Softwareone Holding Ltd. · SIX:SWON
Softwareone — FY2019 Earnings Presentation
35 slides from Softwareone's earnings presentation, 2020
Slide 1: Empowering companies to transform
E M P O W E R I N G C O M P A N I E S T O T R A N S F O R M 1
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. This Pr
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) This Presentation contains specific forward-looking statements, beliefs or opinions, which are based on management’s current beliefs, expectations and projections about future events and operational performance. These statements may contain terms like “potential”, “believe”, “ass
Slide 4: Agenda
Agenda 01 Introduction and FY19 summary results 02 Financial performance 03 Business and strategy update 04 Outlook 05 Q&A 4
Slide 5: Introduction and FY19 summary results
01 Introduction and FY19 summary Chief Executive Officer results 5
Slide 6: SoftwareONE – an integrated platform with end-to-end value proposition
SoftwareONE – an integrated platform with end-to-end value proposition Procurement and provisioning of Software and Software & Cloud • Cloud • Managed catalogue • PyraCloud as an end-to-end procurement digital platform Software Lifecycle Technology Services Management • Software Asset Management • C
Slide 7: Global software & cloud–only solutions leader
Global software & cloud–only solutions leader 100% 65k 737m 5,442 Completed 7 strategic CHF ACQUISITIONS Software & Cloud Customers FY19 Gross profit(1) Employees Within the last 24 ~50% Enterprises ~50% SMEs 90 months(2) Countries >100% 7.5k+ CHF 224m CHF 13bn Successful IPO Net Renewal Rate Softwa
Slide 8: FY2019 summary results
FY2019 summary results • Solid performance and progress with Comparex integration in 2019, in line with IPO guidance • Gross profit (like-for-like) growth of 4.3% in constant exchange rates to CHF737.2m • Adjusted EBITDA (like-for-like) up 23.1% in constant exchange rates to CHF223.6m, with margin a
Slide 9: Financial performance
02 Chief Financial Officer Financial performance 9
Slide 10: FY2019 Profit and loss statement
FY2019 Profit and loss statement Reported (IFRS) D Combined (“like-for-like”)(1) % change CHFm 2018 2019 CHFm 2018 2019 (ccy(2)) Revenue from sale of software and other revenue 3,616 7,314 555 557 2.8% Gross profit from sale of software and other revenue Revenue from solutions and services 124 297 G
Slide 11: Solid 2019 performance in line with guidance
Solid 2019 performance in line with guidance 2019 results(1) Mid-term guidance 2019 IPO guidance(1)(2) Comments “Integration year” (2020-2022) CHF737m 4-6% growth • In line with guidance Double-digit growth(2) Growth: 4.3%(2) CHF557m Sale of software 1-3% growth • At upper end of guidance, reflectin
Slide 12: Gross profit growth at 4.3% ccy, in line with 2019 guidance
Gross profit growth at 4.3% ccy, in line with 2019 guidance Gross profit by line of business • On like-for-like basis, GP grew 4.3% in constant exchange rates to CHFm Growth Growth (yoy, CHF737.2m, in line with 4-6% guidance Sale of software and other revenue (yoy) ccy(1)) • Strong growth in Softw
Slide 13: Diversification across geographies, customers and industries
Diversification across geographies, customers and industries Gross profit by geography Gross profit by customer size(1) Gross profit by customer industry(1) 2019, Combined Group 2018, Customer size based on no. of FTEs 2018 Large enterprises SMEs and small businesses LATAM 7% Other(2) APAC 1-100 >10
Slide 14: Adj. EBITDA growth of 23.1% at ccy, with margin uplift to 30.3%
Adj. EBITDA growth of 23.1% at ccy, with margin uplift to 30.3% Operating cost ratio Adjusted EBITDA % of Gross profit Margin (% of Gross profit) 25.8% 30.3% Adjusted net operating expenses CHFm 74.2% 23.1%(1) 224 69.7% Comparex 187 51 136 2018 2019 2018 2019 (1) In constant exchange rates 14
Slide 15: Growth, cost discipline and synergies drive 60% profit uplift
Growth, cost discipline and synergies drive 60% profit uplift 2019 Margin (% of Gross profit) 30.3% 23.8% 16.7% 17.5% CHFm Of which CHF39m relates to 224 (1) (14) appreciation of Crayon (11) shareholding (21) (6) 170 (51) 35 (29) 125 119 EBITDA Adjustments of CHF47m (3) Adj. M&A-related Integration
Slide 16: Asset-light business model drives strong cash flows
Asset-light business model drives strong cash flows Capital expenditure(1) Operating cash flow(2) Free cash flow(3) % of Gross profit Cash conversion CHFm 3.1% 2.9% 90.2% 87.9% (2) CHFm CHFm 193 150 117 73 21 13 2018 2019 2018 2019 2018 2019 (1) Defined as purchases of tangible and intangible assets
Slide 17: Strong balance sheet and returns to shareholders
Strong balance sheet and returns to shareholders Net working capital(1) Net debt/ (Net cash) • Average NWC at 38%, down to 13% by year-end % of Gross profit, CHFm CHFm • Unlevered balance sheet, with a net cash position of CHF190.7m 93 • Equity ratio unchanged at ~21%, after acquisition of 56 Compar
