Ladies and gentlemen, welcome to the Bechtle conference call. We would like to point out that all participants are in a listen-only mode and that the session will be recorded. After the presentation, you will have the opportunity of asking questions. If you want to do so, press star followed by one on your touchtone telephone. If you need the help of an operator during the call, press star zero. I now hand over to Dr. Thomas Olemotz.
Thank you, welcome to our Bechtle Analyst Conference on the first quarter 2026. I am delighted by your interest. Ladies and gentlemen, today we are reporting on a strong start to the year for Bechtle AG. We are showing top line and bottom line double-digit growth rates. This is all the more remarkable given that the operating environment remains challenging. Well, with regard to the IT market, I've often said size matters, and we are seeing this again very clearly now. Bechtle is one of the largest and most important VARs in Europe. Vendors work closely and trustingly with us. This is paying off, especially in times like these when the IT market is characterized by the so-called memory shortage and the supply chain bottlenecks and clear price increases. As usual, today's presentation is divided into three main sections.
As usual, we start with the essential key financial highlights of the first quarter of the 2026 financial year, which Christian Jehle, our CFO, will present for the first time in the context of the Q1 presentations. Latest news that is important strategic and developments beyond the figures. I'm going to present those to you. Also the third part of the presentation, the outlook for 2026, our objectives and the overall economic development, which we expect for the next three quarters. First, let's look at business performance. Mr. Jehle, please.
Thank you, Dr. Olemotz. The first quarter was characterized by difficult geopolitical framework conditions, amongst them the war in the Middle East and the memory shortage that Dr. Olemotz already mentioned. On the other hand, we also saw high demand from customer groups in all segments. In many talks with our customers and vendors, we were able to find solutions in this respect. A company like Bechtle that stands for customer proximity and cooperation with vendors can benefit from such a situation. As I said, we started out into the year 2026 excellently. Let's first of all take a look at order intake and the order book. In Q1, order intake went up by 17%, which meant that our order book grew further. This means that Bechtle was able to benefit from the high level of demand.
High order intake numbers also gives us certainty for the development of Q2. We see in April already that the development continues. Let's now take a look at the top line. Business volume grew by over 13%. In organic terms, we're at a very good level, 11%, which means that our core business is healthy and intact. Our acquisitions are, of course, an important contribution. We're managing framework conditions well. Revenue and revenue growth is below the business volume as usual due to IFRS 15 and also the growing software business. Let's now take a look at our segments. All segments made a contribution to our growth, either in the double digit or high single digit range. The development in France is remarkable. We're back on a growth path, having managed the turnaround.
In the rest of Europe, we're growing at 17%, almost 30% when we include our acquisitions. The good news is that growth is based on a very broad foundation and all customer segments. This seems to be a sustainable trend. Let's now take a look at our earnings situation. EBT is growing in double-digit terms in Q1. We see growth in the top line, a stable profit margin, which makes us feel very confident. Investment into our own IT infrastructure continues, and our measures in cost management are showing the first success. We still have a very positive message. Our growth margin and our profit margin are healthy in Q1. Let's now take a look at the segments. Again, the trend is broad-based. All segments make a contribution to our development.
We still see a higher share in the classic product business, which you can also see reflected in the margin. In Germany, we have the widest portfolio, established processes, professional management teams, and decentralized services. Our specialists also work from a broad basis. That also is mirrored in profitability. Of course, we're also working towards getting the international segment at the same level of margins. To conclude this part, let's take a look at operating cash flow. Operating cash flow in Q1 developed well after a decline the year before. We're now back in the green despite the positive and the important growth we've seen. Inventories seen a buildup. It's based on customer demand. We see that our performance has increased.
In terms of DSO, after the last quarter of 2026, we were at 28 days, and this number used to be 39. Let's take a look at our staff. The staff expansion we saw in Q1 is due to acquisitions only. In organic terms, we see a decline by 1.7%. Here as well, we take very conscious decisions and we are exercising a moderate approach. By the end of March, 729 young people received training or went through dual study training courses at Bechtle. Let's come to the latest news. Dr. Olemotz, please.
