10 Segment reporting
For management purposes, the group is organized by geographical areas. The following regional clusters are the group’s operating segments:
- EMEA (Europe and South Africa)
- NORAM (US, Canada)
- LATAM (Latin America)
- APAC (Asia Pacific, including India and Dubai)
No operating segments have been aggregated to reportable segments.
The Executive Board (CEO, CFO, COO and President of Sales) is the Chief Operating Decision Maker (CODM) and assesses each of the reported segments separately for the purpose of evaluating performance and allocating resources. Gross profit 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 its customers’ headquarter domicile, since this region is responsible for the global client relationship with a particular customer. There are no intersegment revenues. Different average exchange rates are used in management reporting than for group consolidation purposes.
The group’s financing (including finance income and finance costs) 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 interim condensed consolidated income statement (column ‘Total’) as follows:
The column ‘Corporate’ includes the group cost centers such as management and shared services costs. The column FX eliminates the effect of using differing average foreign exchange rates in the segment reporting. The column Other includes other reconciling items that are not allocated to the segments and Corporate in internal reporting such as share-based payment plans (with the exception of LTIP and ESPP), earn-outs and integration costs as well as differences in accounting policies of IFRS 16 that are not reflected in the segment reporting. Additionally, the column Other includes a reclassification of bad debt provisions that are presented in gross profit in internal reporting but in operating expenses in the consolidated income statement.
For the six months ended 30 June 2021
|
in CHF 1,000 |
EMEA |
NORAM |
LATAM |
APAC |
Total segments |
Corporate |
FX |
Other |
Total |
|
Total revenue (external) |
2,881,909 |
580,596 |
217,732 |
688,488 |
4,368,725 |
– |
–2,098 |
–98 |
4,366,529 |
|
Cost of software purchased and third-party service delivery costs |
–2,619,872 |
–520,942 |
–174,051 |
–637,616 |
–3,952,481 |
–1,419 |
1,780 |
–52 |
–3,952,172 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit 1) |
262,037 |
59,654 |
43,681 |
50,872 |
416,244 |
–1,419 |
–318 |
–150 |
414,357 |
|
Personnel expenses and other operating expenses/income |
–154,888 |
–38,902 |
–35,346 |
–34,227 |
–263,363 |
–49,665 |
185 |
–8,971 |
–321,814 |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA 2) |
107,149 |
20,752 |
8,335 |
16,645 |
152,881 |
–51,084 |
–133 |
–9,121 |
92,543 |
1) Total revenue net of cost of software purchased and third-party service delivery costs
2) EBITDA from segment reporting reconciled to earnings before net financial items, taxes, depreciation and amortization
For the six-month ended 30 June 2021, the most relevant reconciliation items in the column Other were costs for share-based payments (TCHF 7,519), for earn-outs (TCHF 5,817), for integration (TCHF 2,624) and an opposite effect from the difference in accounting policies of IFRS 16 (TCHF 8,748). The reclassification of bad debt provisions amounts to TCHF 746. All other reconciliation items were minor.
For the six months ended 30 June 2020
|
in CHF 1,000 |
EMEA |
NORAM |
LATAM |
APAC |
Total segments |
Corporate |
FX |
Other |
Total |
|
Total revenue (external) 3) |
2,704,600 |
524,658 |
235,583 |
621,420 |
4,086,262 |
– |
1,021 |
–200 |
4,087,083 |
|
Cost of software purchased and third-party service delivery costs 3) |
–2,462,310 |
–471,078 |
–206,203 |
–580,744 |
–3,720,336 |
–801 |
–296 |
5,143 |
–3,716,290 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit 1) |
242,290 |
53,580 |
29,380 |
40,676 |
365,926 |
–801 |
725 |
4,943 |
370,793 |
|
Personnel expenses and other operating expenses/income |
–132,780 |
–32,837 |
–19,893 |
–25,114 |
–210,624 |
–46,549 |
999 |
–12,300 |
–268,474 |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA 2) |
109,510 |
20,743 |
9,487 |
15,562 |
155,302 |
–47,350 |
1,724 |
–7,357 |
102,319 |
1) Total revenue net of cost of software purchased and third-party service delivery costs
2) EBITDA from segment reporting reconciled to earnings before net financial items, taxes, depreciation and amortization
3) Prior-year figures restated due to a change in presentation for deal-based rebates reported in the segment reporting for the first half of 2021 to align external and internal presentation
For the six-month ended 30 June 2020, the most relevant reconciliation items in the column Other were costs in relation to bad debt provisions (TCHF 5,966), which are presented within gross profit in internal reporting. Additional reconciliation items were costs for share-based payments (TCHF 12,365) and positive effects from the application of IFRS 16 (TCHF 8,481), which are not considered in internal reporting. All other reconciliation items were minor.
Switzerland, the US, Germany and the Netherlands are the main geographical markets for SoftwareONE and represent approximately 54% (comparative period: 55%) of total revenue. Revenue is reported based on the customers' headquarter domicile:
Additional geographical information
|
in CHF 1,000 |
Switzerland |
US |
Germany |
Netherlands |
Other countries |
Total |
|
Revenue (external) for the six months ended 30 June 2021 |
401,685 |
687,436 |
788,203 |
479,674 |
2,009,530 |
4,366,529 |
|
Revenue (external) for the six months ended 30 June 2020 |
400,347 |
669,530 |
695,387 |
455,269 |
1,866,550 |
4,087,083 |
No transactions with one single external customer exceed 10% of consolidated revenue of the group.