6-Month Results 2022/23

Unaudited results:

• Sales: EUR 243.4 million (up 6% year on year); adjusted for non-recurring licence revenues up 10%; Share of recurring revenues increases to 54%
• Strong growth in cloud business in 2nd quarter (up 17%)
• EBIT before M&A effects (non-IFRS) down 25% to EUR 13.3 million (margin: 5.4%), EBIT up 3% to EUR 13.4 million (margin: 5.5%)

Outlook:

• Macroeconomic environment and strived increase in profitability require further streamlining of cost structure
• Expansion of the globally delivering service organisation to be accelerated in the process
• One-off negative impact on earnings in upper single-digit million range in financial year 2022/23
• Forecast for EBIT before M&A effects (non-IFRS) lowered to between EUR 17.5 million and EUR 21.5 million (previously: EUR 27.5 million to EUR 30.5 million)
• Medium-term outlook: Target margin for EBIT before M&A effects (non-IFRS) of 7% to 8% expected to be achieved in financial year 2024/25

Filderstadt, 15 May 2023 – All for One Group SE, leading consulting and IT group, published its unaudited results for the period from 1 October 2022 to 31 March 2023 today.

In a challenging market environment characterised by uncertainty, inflation and waves of illness, All for One Group SE was able to increase its sales by 6% to EUR 243.4 million. Adjusted for the effect of non-recurring licencing revenues, this rose by 10%. Even though the 1st quarter 2022/23 got off to a slightly weaker start, the 2nd quarter 2022/23 achieved a double-digit sales growth of 11%. Cloud services and support even recorded a plus of 17% compared to the prior year. In the CORE segment (ERP and collaboration solutions) capacity utilisation was less than planned due to a high level of sick leave and postponements in service-oriented divisions. The LOB segment (lines of business solutions) is performing well.

At EUR 130.3 million (plus 10%), recurring revenues account for 54% (Oct 2021 – Mar 2022: 51%) of total sales. While cloud services and support performed well (plus 12% to EUR 61.6 million), software support increased only slightly to EUR 59.3 million. The future-oriented cloud business is continuously evolving. As a result, licence revenues decreased, as expected, to EUR 12.8 million in the 6-month period 2022/23, a decline of 38% compared to the unusually strong prior-year period (where business was catching up after the effects of the pandemic in 2020). The fact that sales of the Group’s customised technology-based service model »CONVERSION/4« virtually doubled to EUR 9.3 million is testament to the continued growth in demand for transformation projects to SAP S/4HANA.

EBIT before M&A effects (non-IFRS) decreased to EUR 13.3 million (minus 25%), while EBIT increased by 3% to EUR 13.4 million. This includes non-recurring income of EUR 3.2 million from the early acquisition of the outstanding 49% stake in the Polish subsidiary. The result for the period increased by 11% to EUR 9.6 million, while earnings per share increased to EUR 1.91 (plus 11%).

The equity ratio as of 31 March 2023 was 30% (30 Sep 2022: 29%). The headcount has increased substantially year on year to 2,820 as of 31 March 2023 (31 Mar 2022: 2,557).

The management board resolves to restructure the service-oriented divisions in the CORE segment and to accelerate the expansion of the globally delivering service organisation

After the changes in the LOB segment were completed in the past financial year, the management board is implementing a restructuring programme in the service-oriented divisions of the CORE segment to conclude the strategy offensive 2022. Costs are to be reduced considerably and therefore profitability should increase significantly from financial year 2023/24. At the same time, the expansion of the globally delivering service organisation is to be accelerated considerably. In this way, the All for One Group will create the foundation for providing its increasingly international customers from the upper midmarket with fully comprehensive and cost-optimised support.

Co-CEO Lars Landwehrkamp on the planned measures: »Like many other tech companies, we must also continue to streamline our cost structure under the current circumstances. We also have our sights set on a significant increase in profitability. We see the greatest leverage in the accelerated expansion of our global service organisation. This requires structural adjustments in the service-oriented divisions in the CORE segment. An increasingly global orientation also has the effect of being able to integrate global hyperscaler offerings to a greater extent.«

»The necessary adjustments are part of our consistent concentration on the future-oriented cloud business as well as the increasing focus on the upper midmarket. In line with this, we are also consistently pursuing our nearshore strategy and will thus expand our regional delivery centers in Poland, Egypt and Turkey into a global service organisation«, according to Co-CEO Michael Zitz.

Adjustment of forecast for financial year 2022/23

As a result of the restructuring programme in the CORE segment, during which a higher double-digit number of full-time positions are expected to be cut back in service-oriented divisions, one-off expenses in the upper single-digit million range are expected. Due to the one-off expenses, the management board is adjusting the forecast for EBIT before M&A effects (non-IFRS) for financial year 2022/23 accordingly.

The previous forecast predicted EBIT before M&A effects (non-IFRS) between EUR 27.5 million and EUR 30.5 million (2021/22: EUR 27.3 million). The new forecast is expected to be between EUR 17.5 million and EUR 21.5 million. However, the expectation for sales revenues for financial year 2022/23 in a range between EUR 470 million and EUR 500 million (2021/22: EUR 452.7 million) is confirmed.

The medium-term outlook, with robust organic growth in the mid-single-digit percentage range, is reaffirmed. The target margin for EBIT before M&A effects (non-IFRS) of 7% to 8% originally communicated for financial year 2025/26 is expected to already be achieved in financial year 2024/25. Renewed economic setbacks caused by geopolitical changes cannot, however, be entirely ruled out and currently pose the greatest risk to achieving this guidance.

All for One Group SE will be publishing its full half-year financial report 2022/23 as scheduled on 15 May 2023.