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Reporting EUR Credit synth Aaa/AAA Valuation date 2026-05-24 Damodaran FCFF · 1000-iter MC Industry Computer Services FCFF · Dark v3

DCF prices a structural fade · -52.6% MoS

Market above MC p95 ceiling

Market €30.56 sits above every one of 1,000 Monte Carlo draws (p95 ceiling €23.31) — DCF intrinsic €20.02 post 5% governance haircut. The 6/6 sell-side Buy consensus (avg PT €40.60) bets on personnel-ratio reversion and 2030 Vision delivery; this DCF prices the council's central diagnostic — €780M of new capital deployed at zero marginal EBIT — as structural, not transitional.

Sector Computer Services (EU reseller-integrator)Country mix DE 60% · FR 10% · UK 5%MC σ ±€1.80/shGovernance Schick 35% foundation-locked · 5% haircutCredit synth AAA · β 0.81Coverage 6/6 Buy · avg PT €40.60

Intrinsic / share

€20.02

post 5% governance haircut (€21.08 → €20.02)

Market / share

€30.56

XETRA · MDAX · −30% YTD 2026

Margin of safety

-52.6%

vs intrinsic

Enterprise value

€3.02B

73.7% terminal

Cost of equity / debt

6.11% / 1.96%

β 0.81 · CRP 0.35%

Terminal ROIC / g

6.20% / 1.50%

terminal ROC 6.2% vs WACC 5.68%

What it sells, where it sells

Operating segments

System House & Managed ServicesDACH-led integrator + IT International; services + bolt-on hardware. Personnel-ratio drag concentrated here (19.4% of revenue in FY25, up 4pp since 2018).~75%

IT E-commerce14-country online platform; software-agency mix shift driving NWC release. Mix went 11% → 25% of business volume 2018→2025.~25%

System House carries the personnel-cost drag (19.4% of revenue, up 4pp since 2018); IT E-commerce drives the mix shift that mechanically lifts sales-to-capital from 1.7x to 2.0x by Y6-10 — the margin debate is a System House debate, the capital-efficiency debate is an E-commerce debate.

Country mix (revenue-weighted CRP input)

🇩🇪Germany60.0%

🇫🇷France10.0%

🇬🇧United Kingdom5.0%

🇨🇭Switzerland5.0%

🇳🇱Netherlands5.0%

🇮🇹Italy3.0%

🇪🇸Spain3.0%

🇦🇹Austria2.0%

🇧🇪Belgium2.0%

🇵🇹Portugal2.0%

🇭🇺Hungary2.0%

🇮🇪Ireland1.0%

Germany + DACH (Austria, Switzerland) ≈ 67% of revenue — a German wage-inflation or public-sector budget shock hits Bechtle harder than any Continental peer. Weighted CRP ~35bps; this is essentially a Western-Europe AAA-blend on country risk.

Background — five things to know before the case

Context the share price doesn't carry on its face. Skim this once and the bull / bear bullets below stop reading as inside baseball.

Schick family controls 35.02% via a foundation-locked structure, by design. Karin Schick + Schick GmbH + Gerhard & Ilse Schick Foundation (3.57% perpetually locked). Foundation established 2022 explicitly to defeat takeovers and short-term activist pressure. No related-party transactions disclosed; CEO Olemotz on a 16-year tenure since 2010.
FY26 guidance shock cratered the stock −11% in March 2026. Guide of 0–5% revenue + 0–5% EBT growth vs sell-side consensus ~15% EBT growth. Q1 2026 then beat broadly: business volume +13.2%, revenue +7.6%, EBT +11.5%, order backlog €3.3B record. The market is treating Q1 as pulled-forward demand; the council reads it as a partial reversal.
125 acquisitions in 40+ years — disciplined small-bolt-on pattern, no mega-deal blowups. 14 deals in 2025 was unusually heavy because Grupo Solutia counted as 13 sub-entities. €1.5B of acquired business volume over the past decade, funded entirely from cash flow + one €300M convertible (2023, strike €54.99 deep OTM). Share count unchanged FY24 → FY25 at 126.0M.
ROCE compressed from 24% (2016) to 14.9% (2025) — the load-bearing diagnostic. The 2021-2025 cohort deployed €780M of new capital at essentially zero marginal EBIT (capital up €778M, EBIT up only €10M). Council's central question: how much of this is structural vs transitional internal-IT capex (SAP HANA migration, IT-systems consolidation that management explicitly flags as multi-year drag).
Sell-side uniformly Buy with average PT €40.60 (+33% vs spot). 6/6 Buy ratings post-Q1: Jefferies €45, Deutsche Bank €45, UBS €40, DZ Bank €45, Berenberg €34, BofA Buy. 16 institutions cover the name. Marshall Wace lifted disclosed shorts 0.50% → 0.70% during the March sell-off; total hedge-fund shorts ~2-3% of float.

