Good afternoon, ladies and gentlemen, and welcome to the Cancom earnings call on the Q2 2022. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. Now I hand over to Sebastian Bucher.
Dear ladies and gentlemen, welcome to Cancom's earnings call on the Q2 of 2022. With me is Thomas Stark, our CFO, who will present some of the key figures and main facts of the most recent developments. Without further ado, Thomas, please start the presentation.
Thank you, Sebastian, and welcome to everybody to today's earnings call. As usual, it's a pleasure for me to guide you through the events of the Q2 and even some subsequent events that we have seen to keep you up to date and to present you the latest information about Cancom. My name is Thomas Stark, CFO of Cancom, and I'm happy to spend the next 30 minutes to an hour with you. Let's just take a look at the significant events that we have seen in the Q2 . Basically, let's just highlight the key takeaways of today's presentation. I will comment on them in more detail to each topic on the individual slides. Group revenue was the previous year's level, basically affected by supply chain bottlenecks and effects from public sector business. Cloud solutions showed a dynamic growth in revenue at EBITDA.
We have seen a continued growth of the ARR, and that gives a positive outlook for the next 12 months, basically. IT solutions, we have seen a strong impact from supply chain shortages and from public sector business. We have nevertheless no slowdown of the overall demand. We have, in the contrary, the backlog at a new record level. In the market, we see clear signs of an improved availability of several IT components since June. We can further see a normalization of orders from the public sector that started just as expected end of June. For the detailed information, let's start with a subsequent event today. You might be aware we have seen after 17 years as a Cancom board member and thereof two years and a half, as CEO, Rudolf Hotter resigning as CEO at his own request.
The supervisory board accepted this in a common agreement and appointed Rüdiger Rath as new CEO for Cancom from first of November. Rudi will stay in his current role until end of October and will actively assure a smooth transition to Rüdiger Rath. We deliberately, as often asked, mentioned that no severance payments had to be agreed to underline this personal step of Rudi and the alignment with this step with the board. Rudi is member of the board since October 2021. He's a well-known manager in the IT industry, has a deep and profound knowledge of the IT market, and on top, I think he's a manager with a great technical understanding. Personally, I think this is a great solution for Cancom, and already being CEO for some time at Cancom perfectly contributed to his understanding of the Cancom. Second information about M&A.
We did an acquisition, a company called S&L, located close to Frankfurt, Mülheim-Kärlich, actually, a small town where we have no spot yet. Actually, we have a white spot there. The S&L group consists of three different entities. There are about 100 employees active in the group, and their offerings are basically system integration services with a focus on security and compliance, offering a very complementary customer base, which is great. The match showed, well, there are roughly no common customers, and we can see a high proportion of services, so the margin profile is high. The revenue recognition in 2021 was about EUR 15 million, with around 12% EBITDA margin.
From our perspective, this is a perfect fit from a regional perspective, as well as from combining the offerings of both companies. S&L should benefit from Cancom's portfolio quickly and hopefully will be able to address new services and solutions to the existing customer base. As a rationale of the acquisitions, wins, and increase of the gross profit and profitability should clearly be on the growth side. IFRS EBITDA 2021 was about EUR 1.8 million. The purchase price was EUR 10 million as a fixed price. Well, this would reflect an EBITDA multiple of about 5.5x. Additionally, 50% of EBITDA of the next three years as an earn-out component has been agreed to simply assure, just as always, alignment of goals. Some news from the market research institutes.
The Information Services Group, ISG, which is a leading IT market research institute, analyzed the offerings of more than 300 of the most important and best specialized IT providers in Germany. In this highly competitive environment, Cancom was rewarded 2x being a leader for next-gen private and hybrid cloud data center services, one of the core aspects of our strategy, managed services for the mid-market and managed hosting for the mid-market. These awards perfectly underline our strength and our strong position in the IT market, and they absolutely acknowledge Cancom's great managed portfolio for our target group, DACH Mid-market. In the same research, another discipline, in the highly attractive security market, we have strengthened our position as innovative provider of security services. For the fourth time in a row, we became leader in various disciplines regarding cybersecurity services.
Cancom got awarded two leadership positions for technical security services, which reflects our project-based expertise, and managed security services, which reflects our as-a-service-based expertise. In both worlds, in both delivery options, we show a very strong competitive position. Particularly convincing to ISG was our offering regarding Cancom Security Operation Center, also called SOC, and our cybersecurity as a service offerings. We can see in this highly growing market and in this discipline we have great competencies to convince our customers to be the partner of choice. With regards to our share, it's not the last position, I was just wondering, but we have one more topic to talk about. We have just gathered the information about our share buyback program.
