Alternative Performance Measures
SoftwareONE has defined a set of non-IFRS financial measures, which reflect the company’s internal approach to analyzing the results and which are disclosed externally. They provide key decision makers at SoftwareONE with the necessary guidance on managing the group and making investment decisions, and serve as a benchmark to recognize if the company is making progress with the implementation of its vision. The company believes that such measures are frequently used by external stakeholders such as sell-side analysts, investors and other interested parties to evaluate companies in the same industry.
Reconciliation from IFRS reported to adjusted profit and loss statement
Results Overview
Link to full overview of SoftwareONE's consolidated financial statements
Reported and adjusted profit and loss statement
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IFRS reported |
Adjustments |
Adjusted |
% Δ |
% Δ at CCY 1 |
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in CHF million (unless otherwise indicated) |
FY 2020 |
FY 2019 |
FY 2020 Other adj. |
FY 2019 Adding CPX |
FY 2019 Other adj. |
FY 2020 |
FY 2019 |
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Revenue from Software & Cloud |
7,593.3 |
7,313.9 |
– |
230.4 |
– |
7,593.3 |
7,544.3 |
0.6 % |
6.4 % |
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Cost of software purchased |
–7,073.9 |
–6,773.4 |
– |
–209.0 |
– |
–7,073.9 |
–6,982.4 |
1.3 % |
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Gross profit from Software & Cloud |
519.5 |
540.5 |
– |
21.4 |
– |
519.5 |
561.9 |
–7.5 % |
–1.9 % |
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Revenue from Solutions & Services |
312.9 |
296.9 |
– |
18.7 |
– |
312.9 |
315.6 |
–0.9 % |
5.9 % |
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Third-party service delivery costs |
–102.8 |
–123.1 |
– |
–12.1 |
– |
–102.8 |
–135.3 |
–24.0 % |
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Gross profit from Solutions & Services |
210.1 |
173.8 |
– |
6.5 |
– |
210.1 |
180.4 |
16.5 % |
23.9 % |
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Gross profit total |
729.6 |
714.3 |
– |
27.9 |
– |
729.6 |
742.2 |
–1.7 % |
4.4 % |
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Personnel expenses |
–470.0 |
–439.9 |
31.1 |
–18.2 |
29.7 |
–438.9 |
–428.4 |
2.5 % |
9.1 % |
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Other operating expenses |
–86.6 |
–115.3 |
6.2 |
–5.9 |
17.6 |
–80.4 |
–103.6 |
–22.4 % |
–17.2 % |
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Other operating income |
15.0 |
11.2 |
–2.2 |
2.2 |
– |
12.8 |
13.4 |
–4.2 % |
0.9 % |
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Operating expenses |
–541.6 |
–544.0 |
35.1 |
–21.9 |
47.2 |
–506.5 |
–518.7 |
–2.3 % |
4.0 % |
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EBITDA |
188.0 |
170.3 |
35.1 |
6.1 |
47.2 |
223.1 |
223.6 |
–0.2 % |
5.1 % |
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Depreciation, amortization and impairment 2 |
–55.2 |
–51.3 |
– |
–1.0 |
– |
–55.2 |
–52.3 |
5.5 % |
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EBIT |
132.8 |
119.0 |
35.1 |
5.1 |
47.2 |
167.9 |
171.3 |
–2.0 % |
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Finance income |
101.4 |
52.1 |
–83.0 |
0.1 |
–38.9 |
18.4 |
13.3 |
38.2 % |
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Finance costs |
–11.0 |
–9.6 |
– |
–0.8 |
– |
–11.0 |
–10.4 |
5.2 % |
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Foreign exchange difference, net |
–10.1 |
–7.1 |
– |
–0.4 |
– |
–10.1 |
–7.5 |
35.6 % |
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Share of result of joint ventures and associated companies |
0.8 |
– |
– |
– |
– |
0.8 |
– |
– |
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Net financial items |
81.0 |
35.3 |
–83.0 |
–1.1 |
–38.9 |
–2.0 |
–4.7 |
–57.3 % |
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Earnings before income tax |
213.8 |
154.4 |
–47.9 |
3.9 |
8.3 |
165.9 |
166.6 |
–0.4 % |
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Income tax expense |
–37.0 |
–29.3 |
–3.1 |
0.3 |
–3.3 |
–40.2 |
–32.4 |
24.1 % |
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Profit for the period |
176.8 |
125.0 |
–51.0 |
4.2 |
5.0 |
125.7 |
134.2 |
–6.3 % |
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EBITDA margin (%) |
25.8 % |
23.8 % |
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30.6 % |
30.1 % |
0.5 pp |
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EPS |
1.14 |
0.82 |
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0.81 |
0.88 |
–7.4 % |
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1) In constant currency; Current period translated at average exchange rate of prior year period, based on management accounts
2) Includes PPA amortization (including impairments) of CHF 16.8 million and CHF 11.5 million in 2020 and 2019, respectively
Adjustments
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in CHF million |
FY 2020 |
FY 2019 |
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IFRS reported profit for the period |
176.8 |
125.0 |
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Proforma adjustments for Comparex acquisition (adding January 2019) |
– |
4.2 |
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Certain share-based compensation 1 |