Where we diverge from the sector

Each row asks: if we'd used the sector median for this one assumption instead of our override, how much would the share price change? Negative = our override is more conservative (worth less); positive = more aggressive (worth more). Skim down the rightmost column to see which bets are doing the work.

Assumption

Our input

Sector median

Value impact

01 Revenue growth 10y CAGR — Y1-5 4.0% fading to 2.0% Y10

~3.0% below German IT market 4.9% CAGR; reseller layer in secular fade

~4.9% German IT market 2016-2025 average (Jefferies)

−€3.10

02 Operating margin (Y10) EBIT margin at convergence year

4.40% 2030 Vision math: 5% of business volume ≈ 4.4% of revenue

7.41% Computer Services industry standard

−€4.60

03 Sales-to-capital Reinvestment efficiency, Y6-10 endpoint

2.00 trailing 5y run-rate + mix-shift NWC release

5.19 Computer Services industry standard (services-heavy mix)

−€2.40

04 Terminal growth Y10+ steady state

1.50% below EUR risk-free 2.5% — secular reseller decline

2.50% EUR risk-free ceiling (industry default)

−€1.90

05 Cost of capital WACC implied by β + CRP + D/V

5.68% β 0.81 (5Y regression Yahoo + StockAnalysis triangulated)

~6.95% β 1.09 Computer Services industry standard

+€3.80

Net effect of overrides

Overrides net −€8.20/share vs all-defaults baseline. The β override (+€3.80) partially offsets the operating-margin override (−€4.60); revenue, S/C, and terminal-growth overrides all subtract. The DCF reads cleaner than the industry default because it refuses to price the pure-reseller mix at the services-heavy median.

−€8.20

Our override Sector median Override adds value Override subtracts value

The story & the five claims

The 10-year story this DCF is built on, plus the five anchor claims that translate the story into model inputs.

The 10-year story

Bechtle is the largest Continental-European IT reseller-integrator, family-anchored through a Schick foundation locked at 35% in perpetuity. The next ten years are a controlled fade, not a collapse: revenue compounds at 4% Y1-5 then slows to 2% Y10 as hyperscaler direct channels (Microsoft NCE, AWS public-sector, Google sovereign cloud) bite into reseller flow while DACH government framework contracts (40% of business volume on 3-5 year cycles) provide the floor. Operating margin lands at 4.4% by Y5, anchored to the 2030 Vision math (5% of business volume ≈ 4.4% of revenue under current IFRS-15 mix). The investment case is value-defensive: terminal return on capital roughly matches WACC, so the operating business stops destroying value at the margin but doesn't restart compounding. At €30.56 the market is paying for a thesis closer to the sell-side bull (personnel-ratio reversion + 2030 Vision delivery) than the council's central diagnostic (€780M / zero-marginal-EBIT cohort treated as structural). The DCF intrinsic €20.02 says the market is wrong.

Two debates worth pressure-testing

Is the €780M / zero-marginal-EBIT cohort priced or reversible?

Our view: Structural. ROCE compressed 24% (2016) → 14.9% (2025); base case bets on partial recovery (internal-IT capex completion + software-mix NWC release) but explicitly NOT on M&A returns recovering. The sell-side €40+ targets require ROCE to revert to 18%+ — there is no evidence in the corpus this is happening. If reviewers are right, every €/share of margin above 4.4% adds ~€3-4 to intrinsic but requires an unfunded thesis.

Does hyperscaler direct-to-cloud halve reseller flow in 2028-2032?

Our view: 15% probability sized as a failure tail; 30% weight on a runoff scenario inside scenarios.yaml. If both bite simultaneously (Microsoft NCE + AWS public-sector + Google sovereign), the operating model breaks and distress recovery is ~50% of revenue at 3% margin. Bear MC tail at p5 €17.20 already prices most of this; the market at €30.56 is essentially betting these channels do not bite.

CLAIM 01 Revenue €6.4B → €8.9B over 10y, 4% Y1-5 fading to 2% Y10. growth_high=4.0% · growth_term=2.0% Q1 2026 organic +5.2% and €3.3B order backlog (1.5x revenue visibility) anchor the floor; hyperscaler direct channels bite years 3-10. Does not require Bechtle to outgrow the German IT market.

