Softwareone Holding Ltd. · SIX:SWON
Softwareone — FY2020 Earnings Presentation
40 slides from Softwareone's earnings presentation, Mar 25, 2021
Slide 1: FY 2020 Results Presentation
softwareONE SoftwareONE EMPOWERING COMPANIES TO TRAN SORM FY 2020 Results Presentation 25 March 2021
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation may contain certain forward-looking statements relating to SoftwareONE Holding AG (the ‘Company’) and each of its subsidiaries and affiliates (jointly referred to as ‘SoftwareONE’ or the ‘group! and its future business, development and economic
Slide 3: FY 2020 summary results
FY 2020 summary results Financial performance Strategy update Outlook Q8&A softwareONE
Slide 4: Dieter Schlosser, CEO
Dieter Schlosser, CEO softwareONE
Slide 5: FY 2020 Key Highlights
FY 2020 KEY HIGHLIGHTS Gross profit™ CHFm +4.4% cy 742.2 729.6 +23,9% ccy (1.9)% ccy 2019 2020 @ Software & Cloud ™@ Solutions & Services Adj. EBITDA CHFm +5.1% Ccy 223.6 223.1 2019 2020 softwareQNE adjustments detailed on page 14 CHF 730m +4.4% ccy Gross profit iS) [n= cHE 276m Cash flow from opera
Slide 6: Microsoft business mix impacted by Covid-19
MICROSOFT BUSINESS MIX IMPACTED BY COVID-19 Billings growth (voy) Recent trends } 2019 | 2020 | 20202020 _—— Strong growth during Large — Fl Fl ¢ B Covid-19 E Enterprises + Lower margin business + PyraCloud + Advisory services ~15% ~15% ° Strong growth during + Digital supply chain . Covid-19 Public
Slide 7: Acceleration in Solutions & Services
ACCELERATION IN SOLUTIONS & SERVICES Gross profit in Solutions & Services % YoY growth (ccy) 3 32.6% Ry oe C po Comparex integration 15.1% 13.0% 9.2% - L H1 2019 H2 2019 2019 (1) H1 2020 H2 2020 % Managed services softwareONE —_~“ 23.9% 2020 (1) Compared to 2018 on a proforma basis for Comparex acqu
Slide 8: Strategic agreement and co-investment with Microsoft
STRATEGIC AGREEMENT AND CO-INVESTMENT WITH MICROSOFT Application + ae . migration and eae Application services mcternization > SAP Critical Workloads on Azure Legacy SaaS Public Cloud aan xeE a >TO% cisap customers ee (ee STEOSANIA TR mid cS >50m software@NE 2027 30+ applications - % Legacy SAP © in
Slide 9: Successful execution of M&A strategy
SUCCESSFUL EXECUTION OF M&A STRATEGY Acquisitions January 2019 - YTD () iT2C| * SAP S/4HANA migrations and related managed services + SAP S/4HANA migrations and related managed services TELLIGENCE PARTNER * Complete Google Cloud portfolio with related consulting, migration and managed services nter,
Slide 10: Investing in strategic growth areas
INVESTING IN STRATEGIC GROWTH AREAS 02 ae New talent (FTEs) CHFm ~ Execution & cost savings &) & (sana (22.0) | =" Comparex-related synergies ... Covid-19-related savings (travel, physical 16.3 (16.3) marketing events) _ \ To} Strategic growth investments Net new hires || 14.5 -- Scaling & investing
Slide 11: Key take-aways
KEY TAKE-AWAYS o We successfully navigated the Covid-19 pandemic for our customers — and employees Software & Cloud was impacted by Covid-19, but our market position and stategy remain strong 3 Continued acceleration in Solutions & Services accompanied by significant investments (4 Unparalleled stra
Slide 12: Hans Gruter, CFO
Hans Gruter, CFO softwareONE
Slide 13: FY 2020 Profit & Loss Summary
FY 2020 PROFIT & LOSS SUMMARY P&L summary IFRS reported Adjusted") oe Revenue from Software & Cloud 7,313.9 7,593.3 7,544.3 7,593.3 Cost of software purchased (6,773.4) (7,073.9) (6,982.4) (7,073.9) : Gross profit from Software & Cloud 540.5 519.5 5619 519.5 (1.9)% Revenue from Solutions & Services
Slide 14: Adjusted Profit Bridge
