SOFTWAREONE HOLDING AG The development of SoftwareONE's cost base reflected significant investments in strategic growth areas to increase recurring revenues and drive future profitable growth, as well as in sales and marketing and global and local delivery capabilities. The additional personnel expenses relating to these investments, as well as the consolidation of InterGrupo, amounted to approximately CHF 55 million in H1 2021 compared to the prior year period.
The number of FTEs stood at 8,269 as at 30 June 2021, an increase of 2,050 compared to 6,219 as at 31 December 2020, of which approximately 1,450 were related to the InterGrupo acquisition.
With regards to the integration of Comparex, SoftwareONE achieved run-rate cost synergies of CHF 41.9 million by 30 June 2021, thereby exceeding the targeted amount of CHF 40 million of cost savings on schedule.
Adjusted EBITDA for H1 2021 was CHF 109.1 million, compared to CHF 120.0 million for the prior year period. This implies a margin of 26.3% and 32.4% in H1 2021 and H1 2020, respectively, reflecting the aforementioned strategic investments.
Adjusted profit for the period was CHF 54.3 million in H1 2021, representing a decrease of 20.0% YoY in reported currency, compared to CHF 67.9 in the prior year period.
IFRS reported profit for the period decreased 42.5% YoY in reported currency to CHF 38.3 million in H1 2021, compared to CHF 66.7 in the prior year period. This result includes the aforementioned adjustments and related tax impact, as well as a depreciation in SoftwareONE's shareholding in Norwegian listed company Crayon of CHF 1.2 million in H1 2021. In H1 2020, the shareholding in Crayon appreciated by CHF 13.3 million.
For a reconciliation of IFRS reported profit to adjusted profit for the period, see page 6 of this media release.
Strong liquidity and unlevered balance sheet
Net cash generated from operating activities amounted to CHF (32.4) million in H1 2021, driven primarily by an increase in net working capital (NWC) due to seasonal effects and business growth. Excluding the impact of COVID-19-related vendors' deferred payment programs in the amount of approximately CHF 250 million, the level of NWC decreased compared to 30 June 2020 driven by continuous improvements in the collection of receivables and prudent management of payment terms.
Capital expenditure totaled CHF 14.3 million in H1 2021, mainly relating to investments in the PyraCloud platform and other intangible assets generated internally, compared to CHF 10.8 million in the prior year period. Cash outflow relating to acquisitions of businesses amounted to CHF 34.8 million in H1 2021, including earn-out payments relating to prior acquisitions. Free cash flow was CHF (46.1) million during H1 2021.
Net cash position was CHF 385.5 million as at 30 June 2021 compared to CHF 366.2 million one year earlier.
Outlook
With a solid foundation for future growth in place, SoftwareONE re-iterates its guidance for 2021, based on the assumption of no material deterioration in the environment due to COVID-19:
- Gross profit growth above 10% for the group in constant currency, excluding InterGrupo, which is expected contribute approximately 4% in YoY growth;
- Adjusted EBITDA margin of approximately 30%;
- Dividend pay-out ratio of 30-50% of adjusted profit for the year.
This outlook is supported by early signs of more normalized levels of purchasing activity, particularly among SMEs, driving a recovery in Software & Cloud as well as a strong backlog in Solutions & Services. Overall, this is expected to drive a further acceleration in gross profit growth in H2 2021.
Furthermore, the company's cost base is expected to remain at approximately the same level in H2 2021 compared to H1 2021 as a result of investments being predominantly frontloaded earlier in the year.
Beyond 2021, SoftwareONE continues to expect gross profit growth in the 'mid-teens' in constant currency, with EBITDA growth in excess of gross profit growth.
