Softwareone Holding Ltd. · SIX:SWON
Softwareone — FY2021 Earnings Presentation
37 slides from Softwareone's earnings presentation, Mar 3, 2022
Slide 1: FY 2021 Results Presentation
SoftwareONE FY 2021 Results Presentation 3 March 2022 ONE
Slide 2: Disclaimer
DISCLAIMER Forward-looking statements This presentation may contain certain forward-looking statements relating to SoftwareONE Holding AG (the ‘Company’) and each of its subsidiaries and affiliates (jointly referred to as ‘SoftwareONE' or the ‘group’) and its future business, development and economi
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Slide 4: Key Take-Aways
KEY TAKE-AWAYS a Outstanding growth momentum in 2021 with continued investments driving 17.6% YoY ccy gross profit growth XO in 2021, with acceleration to 23.0% YoY ccy in H2 2021 ( 2 Software & Cloud returned to a solid level of growth, up 3.0% and 8.8% YoY ccy in 2021 and H2 2021, respectively, wh
Slide 5: Key Achievements of 2021
KEY ACHIEVEMENTS OF 2021 RETURN TO STRONG DOUBLE-DIGIT GROWTH IN A YEAR MARKED BY STRATEGIC INVESTMENTS “al cHF 855m +17.6%") Group gross profit ie 6 Acquisitions completed conto? SEIGN 5p Ortst i72¢) { synchronet softwareONE +53.5%0 Solutions & Services Gross profit growth o> 6.9m Managed cloud use
Slide 6: Market Opportunity Is Our Foundation for Growth
MARKET OPPORTUNITY IS OUR FOUNDATION FOR GROWTH OUR CUSTOMERS’ ENVIRONMENT IS INCREASINGLY COMPLEX WITH POST-COVID CLOUD ACCELERATION COVID-19 accelerated 9. ft 75% of IT personnel lack digital transformation S382 all? necessary by 7 years ko wy digital skills $634pn Software & Cloud spend ~ Bax 202
Slide 7: Well-Positioned to Benefit from Market Drivers
WELL-POSITIONED TO BENEFIT FROM MARKET DRIVERS SIGNIFICANT OPPORTUNITY TO ADDRESS CUSTOMER NEEDS AND DRIVE CLOUD ADOPTION KEY MARKET DRIVERS ACCELERATION IN DIGITAL TRANSFORMATION RISING COMPLEXITY FOR CUSTOMERS SAAS AND PUBLIC CLOUD DOMINANCE Increasing IT spend, with cloud-first business models Ac
Slide 8: Growth Across Synergistic Business Lines
GROWTH ACROSS SYNERGISTIC BUSINESS LINES VALUE PROPOSITION BASED ON COMBINING SOFTWARE WITH SERVICES TO DRIVE RECURRING CUSTOMER RELATIONSHIPS SOFTWARE & CLOUD SOLUTIONS & SERVICES Gross profit (2021) Gross profit (2021) 38% CHRO 214m cHFD35.6m 62% + Pro-active transfer of customers to pay-as-you-go
Slide 9: Solid Recovery in Software & Cloud with 3.0% YoY
SOLID RECOVERY IN SOFTWARE & CLOUD WITH 3.0% YOY CCY GROSS PROFIT GROWTH SOFTWARE & CLOUD GROSS PROFIT 2021 HIGHLIGHTS CHFm, % YoY growth (ccy) * Billings growth in line with overall Microsoft market; positive performance across customer segments 30% ; * Double-digit growth in Microsoft Cloud (365,
Slide 10: Solutions & Services Maintains Growth Trajectory
SOLUTIONS & SERVICES MAINTAINS GROWTH TRAJECTORY WITH GROSS PROFIT UP 53.5% YOY CCY SOLUTIONS & SERVICES GROSS PROFIT CHFm, % YoY growth (ccy) 3214 2101 @ 140 2020 2021 H2 2020 H2 2021 softwareONE —_~“ 2021 HIGHLIGHTS + Broad-based strong performance across service lines, customers and geographies +
Slide 11: Strong Performance Across Key Markets
STRONG PERFORMANCE ACROSS KEY MARKETS PERFORMANCE OVER THE YEAR PRIMARILY DRIVEN BY PORTFOLIO MIX BY REGION NORAM 2021 Gross profit cHFI2 7m +22.5% YOY Software & Cloud Solutions & Services © LATAM 2021 Gross profit cHF89mo +74.1% YOY Software & Cloud Solutions & Services ® softwareONE (1) Includes
Slide 12: Our Solutions & Services Portfolio
OUR SOLUTIONS & SERVICES PORTFOLIO SCALE DRIVEN BY STRONG MARKET OUTLOOK AND M&A, WITH >CHF400 MILLION GROSS PROFIT RUN-RATE BY END- 2021 DIGITAL Oe FUTURE SUPPLY APPLICATION SERVICES / WORKPLACE SERVICES HYPERSCALER GHIAIN FACTORY ~50% ~70% >100% >100% ~30% FINOPS SECURITY, AUTOMATION, Al/ML & CROS
