COVID takes toll on German reseller duo
Bechtle and Cancom's numbers knocked by pandemic
German reseller powerhouses Bechtle and Cancom have both revealed financial figures for Q2 - a three-month period of extreme pressure for European businesses as COVID-19 took hold.
From April to June, Bechtle's revenue increased by 3.9 per cent year on year to €1.3bn, while operating income (EBIT) grew by 4.3 per cent to €59.5m. EBIT margin remained unchanged at 4.4 per cent.
Bechtle's share price fell by around four per cent on Wednesday as the results were published.
Its core business in Germany, Austria and Switzerland posted organic growth of 2.4 per cent during the quarter.
The Neckarsulm-based reseller's System House and Managed Services business enjoyed 9.7 per cent revenue growth to €893.9m. This includes a 6.1 per cent jump for its domestic German operations and a 33.1 per cent increase in Austria and Switzerland thanks to strong demand from public sector customers.
But while its core business grew, Bechtle's IT e-commerce division endured a more challenging quarter, with revenues down by 6.6 per cent to €416.6m and EBIT falling by 15 per cent to €19.4m.
Bechtle claims that prolonged lockdown measures enforced across its international business to contain the spread of COVID-19 had a severe impact on its Q2 figures.
The reseller giant confirmed its target of reaching five per cent revenue growth for full-year 2020, working on the assumption that conditions will continue to improve in the second half of the year.
"The fact that we were able to continue growing during a quarter when the economy as a whole shrank by more than 10 per cent is a major success," said Bechtle CEO Thomas Olemotz in a statement.
"This positive development not only highlights the major importance of IT in general, but also for the competitiveness of Bechtle's business model. In difficult times in particular, customers value our high level of competence, our broad portfolio, our financial solidity and our reliability."
Munich competitor Cancom's results show a much more devastating impact from COVID-19 than its Neckarsulm-based peer.
For the same three-month period, Cancom's revenues fell by 8.6 per cent to €372m. Its EBIT spiralled by 67 per cent to just €5.29m, while EBITDA sank by 29.5 per cent to €20.1m.
Cancom's shares have fallen by around six per cent so far today after the results were published on this morning.
The reseller's core IT Solutions segment's revenues declined by 14.3 per cent to €290.9m, while EBIT plummeted by 51.7 per cent.
Meanwhile its Cloud Solutions segment logged 20.1 per cent revenue growth for the quarter to €81.1m.
Despite the bruising Q2 results, Cancom's CEO Rudolf Hotter takes solace in a solid H1, thanks to its performance in Q1 which saw revenue grow by 27.3.
"We are very satisfied with revenue growth of 8.2 percent in this economic environment, especially in comparison with the high figures of the prior year. I would like to thank our customers, of course, but above all our employees for making this possible in these times. Even during the peak phase of the corona measures, we were fully operational and, thanks to our AHP platform, at times had a homework rate of over 90 per cent," he said.
Cancom says it still has a "good chance" of meeting its existing 2020 financial forecasts.