, so we're clearly above that. Here again, a positive signal to our shareholders indicating that Bechtle is reliable and delivers in this respect as well. That was it from my side in terms of facts and figures.
Now over to you, Dr. Olemotz.
Thank you very much. As previously announced, let us now turn to some additional current news items which are of great strategic importance for our company's future. Although the year is still relatively young, there have already been many important and above all, interesting announcements already concerning and from Bechtle. I would like to highlight five of them by way of example, and I would like to start with a piece of news regarding the expansion of our partner network. Bechtle has signed new contracts with Telekom and Arvato Systems. We are thus expanding our multi-cloud portfolio and are going to offer customers even more choice and flexibility in the implementation of their digital strategy. When it comes to Deutsche Telekom, this comprises the Open Telekom Cloud, the public cloud by Telekom.
It offers companies a high performance and also GDPR compliant infrastructure based on German and Dutch computing centers. Thus, it supports digital sovereignty as an objective of many of our companies. In addition, Bechtle has also expanded its range of services with Arvato Systems by their cloud services. It's also an organization with high requirements as far as compliance and data protection are concerned. It extends our product portfolio with yet another Germany-based solution. The second point picks up on that because it's also associated with digital sovereignty. As announced in November, and many of you already know about this, the development has now been completed, and we are expanding our consulting services to include an innovative assessment for measuring the digital sovereignty of both businesses and public sector organizations.
The Bechtle Index of Sovereignty or BIoS combines a systematic evaluation of key business processes with comprehensive advisory support from certified IT business architects. Software developed by us, by Bechtle, enables customers to assess their individual level of digital sovereignty on a data-driven basis and to track it continuously over time. Bechtle is currently piloting BIoS assessment in Germany, Austria and Switzerland, with a broader rollout to other European countries planned to follow as soon as possible. The Bechtle Index of Sovereignty provides decision makers in businesses and public administration with a new objective benchmark for assessing their organization's digital sovereignty. The assessment analyzes the data sovereignty, technological independence, and capabilities across key business and administrative processes. When it comes to the heading Important News, we cannot overlook the fact that this is a unique approach in our industry.
Of course, when it comes to important news, there is another thing we must mention, and that is our key customer segment, that is our public sector clients. Business with public sector clients under existing framework agreements got off to a very good start in the fourth quarter of the past financial year, and that is putting it in a very conservative fashion. With a view to our quarterly performance analysis for 2025. We've just heard what is so outstanding about this from our colleague. Of course, we also continue to win new contracts and tenders. A recent example is the conclusion of two framework agreements with ProVitako, the central public procurement agency for municipal IT service providers and their municipal sponsors in Germany. The agreements cover the nationwide provision of products from HPE's network and server portfolio, as well as related services.
Both have an initial term of one year and may be extended up to 3x by a further year each. The total contract volume is up to EUR 501 million, including approximately EUR 283 million for network solutions and EUR 218 million for server solutions. We have a further success story to share regarding our international M&A activity. With the acquisition of the Portuguese IT systems integrator RIS 2048, including its subsidiary, Evoware, we are expanding Bechtle Portugal's existing range of services to include IT consulting and services. That means that we are now represented with IT services across the entire Iberian Peninsula and offer our customers a comprehensive IT portfolio in a total of nine European countries.
Founded in 2000, the company currently employs 165 staff and focuses primarily on enterprise and SME customers. Its turnover in 2025 was over EUR 50 million. In line with Bechtle's usual approach, the managing directors will of course remain in place. We are also successfully expanding our PLM business through M&A activities. With the budget-based PLM specialist EuroSolid, the largest SolidWorks partner in Hungary is becoming a trusted member of the Bechtle Group. EuroSolid has been operating successfully in the market since 2009 and employs 31 highly qualified staff. We have thus further strengthened our position as the largest European partner of Dassault Systèmes SolidWorks. Finally, we will look at important decisions regarding the composition of the executive boards, and that is my succession.
The supervisory board of Bechtle AG has decided to extend Konstantin Ebert's executive board contract, which was due to run until the end of 2026, ahead of schedule for a further three years until 31st of December 2029. As previously announced in November, Konstantin Ebert will succeed me as CEO on the 1st of January, 2027. Another important step regarding the composition of the executive board is the appointment of a full-time CFO, if I may put it this way. Christian Jehle joined Bechtle on the 1st of January, 2026. He's already introduced himself to you. He will take on the traditional responsibilities of a CFO, which were previously my direct responsibility. Both of these appointments are directly linked to my own succession.
