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Dortmund, 31.03.2021

adesso continues strong growth in 2020 in spite of pandemic, increasing sales to EUR 523.4 million and EBITDA to EUR 60.4 million / Forecast of further growth in 2021

31.03.2021 / 07:31
The issuer is solely responsible for the content of this announcement.

/ Dividend proposal: increase to EUR 0.52 per share

adesso SE continued its strong growth in 2020 despite the pandemic, increasing its sales by 16 % to EUR 523.4 million. The vast majority of this growth, over 15 percentage points, was organic. Operating earnings (EBITDA) improved to an even greater extent, rising by 26 % to EUR 60.4 million. As a result, adesso surpassed the full-year sales forecast it raised in November and achieved EBITDA within the guidance corridor. Profitability, which is measured by the EBITDA margin, rose further to 11.5 % (previous year: 10.7 %). The IT Services segment in particular increased its contribution to business performance compared to the previous year thanks to solid capacity utilisation and additional working days, even though adesso's business - particularly in the second quarter - was impacted by the lockdown. All in all, the adesso business model and sector diversification proved to be resilient. Due to the positive business performance, the Executive Board proposes to increase the dividend per share with the approval of the Supervisory Board to EUR 0.52 (previous year: EUR 0.47), maintaining the distribution policy of past years. The Executive Board is planning for further growth in financial year 2021. The full-year forecast is for sales of over EUR 600 million and EBITDA exceeding EUR 72 million. The sale of subsidiary e-Spirit AG, which was only agreed on 19 March 2021, is not yet included in this forecast.

adesso's positive business performance in 2020 was achieved in difficult macroeconomic conditions in a sector environment of pandemic-related recession. Nevertheless, adesso managed to once again significantly surpass double market growth and generate a two-digit organic growth rate. The positive resilience effects associated with the coronavirus pandemic - such as additional digitalisation initiatives, savings effects and a customer base that was not affected as much by the pandemic as other areas of the economy - outweighed negative aspects such as intermittent weaknesses in capacity utilisation and the cancellation or postponement of projects. All of adesso's core industries were able to generate growth, with the exception of the Automotive core industry. Additional customer projects in the Health, Public Administration and Manufacturing Industry business areas made a significant contribution, recording year-on-year growth of over 30 %. Insurance generated a slight increase in sales, in spite of a decline in licence business with the in|sure Ecosphere product family compared to the exceptional previous-year figures.

What's more, strong group-wide employee growth of past years continued in 2020 and opened the door to additional sales. As at the reporting date, the number of employees (converted to full-time equivalents) increased year on year to 4,975 (+23 %).

The increasing internationalisation of business is reflected in the figures once again. While sales in Germany grew by 14 %, international revenue rose by 24 %. Switzerland, Austria, Spain and Turkey all performed particularly well in terms of sales. In Hungary and the Netherlands, the number of employees increased during the year due to acquisitions aimed at facilitating further growth.

The IT Solutions segment generated the highest licence sales in its history for the adesso product family in|sure Ecosphere in the previous year, and performed largely according to plan in 2020 with some weak areas due to caution among customers against the backdrop of the coronavirus pandemic and associated uncertainty. In spite of significant contracts concluded in the third quarter of 2020, transactions were postponed until 2021 in spite of the lowering of sales tax in the second half of 2020. This effect is reflected by the fall in licence sales compared to the previous year. The in|sure Ecosphere sales pipeline has therefore swelled further and initial contracts in 2021 give reason to be positive. Sales involving adesso's FirstSpirit content management system were not able to be increased due to the higher share of contractual models with distributed sales realisation. Additional investment was made in the reporting year in the in|sure and FirstSpirit core products, but licence income was lower than in the previous year. Both of these effects resulted in the IT Solutions segment not performing as well in 2020 as in the previous year.

As expected, the IT Services segment benefited from greater stability in terms of capacity utilisation compared to the previous year and four additional working days due to calendar effects. The parent company in Germany contributed disproportionately high sales growth of 18 %. At EUR 277.3 million, sales revenues in the second half of financial year 2020 were significantly higher than in the first half of the year (EUR 246.1 million).