Slide 13: Adding Capabilities via Strategic M&A
ADDING CAPABILITIES VIA STRATEGIC M&A ACCELERATED PRACTICE-BUILDING IN STRATEGIC GROWTH AREAS VIA M&A predica. centia® February 2022 October 2021 * Leading provider of Azure cloud + Highly certified provider of SAP- migration and application related professional and managed modernization to blue-chi
Slide 14: Operational Excellence with High Growth
OPERATIONAL EXCELLENCE WITH HIGH GROWTH ‘TRANSFORMANCE’ AS AN OPTIMIZATION PROGRAM TO SUPPORT OUR ACCELERATED GROWTH KEY PRINCIPLES OF ‘TRANSFORMANCE’ PROGRAM * ‘Transformance’ aims to ensure that capabilities in sales and operations match evolving CONTINUE business requirements, along DRIVING STRON
Slide 15: Current Positive ESG Impact and Roadmap
CURRENT POSITIVE ESG IMPACT AND ROADMAP ESG PROGRAM LAUNCHED DURING 2021 TO DEFINE OVERALL STRATEGY AND TARGETS ENVIRONMENT SOCIAL GOVERNANCE v¥ Supporting customers in their digital Y Core values focused on people v_ Independence of Board of Directors transformation to drive sustainability v High e
Slide 16: Financial Performance
FINANCIAL PERFORMANCE Rodolfo 3. Savitzky, CFO softwareONE _“
Slide 17: Change in Revenue Recognition
CHANGE IN REVENUE RECOGNITION GROSS PROFIT REMAINS UNCHANGED Software & _J Cloud Solutions & _J Services softwareONE —_~“ \f OLD METHODOLOGY CHFm 8,737 Revenue Gross profit NEW METHODOLOGY CHFm Revenue Gross profit New revenue recognition follows IFRS 15 Revenue in Software & Cloud is presented net
Slide 18: FY2021 Financial Highlights
FY2021 FINANCIAL HIGHLIGHTS GROSS PROFIT GROWTH DRIVEN BY STRONG MOMENTUM IN H2 2021 PROFIT & LOSS SUMMARY [2021 | 2 2071 | " Gespte vanstion to pay.so- despite transition to pay-as- Revenue from Software & Cloud”) 533.6 3.0% 266.0 8.8% youge * Strong growth momentum in Revenue from Solutions & Serv
Slide 19: Attractive Synergistic Business Lines
ATTRACTIVE SYNERGISTIC BUSINESS LINES SIGNIFICANT LEVERS ACROSS BOTH BUSINESS LINES TO DRIVE GROWTH AND PROFITABILITY BUSINESS MIX GROWTH MARGIN PROFILE TODAY MID-TERM TODAY MID-TERM TODAY MID-TERM Potential Software & > > upside via i > i Cloud rR iq Oo) Marketplace & Very High Very High Digital Su
Slide 20: High Operating Leverage
HIGH OPERATING LEVERAGE DRIVING PROFITABLE GROWTH VIA OPTIMIZATION, AUTOMATION AND INDUSTRIALIZATION ILLUSTRATIVE SPLIT OPERATING LEVERAGE ENABLERS CHF635 million Sales & A * Marketplace * Digital Supply Chain * Sales force effectiveness * Global-local delivery model, leveraging regional delivery ce
Slide 21: M&A Core to SoftwareONE's Strategy
M&A CORE TO SOFTWAREONE’S STRATEGY ACCELERATION OF GROWTH AND CAPABILITIES BUILD-UP. + Six completed transactions in 2021 y NC] * Focus on Solutions & Services, SAP ON CLOUD fed centia mainly SAP on Cloud and Cloud SE16N Services HYPERSCALER . a E * Acquired businesses typically FACTORY / . Liber di
Slide 22: Continued Robust Cash Flow Generation
CONTINUED ROBUST CASH FLOW GENERATION TIGHT NET WORKING CAPITAL MANAGEMENT AND LOW CAPEX CAPITAL EXPENDITURE” CHFm 33.3 = — 2020 2021 % of Gross profit + Primarily investments in PyraCloud and other internally generated intangible assets CHANGE IN NET WORKING CAPITAL CHFm 100.2 26.6 | 2020 2021 DsO/
Slide 23: Strong Balance Sheet
STRONG BALANCE SHEET EXCELLENT BASIS FOR FURTHER STRATEGIC ACQUISITIONS NET DEBT/(CASH) EQUITY RATIO CHFm, at period end foal Equity/Book capitalization (%), at period | 25.4% (496.5) 24.8% (847.4 || 2020 2021 2020 2021 PROPOSED DIVIDEND CHF 0.33 per share software@NE (l) See page 36 for further det
