Teamviewer crash: what’s going on with the former stock market star? – Business

Lewis Hamilton’s Formula One Mercedes is on the conference table. Not in toy format, but in full size. There are also notes with lots of questions: Do you have the right tires on? Are all screws tight? Any quirk in the spoiler?

For a moment you forget that this spectacle is only possible because you have a clunky helmet with integrated virtual reality glasses on your head and probably looks pretty stupid to outsiders when you try to tap and swipe in the air to try the on-screen checklist to tick off. Because of course nobody rolled the racing car to the fifth floor of the company headquarters of the software company Teamviewer in Göppingen near Stuttgart. Rather, the demonstration is intended to show what the company wants to earn money with in the future. Because recently there was a huge crunch at the former German stock market star.

When the company went public two years ago, expectations were still huge: A German software company that is shaking up the world market, some even saw Teamviewer as the next SAP. The software from Swabia has so far been installed on 2.5 billion devices worldwide, so that computers or machines can be repaired and controlled remotely. The corona pandemic also accelerated the company’s growth enormously. Teamviewer was considered one of the crisis winners.

The forecasts were correspondingly self-confident: in 2023, one billion euros in invoiced sales, so-called Billings – that would be more than twice as much as in 2020. Not only were the expectations high. The CEO was also rewarded like a king: Oliver Steil received share compensation for the record year 2020 from an earlier participation program of the then owner Permira, which was worth more than 70 million euros at the time of the distribution – no Dax boss earns that much.

There were some decisions that hardly anyone understood

But then things suddenly and rapidly went downhill. The company had to cut its prospects as early as 2021. At the beginning of October, Teamviewer announced that it is only assuming sales of 535 to 555 million euros in 2021. Previously, 585 to 605 million euros had been promised. The stock plunged around 25 percent and has not recovered to this day. Within a year the price collapsed by 70 percent, this Thursday it went down again significantly to just over eleven euros. In the best of times, the paper was quoted at just under 50 euros.

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But what went wrong there? And above all: how do you get out of there? Teamviewer was not the only beneficiary of the pandemic, with the increasing need for remote maintenance and collaboration solutions, more and more competitors came. There are plenty of them, be they big players like Microsoft and Zoom, or startups like Anydesk from Stuttgart, whose founders once worked at Teamviewer themselves. “These simple solutions were sufficient for many companies, even if Teamviewer offers more options in detail,” says AHP analyst Frank Rothauge. Some major customers hesitated to invest millions in pandemic times, others preferred their purchases, which explains the 44 percent growth at Teamviewer for 2020. Based on the last two quarters of 2020, the company calculated the forecast for 2021 – but they turned out to be far too optimistic.

As early as the summer, the shareholders were suspicious, says Marc Tüngler, managing director of the German Protection Association for Securities Ownership (DSW), when the Teamviewer board was still promising to achieve the ambitious goals. “It was assured again and again that the major customers would come – but they did not come.” Teamviewer boss Steil also admits delays. “We expected that we grew less strongly in the first two quarters of this year than in the first half of 2020, but the summer quarter was weaker than expected.” At the end of September it was clear: The second half of the year can no longer tear the lack of growth from the first half of the year. The purely virtual onboarding of almost 500 new employees also led to problems for the digitization professionals from Göppingen in 2020 alone. “Of course we should have acted more quickly at one point or another,” admits the CEO.

But there are also management decisions that many investors did not understand at all, especially the expensive sponsorship of sports. According to media reports, Teamviewer pays around 40 million euros per year to advertise with superstar Cristiano Ronaldo on Manchester United’s jerseys and in the online and social media channels, and another million is flowing into a deal with the Mercedes Formula One and Formula E teams.

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According to Marc Tüngler, many shareholders are wondering how exactly these huge investments should pay off. And analyst Rothauge also says: “Such deals are more of a sign that one has apparently already noticed that the set pace cannot be maintained.” Basically, something like that could help to increase brand awareness, “but in two or three years at the earliest.” Teamviewer CEO Steil remains: “These commitments are important investments in our brand”. The marketing effect of Formula One and football is enormous worldwide – “especially in regions where we are hoping for new customers, such as the Asia-Pacific region”. It was always clear that such measures would only pay off over the years. According to the company, the advertising deal has already generated media value in the first seven Formula One races since the partnership began, which roughly corresponds to the sponsorship costs for the entire first season.

And yet there were also personnel changes, such as the appointment of a new boss for the important Asia-Pacific region, but also on the board. First it was announced that CFO Stefan Gaiser would not extend his contract, which ran until August 2022, a few weeks later it was clear: Lisa Agona, who was only appointed in April, is leaving the company.

There is also criticism of CEO Steil

On the other hand, CEO Oliver Steil is allowed to stay, his contract has been extended until 2024. Not everyone understands that. “The loss of trust is huge. So great that in other cases the entire board had to go,” says DSW managing director Tüngler. Steil is steadfast despite all the criticism. He feels the full trust of the supervisory board and the workforce. “Our business is running smoothly, our customers are satisfied – and Teamviewer’s potential in the course of global trends in digitization and automation is huge.” The company is still expecting sales increases in the high tens of percent for the current year, and the company is still highly profitable. With an expected adjusted margin of 44 to 46 percent with simultaneous double-digit sales growth, Teamviewer is actually anything but badly positioned.

And also the major customers, from whom Teamviewer expects a lot of growth apart from the computer remote access market, are apparently coming in more and more numbers. At least one is now communicating more aggressively who is working with the company’s augmented reality solutions. Most recently, Teamviewer announced that the car manufacturer Ford will in future support its automotive technicians remotely in the repair and maintenance of customer vehicles with software from Göppingen. But how skeptical investors are now about Teamviewer can be seen from the share price after the Ford deal was announced: it went further down.