adesso SE increases sales revenues in Q1 2024 by 15 % to EUR 317.1 million / EBITDA at previous year’s level of EUR 17.8 million due to calendar effect / Guidance confirmed

• Strong growth and fundamentally good demand leads to expectations of an increase in earnings over the course of the year
• EBITDA contribution in the first quarter of 2024 restrained by two fewer working days than in the previous year
• Impacts from investments in the IT Solutions segment
• Full-year sales revenues and EBITDA guidance confirmed

With the quarterly statement published today, adesso SE underscores its continued growth path in 2024 and generates a 15 % increase in sales revenues to EUR 317.1 million, almost exclusively organically. The number of employees converted to full-time equivalents increased by 17 % to 9,926 (previous year: 8,513) as at the reporting date, which is disproportionately high compared to sales revenues. While sales revenues developed dynamically in the first quarter, the calendar effect in particular had an impact on the operating result, with two fewer working days than in the previous year. At EUR 17.8 million, EBITDA remained roughly at the previous year’s level (EUR 17.9 million). Investments in the IT Solutions segment, which unlike in the previous year were not accompanied by corresponding licence revenues, also had an adverse effect on earnings growth. With capacity utilisation still below average at the beginning of the year in the core business with IT services, the disproportionately high increase in personnel and other operating expenses compared to the sales revenues had a particularly strong impact on the operating result due to the calendar effect. The three subsequent quarters will each provide one more working day than in the previous year. With capacity utilisation expected to continue to rise and own price increases, the additional working days should also make a higher contribution to sales revenues compared to the previous year and, with comparable cost structures, a higher contribution to earnings. On this basis, the Executive Board confirms the full-year guidance of over EUR 1.25 billion in sales revenues and EUR 110 to 130 million in EBITDA.

Despite the rather subdued general development of the economy and competition, adesso’s portfolio for the further digitalisation of companies is generally meeting with good demand. Dynamic sales revenue growth in the double-digit percentage range was once again achieved in most of the core sectors served by adesso. The exception to this is insurance, which remained at the previous year’s level, partly due to the previous year’s quarter, which benefited from the acquisition of licences. The “Manufacturing Industry” segment also remained roughly at the previous year’s sales revenues level following strong growth in previous periods. The federal government’s supplementary budget, which was temporarily halted by the Federal Constitutional Court in November 2023, led to the delay of already budgeted projects in the “Public Administration” sector in Germany in the first quarter of 2024. adesso’s largest sector, accounting for 16 % of total sales revenues, nevertheless recorded 7 % growth and generated over EUR 50 million in the first quarter alone. Indications at the start of the second quarter are that the sector remains keen to invest. The “Healthcare” and “Utilities” sectors recorded particularly strong sales growth of 36 % and 65 % respectively. There are still no signs of a structural deterioration in the order situation for adesso.

Sales revenue growth in the German market amounted to 17 %. Outside Germany, revenue increased by 6 %. Revenue in the Netherlands and Italy grew disproportionately by 20 % and 21 % respectively.

As expected and mentioned previously, the development of the operating result (EBITDA) was still subdued in the first quarter due to the calendar effect reaching EUR 17.8 million (previous year: 17.9 million) and was significantly influenced by the disproportionately high increase in absolute personnel costs (+18 % to EUR 227.0 million) compared to sales revenues. However, personnel costs per employee rose only moderately by 1 %. Compared to the first quarter of the previous year, other operating expenses also increased significantly by 24 % to EUR 37.1 million. The increase is due to a large number of cost items that are directly related to further growth. Due to the general price trend, these generally increased disproportionately to employee growth. The still modest development of the operating result led to consolidated earnings of EUR -3.2 million (previous year: EUR 2.0 million) with a 22 % increase in depreciation and amortisation to EUR 15.5 million (previous year: EUR 12.7 million), primarily in connection with the expansion of the company headquarters in Dortmund, a noticeable increase in interest expenses (EUR 2.7 million; previous year: EUR 1.7 million) and higher taxes of EUR 2.7 million (previous year: EUR 1.7 million). This results in earnings per share of EUR -0.49 (previous year: EUR 0.28). The earnings trend, which is heavily influenced by the calendar effect, is likely to improve again significantly against the backdrop of the significantly higher number of available working days, especially in the second half of 2024, as capacity utilisation picks up. A package of measures initiated at the beginning of 2024 to increase profitability will increase the achievable margin in the following quarters and subsequently also the contribution to earnings, assuming appropriate capacity utilisation. In view of the planning and other current indicators, the Executive Board is positive about the outlook for the rest of the financial year. On this basis, the Executive Board has reaffirmed its original full-year guidance for 2024 of over EUR 1.25 billion in sales revenues with EBITDA of EUR 110 to 130 million.

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.

adesso Group
With more than 9,900 employees and annual sales of more than EUR 1.1 billion in 2023, 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 the first locations in Asia, 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 2023 and 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, 2018 and 2020, adesso was ranked first again in 2023.