adesso SE continues to grow strongly in Q1 2023 and increases sales by 32% to EUR 276.2 million / Sick leave and growth-related delays in capacity utilisation dampen profitability despite good order situation

• Number of employees (full-time equivalents) increases by 36 % to 8,513 (previous year: 6,270), despite skilled labour shortage.
• Continued sick leave and lower capacity utilisation due to growth combined with higher personnel costs to result in a 36 % lower EBITDA of EUR 17.9 million
• Full-year forecast for turnover and EBITDA confirmed

With the quarterly statement published today, adesso SE confirms its previously published preliminary figures. The strong growth course was continued in the 1st quarter of 2023 with a sales increase of 32 % to a new quarterly high of EUR 276.2 million (previous year: EUR 209.8 million). Of this, around 29 percentage points were achieved organically and 3 percentage points inorganically. In order to secure additional potential contracts and in view of a highly competitive market for the acquisition of additional talent, recruiting was driven forward. In doing so, positive impulses from employer attractiveness could be used. In March, for example, adesso was once again named "Germany's Best Employer 2023" across all industries by the Great Place to Work® Institute. With a record order backlog and a continuing high demand for adesso’s services, the number of employees converted to full-time equivalents (FTE) was increased by 2,244 or 36 % to 8,513 as of the reporting date compared to the previous year. The average number of employees increased even more strongly by 38 % in the first three months. The growth in turnover was achieved despite below-average project utilisation and an above-average sick leave rate. The expansion of the workforce as well as price increases in the average daily rates achieved contributed to this. Compared to the first quarter of the previous year, which also benefited from higher licence sales and other operating income, the operating result EBITDA was 36 % lower at EUR 17.9 million (previous year: EUR 27.9 million). The main driver is the 42 % increase in personnel expenses to EUR 192.4 million (previous year: EUR 135.2 million), which is adesso's largest cost item.

Dynamic sales growth in the double-digit percentage range was achieved in almost all core industries served by adesso. Only in the "Automotive" industry did the percentage increase remain in single figures. In absolute terms, the "Public Administration" and "Manufacturing Industry" sectors were able to grow particularly strongly with increases of more than EUR 10 million. This corresponds to growth rates of 34 % and 68 % respectively. The established and high-turnover core sectors of insurance and banking achieved growth rates of 27 % and 14 % respectively. The turnover growth in the German market is 29 %. Outside Germany, revenues increased by 46 %.

In the first quarter, the development of the operating result (EBITDA) remained below expectations with a decline of 36 % to € 17.9 million (previous year: € 27.9 million). The increased turnover was almost offset by the disproportionately high increase in personnel expenses and the similarly high increase in material expenses, so that there were no significant positive effects on the EBITDA from the operating business. After a strongly above-average sick leave rate in the final quarter of 2022, the rate declined in the first quarter of 2023, but still remained at an above-average level. Inflation-related increases in personnel expenses, as the largest cost item, are an essential component of the development of results. Viewed in isolation, this effect is compensated for by price increases in the average daily rates if the capacity utilisation is appropriate. Personnel costs, converted to the average number of employees (full-time equivalents) in the reporting period, rose comparatively moderately by 3.4% compared to the first quarter of 2022. However, disproportionately low capacity utilisation due to the strong growth meant that the margin did not develop as expected in the first quarter.

The decline in EBITDA resulted in a preliminary result for the Group of EUR 2.0 million (previous year: EUR 12.5 million). Earnings per share are calculated at EUR 0.28 (previous year: EUR 1.92).

Despite the fact that earnings development in the first quarter was below expectations, the outlook for the rest of the financial year remains positive. The Executive Board anticipates a normalisation of the sickness rate and, in view of the measures initiated, an increase in capacity utilisation. The order backlog is at a record level. The second quarter of the year, with the lowest number of working days, will not yet make a significant contribution to improving margins. In comparison, the third quarter of the year holds six and the fourth quarter two more working days. Especially in the second half of the year, additional licensing revenues are expected with the in|sure Ecosphere. On this basis, the Executive Board has reaffirmed its original full-year 2023 guidance of over EUR 1 billion in revenue with EBITDA of EUR 100 to 110 million.

The full quarterly statement, as well as a table comparing key performance indicators over a period of several years, is available at www.adesso-group.de/en/ in the Investor Relations section.

adesso Group
With more than 8,500 employees and annual sales of EUR 900.3 million in 2022, adesso Group is one of the largest German IT service providers with outstanding growth opportunities. At its own locations in Germany, other locations in Europe and Turkey as well as at numerous local customers adesso offers consulting and software development services for optimising core business processes. adesso also offers ready-to-use software products for standard applications. The development of an own, industry-specific product portfolio opens up additional growth and earnings opportunities and is another key element of the adesso strategy. In 2023 and 2020, adesso was awarded the title of the best employer of its size in Germany across all industries. After having already achieved first place among IT employers in 2016, 2018 and 2020, adesso was ranked first again in 2023.