Preliminary results for financial year 2022/23

Preliminary (unaudited) results and guidance:

• Sales: EUR 488,0 million (plus 8% year on year); share of recurring revenues increases to 55%
• CONVERSION/4 champion: Strong demand for S/4HANA migrations
• Cloud champion: SAP cloud business leader in Central and Eastern Europe
• Restructuring of the CORE segment successfully completed; non-recurring expenditure within budget frame at EUR 8.4 million
• EBIT before M&A effects (non-IFRS): EUR 17.7 million (2021/22: EUR 27.3 million); EBIT: EUR 14.9 million (2021/22: EUR 17.6 million)
• Further growth and improved profitability expected in financial year 2023/24; medium-term outlook confirmed

Filderstadt, 23 November 2023 – All for One Group SE, a leading consulting and IT group, published its preliminary and unaudited results for the period from 1 October 2022 to 30 September 2023 as well as its guidance for 2023/24 today. At the same time, the Group offered insight into its SAP-focused strategy that ranges from S/4HANA transformations using the All for One CONVERSION/4 solution to cloud-based solutions for lines of business (LOB) to ongoing consulting and adaptation to technological advancements. All of which builds on the outstanding competitive position that All for One Group occupies as a leading provider of SAP services in the DACH region and Poland, ranking first for both SAP conversions and SAP cloud business in the Central and Eastern European region. The Group aims to significantly increase profitability to match the growing sales. By completing its efforts to restructure the CORE segment (ERP and collaboration solutions) and the accelerated expansion of the globally operating service organisation, All for One Group created a solid foundation for further profitable growth in the year under review.

Marked rise in sales in financial year 2022/23 – Results in line with adjusted guidance

Based on the preliminary figures, All for One Group generated a significant increase in sales in financial year 2022/23 of 8% to EUR 488.0 million (2021/22: EUR 452.7 million). Adjusted for the decline in non-recurring licence revenues, sales grew by 9%. Recurring revenues, which are easier to budget, increased by 11% to EUR 266.3 million (2021/22: EUR 240.5 million) and accounted for 55% of total revenue (2021/22: 53%). Next-generation cloud business is steadily growing, gaining 14% year on year. At the same time, licence revenues decreased, as expected, to EUR 24.8 million (2021/22: EUR 30.2 million), a decline of 18% compared to the unusually strong prior-year period (where business was catching up after the effects of the pandemic in 2020). Sales generated from the CONVERSION/4 model posted a gratifying increase of 54% to EUR 18.6 million (2021/22: EUR 12.1 million).

Co-CEO Michael Zitz: »In financial year 2022/23, All for One witnessed a further increase in demand for SAP S/4HANA migration projects. Our customers are reaping the benefits both of a clear roadmap and sustainable business advantages that extend far beyond just the technical conversion, but also of the lessons we have learned over the course of the more than 70 S/4HANA transformations that we have so far performed using CONVERSION/4. We are increasingly supporting our customers after the actual transformation and, in doing so, generating recurring revenues. In this process, CONVERSION/4 acts as the booster for downstream projects – especially in the LOB segment – and services that enable us to retain customers over the long term.«

EBIT before M&A effects (non-IFRS) decreased to EUR 17.7 million (2021/22: EUR 27.3 million) due to the one-off special restructuring effect of EUR 8.4 million and was therefore within the revised guidance bandwidth of EUR 17.5 million to EUR 21.5 million. Adjusted for the one-off special restructuring expenses, EBIT before M&A effects (non-IFRS) would be EUR 26.2 million. EBIT decreased by 15% to EUR 14.9 million, which includes one-off profit contribution of EUR 3.2 million from the early acquisition of the outstanding 49% stake in the Polish subsidiary. The result for the period increased by 1% to EUR 11.2 million (2021/22: EUR 11.0 million) and earnings per share increased by 1% to EUR 2.23 (2021/22: EUR 2.20).

All segments contributed to the sales growth

Sales in the CORE segment rose by 6% to EUR 426.9 million (2021/22: EUR 401.9 million) while EBIT before M&A effects (non-IFRS) declined by 60% to EUR 9.2 million (2021/22: EUR 23.2 million) as a result of additional charges related to the restructuring (minus EUR 8.4 million), the ongoing migration towards cloud business – resulting in decreasing non-recurring revenues and margins from licence business – and countless cost effects caused by inflation in 2022/23. Sales in the lines of business solutions in the LOB segment increased significantly by 23% to EUR 79.5 million (2021/22: EUR 64.9 million). Significant revenue growth flanked by good margins was more than able to offset the additional expenditure caused by inflation. EBIT before M&A effects (non-IFRS) more than doubled to EUR 8.5 million in 2022/23 (2021/22: EUR 4.1 million).

