27 Segment reporting

For management purposes, SoftwareOne is organised by geographical areas. After the separation of the operating segment EMEA into DACH and rEMEA, the following regional clusters are the group’s operating segments:

DACH (Germany, Austria and Switzerland)
rEMEA (Rest of Europe, including Mauritius and South Africa);
NORAM (USA, Canada);
LATAM (Latin America);
APAC (Asia Pacific, including Dubai and Qatar).

No operating segments have been aggregated to reportable segments.

The CEO is the Chief Operating Decision Maker (CODM). He assesses each of the reported segments separately for the purpose of evaluating performance and allocating resources. Revenue from Software & Cloud Marketplace, revenue from Software & Cloud Services, contribution margin and EBITDA are the key performance indicators used for internal management and monitoring purposes of the group and are reported as segment results. The group allocates revenue and expenses to regions based on the end customer’s headquarter domicile since the region is responsible for the global client relationship. There are no intersegment revenues. Different average exchange rates are used in management reporting than for group consolidation purposes.

The segment reporting presents a breakdown of revenue from Software & Cloud Marketplace and Software & Cloud Services, directly attributable delivery costs, and indirectly attributable selling, general and administrative costs (“SG&A”). The group’s financing (including finance income and finance expenses) and income taxes are managed on a group basis and are not allocated to the operating segments.

The segment totals are reconciled to the figures reported in the consolidated income statement (column “Total”) as follows:

The column “Group” includes the group cost centres and shared services costs. The column “FX & Consolidation” eliminates the effect of using differing average foreign exchange rates in the segment reporting and consolidation effects. The column “Other” includes other reconciling items that are not allocated to the segments and group in internal reporting. They consist of costs affecting comparability in operating expenses such as integration expenses, M&A and earn-out expenses, restructuring expenses for the commercial and operational excellence programme and the discontinuance of the MTWO business, other non-recurring items which mainly relate to the strategic review, additional bad debt expenses and an adjustment for the upfront recognition of multi-year licensing contracts in which the end customer has the right to change the software reseller during the contract term. Additionally, the column “Other” includes an adjustment for differences in accounting policies of IFRS 16 that are not reflected in the segments, an allocation of internal delivery costs to transition from the internal to the external reporting structure and, to a limited extent, minor reconciliation items.

Segment disclosure 2024

in CHF 1,000	DACH	rEMEA	NORAM	LATAM	APAC	Total segments	Group	FX & Consoli- dation	Other incl. allocation of delivery costs	Total

Revenue from Software & Cloud Marketplace	168,318	161,387	67,487	39,123	90,590	526,905	5,377	25	–1,115	531,192
Revenue from Software & Cloud Services	132,807	138,104	78,440	61,180	72,848	483,379	1,907	–110	–942	484,234

Total revenue	301,125	299,491	145,927	100,303	163,438	1,010,284	7,284	–85	–2,057	1,015,426
Delivery costs	–96,719	–96,288	–46,077	–47,703	–50,447	–337,234	–135	138	337,231	n/a

Contribution margin 1)	204,406	203,203	99,850	52,600	112,991	673,050	7,149	53	335,174	n/a
SG&A	–74,601	–114,232	–59,556	–44,751	–55,759	–348,899	–119,948	–114	–430,444	–899,405

EBITDA 2)	129,805	88,971	40,294	7,849	57,232	324,151	–112,799	–61	–95,270	116,021

1) Total revenue net of third-party service delivery costs and directly attributable internal delivery costs.

2) EBITDA from additional business line view reconciled to earnings before net financial items, taxes, depreciation and amortisation.

The most relevant reconciliation items in the column “Other” were related to adjustments for items affecting comparability in operating expenses and further accounting-related adjustments:

in CHF 1,000	Integration, M&A and earn-out expenses	Restruc- turing expenses 3)	Restruc- turing MTWO business	Other non-recurring items	Additional bad debt expenses 4)	IFRS 15 upfront revenue recognition	IFRS 16 leases	Allocation of delivery costs	Remaining	Total Other

Revenue from Software & Cloud Marketplace	–	–	–1,294	–	–	565	–	–	–386	–1,115
Revenue from Software & Cloud Services	–	–	–804	–	–	–	–	–	–138	–942

Total revenue	–	–	–2,098	–	–	565	–	–	–524	–2,057
Delivery costs	–	–	–	–	–	–	–	337,159	72	337,231

Contribution margin 1)	–	–	–2,098	–	–	565	–	337,159	–452	335,174
SG&A	–13,389	–66,399	–5,330	–14,605	–6,000	–26	16,997	–337,159	–4,533	–430,444

EBITDA 2)	–13,389	–66,399	–7,428	–14,605	–6,000	539	16,997	–	–4,985	–95,270

1) Total revenue net of third-party service delivery costs and directly attributable internal delivery costs.

2) EBITDA from additional business line view reconciled to earnings before net financial items, taxes, depreciation and amortisation.

3) Restructuring expenses include costs associated with the operational excellence and go-to-market initiative, as well as the cost reduction programme.

4) Expenses relate to overdue receivables over 180 days outstanding and under legal dispute, with success rate of collection by SoftwareOne taken down to zero.

