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Investing.com -- Bechtle stock surged 8.5% Thursday after the IT service provider announced it has secured framework agreements worth up to €501 million with Germany’s central procurement agency for municipal IT service providers.
The agreements with ProVitako and its municipal stakeholders have an initial term of one year with the option to extend three times for an additional year each, the company said in a statement from Neckarsulm. This development signals renewed momentum in Bechtle’s public sector business, which had previously experienced sluggish growth.
When presenting third-quarter results in mid-November, Bechtle CEO Thomas Olemotz had expressed optimism about improving business trends, particularly noting that "The trend in October makes us optimistic."
He indicated that positive momentum had continued into November, with public sector clients being the main drivers behind this optimistic outlook for the final quarter.
Olemotz recently reaffirmed the company’s annual outlook, suggesting that achieving more than the lower end of the target range is "not impossible."
For 2025, Bechtle expects pre-tax results to range from minus to plus 5% compared to last year’s €345 million. The company anticipates slight growth in overall business volume, while revenue is likely to be somewhat weaker.
The market’s strong positive reaction reflects investor confidence in Bechtle’s ability to strengthen its position in the public sector, which appears to be a key growth driver for the company moving forward.
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