Welcome to the DATAGROUP SE conference call on the figures for the Q1 of the financial year 2021/2022. At the moment, all participants are on mute. The floor will be open for questions after the presentation. If you would like to ask a question, please press the hand symbol or type your question into the question box. The presentation is also available for download in the Investor Relations section on DATAGROUP's website. I would now like to welcome Oliver Thome, CFO of DATAGROUP SE.
Thank you very much. Ladies and gentlemen, I would like to welcome you to DATAGROUP's conference on the Q1 figures. My name is Oliver Thome, and I'm CFO at DATAGROUP. Next slide, please. As you have probably already seen in our press release from this morning, the year has started very well for us. We had a strong start into the year in Q1 of the year 2021/2022, with a substantial increase in revenue, margins, and earnings. The revenues in the Q1 increased by 13.4% to EUR 123.2 million. The organic growth of about 5.6% during the last 12 months is within our expectation and the management board.
For the first time, fully consolidated companies, the URANO and dna. Today, DATAGROUP BIT Oldenburg, were also able to develop very well in the DATAGROUP environment. The strong development of our CORBOX sales is reflected in five new customers, 18 contract renewals and 10 contract extensions. The EBITDA could even be improved by 29.4% to EUR 19.2 million. Next slide, please. The great development of our EBIT from EUR 4.9 million to a total of EUR 10.4 million is also reflected in the EPS, which increased by 84.7% to EUR 0.76. Next slide, please. I'm pleased to explain some selected profit and loss figures to you.
In the past quarter, we were able to significantly increase the revenue by more than 30.5%. I almost explained. Very important, this is that the gross profit could be increased by almost 14.2%. On the other hand, it's very important to see that our personnel costs only rose by around 11.9%. We were able to translate the good sales and cost development into a significant increase in our profitability and the EBITDA, as well as in the EBIT. Next slide, please. You can see the increase in goodwill in the selected key balance sheet figures, and this is due to the acquisition of the two companies we bought last year. I already mentioned the URANO and BIT Oldenburg, former DNA, in the past fiscal year.
Supported by the strong operating cash flow, the past quarter net debt only increased by around EUR 6 million. This leads to equity ratio, likewise, to significantly rising to 22.8%, especially thanks to the strong results of the past quarter. Next slide, please. In the cash flow statement, you can primarily see the as mentioned strong increase in the operating cash flow, driven by the good operating earnings and the optimization of the working capital. The cash flow from investing activities shows, on one hand, an earn-out of one company acquisition of the past fiscal year. The CapEx investments, on the other hand, could be reduced to a normal level, which we expect in the long term range of about 2%-3% of the revenues.
To explain it to you and to make it a little bit more clear, the acquisition of BIT Düsseldorf, you know, formerly IKB Data, and the entry to a new customer group required investments in an infrastructure, especially a second data center, which was reflected in the 2019 figures with significant higher investments. These investments were stabilized and optimized in 2022, and we expect that we will be in the long term range between 2% and 3%, as I already explained to you. Overall, this leads to a change in cash and cash equivalents of +EUR 16.1 million compared to the Q1 of the past year. Next slide, please.
Those of you who have been with us for a long time know the excellent development of our share price. In the past year, in particular, the share price developed very positively. A little bit sad we are about the current crisis in Ukraine, and this crisis is putting pressure on the stock exchange around the world. The DATAGROUP share is also currently affected. Overall, we are nevertheless very satisfied with the development over the 12-month period, and assume that the share price will recover again in the future when the crisis in Ukraine will be solved by the European Union, the U.S. and Russia. Next slide, please. The consensus estimates can be said that we keep what we promised.
The turnover, the EBITDA, and the net income exceeded the estimates on the consensus 2021. You know, at our annual general meeting on the 10th of March, we will publish the guidance for the current fiscal year and give you an outlook on our medium-term planning. Next slide, please. There were only a few changes in the shareholder structure in the past fiscal year, and our anchor investor, Max H.-H. Schaber, will remain invested in the company in the long term. Next slide, please. You all can see that we will continue very actively to present our company to existing and potential investors at roadshows and conferences to underline the attractiveness of DATAGROUP's business model. We have now come to the end of the presentation.
I would like to thank you for your interest and joining this conference, and I'm now happy to answer your questions.
The floor is now open for questions. If you would like to ask a question, please press the hand symbol. You will then be unmuted and able to ask your question. Alternatively, you can type your question into the question box. At the moment, we have four questions from Mr. Knut Woller. The first question is: What was your organic growth in the Q1 of 21/22?