With the exception of the subsidiaries in the Netherlands and Hungary - which were only established in 2019 - and the subsidiary in Spain, all other international subsidiaries generated operating profit. Operating earnings (EBITDA) across the group increased by 26 % to EUR 60.4 million, translating into a further improvement in the EBITDA margin to 11.5 % (previous year: 10.7 %). With a marked improvement in capacity utilisation and booking intensity in IT Services business, licence revenues from the in|sure Ecosphere product provided a boost in the third quarter, which, like the first quarter, was barely affected by any pandemic-related restrictions. Cost savings linked to the COVID-19 pandemic from the second quarter onward were another reason for the year-on-year improvement. In spite of the rise in sales, other operating expenses declined by 12 %, or EUR 7.9 million, to EUR 57.8 million. The reduction in travel expenses from EUR 16.5 million in the previous year to EUR 6.5 million in 2020 was the main factor in this item. Furthermore, cost savings resulting from moving customer and employee events to virtual platforms also had a noticeable effect. The cost base for recruitment and business premises expenses developed in the opposite direction but largely in proportion to employee growth.

With the cost of materials increasing by 24 %, gross profit climbed slightly less sharply than sales at 15 %. Personnel expenses were 19 % higher than the previous year, although personnel expenses per FTE only increased by 1 % due to increasing internationalisation. Consolidated earnings rose by 20 % to EUR 20.9 million (previous year: EUR 17.5 million), and therefore less sharply than EBITDA, on account of the considerably higher tax rate of 34 % (previous year: 25 %). Earnings per share also improved by 20 %, to EUR 3.39.

Working capital amounted to EUR 93.9 million as at 31 December 2020 (previous year: EUR 85.1 million). As a result, the need for advance financing of business operations rose by 10 % year on year and therefore not as sharply as sales. With liquid assets of EUR 55.1 million (previous year: EUR 46.4 million), net liquidity after the deduction of financial liabilities stood at EUR -5.6 million as at 31 December 2020, compared to EUR -11.6 million in the previous year.

In parallel with its organic growth, adesso is also intensifying its M&A strategy. In 2020, it acquired companies in the Netherlands to reach an advantageous size for typical adesso IT projects. Other companies, and in one case business operations were acquired in Germany and Hungary to reinforce adesso's competencies and expand its range of services in the areas of SAP, digital experience and cloud-native technologies, which adesso believes offer particularly promising growth opportunities in the future.

adesso expects to see rising demand for digitalisation initiatives throughout all sectors in 2021 and the years ahead. The coronavirus pandemic has shown many companies that improvement is needed in this area, a situation underlined by the initiatives and measures implemented by policymakers. The order situation for almost all industries at the start of 2021 can be described as very good. As in the previous year, 2021 also offers a solid framework for service business with positive capacity utilisation thanks to calendar effects providing an average of four additional working days. All foreign subsidiaries are expected to achieve further growth. As the effects of the pandemic subside and additional sales are generated, the fledging companies based abroad, which are currently still operating at a loss, should continue to improve their earnings. In terms of products, the well-filled sales pipeline at in|sure Ecosphere is expected to lead to an increase in licence revenue compared to 2020. Investment in e-Spirit is ceasing as the company is sold and deconsolidated, and so the sales and earnings situation in the IT Solutions segment is expected to improve significantly.

The forecast for financial year 2021, which is also included in the Annual Report, does not include the adjustments resulting from the sale of e-Spirit AG, which was only resolved on 19 March 2021. Said adjustments will only be accounted for and published once the transaction has been concluded.

Based on previous experiences and the resilience of its business, adesso is planning for robust growth in 2021 irrespective of the sale of e-Spirit AG and in spite of the prospect of a stricter lockdown in Germany from mid-March. The solid start adesso has made to 2021 gives cause for optimism. On this basis, sales revenues are expected to rise to at least EUR 600 million in 2021. We anticipate EBITDA of at least EUR 72 million and are aiming to achieve a minimum EBITDA margin of 10 %.

The full annual report, as well as a table comparing key performance indicators over a period of several years, is available at in the Investor Relations section.


adesso Group
With about 5,000 employees and annual sales of EUR 523.4 million in 2020, adesso Group is one of the largest German IT service providers with outstanding growth opportunities. At its own locations in Germany, other locations in Europe and Turkey as well as at numerous local customers adesso offers consulting and software development services for optimising core business processes. adesso also offers ready-to-use software products for standard applications. The development of an own, industry-specific product portfolio opens up additional growth and earnings opportunities and is another key element of the adesso strategy. In 2020, adesso was awarded the title of the best employer of its size in Germany across all industries. After having already achieved first place among IT employers in 2016 and 2018, adesso was ranked first again in 2020.

Martin Möllmann
Manager Investor Relations
Tel.: +49 231 7000-7000

31.03.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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