Slide 24: Strategy & Outlook
STRATEGY & OUTLOOK Dieter Schlosser, CEO softwareONE SINS
Slide 25: Digitization of Software & Cloud with Expanded Services Portfolio
DIGITIZATION OF SOFTWARE & CLOUD WITH EXPANDED SERVICES PORTFOLIO TO DELIVER CUSTOMER VALUE, POWERED BY PYRACLOUD Continue to grow Continue to Expand portfolio to and digitize cross/up-sell serve customers’ Software & Cloud Solutions & digital journey, Services based on customer insights ONE Scale g
Slide 26: FY2022 Outlook and Mid-Term Guidance
FY2022 OUTLOOK AND MID-TERM GUIDANCE ASSUMING NO MATERIAL DETERIORATION IN THE ECONOMIC ENVIRONMENT, PARTICULARLY IN THE CONTEXT OF THE CONFLICT IN UKRAINE GROSS PROFIT GROWTH” 17.6% ADJUSTED 9) EBITDA MARGIN CENT DIVIDEND POLICY CHFO.33 per share software@NE (I) Inconstant currency FY2021 RESULTS F
Slide 27: 'Magic Quadrant': Growth vs. Margin
‘MAGIC QUADRANT’: GROWTH VS. MARGIN SOFTWAREONE'’S GUIDANCE IS IN LINE WITH THE RULE OF 40 FOR THE SOFTWARE INDUSTRY 30.0% Next generation service providers Digital transformers SoftwareONE 9 15.0% Digital Consultancies Traditional VARS Revenue/Gross profit growth (CAGR 2021-23E) 0.0% 0.0% 25.0% 50.
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Slide 31: Adjusted Profit Bridge
ADJUSTED PROFIT BRIDGE CHFm (unless otherwise indicated) [2020 | 201 | IFRS reported profit for the period 176.8 120.1 Share-based compensation" 24.2 13.2 IPO, integration and M&A and earn-out expenses 109 36.7 ‘Transformance’ expenses - 93 Total adjustments to operating expenses 35.1 59.2 Adjustmen
Slide 32: Profit & Loss Summary
PROFIT & LOSS SUMMARY Revenue from Software & Cloud 519.5 533.6 519.5 533.6 3.0% Cost of software purchased - 2 - 2 2 Gross profit from Software & Cloud 519.5 533.6 519.5 533.6 3.0% Revenue from Solutions & Services 3129 430.7 3129 430.7 38.1% Third party service delivery costs (102.8) (109.3) (102.
Slide 33: Balance Sheet
BALANCE SHEET HiFi, as per Si December [2020] 2021 BEF, az per si December [3020 | 20m | Cash and cash equivalents 4349 350.4 Trade payables 1,685.3 1848.7 Trade receivables 1.74.2 1,861.2 Other payables 2213 233.2 Income tax receivables 2.4 10.7 Accrued expenses and contract liabilities 128.6 158.7
Slide 34: Cash Flow Statement
CASH FLOW STATEMENT Profit for the period 176.8 1201 Proceeds from financial liabilities 659.7 3,664.6 Depreciation, amortization & impairment 55.2 oe) Repayments of financial liabilities (694.4) (3,704.9) Total finance result, net (80.2) (49.4) Payment of contingent consideration liabilities (2.8)
Slide 35: Working Capital Reconciliation
WORKING CAPITAL RECONCILIATION Trade receivables 1714.2 1,861.2 Other receivables 64.3 93.8 Prepayments and contract assets 872 als Trade payables (1,685.3) (848.7) Other payables (221.3) (233.2) Accrued expenses and contract liabilities (128.6) (158.7) NWC (after factoring) (169.6) (204.2) Receivab
Slide 36: Net Debt Reconciliation
NET DEBT RECONCILIATION CHF™m, as per 31 December 2020 [| 202 | Bank overdrafts 9.6 12 Other current financial liabilities 3.7 472 Current contingent consideration liabilities 18 16 Other non-current financial liabilities 52.7 45 Non-current contingent consideration liabilities 81 70 Lease liabiliti
Slide 37: FX Exposure
FX EXPOSURE GROSS PROFIT BY CURRENCY Other, 23.0% EUR; 38.9% INR; 1.9% [i MXN; 1.3% BRL 2.3% GBP; 4.4% w CHF, 11.1% USD; 17.0% softwareONE (1) Based on 2021 management accounts OPERATING EXPENSES BY CURRENCY) Other, 25.6% EUR; 37.1% INR; 4.1% MXN; 2.1% BRL 2.9% GBP; 5.8% CHF; 8.2% USD; 14.2% 37