(New: Share price updated, statements chief.)

NECKARSULM (dpa-AFX) - IT service provider Bechtle expects business to pick up in the rest of the year after a less buoyant second quarter. In the months from April to June, the MDax group felt the weakness in PC demand, especially in its online electronics business, while IT projects continued to go well. Now, CEO Thomas Olemotz is assuming a better mood in the SME sector and is therefore expecting more opportunities again. For experts, Bechtle recorded surprisingly high profitability in the past quarter; at the beginning of the year, this had still suffered from stronger growth. The share price rose significantly on Friday.

At the top of the MDax, the stock rose by over six percent to 42.57 euros. This year, the share price has already gained more than a quarter in value - however, the stock had also come under heavy pressure in the previous year with the IT sector. In the fall of 2021, the share was still worth almost 70 euros. Analyst Knut Woller from Baader Bank spoke of a positive surprise with regard to the margin, which remained stable year-on-year. Expert Kathinka de Kuyper of UBS, however, referred to a somewhat weaker than expected sales growth from own resources.

Olemotz confirmed the financial forecast for the current year on Friday. Demand for digitization projects remains high, he said. "Of course, we at Bechtle also see the difficult economic conditions and the accompanying uncertainties," the manager said. At the same time, he said, the need for digital transformation in IT remains unchanged. "Therefore, there is no reason for us to change our optimistic outlook for the second half of the year and the full year 2023, despite the current tense mood."

In the second quarter, sales grew by 6.5 percent to 1.51 billion euros, which was lower than the nearly 12 percent growth in the first quarter of the year. In organic terms - i.e. adjusted for currency and acquisition effects - the increase in the second quarter fell to 2.4 percent.

In the business of setting up and managing IT systems and networks, revenue growth was not as strong as in the first quarter, but still showed double-digit percentage growth. In addition, the mostly high-margin businesses in the area gave a boost to the group's profitability, Olemotz said in a conference call. Online retailing of electronics, in fact, saw a drop in sales of almost five percent. The business is the smaller division at Bechtle.

Pre-tax earnings climbed 5.9 percent year-on-year to 93.8 million euros in the months April to June. The corresponding margin was stable at 6.2 percent. Compared with the first quarter of the year, this was an improvement of one percentage point. Olemotz said that costs had not increased compared to the previous quarter.

According to him, the company is currently taking a more cautious approach to staff expansion. In addition, Bechtle has in recent years bought in part at favorable prices for the incoming orders and is currently benefiting from stable high sales prices when reducing the order book. Below the line, Bechtle increased its net profit by 3.7 percent to 66 million euros compared to the same period last year.

Olemotz continues to target a significant increase in revenues for the year as a whole; at Bechtle, this means an increase of five to ten percent (PY: 6 billion euros). The fact that the order backlog fell to a good 1.4 billion euros at the end of the half-year, thus dropping below the revenue figure, does not worry Olemotz. In June and July, he said, the Group had already noticed a certain revival in order intake, which made him confident. This year, pre-tax profit is expected to develop in parallel with the revenue, and the pre-tax margin is thus expected to remain at around the previous year's level of 5.8 percent.

Bechtle mainly offers medium-sized companies and government agencies the installation and management of IT systems including hardware and software. In addition, the group operates an online trade in electronic parts./men/lew/mis