My contract ends on the 31st of December, 2026, as most of you know, and until then, I will remain fully active as the CEO. For the supervisory board and the executive board, it was important that these decisions were made in a planned manner and with sufficient lead time. We would therefore like to emphasize once again the reliability and transparency of Bechtle, both internally as an employer and also towards our customers and the capital markets. Ladies and gentlemen, this brings us to the final part of my presentation, and that's the outlook for the current financial year and a closer look at our new vision. The high level of uncertainty and difficult economic conditions have already posed major challenges for many of our customers, particularly small and medium-sized enterprises in the industrial sector over the recent years.
Wars such as the one currently raging in the Middle East and the resulting energy price hikes and the risk of resurgent inflation are poison for economic development and thus also for our business. The IT world is currently debating a completely different topic even more heatedly. Many of our partners have talked to us about it in the run-up to this conference. I'm talking about the so-called storage crisis. Due to high demand and the resulting tight supply situation, prices for memory modules have already skyrocketed in recent weeks, and as a result, prices for PCs, servers, and storage modules in particular have also soared. All of this can have an impact on our business, both negative, but certainly also positive. Negative because we are naturally dependent on our partners' delivery capabilities and pricing for projects.
Positive because as the largest European partner, we generally maintain a very close and collaborative relationship with the most strategically important manufacturers. We can assume that the current crisis, depending on how long it lasts, will significantly affect the smaller system integrators in the market. This is further accelerated by a consolidation that cannot be ruled out. From my point of view, it's highly probable that there will be an accelerated consolidation. For customers, the decision on which IT partner to choose is also likely to be increasingly linked to the partner's size and significance in the market. Here we see Bechtle at an advantage. In this respect, the broad range of possible scenarios regarding our business development remains extremely wide again this year too.
Against this backdrop, we nevertheless believe that we will once again be able to demonstrate significant growth in business volume in the range of 5%-10%. As already said, we achieved this in 2025 despite the difficult framework conditions. We currently expect that in the business year 2026, the larger market players will be better able to manage current challenges. When it comes to the development of our business result, we are a little more conservative because of the aforementioned framework conditions and also because of the uncertainty. We are absolutely sure that we will be able to continue to invest consistently in Bechtle's future viability, whether in the form of necessary IT investments in our own platforms or through further M&A activities and subsequent adjustments to our management structure.
In this respect, the forecast for our EBT is for growth of between 0% and 5%. Given the current high pace of development, we will review our guidance for the full year at shorter intervals than we have done in the past, not least to keep the capital market as up-to-date as possible. In a situation where the possible business development scenarios vary widely, we believe this is a requirement of open and reliable communication, which is particularly important in times like these. Of particular importance, ladies and gentlemen, in times like these for companies is also a very clear orientation, and I believe that we do have that. Visions are the thread that binds our history together, and the first vision was defined by our founders in 1988.
Internal and external framework conditions have changed fundamentally and also very dynamically during the last few years, impacting directly the long-term relevance and viability of our current vision. This brought up the question whether our vision 2030, as defined so far and as known by most of you, is still a lodestar for the entire Bechtle Group, whether it still fulfills that purpose. Our answer is that it doesn't. Against this background, we have fleshed out a new vision, which you see in this slide. In a world of accelerated change, we activate the potential of IT, always prepared for success. We've chosen it deliberately in English and kept it pithy and concise. We've underpinned this vision with six so-called mission statements, which are used to derive the strategic fields for action.
The vision is for the long term, whereas these subcategories have a time limit of a few months to a few years. They will make it possible to safeguard the future viability of Bechtle. I would like to exemplarily focus on one thing that most capital market analysts and participants might be most interested in. That is performance. Yes, in order to achieve a business volume of at least EUR 10 billion, we need a CAGR of at least 10%. It doesn't sound very ambitious, but we say at least. We might be able to achieve that goal a little earlier and even exceed it. The EBT margin of 5% based on the business volume. This is all the more ambitious. Unfortunately, during the last two years, we've strayed a little bit away from this margin. The last margin was at 4%.
