q.beyond plans average annual revenue growth of 7% to 8% through to 2025

• “Strategy 2025”: EBITDA margin of 7% to 8 % and positive consolidated income budgeted for 2025
• Sustainably positive free cash flow starting in 2024
• 2023 outlook: revenue growth to € 185 million to € 191 million, EBITDA of € 5 million to € 7 million, and free cash flow of up to € -8 million
• Further development in business model to increase earnings and financial strength

Cologne, 30 March 2023. With its “Strategy 2025,” q.beyond will boost its earnings and financial strength in the coming years while continuing to grow faster than the market. The new two-member Management Board with CEO Thies Rixen and CFO Nora Wolters has budgeted average revenue growth of 7% to 8% a year through to 2025. An EBITDA margin of 7% to 8% and positive consolidated net income are expected for 2025. The company intends to achieve a positive free cash flow for 2024. As announced on 3 March 2023, in the past financial year q.beyond generated revenues of € 173.0 million with an EBITDA margin of 3% (EBITDA: € 5.4 million) and free cash flow of € -9.7 million. Due to impairment losses of € 20.9 million, consolidated net income stood at € -33.1 million.

For the current financial year, q.beyond has budgeted revenues of € 185 million to € 191 million, EBITDA of € 5 million to € 7 million (EBITDA margin of 3% to 4%), and free cash flow of up to € -8 million. The EBITDA budget includes significantly higher electricity costs for data centre operations, increased personnel expenses due to inflation, and higher licence costs. Together, these factors result in charges on a scale of € 5 million to € 7 million.

Half of revenues to be generated with consulting and development services in future

To sustainably improve its earnings and financial strength, q.beyond will develop its business model further. Here, it will focus on expanding its consulting and development expertise. By 2025, q.beyond intends to generate around 50% of its revenues with its expertise in SAP, Microsoft and customised software solutions (“Custom Code”). These activities currently account for almost a third of revenues. The other half will be contributed by operations, with key focuses here on hybrid cloud solutions, combining resources at proprietary data centres with those at public cloud providers, and application operations.

Comments Thies Rixen, q.beyond’s new CEO: “We will market our consulting and development expertise more extensively than to date. This will also benefit our operations. As a general rule, applications are operated by the IT service provider who developed them. And providers who support companies in compiling new IT strategies are mostly the ones commissioned to implement them. Linking activities this way will make it possible to generate more profitable growth in the years ahead.” In future, q.beyond will market its services via two channels. It will supplement its existing direct sales with an indirect sales channel. Today, partners such as Telekom Deutschland and Vodafone already market a standardised portfolio of services and use q.beyond’s own highly scalable platform to this end.

Rapid integration of subsidiaries and expansion of nearshoring locations

The “One q.beyond” project already launched by the new Management Board will make a crucial contribution to achieving the target of making the company’s growth more profitable. This involves accelerating the integration of subsidiaries in the current financial year, eliminating duplicate functions in management and sales and establishing uniform lean structures. Moreover, the existing nearshoring locations in Latvia and Spain will be systematically expanded. “In 2023, we are laying the basis for significantly boosting our earnings and financial strength”, explains CFO Nora Wolters and adds: “At the same time, we aim to make our organisation more effective and thus build a sustainable competitive advantage.”


About q.beyond AG
q.beyond AG is the key to successful digitalisation. We help our customers find the best digital solutions for their business and then put them into practice. Our strong team of 1,100 people accompanies SME customers securely and reliably throughout their digital journey. We are experts in Cloud, SAP, Microsoft and software development. With locations throughout Germany, as well as in Latvia and in Spain, and its own certified data centres, q.beyond is one of Germany’s leading IT service providers.


Contact
q.beyond AG
Arne Thull
Head of Investor-Relations/Mergers & Acquisitions
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