MUNICH (dpa-AFX) - IT service provider Nagarro wants to become significantly more profitable in the coming years. The operating margin, measured by adjusted earnings before interest, taxes, depreciation and amortization (EBITDA margin), is to increase to 18 percent by 2026, as the company announced in Munich on Tuesday as part of the publication of its annual report for 2023. However, this assumes that economic growth in the company's largest markets will increase significantly by the beginning of 2025. Nagarro is targeting an operating margin of around 14 percent for the current year.

In 2023, the IT service provider also closed the year with a decline in profits. Despite higher revenues, net profit fell from more than 77 million euros in the previous year to 52.1 million euros. Nagarro had already published key figures on turnover and operating profit in February and March. These have now been confirmed.

Last year, Nagarro had felt the effects of weak capacity utilization. Despite a 6.5 percent increase in sales to 912 million euros, earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for special effects fell by 15 percent to 126.1 million euros. This resulted in an adjusted operating margin of 13.8%. In the previous year, it had been 17.3 percent.

In the current year, Nagarro's management is still aiming for sales in the region of one billion euros at constant exchange rates./mne/mis