30.08.2023 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.
SUSE Q3 FY23 Quarterly Statement
Q3 IFRS Revenue of $173 million was up 2% versus the prior year, and IFRS Operating Profit Before D&A was $36 million, down 11%, reflecting continued investments in initiatives to support future growth
ARR (as at April 30, 2023) of $665 million was up 4%
Adjusted Revenue of $173 million, up 1% (same at constant currency), was supported by earlier-than-expected revenue from retrospective consumption contracts
Adjusted EBITDA Margin of 32%, down 6 ppt, also reflects investments into initiatives to support future growth, including in R&D
Adjusted Unlevered Free Cash Flow of $60 million, down 2%, with cash conversion of 108%, was supported by a core working capital inflow
During Q3 FY23 and since the end of the quarter, SUSE’s expectations for future performance and market outlooks have not changed materially
There will be no further announcement of Q3 results, previously due on September 21, 2023, and no management conference call today
On August 17, 2023, post quarter end, SUSE announced that its majority shareholder Marcel LUX III SARL (EQT Private Equity) intends to take the company private by delisting it from the Frankfurt Stock Exchange. As part of that, EQT Private Equity announced a voluntary public purchase price offer to acquire the shares it does not own. The offer price per SUSE share to be paid by EQT Private Equity will be EUR 16.00 less the gross amount per SUSE share of an interim dividend to be paid by SUSE to all shareholders, representing a premium of 67% on the XETRA closing share price on 17 August
The interim dividend will be funded by SUSE through a combination of existing cash and additional borrowing and will be paid to all shareholders, allowing EQT Private Equity to finance its purchase of SUSE shares under the offer and certain transaction costs. For more information see ir.suse.com
SUSE’s Management Board and Supervisory Board support the strategic opportunity from delisting of the company as it will allow SUSE to focus fully on its operational priorities and execution of its long-term strategy
On August 14, 2023, SUSE announced the appointments of Ian Halifax as Chief Financial Officer from December 11, 2023, and Frank Feldman as Chief Strategy Officer with immediate effect. These appointments completed SUSE’s strengthened executive leadership team
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
YoY
CCY
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
YoY
CCY
Non-IFRS measures
ACV
117.0
114.4
2%
1%
394.6
397.6
(1)%
0%
ARR (as at April 30)
664.9
639.6
4%
664.9
639.6
4%
Adjusted Revenue
173.3
171.2
1%
1%
504.7
487.5
4%
4%
Adjusted EBITDA
55.9
65.1
(14)%
(12)%
175.2
176.0
(0)%
(3)%
Adjusted EBITDA Margin
32%
38%
35%
36%
Adjusted uFCF
60.1
61.5
(2)%
151.5
143.8
5%
IFRS measures
Revenue
173.0
170.1
2%
503.3
483.4
4%
Gross Profit
159.4
156.8
2%
462.5
444.7
4%
Operating Profit Before D&A
36.2
40.8
(11)%
118.8
107.9
10%
Net Cash Inflow from Operating Activities
40.9
54.0
(24)%
103.4
105.1
(2)%
Luxembourg – August 30, 2023 – SUSE S.A. (the “Company” or “SUSE”), an independent leader in open source software specializing in Enterprise Linux operating systems, Enterprise Container Management and Edge software solutions, today announced its results for the third quarter of financial year 2023, which ended July 31, 2023.
Notes
This document contains Alternative Performance Measures as defined in Appendix 4.
Operating expenses exclude non-recurring items, as shown in the IFRS operating loss to Adjusted EBITDA reconciliation in Appendix 2.
Constant Currency movements (CCY) have been provided for ACV, Adjusted Revenue and Adjusted EBITDA. The definition of constant currency is included within Appendix 4.
Statutory data for the financial period is reported in Appendix 1. Reconciliations to IFRS measures are shown in Appendix 2.
Summary IFRS Income Statement, KPIs and Adjusted Profit and Loss for Q3 and Q3 YTD FY23, and Q3 and Q3 YTD FY22
Summary IFRS Income Statement
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Revenue
173.0
170.1
2%
503.3
483.4
4%
Cost of sales
(13.6)
(13.3)
2%
(40.9)
(38.7)
6%
Gross profit
159.4
156.8
2%
462.4
444.7
4%
Operating expenses
(123.2)
(116.0)
6%
(343.6)
(336.8)
2%
Amortization of intangible assets
(34.4)
(35.2)
(2)%
(102.7)
(107.6)
(5)%
Depreciation - PPE
(1.2)
(0.9)
33%
(3.3)
(2.8)
18%
Depreciation - Right of Use assets
(1.2)
(1.7)
(29)%
(4.2)
(5.9)
(29)%
Operating profit/(loss)
(0.6)
3.0
n.m.
8.6
(8.4)
n.m.
Net finance costs
(12.5)
(9.1)
37%
(40.1)
(30.7)
31%
Share of losses on associate
(0.2)
(0.3)
(33)%
(1.4)
(1.7)
(18)%
Profit/(Loss) before tax
(13.3)
(6.4)
108%
(32.9)
(40.8)
(19)%
Taxation
(0.7)
(6.5)
(89)%
(6.6)
1.4
n.m.
