11 Segment reporting

For management purposes, the group is organised by geographical areas. The following regional clusters are the group’s operating segments:

EMEA (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. 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 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 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 '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 earn-outs, integration and M&A expenses, restructuring expenses for the operational excellence programme 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.

In the first half of 2023, the group made a change in presentation for bad debts provisions to align the internal and external reporting structure. In prior year, bad debt provisions were presented in gross profit in internal reporting but in operating expenses in the interim condensed consolidated income statement. The comparative period was restated.

For the six months ended 30 June 2023

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

Total revenue	307,130	75,806	47,718	72,280	502,934	3,843	274	–688	506,363
Delivery costs	–104,608	–22,580	–24,406	–26,647	–178,241	–220	77	178,384	n/a

Contribution margin 1)	202,522	53,226	23,312	45,633	324,693	3,623	351	177,696	n/a
Other operating costs	–92,315	–29,680	–20,703	–24,099	–166,797	–55,755	–1,061	–191,386	–414,999

EBITDA 2)	110,207	23,546	2,609	21,534	157,896	–52,132	–710	–13,690	91,364

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

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

The most relevant reconciliation items in the column 'Other' break down as follows:

in CHF 1,000	Earn-out expenses	Integration and M&A expenses	Restructuring expenses	IFRS 15 upfront revenue recognition	IFRS 16 leases	Allocation of delivery costs	Remaining	Total Other

Total revenue	–	–	–	–447	–	–	–241	–688
Delivery costs	–	–	–	–	–	178,182	202	178,384

Contribution margin 1)	–	–	–	–447	–	178,182	–39	177,696
Other operating costs	–5,268	–2,546	–12,471	21	7,914	–178,182	–854	–191,386

EBITDA 2)	–5,268	–2,546	–12,471	–426	7,914	–	–893	–13,690

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

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

For the six months ended 30 June 2022

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

Total revenue 1)	297,421	75,973	52,403	63,417	489,214	2,539	754	–4,272	488,235
Delivery costs	–104,032	–23,353	–25,359	–22,042	–174,786	–3,399	546	177,639	n/a

Contribution margin 2)	193,389	52,620	27,044	41,375	314,428	–860	1,300	173,367	n/a
Other operating costs 1)	–88,798	–27,974	–17,444	–21,837	–156,053	–45,118	–1,546	–243,561	–446,278

EBITDA 1) 3)	104,591	24,646	9,600	19,538	158,375	–45,978	–246	–70,194	41,957

1) Prior-year figures restated, refer to Note 2 Change in accounting policies and correction of errors.

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

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

The most relevant reconciliation items in the column 'Other' break down as follows:

in CHF 1,000	Share-based payment expenses	Earn-out expenses	Integration and M&A expenses	Restructuring expenses	One-time expenses Russia & Ukraine 4)	IFRS 15 upfront revenue recognition	IFRS 16 leases	Allocation of delivery costs	Remaining	Total Other

Total revenue 1)	–	–	–	–	–	–4,076	–	–	–196	–4,272
Delivery costs	–	–	–	–	–	–	–	177,395	244	177,639

Contribution margin 2)	–	–	–	–	–	–4,076	–	177,395	48	173,367
Other operating costs 1)	–3,784	–18,697	–5,674	–8,438	–35,792	187	8,154	–177,395	–2,122	–243,561

EBITDA 1) 3)	–3,784	–18,697	–5,674	–8,438	–35,792	–3,889	8,154	–	–2,074	–70,194

1) Prior-year figures restated, refer to Note 2 Change in accounting policies and correction of errors.

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

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

4) One-time expenses Russia & Ukraine include the loss on disposal for the sale of SoftwareOne Russia (TCHF -29,655), additional bad debts in connection with clients in Russia (TCHF -4,540) and further one-time expenses (TCHF -1,597).

Additional information for business lines

SoftwareOne internally also reports EBITDA by business lines to the CODM.

The business line view presents a breakdown of total revenue, directly attributable external and internal delivery costs and indirectly attributable other operating costs such as sales and marketing costs as well as general and admin costs. It discloses contribution margin and EBITDA by business line 'Software & Cloud Marketplace', 'Software & Cloud Services' and 'Corporate' which includes non-operational group costs.

The column 'Adjustments' includes costs affecting comparability in operating expenses and are therefore adjusted in internal reporting 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. 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'.

For the six months ended 30 June 2023

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

Total revenue	276,562	230,248	–	506,810	–447	–	506,363
Delivery costs	–37,652	–140,530	–	–178,182	–	178,182	n/a

Contribution margin 1)	238,910	89,718	–	328,628	–447	178,182	n/a
Other operating costs	–111,439	–82,611	–22,871	–216,921	–19,896	–178,182	–414,999

EBITDA 2)	127,471	7,107	–22,871	111,707	–20,343	–	91,364

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

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

For the six months ended 30 June 2022

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

Total revenue 1)	274,688	217,623	–	492,311	–4,076	–	488,235
Delivery costs	–37,464	–139,930	–	–177,394	–	177,394	n/a

Contribution margin 1) 2)	237,224	77,693	–	314,917	–4,076	177,394	n/a
Other operating costs 1)	–91,001	–75,428	–30,586	–197,015	–71,869	–177,394	–446,278

EBITDA 1) 3)	146,223	2,265	–30,586	117,902	–75,945	–	41,957

1) Prior-year figures restated, refer to Note 2 Change in accounting policies and correction of errors.

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

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

Additional geographical information

Switzerland, the US, Germany and the Netherlands are the main geographical markets for SoftwareOne and represent approximately 49% (comparative period: 50%) of total revenue. Revenue is reported based on the customer's headquarter domicile:

in CHF 1,000	Germany	US	Switzerland	Netherlands	Other countries	Total
Revenue for the six months ended 30 June 2023	101,345	72,211	43,366	33,475	255,966	506,363
Revenue for the six months ended 30 June 2022 1)	97,583	71,800	36,971	35,549	246,332	488,235

1) Prior-year figures restated, refer to Note 2 Change in accounting policies and correction of errors.

No transactions with one single external customer exceed 10% of consolidated revenue of the group.