Alternative Performance Measures

SoftwareONE has defined a set of non-IFRS financial measures, which reflect the company’s internal approach to analyzing its performance and are also disclosed externally. These measures provide key decision makers at SoftwareONE with the necessary guidance to manage the company and make investment decisions, while also serving as benchmarks to determine whether the company is making progress in executing its strategy. The company believes that such measures are also frequently used by external stakeholders such as sell-side research 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

1) Revenue from Software & Cloud presented net of cost of software purchases in line with tentative decision by IFRS IC with regards to revenue recognition under IFRS 15; 2020 restated in line with 2021

2) Includes PPA amortization (including impairments, if applicable) of CHF14.4 million and CHF16.8 million in 2021 and 2020, respectively

Adjustments

Source: Management view

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 company’s performance and may be helpful for external stakeholders in evaluating SoftwareONE’s financial results compared to industry peers. 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 in constant currency: 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. In addition, the charts provide an overview of the currency breakdowns, including currencies which had the biggest impact on gross profit and operating expenses during 2021. Related calculations are based on underlying management accounts and may slightly differ from exchange rates shown in the Consolidated financial statements.