Our CAGR to achieve this target is at 9%. Profitable growth, ladies and gentlemen, is and remains our goal at Bechtle. That is my take-home message. On that note, I'd like to end my presentation. Thank you for your kind attention, and we look forward to hearing your questions.
Thank you, Mr. Olemotz. Thank you, Mr. Jehle. As announced before, we start with the questions right here. If you have questions, just indicate it and wait for the microphone so that everyone can hear the question. Mr. Ziering. Julia, please take the mic to Mr. Ziering.
Thank you, Yannick Ziering. Two questions. One regarding the start of this year. You mentioned the memory crisis, storage crisis. Just to get a kind of feeling of the current situation, do you see any advanced effects of the customers who buy now in anticipation here? And a more general question, if you think back to the last crisis and the supply chains, Bechtle, well, benefited in terms of bottom line. You had strong connections to the manufacturers. Is that imaginable for this year, too?
There might be a slowdown development at the top line, but the bottom line might not be that much affected. Thank you, Mr. Ziering. Let's start with the second question. Yes. This might happen. That is the dilemma we are faced with right now. I've mentioned to some of you in the preliminary talks. This morning, we were asked the question, well, everything is nice, and thank you for being so open and transparent. We appreciate that very much. Basically, you're showing two scenarios here. What is the more likely one? That's exactly your question. That's what I've tried to explain. There is a positive scenario and a negative one. Currently, we just didn't think it appropriate to take a clear position because we can't. We can't tell you yet.
Well, right now, the markets are sort of developing. Do we have bottlenecks? Yes. That can't be overcome? No. Do we see a extension of delivery times? In selected cases, yes. What about order backlog or all-time high? We never had a higher order backlog on our books than we have. You know us long enough, you know, to know that structural factors that remind of the COVID pandemic. You might remember that the COVID time is something we managed about very well, above average indeed. In a nutshell, yes, what you've just described is the positive scenario that might happen. Currently, we assume that by the middle of the year, we can assess with greater certainty what the outcome will be, because by then we'll have a broad feedback by the manufacturers, by the customers. We'll see the price elasticity in this question.
We'll know what the public sector response will be, where there's still a lack of investment, and the budgets are there. The situation which we had in the fourth quarter is something we don't foresee this year. A whole bunch of opportunities, but also risks. We want to point out that there are these risks. Personally, I believe, well, to put it conservatively, I'm not a Swabian, but I've lived there long enough, so I guess we'll handle it quite reasonably. I mean, you've mentioned it, this close relationship to our vendor partners helps us a lot, especially during times as these. We have a lot of critical framework agreements for our public customers, and the budgets are in place. There's a bunch of reasons to expect a good year. Briefly, my colleague can confirm it to your first question.
The start, 26, do we still see any adverse effects? There are some customers who has processed the fact that prices will increase. We see an increase in orders, disproportionate increase, despite the fact that order backlog was already high. Despite the fact that in the fourth quarter, we had an outstanding December, there is anticipated investment, but delivery times in individual categories with specific products, there's slight elongation. How did we start in the year? Well, we're looking at a solid January in our books. That was nice. That's where the problem is. We know it's an economic topic. It's about availability, pricing. If you look at the figures, everything looks nice and fine. Order backlog fourth quarter, we took this over to January. January looks really well.
February, we don't expect any drops there. What we are saying right now is exactly right. We gain clarity, we gain transparency. We're closely working with sales, discuss it several times a week to make sure that we don't overlook any trends here. We have full transparency in terms of order intake and individual transactions. We know all that, but there is a risk out there. We're aware of that, and that is why we are managing it, controlling it. As Dr. Olemotz has said, we think that by mid-year, we'll have more certainty, more data points, more experience in the market. The range is there. Yes. Florian Treisch, Kepler Cheuvreux. One question relates to the public sector. If I read it rightly, Q4 was driven by strong public sector business in December in particular. You said January isn't weak either.
How consistent is the public spending? I mean, it's less at risk compared to SME, who respond faster to economic development. Do you see a consistent momentum and an overall recovery? Can we expect the first quarter will be good thanks to the public sector? Well, we all hope for better second quarter.
Yes, you're right. I mean, you can take a different perspective. Top line, 5%-10% growth. In the current economic environment, that's not ambitious in our sector. Of course, our confidence is driven to some extent by what you've just said. I've mentioned it already. We have a positive situation which we only perceived in the fourth quarter last year. The budgets were agreed in November, so the budget is secure in terms by the procurement of the public sectors.
