Bechtle is set to enjoy another "record" year of growth for its full-year 2019. That's despite some cautions expressed by CEO Thomas Olemotz (pictured) that a slowdown in the economy could hinder growth for the German reseller for full-year 2019.
We break down the key information from Bechtle's Q3 results.
Bechtle sustains double-digit revenue growth
Revenues ballooned by 21.6 per cent in the three months ending 31 September 2019 to €1.28bn, while earnings before interest and taxes shot up by 25.6 per cent to €58.36m.
Bechtle's revenue and profit growth has slowed on a quarter-on-quarter basis - the firm recorded 30 per cent revenue and profit growth in its Q2, which came as a welcome surprise to its senior leadership team.
But from a year-on-year perspective, Bechtle's recent Q3 is the best it has seen for the last nine years - since 2010 when Q3 revenues shot up by 33.1 per cent. Its 26 per cent growth this Q3 was higher than Q3 last year, when it logged 19.7 per cent growth. In Q3 of 2016, its revenue growth was significantly lower at 6.4 per cent.
At the end of 2018, Bechtle publicly announced that it is targeting €10bn in revenues by 2030. This would mean it would have to add just shy of €500m to its top line each year until then.
But the firm has already far exceeded that figure so far this year. A strong Q1, Q2 and now Q3 have already added €807.14m to its top line over the course of the last nine months alone, and it hasn't even closed out its year yet.
Hypothetically, if Bechtle manages to match its Q4 growth rate of last year, when it grew revenues by 26 per cent, then it will be adding another €351.75m to its revenues this coming Q4, meaning revenues will smash the €5bn mark, coming in at €5.48bn.
Overseas operations growing faster than business in Germany
While Bechtle's domestic operations recorded 13.7 per cent revenue growth in Q3 to €1.28bn, its overseas business saw a phenomenal 38 per cent revenue increase to €471.641m.
Its overseas business has grown by 49.8 per cent in the first nine months of the year.
The addition of €420m-revenue French reseller Inmac Wstore, which Bechtle acquired last year, surely had a positive impact on Bechtle's overseas business.
But the firm has also been aggressively ramping up its operations in neighbouring Switzerland this year. Earlier this month, it made the move to consolidate its disparate Swiss business units - Bechtle Steffen Schweiz, Bechtle Steffen IT-Services and Comsoft direct AG - under the dominant Bechtle Switzerland AG brand.
The move followed a concentrated effort to ramp up its Swiss business through M&A over the last few years, most recently through its acquisition of Microsoft Messaging partner Algacom.
E-commerce outgrowing core IT resale and managed services business
In Q3, Bechtle's core IT system house and managed services business grew revenues by 17.3 per cent to €837.07m, while its e-commerce arm saw a staggering 38 per cent growth to €439.24m.
The burgeoning growth of its e-commerce business is certainly linked to Bechtle's growth overseas - the firm's UK business has been performing very well, with the reseller opening a new office in Manchester recently, while its French presence has been substantially bolstered through the Inmac Wstore acquisition.
Its e-commerce arm, which is based on internet and telesales through the Bechtle Direct and ARP brands, is now half as large as its more traditional resale business which runs from systems houses across the DACH region.
As Bechtle continues to expand internationally, and e-commerce continues to outgrow its core business, could we see e-commerce becoming its primary route to market in the not-so-distant future?
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