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1. Company Snapshot

1.a. Company Description

Bechtle AG provides information technology (IT) services primarily in Europe.The company operates in 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 selling, project planning and implementation, system integration, IT services, and training for IT operation.


This segment also provides applications for business intelligence, customer relationship management, enterprise resource planning, product lifecycle management, computer-aided design/computer-aided manufacturing, product data management, enterprise content management, document management systems, artificial intelligence.The IT E-Commerce segment provides hardware and software products, and peripherals and accessories that comprises approximately 40,000 products through an online shop and telesales.The company also provides data center, modern workplace, networking, IT security, consulting, professional, managed, training, financial, remarketing, and cloud services, as well as design, development, and implementation of software services.


It serves customers in the fields of industry, trade, finance, and the public sector.Bechtle AG was founded in 1983 and is headquartered in Neckarsulm, Germany.

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1.b. Last Insights on BC8

Bechtle AG's recent performance has been driven by strategic expansion into new European markets, fueling speculation about further growth through digital transformation deals. The company's Q3 2025 earnings call highlighted significant business volume growth and improved earnings, driven by international expansion and strategic acquisitions. This momentum suggests growing market confidence, with a wave of digital transformation deals contributing to a favorable outlook. Industry trends indicate a positive trajectory, underpinned by the company's strategic initiatives.

1.c. Company Highlights

2. Bechtle AG FY 2024 Earnings and 2025 Outlook

Bechtle AG reported mixed results for FY 2024, with a 2.0% increase in business volume but a decline in revenue due to changes in software business accounting. Despite this, the company achieved a record gross margin of 18.1%, reflecting operational efficiency. However, EBIT fell by 8%, and revenue growth was lackluster, particularly in key markets like Germany and France, where SMEs delayed IT investments, and public sector spending contracted. The Q4 rebound of 4.4% growth was notable but not indicative of a sustainable trend, leaving the company cautious about the near-term outlook. Bechtle's workforce expanded by 4.2% to 15,801 employees, with 60% of growth driven by acquisitions. The proposed dividend of €0.70 per share signals continuity and confidence in long-term prospects.

Publication Date: Apr -03

📋 Highlights
  • Business Volume Growth: Despite challenging conditions, Bechtle achieved a 2.0% increase in business volume in FY 2024.
  • Revenue Decline: Revenue decreased due to changes in software business accounting, though organic growth matched the prior year.
  • Regional Revenue Weakness: Revenue growth was subdued in Germany and France due to delayed IT investments by SMEs and reduced public sector spending.
  • Profitability Challenges: EBIT declined by 8% year-on-year, though gross margin reached a record 18.1%.
  • Strong Cash Flow: Operating cash flow and free cash flow reached all-time highs of €558 million and €377 million, respectively.

Financial Performance Highlights

Bechtle's FY 2024 results underscore the challenges of navigating a difficult macroeconomic environment. While business volume growth was modest, the company's ability to maintain organic growth at prior-year levels highlights its resilience. However, the revenue decline and EBIT drop reflect broader industry headwinds, particularly in the public sector and among SMEs. The record-high gross margin of 18.1% is a positive sign, but the EBIT decline suggests margin pressures in other areas. Operating cash flow and free cash flow reached all-time highs of €558 million and €377 million, respectively, indicating strong liquidity and capital allocation capabilities. Bechtle's dividend stability at €0.70 per share aligns with its conservative financial strategy, aimed at rewarding shareholders while maintaining financial flexibility for growth initiatives.

Strategic Developments and Outlook

Bechtle's new Executive Board structure emphasizes multichannel distribution, a strategic shift aimed at enhancing market reach and competitiveness. The company's success in public sector cloud services and its commitment to diversity through the Bechtle Foundation are positive developments, signaling a focus on long-term growth and social responsibility. However, the 2025 outlook is cautiously optimistic, with limited visibility and a wide range of scenarios due to macroeconomic uncertainties. Bechtle expects a challenging first half of 2025, but it remains committed to investing in future growth through IT platforms and M&A activities. Analysts estimate next year's revenue growth at 6.1%, suggesting cautious optimism about Bechtle's ability to navigate the current environment and capitalize on structural IT market opportunities.

