Softwareone Holding Ltd. · SIX:SWON
Softwareone — Q3 2023 Earnings Presentation
25 slides from Softwareone's earnings presentation, Nov 15, 2023
Slide 1: Q3 2023 Trading update
Q3 2023 Trading update 15 November 2023
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
Slide 3: Today's agenda
Today’s agenda 1 Q3 2023 highlights Brian Duffy, CEO 2 Financial performance and outlook 3 Q&A Rodolfo Savitzky, CFO
Slide 4: Q3 2023 highlights
Q3 2023 highlights Brian Duffy, CEO 4
Slide 5: Solid Q3 performance with 8.4% revenue growth
Solid Q3 performance with 8.4% revenue growth CHFm, % YoY (ccy)(1) Q3 2023 9M 2023 Revenue 233.4 +8.4% 740.2 +8.5% Adjusted EBITDA 47.9 +14.1% 159.6 +2.7% Margin (% revenue) 20.5% +0.6pp 21.6% (1.1)pp 5 (1) Q3 2022 and 9M 2022 revenue for Software & Cloud Services restated as a result of implementat
Slide 6: Positive momentum driven by EMEA and APAC
Positive momentum driven by EMEA and APAC Revenue by region CHFm, % YoY growth (ccy) EMEA Q3 2023 9M 2023 NORAM 136.7 443.8 Q3 2023 9M 2023 +9.6% +8.7% 36.0 111.8 APAC +4.7% +4.0% Q3 2023 9M 2023 35.9 108.2 +19.8% +22.1% LATAM Q3 2023 9M 2023 24.3 72.0 (3.6)% (1.3)% 6
Slide 7: Broad-based growth in S&C Services; Momentum in S&C Marketplace maintained
Broad-based growth in S&C Services; Momentum in S&C Marketplace maintained Software & Cloud Services Software & Cloud Marketplace Revenue, CHFm, % YoY growth (ccy) (1) Revenue, CHFm, % YoY growth (ccy) +5.6% +12.1% 394.1 397.6 +11.4% 322.9 342.7 +5.7% 105.2 112.4 119.4 121.0 Q3 2022 Q3 2023 9M 2022
Slide 8: Selected Q3 2023 wins: delivering value-adding solutions to meet customer needs
Selected Q3 2023 wins: delivering value-adding solutions to meet customer needs Canton of Basel-Landschaft Switzerland APAC US Five-year framework contract for consulting and Reselling agreement to procure Microsoft and Replacement of desktop application to fully development services for the digital
Slide 9: Significant progress on 'Ignite, Focus, Accelerate'
Significant progress on ‘Ignite, Focus, Accelerate’ ACCELERATE FOCUS ✓ Generative AI offering under IGNITE development ✓ New leadership for SoftwareOne ✓ Certified and enabled resources Client Portal to execute on to drive implementation of roadmap ✓ New leadership hires to drive sales Microsoft 365
Slide 10: Estimated market opportunity
Estimated market opportunity 12.5m + 15% = >$100m Addressable Adoption rate Revenue opportunity 10 365 seats
Slide 11: Financial performance
Financial performance Rodolfo Savitzky, CFO 11
Slide 12: Revenue growth of 8.4% with adj. EBITDA up 14.1%
Revenue growth of 8.4% with adj. EBITDA up 14.1% P&L summary CHFm Q3 2023 % Δ Rep % Δ CCY(2) 9M 2023 % Δ Rep % Δ CCY(2) Revenue(1) 233.4 3.9% 8.4% 740.2 3.3% 8.5% ▪ Solid growth in Q3 2023 across both business lines Delivery costs (85.4) 3.6% 7.4% (263.6) 1.4% 7.0% ▪ Further improvement in contribut
Slide 13: Adj. EBITDA growth impacted by post-Covid normalisation of commercial activities
Adj. EBITDA growth impacted by post-Covid normalisation of commercial activities Adjusted EBITDA bridge CHFm Personnel costs Normalisation Adj. EBITDA Revenue Delivery One-off co- Marketing Sales G&A Other(1) Adj. EBITDA 9M 2022 costs marketing and travel 9M 2023 investments in 2022 13 (1) Includes
Slide 14: Improved contribution margin across both business lines