We have our framework contracts in our books, and the hurdles that still exist for the three quarters have been overcome in terms of demand. With the reference to what I've shared already, we are winning new framework contracts. I mean, we just almost ignored it, but two framework contracts with half a billion, that's not bad at all. Beyond that, I think it's worthwhile mentioning here, because that's not typically Bechtle, to put it like that. I think that digital sovereignty as a European company with a German anchor shareholder widely based in the SME and the public sector, and the development of our index of sovereignty, we are really hitting the nerve. I'm absolutely convinced of that. I mean, who, if not Bechtle, is suited to carry this topic into the market?
That is why we invest a lot of effort and money in developing this index. It's software-based. Something I haven't seen elsewhere here. Of course, you can check many competitors, and they offer checklists and checklist-based assessments, but we actually use a software to assess the existing software and/or infrastructure, sorry, and that is the starting point to start discussions with the customers. We end with a status, and then we talk to the customer to say, "Okay, that's the current status. What are you aiming for?" There are customers that say, "Well, I have security sensitive areas and other areas, well, I couldn't care less about." With that, we start a dialogue, and then we can tell the customer how to get from the current status to their target, and that distinguishes us from typical consulting companies. We're not just consulting.
We're not helping the strategy, devising the strategy. No, we're implementing it as well.
There's a follow-up question here, a second question. You've mentioned a business growth of business volume, and I'd say, well, EBT 0%-5% isn't particularly ambitious. But what's the buffer here? Or what do you fear? I mean, -2% organic decrease in headcount, then performance in the first half was disastrous. Well, I don't know how you put it, but you weren't happy with it.
There are many reasons why profit should grow faster.
Well, the reason is that in the current situation, with all the challenges, with a high level of uncertainty and the high level of dynamism, with a weak German economy or internal economy, not only in Germany, but also in France, that despite all that, we are investing in our own IT, in our own platform. No, we're not running a structural job-shedding program. We use fluctuation, natural fluctuation that led to this organic drop you've mentioned, but we are prepared for the future. We want to be the partner of our customers, the chosen partner for our customers for digital transformation. We could save up a margin, that's no problem. We would postpone internal projects by one year or two. We needn't have to cancel them. We wouldn't do certain expenditures. We really hit the brake in terms of acquisitions.
We could all do this, but in terms of the future of the companies, it's wrong to do that. That's exactly the way of thinking which we've always avoided. Right now, to be fair, we have to admit we are really trashed for that, but we still deem it right. This also applies to institutional shareholders of our companies, and of course, we are in close dialogue with that. They say, "No, that's exactly what we expect from you to move in this direction." That answers your questions.
The first question I have refers to the bonus payments of the vendors and OEMs. Have they already communicated their expectations? Should you think about flat volumes in the market? I mean, does flat volumes mean that the margin or the bonuses needs to be revised so that they're not impacted? Then picking up on what Mr. Ziering said, in 2021, 2022, the year wasn't that bad at the end, but there were crossover effects. If a customer wanted product A and also B, and product A wasn't available, the customer didn't buy product B either. Now we're talking about problems with storage and network components. It's a similar effect. Does it have a negative impact on currently existing framework agreements?
Well, let me start with bonus payments. That is a decisive question concerning the year.
In our company calendar, the current discussions are only just taking place. Q1 is actually the quarter where you discuss the growth plans with the biggest vendors, and then you also define the hurdles for pickbacks and everything else. I can't really tell you more about that because everything's still being discussed. Without wanting to name any brands, the problem of storage modules is actually not that one that every company has based on their procurement strategy. We, for instance, have a vendor or an OEM that says, "I'm not impacted at all or only slightly because I have a completely different sourcing strategy for CPUs." Most people probably already know whom I'm talking about, so we don't have that kind of dependence. There are some OEMs with major problems and others which are somewhere in the middle.
In our view, it is important and also one of our strengths that traditionally we cooperate with more than 300 OEMs on an independent basis. We're not reliant when it comes to our business volume to cooperate just with one or two OEMs. As far as this year is concerned, we assume that once the dust has settled in the industry concerning the supply bottlenecks, et cetera, there will be a fight for market shares. It will be quite a strong fight in our industry. Bechtle is a decentralized European company with lots of SME customers, with customers from the public sector, and that helps us. It really helps that we've got decades worth of experience.
