Stuttgart, 10 August 2023 – GFT Technologies SE (GFT) continues to grow. With revenue growth of 10 percent, the digital transformation pioneer maintained its upward trajectory in the first six months of 2023. Compared to the first half of 2022, adjusted earnings before interest and taxes (adj. EBIT) rose by 4 percent or by 11 percent adjusted for currency effects.
Demand expected to grow in second half of the year
"Despite a volatile environment, we continue to outpace market growth,” says Marika Lulay, CEO of GFT. “Thanks to our global footprint, we were able to mitigate very effectively the slowing investment in our largest market, Brazil. Our medium-term growth drivers, including our project pipeline, are fully intact. There is a noticeable uptick in client demand in the fields of cloud and artificial intelligence in particular. We are therefore confident that we can accelerate our growth in the second half of the year."
The GFT Group generated revenue of EUR 391.58 million in the first half of 2023. The company thus exceeded the prior-year figure of EUR 357.25 million by 10 percent. In the Insurance sector, revenue rose by 1 percent, in the Industry & Others sector by 13 percent. In the Banking sector, revenue was up 11 percent on the previous year.
Disproportionately strong growth in USA and Mexico
There was further disproportionately strong growth in the world’s largest software market, the USA, with an increase in revenue of 35 percent. In Mexico, GFT succeeded in raising revenue by as much as 63 percent. This growth was driven above all by complex modernisation and transformation projects in the finance sector. In Germany, business was boosted by the successful integration of targens GmbH. Compared to the same period last year, revenue in Germany was up 43 percent.
Further growth in earnings
There were also improvements in the Group’s key earnings figures compared to the first half of 2022 with year-on-year growth in adjusted EBIT of 4 percent to EUR 31.17 million (H1 2022: EUR 30.10 million). This item was burdened by currency losses and capacity adjustments in the reporting period. Without currency effects, adjusted EBIT would have risen by 11 percent. Compared to the prior-year period, EBT increased by 3 percent to EUR 30.04 million (H1 2022: EUR 29.16 million).
As of 30 June 2023, the Group had a total of 9,008 full-time employees (FTE). This corresponds to an increase of 2 percent compared to 8,842 talents at year-end 2022.
Financial stability and flexibility maintained despite targens acquisition
Operating cash flow fell year on year to EUR -9.96 million (H1 2022: EUR -0.44 million), due mainly to unfavourable working capital effects in connection with fixed-price projects and a further negative special item. Net liquidity decreased to EUR -38.74 million (31 December 2022: EUR 35.70 million). As a result of the increase in net income, the equity ratio remained stable at 40 percent (31 December 2022: 40 percent).
GFT expects solid revenue and earnings growth for 2023
GFT still expects to continue its growth and to raise both revenue and earnings in the financial year 2023. Recognised by the market for its extensive sector and technological expertise, the Group has an attractive portfolio of digitalisation and cloud solutions. As a result, it continues to be excellently positioned to benefit from growth trends.
Due to the volatile macroeconomic environment, GFT has downgraded its guidance slightly. Group Revenue is expected to reach around EUR 810-820 million (2022: EUR 730 million; previous guidance: EUR 850 million). The Group anticipates growth in adjusted EBIT to around EUR 74-76 million (2022: EUR 67 million; previous guidance: EUR 80 million). GFT’s earnings before taxes (EBT) are expected to reach EUR 68-70 million (2022: EUR 66 million; previous guidance: EUR 72 million). This guidance takes into account the acquisition of targens GmbH pro rata temporis as of 1 April 2023.