Q3 2026 All for One Group SE Earnings Call
Speaker #1: Good morning, everybody. Very warm welcome to our call today relating to the publication of our results. This morning we have released the results for the third quarter, respectively the 9-month period 2025-26, so it's available on the website and it also went to the channels.
Speaker #1: So, what happened? The environment is still challenging, but we have completed the precision program relating to the efficiency gains and being more profitably in the future.
Speaker #1: And we have confirmed the revised outlook. And in addition, which is very interesting for, I think, everybody of you on 16 July, Vinci Energy's announced a voluntary public takeover.
Speaker #1: So now we will give you some more insights into our numbers, into the development, and also what you can expect. You can ask your questions using the Q&A button.
Speaker #1: And we will read them out in the end and answer all the questions you might have. I will now hand over to Stefan Land, our CFO, who will now provide you with more details.
Speaker #1: Thank you, Stefan.
Speaker #2: Thank you, Nicole. Good morning, ladies and gentlemen. So then let's jump into our slides for Q3. Just for those of you who don't know us, just in the beginning, at a glance, what we are.
Speaker #2: So all for one is an international IT service and consulting provider. We deliver majorly based on SAP services, the entire business suite, through our network globally.
Speaker #2: It's called UnitedWires. So we have a territory of more than 100 countries with that, with the in that environment. And that's the way how we are one of 11 platinum partner on a worldwide base for SAP.
Speaker #2: Awarded a lot of times, of course, but we are focusing definitely on industries like machinery manufacturing, life science environment, food and beverage, wholesale, everything related to defense and aerospace, professional services, and electronics, plastic, and metal, industries.
Speaker #2: And finally, we are also a stake in automotive. So basically, we are servicing on a daily base 4,500 customers, actively, with more than 3,000 experts.
Speaker #2: And last fiscal, we did round about 504 million in revenues, with thereof 53% of recurring revenues. So what is our target? It is very easy.
Speaker #2: We want to be the world's leading SAP partner for medium-sized companies in our core industries and target markets. How are we going to achieve this?
Speaker #2: Basically, it's the portfolio we are offering. It is unique. So it is an integrated portfolio and provides an end-to-end IT, cloud, and business transformation services.
Speaker #2: So customers relate all their data on applications, on artificial intelligence, and the major business applications around. Our services help them to transform and to build up businesses operate and manage them and be innovative.
Speaker #2: So we help them to adopt and to scale on their processes, getting more efficiency, getting more competitiveness into their own market. And of course, finally, very important, in that time, especially in the cloud and AI-driven scenario, we are focusing on security and protection.
Speaker #2: So governance is key for all of our customers in the future. There's a very weak situation in the market, as you all know, especially in the industries we are servicing.
Speaker #2: And there's a lot to do with transformation in order to achieve these goals in 2030. Just mentioned by me. So we implemented a program.
Speaker #2: It's called Precision. It is a program to boost competitiveness and to be more innovative than competition, entering into the new kind of high-level services basically supported by artificial intelligence.
Speaker #2: So what we are doing in this scenario, we realign our delivery model and our go-to-market strategy. We rapidly integrate our new subsidiary Absolute as fast as we can.
Speaker #2: And we accelerate the investment in artificial intelligence resources and developments. So finally, of course, we are targeting a major part of reductions of operational expenses.
Speaker #2: So the one-off expenses, which we already booked in the third quarter, is roughly 20 million for this program. The positive impact is more or less the same amount per year.
Speaker #2: So we are shooting for an upgrade of EBIT or downsizing the level of break-even by 20 million a year, as of autumn 26 onwards.
Speaker #2: Let's come to the major key results of the third quarter. So there's a very weak economy. Customers very often postpone projects, delay projects, make them smaller, try to stop them for a moment in order to save money.
Speaker #2: You know what is happening into our key territories? Especially in the German, Austrian, and Swiss market. So revenue has been round about 380 million.
Speaker #2: It's flat. But if we deduct the revenues coming out of the Absolute acquisition, it was a minus of roughly 3% compared to last year.
Speaker #2: EBIT has been dramatically lowered as of June. So in a total, it is minus 9.3 million. But as mentioned before, there's roughly 20 million in special effects extraordinary effects coming from Precision into that number.
Speaker #2: So if we adjust the one-time effects we did round about 10.9 million in operational EBIT before M&A effects, which is close to 3% of revenue.
Speaker #2: So this is, of course, not the target for the company. But this is in that very weak scenario the current situation of our own transformation we are sitting in into the cloud and the AI-related services.
Speaker #2: So if we are looking into the revenue streams, then you understand a little bit more what is happening into our business and what's happening in our top line.