Yes. Thank you, Mr. Jehle. The latest news which we've compiled here highlight a lot of the key future areas of IT in which we are strategically well-positioned, thereby underpinning once again Bechtle's readiness for the future. We look at the topic of quantum computing, an important project in the healthcare sector, and of course, digital sovereignty is an essential topic here. We're also looking at a further success in our business with public sector clients and the presentation of many future-oriented topics at the Hanover Fair. Let's start with quantum computing. We are currently implementing a highly forward-looking project at Heilbronn University of Applied Sciences. This involves the integration of a so-called IQM Spark quantum computer, with which we are creating a platform for teaching, research, and practical development.
The system by the Finnish manufacturer IQM Quantum Computers will go live later this year and will be supported and further developed by Bechtle over a three-year period. The installation at the TechCampus will provide direct access to superconducting quantum hardware for students, researchers, and partners. The aim is to embed quantum computing in education and application at an early stage and to integrate it with the traditional IT and AI environments. The project is also an impressive example of Europe's technological sovereignty as European hardware operations and expertise are closely integrated and the regional innovation ecosystem that has emerged in Heilbronn in recent years is being further expanded. A functioning innovation ecosystem is also at the heart of the following project in the healthcare sector. As consortium leader, Bechtle is playing a key role in the WebMedX project.
This project aims to make care for people with cardiac insufficiency more digital, more connected, and easier to use in everyday life. Together with University Hospital Würzburg and other technical and academic partners, a cross-sector telemedicine platform is being developed to better connect all parties involved. The aim is to close gaps in care in the post-hospitalization phase, prevent readmissions, and to sustainably improve care. The digital network is intended to serve as a model for other regions and other conditions and is thus truly relevant for us beyond this individual project. Bechtle brings comprehensive industry experience in the field of digital healthcare to the consortium through a team specializing in healthcare solutions. As consortium leader, Bechtle is responsible for the over-implementation of a viable technological framework for the platform, thereby supporting the transformation of a medically highly relevant care concept into a practical digital solution.
Aspects of digital sovereignty also play a major role here, an area that Bechtle has also been active in from an early stage. Since March, we have been actively promoting the Bechtle Index of Sovereignty, BIoS in short, offering a specific implementation model for customers who wish to take a structured approach to digital sovereignty. BIoS is a proprietary software solution designed for the systematic assessment of the level of digital sovereignty within companies and public organizations. We combine the systematic assessment of key business processes with comprehensive consultancy from certified IT business architects. This enables customers to determine their individual maturity level of digital sovereignty based on data and to track developments on an ongoing basis. The assessment analyzes data sovereignty, technological independence, and capabilities across key business and administrative processes. Bechtle is initially piloting the BIoS assessment in Germany, Austria, and Switzerland.
Marketing in other European countries will follow in due course. In terms of sales, too, the topic of digital sovereignty has now become highly relevant, as the following example clearly illustrates. A recent report published just yesterday by GovTech Campus Deutschland highlights a significant sales success for Bechtle in the public sector. We are very happy to have been awarded the contract for the multi-cloud broker within the GovTech framework. With a strong partner network comprising international hyperscalers and European providers, we are creating a centralized, standardized platform for cloud and AI services. This enables public authorities to have fast, secure, and flexible access to modern infrastructures, and it provides a concrete contribution to digital sovereignty as well as to the successful implementation of the Medicus healthcare platform and the so-called Deutschland-Plattform.
The framework contract is worth EUR 250 million over a two year term, with two options to extend for a one year each. Further, digitalization using platform-based ecosystem is playing an increasingly significant role, not only in public administration and medicine, but of course, above all, in industrial value creation. At the Hanover Fair, Bechtle demonstrated thus how companies can approach the digitalization of their industrial value chain in a consistent and end-to-end manner. The guiding principle behind the exhibition stand was the intelligent integration of various dimensions of modern industrial digitalization. To this end, Bechtle brought together the expertise of various specialized units within the group and, together with partners, presented practical application examples and innovations. This year, Bechtle further expanded its presence at the world's largest industrial trade fair.