Valuation Insights

Bechtle's ability to balance near-term challenges with long-term strategic investments will be critical in determining its performance in 2025 and beyond. As the IT market remains structurally attractive, the company's focus on cloud services, M&A, and operational efficiency positions it to navigate current headwinds and emerge stronger in the long term.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.66%)

6. Segments

Information Technology System House & Managed Services

Expected Growth: 5%

Bechtle AG's Information Technology System House & Managed Services segment growth is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity solutions. The company's strong partnerships with leading IT vendors, its comprehensive service portfolio, and strategic acquisitions also contribute to its growth. Additionally, the rising need for IT outsourcing and managed services among SMEs and large enterprises fuels the segment's expansion.

Information Technology E-commerce

Expected Growth: 7%

Bechtle AG's 7% growth in Information Technology E-commerce is driven by increasing demand for digital transformation, cloud computing, and cybersecurity solutions. Additionally, the company's strong e-commerce platform, strategic partnerships, and expanding product portfolio contribute to its growth. Furthermore, the rising need for remote work and online shopping during the pandemic has accelerated the adoption of e-commerce solutions, benefiting Bechtle AG's business.

7. Detailed Products

IT Infrastructure

Bechtle AG provides a wide range of IT infrastructure solutions, including servers, storage systems, and network components from leading manufacturers.

Client Systems

Bechtle AG offers a broad portfolio of client systems, including desktops, laptops, tablets, and smartphones from leading manufacturers.

Software

Bechtle AG offers a wide range of software solutions, including operating systems, productivity software, and security software from leading manufacturers.

IT Services

Bechtle AG offers a range of IT services, including consulting, implementation, and support services, to help customers optimize their IT infrastructure and operations.

Cloud Services

Bechtle AG offers a range of cloud services, including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) solutions from leading cloud providers.

Cybersecurity

Bechtle AG offers a range of cybersecurity solutions, including security consulting, penetration testing, and security software from leading manufacturers.

8. Bechtle AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Bechtle AG operates in the IT industry, where substitutes are available, but the company's strong brand reputation and customer loyalty mitigate the threat.

Bargaining Power Of Customers

Bechtle AG's customers are largely businesses and governments, which have limited bargaining power due to the company's strong market position and customized solutions.

Bargaining Power Of Suppliers

Bechtle AG relies on a diverse supplier base, which reduces the bargaining power of individual suppliers, but the company still faces some pressure from large suppliers.

Threat Of New Entrants

The IT industry has high barriers to entry, including significant capital requirements and the need for specialized expertise, which limits the threat of new entrants.

Intensity Of Rivalry

The IT industry is highly competitive, with many established players, which leads to intense rivalry and pressure on prices and margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.54%
Debt Cost 3.95%
Equity Weight 74.46%
Equity Cost 8.36%
WACC 7.24%
Leverage 34.30%

11. Quality Control: Bechtle AG passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Sopra Steria

A-Score: 5.2/10

Value: 8.3

Growth: 5.7

Quality: 5.0

Yield: 4.4

Momentum: 2.5

Volatility: 5.3

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Softcat

A-Score: 5.2/10

Value: 2.0

Growth: 5.8

Quality: 8.0

Yield: 3.1

Momentum: 5.0

Volatility: 7.0

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Reply

A-Score: 5.0/10

Value: 3.4

Growth: 8.0

Quality: 6.9

Yield: 1.2

Momentum: 3.0

Volatility: 7.3

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Bechtle

A-Score: 4.8/10

Value: 5.3

Growth: 6.6

Quality: 4.9

Yield: 3.1

Momentum: 5.5

Volatility: 3.7

1-Year Total Return ->

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TietoEVRY

A-Score: 4.8/10

Value: 6.8

Growth: 1.9

Quality: 1.8

Yield: 9.4

Momentum: 3.0

Volatility: 6.0

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Lagercrantz Group

A-Score: 4.4/10

Value: 0.7

Growth: 8.3

Quality: 6.2

Yield: 1.2

Momentum: 5.5

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.32$

Current Price

43.32$

Potential

-0.00%

Expected Cash-Flows