Profit/(Loss) for the period
(14.0)
(12.9)
9%
(39.5)
(39.4)
0%
KPIs and Adjusted Profit and Loss
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
YoY
CCY
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
YoY
CCY
ACV by Solution
Core
93.4
93.2
0%
(1)%
319.4
326.7
(2)%
(1)%
Emerging
23.6
21.2
11%
11%
75.2
70.9
6%
7%
Total ACV
117.0
114.4
2%
1%
394.6
397.6
(1)%
0%
ARR (as at April 30)
664.9
639.6
4%
664.9
639.6
4%
NRR as % (as at April 30)
100.4%
107.6%
(7)%
100.4%
107.6%
(7)%
Adjusted Revenue by Solution
Core
144.0
142.9
1%
0%
413.5
407.0
2%
2%
Emerging
29.3
28.3
4%
4%
91.2
80.5
13%
13%
Total Adjusted Revenue
173.3
171.2
1%
1%
504.7
487.5
4%
4%
Adjusted Cost of Sales
13.4
13.3
1%
0%
40.2
38.2
5%
7%
Adjusted Gross Profit
159.9
157.9
1%
1%
464.5
449.3
3%
3%
Adjusted Gross Profit Margin
92%
92%
92%
92%
Sales, Marketing & Operations
47.7
45.0
6%
5%
134.2
134.3
(0)%
2%
Research & Development
33.4
27.1
23%
21%
93.1
81.2
15%
16%
General & Administrative
22.9
20.7
11%
6%
62.0
57.8
7%
9%
Total Operating Expenses
104.0
92.8
12%
10%
289.3
273.3
6%
8%
Adjusted EBITDA
55.9
65.1
(14)%
(12)%
175.2
176.0
(0)%
(3)%
Adjusted EBITDA Margin
32%
38%
35%
36%
Depreciation & Amortization
4.9
5.0
(2)%
15.0
16.3
(8)%
Adjusted EBIT
51.0
60.1
(15)%
160.2
159.7
0%
Net Finance Costs
12.5
9.1
37%
40.1
30.7
31%
Adjusted Profit Before Tax
38.5
51.0
(25)%
120.1
129.0
(7)%
Notional Tax
11.0
14.2
(23)%
38.4
37.2
3%
Adjusted Profit After Tax
27.5
36.8
(25)%
81.7
91.8
(11)%
Weighted average shares in issue
170.6
169.2
1%
169.9
169.1
0%
Basic Adjusted Earnings Per Share
0.16
0.22
(27)%
0.48
0.54
(11)%
Diluted Adjusted Earnings Per Share
0.16
0.21
(24)%
0.47
0.53
(11)%
Notes: Basic Adjusted Earnings Per Share is calculated on the basis of the weighted average number of ordinary shares in issue during the period. Diluted Adjusted Earnings Per Share takes into account potential dilution from outstanding share grants and options. The weighted average number of ordinary shares in issue, fully diluted, during the third quarter, was 174.2 million, and during the Q3 YTD FY23 was 173.5 million.
Financial and Business Review
The information in this section is based on the presentation of Alternative Performance Measures as defined in Appendix 4 and has not been audited.
A reconciliation to the IFRS financials is included in Appendix 2. Results are shown using actual exchange rates.
Business and Markets Update
On August 17, 2023, post quarter end, SUSE announced that its majority shareholder Marcel LUX III SARL (EQT Private Equity) intends to take the company private by delisting it from the Frankfurt Stock Exchange via a merger into an unlisted Luxembourg entity in the legal form of an S.A. As part of that, EQT Private Equity has announced a voluntary public purchase price offer to acquire the shares it does not own. The offer price per SUSE share to be paid by EQT Private Equity will be EUR 16.00 less the gross amount per SUSE share of an interim dividend to be paid by SUSE to all shareholders, representing a premium of 67% on the XETRA closing share price on 17 August.
The interim dividend will be paid to all shareholders prior to the settlement of the offer and will allow EQT Private Equity to finance its purchase of SUSE shares under the offer and certain transaction costs incurred by it. The payment of the interim dividend will be funded by SUSE through a combination of existing cash and additional borrowing. Any additional borrowing will be in the form of loans taken out by companies of the SUSE group to a maximum of EUR 500 million. The amount of the loans taken out will only be determined after the expiry of the offer acceptance period.
SUSE’s Management Board and Supervisory Board support the strategic opportunity from delisting of the company as it will allow SUSE to focus fully on its operational priorities and execution of its long-term strategy.
For more information, see the press release and ad hoc announcement at https://ir.suse.com/websites/suse/English/4900/eqt-purchase-offer.html
On August 14, 2023, SUSE announced the appointments of Ian Halifax as Chief Financial Officer from December 11, 2023, and Frank Feldman as Chief Strategy Officer with immediate effect. These appointments completed SUSE’s strengthened executive leadership team.
Ian Halifax will take over as CFO on December 11, 2023, following a handover with the interim CFO Jonathan Atack, who retains full responsibility for the role until then. Ian Halifax has more than 30 years' experience in senior financial leadership positions, including as Chief Financial Officer at leading global technology providers such as Trellix, Riverbed Technology, ON24, Wind River Systems and Micromuse. He has substantial strategic and executional experience in private and public technology companies, and he has developed and led global teams to drive performance, rapid growth and diversification.