At the Bechtle Group stand, visitors were able to view an integrated portfolio spanning the fields of engineering, OT security and manufacturing, the Industrial Internet of Things, and business integration. Ladies and gentlemen, so much on the strategically relevant news in the past months of the financial year. Let us now turn to the outlook. We have started the year with a good first quarter. This is very encouraging and makes us confident as regards the remainder of the year. As I've mentioned at the start, this is all the more remarkable given that unfortunately, the economic conditions have not improved significantly. The fact that we are coping well with these difficult conditions is a very positive sign. Against this backdrop, we are confident regarding the developments in the second quarter, above all in view of the tremendous order intake.
According to the first preliminary figures, April is showing as positive a picture as the previous months. On the other hand, uncertainties remain in connection with the geopolitical situation and also regarding the IT-specific situation. Our vendor partners have already announced further price increases. Visibility as regards the second half of the year remains limited. Being close to customers and vendors are particularly relevant here, and that is the strength of Bechtle. Well, in concrete terms, this means for our outlook, we confirm our guidance from March 2026. In the first quarter, we demonstrated that we can grow profitably even under difficult conditions, and we expect this to hold true for the full year as well. We will continue to closely monitor the dynamic developments, particularly in the IT market, and regularly review whether our guidance still accurately reflects the situation.
Nevertheless, I would like to remind you, as does Christian Jehle, that we have planned significant investment in our own IT for this year, which will be reflected in the bottom line, of course. However, this does not change the fact that we remain convinced of the positive development of the Bechtle group, even at difficult times as these.
That, ladies and gentlemen, concludes our review of the first quarter of 2026 and the outlook for the rest of the 2026 financial year. Thank you so much, and
We are now ready to take your questions. Ladies and gentlemen, we will now start the Q&A session. If you want to ask a question, please press star one on your telephone. If you want to withdraw your question, press star two on your telephone. For questions, please press star followed by one. First question, Florian Treisch of Kepler Cheuvreux, please.
Good morning, thank you very much for taking my question. I have two questions. First of all, the top line performance was very solid and probably even better than expected. I was impressed that the gross margin was relatively stable. Is that because of the quality of top-line developments? The market is concerned, after all, with all the price increases, whether you have to share this pain with the customers.
If the gross margin is as good as it is, it means that you can transfer your price increases to your customers, pass them through. Second question on investments. Can you give us the total headwind expectation for the year?
Thank you for this question. Let me take the first question on the top line and the gross margin. We generally see varying customer behavior. Some customers are postponing projects, others are downsizing their projects, but other customers would be confident that they have the infrastructure in place and implement projects right now. We are dealing with this well. There's a lot of pressure from the vendor side, of course, and we're able to pass on many of the effects to our customers.
The top line is not bought, as it were, but it shows you that we are very resilient in our positioning in the market, and we find flexible solutions. It is, of course, our size that matters here. We are one of the big players in Europe, and that comes in handy because we can work together with the vendors and the customers, and that gives us a competitive edge. In total, this speaks to the resilience of our market performance that we actually have a stable gross margin, although we look at high growth numbers. Mr. Treisch, you know as well, so let me just add one point. You were able to understand our business well, so let me say that the stable gross margin, even for us internally, is an essential indicator. Why is that?
Well, as Christian Jehle just explained, we are struggling with the framework conditions in our industry, that alone shows that the stable gross margin, as you hinted at with your question, is a very strong signal that indicates we're dealing with this well. The situation is special too, because structurally now there are many framework agreements that are in the early stages. You will remember that in the second half of the past financial year that we won many big tenders in the industry and public sectors. The profitability at the beginning of these tender projects is usually below the level of profitability that we have for the remainder of the term.