Segment disclosure 2023

in CHF 1,000	DACH 3)	rEMEA 3)	NORAM	LATAM	APAC	Total segments	Group	FX & Consoli- dation	Other incl. allocation of delivery costs	Total

Revenue from Software & Cloud Marketplace	173,489	179,208	76,691	37,505	79,077	545,970	2,682	–735	1,860	549,777
Revenue from Software & Cloud Services	125,887	131,202	72,429	62,187	65,240	456,945	2,593	2,163	–189	461,512

Total revenue	299,376	310,410	149,120	99,692	144,317	1,002,915	5,275	1,428	1,671	1,011,289
Delivery costs	–102,537	–98,955	–46,582	–49,406	–49,447	–346,927	14	–28	346,941	n/a

Contribution margin 1)	196,839	211,455	102,538	50,286	94,870	655,988	5,289	1,400	348,612	n/a
SG&A	–69,968	–106,687	–55,946	–42,156	–45,666	–320,423	–108,599	–1,031	–419,512	–849,565

EBITDA 2)	126,871	104,768	46,592	8,130	49,204	335,565	–103,310	369	–70,900	161,724

1) Total revenue net of third-party service delivery costs and directly attributable internal delivery costs.

2) EBITDA from additional business line view reconciled to earnings before net financial items, taxes, depreciation and amortisation.

3) Prior-year figures restated, refer to Note 2 Changes to the segment reporting.

The most relevant reconciliation items in the column “Other” were related to adjustments for items affecting comparability in operating expenses and further accounting-related adjustments:

in CHF 1,000	Integration, M&A and earn-out expenses	Restruc- turing expenses 3)	Restruc- turing MTWO business	Other non-recurring items	IFRS 15 upfront revenue recognition	IFRS 16 leases	Allocation of delivery costs	Remaining	Total Other

Revenue from Software & Cloud Marketplace	–	–	–	–	236	–	–	1,624	1,860
Revenue from Software & Cloud Services	–	–	–	–	–	–	–	–189	–189

Total revenue	–	–	–	–	236	–	–	1,435	1,671
Delivery costs	–	–	–	–	–	–	347,612	–671	346,941

Contribution margin 1)	–	–	–	–	236	–	347,612	764	348,612
SG&A	–23,051	–39,333	–5,724	–15,874	–10	17,024	–347,612	–4,932	–419,512

EBITDA 2)	–23,051	–39,333	–5,724	–15,874	226	17,024	–	–4,168	–70,900

1) Total revenue net of third-party service delivery costs and directly attributable internal delivery costs.

2) EBITDA from additional business line view reconciled to earnings before net financial items, taxes, depreciation and amortisation.

3) Restructuring expenses include costs associated with the operational excellence and go-to-market initiative.

Additional information for business lines

Even if the regions are the operating segments, SoftwareOne also internally reports total revenue, contribution margin and EBITDA by business lines “Software & Cloud Marketplace”, “Software & Cloud Services” and “Corporate”, which includes non-operational group costs, to the CODM.

The business line view presents a breakdown of total revenue, directly attributable external and internal delivery costs and indirectly attributable selling, general and administrative costs.

The column “Adjustments” includes adjustments for items affecting comparability in operating expenses. In contrast to the segment reporting, the IFRS 16 adjustment and minor reconciliation items are allocated to the business lines “Software & Cloud Marketplace” and “Software & Cloud Services”.

Business line view 2024

in CHF 1,000	Software & Cloud Marketplace	Software & Cloud Services	Corporate	Total business unit	Adjustments	Allocation of delivery costs	Total

Total revenue	532,339	484,649	–	1,016,988	–1,562	–	1,015,426
Delivery costs	–62,189	–274,970	–	–337,159	–	337,159	n/a

Contribution margin 1)	470,150	209,679	–	679,829	–1,562	337,159	n/a
SG&A	–205,964	–179,705	–70,800	–456,469	–105,777	–337,159	–899,405

EBITDA 2)	264,186	29,974	–70,800	223,360	–107,339	–	116,021

1) Total revenue net of directly attributable external and internal delivery costs.

2) EBITDA from additional business line view reconciled to earnings before net financial items, taxes, depreciation and amortisation.

Business line view 2023

in CHF 1,000	Software & Cloud Marketplace	Software & Cloud Services	Corporate	Total business unit	Adjustments	Allocation of delivery costs	Total

Total revenue	549,750	461,154	–	1,010,904	385	–	1,011,289
Delivery costs	–71,994	–275,573	–	–347,567	–	347,567	n/a

Contribution margin 1)	477,756	185,581	–	663,337	385	347,567	n/a
SG&A	–195,396	–157,525	–65,214	–418,135	–83,863	–347,567	–849,565

EBITDA 2)	282,360	28,056	–65,214	245,202	–83,478	–	161,724

1) Total revenue net of directly attributable external and internal delivery costs.

2) EBITDA from additional business line view reconciled to earnings before net financial items, taxes, depreciation and amortisation.

Additional geographical information

Germany, the US, Switzerland and the Netherlands are the main geographical markets for SoftwareOne and represent approximately 46% (prior year: 49%) of total revenue. Revenue is reported based on the end customer’s headquarter domicile:

2024
in CHF 1,000	Germany	US	Switzerland	Netherlands	Other countries	Total

Revenue (IFRS reported)	189,702	128,839	85,622	65,604	545,659	1,015,426
Non-current assets	9,169	42,046	156,394	11,858	509,398	728,865

2023
in CHF 1,000	Germany	US	Switzerland	Netherlands	Other countries	Total

Revenue (IFRS reported)	198,938	139,996	82,199	69,824	520,332	1,011,289
Non-current assets	149,333	23,192	135,914	96,032	284,819	689,290

SoftwareOne has generated 33% of total revenues with the customer Microsoft (prior year: 35%). The revenue derives from all segments. Microsoft is our only customer aggregating more than 10% of our total revenues.

Non-current assets for this purpose consist of tangible, intangible assets, right-of-use assets, and investments in associated companies and are allocated based on the location of the group company.