Frank Feldmann’s career includes more than 15 years in several senior management roles at Red Hat, as well as at Novell. Feldmann has a strong foundation in technology product management, sales and technology marketing, focused on business and technology transformation and growth. His role at SUSE includes the development and execution of long-term business strategies.
ACV and Revenues
Q3 ACV was $117.0 million, up 2%, comprising Core ACV of $93.4 million, flat versus the prior year, and Emerging ACV of $23.6 million, up 11%. At constant currency, Q3 total ACV growth was up 1%, Core was down 1% and Emerging up 11%.
Q3 Adjusted Revenue was $173.3 million, up 1%, comprising Core Revenue of $144.0 million, up 1%, and Emerging Revenue of $29.3 million, up 4%. At constant currency, movements are the same for total Adjusted Revenue and Emerging Revenue, with Core Revenue flat versus the prior year.
The average contract duration on a last-12-months basis was 18 months, the same as the prior quarter. This only considers contracts paid up front.
ACV – By Route-to-Market
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
End User & Cloud
108.0
101.9
6%
343.8
335.9
2%
IHV & Embedded
9.0
12.5
(28)%
50.8
61.7
(18)%
Total ACV
117.0
114.4
2%
394.6
397.6
(1)%
End User and Cloud ACV was up 6% in Q3, driven by growth in both Cloud and End User routes-to-market.
Independent Hardware Vendors (IHV) and Embedded ACV declined 28% in Q3, driven by lower hardware shipments and a shift to selling through other routes, primarily through Cloud Service Providers.
ACV – By Region
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Europe, Middle East and Africa
53.8
41.4
30%
178.8
159.7
12%
North America
43.8
53.6
(18)%
154.0
171.5
(10)%
Asia Pacific and Japan
9.7
10.8
(10)%
29.1
28.5
2%
Greater China
5.4
4.6
17%
16.9
20.8
(19)%
Latin America
4.3
4.0
8%
15.8
17.1
(8)%
Total ACV
117.0
114.4
2%
394.6
397.6
(1)%
Annual Recurring Revenue and Net Retention Rate
Total Annual Recurring Revenue (ARR) as at April 30, 2023, was $664.9 million, up 4%.
SUSE’s Net Retention Rate (NRR) as at April 30, 2023, was 100.4%.
ARR and NRR are reported three months in arrears as a significant portion of the revenues are invoiced retrospectively.
Costs
SUSE’s Q3 Adjusted Cost of Sales grew broadly in line with Adjusted Revenue versus the prior year, resulting in a consistently high Adjusted Gross Profit margin of 92%.
Total Operating Expenses increased by 12% in Q3, 10% at constant currency.
Profitability
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Adjusted EBITDA
55.9
65.1
(14)%
175.2
176.0
(0)%
Adjusted EBITDA Margin
32%
38%
35%
36%
Change in Deferred Revenue
(13.6)
(18.9)
(28)%
(17.8)
39.2
n.m
Adjusted Cash EBITDA
42.3
46.2
(8)%
157.4
215.2
(27)%
Adjusted Cash EBITDA Margin
24%
27%
31%
44%
Adjusted EBITDA declined 14% versus the prior year, as revenue growth was more than offset by higher operating costs.
Change in Deferred Revenue was negative $13.6 million, despite higher ACV and stable contract lengths in Q3 versus the prior year, as revenue recognition more than offset the total contract value booked in the period.
The decrease in Adjusted EBITDA was partly offset by the lower negative Change in Deferred Revenue, leading to Q3 Adjusted Cash EBITDA of $42.3 million, down 8%.
Cash Flow
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Adjusted Cash EBITDA
42.3
46.2
(8)%
157.4
215.2
(27)%
Gross capital expenditure
(1.3)
(2.5)
(48)%
(6.9)
(7.2)
(4)%
Change in core working capital
27.5
27.2
1%
30.6
(27.2)
n.m.
Commission paid (net of amortization)
(2.6)
(5.3)
(51)%
(10.9)
(18.6)
(41)%
Leases paid
(2.1)
(1.9)
11%
(6.3)
(5.7)
11%
Cash taxes
(3.7)
(2.2)
68%
(12.4)
(12.7)
(2)%
Adjusted uFCF
60.1
61.5
(2)%
151.5
143.8
5%
Adj. uFCF Conv from Adj. EBITDA
108%
94%
86%
82%
Adjusted Unlevered Free Cash Flow of $60.1 million in Q3 was down 2% versus the prior year, driven primarily by the lower Adjusted Cash EBITDA, partly offset by lower commissions paid (net of amortization). The Core Working Capital inflow of $27.5 million in Q3 was broadly similar to the prior year, reflecting customer payment for contracts signed in the prior quarter.
Leverage
All USD $m unless otherwise stated
FY23
End Q3
FY22
End Q3
YoY
Actual
Net Debt
507.3
604.1
(16)%
Adjusted Cash EBITDA (LTM)
237.4
266.9
(11)%
Leverage
2.1
2.3
(9)%
Net Debt at the end of Q3 was $507.3 million, a reduction of $96.8 million versus the prior year, driven by SUSE’s strong cash flow.
