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

1) Includes PPA amortization (including impairments, if applicable) of CHF7.1 million and CHF7.1 million in H1 2022 and H1 2021, respectively

Reconciliation - IFRS reported to adjusted profit

Source: Management view

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 Software & Cloud equals revenue from the sale of software and cloud¹. Gross profit from Solutions & Services is calculated as revenue from solutions and services less third-party service delivery costs.

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 (loss)/profit for the period, adjusted for items affecting comparability in operating expenses and net finance income/(expenses) as well as the related tax impact (see adjustments).

Contribution margin is defined as total revenue net of third-party service delivery costs and directly attributable internal delivery costs.

Free cash flow is defined as the group net cash generated from/(used in) operating activities, plus net cash from/(used in) investing activities, minus net cash from acquisition of businesses (net of cash acquired), sale of subsidiary (net of cash disposed) and proceeds from sale of financial assets.

Growth at constant currencies is defined as the change between two periods presented on a constant currency basis for comparability purposes and to assess the group’s underlying performance.  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, current financial assets and other non-current receivables less bank overdrafts, contingent consideration liabilities, lease liabilities, other current and non-current financial liabilities.

Net working capital is defined as the group’s trade receivables, current other receivables, prepayments and contract assets minus trade payables, current other payables and accrued expenses and contract liabilities.

1) Presented net of cost of software purchases in line with revenue recognition under IFRS 15

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.