ADJUSTED PROFIT BRIDGE IFRS reported to adjusted profit bridge CHFm (unless otherwise indicated) [| 2019 | 2020 | IFRS reported profit for the period 125.0 176.8 Proforma adjustments for Comparex acquisition 4.2 - Share-based compensation( 24 242 IPO expenses 10.5 04 Integration expenses Bo 72 M&A a
Slide 15: Strong cash flow driven by working capital improvements
STRONG CASH FLOW DRIVEN BY WORKING CAPITAL IMPROVEMENTS Capital expenditure?) Change in working capital” Cash flow from operating activities” CHFm CHFm CHFm 2763 100.2 216.3 533 20.7 22.8 L | |] |_| _ _ 2019 2020 2019 2020 % of Gross profit > ©. softwareONE (I) Onan IFRS reported basis —— (2) Define
Slide 16: Strict management of credit exposure
STRICT MANAGEMENT OF CREDIT EXPOSURE Accounts receivable insurance Bad debt provision % of accounts receivables at 31 Dec 2020 30.0% 47.0% Accounts receivable — CHF 1.7bn 3.0% 20.0% @ Insured ® Not insured (top credit rating) @ Too small to be insured (<CHF2k) ™@ No insurance available softwareONE C
Slide 17: Strong balance sheet for accelerated growth
STRONG BALANCE SHEET FOR ACCELERATED GROWTH Net working capital” Net debt/(cash)) CHFm, at period end (71.4) (169.6) CHFm, at period end (209.9) (496.5) Equity ratio Proposed dividend Total Equity/Capitalization (%), at period end (I) After factoring and including MEP liability; See page 38 for furt
Slide 18: Alex Alexandrov, COO
Alex Alexandrov, COO softwareONE
Slide 19: Key take-aways
KEY TAKE-AWAYS Move towards a ‘post-pandemic normal’ is affecting customer, vendor and market landscapes We are transforming into a provider of IP-based services and solutions at scale, with a recurring software & cloud business Portfolio supports customers through their end-to-end digital transform
Slide 20: Navigating constant change
NAVIGATING CONSTANT CHANGE Partners / Ecosystem * Explosive hyper-scaler growth * Innovative ISVs * Convergence of emerging technologies softwareONE Customers F) Key Trends NC Increasing customer complexity & demands "Cloud now" mindset inOps & shift to “opex” Security is priority Technology + Agile
Slide 21: Large markets with attractive outlook
LARGE MARKETS WITH ATTRACTIVE OUTLOOK Global Technology Market™ Market growth (%) 102 CHF 1.6tn 88 6.2 6.0 63 Global Software 4.6 & Cloud market | CHF 525bn 1 (3.2) (2.4) (2.7) 2020 2021 2022 @ Overall IT market ® Enterprise software Source: Gartner (January 2021) IT Services Market | Strategic incu
Slide 22: Portfolio supporting end-to-end customer's digital transformation
PORTFOLIO SUPPORTING END-TO-END CUSTOMER’S DIGITAL TRANSFORMATION Combining capabilities in a unique way for software, DIGITAL SUPPLY assets, workloads, apps and data running in the cloud... MARKETPLACE, ERIN COMMERCIAL a“ mK IT ASSET : TRANSFOR MATION .. DIAGNOSTICS. GOVERNANCE MANAGEMENT Reduce So
Slide 23: PyraCloud gaining adoption and momentum
PYRACLOUD GAINING ADOPTION AND MOMENTUM SoftwareONE Digital ® Digitizing SoftwareONE value in support of human interaction with customers + Provides insights based on current customer assets benchmarked against predictive behavior, best practices and relevant peer groups ONE Marketplace Intuitive gl
Slide 24: Five strategic incubation initiatives
FIVE STRATEGIC INCUBATION INITIATIVES a B88 sy QO Hyperscaler factory SAP inthe cloud Application services Managed Finops Industry verticals * Explosive hyperscaler market growth (>50%) + Multi-cloud strategy, incl. Azure, AWS and GCP. * End-to-end platform capabilities, covering cloud management, w
Slide 25: M&A as an additional lever for growth
M&A AS AN ADDITIONAL LEVER FOR GROWTH OPPORTUNITY-BASED SYSTEMATIC SCREENING Software In market- Capabilities & Cloud services oO Allo Pp = Large / fragmented Adding services in Acquiring capabilities to market specific countries accelerate organic build-up Selective acquisitions at In line with att
