CEO letter to shareholders
Vision 2026, which we presented at our Capital Markets Day in February 2024, represents a comprehensive roadmap designed to leverage our market position and drive revenue growth acceleration, margin expansion, and cash generation.
Brian Duffy, CEO
Dear shareholders,
The past year has been one of transformation for SoftwareOne, setting the stage for the ambitious journey that lies ahead. When I joined as CEO in May 2023, I found a company that is uniquely positioned to benefit from the ongoing transition to the cloud and the broad adoption of data & AI. These are among the megatrends that are going to shape how organisations across the world operate for years to come.
Amid this shift, and against a backdrop of an economic landscape marked by continued uncertainty in 2023, we demonstrated the robustness and adaptability of our business model and remained focused on delivering for our clients. SoftwareOne achieved solid financial results in 2023 and, by over-delivering on our operational excellence programme, laid the foundation for a new chapter of growth.
Vision 2026 – a new chapter of growth
Vision 2026, which we presented at our Capital Markets Day in February 2024, represents a comprehensive roadmap designed to leverage our market position and drive revenue growth acceleration, margin expansion, and cash generation. Based on this updated strategy, we will continue to leverage our “lead” offering in software & cloud to deliver value-added services to our clients. We will complement this leading position by expanding in selected high-growth segments serving mid-market clients, including application modernisation and data & AI. We will also sharpen our execution through a transformed go-to-market approach, supported by a new client segmentation model, portfolio innovation, delivery excellence and talent management.
SoftwareOne’s serviceable addressable market (SAM) is projected to grow at a 17% CAGR until 2026, and we are poised to seize the opportunities this offers. We will deepen partnerships with hyperscalers, drive the global rollout of Microsoft Copilot, capitalise on data & AI, and execute a focused ISV strategy. Importantly, we will also leverage the full power of our Marketplace platform, which includes Client Portal, our digital self-serve one-stop-shop.
Driven by SoftwareOne’s world-class leadership team and our colleagues worldwide, we will execute on these growth priorities as we enter our next chapter of growth, to achieve our financial targets by 2026:
- Mid-teens revenue growth
- An adjusted EBITDA margin approaching 28%
- A dividend pay-out ratio of 30 to 50% of adjusted profit
Driving operational excellence
As we work to continue growing profitably, SoftwareOne’s operational excellence programme remains a key pillar of our strategy. During 2023, we substantially exceeded our cost savings target, realising CHF 47 million in savings against a full-year target of CHF 15 million. As we continue to refine our operations, we have set an increased target of CHF 70 million in annualised savings for 2024, reflecting our ongoing commitment to operational agility and financial discipline.
These cost savings have been instrumental in supporting our profitability and will continue freeing up resources to reinvest in key strategic areas. Our operational excellence programme has contributed to a stronger and more resilient organisation, positioning us better to capitalise on the changing market dynamics and growth opportunities.
Right team to deliver on our strategy
As we demonstrated at our Capital Markets Day, we have the right leadership team and talent ecosystem in place to deliver on SoftwareOne's strategic objectives. This goes beyond the Executive Board – more than 9,300 people work diligently to support our clients as they navigate the complexities of today’s fast-evolving technology environment.
Our people are our most valuable resource, particularly our highly qualified experts. Our talent development leverages initiatives ranging from our apprenticeships and our Academy programme, to the 34,000 hours we invested in further training our thousands of experts in 2023. We will continue to build on our exceptional talent base by focusing on continuously upskilling all our employees, ensuring that we can meet the business needs of our clients.
ESG commitment
Last year, we embarked on our ESG journey by publishing our inaugural report, outlining our ambitious goals for 2030. This year, I am delighted to present our Non-Financial Report as an integral part of our Annual Report, emphasising how ESG has become ingrained in the DNA of SoftwareOne. Our unwavering commitment remains steadfast: reducing our carbon footprint, assisting clients in emissions reduction, fostering an inclusive and diverse culture, supporting communities in their digital journeys, and advancing our corporate governance to the highest standard.
Outlook for 2024
Organisations worldwide are expected to maintain their focus on digital transformation, which continues to be a priority despite the uncertain macroeconomic environment. As we execute against the strategy we presented in February 2024, we continue our journey to higher growth, targeting:
- Revenue growth in the range of 8-10% year-over-year in constant currency;
- An adjusted EBITDA margin between 24.5 and 25.5% of revenue;
- A dividend payout ratio of 30-50% of adjusted profit for the year.
This transition year will set up SoftwareOne for sustainable, attractive shareholder returns, driven by profitable growth.
As the team at SoftwareOne works to achieve these targets, I would like to thank our dedicated employees, our valued clients, our strategic partners, and you, our shareholders, for your enduring trust, unwavering support, and continued investment in SoftwareOne. Your commitment fuels our journey towards Vision 2026, and together, we will achieve new heights in the years to come.
Yours sincerely,
Brian Duffy
CEO