SoftwareOne delivers solid start to 2024 and reiterates full-year guidance

SoftwareONE Holding AG / Key word(s): Quarter Results/Quarter Results
SoftwareOne delivers solid start to 2024 and reiterates full-year guidance

15-May-2024 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

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Media Release - ad hoc announcement pursuant to Art. 53 LR

SoftwareOne delivers solid start to 2024 and reiterates full-year guidance

Stans, Switzerland I 15 May 2024 - SoftwareOne Holding AG, a leading global
software and cloud solutions provider, today published its Q1 2024 trading
update.

  * Group revenue up 7.4% YoY constant currency (ccy) and 3.1% YoY reported
    currency to CHF 246.9 million in Q1 2024

  * Adjusted EBITDA up 18.8% YoY ccy to CHF 45.4 million, with margin up
    1.8pp YoY to 18.4% reflecting continued cost control

  * Acceleration in NORAM to revenue growth of 26.4% YoY ccy supported by a
    number of large client wins

  * Execution of Vision 2026 progressing as planned, with a focus on driving
    strategic growth priorities, sharpening execution and margin expansion

  * Ambition to become #1 Copilot partner and deliver on USD 100 million
    revenue opportunity across licensing and services on track

  * Implementation of transformed GTM model ongoing based on new client
    segmentation and coverage model, with a phased roll-out starting in key
    markets in Q2 2024

  * Outlook for 2024 reiterated based on YTD performance and stabilising
    market environment

  * Transaction Committee chaired by Till Spillmann and comprised of all
    independent members of the Board of Directors has been established to
    address approaches received from several parties

Brian Duffy, CEO of SoftwareOne said, "We delivered our Q1 2024 results
against a backdrop of uncertainty in the economic environment. With our
integrated offering of software & cloud, services and data & AI, we are
strongly positioned to serve our clients with outcome-oriented solutions to
meet their needs. In particular, we made great progress in supporting
clients with the implementation of Microsoft 365 Copilot this quarter,
helping them bend the productivity curve, while addressing security,
governance and other considerations.

We are focused on executing our updated strategy 'Vision 2026 - a new
chapter of growth'. We have finalised the blueprint design for a transformed
GTM approach based on our new client segmentation and coverage model, with
roll-out in key markets starting in Q2 2024. We have also made significant
progress in forming a well-defined global alliance organisation to manage
prioritised partnerships with ISVs. Lastly, we continue to see traction on
our Marketplace Platform, with the number of clients, cloud subscriptions
and sales steadily increasing. Combined with a continued focus on
operational excellence, we are confident these strategic initiatives will
drive accelerated growth and margin expansion in line with our Vision 2026
targets.

Rodolfo Savitzky, CFO of SoftwareOne added, "Our Q1 2024 results are a
testament to our resilient business model and the successful execution of
our operational excellence programme. We continue to be on track to deliver
our target of CHF 70 million in annualised savings in 2024. Based on our
performance this quarter, we reiterate full-year guidance of revenue growth
of 8-10% and an adjusted EBITDA margin of 24.5-25.5%."

Key figures - Group

CHFm Q1 2024 Q1 2023 % % (CCY)

    Software & Cloud Marketplace      125.6    125.6    0.0%       4.6%
    Software & Cloud Services         121.3    113.8    6.6%      10.4%
    Total revenue                     246.9    239.4    3.1%       7.4%
    Delivery costs                   (87.7)   (91.4)  (4.1)%     (1.1)%
    Contribution margin               159.3    148.0    7.6%      12.6%
    SG&A                            (113.9)  (108.4)    5.1%      10.3%
    Adj. EBITDA                        45.4     39.6   14.5%      18.8%
    Adj. EBITDA margin (% revenue)    18.4%    16.6%   1.8pp          -

In Q1 2024, revenue at the group level grew 7.4% YoY ccy and 3.1% reported
currency to CHF 246.9 million, compared to CHF 239.4 million in the prior
year period.

The strengthening of the CHF versus several major currencies, including the
EUR, USD and GBP led to a negative FX translation impact of around 4.3
percentage points on revenue.

Solid growth in key markets

Revenue by region

CHFm Q1 2024 Q1 2023(1)(1) % % (CCY)



1. #_ftn1

    EMEA                 147.0          148.9   (1.3)%       3.0%
    NORAM                 39.1           32.6    19.9%      26.4%
    LATAM                 24.8           23.1     7.3%       4.3%
    APAC                  32.8           31.3     5.0%      14.4%
    Group, FX & Other      3.1            3.5  (10.4)%          -
    Total revenue        246.9          239.4     3.1%       7.4%

By region, EMEA grew revenue by 3.0% YoY ccy to CHF 147.0 million, with good
momentum in Southern Europe, Benelux and CEE, particularly within services.

