Strong order intake // Significant sales growth in the CORE segment // Management board confirms guidance for 2023/24 despite challenges

Unaudited results:

• Sales increase organically by 4% to EUR 378.8 million (Oct 2022 – Jun 2023: EUR 363.8 million); recurring revenues increase by 6%; share of recurring revenues increases to 56% (Oct 2022 – Jun 2023: 55%)
• Licence revenues (incl. commission) well above the prior-year period
• »Land and Expand« strategy leads to high order intake in the CORE segment; strong focus on SAP conversions (migrations)
• EBIT before M&A effects (non-IFRS) grows by 81% to EUR 20.7 million; EBIT margin before M&A effects (non-IFRS) increases to 5.5% (Oct 2022 – Jun 2023: 3.1%)
• Internal transformation programme to secure future business requirements proceeds according to plan
• SAP Quality Awards for customer projects in 3 out of 4 categories
• 2023/24 outlook confirmed

Filderstadt, 5 August 2024 – All for One Group SE, a leading international IT, consulting and service provider focusing on SAP solutions and services, published its preliminary unaudited results for the period from 1 October 2023 to 30 June 2024 today.

All for One generated sales of EUR 378.8 million in the first nine months of 2023/24, an increase of 4% compared to the prior-year level. Against the backdrop of an uncertain geopolitical situation and the current economic challenges in Central Europe, there continue to be significant fluctuations in contract signings and delays in project starts.

However, the robust and still strong order situation makes us very confident, as the strong order intake in the 3rd quarter suggests that a good 4th quarter is expected. With the introduction of »RISE with SAP« and »GROW with SAP«, the focus is on the transformation to an AI-supported cloud ERP solution that is managed and optimised by SAP. This innovative platform enables customers to transform their business processes, drive continuous innovation, and utilise the agility of the cloud. The market's focus on SAP ERP transformation was further strengthened by SAP’s announcement last year. The end of maintenance and the lack of delivery of innovations in the on-premise environment will continue to drive companies to move to the cloud.

EBIT before M&A effects (non-IFRS) amounted to EUR 20.7 million with a margin of 5.5%. Recurring revenues, which are easier to budget, increased by 6% in the first nine months and already account for 56% of total sales.

In Q3 2023/24, sales rose only slightly by 2% to EUR 122.3 million due to the aforementioned effects, while EBIT before M&A effects (non-IFRS) rose to plus EUR 3.0 million (Apr 2023 – Jun 2023: minus EUR 1.9 million). Adjusted for the one-off restructuring expenses in the prior-year period, EBIT before M&A effects (non-IFRS) decreased by EUR 2.1 million in Q3 2023/24.

With a good order situation and stable capacity utilisation, sales in the CORE segment in the 9-month period 2023/24 increased by a pleasing 5% to EUR 334.8 million (Oct 2022 – Jun 2023: EUR 319.2 million), and EBIT before M&A effects (non-IFRS) also more than doubled to EUR 16.4 million.

In view of the good pipeline (existing and new customers), which makes us confident in the CORE segment, we also see the wave in the »RISE and GROW with SAP« segment continuing to grow. We are delighted with All for One's pole position as a leading industry and cloud specialist«, said All for One Co-CEO Michael Zitz, commenting on the quarterly figures. »It's great that we won three out of four categories at this year's SAP Quality Awards for outstanding projects, especially in our core industries. The fact that we scored points with customer projects in the categories Large Business Transformation Projects and SAP S/4HANA Cloud confirms our focus on upper midmarket and cloud business.«

»Land and Expand« strategy is promising

As part of the increasing »Land and Expand« strategy, the focus of customers is currently on the urgently needed conversion of the core system ERP to SAP S/4HANA and the move to the cloud. Investments in end-to-end LOB solutions in the areas of customer experience or employee experience are being made downstream. However, more and more customers are opting for an integrated, AI-supported solution approach based on SAP, in which we see great potential for the specialist solutions in the areas of human resources, marketing & sales and finance in the coming years.

Michael Zitz, Co-CEO of All for One: »The intensified »Land and Expand« strategy is currently leading to a strong order intake in the CORE segment. Our customers are now reorganising their core systems and will then increasingly tackle the specialist solutions. Our positioning fits.«

The current capacity utilisation of the lines of business solutions (LOB segment) in the areas of employee experience and business analytics was stable, but generally restrained. The customer experience area, which is well below plan, reflects SAP's current pricing and version policy. Price increases, new product developments and fundamental architecture revisions have led companies to take a wait-and-see approach. Sales decreased by 4% to EUR 56.2 million (Oct 2022 – Jun 2023: EUR 58.7 million). However, at EUR 4.3 million (Oct 2022 – Jun 2023: EUR 5.0 million), EBIT before M&A effects (non-IFRS) was still able to achieve a margin of 7.6%, although this is still below potential.