As far as crossover effects are concerned, I have to say that our vendors and vendor partners are, of course, also trying to figure out how to deal with the current shortage. They look for alternative supply sources, and there are some OEMs who have started reducing the B2C business in order to keep the B2B business up. I'm not going to name any of them, but there are some companies that want to be present only in certain countries and not at the periphery. They want to make sure that as far as market supply is concerned, they can focus on the large IT markets throughout the world, especially in Europe. Our European footprint helps us because we're present in the largest IT markets in Europe, in Germany, France, and the U.K. There are both opportunities and risks very close to each other.
Lars Vom Cleff, Deutsche Bank. Hear the microphone, please. Thank you very much for giving me the floor. We've talked about the supply situation. I believe that the public sector will continue to place orders based on tendering processes, based on the digitalization pact. You're also participating in these tenders. Demand seems very stable, but when it comes to SMEs, demand is at a very low level, but there are still signs of life. Or is there still headwind? Now we see that the public sector business is increasing, and it's also recovering, and we also see first signs for SMEs. We now have to consider in how far the current geopolitical situation is going to put a damper on it and on growth rates for this year.
At the end of the year, in our customer segments, in corporates, SME, and public sector, we were on a good way. May I just pick up on that? I mean, we've just heard it, that you've got a lot of orders on your books. I mean, that's not our problem. We have enough orders, but the problem is that we need our vendors to supply the goods. Well, SMEs have placed orders now after waiting for years and years, so I believe that there is a lot of pressure to invest despite higher prices. Maybe they're going to invest a lower volume. You said that the average life cycle in the, when it comes to IT hardware is four-five years. Now, I think we would probably talk about seven years. Yes.
We saw that during the COVID pandemic, investments were anticipated. There was a lot of pressure to invest, and the necessity to invest will keep increasing, not just in our industry business. This is the first year in which we have the first normal public business. What do I mean by that? Well, last year, the budgets were defined for three quarters. The year before that, the German government broke down and we had new elections. 2026 is the first year with normal demand conditions in public business, in the public sector. That also means that here there is an investment backlog. I can only pick up on what Mr. Link said, that supply path or supply side is not the one we're worried about at the moment. Understood. You said that January was a strong month. February was also okay. What about March?
Let me just try and ask that question. It doesn't look bad. Okay. Two very short questions. I don't want to hijack the microphone. The Strategy 2030 with an EBT margin of 5%. I mean, even last year, a bad year, you had a margin of 5.1%, so that objective is not very ambitious. Yes, but it's based on the business volume. Oh, I understand. Reading is an art and an advantage if you can read. Okay, let's change the topic. Mr. Jehle, you are the CFO now. With a pair of fresh eyes, let me just ask you what were the positive and negative surprises? Well, the surprises were absolutely something I expected. Bechtle is the way I expected it and even more positive than expected. I've known the company for a very long time.
Even back when I was still working for SAP, Bechtle was a big partner and still is, especially when it comes to network equipment. Bechtle also buys software licenses. There are lots of touch points, and from the times of Computacenter onwards, Bechtle has always been a household name because everyone in Germany is really in awe of Bechtle. That's not due just to the customer segment. We are strong in all segments, so only positive aspects and a lot of potential. The corporate culture is also very strong. I mentioned the green blood at the beginning, and when I started working for Bechtle, one of my colleagues on the board said, "You will meet lots of people with green blood." I thought, "What's he talking about?" Now I understand it.
I mean, usually it's difficult to find people who feel passionate about the company and have been working for the company for more than 20 years, and that's the case in Bechtle, at Bechtle. That's an asset we can build on. During the last quarter, we saw a performance unlike any other company can achieve. I've never seen anything like it. All in all, just positive aspects. There are some things that still need to be done. If you read the figures, then based on the volume, last year we had a margin of 3.8%, and from 3.8% we have to get to 5%, and that means we have to grow by 9% every year as far as our business result is concerned. We've got everything it takes. We have an intact and fully functional company.
I grant you that. We have a difficult market environment at the moment, but it's also a very big opportunity, and we invested in productivity and technologies in the past to make sure that we're successful in the future. It doesn't mean that it's going to be easy, but we've got everything and anything it takes to be successful. I look forward to working in my new role and to bring this company to even more success.