RESULTS OVERVIEW
Profit & loss summary
IFRS reported Adjusted
CHFm (unless otherwise indicated) H1 2021 H1 2020 H1 2021 H1 2020 % ? % ? at CCY
Revenue from Software & Cloud 4,170.2 3,941.2 4,170.2 3,941.2 5.8% 6.5%
Cost of software purchased (3,902.5) (3,666.5) (3,902.5) (3,666.5) 6.4%
Gross profit from Software & Cloud 267.6 274.6 267.6 274.6 (2.5)% (2.1)%
Revenue from Solutions & Services 196.3 145.9 196.3 145.9 34.5% 35.2%
Third party service delivery costs (49.6) (49.8) (49.6) (49.8) (0.2)%
Gross profit from Solutions & Services 146.7 96.2 146.7 96.2 52.5% 53.4%
Gross profit total 414.4 370.8 414.4 370.8 11.7% 12.3%
Operating expenses (321.8) (268.5) (305.3) (250.8) 21.7% 22.5%
EBITDA 92.5 102.3 109.1 120.0 (9.1)% (9.0)%
Depreciation, amortisation & impairment^[4] (27.2) (29.7) (27.2) (29.7) (8.3)% -
EBIT 65.3 72.6 81.9 90.3 (9.4)% -
Net financial items (9.6) 11.6 (8.4) (1.7) - -
Earnings before tax 55.7 84.2 73.5 88.6 (17.1)% -
Income tax expense (17.4) (17.5) (19.2) (20.8) (7.7)% -
Profit for the period 38.3 66.7 54.3 67.9 (20.0)% -
EBITDA margin (%) 22.3% 27.6% 26.3% 32.4% (6.0)% -
EPS (diluted) 0.25 0.43 0.35 0.44 (8.9)% - Reconciliation - IFRS reported to Adjusted profit
CHFm (unless otherwise indicated) H1 2021 H1 2020 IFRS reported profit for the period 38.3 66.7 Share-based compensation 7.8 12.4 IPO, integration and M&A and earn-out expenses 8.7 5.3 Total operating expense adjustments 16.6 17.7 Depreciation / (appreciation) of Crayon shareholding 1.2 (13.3) Tax impact of adjustments (1.8) (3.2) Adjusted profit for the period 54.3 67.9
Source: Management view
Alternative Performance Measures
Please see the 2021 Half-year report (page 12 of the PDF version) for a definition of Alternative Performance Measures used in this media release.
H1 2021 RESULTS DOCUMENTS
The H1 2021 results documents can be found on SoftwareONE's website in the Results Center.
CALL FOR INVESTORS, ANALYSTS AND THE MEDIA
An investor, analyst and media audio webcast with Dieter Schlosser, CEO, Hans Grüter, CFO and Alex Alexandrov, COO will be held today at 9.00 CEST and may be joined via the link Audio webcast.
To actively participate in the Q&A session, please join via telephone instead:
Switzerland: +41 445807145
Germany: +49 3052002085
UK: +44 8444819752
US: +1 6467413167
Enter the PIN: 8298320#
Other international numbers are available here. Please join 10-15 minutes before the webcast is due to start.
The webcast will be archived and a digital playback will be available approximately one hour after the event in the Results Center.
CORPORATE CALENDAR
2021 Virtual Capital Markets Day 20 October 2021
2021 Full-year results & Annual report 3 March 2022
2022 Annual General Meeting (AGM) 5 May 2022
2022 Half-year results & Half-year report 25 August 2022
CONTACT
Patrick Zuppiger, Media Relations Tel. +41 44 832 82 00, patrick.zuppiger@softwareone.com
Anna Engvall, Investor Relations Tel. +41 44 832 41 37, anna.engvall@softwareone.com ABOUT SOFTWAREONE
SoftwareONE is a leading global provider of end-to-end software and cloud technology solutions, headquartered in Switzerland. With an IP and technology-driven services portfolio, it enables companies to holistically develop and implement their commercial, technology and digital transformation strategies. This is achieved by modernizing applications and migrating critical workloads on public clouds, while simultaneously managing and optimizing the related software and cloud assets and licensing. SoftwareONE's offerings are connected by PyraCloud, its proprietary digital platform, which provides customers with data-driven, actionable intelligence. With around 8,300 employees and sales and service delivery capabilities in 90 countries, SoftwareONE provides around 65,000 business customers with software and cloud solutions from over 7,500 publishers. SoftwareONE's shares (SWON) are listed on SIX Swiss Exchange. For more information, please visit SoftwareONE.com.
SoftwareONE Holding AG, Riedenmatt 4, CH-6370 Stans
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