Slide 18: Business and strategy update
03 Chief Operating Officer Business and strategy update 18
Slide 19: Technology has become more important and more complex
Technology has become more important and more complex Increased Importance + Increased Complexity = Increased DEMAND for SoftwareONE Technology seen as a key differentiator / competitive Increasing number of software publishers(2) Organizations lack digital skills to operate in a multi- advantage an
Slide 20: SoftwareONE operates in large and growing markets
SoftwareONE operates in large and growing markets +4% +4% Global Technology Market(1) IT Services Market CHF 1.6tn CHF 1tn +10% Global Software & Cloud market +17% CHF 525bn Total addressable Solutions & Services market CHF 31bn +% CAGR % 2018-2022 Source: External industry experts (1) Comprises Sof
Slide 21: Customer focus drives a differentiated business model
Customer focus drives a differentiated business model Globally scaled Powered by proprietary platform 3 Global Service Delivery Centres Leipzig EMEA Romania 6 Regional Service Edge Cloud Advisory NORAM Stans Delivery Centres Publishers / ISVs(2) Raleigh New Delhi APAC Digital Supply Chain 24 / 7 sup
Slide 22: Vision 2022 broken down into tactical execution strategy
Vision 2022 broken down into tactical execution strategy Organic Inorganic Continue to grow our Continue to cross-sell and Expand our portfolio to serve Scale our global-local Selectively pursue M&A to Software & Cloud business up-sell Solutions & Services customers end to end operating model for su
Slide 23: Underlying drivers support a recurring business with a diverse and large customer base
Underlying drivers support a recurring business with a diverse and large customer base Software & Cloud Services & Solutions • 76% of gross profit(1) • 24% of gross profit(1) • Highly recurring software revenues with existing customers • Approximately 50% professional services and 50% managed (contr
Slide 24: Post-merger integration update
Post-merger integration update Overall PMI status Comparex acquisition overview Item Description Status • Solidify European presence and global leadership UC Point UCC practice • Drive digital transformation in common customer base ISI Expert In-market services (future workplace, future data cente
Slide 25: Outlook
04 Chief Executive Officer Outlook 25
Slide 26: Current operating environment with Covid-19
Current operating environment with Covid-19 #1. Protect our employees and continue our strong sense #2. Do our part as a “Global Citizen” to flatten the curve of shared purpose • Global company already used to working remotely and virtually • 98% WFH on March 23 (including 100% in India) • Most call
Slide 27: Outlook
Outlook • SoftwareONE reaffirms its mid-term (2020-2022) guidance provided at IPO • However, due to the Covid-19 situation, it is currently not possible to predict whether it can already reach gross profit targets in 2020, as expected during the IPO • Key mid-term guidance includes: • Double-digit g
Slide 28: Q&A
Q&A
Slide 29: Thank you!
4 THANK YOU! A A o>. 4
Slide 30: Appendix
softwareONE Appendix 30
Slide 31: Revenue and Gross profit recognition
Revenue and Gross profit recognition Total customer purchasing volume Total revenue Gross profit (IFRS) (Non-IFRS) SoftwareONE commissions and incentive payments from publishers Total customer 76% purchasing volume 24% 31
Slide 32: Profit and loss statement
Profit and loss statement (in CHFm) 2018 2019 2018 2019 Revenue from sale of software 3,600 7,296 6,570 7,527 Revenue from solutions and services 124 297 368 316 Other revenue 16 18 16 18 Total revenue 3,741 7,611 6,954 7,860 Cost of software purchased (3,294) (6,773) (6,031) (6,987) Third party ser
Slide 33: Balance sheet statement—assets
Balance sheet statement—assets (in CHFm) 2018 2019 2018 2019 Cash & Cash Equivalents 154 313 290 313 Trade Accounts Receivable 751 1,649 1,422 1,649 Income Tax Receivables 2 9 6 9 Other Receivables 62 82 74 82 Derivative financial instruments 3 3 3 3 Prepayments, accrued income and contract assets 9
Slide 34: Balance sheet statement—liabilities
Balance sheet statement—liabilities (in CHFm) 2018 2019 2018 2019 Trade payables 484 1,073 1,216 1,073 Other payables 76 233 153 205 Accrued expenses, deferred revenue and contract liabilities 287 737 342 737 Derivative financial instruments 2 4 3 4 Income tax liabilities 12 26 21 26 Bank overdrafts
Slide 35: Cash flow statement
Cash flow statement (in CHFm) 2018 2019 (in CHFm) 2018 2019 Profit for the year 78 125 Purchases of tangible and intangible assets (13) (21) Proceeds from sale of tangible and intangible assets 0 0 Adjustments for: Purchases of financial assets (13) (7) Depreciation and amortization 17 51 Loans gran