CEO letter to shareholders
I am convinced that we are capable of much more than we delivered in 2024. I am also confident in our 2025 outlook, where growth is expected to gradually accelerate and reported EBITDA to double, based on a significant reduction in earnings adjustments.
Raphael Erb, CEO
Dear shareholders,
I am honoured to present our Annual Report for the first time as CEO of SoftwareOne, a role which I took on in November 2024. With over 25 years at SoftwareOne, I have lived through the company’s journey from its entrepreneurial roots in Switzerland to its successful evolution into a leading global software and cloud solutions provider. In that context, the past year has been one of the most challenging ever, with the overall macro-economic environment, coupled with challenges at SoftwareOne following Board and management changes, along with go-to-market-related sales execution issues, weighing on our performance.
I am convinced that we are capable of much more than we delivered in 2024. I am also confident in our 2025 outlook, where growth is expected to gradually accelerate and reported EBITDA to double, based on a significant reduction in earnings adjustments. I am also excited about the combination with Crayon, subject to required approvals, and the substantial benefits it brings to both companies and their stakeholders.
Driving customer-centricity and agility
In Q4 2024, we took decisive action to not only resolve the go-to-market-related disruption, but to also reclaim the agility and client-centric approach that define SoftwareOne. We implemented leadership changes, with highly experienced leaders appointed in DACH and the Rest of EMEA, focused on close customer engagement and strengthened business cadence. By year-end, the impacted countries had successfully adopted key elements of the transformation, along with early signs of new sales pipeline generation and improvements in sales productivity. At the same time, the remaining markets are progressing in a phased approach, with a focus on safeguarding customer relationships.
We also executed on the CHF 50 million cost reduction programme, over-achieving the targeted savings well ahead of schedule, primarily through the reduction of management layers and corporate overheads. This programme was an important step in driving a change in mind-set and empowering the regions and our front-line who serve our customers every day.
Growth across key partner ecosystems
To capture the market opportunity, we increasingly look at our business from an ecosystem perspective, with integrated solutions – consisting of licenses plus services – driving business outcomes for our customers. Accordingly, we position our offering to support customer needs across segments, while also aligning with vendor incentives. This means increasing our focus on cloud-consumption based programmes and pre and post sales services, and focusing on attractive market areas such as public sector. In addition, while looking to grow with Microsoft, we continue to invest in new partner relationships. For example, we recently signed a strategic agreement with ServiceNow, combining their leading workflow automation capabilities with SoftwareOne’s expertise in optimising customers’ IT investments.
Investments in scalable global platform
Over the past two years, we have invested in our operating model to develop a scalable global platform. This involved creating digital sales hubs to cost-effectively serve our SME customer base as part of the go-to-market transformation, optimising our delivery network and establishing financial shared service centres to efficiently manage over CHF 11 billion yearly billings. These organisational changes led to significant restructuring costs and adjustments to our reported EBITDA, which will be minimal going forward. As a result, we start 2025 with a solid organisational and cost foundation to support future scalable growth, including the integration of Crayon.
Combining two leading global software and cloud providers
Our decision to combine with Crayon follows a compelling strategic rationale. Together, we’ll be even better placed to serve our addressable market of nearly USD 150 billion which continues to grow at mid-teens. As our industry continues to consolidate, the feedback from our partners and customers is clear: they are demanding scale. Our highly complementary geographical footprints, customer base, offering and shared values offer the ideal set-up to hit the ground running and deliver on the substantial revenue and cost synergies identified.
Together with the Crayon team, we are committed to providing a strong foundation for the successful integration, strategic alignment and growth of our merged entity. Our goal is to minimise disruption, maximise synergies, and ensure a seamless integration that benefits all stakeholders. Closing of the transaction is expected in June 2025, subject to required approvals.
Building a sustainable future
At SoftwareOne we recognise that ESG is not just a corporate responsibility – it is fundamental to our long-term success and industry leadership. The Non-financial chapter of this report outlines the progress, challenges and commitments we have made in 2024.
Outlook for 2025
As we move through 2025, we remain focused on execution. Our standalone targets for 2025 include:
- Revenue growth of 2–4% for the group in constant currency;
- Adjusted EBITDA margin of 24–26% of revenue, with reported EBITDA to more than double compared to prior year;
- Dividend payout ratio of 30–50% of adjusted profit for the year.
Importantly, adjustments to operating expenses are expected to be below CHF 30 million in 2025, which will contribute significantly to the increase in reported EBITDA.
Finally, I would like to extend my heartfelt thanks to our dedicated employees, valued customers, strategic partners, and you, our shareholders, for your trust and support as we drive positive change at SoftwareOne. Your commitment is our motivation, and together, we look forward to achieving SoftwareOne’s full potential in this next chapter.
Yours sincerely,
Raphael Erb
CEO