You might all be aware that we have exercised our share buyback program in the first half of 2022. We have stopped it for technical reasons before the annual general meeting, and we got an entitlement for a new program to be just able to act. You can see on the slide; we have therefore paid EUR 161.4 million. That's the total volume of the share buyback program that we have done, and we bought about 3.2 million of shares. As a subsequent event, in July, on the July 18th, we have announced the cancellation of those shares. Well, with clear effects, clearly this increases the earnings per share and the dividends per share due to a reduced number of shares that we can see going forward.
The numbers of shares outstanding after the cancellation of our own shares is about 35.371 million. Finally, as things that happened in order before we come to the financial KPIs, we have decided to sell our U.S. business. This is just in line with our strategic focus on the DACH region, Germany, Switzerland, and Austria. The impact will be minor. Revenues of 2021 were about EUR 18.5 million, and EBITDA contribution was not significant. Consequently, we have classified the business as held for sale, and this will be discontinued operations going forward. Now, I'm pretty much aware that you all have your financial models, as this just slightly, however it does, changes all of the financial KPIs.
We have provided to you as last slide of this presentation, the data of 2021 and 2022 on a comparable basis. Of course, you will additionally find this presentation as a download on the website to simply update your models with this impact. Let's head for the financial results of the Q2 . Group showed a revenue of EUR 298.8 million. They reached about the same level as we have seen in Q2 2021. But two topics to explain in more detail. First, supply chain and backlog. Given that we had indicated in our last earnings call our expectation to still be affected significantly in the Q2 from supply chain shortages, some comments on the getting the supply chain right. Despite of restrictions, we are obviously able to deliver on customer sites.
The line of 1.6% shows the dimension that we are facing, so it can be handled. However, it nevertheless affects the business. As of end of June, we are facing, again, a new record level of all the backlogs. To provide you with some more details on this, backlog topped even the end of 2021 level by almost 20%. We are just talking about the project-based one-off business that accounts for backlog and is now at a level of about one quarter of revenues. Second, public sector. Clearly, the lack of orders from the public sector have been tremendous. The revenue reduction we see is triggered to more than 100% from public sector restrictions. Industry sectors were growing, however, less than the effects that we have seen from the public sector.
EBITDA was triggered by exactly the same level of gross profits that we have generated compared to the previous year's Q2 . However, clearly, we have an increased cost base as we have planned for growth that we are still expecting going forward. IT solutions is the segment where we basically have a more profound impact for, due to the reasons that we've talked about. First of all, public sector demand most often trails industry demand from an as-a-service perspective. That means the impacts of this can be seen predominantly in the IT solutions and as-a-service segment. That's why there we see a heavy impact from both supply chain and public sector demand. Where are we now? The funds for the public sector from the government have not been reduced.
The formal processes to access these funds were done by end of June. The demand is still high, so we have seen a re-ignition of the demand and have to handle plenty of RFPs, so that's the term for request for proposals at the moment. That's basically what we expected. It has not yet materialized in the Q2 , as clearly the processes will take time. However, just as expected, demand is coming back, and now formally the authorities are entitled to act. This expected development has not yet contributed to the Q2 revenues. We expect this to have an impact in the third quarter and to a majority in the Q4 . With regards to supply chain, the situation is not yet done. However, lead times got reduced, so we assume a further positive development on this going forward.
Due to the high level of recurring revenues, traditionally, the as-a-service business is less affected than the project-based and consulting business. First of all, we have seen in Q2 2021 a low comparable level. Actually EUR 55 million was the quarter with the lowest revenues generated in the cloud segment. Just to get the things right, average of the non-COVID quarters was EUR 62 million. We have seen growth rates. Where do we come from? In contrast to the Q1 , we have no major one-offs like in the Q1 . We have a broad development. A lot of smaller contracts have been won, and we have seen upselling of existing customers, basically.
Secondly, the growth was mainly triggered by hardware sales that have had an impact on the margin profile, and that's why we see a decreased margin level compared with last year's Q2 . Consequently, ARR kept on growing year-over-year. We've seen a growth rate of 24% year-over-year, 3.9% QoQ. Thus, the development is just fully in line with our internal targets. This is corresponding with the status as of the end of the quarter contracted, just to give you an idea. That does not mean that you are actually for the full quarter contributing to revenues and profitability. Let's come to the financial performance indicators of the Q2 . Operating cash flow, well, the situation basically remains unchanged. Some comments on this.