Speaker #2: Our cloud services even there's a very difficult situation outside are still growing. Organically. And it did 4% in the first nine months. But software and support, so this is the old measurement of our industry, declining by 8% in the first nine months.
Speaker #2: And within that row, you see two different lines. One is basically the licenses. And the commissions related to them. It declined by 26% compared to last year.
Speaker #2: And the support contracts are going down by another 4%. Consulting has a plus of 2%. But we have to adjust in this line also the acquisition of Absolute.
Speaker #2: So there is a weak utilization coming from a weak market environment currently. So in a total, the revenue adds up to 380 million as it was one year before.
Speaker #2: If we are looking into the segmentation the geographic regions we are looking and managing our business, then we see a clear decreasing business currently due to the market and due to the transformation into the cloud and AI-based services.
Speaker #2: Of minus 3% in revenues. Even we have adjusted or included Absolute since five months. And the result was dropping from 20.5 million to minus 3.6 million, which is a margin of minus 1%.
Speaker #2: Of course, very much relating to one-off expenses. So if that would not be the case, it would be positive. But it would be lower than the year before.
Speaker #2: If we are looking into the rest of Europe, excluding Germany, then we see already a revenue growth of 9%. It's partly coming from the Absolute acquisition.
Speaker #2: But it's also driven by Poland. So Poland has a different economic situation than the German-based territory. So Switzerland and Austria is also in a work in a very weak situation.
Speaker #2: But Poland is growing quite nicely currently. So result was been influenced a little bit by the one-off expenses of Precision. But however, it was still a margin of close to 4% compared to 6% the year before.
Speaker #2: So the rest of the world, which is so far very small, but due to the acquisition of Absolute, we are getting some momentum now in the region in Asia especially.
Speaker #2: And therefore, the revenue is already increasing by 47%. And the segment result in the first nine months is also going up by another 96% to 1.2 million.
Speaker #2: So there's a nice margin already in that territory. And we try to leverage now. And that was part of the deal and the acquisition and the strategy we did to leverage on the margin now and on the business of Absolute and going into the different territories.
Speaker #2: So balance sheet is still very solid. Of course, net debt raised to 104.6 million. Due to the acquisition of Absolute, cash is still in a good shape.
Speaker #2: So we have been well prepared. Close to 62. million as of June. Operating cash flow was down to 2.8 million. Of course, we had the situation of lower performance.
Speaker #2: So EBIT was decreasing and declining. And we had some more cash payments relating to 24 and 25 this year than normal. But in a total, we had a positive operating cash flow.
Speaker #2: Equity ratio is down to 22% as planned. This is due to the acquisition of Absolute. Employees. You can imagine we are going more international step by step.
Speaker #2: So more than 3,000 employees are now running on our payroll. And 13% already in our extra territories where we try to leverage the workload into that platforms now.
Speaker #2: More and more especially since Absolute is on board. So we have not only Egypt and Turkey. We now also having the opportunity to leverage on our Indian colleagues.
Speaker #2: And our Czech Republic colleagues in a total. So it's already on a level of 13%. This will be driven the next few years further on in order to be competitiveness and to support our customers in the territories in Europe by very good and adequate services.
Speaker #2: Employee retention is roughly at 90.92.4%. So it's a little bit up. And health index is exactly on the level of last year, 96.7%. As mentioned by Nicole in the beginning, a new chapter is opening.
Speaker #2: It begins now very soon. We are looking forward to these opportunity of Vinci. And what happens so far is as mentioned before on July 16, Vinci did a voluntary public takeover announcement.
Speaker #2: They are now preparing the offering in details, in connection with the BAFIN. And we believe that Vinci and especially Vinci Energy, so that's the segment where we should be in within Vinci, the ICT brands of Axions within that will help us to leverage our business.
Speaker #2: So we strongly believe that this is a unique opportunity for all stakeholders, not only for the shareholders, also for the employees. For the partners and especially for the customers, for the midsize customers.
Speaker #2: That we are entering into that opportunity. The revised Outlook we did on May 7, based on the ongoing economic and geopolitical uncertainty, as you all know, was 500 till 530 million in sales.
Speaker #2: It was the same level as before, but now it was including the acquisition of Absolute, which we firstly consolidated in February this year. And EBIT before M&A effects will drop around zero with a spread of roughly 5 million plus or minus.
Speaker #2: So we confirm this based on the figures we have achieved in the third quarter and based on the Outlook we are seeing for the fourth quarter.
Speaker #2: Again, from the board and of all for one. Let's finally come to the midterm targets. So artificial intelligence will provide further growth. So. We are sitting in the middle of the customer on his heart and servicing his applications helping him with his data and artificial intelligence.