Transformation programme on track

The internal transformation programme to ensure future business requirements is proceeding according to plan. »The technology shift to the cloud, but also our increased focus on the upper midmarket segment, require different skills and advanced qualifications. For example, we are investing heavily in retraining and training measures such as cloud certifications, process know-how or language courses – also in the regional delivery centers. But this takes time, so we currently have to buy in additional external resources to complete projects«, explains Ursula Porth, CHRO of All for One. »Proper change management requires effort, which we are putting in accordingly. Be it for the structural and procedural reorganisation or for the qualification of our employees, which is currently also taking place in our Regional Delivery Centers in Egypt and Turkey. Here, too, we are on track with our transformation programme, but it is very time-consuming due to our high demands and standards«, Ursula Porth continues.

Recurring revenues amounted to EUR 210.7 million (up 6%). In particular, the trend towards the cloud is visible in Cloud Services and Support revenues (up 12% to EUR 105.6 million), while Software Support increased only slightly to EUR 91.0 million (up 2%). Licence revenues (incl. commission) in the first nine months of 2023/24 were slightly above our expectations at EUR 23.4 million (up 34%) and mainly reflect the increasing demand from new and existing customers for cloud-based SAP S/4HANA solutions (RISE).

EBIT before M&A effects (non-IFRS) for the Group rose significantly by 81% auf EUR 20.7 million; with a margin of 5.5% in the first nine months of 2023/24 (Oct 2022 – Jun 2023: 3.1%). EBIT before M&A effects (non-IFRS) adjusted for one-off restructuring expenses increased by 13% in the first nine months of 2023/24 compared to the prior year. EBIT amounted to EUR 16.4 million; an increase of 65%. The result for the period grew by 51% to EUR 10.4 million and earnings per share by 54% to EUR 2.09.

The equity ratio as of 30 June 2024 increased to 33% (30 Sep 2023: 29%). At 2,793, the number of employees as of 30 June 2024 was slightly below the prior-year level (30 Jun 2023: 2,853).

Guidance 2023/24 confirmed

The management board is holding firm to its guidance for financial year 2023/24. According to CFO Stefan Land: »We’ve done our homework and have extensively adjusted our margins and efficiency – by driving the focused expansion of our Regional Delivery Centers in Poland, Egypt and Turkey, for example. In view of the promising order inflow, the strong pipeline and the upcoming projects, we should have a good few months ahead of us«.

Given its outstanding position in the SAP environment and the optimisations and improvements that were put in place last year, the management board continues to expect the Group to reap above-average benefits from a growing market for IT consulting and services. Which should translate into further sales growth and greater profitability. Land continues: »More and more customers are opting for »RISE with SAP« for a smooth and attractive transition to the cloud. In contrast to previous licence projects, where recurring maintenance revenue was invoiced from the conclusion of the contract, there are delays here due to the model. SAP's one-off revenue from RISE is due at closing; However, implementation, consulting services and recurring revenues do not start until a few months after the contract has been signed – with a corresponding impact on sales revenues.«

The incoming orders in Q3 and the strong pipeline (RISE and GROW) lead the mangement board to expect a strong 4th quarter in the CORE segment. The LOB segment is expected to continue its stable development.

At the same time, the management board has implemented measures to reduce costs and increase efficiency. As things stand at present, and based on an increased order intake in recent months as well as the excellent position in the SAP environment in the transition of SMEs to the cloud, sales are expected to be between EUR 505 million and EUR 525 million in financial year 2023/24 (2022/23: EUR 488 million). EBIT before M&A effects (non-IFRS) is predicted to be in a range between EUR 32 million and EUR 36 million (2022/23: EUR 17.7 million).

The board also reaffirmed its mid-term outlook of robust organic growth in the mid-single-digit percentage range and a margin of between 7% and 8% for EBIT before M&A effects (non-IFRS) up to financial year 2024/25.

All for One Group SE will be publishing its full quarterly statement for the 9-month period 2023/24 on 8 August 2024.

About All for One Group SE

All for One Group is an international IT, consulting and service provider with a strong SAP focus. Determined to translate technology into a clear business advantage, the Group specialises in specific sectors of industry, accompanying and supporting the sustainable transformation of its more than 3,500 midmarket customers in Germany, Austria, Poland and Switzerland on their journey to the cloud. Focus is on SAP S/4HANA, which forms the digital core for the industry-specific processes throughout a business. All for One Group is the leading SAP partner in Central and Eastern Europe, both for transformations to SAP S/4HANA using its innovative CONVERSION/4 model, and for SAP cloud business.

In financial year 2022/23, All for One Group SE generated sales of EUR 488 million with its team of almost 3,000 employees. The Group is based in Filderstadt near Stuttgart, in Germany, and is listed in the Prime Standard on the Frankfurt Stock Exchange.