I have a question concerning long-term growth, very long-term growth. Christoph Eckert from Eckert Mittelstand Invest. You could say that AI and agents, especially in Germany, mean that in 10, 20 years, there will be fewer jobs. We can also say that digital sovereignty is an important topic, especially for a company like Bechtle. It could be a door opener to a huge market. If you look beyond 2030, what kind of growth do you forecast for the company?
Well, of course, that's a very good question. It's also a question that is very difficult to answer. I mean, looking back maybe just at the last three years, we can say that economically a lot has happened, and not just in our industry. I believe that many developments of the last three to five years were difficult to predict. I will repeat what I've already said. Even today, the potential of AI for productivity gains in our industry, but also generally speaking, is difficult to forecast, at least when it comes to aggregated growth numbers and productivity gains. On a customer basis, it might be a little more tangible. If you want to get a flavor for that, maybe then you will have to look at our website and the customer reference cases. They will detail how the use of AI in a specific customer situation can work.
There is one case, Marabu. It's a specialist company from Swabia for special colors. No one knows that company, and we carried out an AI project with extremely interesting productivity gains that can be measured and also put into numbers. I assume that beyond 2030, the average growth rate of the IT industry will be above the average growth rate of national economies, just like in the past. The 5%-10% are not just due to our expectations for the current year. It's also our ambition, what we focus on. If I may just take out the last two years, we can say that we had a CAGR above 12%. We've gone through very interesting times, and we've had a lot of success in the past.
For long-term investors, it's important to reference all the important aspects of an industry like the IT industry. Against the backdrop of technological developments mentioned by you, I believe that our IT industry will outpace the markets when it comes to the growth rate. We will make money with AI, but we will also use AI ourselves. That goes without saying. We are currently using the first AI agents, and they are used across the customer interface. The Turing test would be passed without problems by these agents. You wouldn't realize you're talking to an agent, and it's only after talking to an agent that automated order confirmation needs to be done. No human has to do anything about it manually. It's still a pilot, but it shows the development of potential of our business model based on AI.
There is still a lot of potential, and we haven't even started using the full breadth of AI. That's all coming.
Well, I'd like to remind you of the virtual room. If you want to ask a question, please press asterisk followed by one. There's one last question here. Hans-Jörg Naumer , DWS.
A follow-up question to the previous speaker. Do you think that in the mid-term, the addressable market will decrease due to profitability gains and in the market? Or is the true relevant bit the number of software licenses you sell, and in the future, agents will talk to agents and bots to bots?
Well, my personal opinion, as long as we are as successful as we have been in the past 40 years in addressing the interface to the customers, well, as long as we are successful, I don't see the risk you see. The question is who.
Holds the customer interface, so to speak, with which hardware solution, software solution, platform solution, that is less relevant. We have to capture this customer interface. Many customers, both in the public sector as well as in the industry, look for orientation and guidance because the world is getting more complex. I'm not talking about the geopolitical world, but the IT world and digital sovereignty, European platform providers, European hyperscaler as potential competitors. Well, that is something I even ignored here. Whenever the IT world is getting more complex, it takes companies such as Bechtle, unfortunately not Bechtle alone, to take the customers by the hand and guide them. That is why for our business model in the future, it is essential to capture the customer interface. It is going to change the way we do this, obviously.
The use of AI bots and agents will also change the customer interface, but there will still be such an interface, and a company such as Bechtle will still be needed. Even more so, probably, I guess our industry will even gain more relevance in the future.
Questions here in the room? That's not the case right now. Since there are no questions in the English room, we switch to the German room. Just to remind you, if you want to ask a question, press asterisk followed by one. First question in German, Andreas Wolf, Berenberg.
Hello, and good morning. First of all, congrats to the strong fourth quarter. I have several questions. 5%-10% increase in business volume. Are these price effects or volume effects? Second question, storage of hardware. Have you increased your stocks here?
I mean, obviously there are changes if you look at the board member responsible for inventory. Back-end margin, does that result in increasing bonuses, hardware bonuses? Could you give us an update on the migration of customers for Windows 10 to Windows 11, enterprise agreements and the Microsoft environment? To what extent do customers accept the CSP agreements? Can you realize cross-selling here? The last question refers to the investment in internal IT. Could you put some figures to that? What's CapEx and what are the expenses here?
