Bechtle Q1 Earnings Call Highlights

Key Points

• Bechtle said it had a strong start to fiscal 2026, with double-digit growth in both revenue-related metrics and profitability despite geopolitical uncertainty, supply constraints and vendor price increases. Order intake rose 17%, expanding the order book and improving visibility into Q2.
• Management said margins held steady even as vendors raised prices, with the company able to pass through many of the cost pressures without sacrificing pricing. Operating cash flow also improved, and days sales outstanding fell to 28 days from 39 previously.
• Bechtle reiterated its full-year guidance but said the macro environment remains uncertain and second-half visibility is limited. The company expects investment-related headwinds to stay roughly stable while continuing strategic initiatives in quantum computing, digital healthcare and digital sovereignty.

Bechtle ETR: BC8 executives told analysts the company posted a “strong start” to fiscal 2026, delivering double-digit growth in both top- and bottom-line measures despite what management described as a challenging operating environment marked by geopolitical uncertainty, supply constraints and vendor price increases.

First-quarter performance driven by demand and order intake

Chief Executive Officer Dr. Thomas Olemotz said Bechtle benefited from its scale and vendor relationships at a time when the European IT market is affected by a “memory shortage,” supply chain bottlenecks and “clear price increases.” He argued that Bechtle’s position as one of Europe’s largest value-added resellers has helped it “find flexible solutions” with both customers and vendors.

Chief Financial Officer Christian Jehle said the quarter included “difficult geopolitical framework conditions,” citing the war in the Middle East, but added that Bechtle also saw “high demand from customer groups in all segments.” According to Jehle, the company’s order intake rose 17% in the first quarter, further expanding the order book and improving visibility into the second quarter. He added that early indicators remained positive, saying, “We see in April already that the development continues.”

Jehle reported business volume growth of “over 13%,” including 11% organic growth, which he said indicated the “core business is healthy and intact.” He noted that reported revenue growth typically trails business volume due to IFRS 15 accounting and the increasing weight of software in the mix.

Margins held steady amid vendor price pressure

On profitability, Jehle said earnings before taxes (EBT) grew at a double-digit rate in the first quarter, supported by top-line growth and what he described as a “stable profit margin.” He also pointed to ongoing investment in Bechtle’s own IT infrastructure and early progress from cost management measures.

During the Q&A, analysts pressed management on the stability of gross margin in the face of vendor price increases. Olemotz said customer behavior has been mixed, with some clients postponing or downsizing projects while others proceed with implementations. He said Bechtle has been able to pass through “many of the effects” of vendor-side pressure to customers, adding that the strong quarter was not achieved by sacrificing pricing. “The top line is not bought,” he said, describing the stable gross margin as a key indicator of resilience.

Olemotz also noted that Bechtle entered the year with a higher number of “young tenders” won in the second half of the prior year, where profitability tends to start lower and improve over the term of the contract. Against that backdrop, he said maintaining the gross margin was an especially important internal signal.

Cash flow improved; headcount growth tied to acquisitions

Jehle said operating cash flow improved versus the prior year’s decline and returned “back in the green” despite the company’s growth. He attributed an inventory build to customer demand. He also highlighted a reduction in days sales outstanding (DSO), saying DSO was 28 days after the last quarter of 2026, compared with 39 days previously.

On staffing, Jehle said headcount expansion in the first quarter was “due to acquisitions only,” while organic headcount declined 1.7% as the company took what he called a “moderate approach.” He also noted that, at the end of March, 729 young people were in training or dual-study programs with Bechtle.

Asked whether the organic headcount trend would continue, Olemotz said the company is “highly cost-sensitive” on personnel expenses while aiming not to jeopardize long-term viability. He said Bechtle expects to achieve its targets for the year “with the headcount as is” and does not anticipate a significant increase, excluding potential M&A.

Strategic updates: quantum computing, digital healthcare, and sovereignty

Beyond quarterly financial performance, Olemotz outlined several initiatives intended to underscore Bechtle’s positioning in “key future areas of IT.”

• Quantum computing: Olemotz said Bechtle is implementing a project at Heilbronn University of Applied Sciences to integrate an “IQM Spark quantum computer” from Finnish manufacturer IQM Quantum Computers. The system is expected to go live later in 2026, with Bechtle supporting and further developing it over a three-year period. He said the goal is to create a platform for teaching, research and development and to integrate quantum computing with traditional IT and AI environments.
• Digital healthcare (WebMedX): Olemotz said Bechtle is consortium leader in the WebMedX project, working with University Hospital Würzburg and other partners to develop a cross-sector telemedicine platform aimed at improving care for people with cardiac insufficiency. He said the platform is intended to help close post-hospitalization care gaps, prevent readmissions and serve as a model for other regions and conditions.
• Digital sovereignty and BIoS: Olemotz said Bechtle began actively promoting the Bechtle Index of Sovereignty (BIoS) in March, describing it as a proprietary software solution to assess digital sovereignty maturity within companies and public organizations. He said Bechtle is piloting the assessment in Germany, Austria and Switzerland, with marketing in additional European countries to follow.
• Public-sector cloud contract: Olemotz said a report by GovTech Campus Deutschland highlighted Bechtle’s award as the multi-cloud broker within the GovTech framework. He described it as a centralized platform for cloud and AI services supported by “international hyperscalers and European providers.” Olemotz said the framework contract is worth €250 million over two years, with two one-year extension options.
• Hanover Fair: Olemotz said Bechtle expanded its presence at the industrial trade fair and showcased an integrated portfolio spanning engineering, OT security and manufacturing, the Industrial Internet of Things and business integration.

Outlook: guidance reiterated; investment headwinds expected to remain stable

Looking ahead, Olemotz said the company remains encouraged by the first-quarter performance but emphasized that economic conditions have “not improved significantly” and that uncertainty persists, including further vendor price increases and limited visibility into the second half of the year. He said Bechtle is confirming the guidance issued in March 2026 and will continue to monitor market developments and reassess whether guidance remains appropriate.

On IT investments, Olemotz told analysts Bechtle does not expect the investment-related “headwind to increase,” saying costs seen in the first quarter should remain stable. He said Bechtle is closely monitoring the IT budget and reassessing projects, while continuing central initiatives such as its cloud platform and an SAP HANA project.

Jehle also addressed the investment outlook for 2027, telling UBS that investment volume is expected to be “roughly flat,” “maybe slightly higher,” noting that many initiatives are multi-year projects and the company is reviewing the phasing.

In the Q&A, Olemotz added that public-sector growth in the first quarter was approximately 12% year-over-year, but cautioned that comparisons may be distorted because last year was “an atypical public sector year” with unusual seasonality. He and Jehle stressed that growth was broad-based across sectors, segments, customer groups and countries.

Jehle also cautioned against directly comparing German and international segment margins, citing purchase price allocation effects from acquisitions and ongoing integration work abroad. He said investors should consider EBIT before goodwill amortization and noted that international operations are at a different stage of development, adding: “Please don't expect margins to come up to the same level in the next one or two years already.”

About Bechtle ETR: BC8

Bechtle AG provides information technology (IT) services primarily in Europe. The company operates through two segments, IT System House & Managed Services, and IT E-Commerce. The IT System House & Managed Services segment offers IT strategy consulting, hardware and software, project planning and implementation, system integration, IT, and training services for IT operation. The IT E-Commerce segment provides hardware and software products, and peripherals and accessories through a web shop.

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