Slide 26: Software & Cloud foundation, IP-based services, double digit growth
SOFTWARE & CLOUD FOUNDATION, IP-BASED SERVICES, DOUBLE DIGIT GROWTH Gross profit evolution by product Up to ~50% Solutions & Services Entire portfolio driven by ow PyraCloud 2020 Vision 2022 ~2025 ™@ Software &Cloud (Traditional) dad ™ Solutions & @ Strategic vain) Services (SLM/TS) — incubation ini
Slide 27: Building the next-generation Solutions & Services leader
BUILDING THE NEXT-GENERATION SOLUTIONS & SERVICES LEADER TECHNOLOGY TRANSFORMATION DIGITAL J TRANSFORMATION 65 k + Od Bd Global Market a Customer base Leader B ~70% SMEs COMMERCIAL ~25% Enterprises TRANSFORMATION f oo ‘, Customer Hy Microsoft y a7 O08 Outcomes aws ¢ \ 5 ane) Google ByraCloud 7.5k+ p
Slide 28: Dieter Schlosser, CEO
Dieter Schlosser, CEO softwareONE
Slide 29: 2021 Outlook
2021 OUTLOOK + Improved operating environment, but Covid-related uncertainties persist and are expected to impact macroeconomic recovery * Increased pace of investments driving return to double-digit growth * Guidance for 2021: * Gross profit growth above 10% for the group in constant currency”) + A
Slide 30: Mid-term guidance
MID-TERM GUIDANCE }2020 results | 2021 guidance Mid-term guidance CHF729.6m + Above 10% growth in constant Growth: 4.4% ccy currency?) Gross profit + ‘Mid-teens’ growth in constant currency Adjusted + EBITDAgrowth in excess of gross profit ‘0; . iT EBITDA margin® 30.6% Approximately 30% growth _ . C
Slide 31: Q&A
Q&A software@NE ——
Slide 32: Slide 32
Slide 33: softwareONE
softwareONE ey
Slide 34: Total customer purchasing volume
Total customer purchasing volume ONE 10) Based on FY2019 Total customer purchasing volume Total revenue (IFRS) Gross profit (Non-IFRS) 34
Slide 35: Profit and Loss Statement
PROFIT AND LOSS STATEMENT Revenue from Software & Cloud 73139 7,593.3 75443 75933 Revenue from Solutions & Services 2969 3129 315.6 3129 Total revenue 7,610.8 7,906.3 7,859.9 7,906.3 Cost of software purchased (6,773.4) (7,073.9) (6,982.4) (7,073.9) Third-party service delivery costs (123.1) (102.8)
Slide 36: Balance Sheet
BALANCE SHEET HFm, as per 31 December HF m, as per 31 December Cash and cash equivalents a S =m Trade payables — 9 an Trade receivables 1,830.6 W742 Other payables 233.5 221.3 Income tax receivables 92 24 Accrued expenses and contract liabilities 259.0 1286 Other receivables 823 643 Derivative finan
Slide 37: Cash Flow Statement
CASH FLOW STATEMENT ER ag 020 cir [09] 2020 | Profit for the period 125.0 176.8 Proceeds from financial liabilities 1,671.0 659.7 Depreciation, amortization & impairment 513 55.2 Repayments of financial liabilities (1,704.8) (694.4) Total finance result, net (35.4) (80.2) Contributions from sharehol
Slide 38: Working Capital Reconciliation
WORKING CAPITAL RECONCILIATION Net working capital CHFm, as per 31 December [| 2019 | 2020 Trade receivables 1,830.6 1,714.2 Other receivables 823 64.3, Prepayments and contract assets 59.0 872 Trade payables (1,550.9) (1,685.3) Other payables (233.5) (221.3) Accrued expenses and contract liabilitie
Slide 39: Net Debt Reconciliation
NET DEBT RECONCILIATION Net debt/(cash) Bank overdrafts 42 9.6 Other current financial liabilities 93 31.7 Current contingent consideration liabilities 36.5 18 Other non-current financial liabilities 75.2 52.7 Non-current contingent consideration liabilities 122 81 Lease liabilities 38.6 41.7 MEP li
Slide 40: FX Exposure
FX EXPOSURE Gross profit by currency” Operating expenses by currency” Other; 19.3% INR; 1.8% MXN; 1.6% —S BRL; 2.5% GBP; 5.3% - CHF; 9.1% USD; 17.2% softwareONE (I) Based on FY 2020 management accounts EUR; 43.2% Other; 20.9% INR; 4.4% MXN; 2.4% BRL; 2.8% GBP; 5.8% CHF; 9.3% USD; 13.3% EUR; 41.2% 40