Outlook
During Q3 FY23 and since the end of the quarter, SUSE’s expectations for future performance and market outlooks have not changed materially.
Additional Information
About SUSE
SUSE is a global leader in innovative, reliable and secure enterprise-grade open source solutions, relied upon by more than 60% of the Fortune 500 to power their mission-critical workloads. The company behind Rancher, NeuVector and SUSE Linux Enterprise (SLE), SUSE collaborates with partners and communities to empower customers to innovate everywhere – from the data center to the cloud, to the edge and beyond. SUSE puts the “open” back in open source, giving customers the ability to tackle innovation challenges today and the freedom to evolve their strategy and solutions tomorrow. The company employs more than 2,400 people globally and is listed on the Frankfurt Stock Exchange. For more information, visit www.suse.com.
For reference you'll find all releases here https://www.suse.com/news/
Contacts
Investors:
Matt Jones
Investor Relations, SUSE
Phone: +44 7809 690 336
Email: ir@suse.com
Media:
Christopher Deifuss
Kekst CNC
Phone: +49 162 2059754
Email: christopher.Deifuss@kekstcnc.com
Monique Perks
Kekst CNC
Phone: +44 758 1033 557
Email: monique.perks@kekstcnc.com
Webcast Details
There will be no management conference call covering Q3 FY23 results. Please see above contact details for any questions.
Important Notice
Certain statements in this communication may constitute forward-looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties, including, but not limited to, those risks and uncertainties described in SUSE's disclosures. You should not rely on these forward-looking statements as predictions of future events, and we undertake no obligation to update or revise these statements. Our actual results may differ materially and adversely from any forward-looking statements discussed in these statements due to several factors, including without limitation, risks from macroeconomic developments, external fraud, lack of innovation capabilities, inadequate data security and changes in competition levels.
The Company undertakes no obligation, and does not expect to publicly update, or publicly revise, any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to it or to persons acting on its behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this communication.
APPENDIX 1 IFRS Figures
Interim Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the nine months ended 31 July 2023
Nine months ended 31 July 2023
Nine months ended 31 July 2022
Separately
Separately
Income statement:
Headline
reported items
Total
Headline
reported items
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Revenue
503,307
-
503,307
483,409
-
483,409
Cost of sales
(40,857)
-
(40,857)
(38,751)
-
(38,751)
Gross profit
462,450
-
462,450
444,658
-
444,658
Selling and distribution costs
(140,646)
(6,836)
(147,482)
(136,914)
-
(136,914)
Research and development costs
(95,858)
-
(95,858)
(86,075)
-
(86,075)
Administrative expenses
(100,940)
-
(100,940)
(114,378)
-
(114,378)
Impairment credit on trade receivables
657
-
657
531
-
531
Operating profit before depreciation/impairment and amortization
125,663
(6,836)
118,827
107,822
-
107,822
Amortization of intangible assets
(102,707)
-
(102,707)
(107,568)
-
(107,568)
Depreciation – Property, plant and equipment
(3,266)
-
(3,266)
(2,760)
-
(2,760)
Depreciation/impairment – Right of use assets
(4,237)
-
(4,237)
(5,888)
-
(5,888)
Operating profit/( loss)
15,453
(6,836)
8,617
(8,394)
-
(8,394)
Finance costs
(44,132)
-
(44,132)
(30,949)
-
(30,949)
Finance income
4,074
-
4,074
268
-
268
Net finance costs
(40,058)
-
(40,058)
(30,681)
-
(30,681)
Share of losses of associate
(1,501)
-
(1,501)
(1,745)
-
(1,745)
Loss before tax
(26,106)
(6,836)
(32,942)
(40,820)
-
(40,820)
Taxation
(8,295)
1,706
(6,589)
1,419
-
1,419
Loss for the period
(34,401)
(5,130)
(39,531)
(39,401)
-
(39,401)
Attributable to:
Equity shareholders of the parent
(34,401)
(5,130)
(39,531)
(39,401)
-
(39,401)
Non-controlling interests
-
-
-
-
-
-
Loss for the period
(34,401)
(5,130)
(39,531)
(39,401)
-
(39,401)
Basiclossper share (USD/share) (1)
(0.2)
(0.2)
(1)For the nine months ended 31 July 2023 and 31 July 2022, potential ordinary shares are anti-dilutive, as their inclusion in the diluted loss per share calculation would reduce the loss per share, and hence have been excluded.
