EQS-News: q.beyond generates positive free cash flow one year earlier than expected

q.beyond generates positive free cash flow one year earlier than expected

• Preliminary results for 2023: Free cash flow rises by € 11.4 million to € 1.7 million
• Revenues of € 189.3 million and EBITDA of € 5.7 million also meet targets
• For 2024, q.beyond has budgeted EBITDA growth to € 8 million to € 10 million, with revenues of € 192 million to € 198 million and sustainably positive free cash flow

Cologne, 11 March 2024 – The IT service provider q.beyond improved its free cash flow by € 11.4 million to € 1.7 million in 2023. It thus achieved a positive full-year free cash flow one year earlier than planned upon the presentation of the “2025 Strategy” in spring 2023. Based on preliminary calculations, in the past financial year revenues rose by 9% to € 189.3 million, while EBITDA improved by 6% to € 5.7 million. Both key figures are consistent with the outlook published at the beginning of 2023, with revenues forecast at between € 185 million and € 191  million, and EBITDA at between € 5 million and € 7 million.

Implementation of the 2025 Strategy involved a far-reaching restructuring of the company in the past financial year. In particular, q.beyond provided its business model with a clearer focus, increased the effectiveness of its go-to-market approach and, in the “One q.beyond” project, simplified and standardised all its processes and structures. As expected, in the short term the various measures had the benefit of boosting the financial strength of the debt-free company. Net liquidity rose to € 37.6 million in 2023. Starting in 2024, the company’s earnings strength will rise sustainably.

Double-digit revenue growth in SAP business

Both segments contributed to the company’s revenue growth during the year of restructuring in 2023. Cloud revenues increased by 9% to € 151.2 million, while SAP revenues rose by 13% to € 38.1 million. As previously announced, the EBITDA growth was partly due to an increase in other operating income by € 3.7 million to € 9.2 million following a decision by the tax authorities concerning the tax treatment of the Plusnet sale executed in 2019. This decision, which was in q.beyond’s favour, will only impact on liquidity in 2024. A second decision by the tax authorities in this respect was a key reason for the increase in taxes on income to € -5.2 million, compared with € +0.2 million in the previous year. This decision will also impact on liquidity in 2024. Based on preliminary calculations, consolidated net income for 2023 nevertheless improved to € -16.4 million, up from € -33.1 million one year earlier.

q.beyond expects its profitability to increase significantly in the current financial year, with EBITDA set to rise to between € 8 million and € 10 million. This will be accompanied by revenues of between € 192 million and € 198 million and a continued sustainably positive free cash flow. The measures q.beyond will take to boost its efficiency include raising the share of its nearshoring and offshoring activities from 11% currently, promoting the automation of processes and increasingly deploying generative artificial intelligence.

Profitability ahead of growth

In its 2025 Strategy, the company set itself the target of achieving an EBITDA margin of 7% to 8% and positive consolidated net income in 2025. Thies Rixen, q.beyond’s CEO, sees the company as being well on the way to meeting these targets. The EBITDA margin is budgeted to rise to 4% to 5% in 2024. Here, Rixen has set clear priorities: profitability ahead of growth! The core goal of the 2025 Strategy is to sustainably and significantly increase q.beyond’s earnings and financial strength.
 

Key figures at a glance

Notes:
This Corporate News contains forward-looking statements that are based on current expectations and forecasts on the part of the management with regard to future events. Due to risks or erroneous assumptions, actual results may deviate materially from these forward-looking statements. The complete Quarterly Statement is available at www.qbeyond.de/en/investor-relations.

About q.beyond AG:
q.beyond AG is the key to successful digitalisation. We help our customers find the best digital solutions for their business and then put them into practice. Our strong team of 1,100 people accompanies SME customers securely and reliably throughout their digital journey. We are experts in Cloud, SAP, Microsoft, data intelligence, security and software development. With locations throughout Germany, as well as in Latvia, Spain and India, and its own certified data centres, q.beyond is one of Germany’s leading IT service providers.

Contact:
q.beyond AG
Arne Thull
Head of Investor Relations /Mergers & Acquisitions
T +49 221 669-8724
invest@qbeyond.de
www.qbeyond.de