In the presented consolidated financial statements, adesso SE has largely confirmed the preliminary figures for 2021, which were already published in the first half of February. Group sales grew by 30 % (of which 20 percentage points is organic) year on year to a new record of EUR 678.3 million, attaining an EBITDA amounting to EUR 102.4 million. This includes a non-recurring special effect of EUR 17.9 million from the sale of the e-Spirit Group in the first quarter of 2021. Operating earnings (EBITDA), excluding the non-recurring effect, rose disproportionately highly by 40 % to EUR 84.5 million. The EBITDA margin (before non-recurring effect) stood at 12.5 % and was at the high end of the target corridor. As announced, the full-year forecast for 2021 (over EUR 630 million in sales and more than EUR 95 million in EBITDA (including non-recurring effect)) was exceeded. This was helped by continued good capacity utilisation in the IT services business during the fourth quarter, a higher than expected contribution to earnings from companies acquired in 2020 and 2021, as well as increased licensing revenue in year-end business from in|sure Ecosphere for the insurance industry. Due to the pleasing development in earnings, the Executive Board proposes to increase the dividend per share with the approval of the Supervisory Board to EUR 0.60 (previous year: EUR 0.52), maintaining the distribution policy of past years. The forecast for 2022 envisages continued growth in sales and operating earnings (excluding the non-recurring effect from 2021). Sales are expected to increase to EUR 750 to 800 million with an EBITDA of EUR 90 to 95 million.
Following the coronavirus crisis year of 2020, adesso experienced positive business development in macroeconomic conditions that were again largely characterised by growth. Like adesso, most customers have adapted to the restrictions that were required at times. The IT industry has also benefited in particular from digitalisation projects in times when long-distance collaboration with spread-out teams, digital infrastructure and media have come to the fore. New record sales and operating earnings figures show that there is high demand for adesso’s industry-specific services and projects, and that adesso can capitalise on the strong growth in employee numbers from recent years through positive business development. With a 30 % increase in sales, adesso once again strengthened its market position significantly, exceeding the minimum target of doubling organic market growth. All core industries, with the exception of healthcare, recorded double-digit growth rates. In particular, relatively new industries (Manufacturing Industry and Automotive) demonstrated disproportionately high growth, posting gains of 47 % and 59 %, respectively. Within an increase of 44 % to EUR 100 million, public administration closed the gap on the most important industries in terms of sales, banking (+15 %) and insurance (+24 %). Insurance, the most important industry in terms of sales, benefited from an increase in sales from the in|sure Ecosphere to rise by a good 6 percentage points. In healthcare, capacities were committed to developing new products and solutions in 2021, including digital healthcare applications (DiGAs) and a hospital auditing application, resulting in 3 % lower growth. Investments in these promising areas will continue in 2022. While coronavirus-related weaknesses in capacity utilisation hardly played a role in 2021, saving effects due to travel restrictions only had a positive impact in the first quarter (2020 was the last comparative quarter before the lockdown). Nevertheless, the cost structure of other operating expenses has changed and the level of travel expenses is significantly lower than before the pandemic.
The strong Group-wide growth in employee numbers from the previous years continued. Together with a large number of new customer situations, this helped to boost sales. As at the reporting date, the number of employees (converted to full-time equivalents) increased year on year to 5,814 (+17 %).
Although there was a very significant rise in sales to customers in Austria and Turkey while other companies outside of Germany showed growth, revenue mainly increased domestically with a 33 % gain. The business continued to expand into international markets in 2021, with new foreign subsidiaries opening in Finland and a new site starting operations in Italy. In total, sales abroad rose by 16 %.
The IT Services segment once again increased sales markedly on the back of continued good capacity utilisation (+33 %). In the IT Solutions segment, the loss of sales from the second quarter onwards due to the sale of the e-Spirit Group was mainly compensated by increased licensing revenue from adesso’s own in|sure Ecosphere product family, the expansion of sales revenue for services in connection with mobile devices, and the new influencer marketing solutions. The segment increased sales by 5 %.
At EUR 355.9 million, sales revenue in the second half of financial year 2021 was slightly higher than in the first half of the year (EUR 322.4 million) in line with the higher number of working days. The fourth quarter proved to be the strongest quarter of the year, with revenue coming in at EUR 182.1 million.