Interim Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the nine months ended 31 July 2023
Nine months ended 31 July 2023
Nine months ended 31 July 2022
Separately
Separately
Headline
reported items
Total
Headline
reported items
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Lossfor the period
(34,401)
(5,130)
(39,531)
(39,401)
-
(39,401)
Other comprehensive (loss)/income:
Items not to be reclassified to income statement:
Remeasurement of defined benefit pension schemes
325
-
325
2,304
-
2,304
Related tax impact
(8)
-
(8)
(706)
-
(706)
Items that may be reclassified to income statement:
Currency translation differences
(32,587)
-
(32,587)
48,671
-
48,671
Cash flow hedge – changes in fair value
7,832
-
7,832
(49)
-
(49)
Cash flow hedge – reclassified to income statement
89
-
89
4,386
-
4,386
Related tax impact
(1,861)
-
(1,861)
(1,003)
-
(1,003)
Other comprehensive (loss)/income for the period
(26,210)
-
(26,210)
53,603
-
53,603
Total comprehensive (loss)/income for the period
(60,611)
(5,130)
(65,741)
14,202
-
14,202
Attributable to:
Equity shareholders of the parent
(60,611)
(5,130)
(65,741)
14,202
-
14,202
Non-controlling interests
-
-
-
-
-
-
Total comprehensive (loss)/income for the period
(60,611)
(5,130)
(65,741)
14,202
-
14,202
Interim Condensed Consolidated Statement of Financial Position (unaudited)
As at 31 July 2023
As at 31 July 2023
As at 31 October 2022
US$’000
US$’000
Non-current assets
Goodwill
2,686,320
2,686,320
Intangible assets
294,269
393,427
Property, plant and equipment
17,580
13,914
Right of use assets
16,681
18,089
Investment in associate
10,775
12,276
Derivative asset
12,194
4,051
Long-term pension assets
569
484
Other receivables
8,813
8,697
Deferred tax assets
184,374
178,680
Contract related assets
94,714
78,183
3,326,289
3,394,121
Current assets
Trade and other receivables
111,943
158,044
Current tax receivables
3,597
3,597
Cash and cash equivalents
258,787
177,544
Contract related assets
32,307
37,796
406,634
376,981
Total assets
3,732,923
3,771,102
Current liabilities
Trade and other payables
88,633
110,490
Borrowings
3,600
3,600
Lease liabilities
6,705
6,249
Provisions
692
337
Current tax liabilities
7,950
10,113
Deferred income – contract liabilities
361,186
351,197
468,766
481,986
Non-current liabilities
Borrowings
730,675
695,989
Lease liabilities
12,458
14,431
Provisions
1,043
1,033
Non-current tax liabilities
8,083
8,083
Deferred tax liabilities
102,050
98,831
Retirement benefit obligations
2,163
2,142
Deferred income – contract liabilities
188,700
215,034
Other payables
2,574
3,861
1,047,746
1,039,404
Total liabilities
1,516,512
1,521,390
Equity
Share capital
17,079
16,936
Share premium
2,522,835
2,522,978
Retained losses
(441,337)
(400,262)
Other reserves
104,922
72,482
Cash flow hedging reserve
11,972
4,051
Foreign currency translation reserve
940
33,527
Total equity
2,216,411
2,249,712
Total liabilities and equity
3,732,923
3,771,102
Interim Condensed Consolidated Statement of Changes in Equity (unaudited)
For the nine months ended 31 July 2023
Share capital
Share premium
Retained losses
Other reserve
Cash flow hedging reserve
Foreign currency translation reserve
Total equity
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
As at 1 November 2022
16,936
2,522,978
(400,262)
72,482
4,051
33,527
2,249,712
Loss for the period
-
-
(39,531)
-
-
-
(39,531)
Other comprehensive (loss)/income for the period
-
-
(1,544)
-
7,921
(32,587)
(26,210)
Total comprehensive (expense)/income for the period
-
-
(41,075)
-
7,921
(32,587)
(65,741)
Transactions recorded in equity:
Issue of share capital
143
(143)
-
-
-
-
-
Equity settled share-based payments
-
-
-
32,440
-
-
32,440
Total transactions with owners
143
(143)
-
32,440
-
-
32,440
As at 31 July 2023
17,079
2,522,835
(441,337)
104,922
11,972
940
2,216,411
Interim Condensed Consolidated Statement of Changes in Equity (unaudited)
For the nine months ended 31 July 2022
Share capital
Share premium
Retained losses
Other reserve
Cash flow hedging reserve
Foreign currency translation reserve
Total equity
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
As at 1 November 2021
16,903
2,523,011
(355,870)
21,169
(4,337)
(14,866)
2,186,010
Loss for the period
-
-
(39,401)
-
-
-
(39,401)
Other comprehensive income for the period
-
-
595
-
4,337
48,671
53,603
Total comprehensive (expense)/income for the period
-
-
(38,806)
-
4,337
48,671
14,202
Transactions recorded in equity:
Issue of share capital
26
(26)
-
-
-
-
-
Equity settled share-based payments
-
-
-
37,024
-
-
37,024
Total transactions with owners
26
(26)
-
37,024
-
-
37,024
As at 31 July 2022
16,929