Speaker #2: In order to get his own business in a successful pass and growth in the future. So a lot of migrations will happen. A lot of S4 migrations will happen.
Speaker #2: As you all know, we are the number one for midsize businesses. And based on the opportunity we are sitting, we are seeing now with Vinci, we can even pace up, speed up these opportunity and help customers especially in Europe to gain momentum and efficiency.
Speaker #2: So there will be increasing revenue opportunities. Every single relating to the cloud, to the environment of the cloud, the business applications, all the governance which have to be improved, all the cybersecurity issues and the stability the companies need in order to run their global business.
Speaker #2: So including Absolute, we have the opportunity to leverage on extra to leverage on existing customer bases, especially in the upper mid market. Absolute is also providing a lot of opportunities now in the upper mid market.
Speaker #2: So that's our target for the next few years. So it will boost our international strategy. Step by step in the first step in Europe, first territories in Asia, and from there on we will probably go further on a worldwide landscape in order to provide the right service level to our customers.
Speaker #2: So we will run for a lot of organic growth after the transformation again. We see a lot of opportunities for inorganic growth and profitability shall raise after these transformation.
Speaker #2: Soon. That's it from our side. Thank you very much. That you're joining us for today and we would be open for some Q&A now.
Speaker #1: Thank you, Stefan, for the explanations of the current development and the Outlook. So you do have the possibility to put your questions into the Q&A module.
Speaker #1: I will start with the first question now. Stefan, can you provide us with a timeline relating to the potential Vinci public offer?
Speaker #2: Yes. Yeah, we expecting the publishment of the offer within the next 10 days. As of then, shareholders will get the offer to sell their shares for 67 euros and 50 cent for another five weeks.
Speaker #2: And after the five weeks, the offering can be extended as far as we know. So Vinci has the opportunity to extend it by another timeframe of roughly two weeks.
Speaker #2: A maximum. So finally, we will end up in a closing we estimate in the beginning of October.
Speaker #1: Okay. Thank you. What do you expect from the corporation with Vinci or Axions?
Speaker #2: Well, we expect a lot of leverage in the sales. So a lot of momentum in the sales. So there will be very attractive customer relations from Axions which we don't have so far.
Speaker #2: So we can bundle in the future also services. Different IT services. Hopefully, and that's something we would go for, we can enter into new industries.
Speaker #2: So it would be very easy to enter into more utility and construction related industries. So this would open up definitely new opportunities. Furthermore than now, even we have already some routes in that industries.
Speaker #2: There would be a major opportunity. It's really a growth market on a worldwide landscape for these industries. So this would help a lot. And on the cost side, yes, we will see.
Speaker #2: So we don't know Vinci. So far we are not allowed to enter into detailed talks. But I see there also some cost efficiency opportunities.
Speaker #2: So they have a global establishment all over the world. So we can leverage on different territories. So I would also see that there is a cost efficiency opportunity as well.
Speaker #1: Thank you. Now a question relating to the numbers. On the top line, could you break down the organic versus M&A contribution to revenue and segment EBIT specifically are the flat nine month sales and the plus 5% growth in Q3 generally organic or are they entirely driven by the Absolute consolidation?
Speaker #2: Ooh, a lot of questions. Thank you. So I think I had it on one slide. The total number of revenues for the Absolute group.
Speaker #2: But I'm not sure it was 14.2 million. So you will find it on the slide key results. So if you deduct 14.2 million out of the 380, then you come to the organic number.
Speaker #2: It is a. Line of roughly 3%. The split between the territories I don't have it right now here. But if you go into the slide number or you can just flip back please.
Speaker #2: Germany. Then you see that we had a minus 3% in revenue. And this does already include revenues out of Absolute. So I don't have the number in my brain right now.
Speaker #2: But. I would say roughly 5 to 6% is the organic decrease in Germany. In the first nine months. Basically to the transformation. So a lot of customers are moving into the cloud.
Speaker #2: So we are not selling licenses anymore. So we're getting more subscriptions. Much smaller than before. And utilization was not very high compared to last year.
Speaker #2: There was a decline in consulting revenues. Because customers always asking us, could we stop or wait for a moment to execute programs or projects?
Speaker #2: And new projects will be very often postponed by another months or quarter. So we do have a row of projects which we are forwarding more than a year now already.
Speaker #2: So this is not an issue that the customer says, we will not do it with all for one. Or we will switch software to anyone else.
Speaker #2: In the world. It's just an issue of they stop innovation focusing on their own results and profitability and cash flow in the first. And afterwards they will of course start to renovate their IT business and solutions and applications as well.
