Bechtle AG (BECTY) (Q2 2026) Earnings Call Highlights: Record Order Intake and Raised Guidance ...

Negative Points

• Operating cash flow was under pressure in Q2 due to strong June sales, leading to higher inventories and contract assets, though management expects improvement by year-end.

• The company noted that more than 50% of its growth is driven by price effects rather than volume, which may not be sustainable if price increases moderate.

• Organic headcount declined by 1.4%, reflecting a cautious approach to recruitment, which could limit capacity to handle future demand.

• The EBT margin is expected to decline slightly for the full year due to investments in IT infrastructure.

• The non-public sector, particularly SMEs, showed weaker demand, with Q1 being 'rather hard' and a difficult situation persisting in the classical SME segment.

• The company acknowledged that the order backlog may not fully materialize into revenue due to potential cancellations or delays, as customers may place non-binding orders with multiple providers.

• Framework conditions remain challenging, with downward revisions to GDP growth forecasts for the EU and Germany, as well as IT market growth expectations.

• The guidance raise was described as 'conservative' due to high uncertainty, and the company could not guarantee that the upper end of the range would be achieved.

• Supply chain disruptions continue, particularly for storage and servers, which could delay project completions and invoicing.

• The company faces high comparative figures in Q4, which may make it difficult to maintain the same growth momentum.

Q & A Highlights

Q: Is the company's raised guidance for 5-10% revenue and EBT growth too conservative, especially given that more than 50% of growth is driven by price increases that are expected to continue? A: Christian Jehle (CFO) defended the guidance as appropriately cautious given the high level of uncertainty. He noted that while the order backlog is at a historic high, there is a lack of reference values for how it translates into actuals due to ongoing supply chain disturbances and longer delivery times. The company revises its guidance monthly, not quarterly, and remains confident in achieving its targets, but cannot guarantee that all backlogged orders will materialize within the fiscal year.

Q: Can you provide more detail on the strong incremental EBIT in the 'Other Europe' segment, specifically how much is from acquisitions, and what is the outlook for H2? A: A company representative explained that the growth in 'Other Europe' is a 50/50 split between organic growth and acquisitions. The acquired companies, particularly on the Iberian Peninsula, are developing positively and in line with the acquisition plan. While the margins in this segment are slightly lower than in Germany due to organizational maturity and ramp-up times, the positive contribution is expected to continue in H2 and improve further in 2027.

Q: Is the strong order intake and business performance driven by customers pulling forward demand due to hardware price increases, and will this negatively impact H2? How are customers changing their procurement behavior? A: A company representative stated that while there is uncertainty, they do not expect a decline in order intake. July has started positively, and Q3 is expected to see positive values. Customers are not reducing budgets but are reallocating spending based on price, sometimes considering vendors they previously didn't. The structural demand for IT infrastructure, driven by AI and edge computing, remains high, so the investment budget remains a potential market for Bechtle.

Q: Can you comment on the organic growth versus flat employee development, and what are the cost expectations for the rest of the year? A: Christian Jehle (CFO) stated that the company is keeping a close tab on costs and does not expect significant cost increases for the remainder of the year. Any increase in employee costs would be due to variable remuneration provisions if performance continues. They do not assume an organic increase in headcount for the rest of the year; any FTE growth will only come from acquisitions.

Q: Can you provide more details on the Q2 cash flow figures, which were under pressure, and what is the expected impact on Q3? A: A company representative explained that the cash flow pressure is due to deadline-related special effects, including increased project-bound inventories and contract assets, which do not carry depreciation risk as they are backed by specific projects. The company is actively and aggressively managing cash flow and capital, and despite the absolute increase, working capital relative to business volume has improved. They are optimistic that the situation will improve by the end of the year.

Q: How are customers reacting to hardware price increases, and are they adapting their budgets for 2027? A: A company representative noted that customers are reacting in two ways: some are putting projects on hold, while others are proceeding carefully. There is a risk that customers may place non-binding orders with multiple providers, which could be cancelled later. However, most customers do not have endless budget options but are not reducing investments either. They are reallocating their existing budgets according to prices, and the structural demand for IT infrastructure remains high.

Q: Regarding the public sector, is the non-public sector recovering, and do you expect a recovery in H2? A: Christian Jehle (CFO) acknowledged that Q1 was hard for the non-public sector, but Q2 saw better development in industrial customers. However, the classical SME segment, which accounts for almost 50% of business, remains difficult. The company is currently compensating for this with corporate business and public sector business. If the economic development shows slight improvement in H2, they will reassess the situation towards the end of the year.

Q: Can you break down the public sector business between federal and state levels, and do you see increased tender activity for 2027 indicating a stimulus program? A: A company representative stated that they see increased activity reflected in specific tenders and the fact that they started the year with an approved budget, which was not the case in the past two years. The business is broadly based across federal, state, and municipal authorities, with no singular dependencies. The past years have seen a constant increase in tenders, sometimes reaching billions, which presents both opportunities and risks.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .