EQS-News: adesso SE / Key word(s): Quarterly / Interim Statement/9 Month figures
adesso SE on track for 2022 after record quarter: sales up 32 % to EUR 653.6 million after nine months / EBITDA increases by 13 % year on year to EUR 71.4 million before previous year’s non-recurring effect from company sale
The adesso Group finished the first nine months of 2022 with sales growth of 32 % year on year to EUR 653.6 million. Of that growth, 27 percentage points were organic. The company built on the existing momentum in the third quarter of 2022, recording a 39 % rise in sales. In combination with sustained high demand for the Group’s industry-specific IT services, significant licence revenue from multiple transactions involving adesso products and the largest number of working days in a single quarter in 2022, the improved capacity utilisation compared to the second quarter resulted in record earnings. At EUR 33.3 million, EBITDA (before non-recurring effects) was up by 30 % year on year to its highest level ever for a single quarter. Cumulative EBITDA after nine months stood at EUR 71.4 million (previous year: EUR 81.2 million, of which EUR 17.9 million were due to a non-recurring effect from the sale of a company). Adjusted for the non-recurring effect in the previous year, EBITDA increased by 13 %. As a result, adesso is well within its target corridor for the full year and believes it is on track to achieve both its full-year forecast, which it raised in the course of 2022 in view of sales expectations, and the target corridors for EBITDA and the EBITDA margin. Despite a lower number of working days in the final quarter, adesso looks set to achieve a figure at the upper end of its sales forecast, provided that the company’s growth continues as expected. The forecast for the year as a whole has been reaffirmed.
The adesso Group increased its sales revenues quarter on quarter and year on year to a new record level of EUR 241.4 million in the third quarter of 2022. Due to improved levels of capacity utilisation and booking intensity in IT service business, the third quarter having the highest number of working days as well as encouraging licence revenue, adesso SE achieved growth of 39 % compared to the same quarter of the previous year. Revenue increased by 32 % to EUR 653.6 million over the nine-month period. Most of the increase in sales came from the German market with growth by 33 %. The relative growth abroad was an equally strong 27 %. Demand in the area of digitalisation remains at a high level. Dynamic sales growth almost exclusively in the double-digit range (between 9 % and 80 %) was achieved in all core industries in which adesso operates. As expected, the insurance sector also returned to a growth path. Sales from the manufacturing industry – still a relatively new core sector for adesso – were up sharply (by 80 %) and accounted for 11 % of total sales after nine months, making this industry adesso’s fourth largest after the well-established public administration, insurance and banking sectors.
Personnel costs, the largest cost item at adesso, grew at a slower rate than sales, climbing by 28 % to EUR 422.5 million. The average number of employees, converted into full-time equivalents, increased by 25 % year on year to 6,669 and therefore developed generally in line with personnel costs. As at the reporting date of 30 September 2022, adesso employed 7,524 people (full-time equivalents). At EUR 84 thousand, annualised personnel costs per employee rose by only 2 % compared to the 2021 figure of EUR 83 thousand. The cost of materials, which primarily related to services from external providers purchased within the scope of customer projects, increased significantly more sharply than sales, rising by 61 % to EUR 101.5 million and standing at 16 % of sales. Due to fast growth, adesso continues to use external services. This development is also structurally attributable to the acquisition of KIWI Consulting EDV-Beratung GmbH, which employs a larger proportion of external specialists in projects. Annualised gross profit per employee in the first nine months was up slightly year on year from EUR 109 thousand to EUR 110 thousand. Other operating expenses climbed by 77 %, from EUR 33.4 million to EUR 76.8 million, in some cases due to the further easing of COVID-19 restrictions and the return to a post-pandemic working model. An initial significant rise in travel costs and expenditure relating to an increase in in-person events both acted as driving forces. IT infrastructure conversion projects were also launched at adesso SE. Said projects are associated with a corresponding increase in expenses compared to the same period in the previous year.
The tax rate, which reflects a non-recurring effect in the previous year, was up from 22 % to 30 %, as the income generated last year by the sale of a company was largely tax-free. Consolidated earnings after taxes amounted to EUR 23.8 million after the first nine months of 2022 (previous year: EUR 42.1 million; previous year before non-recurring effect: EUR 24.4 million). Earnings per share were EUR 3.64 (previous year: EUR 6.76; previous year before non-recurring effect: EUR 3.91).
“Thanks to an improvement in capacity utilisation and encouraging licence revenue, adesso took advantage of the third quarter, which had the most working days in 2022, and made up for the lower profitability in the second quarter which was impacted by investments in more in-person events,” says CFO Jörg Schroeder, explaining the positive development of margins in the third quarter.
The positive expectations for the second half of 2022 disclosed by adesso after the first six months of the year have so far proved to be correct. On the basis of the return to healthy capacity utilisation in the third quarter and sustained high demand in the area of IT services, the Executive Board believes that the challenging macroeconomic situation will not have a negative effect on adesso’s business in the fourth quarter either. In addition, strong chances of additional licence revenue continue to exist. As a result, the Executive Board is reaffirming its full-year forecasts of sales totalling EUR 800 million to EUR 850 million and EBITDA of EUR 90 million to EUR 95 million. The EBITDA margin is expected to be 11 % to 12 %.
The full quarterly statement, as well as a table comparing key performance indicators over a period of several years, is available at www.adesso-group.de/en/ in the Investor Relations section.
With more than 7,500 employees and expected annual sales of more than EUR 800 million in 2022, adesso Group is one of the largest German IT service providers with outstanding growth opportunities. At its own locations in Germany, other locations in Europe and Turkey as well as at numerous local customers adesso offers consulting and software development services for optimising core business processes. adesso also offers ready-to-use software products for standard applications. The development of an own, industry-specific product portfolio opens up additional growth and earnings opportunities and is another key element of the adesso strategy. In 2020, adesso was awarded the title of the best employer of its size in Germany across all industries. After having already achieved first place among IT employers in 2016 and 2018, adesso was ranked first again in 2020.
14.11.2022 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
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