This is a question we just looked at, and you know, our business model has some variances from quarter- to- quarter, so that it's very hard to measure only quarter one to quarter one the past year. We decided to only show our long-term growth. This long-term growth is shown 5.6%. What is not shown is the organic growth in this 5.6% of these companies who join DATAGROUP from the side of URANO dna, which developed very, very strongly in the environment of DATAGROUP. I cannot give you the answer exactly for the Q1 and only for the 12-month period.
The next question is: Do you expect other operating income to be a tailwind year-over-year in 2021, 2022?
That is a good question. I want to answer it with a long-term view to DATAGROUP. I think the tailwind we have year-over-year. There is a headwind on the other side, and these are effects in the past who equalized each. We have some tailwind with further having the vaccination centers, not on the level of the past year, but still on our contract situation. On the other hand, you know, our business is always proven by tailwind and headwind, and we cannot say that there is more tailwind than other years. We expect a further growing and very good situation for us for this year.
Why were personnel expenses down quarter-over-quarter?
You know, DATAGROUP's strategy, since we made our CORBOX business model, reflects that we have a centralized production unit, especially our DATAGROUP Operations, and our DATAGROUP with our service desk. This allows us that we optimize our personnel costs because there is no dedicated infrastructure for technical realization in each company. We were able to equalize these customer situations over all DATAGROUP. This is the reason why we can reduce our personnel expenses as a percentage of our revenues. We believe that this development goes further on.
The fourth question is: Did the operating cash flow enjoy a tailwind from FIS troubles in 2019/2020? And if, to which extent?
No, I do not think that there is a tailwind of this in our cash flow statement. The answer is no, there is no tailwind from this. We do have major restructuring or analysis of the recruits we need, and we are very optimistic that the accruals we did made are from the level of what we need, but there is no tailwind in our cash flow statement from FIS.
Next up, we have a question from Mr. Gustav Holberg.
Hi there. Can you hear me okay?
Yes, we can hear you.
Hi, Oliver. Thanks. I have two questions, please.
Mm-hmm.
First question, I was hoping you could provide some more qualitative comments around the margin drivers in the quarter. I'm particularly curious just to learn a bit more about the strength of the EBITDA and EBIT margins. Second question relates to the same thing. Your run rate EBIT for Q1 points to a full year EBIT figure above EUR 40 million. I was wondering if there is any reason, for example, why you cannot achieve this, maybe due to one-offs in Q1, or is there any profitable contracts that are concluding later in the year that means that EUR 40 million + is not a good number?
Maybe we will start first at the question to the margin. The question to the margin is that we are very focused on giving our business into the CORBOX business model to our long-term margin contract. When we see that this development and the switch from the project-based sales to our CORBOX business model with long-term product as a service approaches, this allows us to optimize these contracts which have duration of about four-five years in the first step. This transfer of a one-time project phase to our CORBOX long-term is the reason why our margin is this year better than in the past.
The second question you mentioned is where I want to invite you to join us and the 10th of March, and there we will give you our estimations for the current year. You know, I cannot give you an answer before. We are optimistic that we have a good H1 of the year 2021/22.
Okay. No one-offs or any profitable contracts rolling over, anything like that in Q1 that will distort the figure into Q2, three and four?
Yeah. This is our run rate to CORBOX business. There are no special effects from extraordinarily high margins. There are some figures, including that I just talked about with the vaccination centers, but these contracts are still running, so we have to see what will be the effect. This will not be an effect which will show quite different accounts during the quarter closings of DATAGROUP.
All right. Super. Thank you very much.
Next up, we have a question from Mr. Tim Wunderlich.
Yeah. Good morning.
Good morning.
My question would be, could you give us an update on the M&A pipeline, first of all, and then about the working capital improvement. You mentioned this. I mean, the cash flow was extremely strong in Q1. My question would be in how far the working capital improvements are sustainable. I think your current working capital ratio is around 11% of revenues. I mean, do you expect this to go down and stay down below 11% going forward? Thank you very much.
Thank you for your question. At first, you asked about the M&A pipeline. The M&A pipeline is still filled. We are very active here in different segments. I cannot give you too much details on this, but you know, our strategy of looking for technology for additional strategy positions and on local white flags. These aren't the companies we are now screening and we are talking about. Our strategy of organic growth and inorganic growth is still going on like in the past. The second question you talked about is about the cash flow statement and the operating income. This is quite right.