That means that the stable gross margin couldn't only be maintained against the backdrop of the difficult macroeconomic environment, but also in a situation where we have a high number of young tenders that we're working with at this time. You're absolutely correct. The stable gross margin was an important indication for us as well, and it really goes to show that we're dealing with the current challenges well, as Christian Jehle explained. As far as IT investments are concerned, let me put it like that, we don't expect the headwind to increase. The costs we've seen in Q1 will remain stable. You won't be surprised to hear that, of course, we are monitoring our IT budget very closely and individual projects are being questioned.
We made central investments into our IT, and we have to continue those in order to be viable for the future. One is the investment into our platform, our own, cloud platform, and the other is the SAP HANA project, which we talked about several times already in this circle. To be brief, we don't expect any further hookups here, or hiccups rather, and maybe even a relenting headwind. Definitely we're confident.
Thank you very much.
Next question, Lars vom- Cleff of Deutsche Bank, please.
Yes. Good morning. Thank you for taking my question. This is really a follow-up question on the same topic. Apart from the indication you gave at the AGM, have you quantified the headwind numbers?
You just said that it's not going to increase, it's probably going to be well-distributed across all fields.
Yes, in Frankfurt, we already gave you the numbers for the volume, as Dr. Olemotz said, we're currently putting every IT project to the test, we try to optimize things as we go forward. The distribution is probably well spread out through the year, what we digested in Q1 is probably what we're going to see in the other quarters as well.
Thank you.
Next question, Andreas Wolf of Berenberg.
Thank you. Congratulations on this strong start into the new year. I've got the following questions. 1, concerning the development of your headcount. In organic terms, it remains stable. Is that also the run rate for the rest of the year?
Will you see efficiency gains that you will be able to increase revenue with the same number of people? Is that simply because last year ended below expectations? My second question about the public sector versus the private sector. I would assume that the public sector was the driving force behind Q1 numbers. The third question about sales channels. The responsibility for the different channels were transferred to the regions. Can you maybe elaborate a little bit and comment on that?
Let me start with the first two questions. The third question is going to be answered by Christian Jehle. Headcount, Mr. Wolf, to give you a more differentiated picture. In organic terms, we grew by, or rather decreased our numbers by 1.7%, if I remember correctly.
This is a development that already started to happen last year. We're basically following on the same level, meaning that in organic terms and also because of productivity gains, we pay close attention to personnel costs without jeopardizing the future viability of our company, and that is very important, of course. This means the situation of last year was repeated in that it was only acquisitions that grew our headcount numbers. The third point that I think is important, Christian Jehle talked about it in his presentation. We believe that our training measures are very important, and that would be the differentiated picture, I suppose. I believe that this is going to remain the case for the remainder of the year. We're highly cost-sensitive still concerning the buildup of more costs in the personnel area.
We believe that the targets we set ourselves for this year can be achieved overall with the headcount as is, and we don't expect any significant increase throughout the year. Of course, that would exclude M&A activities. The development of the public sector, to come back to your second question, yes, I would have expected too, that the public sector business would grow disproportionately in the first half of the year against the backdrop of different framework parameters that we talked about at length. That is not the case. The public sector business grew by approximately 12% year-on-year. I'm still careful about the interpretation of these growth rates. You know that last year was an atypical public sector year, so year-on-year comparisons might be a little bit misleading.
There was an unusual seasonality last year compared to the long-term average of the years before, but a positive message, and it's also one that we attach great importance to when we commented the numbers, and Mr. Jehle mentioned it too. It is growth across all sectors, across all segments, customer groups and countries. In times like these, this is definitely a positive signal. Let's be very clear about that. Your third question, if I'm not mistaken, you asked about the change in the segment reporting. We have concluded that
System. The new system is in place, and both on the executive board and the level below that and on country level, this system has been implemented. We're fully operational. I've mentioned the numbers, margin developments in the different segments, especially abroad. There is some work to do. On the other hand, we've seen very positive trends looking at the segments. Other countries in Europe, very strong growth, almost 30%, and that shows you that the new structure in place is a real benefit, and acquisitions help us grow too. This transformation issue has been concluded. The setup is in place. Still some work on the margin side, but top line, we're already seeing very strong performance.
