Segment Report

The activities of the Bechtle Group are associated with the two segments IT system house & managed services and IT e-commerce. This split reflects the main pillars of the business model, which combines the vendor-independent centralised direct sale of IT products (IT e-commerce) with the decentralised provision of services and IT infrastructure trading (IT system house & managed services) in an integrated approach.

IT System House & Managed Services

In 2008, Bechtle AG generated revenues of 927.5 million euros (prior year 885.8 million euros) in the IT system house & managed services segment. This means an increase of 4.7 per cent or 41.8 million euros. This segment was very successful even in the more difficult second half of the year. The service-driven projects and service contracts usually involve medium or long terms and are therefore less susceptible to economic trends than the short-term trading-only business. Moreover, the sales staff qualification measures yielded a positive effect in the reporting period. All in all, Bechtle generated 64.8 per cent of the group revenues in this segment (prior year: 64.0 per cent).

In the reporting period, the company again increased its productivity in the IT system house & managed services segment. Apart from the said further qualification of the employees, process efficiency improvements also played a role. In the reporting period, based on an average number of 3,048 full-time employees (prior year: 2,975 employees), the revenue per employee increased by 2.2 per cent to 304,000 euros (prior year: 298,000 euros).

At 778.7 million euros, the revenue share of the domestic system houses amounted to 84.0 per cent, almost the same as in the prior year (prior year: 83.9 per cent). This includes the two acquisitions in North Rhine-Westphalia.

In 2008, the share of the international system houses was 16.0 per cent. For the first time, this figure also includes the newly acquired Austrian companies and amounted to 148.8 million euros, compared to 142.8 million euros in the prior year.

Organically, the revenue in this segment amounted to 911.8 million euros, 2.9 per cent more than in the prior year. The acquisitions in Germany and Austria, most of which were realised in the second half of 2008, contributed 15.7 million euros to the revenue.

Substantial profitability increase in the IT system house & managed services segment

In 2008, the EBIT in the IT system house & managed services segment increased by 16.3 per cent to 38.4 million euros (prior year: 33.1 million euros). Thus, the prior-year value was eclipsed, and the positive special effects amounting to 2.6 million euros, which were contained in the EBIT 2007, were more than equalised.

Accordingly, the EBIT margin increased from 3.7 per cent to 4.1 per cent. Without the special effect, the EBIT margin in the prior year was 3.4 per cent, which makes the leap even more noteworthy. This improved margin is mainly the result of efficiency improvement measures such as the closedown and consolidation of locations and improved productivity.

IT E-Commerce

In the IT e-commerce segment, the revenue in the fiscal year 2008 increased by 1.3 per cent from 497.7 million euros to 503.9 million euros. Following a good start, the effects of the macroeconomic slowdown became increasingly evident in the second half of the year.

However, the strategically motivated sale of TomTech as of 31 August must also be taken into consideration in this segment. From September to December of the prior year, TomTech had contributed 5.5 million euros to the revenue, an amount that was missing in the growth in the reporting period. The share of the trading business in the total revenue receded slightly from 36.0 per cent in the prior year to 35.2 per cent.

Increased sales compensate effect of sinking prices

In the reporting period, the price pressure further intensified especially on hardware products. Thus, the quantities sold had to be increased substantially in order to achieve the same revenues. In 2008, Bechtle succeeded in doing this. Yet, the decline in prices and the slackening economy could not be compensated fully.

In 2008, Bechtle had an average of 923 full-time employees in the IT e-commerce segment (prior year: 830). In the past year, the revenue per employee dropped to 546,000 euros (prior year: 600,000 euros). Bechtle’s objective is to achieve profitable growth even in difficult times. This is only possible with a duly qualified, effective team. These were the reasons for the new appointments, which are expected to support the growth dynamics of IT e-commerce in and after the current year.

Due to the internationalisation strategy, the foreign share of IT e-commerce is on the rise. In the reporting period, the revenues of the international companies amounted to 343.8 million euros (prior year: 338.3 euros), or a share of 68.2 per cent (prior year: 68.0 per cent). The domestic trading companies accounted for 160.2 million euros (prior year: 159.4 euros), a share of 31.8 per cent (prior year: 32.0 per cent) of the segment revenue.

In the reporting period, the EBIT in the IT e-commerce segment receded by 3.4 million euros from 25.2 million euros to 21.8 million euros.

The EBIT margin dropped from 5.1 per cent to 4.3 per cent. This development reflects the disproportionately low revenue performance in relation to the expenses for employees hired in 2008 as well as the required proactive investments for the expansion of the Comsoft and ARP activities. In the medium run, IT e-commerce continues to target a margin of 5 per cent.