24.2 |
21.4 |
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IPO, integration and M&A and earn-out expenses |
10.9 |
25.9 |
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Total operating expense adjustments |
35.1 |
47.2 |
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Depreciation / (appreciation) of Crayon shareholding |
–83.0 |
–38.9 |
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Tax impact on adjustments |
–3.1 |
–3.3 |
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Adjusted profit for the period |
125.7 |
134.2 |
1) Relate to management equity plan and free share grant to employees
Adjustments related to Comparex acquisition for 2019
SoftwareONE has prepared a selection of unaudited adjusted financial information for full year 2019 to illustrate the effect of the Comparex acquisition on its consolidated income statement by giving effect to the transaction as if it had been completed on 1 January 2019, including accounting policy alignment, reclassification and currency translations. For 2019, this includes audited IFRS reported numbers 2019 (12 months SoftwareONE and 11 months Comparex) and the month of January 2019 of Comparex. On a profit for the period level, these proforma adjustments totaled CHF 4.2 million in 2019.
Other adjustments
Other adjustments include the following items:
- Including management equity plan expenses in connection with the IPO; these are fully funded by major shareholders with no equity impact and free share grants to employees
- Costs relating to integrating acquired companies
- M&A-related third-party costs and earn-out expenses
- Depreciation / (appreciation) of Crayon shareholding
- Tax impact on adjustments
Non-IFRS financial measures and group key performance indicators (KPIs)
The group presents non-IFRS financial measures because they are used by management to monitor the business performance and as they might be helpful for external stakeholders to evaluate SoftwareONE’s financial results compared to other companies in the same industry. They include the following:
Gross profit from sale of software equals revenue from the sale of software less cost of software purchased. Gross profit from solutions and services is calculated as revenue from solutions and services less third-party service delivery costs. Gross profit is a useful measure for managing and monitoring SoftwareONE’s business, as well as for incentivizing the sales force and leaders.
Adjusted EBITDA is defined as the underlying earnings before net financial items, tax, depreciation and amortization, adjusted for items affecting comparability in operating expenses (see other adjustments).
Adjusted EBITDA margin is defined as adjusted EBITDA divided by gross profit.
Adjusted profit for the period is defined as the profit for the period, adjusted for items affecting comparability in operating expenses and net financial income / (expenses) as well as the related tax impact (see other adjustments).
Growth at constant currencies: The change between two periods is presented on a constant currency basis for comparability purposes and to assess the group's underlying performance. Current period profit and loss figures are translated from the subsidiaries’ respective local currencies into Swiss francs at the applicable average exchange rate of the prior-year period. This calculation is based on the underlying management accounts.
(Net cash)/net debt comprises the group’s cash and cash equivalents, short-term financial assets and long-term other receivables less bank overdrafts, contingent consideration liabilities, lease liabilities, other current and non current financial liabilities and any open payments related to the management equity plan.
Net working capital is defined as the group’s trade receivables, other receivables, prepayments and contract assets minus trade payables, other payables and accrued expenses and contract liabilities (excluding any open payments related to the management equity plan).
Free cash flow is defined as the group net cash generated from/(used in) operating activities, minus cash from/(used in) investing activities, plus cash from/(used in) acquisitions of businesses (net of cash balance).
Exchange rates
The table below shows the development of the Swiss franc, SoftwareONE's reporting currency, against major local currencies between two periods, and the charts pro
vide an overview of the currency splits, inlcuding exchange rates that had the biggest impact on gross profit and operating expenses. Related calculations are based on underlying management accounts and may slightly differ from exchange rates shown in the Consolidated financial statements.
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CHF to LCY |
FY 2020 |
FY 2019 |
% change |
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EUR |
0.93 |
0.90 |
3.8 % |
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USD |
1.07 |
1.01 |
6.1 % |
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CHF |
1.00 |
1.00 |
0.0 % |
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GBP |
0.83 |
0.79 |
6.0 % |
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BRL |
5.40 |
3.95 |
36.6 % |
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MXN |
22.97 |
19.40 |
18.4 % |
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INR |
79.30 |
70.54 |
12.4 % |