Mr. Wolff, maybe to add one thing, margins in Germany and abroad cannot really be compared. What do I mean by that?
Because of the M&A activities in other European countries, we had the purchase price allocation, which weighed on our results. This makes comparability difficult. That's one point. Really, we should be looking at the EBIT before the goodwill depreciation or amortization. When you compare things, you have to bear in mind as well that the integration effort in the course of the acquisitions of the last one or two years, we're still right in the middle of that. On the one hand, we have a fully integrated, a well-balanced business which we've been successful in for decades now, and abroad, our business operations are in a totally different stage. Please don't expect margins to come up to the same level in the next one or two years already.
I just wanna manage expectations here, but it's important to inform you, that these numbers cannot really be compared.
Thank you. Just to remind you, if you want a question, please press star and one on your telephone. The next question, Martin Jungfleisch, BNP Paribas.
Yes. Hi, good morning. One brief question regarding the vendor kickbacks. The Q4 figures in March, you said that the negotiations haven't been completed. Can you comment on that now, whether they have been completed by now and if the vendors will focus more on value or volume? First question. The second question as regards pull-ins. Do you think that customers will there be more pull-ins so that the revenue is sort of brightened by pull-ins?
Well, I'll start with your first question regarding vendor kickbacks and vendor bonuses. Well, the frameworks and the negotiations have been completed, as you said. We focus more on value instead of volume. On the other hand, if you look at the figures, there are no disadvantages here. I see a stable development by the vendor bonuses, above all in the first quarter. Against the backdrop of the current market situation, that is an important indicator for us. Here again, we see confirmed in what we reflected in our forecast. It's a stable development. There were some shifts, there are no disadvantages for us. Now, your second question, Mr. Jungfleisch, possible pull-ins that might distort the picture. Well, we see them as a singular event, the KPIs that reflect this is order backlog, not so much order intake.
The reason simply is that there are delivery times that are clearly expanded, and in calculation terms, they are softening the variations here. We'd all like to have shorter delivery times, due to the longer delivery times, it means that I mean, I've already pointed it out in March, and it's similar to the situation we had during the coronavirus pandemic. There's an overproportional increase in order backlog. It has been increased in April again. That is an indication that, of course, many customers are trying to place their orders, on the other hand, we have longer delivery time, so we can't say that is an extremely short-term effect on our top line growth. In the mid to long term, if you look over two years, that will be the case. No doubt about that.
Order backlog is at the level we reported. In the short time.
There are not too many problems to be expected.
Yes. Great.
Thank you. To ask more question, please press star and one.
The first question from the English room comes from Christopher Tong from UBS. Please go ahead.
Hi. Thanks for taking my question. Just one from my side. On IT investments, do you expect to also spend significantly more in 2027 versus 2026?
Well, I would say Morning, Chris, first of all. Thanks for the question. I would say that, you know, the investment volume is probably gonna be roughly flat in 2027, maybe slightly higher. As we said earlier, we're currently reviewing all the IT projects, and as you know, they're multi-year projects, we will have to review the phasing there as well. The general expectation is that the level of investments for 2027 will be either the same or slightly higher, no major change there.
Yep. Got it. Thank you very much.
As a reminder, to ask a question, please press star followed by one on your telephone. Okay. There are no more questions at this time. I would now like to hand the conference back over to Dr. Thomas Olemotz for any closing remarks.
Yeah, [Foreign language]. [Foreign language] .
Well, thank you.
[Foreign language] Are we in the English room or? Oh, okay. Sorry, I didn't get that. Once again, in English, thanks for your question and discussions. We got the information that there are no questions left so far, thanks for that. Have a nice evening and a nice rest of the day.