NORAM accelerated on the back of a number of large client wins, driving
revenue growth of 26.4% YoY ccy to CHF 39.1 million in Q1 2024.

APAC was up 14.4% YoY ccy to CHF 32.8 million in Q1 2024, driven primarily
by Microsoft and related services.

Revenue in LATAM grew 4.3% YoY ccy to CHF 24.8 million in Q1 2024 with
improved performance across the region on the back of new leadership since
last year.

Continued growth momentum across business lines

Software & Cloud Marketplace

Key figures - Software & Cloud Marketplace

CHFm Q1 2024 Q1 2023 % % (CCY)

    Revenue                               125.6    125.6   0.0%       4.6%
    Contribution margin                   108.2    106.6   1.5%       6.1%
    Contribution margin (% of revenue)    86.1%    84.9%  1.2pp          -
    Adj. EBITDA                            57.9     53.3   8.6%      13.0%
    Adj. EBITDA margin (% of revenue)     46.1%    42.5%  3.6pp          -

Revenue in Software & Cloud Marketplace grew 4.6% YoY ccy to CHF 125.6
million in Q1 2024.

Gross billings in the Microsoft business amounted to USD 4.3 billion in Q1
2024, up 6% compared to Q1 2023. Revenue growth in the Microsoft business
continued to offset lower growth in other ISVs.

Contribution margin grew by 6.1% YoY ccy to CHF 108.2 million in Q1 2024,
with the margin improving to 86.1% of revenue.

Adjusted EBITDA grew by 13.0% YoY ccy to CHF 57.9 million in Q1 2024,
compared to CHF 53.3 million in the prior year period.

Software & Cloud Services

Key figures - Software & Cloud Services

CHFm Q1 2024 Q1 2023 % % (CCY)

    Revenue                               121.3    113.8   6.6%      10.4%
    Contribution margin                    51.1     41.4  23.5%      29.2%
    Contribution margin (% of revenue)    42.1%    36.4%  5.8pp          -
    Adj. EBITDA                             4.4      2.3  89.1%      93.6%
    Adj. EBITDA margin (% of revenue)      3.6%     2.0%  1.6pp          -

Software & Cloud Services delivered revenue growth of 10.4% YoY ccy to CHF
121.3 million in Q1 2024, up from CHF 113.8 million in the prior year
period. Growth was driven by Cloud Services and Software Sourcing &
Portfolio Management (previously known as ITAM).

Focus on cross-selling continued with 73% of LTM (to 31 March 2024) revenue
generated by c. 15.9k clients purchasing both software and services, up from
15.5k a year ago

Contribution margin increased to CHF 51.1 million in Q1 2024, driving the
margin to 42.1%, driven by continued optimisation of the delivery network.

Adjusted EBITDA was CHF 4.4 million in Q1 2024, compared to CHF 2.3 million
in the prior year period. The margin was 3.6%, up 1.6 ppts compared to one
year ago.

Focus on profitable growth

Adjusted EBITDA for Q1 2024 was CHF 45.4 million, increasing 18.8% YoY ccy
driven primarily by optimisation of the delivery network and strict cost
control.

The operational excellence programme generated additional cost savings of
CHF 7 million in Q1 2024 and is on track to achieve the CHF 70 million
target this year.

Restructuring expenses relating to the operational excellence and GTM
programmes, as well as discontinuation of the MTWO vertical totalled CHF
12.2 million in Q1 2024.

Update on implementation of Vision 2026

At its Capital Markets Day on 15 February 2024, SoftwareOne announced 'Vision
2026 - a new chapter of growth' to drive accelerated growth, margin
expansion and cash generation by pursuing key growth priorities and through
sharpened execution, while leveraging its unique value proposition. The
implementation of Vision 2026 is progressing as planned.

Strategic growth opportunities

In terms of its strategic growth priorities, SoftwareOne remains on track to
becoming the #1 Copilot partner for Microsoft and achieving the USD 100
million mid-term revenue opportunity, with over 325,000 new Copilot users
and 325+ services engagements in the quarter.

Sharpened execution

With regards to sharpening execution, transforming the company's GTM
approach and implementing pricing and renewals initiatives were priorites in
Q1 2024. A blueprint design of the GTM model based on the new client
segmentation and coverage model was finalised in the quarter. Roll-out to
key markets is planned for Q2 2024, followed by an organisation-wide launch
towards year-end.

To execute on its focused ISV strategy, significant progress was made in
establishing the global alliance team to manage prioritised partnerships
with the hyperscalers and other ISVs.

To increase wallet share and expand its addressable market, the company
remained focused on accelerating adoption of the Marketplace platform, which
continued to gain traction with both vendors and clients in Q1 2024. With
over 17k clients actively using the platform, the number of cloud
subscriptions increased to 34.5k and LTM gross sales to 31 March 2024 was
CHF 668 million.