CLAIM 02 Year-10 EBIT margin lands at 4.4%, anchored to 2030 Vision math. target_op_margin=4.40% 5% EBT on business volume × ~0.88 BV-to-revenue translation ≈ 4.4% EBIT on revenue. Personnel-ratio partial reversion (19.4% → 18%); no full reversal assumed.

CLAIM 03 Sales-to-capital 1.7x Y1-5 lifting to 2.0x Y6-10 on mix shift. s2c_y1_5=1.7 · s2c_y6_10=2.0 Trailing 5y run-rate plus mechanical NWC release as software-agency mix grows 25% → 40% of business volume (lower receivables, lower inventory).

CLAIM 04 Margin converges by Y5; growth fades to terminal by Y10. year_of_convergence=5 Mature mid-cap, 26 years public. FY25 margin 5.23% is the trailing reality — modest mix-driven drift to 4.4% over 5 years requires no regime change.

CLAIM 05 Terminal growth 1.5%, failure probability 15%. g_term=1.50% · p_fail=15% Terminal below EUR risk-free (2.5%) to signal secular reseller decline. 15% failure captures the tail where hyperscaler direct channels collapse reseller flow; distress = 50% revenue cut + 3% op margin.

Where we diverge from sell-side

Beta override 0.81 vs Damodaran-relevered 1.04. Triangulated from 5Y regression (Yahoo Finance 0.81, StockAnalysis.com 0.81 — two-source converged). German blue-chip beta suppression + low leverage + Schick anchor make Bechtle structurally less volatile than the Computer Services industry aggregate. WACC drops to 5.68%; equity per share lifts ~€3.80.
Failure adjustment ON at 15% probability — sell-side runs pure going-concern. Hyperscaler direct-channel tail is non-trivial; B/C council members ran 25-35%, base case clusters at the midpoint. Distress recovery 50% of revenue × 3% margin per Damodaran framework. Drops EV ~€313M from the going-concern €3,337M.
Terminal growth 1.5% (below EUR risk-free 2.5%). Sell-side anchors at risk-free; we anchor below to signal secular reseller-layer decline. Costs ~€1.90/share but is honest about the structural read of the IT-services value chain.
Y10 EBIT margin 4.4% (vs Computer Services industry 7.41%). Pure-reseller mix runs structurally below industry; the 2030 Vision math is the right benchmark, not the global cross-sector median. Council demolished the bull case for personnel-ratio reversal (6%+ margin) on zero evidence.
Sales-to-capital 1.7→2.0x (vs industry 5.19x). Goodwill-loaded balance sheet from 125 acquisitions + reseller-heavy mix means the industry median is the wrong reference set. Our number reflects the post-2021 €780M cohort's actual delivered S/C.

Two-sided case — bear anchors

Personnel ratio reverts fully to 17% (sell-side bull). If German wage inflation cools and M&A-loaded headcount drag unwinds, Y10 EBIT margin could lift to 5.5%+. That alone adds ~€8-10/share — pushing intrinsic toward the sell-side €40 PTs. The Expansionist council position; demolished by 4/5 reviewers but not zero-probability.
Internal-IT capex completes 2027 and ROCE re-rates. SAP HANA migration is a multi-year drag management explicitly flags. If it taper as planned and freed cash redeploys at 12%+ IRR, terminal ROC lifts to 8%+ vs WACC 5.7% — adds ~€3-4/share. Base case bets on partial taper, not full re-rating.
2030 Vision actually delivers €10B BV at 5% EBT margin. Hits €500M EBT vs ~€340M today — a 47% lift in 5 years. The math is anchored, the execution is contested; if Bechtle hits both numbers, sell-side €45 PTs look conservative, not aggressive.
Defense-tech / sovereign-IT pivot re-rates the multiple. The Expansionist's reframe (EU sovereignty pivot away from US hyperscalers). Conceptually plausible; no evidence Bechtle is executing this transition. If it materialises, growth assumption +200-300bps adds ~€5/share.
Schick family takes the company private at premium. Foundation-locked 35% block is anti-takeover by design, but a private offer from the family at 30-40% premium is structurally possible. Listed as the tail rather than scenario weight.

Risks to thesis (tail, not bear case)

Hyperscaler direct-channel inflectionHigh

Microsoft NCE + AWS public-sector + Google sovereign cloud simultaneously bypass the reseller layer in 2028-2032. Reseller flow halves; recovery dynamics depend on Bechtle pivoting to prime systems-integrator. Already 15% probability inside the model; tail is worse if it lands in 2026-2027.