Improved contribution margin across both business lines Business line P&L(1) CHFm Software & Cloud Services(2) Software & Cloud Marketplace Q3 2023 % Δ CCY(3) Q3 2023 % Δ CCY(3) Revenue 112.4 11.4% 121.0 5.7% ▪ Further optimisation of delivery costs driven by operational excellence Delivery costs (6
Slide 15: Operational excellence programme delivering ahead of plan
Operational excellence programme delivering ahead of plan Execution against plan Current status ▪ Ongoing implementation of customer tiering and new coverage model for sales Commercial ▪ AI-driven cross-sell pilot ongoing in APAC and scaled up in NORAM effectiveness ▪ Pricing levers pilot ongoing in
Slide 16: 2023 revenue guidance revised; mid-term guidance maintained
2023 revenue guidance revised; mid-term guidance maintained 2023 outlook and mid-term guidance FY 2023 Mid-term High single-digit Revenue growth(1) Mid-teens (Previously: double-digit) Adj. EBITDA margin 24-25% >25% (% revenue) (Unchanged) 30-50% adj. 30-50% adj. Dividend policy profit for the year
Slide 17: Key takeaways
Key takeaways Capital Markets Day 2024 Save-the-date Solid Q3 results with 8.4% YoY ccy revenue 1 growth 15 February 2024 from 14 CET Operational excellence cost savings well Zurich and broadcast live 2 exceeding full-year 2023 target 3 Strong progress on ‘Ignite, Focus, Accelerate’ FY2023 revenue g
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Slide 19: Appendix
Appendix 19
Slide 20: Definitions of key alternative performance measures
Definitions of key alternative performance measures Adjusted EBITDA is defined as the underlying earnings before net financial items, tax, depreciation and amortisation, adjusted for items affecting comparability in operating expenses. Adjusted EBITDA margin is defined as adjusted EBITDA divided by
Slide 21: Adjusted EBITDA bridge
Adjusted EBITDA bridge CHFm Q3 2023 Q3 2022 9M 2023 9M 2022 ▪ Adjustments: Reported EBITDA 21.6 31.6 112.9 73.6 Impact of change in revenue recognition of ▪ Change in revenue recognition 0.3 1.1 0.8 4.9 of Microsoft Enterprise Microsoft Enterprise Agreements Share-based compensation(1) - 1.2 - 4.6 A
Slide 22: Business line profit & loss summary
Business line profit & loss summary Software & Cloud Services(1) Software & Cloud Marketplace Corporate CHFm Q3 2023 % Δ CCY(2) 9M 2023 % Δ CCY(2) Q3 2023 % Δ CCY(2) 9M 2023 % Δ CCY(2) Q3 2023 9M 2023 Revenue 112.4 11.4% 342.7 12.1% 121.0 5.7% 397.6 5.6% - - Delivery costs (68.5) 9.2% (209.1) 7.8% (
Slide 23: Quarterly summary by business line
Quarterly summary by business line CHFm Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Revenue Solutions & Cloud Marketplace 123.5 144.2 112.3 153.7 533.6 121.9 152.8 119.4 151.2 545.3 125.6 151.0 121.0 Revenue Software & Cloud Services(1) 75.5
Slide 24: Large, fast-growing addressable market for S&C Marketplace
Large, fast-growing addressable market for S&C Marketplace Software & Cloud Marketplace SAM(1) ▪ Strong market growth driven USD bn, % CAGR by underlying spend in software & cloud 30.0 ▪ Customer trending towards 14% Self-service digital buying and self-service Hyperscaler marketplaces ▪ SoftwareOne
Slide 25: Significant headroom to grow for S&C Services
Significant headroom to grow for S&C Services SoftwareOne SAM(1) ▪ Services increasingly critical USD bn, % CAGR in a cloud and subscription 114.4 CAGR (22-26) world 0.8 5.8 ▪ SoftwareOne has unique 19% 8.1 8.6 Software Sourcing Services 12% insights on customer pain points, purchasing patterns ITAM