Margin expansion

To drive margin expansion, SoftwareOne continued to execute on its
operational excellence programme, with continued optimisation of delivery
network, scaling of HR shared service centers and completion of Finance
shared service transitions.

Board of Directors' update

Together with the Executive Board, the newly elected Board of Directors is
currently analysing the business with a view to accelerating the current
transformation and growth plans.

In the meantime, the Board has been approached by several parties regarding
a potential going-private transaction. To ensure an orderly follow-up, the
Board has established a Transaction Committee that is chaired by Till
Spillmann and comprises all independent members of the Board of Directors.

Outlook for the financial year 2024 reiterated

Based on its first quarter performance, SoftwareOne reiterates its 2024
full-year guidance, assuming no material deterioration in the macroeconomic
environment:

* 8-10% YoY revenue growth for the group in constant currency;

* Adjusted EBITDA margin of 24.5-25.5% of revenue;

* Dividend pay-out ratio of 30-50% of adjusted profit for the year.

Reconciliation - Reported to adjusted EBITDA

   CHFm                                                      Q1      Q1
                                                           2024    2023
   Reported EBITDA                                         28.7    29.9
   Impact of change in revenue recognition of Microsoft     0.3     1.4
   Enterprise Agreements
   Share-based compensation                                   -       -
   Integration, M&A and earn-out expenses                   3.1     3.9
   Operational excellence restructuring expenses            4.1     4.4
   GTM restructuring expenses                               5.1       -
   Discontinuatoin of MTWO vertical                         3.0       -
   Russia-related loss                                        -     0.1
   Other non-recurring items                                1.0       -
   Adjusted EBITDA                                         45.4    39.6

Q1 2024 RESULTS DOCUMENTS

The Q1 2024 Trading update documents can be found on SoftwareOne's website
in the Results centre.

CALL FOR INVESTORS, ANALYSTS AND THE MEDIA

A webcast for investors, analysts and the media with Brian Duffy, CEO and
Rodolfo Savitzky, CFO will be held today at 9.00 CEST and may be joined via
the link Audio webcast.

If you wish to actively participate in the Q&A session or are unable to join
via the webcast, you may call the following numbers, 10 - 15 minutes before
conference start:

Switzerland / Europe: +41 (0) 58 310 50 00

United Kingdom: +44 (0) 207 107 06 13

United States: +1 (1) 631 570 56 13

Other international numbers available here.

The webcast will be archived and a digital playback will be available
approximately two hours after the event in the Results centre.

CORPORATE CALENDAR

2024 Half-year results and Half-year Report 21 August 2024

Q3 2024 Trading update 13 November 2024

CONTACT

Anna Engvall, Investor Relations

Tel. +41 44 832 41 37, anna.engvall@softwareone.com

FGS Global, Media Relations

Tel. +41 44 562 14 99, press.softwareone@fgsglobal.com

ABOUT SOFTWAREONE

SoftwareOne is a leading global software and cloud solutions provider that
is redefining how organizations build, buy and manage everything in the
cloud. By helping clients to migrate and modernize their workloads and
applications - and in parallel, to navigate and optimise the resulting
software and cloud changes - SoftwareOne unlocks the value of technology.
The company's -9,300 employees are driven to deliver a portfolio of 7,500
software brands with a presence in over 60 countries. Headquartered in
Switzerland, SoftwareOne is listed on the SIX Swiss Exchange under the
ticker symbol SWON. Visit us at www.softwareone.com

SoftwareOne Holding AG, Riedenmatt 4, CH-6370 Stans

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This media release may contain certain forward-looking statements relating
to the group's future business, development and economic performance. Such
statements may be subject to a number of risks, uncertainties and other
important factors, such as but not limited to force majeure, competitive
pressures, legislative and regulatory developments, global, macroeconomic
and political trends, the group's ability to attract and retain the
employees that are necessary to generate revenues and to manage its
businesses, fluctuations in currency exchange rates and general financial
market conditions, changes in accounting standards or policies, delay or
inability in obtaining approvals from authorities, technical developments,
litigation or adverse publicity and news coverage, each of which could cause
actual development and results to differ materially from the statements made
in this media release. SoftwareOne assumes no obligation to update or alter
forward-looking statements whether as a result of new information, future
events or otherwise.

(1) Includes reallocation of revenue between Group and the regions to align
with 2024 reporting, with no change to total revenue


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End of Inside Information

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   Language:       English
   Company:        SoftwareONE Holding AG
                   Riedenmatt 4
                   6370 Stans
                   Switzerland
   Phone:          +41 44 832 41 69
   E-mail:         info.ch@softwareone.com
   Internet:       www.softwareone.com
   ISIN:           CH0496451508
   Valor:          A2PTSZ
   Listed:         SIX Swiss Exchange
   EQS News ID:    1903211

End of Announcement EQS News Service
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1903211 15-May-2024 CET/CEST