Thank you, Mr. Wolf. Let's start. Mr. Jehle will help me out, rather. Let me start with the Microsoft CSP. The migration from the enterprise agreements, which they really gave rise to concern last year, went better than originally expected, at least in terms of transformation. We've managed this.
We've been extremely successful when it comes to the migration to CSP contracts. Unfortunately, I have to add, we haven't been able to achieve price increases at the same time. What's good, we've kept the customers on the cloud platform too. What was bad is that there is an increase in competition during the migration that was extremely high, this competitiveness. All in all, we fared much better than we feared. We've calculated different scenarios, and I think we've quantified it. We are pretty close to the best case. It's not an issue for the current year anymore. As regards stock, yes, we've increased stock and selected items. Because referring to what you've already said, we can't foresee which manufacturer and which product will be affected by the shortages.
Sorry, I mean, we are commercial people, and we make sure that we don't overreact and build up stock risks, which will be negative in six months. It's using brake and accelerator in the right way. But you remember COVID, we've done that successfully at the time. Storage capacities and, well, we have a new warehouse in France, and that helped us indeed, close to Paris. Today we have more warehouse capacities as well, and we can work with that. Based on that, and thanks to the close cooperation with our distributors. We think we're well-positioned. The first question, revenue, the turnover, and the volume effects for the forecast growth, I can't answer that. Not because I don't want to, but it's something I just can't tell you.
If you ask me personally, if you ask about how will the year turn out in terms of growth, I personally expect that the bigger share of growth will be driven by price effects, not by volume effects. That's plain vanilla, really, as an answer, because if you expect shortages, well, where is growth going to come from if not from price? I expect that this will be the outcome at the end of the day. As regards back end, well, we only started that. You know that we have the discussions right at the end of the first quarter with our vendors. These are tough talks for sure, understandably enough. I assume. Well, I've already said it.
If everything falls into place in terms of supply chain and so on, then I assume that the market share will play a greater role. That's good prerequisite for Bechtle to negotiate good growth plans. Once we've taken the hurdle successfully, we hope to get the appropriate back end funds as well. Do you want to comment on the investment? Well, as regards the internal IT, you asked about the volume CapEx and OpEx. Well, we don't have a specific figure we can share here right now, but what I can tell you is that currently we have a program where we look at the entire IT landscape. We have a system landscape consisting of Navision, SAP, and some smaller systems. Like many other companies in the market, we are setting the strategy for the future.
That covers smaller investment where we don't need a big solution such as SAP and Navision, and we will think in general terms about the ERP situation. That's a program which we will conclude this year, and then we have the position for the future. The investment we're doing right now are mainly driven by the fact that certain systems reach the end of maintenance. We have a system by SAP, and we have to reinforce it, run upgrades to make sure that these systems stay safe. This is the investment we're pushing, and Dr. Olemotz has already mentioned it. We're investing also in AI to be more productive. We have individual solutions that are in the pilot phase, and we are testing how to scale things up so that the entire company can use it. These are the steps we are taking right now. Mr.
Wolf, and the last goodbye, my last conference here. I mean, the colleague hasn't given you a figure, and I'm not giving a figure either, but I'd like to point out one thing here. It's in the upper single-digit EUR million range, maybe even slightly above this. Did I give away a secret now? No. Well, what am I saying?
I'm gonna refer to Ms. Treisch's q uestions. We talk about investment in the future, investment into our own systems. By the way, we're always thinking in view of the sheer scale we are talking about, should we give up our existing tech policy and report a result adjusted for these effects? Well, even after intense discussions with some representatives present here, we didn't opt for that solution because it's not our standard at Bechtle.
Secondly, we talk about investment into the future, and the company has to earn this. We want to be measured against this, but this doesn't mean that we specify the investment. That's part of our business. That's part of revenue streams in the future. It was never relevant for us to take these investment as an excuse for the margin. If you extrapolate it and do a back of an envelope calculation and think of if Bechtle has the profitability it has in Germany, if it has that abroad as well, you'll get interesting figures.
Thank you. The last open question, the transition from Windows 10 to 11. Oh, yes, I forgot that. Sorry. That topic doesn't play an essential role anymore because there are other topics that are relevant.
