Focus on disciplined execution
Adjusted total operating expenses in 2022 were CHF 699.1 million, increasing 14.5% YoY ccy compared to the prior year. In Q4 2022, total operating expenses amounted to CHF 176.3 million, remaining broadly stable for five quarters since Q4 2021 as a result of strict cost control.
Adjusted EBITDA for 2022 was CHF 240.4 million, increasing 11.9% YoY ccy compared to CHF 219.4 million in the prior year. The adjusted EBITDA margin was 25.6%, demonstrating stable profitability compared to prior year.
Adjusted profit for the year was CHF 115.0 million in 2022, representing an increase of 4.6% YoY in reported currency, compared to CHF 110.0 million in the prior year.
IFRS reported profit for the year decreased to CHF (58.3) million in 2022, compared to CHF 117.6 million in the prior year, reflecting a mainly non-cash loss related to the sale of the Russian operations and a fair value loss on shares in Norwegian listed company Crayon (partially realised due to sell-down in April 2022), as well as the impact of M&A and integration-related expenses, restructuring and a change in revenue recognition for Microsoft Enterprise Agreements.
For a reconciliation of IFRS reported profit to adjusted profit for the year, see page 7 of this media release.
Driving operational excellence
SoftwareOne will implement a new programme in 2023 geared towards embedding operational excellence across the organisation. The programme spans three pillars – commercial effectiveness, efficient service delivery and right-sized support functions. Cost savings are expected to be CHF 15 million in 2023 and CHF 50 million on an annualised basis from 2024 onwards. Up to 50% of cost savings achieved in each year will be re-invested into strategic growth areas. A restructuring cost is expected to be recognised in Q1 2023.
Strong liquidity and unlevered balance sheet
Net working capital3 remained negative at CHF (158.3) million, with payables exceeding receivables in 2022, compared to CHF (187.5) million in the prior year. Net cash from operating activities was CHF 91.1 million in 2022, down from CHF 158.0 million in the prior year, driven primarily by working capital.
Capital expenditure totalled CHF 47.3 million, mainly relating to investments in Goatpath, compared to CHF 33.3 million in the prior year.
Proceeds from the sale of financial assets (related to Crayon) were CHF 115.5 million. Cash outflow relating to acquisitions of businesses amounted to CHF 78.4 million.
Net cash position was CHF 461.2 million as at 31 December 2022, compared to CHF 547.4 million in 2021.
Launch of buyback program
As previously announced, SoftwareOne will launch a buyback program of up to CHF 70 million. The programme is expected to start in Q2 2023.
The share buyback program is for capital reduction purposes and will be executed on a second trading line on the SIX Swiss Exchange. SoftwareOne intends to request shareholder approval to cancel the shares purchased through this program and to reduce the share capital at future shareholders’ meetings.
3 After factoring