CEO succession (unspoken)Med

Olemotz 16-year tenure, age 64. Succession not flagged publicly. Strategy reset or M&A pivot from a new CEO could break the disciplined-bolt-on pattern; equity-per-share impact 5-15% if reset is value-destructive.

German wage / public-sector budget shockMed

67% of revenue from Germany + DACH. A German recession + tighter public-sector framework contracts compounds the personnel-ratio drag. Bull case (full personnel reversion) is dead in this scenario.

Convertible 2030 dilutionMed

€300M 2% convertible (2023, strike €54.99, maturity 2030) is currently deep OTM at €30. If the bull case plays out and the stock re-rates above €55, ~5.5M new shares (~4.4% dilution) come in. Not in the current count.

Marshall Wace + hedge-fund shortsLow

Disclosed shorts ~2-3% of float; Marshall Wace built 0.70% during the March guidance sell-off. Not large enough to move price independently but tells you the bear thesis has institutional believers.

Schick family forced sellingLow

Foundation-locked structure (2022) is explicitly anti-takeover and multi-generational. Forced-selling pressure from the 35% block is structurally suppressed. Listed as the residual tail.

10-year forecast

Revenue €6.66B → €8.95B over 10y (4.0% Y1-5 fading to 2.0% Y10). EBIT margin compresses 5.06% → 4.40% by Y5 then holds; FCFF ramps from €87M (Y1) to €188M (Y10) as sales-to-capital lifts 1.7x → 2.0x and the software-agency mix shift releases NWC.

Monte Carlo distribution

Every one of the 1,000 Monte Carlo draws lands below the current €30.56 market price — including the p95 ceiling of €23.31. P(intrinsic < market) = 100%. The disagreement is not whether Bechtle is overvalued per the DCF; the disagreement is whether the sell-side bull thesis (personnel reversion + 2030 Vision delivery + ROCE re-rating) belongs in the base case at all. Council says no; market says yes.

1000 iterations randomising the central uncertainties (revenue growth, Y10 margin, sales-to-capital, failure probability, beta). P(intrinsic < market €30.56) = 100.0%.

Mean €20.16 ± €1.80, p5 €17.20 · p50 €20.07 · p95 €23.31. Every one of the 1,000 draws lands BELOW current market €30.56 — the disagreement is by how much, not whether.

Cost of capital build

Risk-free rate	2.12%
Mature-market ERP	4.50%
Levered β	0.81
Weighted CRP	0.35%
Cost of equity	6.11%
Pre-tax cost of debt (synth Aaa/AAA)	1.96%
D / V	~15%
WACC	5.68%

Full year-by-year DCF

Year	Revenue	Op mgn	EBIT	EBIT(1−t)	Reinvest	FCFF	PV
1	€6.66B	5.06%	€337M	€237M	€151M	€87M	€82M
2	€6.93B	4.90%	€339M	€239M	€157M	€82M	€74M
3	€7.21B	4.73%	€341M	€240M	€163M	€77M	€65M
4	€7.49B	4.57%	€342M	€241M	€170M	€71M	€57M
5	€7.79B	4.40%	€343M	€241M	€176M	€65M	€49M
6	€8.07B	4.40%	€355M	€250M	€140M	€110M	€79M
7	€8.33B	4.40%	€367M	€258M	€129M	€128M	€87M
8	€8.57B	4.40%	€377M	€264M	€117M	€148M	€94M
9	€8.77B	4.40%	€386M	€270M	€103M	€168M	€101M
10	€8.95B	4.40%	€394M	€276M	€88M	€188M	€106M

Methodology & flags

Damodaran FCFF DCF, 10y explicit forecast + perpetuity. Revenue grows 4.0% Y1-5 fading to 2.0% Y10; EBIT margin lands at 4.4% by Y10. Sales-to-capital 1.7x Y1-5 then 2.0x Y6-10 (mix-shift NWC release). Failure adjustment ON at 15% probability with 50% distress recovery on EV. Synth credit Aaa/AAA. CRP from revenue-weighted 12-country mix × Damodaran 2026 CRPs. Beta override 0.81 (5Y regression triangulated Yahoo + StockAnalysis) replaces the bottom-up 1.04. Monte Carlo: 1,000 iterations. Engine v1.0.0 · result: valuations/bc8/output/2026-05-25-result.json

R&D cap: OFF · Lease cap: OFF · Failure: ON · ESO: OFF
Governance haircut: 5% (€21.08 → €20.02)
Sensitivity tornado: not run (Monte Carlo overlay covers the load-bearing axes)

FCFF DCF · dark theme v3. Generated 2026-05-25T20:58:28 from valuations/bc8/output/2026-05-25-result.json.