2,522,985
(394,676)
58,193
-
33,805
2,237,236
Interim Condensed Consolidated Statement of Cash Flows (unaudited)
For the nine months ended 31 July 2023
Nine months ended 31 July 2023
Nine months ended 31 July 2022
US$’000
US$’000
Loss for the period
(39,531)
(39,401)
Net finance costs
40,058
30,681
Taxation
6,589
(1,419)
Share of losses of associate
1,501
1,745
Operating profit/(loss) for the period
8,617
(8,394)
Addback:
Depreciation – Property, plant and equipment
3,266
2,760
Depreciation/impairment – Right of use assets
4,237
5,888
Amortization of intangible assets
102,707
107,568
Amortization of contract related assets
15,317
10,733
Share-based payments expense
34,078
37,771
Restructuring charges
6,836
-
Foreign exchange movements
(5,303)
13,340
Impairment credit on trade receivables
(657)
(531)
Movements:
Movements in trade receivables
54,579
11,104
Movements in other receivables
(7,939)
(839)
Movements in trade payables
(8,319)
(5,505)
Movements in other payables
(6,229)
(43,857)
Movement in other pensions
(606)
(494)
Movements in provisions
(6,471)
(2,499)
Movements in contract related assets
(26,243)
(29,294)
Contract assets - fair value haircut
(116)
(286)
Movements in contract liabilities
(17,887)
39,238
Contract liabilities - fair value haircut
1,542
4,290
Cash-settled share-based payments
(1,892)
(198)
Cash generated from operations
149,517
140,795
Interest paid
(37,711)
(23,069)
Interest received
4,074
8
Tax paid
(12,443)
(12,655)
Net cash inflow from operating activities
103,437
105,079
Cash flow used in investing activities
Purchase of property, plant and equipment
(6,868)
(7,151)
Purchase and development of intangible assets
(9,266)
(957)
Acquisition of a business, net of cash
-
(2,545)
Net cash outflow from investing activities
(16,134)
(10,653)
Net cash inflow before financing activities
87,303
94,426
Interim Condensed Consolidated Statement of Cash Flows (unaudited)
For the nine months ended 31 July 2023
Nine months ended 31 July 2023
Nine months ended 31 July 2022
US$’000
US$’000
Cash flows used in financing activities
Repayment of bank borrowings
(2,700)
(2,700)
Payment of interest rate swap premia
(88)
(4,386)
Lease payments
(6,251)
(5,675)
Net cash outflow from financing activities
(9,039)
(12,761)
Net increase in cash and cash equivalents
78,264
81,665
Foreign exchange movements
2,979
(2,191)
Cash and cash equivalents at beginning of period
177,544
61,061
Cash and cash equivalents at end of period
258,787
140,535
APPENDIX 2 Reconciliation from IFRS to Adjusted Pro Forma Figures
IFRS Revenue to Adjusted Revenue
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Revenue - IFRS
173.0
170.1
2%
503.3
483.4
4%
Adjustments
Deferred revenue haircut amortized
0.3
1.1
(73)%
1.5
4.3
(65)%
Contract Asset haircut amortized
0.0
0.0
0%
(0.1)
(0.2)
(50)%
Adjusted Revenue
173.3
171.2
1%
504.7
487.5
4%
IFRS Operating Profit/(Loss) to Adjusted EBITDA
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Operating profit/(loss) - IFRS
(0.6)
3.0
n.m.
8.6
(8.4)
n.m.
Adjustments
Depreciation and Amortization
36.7
37.7
(3)%
110.2
116.2
(5)%
Separately reported items
0.0
0.0
0%
6.8
0.0
100%
Contract liability haircut amortized
0.3
1.1
(73)%
1.5
4.3
(65)%
Contract Asset haircut amortized
0.0
0.0
0%
(0.1)
(0.2)
(50)%
Non-recurring items
10.4
5.3
96%
15.2
14.4
6%
Share-based payments - charge
10.1
15.2
(34)%
34.1
37.8
(10)%
Share-based payments - ER taxes
(0.3)
0.0
n.m.
0.3
0.9
(67)%
Foreign exchange - unrealized
(0.7)
2.8
n.m.
(1.4)
11.0
n.m
Adjusted EBITDA
55.9
65.1
(14)%
175.2
176.0
0%
Adjusted Deferred Revenue to IFRS Deferred Revenue
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Change in Deferred Revenue
(13.6)
(18.9)
(28)%
(17.8)
39.2
n.m.
Adjustments
Contract liability haircut amortized
0.3
1.1
(73)%
1.5
4.3
(65)%
Contract asset haircut amortized
0.0
0.0
0%
(0.1)
(0.2)
(50)%
Change in deferred revenue - IFRS
(13.3)
(17.8)
(25)%
(16.4)
43.3
n.m.
IFRS Net Cash Inflow from Operating Activities to Adjusted uFCF
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Net cash inflow from operating activities
40.9
54.0
(24)%
103.4
105.1
(2)%
Interest paid
12.8
8.0
60%
33.6
23.1
45%
Tax paid
3.7
2.2
68%
12.4
12.7
(2)%
Cash generated from operations
57.4
64.2
(11)%
149.4
140.9
6%
Addbacks - non cash items
(51.7)
(62.1)
(17)%
(161.7)
(181.6)
(11)%
Movements - other working capital
(29.4)
(27.7)
6%
(32.2)
39.0
n.m.
Movement in other pensions
0.0
0.0
0%
0.6
0.5
20%
Movements in provisions
0.9
0.5
80%
6.5
2.5
160%
Movements in contract related assets
8.0
9.0
(11)%
26.3
29.3
(10)%
Movements in deferred revenue
13.6
18.9
(28)%
17.8
(39.2)
n.m.