At the end of the year, however, we found that that's part of the improvement we saw in the SME business, and we hope that the current situation will not decrease again. Part was driven by the migration and the infrastructure investment. For the ongoing year, it's not a push topic any longer, not to the extent it was before. Availability is really what counts right now. Great, thank you. Maybe you want to comment on your questions if I got it right. Higher prices, higher bonuses. Don't get us wrong here. Most agreements with the vendors are linked to unit figures, so higher prices don't help us for the back-end margins, but for the front-end margin.
Thank you. Ladies and gentlemen, just to remind you, if you want to ask a question, please press star one. Any questions here in the room?
Yes, please wait for the microphone. I want to make sure that all my calculations are right. You said that by the middle of the year, you expect to see clearer in terms of guidance, and you've said several times if the supply chain has fallen into place, so to speak. I assume that the current scarcity is something you see as tackled for the back end of the year. No, that was over-interpreting what I've said. Let me rephrase it. I think that we have more data by the middle of the year to provide a clear statement. Second, I believe that this year, and there are first voices by our vendor partners that this will apply for the next year, too, that we will have to face shortages this year and next year.
Currently, and I hope that no longer applies to the back end, I cannot tell you right now to what extent this triangle customer vendor, Bechtle, whether we handle it as successful as we have been able to do during the COVID pandemic. Why is that? Well, the shortage, it's during the COVID pandemic, and Mr. Ziering, that's how this current situation differs from back then. The shortage focused on the small systems. We all remember it. We were all sitting at home. We needed a second notebook. It had to be connected. This time, the shortage affects a broader range of products because you have a a storage chip in almost any device, and that is why it's more difficult to assess the situation. If you look at what's happening at the stock exchange, we are not pessimistic in terms of the total year.
We said, yes, it is going to be challenging, and we can't foresee right now how difficult it's going to be. We believe that in a difficult year, as Bechtle, due to our size and our international layout and due to the closeness to our vendors and customers, we are in a comparatively good competition position, to put it like that. That wasn't the final conclusion yet. We switch to the English room right now. Yes, there's one English question, we switch to the English room now.
We have one more question, English, coming from Christopher Tong from UBS. Please go ahead.
Hi. Good afternoon, everyone. Thanks for taking my question. Just one for me. When we think about the cadence of EBT growth, you have quite easy comps in the first half, and so I was just wondering, do you think this is going to be a first half-weighted year? Thank you.
Well, you know, Chris, the main question will be, you know, after the first two months. When we look to January looks pretty much, you know, okay. February looks decent as well. It will depend on March, how that is gonna turn out. Then we know what the first quarter will be. I know, you know, the comps are easier for the first half, but I think, you know, based on the current development, we have to manage that on a month-by-month basis. I think it's too soon to tell whether it's gonna be a first half, you know, loaded year or a second half loaded year. It will be, you know, something that will turn out month by month. I think you cannot really say at this point in time.
Got it. Thank you very much.
If I might add, you are correct. We have easy comps in the first half of the year, but I remind you that the fourth quarter was fantastic last year, so we have very hard comps in the second half of this year.
That makes sense. Thank you very much.
There are no further questions at this time, so I would like to turn the conference back over to Dr. Thomas Olemotz for any closing remarks.
Okay. I think you've always felt this. I always enjoyed discussions with you. Sometimes it was challenging, admittedly ambitious, analytically challenging indeed, but that's exactly what I like. That's what a good discourse is characterized by. Once again, thank you so much for the past years. Personally, all the best to you and your companies. Please stay tuned and favor Bechtle. It's really worthwhile investing in Bechtle. We wanted to make sure that we go beyond the current situation, which is difficult. Personally, I'm absolutely confident that even in difficult situations, we will develop well. I'm fairly sure that under the new management, we will keep up this open communication with you. I can say that I will leave at the end of the year with a clear conscience. I will see many of you throughout the year, but not in this group here.
I will leave with a clear conscience at the end of this year, and I'm fully convinced that the company is in good hands. Management is solid. The orientation will change slightly. Konstantin Ebert will be somewhat at the helm, who stands more for the market, the manufacturer and the business, which is more important than ever, and that is why it is all the more important to have a strong CFO supporting him. Christian Jehle is the strong CFO, and I'm firmly convinced that this is an excellent leadership team. Again, thank you and all the best to you. Have a nice weekend. Stay true to us. Thank you. Ladies and gentlemen, this conference call has been completed. Thank you very much for joining us and dialing in. Bye-bye.