9-month results 2021/22

Unaudited results:

• Sales: EUR 338.9 million (up 21% year on year); recurring revenues increase by 20%
• CONVERSION/4 business almost tripled
• Project postponements and interruptions at short notice / Increased pandemic-related sick leave / Inflation driving costs
• EBIT: EUR 13.3 million (down 16% year on year); EBIT margin at 3.9% (prior year: 5.7%)
• EBIT before M&A effects (non-IFRS) increases by 7% to EUR 20.3 million; EBIT margin before M&A effects (non-IFRS) at 6.0%
• Acquisition of POET and its Egyptian subsidiary in May 2022
• »Champion« PUR Award for Managed Application Services and Microsoft 365 Services
• Successful placement of EUR 40 million in promissory note loans
• Due to significantly weaker 3rd quarter 2021/22 adjustment of EBIT guidance for 2021/22

Filderstadt, 28 July 2022 – All for One Group SE, leading consulting and IT group, published its unaudited results for the period from 1 October 2021 to 30 June 2022, the 3rd quarter 2021/22 and the adjusted forecast for 2021/22 today.

Sales in the first nine months of financial year 2021/22 rose by 21% to EUR 338.9 million while EBIT declined by 16% to EUR 13.3 million. In contrast, EBIT before M&A effects (non-IFRS) increased by 7% to EUR 20.3 million.

Tougher market environment in 3rd quarter 2021/22

Following a robust first half of the financial year 2021/22, All for One Group was adversely affected by several factors at once in the 3rd quarter 2021/22. Sales from April to June 2022 amounting to EUR 108.5 million (plus EUR 13.6 million), and EBIT of EUR 0.3 million (minus EUR 4.8 million), were below expectations compared with the prior-year quarter. Earnings were affected to a disproportionate degree by the negative impact on sales of a greater number of people off sick due to the pandemic, much lower licensing revenues, inflation-related price increases and the cost of acquiring POET GmbH (together with its Egyptian subsidiary). With the pandemic and supply chain bottlenecks persisting, and uncertainty still surrounding economic development, a greater number of projects were deferred and interrupted at short notice in both segments. The segments grew in terms of sales, CORE by 14% and LOB by 15%, but earnings development was significantly impacted by the aforementioned effects. Despite continued strong demand for transformation projects, EBIT in the CORE segment (ERP and collaboration solutions) in the 3rd quarter 2021/22 declined to minus EUR 0.1 million (minus EUR 4.8 million) compared to the prior-year quarter and in the LOB segment (line-of-business solutions) to plus EUR 0.5 million (minus EUR 0.1 million).

Group sales and earnings performance in the first nine months of 2021/22 – demand for digitalisation services remains strong and orders stable

The trend surrounding digitalisation, cloud transformation and the need for customers to migrate to SAP S/4HANA is persisting, although some customers are deferring making decisions in response to the overall economic circumstances. Orders and demand for our digitalisation services – especially in the CORE segment – remain stable. Sales of our customised technology-based service model (»CONVERSION/4«) in the first nine months 2021/22 virtually tripled to EUR 8.2 million (Oct 2020 – Jun 2021: EUR 2.9 million). Recurring revenues – a key indicator of future sales and cash flow growth potential – increased by 20% to EUR 179.2 million and accounted for an unchanged 53% of total sales.

The consolidation and integration of the companies acquired in the 1st quarter 2021/22 – All for One Poland, ASC Group and blue-zone GmbH – are progressing well. POET GmbH and its Egyptian subsidiary POET Egypt LLC. were acquired in May 2022, adding the expertise and performance capabilities of a further 110 experts to the customer experience (CX) business of All for One Group subsidiary B4B Solutions GmbH. Together with these acquisitions, sales grew by 21% in the first nine months of financial year 2021/22, organic sales growth was 7% year on year.

»Even if we need to adjust to the continuing consequences of the pandemic and project postponements and interruptions in the short term, we are convinced that our team remains capable of successfully delivering our portfolio of all-inclusive products and services aimed at enhancing the ability of our customers to compete in a digital world. Our customers value the comprehensive support we have been providing for many years, as well as our expertise, resulting in our recognition as »Champion« by the PUR Award for Managed Applications and Microsoft 365 Services for the third time running. In the past, we have demonstrated our ability to successfully integrate acquisitions several times over. We are increasing our focus on efficiency improvements and on quickly and completely integrating the purchased companies with the aim of raising our profitability again«, explains CFO Stefan Land.

EBITDA amounted to EUR 35.0 million (Oct 2020 – Jun 2021: EUR 31.9 million), while EBIT totalled EUR 13.3 million (minus 16%). The EBIT margin was 3.9% (Oct 2020 – Jun 2021: 5.7%). EBIT before M&A effects (non-IFRS) shows the »real« operating result adjusted for acquisition-related external expenses and income and acquisition-related amortisation, depreciation and impairment on intangible assets. Despite the unplanned charges we were able to increase this metric by 7% to EUR 20.3 million compared to the prior year. EBT totalled EUR 12.3 million (minus 18%), while earnings for the period amounted to EUR 8.7 million (minus 18%), and earnings per share to EUR 1.73 (minus 17%).

The equity ratio as of 30 June 2022 was 29% (30 Sep 2021: 35%). In addition to the solid structure of its balance sheet, the Group was able to secure attractive long-term financing on an increasingly uncertain capital market when it successfully placed EUR 40 million in promissory note loans in May 2022.

The headcount has increased substantially year on year to 2,675 employees (including the acquisitions) as of 30 June 2022 (30 Jun 2021: 1,956). The health index was 96.6% (prior year: 97.5%).

The war in Ukraine, the ongoing pandemic and the problems facing supply chains are increasingly impacting our customers. Added to which, we are having to deal with unplanned increases in costs in the wake of inflation. Preventive steps are being implemented and should already begin to take effect from the 4th quarter 2021/22 onwards.

Due to significantly weaker 3rd quarter 2021/22 adjustment of EBIT guidance for 2021/22

In this context, the management board decided to reduce its guidance for financial year 2021/22 with regard to the expected EBIT. According to previous estimates, EBIT in the range of EUR 24 million to EUR 26 million was expected. The management board has now reduced the EBIT forecast to a range of EUR 17 million to EUR 21 million (2020/21: EUR 20.6 million).

Reasons for the adjustment following a robust 1st half-year 2021/22 are the negative overall economic and pandemic-related influences in the 3rd quarter 2021/22 and the growing signs that our customers may well continue to defer project decisions in the next quarter. Earnings were affected to a disproportionate degree by the negative impact on sales of a greater number of people off sick because of the pandemic, much lower licensing revenues, inflation-related price increases and the cost of acquiring the POET group. The war in Ukraine, the ongoing pandemic and the problems facing supply chains are increasingly impacting our customers. Added to which, we are having to deal with unplanned significant increases in costs and the resulting pressure on margins. Preventive steps are being implemented and should already begin to take effect from the 4th quarter 2021/22 onwards. Notwithstanding the challenges, we expect the CORE segment to perform virtually as budgeted. It will, however, no longer be possible to make good the additional unplanned charges burdening the LOB segment before this financial year ends.

By contrast, the sales forecast in the range of EUR 440 million to EUR 460 million in financial year 2021/22 (2020/21: EUR 372.9 million) has been confirmed.

All for One Group SE will be publishing its full quarterly statement for the 9-month period 2021/22 as scheduled on 4 August 2022.