We have clearly a high working capital requirement at the moment. We have a negative cash flow that is, well, to some extent unusual and to some extent outstanding. Inventories were up to EUR 120 million. A comparable usual level with the given revenues that we're generating would be about EUR 60 million less. That should be a quantification of the effects that we have seen. In the cash flow statement, you can see a EUR 23 million negative impact from the inventories. We've already talked about this in detail. We are yes, investing the money to keep availability high, to have products that we can sell on behalf of our customers. Of course, we have the effect that and for given projects, you need different categories, product categories at the same time.
If one of them is missing, then you will not be able to deliver the whole project, and that actually affects your inventories significantly. We can see basically the same behavior with all peers. They all have the same topic, but I think we all already commented on this as this should be a means to, well, grow in the market faster than others that cannot afford having such inventories and assuring availability to generate business. We have seen ARs, accounts receivables rising from EUR 326 million to EUR 370 million, so another negative impact. This is basically triggered by a great June.
We have seen June, the by far best month of the quarter, keeping the highest proportion of revenues of the Q2 , and therefore, clearly, we see a higher than usual level of AR at the end of the quarter. Nevertheless, there are no issues with write-offs, and we have no impact from any things that might affect the validity of the ARs in place. APs improved slightly, and in total, we can see an effect of EUR -49.8 million of working capital in the Q2 . Again, we are facing uncertainties what is going to happen. I think I've commented on this in the first quarter already. Clearly, the fourth quarter will be a positive and the best positive cash inflow that we are facing.
Depending on the extent of the improvement of the supply chain that we see, and depending on what we can actually deliver, in the Q3 and Q4 , there should be a significant improvement. However, difficult to quantify due to the circumstances that we are facing. CapEx is above plan. Nevertheless, we've communicated to you that the first half will be affected by some more investments to go. Second half should be lower than the first half of 2022. Basically, and that's the most important impact, the SAP spending for the new ERP systems should come to, well, not an end, but should be significantly reduced, in the second half of 2022. The expectation is a reduction in the second half of 2022. PPA is just for your information.
We expect a minor effect to be quantified in the Q3 earnings call from S&L. The purchase price allocation has not yet been done, but we are talking about a surplus topping the equity of about EUR 10 million, and this will be split about usually 50% goodwill. 50% should be a PPA effect that could be stretched over three to four years. That's basically what we expect. We will provide you with the detailed data in the Q3 earnings call. The last slide regarding the financials, just as promised and already indicated at the beginning, please find enclosed the financial statements without a U.S. business.
You can easily update or hopefully you can easily update your models, and please do not hesitate to get in touch with Sebastian Bucher or Florian Mangold in case of any questions. Forecast. We have revised our forecast at the end of the Q1 . I think everybody has seen we seem to be pretty in line with what the market expected from us in the Q2 , according to indications that we have seen now. We have, at the moment, inconsistent points of view and therefore a very difficult starting position to assess the situations. We will explain to you our assumptions and let me add where we see markets talking about threats, interest rates, inflation, war, potential recession, and so on.
We have on top seen, and that's something that I've read in the German Handelsblatt as of third of August, they as a quote, "have the highest number of both adjusted forecasts to a higher as well as to a lower level." It's a very difficult situation. Despite of the market that we see, we see a high demand and no impact on investment behavior yet from our customers and in the IT market. All the peers, by the way, obviously are facing the same demand. They all comment the same way, and the demand for digitization is still high.
Assessing the demand, the high level of backlogs, overcoming the supply chain issues gradually, and especially reigniting the public business with funds unchanged, and still in place and the demand in place gives us the understanding of our unchanged forecast for the full year 2022. Finally, we see the majority of the effects in the Q4 , as even when they are starting the processes, they will take some time, at least for the public sector, drivers that are expected to push the business in the second half of 2022. Some final comments on the financial calendar. We have just two points in there. First of all, interim statement of the Q3 will be on 10th of November.
Analyst conference, just a mandatory thing for us, that's why we commented this on at the German Equity Forum in Frankfurt. We were asked about what to do with regards to a capital markets day. We decided. Well, we had last year a capital markets day in November. Nevertheless, this was an unusual point of time, as usually you do this at the beginning of a year, and you give an outlook and talk about a strategy for the year to come. You are talking about the forecast and so on. This was just done because of the COVID situation.
We would like to come back to a regular term that would be after the disclosure of the financial statements of 2022 and having on board the new CEO, Rüdiger Rath. As you might have seen already some new Board members that have been announced or indicated to be announced going forward. That's the information for you, and would be great to have you joining this conference. With this said, I'm handing over back to Sebastian Bucher and looking forward to your questions.