Corporate | 14 November 2006 07:30

Bechtle AG: earnings increase disproportionately to turnover

Corporate news transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Bump in sales of 4.6 percent / Pre-tax earnings up by 6.8 percent / Outlook for the year on aggregate clarified / CFO appointed to the Executive Board Neckarsulm, 14.11.2006 – From January through September, Bechtle AG increased sales and earnings above market growth levels and also clarified its planning for the year on aggregate. Up until 30 September, Group turnover for the IT services and trading company increased by 4.6 percent, totalling 855.7 million euros. On the earnings side, the IT-specialized company was able to achieve above average growth in relation to earnings. At 26.8 million euros, Group earnings before tax (EBT) were up 6.8 percent on the amount achieved in the previous year, of 25.0 million euros. Return on EBT earnings remained a constant 3.1 percent. Given the high share of domestic sales for earnings, the tax ratio for the first nine months rose in comparison to last year, from 35.5 to 37.4 percent. After-tax earnings were thus higher than in the comparable period last year, climbing from 16.2 to 16.7 million euros. Earnings per share reached 0.79 euros, compared to 0.76 euros for the same period last year (an increase of 3.7 percent). ‘Today, as before, the expected tailwind has not been forthcoming in our sector. Given this fact, we can be very satisfied with how business has developed in the first nine months. This is even more so given that Bechtle is in the midst of a period of consolidation, and is confronted with numerous structural, organizational and strategic changes which lead naturally to special items. Our ability to still notch up clear earnings growth, shows how strong the Bechtle Group is.’ This statement was made by Ralf Klenk, Chairman of the Executive Board. ‘Even under such adverse market conditions, we have remained faithful to the principle of earnings before turnover’. e-commerce segment shows strong growth With sales totalling 567.8 million euros, the IT system-house segment did slightly better than last year, where the corresponding figure was 565.7 million euros (an increase of 0.3 percent). Bechtle IT system houses thereby contributed 66.3 percent to aggregate turnover. Operational EBIT earnings were down somewhat, from 9.5 million euros to 9.3 million euros. The EBT margin was at 1.6 percent, down from 1.7 percent in the previous year. More than anything else, it was the high costs involved in expanding the branch and service-focused distribution structure which influenced the segment’s earnings. In addition to this, persistent price competition continued to have an influence on basic services. In the IT e-commerce segment, Bechtle achieved strong growth in turnover, which was up 14.2 percent, totalling 288.2 million euros. EBIT grew by 11.1 percent to 17.3 million euros. The EBIT margin grew by 6.0 percent (previous year: 6.2 percent). In IT e-commerce, Bechtle was able to compensate for pressure against the margins, particularly for hardware, by means of high process efficiency. Balance sheet and asset structure remain solid Per 30 September 2006, the equity capital ratio was at 63.9 percent, compared to 61.9 percent at the end of the same quarter in 2005. The return on equity dropped slightly, from 7.6 to 7.2 percent. Together with available credit lines in the amount of 45.4 million euros, Bechtle disposes of liquidity reserves in the amount of 81.3 million euros. The Group thereby has a comfortable amount of financial room at its disposal in order to grow in the future. Cash flow from current business activities increased in the first nine months by 65.8 percent, to 16.1 million euros. This is due largely to decreased advance tax outlays and the increase in EBT. The free cash flow also increased considerably, from 4.0 million euros to 8.3 million euros. Bechtle clarifies forecast Given business developments up to now, and the strong growth experienced in earnings, previous plans to achieve pre-tax earnings as good as those achieved last year (41.2 million euros) will now certainly be reached. The Executive Board is thus forecasting EBT of at least 42 million euros, contingent upon strong seasonal upturn in business at the end of the year. Bechtle expects turnover after the end of the first nine months, and with a small number of large-scale (and thus smaller margin-producing) orders, to be around 1.2 billion euros. Up to now, planning was aiming at a target range of between 1.25 and 1.30 billion euros. In the previous year, Bechtle achieved turnover in the amount of 1.18 billion euros. ‘Particularly in the last two quarters, we have achieved healthy turnover. Today, we are on the right track and will also refrain in the final quarter from going after turnover at any price. We are confident that we will achieve the EBT target of 42 million euros, in fact, we will probably exceed that target. As always, this is contingent upon the usual strong seasonal upturn in business at the end of the year,’ explains Ralf Klenk. Bechtle appoints Chief Financial Officer Effective as of 1 March 2007, the Supervisory Board of Bechtle AG has appointed Dr. Thomas Olemotz to the Executive Board of the Group. The 44-year-old Dr. Olemotz will be taking on the financial management portfolio from the Chairman of the Executive Board, Ralf Klenk. After having worked at Westdeutche Landesbank and the Deutsche Bank Group, Dr. Olemotz served in the Executive Board of Bad Homburger Deltron AG before moving to Microlog Logistics AG. It was here that he was responsible for over five years for managing the company’s finances as well as HR, in the capacity as a member of the executive board. With his appointment to the position of CFO, another important milestone has been achieved in the reorientation of the organizational structures which began in February 2006. *** Notice for analysts and journalists: In the telephone conference which is scheduled to take place today, Ralf Klenk, CEO, and Stefan Sagowski, department head for finances, will present the earnings results, as well as the current status of implementation of the strategic measures, as well as other expectations for the year on aggregate. They shall also be available for questions. The telephone conference for analysts begins at 8:30 am and for journalists at 10:30 am (CET). Should you be interested, please dial in shortly before the start of the conference, using the following number: +49 (0) 69 5 8999 0509 (analysts’ conference) and +49 (0) 69 5 8999 0507 (press conference) Overview of Quarterly Figures and Figures for the First Nine Months in TEuros Q3/2006 Q3/2005 Jan Jan – Change -Sept Sept Jan – 2006 2005 Sept Turnover 280,946 288,070 855,702 817,883 + 4.6% Domestic 194,120 193,786 570,851 548,066 + 4.2% Abroad 86,826 94,284 284,851 269,817 + 5.6% IT System house 187,643 204,336 567,548 565,664 + 0.3% IT e-commerce 93,303 83,734 288,154 252,219 + 14.2% EBITDA 15,645 14,755 36,123 33,483 + 7.9% EBIT 12,403 11,934 26,547 25,027 + 6.1% IT System house 5,600 6,090 9,275 9,476 – 2.1% IT e-commerce 6,803 5,844 17,272 15,551 + 11.1% EBT 12,426 11,919 26,750 25,043 + 6.8% After-tax earnings 7,418 7,753 16,748 16,160 + 3.6% EPS (in euros) 0.35 0.37 0.79 0.76 + 3.7% Equity ratio (in %) 63.9 61.9 + 3.2% Workforce (30.09.) 3,838 3,798 + 1.1% The unabridged version of the interim report is available in both German and English and can be downloaded from www.bechtle.com/qb Bechtle AG, Investor Relations, Sabine Emich, Bechtle Platz 1, 74172 Neckarsulm, Tel: +49 (0)71 32/ 981-4115, Fax: -4116, Email: sabine.emich@bechtle.com, www.bechtle.com (c)DGAP 14.11.2006 ————————————————————————— Language: English Issuer: Bechtle AG Bechtle Platz 1 74172 Neckarsulm Deutschland Phone: +49 (0)71 32/ 9 81-0 Fax: +49 (0)7132/ 9 81 – 80 E-mail: ir@bechtle.com WWW: www.bechtle.com ISIN: DE0005158703 WKN: 515870 Indices: Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-Bremen, Hannover, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service —————————————————————————