Cash-settled share-based payments
0.6
0.2
200%
1.9
0.2
850%
Operating profit/(loss) per IFRS
(0.6)
3.0
n.m.
8.6
(8.4)
n.m.
Depreciation and Amortization
36.7
37.7
(3)%
110.2
116.2
(5)%
EBITDA per IFRS Statements
36.1
40.7
(11)%
118.8
107.8
10%
Separately reported items
0.0
0.0
0%
6.8
0.0
n.m.
Contract liability haircut amortized
0.3
1.1
(73)%
1.5
4.3
(65)%
Contract asset haircut amortized
0.0
0.0
0%
(0.1)
(0.2)
(50)%
Non-recurring items
10.4
5.3
96%
15.2
14.4
6%
Share-based payments - charge
10.1
15.2
(34)%
34.1
37.8
(10)%
Share-based payments - ER taxes
(0.3)
0.0
n.m.
0.3
0.9
(67)%
Foreign exchange - Unrealized
(0.7)
2.8
n.m.
(1.4)
11.0
n.m.
Adjusted EBITDA
55.9
65.1
(14)%
175.2
176.0
0%
Change in deferred revenue
(13.6)
(18.9)
(28)%
(17.8)
39.2
n.m.
Adjusted Cash EBITDA
42.3
46.2
(8)%
157.4
215.2
(27)%
Gross tangible capital expenditure
(1.3)
(2.5)
(48)%
(6.9)
(7.2)
(4)%
Change in core working capital
27.5
27.2
1%
30.6
(27.2)
n.m.
Commissions paid (net of amortization)
(2.6)
(5.3)
(51)%
(10.9)
(18.6)
(41)%
Leases paid
(2.1)
(1.9)
11%
(6.3)
(5.7)
11%
Cash taxes
(3.7)
(2.2)
68%
(12.4)
(12.7)
(2)%
Adjusted Unlevered Free Cash Flow
60.1
61.5
(2)%
151.5
143.8
5%
IFRS Working Capital Movements to Change in Core Working Capital
All USD $m unless otherwise stated
FY23
Q3
FY22
Q3
YoY
Actual
FY23
Q3 YTD
FY22
Q3 YTD
YoY
Actual
Working Capital Movements - IFRS
Movements in trade receivables
23.9
26.2
(9)%
54.6
11.1
392%
Movements in other receivables
2.9
3.7
(22)%
(7.9)
(0.8)
888%
Movements in trade payables
(7.2)
(0.3)
2300%
(8.3)
(5.5)
51%
Movements in other payables
9.8
(2.1)
n.m.
(6.2)
(43.9)
(86)%
Total Working Capital Movements - IFRS
29.4
27.5
7%
32.2
(39.1)
n.m.
Remove non-recurring items:
Third party consulting fees
(1.1)
(0.3)
267%
(0.9)
(1.0)
(10)%
Transaction costs
0.0
0.0
0%
1.3
12.9
(90)%
Integration costs
(0.8)
0.0
n.m.
(2.0)
0.0
n.m.
Total Working Capital Adjustments
(1.9)
(0.3)
533%
(1.6)
11.9
(113)%
Change in core working capital (within uFCF)
27.5
27.2
1%
30.6
(27.2)
n.m.
APPENDIX 3 Comparable Data for Prior Periods
All USD $m unless otherwise stated
FY21
FY22
FY23
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
ACV by Solution
Core
98.7
119.9
113.6
93.2
102.4
118.5
107.5
93.4
Emerging
26.3
23.9
25.8
21.2
35.9
28.5
23.1
23.6
Total ACV
125.0
143.8
139.4
114.4
138.3
147.0
130.6
117.0
Adjusted Revenue by Solution
Core
133.4
130.2
133.9
142.9
139.8
137.5
132.0
144.0
Emerging
20.6
24.8
27.4
28.3
30.5
31.5
30.4
29.3
Total Adjusted Revenue
154.0
155.0
161.3
171.2
170.3
169.0
162.4
173.3
Adjusted Cost of Sales
10.8
11.8
13.1
13.3
12.7
13.4
13.4
13.4
Adjusted Gross Profit
143.2
143.2
148.2
157.9
157.6
155.6
149.0
159.9
Adjusted Gross Profit Margin
93%
92%
92%
92%
93%
92%
92%
92%
Sales, Marketing & Operations
45.7
43.0
46.3
45.0
45.1
42.0
44.5
47.7
Research & Development
24.8
27.0
27.1
27.1
26.0
28.0
31.7
33.4
General & Administrative
24.7
20.9
16.2
20.7
20.6
18.5
20.6
22.9
Total Operating Expenses
95.2
90.9
89.6
92.8
91.7
88.5
96.8
104.0
Adjusted EBITDA
48.0
52.3
58.6
65.1
65.9
67.1
52.2
55.9
Adjusted EBITDA Margin
31%
34%
36%
38%
39%
40%
32%
32%
Change in deferred revenue
3.7
40.8
17.3
(18.9)
14.1
2.5
(6.7)
(13.6)
Adjusted Cash EBITDA
51.7
93.1
75.9
46.2
80.0
69.6
45.5
42.3
Adjusted Cash EBITDA Margin
34%
60%
47%
27%
47%
41%
28%
24%
APPENDIX 4 Alternative Performance Measures (APMs)
This document contains certain alternative performance measures (collectively, “APMs”) as defined below that are not required by, or presented in accordance with, IFRS, Luxembourg GAAP or any other generally accepted accounting principles. Certain of these measures are derived from the IFRS accounts of the Company and others are derived from management reporting or the accounting or controlling systems of the Group.
