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SME reluctance to spend hits Bechtle Q3 numbers
Channel player updates the market with a sober assessment of the consequences of trading in a surprisingly weak market
German channel powerhouse Bechtle has indicated tough market conditions have caused its third quarter to fall short of expectations.
The channel player, which has recently been actively involved with M&A to bolster its UK foothold, revealed that according to preliminary figures, earnings before taxes are expected to be “considerably below those of the previous year and also under Bechtle’s own market expectations”.
The firm explained that the ongoing reluctance of customers, particularly small and medium-sized enterprises (SMEs), to invest in technology was the primary cause of the problems, with Germany and France most affected by the challenges.
There were also some worrying signs that the usual business pattern was disrupted, and that also negatively impacted its third quarter. “As in Q2, the usually critical end-of-quarter period was once again surprisingly weak,” the firm stated.
In Q3 last year, Bechtle was able to land a significant software project that directly helped buoy revenues and earnings. The lack of something similar this time around also made life more difficult.
In an announcement to investors, the firm shared details of Q3, preparing the market ahead of full figures coming out towards the end of next month.
Business volume, which came in at €1,890m, decreased slightly, down by 1% year-on-year. Revenue climbed approximately 2% to €1,510m, with EBT dropping back to €78m after hitting €93.9m in the previous year.
Adjusted forecast
The result of all of those factors combining meant the executive board warned it no longer expected to reach the adjusted forecast it made back in July.
“While the executive board still expects to see an improvement in business development in the fourth quarter of 2024, its impact cannot be forecast with any accuracy due to the continuing chronic market uncertainties at this time,” the firm stated.
As a result, the channel player said it would not be sharing forecasts about the prospects for the last few weeks of 2024.
Bechtle hit the headlines earlier this month for making two acquisitions in the UK to extend its market reach, picking up both DriveWorks and Qolcom.
Those couple of deals come in the wake of other moves the firm has made to widen its reach, including buying London-based Tangible Benefit last March, which followed the decision four months earlier to buy ACS Systems as the firm continued to grow its UK business.
Targeted acquisitions
Elsewhere, M&A activity across the channel continued, with the move by global solutions and services player Syntax Systems for Argon Supply Chain Solutions underlining the ongoing trend for targeted acquisitions.
Argon, an SAP gold partner, specialises in warehouse management and supply chain optimisation, and that expertise will be shared with Syntax’s UK operation.
Syntax has been following an acquisition strategy of picking targets that operate in industry-specific areas, which should resonate with channel partners that also participate in M&A to bolster their vertical market coverage.
“By welcoming the Argon team to the growing Syntax family, we are expanding our capabilities and infusing a critical component within our core industry verticals,” said Christian Primeau, Global CEO of Syntax. Together, we are growing our services and reach to better serve our respective customers with full implementation lifecycle support for logistics execution.”
Argon also has a UK operation, and its co-founders, Peter Kerr and David Webb, said the deal would be a positive for the business.
“As part of Syntax, Argon will have additional resources to grow our reach into new markets and industry verticals,” they said. “Together, we are in a better position to further our mission of delivering operational performance improvements to a growing international customer base.”
