SoftwareONE sees double-digit gross profit growth in 2021 results

Growth in the groups solutions and services arm shot up more than 50 per cent

SoftwareONE has posted an increase in gross profit in its full-year 2021 results.

Gross profit at group level rose 17.6 per cent to CHF 855m (€849m) in 2021.

EBITDA fell one per cent year on year to CHF 219m (€217m), with a margin of 25.7 per cent from 30.6 per cent in 2020.

"While we are aware that margins fell below expectations, we believe the strategic investments underpin our strong growth and support long-term shareholder value," said SoftwareONE CEO, Dieter Schlosser.

"As organisations continue to embrace the cloud, the demand for services is expected to grow significantly.

"In order to capitalise on this market opportunity, we have continued to invest in talent and capabilities.

"With our two synergistic business lines now at scale, we can better serve our customers' entire transformation journeys, gain wallet share and be their trusted advisor - today and in the future."

The Swiss firm's total adjusted operating expenses increased 25.8 per cent to CHF 635.7m (€631m).

It claimed the development of its cost base reflected higher personnel costs as a result of investments in sales & marketing and delivery capabilities to support the company's continued growth, as well as incremental operating expenses of acquired companies.

Software & Cloud

Gross profit from Software & Cloud grew three per cent year on year to CHF 533.6m (€530.2m) in 2021, compared to CHF 519.5m during the prior year period.

SoftwareONE said this was driven by a recovery across the key hyperscalers (Microsoft, AWS, Google) and ISVs during the year.

It added in terms of Microsoft gross billings, which amounted to $14.7bn in 2021, SoftwareONE's business developed in line with the overall Microsoft market, with positive momentum across all customer segments.

Microsoft Cloud billings demonstrated double-digit growth, making up 73 per cent of total Microsoft volume in 2021, compared to 67 per cent in 2020.

Solutions & Services

Solutions & Services achieved strong gross profit growth of 53.5 per cent to CHF 321.4m (€319.4m).

The Swiss giant said this segment represented 38 per cent of group gross profit in 2021, reflecting the company's strategic focus on cross and up-selling services and portfolio expansion to serve customer journeys end-to-end.

Regional breakdown

Regional performance varied across the group, primarily reflecting the portfolio mix of each region, it said.

In NORAM and APAC, where Solutions & Services represent more than 40 per cent of total gross profit, growth was very strong and corresponded to 22.5 per cent and 31.1per cent respectively in 2021.

Both NORAM and APAC also saw strong recoveries in Software & Cloud on the back of strong results in the Microsoft business.

EMEA delivered a solid performance with gross profit up 9.1 per cent, impacted by the transition to pay-as-you-go in the Microsoft business, while the remainder of Software & Cloud and Solutions & Services delivered strong growth.