Operating earnings (EBITDA) across the group increased by 70 % to EUR 102.4 million, Excluding the one-off effect from the company sale, there was a further improvement in the EBITDA margin at 12.5 % (previous year: 11.5 %) with EBITDA of EUR 84.5 million. Capacity utilisation and booking intensity in IT Services business remained high without suffering from any major pandemic-related factors, resulting in a considerable increase in licence revenue with the in|sure Ecosphere product and reductions in other operating expenses, particularly in the first quarter. In spite of the 30 % rise in sales, other operating expenses only climbed by 17 %, or EUR 9.3 million, to EUR 63.4 million.
With the average number of employees rising by 24 %, cost of materials climbed by 49 % to EUR 93.6 million (mainly due to external services) and therefore by a disproportionately high margin compared to sales. This effect was strengthened inorganically by the acquisition of KIWI Consulting GmbH as the business model provides for a greater share of external services. As a result, gross profit rose by a slightly lower margin compared to revenue, namely by 27 % to EUR 584.7 million. However, the gross profit per employee increased by EUR 108 thousand (previous year: EUR 105 thousand). Personnel costs per FTE were up by 3 %.
Depreciation and amortisation increased by 38 % in the reporting period to EUR 36.0 million. The main drivers of this development are the 28 % increase in amortisation of rights of use from leases, and the additional amortisation connected with intangible assets recognised in the context of company acquisitions amounting to EUR 7.0 million, compared with EUR 2.4 million from the previous year.
With a tax rate of 25 % (previous year: 34 %; before the non-recurring effect: 34 %) due to the largely tax-exempt income from the company sale, consolidated earnings were positive at EUR 47.9 million, up from EUR 20.9 million in the previous year. Earnings per share stood at EUR 7.65 (EUR 4.83 before the non-recurring effect), increasing from EUR 3.39 in the previous year. Excluding the non-recurring effect, earnings per share improved by 42 %.
Working capital rose in line with revenue by 30 % to EUR 122.4 million as at the reporting date (previous year: EUR 93.9 million). Despite the 30 % increase in financial liabilities on account of the company acquisitions to EUR 78.9 million, net liquidity still improved considerably from EUR -5.6 million in the previous year to EUR 31.0 million. The capital increase made in the fourth quarter contributed significantly to this development. The resulting liquidity is to be used together with additional borrowed capital for further acquisitions. Equity increased by EUR 88.9 million to EUR 191.8 million, mainly due to the healthy consolidated earnings and the capital increase. The equity ratio as at the reporting date stood at 34.5 % (previous year: 27.6 %).
adesso expects to see rising demand for digitalisation initiatives throughout all sectors in 2022 and the years ahead. Order intake is positive for 2022. The pipeline of potential projects and licence sales has already grown, and the volumes already commissioned have increased. The Executive Board therefore expects the adesso Group to continue to grow at an above-average rate in financial year 2022. adesso does not maintain any supplier or customer relationships within Ukraine or Russia that could directly affect the business. However, it cannot be ruled out that directly affected client companies will postpone investment projects. The military conflict could have an isolated, indirect and delayed impact on adesso and any further escalation could lead to a sustained downturn in global economic recovery. However, it is not possible to reliably predict these effects at the time of writing.
Earnings growth will be more moderate in 2022 given that the financial year has two fewer working days than the previous year. This effect alone has a seven-digit impact on the result. After two difficult years of the coronavirus pandemic, adesso also plans to invest in its corporate culture in 2022 and safeguard the sustainable and profitable growth of the adesso Group. As the shortage of skilled workers in the sector continues, adesso intends to further cement its position as Germany’s most attractive employer.
On this basis, adesso plans to increase its sales revenue to EUR 750 million to EUR 800 million in 2022. EBITDA is expected to rise to EUR 90 million to EUR 95 million (excluding the non-recurring effect from the previous year), with the EBITDA margin standing at between 11 % and 12 %.
The full annual report, as well as a table comparing key performance indicators over a period of several years, is available at www.adesso-group.de in the Investor Relations section.