We have very strong operating cash flow driven by our EBIT or our results. On the other hand, we have some good positions in our trade receivables and liabilities. There we have some positions and, you know, we work with the public sector and the payment terms of the public sector is not as good as in the industrial sector. We have sometimes from quarter- to- quarter some very good positions or some tailwind and sometimes a little bit of headwind. Overall, we have a quite good look and a close look for the development of our working capital.
This will not be a one-hit wonder, but the Q1 has been extremely strong. On the other hand, like I explained in the presentation, our CapEx estimation will be very stable. You have seen it in 2021. In 2021, we had investments in CapEx of about EUR 15 million, and we are in a comparable level like in 2021. We are growing. We have two more companies inside with URANO and dna. But I think that between 2% and 3%, CapEx investments of the revenue will be a proper position.
Okay, thank you so much.
Next up, we have a question from Mr. Andreas Wolf. Mr. Wolf, can you hear us? All right. We'll switch to a question from Mr. Jannik Sieling.
Yeah, thank you. Can you hear me?
Yes, we can hear you.
Okay, great. Thanks. Most of my questions were already answered, so I would just have one left. Could you talk about the tax rate? Is there any guidance for the full year? My understanding from last year was that there would be a positive effect on the tax rate in case of acquisitions done via FIS, right? For now, we've seen 35.5% in Q1. Could you elaborate a bit on that?
The estimation for the tax rate, I cannot give you the detailed answer. We have a potential to have a tailwind in our tax rate. This at first means that we have the common understanding for the reorganization part of FIS. It seems to be so that we are on the right path. We are very confident with this. We are now looking for potential tax optimization and are discussing them with our consultants, but there is not quite results. We did not have shown it in our Q1 .
Okay, thank you.
Next up, we have a question from Mr. Matthias Ensminger. Are you planning a capital increase?
Normally, this is a question I normally give to Max Schaber. You've seen that our equity ratio is nearly 23%. In this moment, we are very comfortable with this equity ratio. It depends on the further development of organic and inorganic growth and the opportunities we have in the market. In this situation, you have seen our net debt is a very comfortable situation as well, so we will decide this on the one hand in the question of financing our growth or the inorganic growth, and on the other hand, to have a quiet look on our balance sheet and the ratios which we have.
In this moment, we are not looking for a short-term equity increase.
Next up, we have Mr. Andreas Wolf.
We have some technical issues.
I see you on green, but we can't hear you.
Can you hear me now?
Yes.
Yes, we can hear you.
I had to dial in again. Sorry. Via another route. I would have a couple of questions. The first one would be the most obvious one. Especially if you look at the IT space, many companies complain about wage inflation. Maybe you could share your view on the developments that you observed within DATAGROUP. What are the consequences basically for you also given the fact that the contracts that you have with your clients are usually more or less fixed given the services that you are providing? What's your behavior here? What's your strategy? The second would be in general on the individual entities within DATAGROUP of all parts of DATAGROUP already running at full steam, i.e., financial services.
DATAGROUP Ulm had some issues a while ago. Maybe you could update us quickly here, whether there is more tailwind coming from what to be expected from more efficiency in the future in these places. That would be helpful. Thank you.
Okay. The first question, thank you very much, Stefan, was about the inflation and our contract situation. In normal cases, we have especially rules in our contracts which are looking for this inflation, and it gives us the possibility to make an adjustment of our rates. This is what we are quite looking at where we are working normally every year on it. This is not a special situation. The only situation we have now in our view is that the inflation is much more higher than in the past. From this point of view, we do not see an extraordinary negative impact in our business model.
The second question you talked about is of the full set of our subsidiaries and where you know we do not publish the individual financial statements. What you have seen or what I just explained is that especially these two units, this FIS and URANO, we are very close on these companies. We are very confident that the strategy of entering these markets of the finance industry, for example, is the right decision. What was very hard is to make the investments in the infrastructure for running this business. Now we are able and this is where we are meanwhile successful in it is to onboard new customers with profitable contracts in this area.
To summarize it, we are on a good way with this companies, especially with the FIS. We are on the right path of the reorganization of this unit. We will work hard for it.
Great. Thank you.
Thank you.
Next up, we have a follow-up question from Mr. Knut Woller. What is the expected payout for finance leases in 2021/2022?
I have to give this answer a follow-up because I cannot say what is the budget of the finance leases. I know what you want to know is the question of discounted cash flow and the need for capital in our business, but I have to give this answer after the call.
At the moment, we have no further questions. If you would like to ask a question, please press the hand symbol or type your question into the question box. Great. We have no further questions. Thank you for participating in our conference call today. The call will be made available on DATAGROUP's website after the conference.
Thank you very much from my side. We will see you next time. I wish you a great time. Thank you very much.