Bechtle Chief Predicts Profit Rise on Public Spending (Update1)
March 12, 2010, 6:10 AM EST(Adds share price in fifth paragraph.)
By Claudia Rach
March 12 (Bloomberg) -- Bechtle AG, the German computer and software retailer whose customers include the Federal Army, predicted 2010 revenue and earnings before tax will rise, helped by the economic recovery and public-sector spending.
The first quarter has been “positive” so far, with orders in the first weeks above last year’s level, Chief Executive Officer Thomas Olemotz said in an interview from Neckarsulm, where the company is based. “I expect that at the end of the first quarter we will be clearly above last year and I hope we will also manage it in the second quarter.”
Bechtle sells hardware and software via the Internet and offers services to implement information technology, and integrate, maintain or outsource systems. In the first three quarters of 2009, the global economic slowdown eroded revenue, before the company returned to growth in the fourth quarter with record sales of 415.2 million euros ($570 million). The results were helped by increased public-sector business.
The company’s 2009 profit, to be published March 19, will “surprise” the market due to the “low” tax ratio of about 25 percent, Olemotz said. “Due to fiscal one-time effects, I expect last year’s adjusted net income to be above” the 29.97 million-euro average estimate of analysts surveyed by Bloomberg, he said.
Bechtle shares rose as much as 58 cents, or 2.7 percent, to 21.755 euros, and traded at 21.22 euros as of 11:53 a.m. in Frankfurt.
The company generated 21 percent of its sales from public authorities in 2009, an increase of more than 30 percent, because of the country’s stimulus packages, Olemotz said.
Dividend
“Spending from public authorities will also drive Bechtle’s growth in 2010” even without the government’s stimulus spending to boost the economy, Olemotz said. “Carried by the second half, I expect another successful year for Bechtle.”
On Jan. 28, Bechtle said 2009 earnings before taxes fell to 43.5 million euros from 61.5 million euros a year earlier, as sales declined 3.5 percent to 1.38 billion euros, according to preliminary figures.
Bechtle aims for a 5 percent margin for earnings before taxes, and plans to increase the margin this year above the 2009 level of 3.1 percent, Olemotz said. That compares with a 4.3 percent pretax margin in 2008 and 4.5 percent in the fourth quarter of 2009 as demand rose, the company has said.
Bechtle will maintain a stable dividend for shareholders, Olemotz said. Bloomberg’s estimate for a dividend of 60 cents a share “doesn’t make me sleepless,” he said, adding that the supervisory board hasn’t discussed any proposal yet.
--Editors: Robert Valpuesta, Simon Thiel.
To contact the reporter on this story: Claudia Rach in Berlin at crach1@bloomberg.net
To contact the editor responsible for this story: Vidya Root in Paris at vroot@bloomberg.net
