Business Report of GFT group

GFT recorded a significant increase in revenue in 2022 with an improving gross profit situation

Business development of GFT

In 2022 GFT recorded revenue of € 145.2m (previous year: € 129.7m). Compared to the previous year, revenue was thus expanded by € 15.5m or 12%. Central invoicing turnover increased across all quarters, with the last two quarters of 2022 showing significant year-on-year growth with double-digit increases in turnover. The first and second quarters also contributed to the volume growth with an increase of 5.1 % and 4.7 % respectively. This was due to the numerous price increases in the industry and the acquisition of larger member companies.  

Many suppliers continued to struggle with supply bottlenecks in 2022, so that GFT's order backlog continued to grow in the past year. In detail, the business fields developed as follows:

Total revenue is distributed across six major product groups. In the fourth quarter of 2022 GFT expanded its business activities to include the area of "Photovoltaic | New Energy".

Significant revenue increases were recorded across all product groups. The ICT (+6.0%) and Security Technology (+24.4%) divisions grew for the first time beyond the 90m and 40m revenue thresholds respectively. The strongest growth for GFT in 2022 will be in the area of "Security Technology" (+24.4%).

Development of the ICT segment (as of 31.12.)

Development of the safety division (as at 31.12.)

Profit Situation

The operating income which increased by k€ 137.1 to k€ 8,030.2 compared to the previous year, is mainly the result of the target achievement and marketing bonuses of the TC manufacturers as well as the other operating income.

Personnel expenses of k€ 2,263.4 were k€ 318.1 higher than in the previous year. The increase is mainly due to one-off effects which will no longer occur in the current financial year.

The increased financial result is due to the use of increased currency financing by our members.

With a total distribution of k€ 4,317.8, the distribution of the previous year was not reached, despite an increase in turnover of 12.0 %. This is mainly due to the fact that the bonus income does not correlate with the turnover development, as a not insignificant share results from turnover-independent bonus agreements of our members. The total payout in relation to turnover before sales deductions thus fell to 3.0 % (previous year: 3.8 %).

The focus of the total distribution is the suppliers' merchandise bonus with a share of 72 %, followed by the cooperative merchandise reimbursement with 21 % and the DFÜ bonus of 7 %.

Revenue development of GFT eG (as at 31.12.)

Capital expenditure

A total of k€ 80.9 was invested in the past business year. Of the investment total, k€ 56.3 was in the area of "software", k€ 15.1 in "other equipment, operating and office equipment" and k€ 9.5 in "advance payments and assets under construction".

In the area of the existing IT infrastructure, replacement and expansion investments amounting to k€ 29.0 were made. In addition, k€ 96.9 have been invested so far for the "Asteria" project after deducting grants and subsidies from the programme "Digital jetzt - Investitionsförderung des Mittelstandes" of the Federal Ministry of Economics and Climate Protection. The assets under construction are the preliminary costs for the construction of a photovoltaic system on the company building of GFT in Hilden.

The investments carried out are financed by own funds.

Net assets and financial position

Fixed assets amounting to k€ 888.7 are fully covered by own funds. An equity share of k€ 2,364.0 is also available to finance parts of the current assets.

As of the balance sheet date, the inventory assets of € 3.7 million include the remaining stock of software licences 2021 of our members as well as the additional tranche of € 2.9 million acquired at the end of 2022.

Due to the increased utilisation of value dates of individual members over the turn of the year as well as the acquisition of a further tranche of software licences for the member companies in December 2022, trade receivables on the one hand and trade payables on the other hand increased compared to the previous year. This resulted in an extraordinary expansion of the balance sheet total by k€ 7,110.6 to k€ 24,580.4, which, however, could already be reduced to the level of the year 2021 in the first week of January 2023.

Cash and cash equivalents increased by k€ 96.3 to k€ 122.7 compared to the previous year.

As of 31 December 2022, GFT had sufficient financial resources to meet its payment obligations on time.

Trade payables increased to k€ 11,404.6 due to invoicing and reporting date factors.

The other liabilities of k€ 2,889.3 include the remaining distribution to the member companies of k€ 2,538.9. It mainly consists of the cooperative reimbursement, the DFÜ bonus for the second half of 2022 and the remaining target achievement bonuses of the GFT suppliers.

Equity increased in absolute terms by k€ 99.6 to k€ 3,252.7. Reserves including retained earnings amount to 53.3% of equity.

Development of Membership

As of 31st of December 2022 the GFT has 192 members. Fifteen new members were recruited for the group of companies during the financial year. Nine member companies will leave the GFT as of 31st of December 2022 (of which: three through termination/liquidation and six through merger/transfer). The GFT continues to strive to win companies in Germany and abroad as members, because every system house in the ICT, security & electrical engineering sector that joins the GFT strengthens the market position of the group of companies.

Each member is not only a customer, but also a shareholder of GFT. Depending on the turnover generated with GFT, the members subscribe to business shares of € 3,100.00 each: 115 members hold one share, 30 members hold two shares and 47 members hold more than two shares in GFT. With a share of 47%, the business assets are a considerable part of the equity capital.

Development of Membership

Statement of the Executive Board on the Business Development and Situation of GFT

The greatest challenge is the supply situation and the extreme price increases in the industries in which GFT operates. The interrupted supply chains had an impact throughout the year in the form of considerable price increases and delivery postponements. The order situation of our member companies remains good. The acquisition of 15 new member companies, the cooperation with expert Technik SE & Co. KG and the continued internationalisation in Austria and the Benelux countries will further stabilise GFT's growth and thus enable GFT to continue to fully fulfil its cooperative sponsorship mandate in the future.

The development of new business fields such as photovoltaics | solar technology as well as the strategic further development of our services in the field of cloud telephony with "Asteria" will sustainably expand the market position of our members. The resulting income strengthens the market position of our members via bonus and/or merchandise reimbursement systems. Due to the stable growth at home and abroad, we see ourselves well positioned for the future. In addition to their traditional business fields, our members are also growing into new business fields related to advanced building technology. Here we see interesting starting points for GFT to successfully accompany our members on this growth path by taking on new suppliers in other business fields.

The main risks continue to include gross profit risks such as a falling trade margin, deteriorating purchasing conditions, rising refinancing costs and the latent risk of bad debt losses due to rising insolvency rates.

In the past business year, turnover across all business areas increased significantly by 12 %. For the first time, the turnover barrier of 140 million euros was broken. Apart from the general price increases, the new member companies acquired in the last three years and the catch-up effects from the supply bottlenecks on the international procurement markets from the fourth quarter of 2021 had a positive effect. The gross profit increased by k€ 693.2 to k€ 3,712.4 and resulted from the turnover-dependent target achievement bonuses, the marketing bonuses of the TC manufacturers and the other operating income. With a total distribution of k€ 4,317.8, the distribution of the previous year was not reached despite an increase in turnover. This is mainly due to the fact that the bonus income does not correlate with the development of turnover, as a significant part of it consists of non-revenue-related bonus agreements of our members, which were around k€ 582.0 lower this year than in the previous year.

In the area of expenses, the temporary double appointment to the Executive Board as well as expenses unrelated to the accounting period led to one-off effects that impacted earnings and thus the amount of the reimbursement of goods. In this respect, the earnings situation of GFT in 2022 was not fully satisfactory. We assume that the progress of GFT's internationalisation, the addition of further key suppliers, the development of new business fields such as photovoltaics | solar technology, as well as the strategic further development of our services in the field of Cloud Telephony with "Asteria" will sustainably strengthen our members vis-à-vis the competition. The resulting income will strengthen the market position of our members in the future through bonus and/or merchandise reimbursement systems.