Speaker #2: So if you look into rest of Europe on the next slide please, then you see a growth of 9%. Most of the 9% comes through the acquisition of Absolute.
Speaker #2: Because we got some revenues also in Spain and in the UK. And in Switzerland and Austria. But as mentioned before, we have also a very good momentum in Poland.
Speaker #2: So we are growing quite strongly. More than 5%. Something like this in the first nine months. And in the opposite, we have small decreasing numbers also as in Germany, in Austria, and in Switzerland.
Speaker #2: We are moving to the next slide. Rest of the world. So this is provided by Absolute. It is the territory around Dubai. The GCC countries.
Speaker #2: Mainly. And we are operating there out. Roughly 60, 70 people. Business in Asia. And that's the reason why revenues went up from 8.7 to 12.9.
Speaker #2: Hopefully I got all the figures so far.
Speaker #1: Question relating to the revenues. Would you be able to share your perspective on when consulting utilization could start improving including any expectations for the fourth quarter?
Speaker #2: Well, I can only say something to for this business year. As mentioned in my outlook. Further on. So we will definitely see our guidance on the EBIT and on the revenues.
Speaker #2: So within July August and September, we will perform according to the guidance. Which mean we see a clear operational profit a lot is relating also to precision.
Speaker #2: So a precision has been closed or finalized more than 90% in the last quarter. And we will still we see first economics positively in the running quarter.
Speaker #2: And that's the reason why we come to an EBIT operational EBIT including all the one time impacts. Of roughly zero. Plus minus. 5 million.
Speaker #2: And regarding utilization and ramp up of utilization. So there is still a lot of uncertainty. It depends on different industries. Of course. There are some pros and some cons.
Speaker #2: But however the markets are very strong. So a lot of IT service company also the global ones are fighting for customers in the German territory.
Speaker #2: So there is still let's say a huge offering of IT services. And it's not easy to close deals currently in the industry. Because customers are very cautious on investments still.
Speaker #1: Thank you. Another question relating to Germany also yeah the general development there. Germany which has swung into an. Trading loss. How much of that deterioration do you view as cyclical versus structural?
Speaker #1: And what recovery should we expect?
Speaker #2: Yeah. So excluding the one off expenses of precision. Germany was positive. In the first quarter. But on a very low level. So as mentioned before, that's the reason for precision.
Speaker #2: So we transform our services. In order to leverage on our customer base. And currently the growth rates are very tight or negative. So we have to do that.
Speaker #2: We see a lot of efficiency also coming through the implementation of own software and artificial intelligence. So we have a new software tool in place.
Speaker #2: We're doing things more automatically than in the past. Also on the development area. Artificial intelligence provides a lot of speed up and efficiency. And that was the reason why we have we had to be active.
Speaker #2: We had to do this. Now because in very strong or in very difficult market environments we need to lower break even hurdle level. And to get more efficiency in our profit and loss scheme and in our services finally.
Speaker #2: But if we if I'm looking into the order entry and looking what do we really implement successful on new recurring services as mentioned before.
Speaker #2: You our software tools e-invoicing tools government related stuff first agents so we did a wonderful deal. I'm not allowed to talk about the numbers.
Speaker #2: But a wonderful deal some weeks ago. Which will add up to our recurring revenues and margins. So we really see that after this transformation into the cloud and artificial intelligence opportunities and security and governance opportunities.
Speaker #2: We will show very robust revenues and margins as well.
Speaker #1: Now you already mentioned precision question. On the 20 million of non recurring precision charges. Could you walk us through the bridge? Which is also given in the report.
Speaker #1: How much has already been booked through the third quarter? And how much is still to come in the fourth quarter? And of the euro 17.8 million in personal measures.
Speaker #1: What share is cash versus non cash?
Speaker #2: Yeah. You're very detailed. Thank you. It's especially in our in our report today. On in the internet as well. And on the split is on page number three.
Speaker #2: The 17.8 million 80% 75% 80% is cash. Related. So and this will happen within the next three months four months five months or something like this.
Speaker #2: So the payout on this. We have something between 95 and 100% realized so far in the numbers. So the total of non recurring effects are 20.2 million.
Speaker #2: There will be not much more in the last quarter.
Speaker #1: Thank you. Just a comment. You can put your questions in the Q and A tool. If you would like to. So far I don't see any more new questions coming.
Speaker #1: So thank you very much for the questions. Thank you very much for answering them. And the introduction. And I hand over to you Stefan for the last words.
Speaker #2: Thank you Nicole. Thank you to you. And thank you to all of you for all the audience today. Thank you for joining us. And the Q and A.
