Alternative Performance Measures

SoftwareONE has defined a set of non-IFRS financial measures, which reflect the company’s internal approach to analyzing the results and which are disclosed externally. They provide key decision makers at SoftwareONE with the necessary guidance on managing the group and making investment decisions, and serve as a benchmark to recognize if the company is making progress with the implementation of its vision. The company believes that such measures are frequently used by external stakeholders such as sell-side 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

Go to full overview of SoftwareONE's interim condensed consolidated financial statements

Reported and adjusted profit and loss statement


	IFRS reported		Adjustments		Adjusted		% Δ	% Δ at CCY 1
in CHF million (unless otherwise indicated)	H1 2021	H1 2020	H1 2021	H1 2020	H1 2021	H1 2020

Revenue from Software & Cloud	4,170.2	3,941.2	–	–	4,170.2	3,941.2	5.8 %	6.5 %
Cost of software purchased	–3,902.5	–3,666.5	–	–	–3,902.5	–3,666.5	6.4 %
Gross profit from Software & Cloud	267.6	274.6	–	–	267.6	274.6	–2.5 %	–2.1 %
Revenue from Solutions & Services	196.3	145.9	–	–	196.3	145.9	34.5 %	35.2 %
Third-party service delivery costs	–49.6	–49.8	–	–	–49.6	–49.8	–0.2 %
Gross profit from Solutions & Services	146.7	96.2	–	–	146.7	96.2	52.5 %	53.4 %
Gross profit total	414.4	370.8	–	–	414.4	370.8	11.7 %	12.3 %
Personnel expenses	–284.4	–231.1	13.8	15.8	–270.6	–215.3	25.7 %	26.5 %
Other operating expenses	–44.4	–44.7	3.8	3.4	–40.6	–41.3	–1.7 %	–1.2 %
Other operating income	7.0	7.3	–1.1	–1.5	5.9	5.8	2.0 %	2.5 %
Operating expenses	–321.8	–268.5	16.6	17.7	–305.3	–250.8	21.7 %	22.5 %
EBITDA	92.5	102.3	16.6	17.7	109.1	120.0	–9.1 %	–9.0 %
Depreciation, amortization and impairment²	–27.2	–29.7	–	–	–27.2	–29.7	–8.3 %
EBIT	65.3	72.6	16.6	17.7	81.9	90.3	–9.4 %
Finance income	1.2	21.5	–	–13.3	1.2	8.2	–85.1 %
Finance costs	–4.6	–4.4	1.2	–	–3.4	–4.4	–23.0 %
Foreign exchange difference, net	–6.2	–5.9	–	–	–6.2	–5.9	5.9 %
Share of result of joint ventures and associates	–	0.4	–	–	–	0.4	–
Net financial items	–9.6	11.6	1.2	–13.3	–8.4	–1.7	389.2 %
Earnings before tax	55.7	84.2	17.8	4.4	73.5	88.6	–17.1 %
Income tax expense	–17.4	–17.5	–1.8	–3.2	–19.2	–20.8	–7.7 %
Profit for the period	38.3	66.7	16.0	1.2	54.3	67.9	–20.0 %

EBITDA margin (%)	22.3 %	27.6 %			26.3 %	32.4 %	-6.0pp
EPS (diluted)	0.25	0.43			0.35	0.44	–20.2 %

1) In constant currency

2) Includes PPA amortization (including impairments if applicable) of CHF 7.1 million and CHF 10.7 million in H1 20201 and H1 2020, respectively

Adjustments

in CHF million	H1 2021	H1 2020

IFRS reported profit for the period	38.3	66.7
Share-based compensation	7.8	12.4
IPO, integration and M&A and earn-out expenses	8.7	5.3
Total operating expense adjustments	16.6	17.7
Depreciation / (appreciation) of Crayon shareholding	1.2	–13.3
Tax impact on adjustments	–1.8	–3.2
Adjusted profit for the period	54.3	67.9

Adjustments include the following items:

Share-based compensation, 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 (see Note 8 of the financial statements)
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 business performance and as they might be helpful for external stakeholders to evaluate SoftwareONE’s financial results compared to other companies in the same industry. 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 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 adjustments).

Growth at constant currencies: 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 debt/(cash) 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 between two periods, and the charts provide an overview of the currency splits, including exchange rates that had the biggest impact on gross profit and operating expenses. Related calculations are based on underlying management accounts and may slightly differ from exchange rates shown in the interim condensed consolidated financial statements.