07/09/2018

Publication of inside information pursuant to Art. 17 MAR

Munich, July 9, 2018 – The Management Board of Allgeier SE (ISIN DE000A2GS633, WKN A2GS63) decided today on the further strategic direction of the Allgeier Group.

In previous years, Allgeier has grown strongly through acquisitions and has built up a broad portfolio of various, differently integrated companies. In recent years, Allgeier has focused on the three segments Experts, Enterprise Services and Technology. While the two divisions Technology and Enterprise Services are growing closer together in the areas of consulting, software development and software services, in particular also through the current topics HANA, Cloud, IoT and Multi Channel Commerce, Allgeier Experts with its specialized personnel services business in the German-speaking region represents a clearly complementary activity with a differing business model. As a result, Allgeier today consists of two large business units with significantly different business models under the umbrella of the listed Allgeier SE.

The Management Board has made the decision to expand both divisions more systematically and independently in the coming years:

• The strategic goal for Allgeier SE is the intensive expansion of the international software development and services business, which is now divided into the Technology and Enterprise Services divisions. The next step was the acquisition of Objectiva Software Solutions, Inc., San Diego, USA. Further acquisitions are planned. The goal is to create a modern and scalable matrix organization with very flat structures that is aligned according to Markets/Geographies, Industry Verticals, Technologies/Skills.

Future integration will not be based on legal entities or management hierarchies, but on a modern matrix structure that meets market requirements.

• For Allgeier Experts, the Management Board also sees a clear growth potential following the realignment carried out in the recent two years. Allgeier Experts intends to significantly expand its market position as one of the leading personnel services companies specializing in the technology sector, IT and engineering through acquisitions, entry into further markets, the expansion of international recruiting with corresponding training concepts and new software-based recruiting methods, and to expand strongly.

As a result, a split into Technology/Software Services and Experts will come to the fore in the near future. Due to the differences between the two business units in terms of business model, peer group and capital market perception, neither the existing growth opportunities can be sufficiently exploited nor a fair capital market valuation can be achieved under a common roof with limited resources. For both parts of the company, more independent further development is a much more attractive option. Their own image and standing in the market can be sharpened considerably. Access to sources of finance – both capital markets and credit institutions or private sources of finance – should be possible for both units directly. Strategic development options can be assessed and decided in a more targeted manner.

The Management Board of Allgeier SE has therefore decided to separate the two parts of the company within a timeframe of the next 18 months and to spin off the Allgeier Experts division. All possibilities are examined with the support of appropriate professional partners. This ranges from the IPO of one of the two units to a split into two independently listed companies as well as further strategic options with a view to private sources of financing to prepare the company for its own capital market capability and acquisitions or mergers to achieve an attractive size.

Above all, the step is intended to greatly increase the dynamics of further development and profile in the respective business model. The aim of the separation is to be able to continue the establishment of two market-leading units with significant acceleration and intensity:

• Allgeier SE is focusing its further development on the divisions Technology, consisting of Nagarro, mgm technology partners and Objectiva, as well as Enterprise Services, which together with sales of around 400 million EUR planned for 2018, approx. 6,000 employees and customers in more than 30 countries are on the threshold of becoming a globally relevant player in the field of software development and future technologies. This path is to be accelerated with further targeted acquisitions and an intelligent structure that favors integration as well as organic growth and scaling. The peer group includes companies like Globant, EPAM Systems, GlobalLogic, but to a certain extent also global players like Accenture, TCS, Infosys or Cognizant. In times of massive upheaval, it will be important in future competition not only to provide qualified specialists for customers, but also to provide the decisive ideas and contributions for the repositioning of customers’ business models. Allgeier already sees itself excellently positioned here.

• Following its realignment and separation from Allgeier SE, Allgeier Experts is on the threshold of developing from one of Germany’s leading personnel and recruitment service providers to a more internationally active player with a comprehensive service portfolio and sales of more than EUR 300 million planned for 2018. This requires further investments in cross-border recruitment and training concepts as well as the development of new markets through organic development, acquisitions and strategic partnerships. The peer group basically includes companies such as Adecco, Randstad/Gulp, Manpower/Experis, Recruit, Outsourcing, Technopro, Hays, Amadeus Fire or Brunel. As a first step, further acquisitions and growth in the domestic German market are aimed at in order to further expand the market-leading position and to further increase the growth momentum achieved.

The Management Board will work out the details of the future setup with the respective management teams. The aim is to continue to maintain and expand the good cooperation between the two corporate units. The Management Board is convinced that both Allgeier SE and the Experts division will experience an acceleration in their development after the separation and spin-off of the personnel services business.