The Group was able to further increase recurring revenues from cloud services and support (plus 14% to EUR 127.7 million) and from software support (plus 3% to EUR 120.0 million). At EUR 266.3 million (2021/22: EUR 240.5 million), the strategic performance metric of recurring revenues – a key indicator of future sales and cash flow growth potential – currently accounts for 55% (2021/22: 53%) of total revenues.

The equity ratio as of 30 September 2023 remains at 29% (30 Sep 2022: 29%). Cash flow from operating activities increased by EUR 12.2 million to EUR 40.2 million. In financial year 2022/23, cash and cash equivalents decreased following the purchase of the outstanding shares in Poland, the dividend payment and the acquisition of a financial investment. As of 30 September 2023, cash and cash equivalents totalled EUR 62.6 million (2021/22: EUR 77.5 million).

The headcount has increased substantially year on year to 2,858 as of 30 September 2023 (30 Sep 2022: 2.758). The health index decreased by 0.3 percentage points to 96.3% in 2022/23.

Restructuring phase completed – Profitable growth thanks to SAP S/4HANA transformations and sustainable follow-on business

The continuing demand for SAP S/4HANA transformations and cloud solutions is providing ideal conditions for the further growth of All for One Group. Digitalising business processes within companies and along the value and supply chains is a key core task for companies wanting to remain competitive in the future. SAP supplies the technology basis for core digital processes. Key target groups for consultancy services focusing on SAP and associated IT solutions and services include companies of a midmarket character with sales of up to about EUR 10 billion who operate in the core industries of relevance for All for One – series production/automotive, mechanical and plant engineering, life sciences, service providers and wholesalers.

Offerings focus on transforming these companies to SAP S/4HANA. With more than 70 CONVERSION/4 projects under its belt, All for One Group leads the market in this field thanks to its exclusive package of solutions for migrating to cloud-based S/4HANA offerings. In addition to implementing the software and migrating the existing data, other key areas of focus include the digitalisation of business processes together with the integration of applications outside the SAP universe. The Group aims to continue to support these companies beyond the completion of the multi-year transformation by providing services to further improve their SAP landscapes and to integrate new SAP applications emerging from innovation cycles.

»Following the successful restructuring of the CORE segment and the accelerated expansion of our globally operating service organisation, we plan to concentrate on implementing our growth strategy and generating higher margins as we move forward. We see the huge demand for end-to-end consultancy and supporting the implementation of the digital transformation and conversion to SAP S/4HANA. At the same time, we are noticing greater interest in the use of new technologies. We believe that translating these technologies into a specific business advantage is a core task that is key to our business operations«, Zitz continues.

Given the growing international activities and strong expansion of the Group, there is a need to align structures, transparency and agility. In order to achieve these objectives, All for One Group announced several additions to its top management in early November.

Guidance

In the financial year just ended, All for One Group put numerous measures in place aimed at optimisation and further improvement. Given the Group’s outstanding market position, further sales growth and greater profitability are therefore possible.

As things stand at present, and presuming a continued robust and steady stream of incoming orders and a stable and broad customer base, and based on the growth rates predicted for the IT services market, the management board of All for One Group expects sales to be between EUR 505 million and EUR 525 million in financial year 2023/24 (2022/23: EUR 488.0 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).

According to Stefan Land, All for One Group CFO: »We made very good progress with developing our business and organisational structures over the past financial year. In the new financial year, we not only want to continue growing, but also to demonstrate enhanced performance. Our pipeline is very full, investment in digitalisation and transformation will continue despite these challenging times and is becoming more important than ever before for a number of midmarket players.«

In light of the above, the management board is also confirming its medium-term outlook. All for One Group expects robust organic sales growth over the coming years in the mid-single-digit percentage range (depending partly on future inflation levels) that will be supplemented by inorganic growth in areas of the portfolio offering future promise. The EBIT margin before M&A effects (non-IFRS) is expected to reach a range of 7% to 8% as early as financial year 2024/25.

Renewed economic setbacks due to geopolitical uncertainty caused by the wars in Ukraine and the Middle East, high inflation and global supply chain difficulties cannot, however, be ruled out under any circumstances. They could result in lower demand and increased defaults and insolvencies among the customer base, and thus jeopardise our guidance.

All for One Group SE will be publishing its finalised consolidated financial statements for financial year 2022/23 and its sustainability report as scheduled on 18 December 2023 to coincide with the financial statements press conference.