SUSE presents APMs because they are used by management in monitoring, evaluating and managing its business, and management believes these measures provide an enhanced understanding of SUSE’s underlying results and related trends. The definitions of the APMs may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should, therefore, not be considered in isolation or as a substitute for analysis of SUSE’s operating results as reported under IFRS or Luxembourg GAAP. SUSE has defined each of its APMs as follows:
Annual Contract Value or ACV
represents the first 12 months value of a contract. If total contract duration is less than 12 months, 100% of invoicing is included in ACV.
Annual Recurring Revenue or ARR
represents the sum of the monthly contractual value for subscriptions and recurring elements of contracts in a given one month period, multiplied by 12. ARR is calculated three months in arrears, given backdated royalties relating to IHV and Cloud Service Providers, and hence reflects the customer base as of three months prior.
Adjusted Cash EBITDA
represents Adjusted EBITDA plus changes in contract liabilities (also referred to as deferred revenue) in the related period and excludes the impact of contract liabilities haircut (also referred to as deferred revenue haircut).
Adjusted Cash EBITDA Margin
expressed as a percentage, this APM represents Adjusted Cash EBITDA divided by Adjusted Revenue.
Adjusted Gross Profit
represents Adjusted Revenue less cost of sales adjusted for non-recurring items.
Adjusted Gross Profit Margin
expressed as a percentage, this APM represents Adjusted Gross Profit divided by Adjusted Revenue.
Adjusted Earnings per share
represents Adjusted Profit after Tax divided by the weighted average number of ordinary shares in issue during the period. Diluted Adjusted Earnings Per Share takes into account potential dilution from outstanding share grants and options.
Adjusted EBITDA
represents earnings before net finance costs, share of loss on associate and tax, adjusted for depreciation and amortization of intangible assets, share–based payments, contract liabilities haircut, separately reported items, specific non-recurring items and net unrealized foreign exchange (gains)/losses.
Adjusted EBITDA Margin
expressed as a percentage, this APM represents Adjusted EBITDA divided by Adjusted Revenue.
Adjusted Effective Tax Rate
represents the IFRS effective tax rate adjusted for the tax effect of adjusting items (those items adjusted for to arrive at Adjusted Profit before Tax).
Adjusted Profit Before Tax
represents Adjusted EBITDA, less depreciation and amortization (excluding intangible amortization for customer relationships, intellectual property and non-compete agreements) less net finance costs.
Adjusted Profit After Tax
represents Adjusted Profit Before Tax less notional tax.
Adjusted Revenue
represents Revenue as reported in the statutory accounts of the Group, adjusted for contract liability fair value adjustment (also referred to as deferred revenue haircut).
Adjusted unlevered Free Cash Flow or Adjusted uFCF
represents Adjusted Cash EBITDA less tangible capital expenditure related cash outflow, working capital movements (including commissions paid net of amortization of contract-related assets and excluding non-recurring items), cash taxes paid and leases paid.
Cash Conversion
expressed as a percentage, this APM represents Adjusted uFCF divided by Adjusted EBITDA.
Constant Currency
Reported for Adjusted Revenue, ACV and Adjusted EBITDA. Prior year metrics are re-stated at prevailing exchange rates, to compare with current year results.
Contractual Liabilities and Remaining Performance Obligations or “RPO”
a Contract Liability is an entity’s obligation to transfer goods or services to a customer and is recognized in the Statement of Financial Position, when a payment from a customer is invoiced, before a related performance obligation is satisfied. A remaining performance obligation is a promise to transfer goods or services to a customer (with a contract agreed), at a point in the future, but is yet to be invoiced or recognized in the Statement of Financial Position.
Leverage
expressed as a multiple, Leverage is Net Debt divided by Adjusted Cash EBITDA.
Net Debt
represents the sum of current and non-current interest bearing borrowings (excluding un-amortized capitalized arrangement fees, gains or losses on loan modifications), current and non-current lease liabilities, less cash and cash equivalents.
Net Retention Rate or NRR
expressed as a percentage, NRR indicates the proportion of ARR that has been retained over the prior 12-month period, which is inclusive of up-sell, cross-sell, down-sell, churn and pricing. It excludes ARR from net new logo End user customers. The NRR is calculated three months in arrears, aligned to the calculation of ARR.
Notional Tax
represents total income tax charge/credit for the year less the taxation charge/credit associated with adjusting items (those items adjusted for to arrive at Adjusted Profit before Tax).
30.08.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.
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SUSE SA is Luxembourg-based company that provides open-source software solutions. This company offers its services into two open-source software product categories - the SUSE Linux Enterprise product family, which comprises core Linux operating system offering, and the SUSE Rancher product family, which comprises container management platform offering. Both of these products offer support for desktop, cloud and data center, as well as Edge computing solutions. SUSE offers its solutions for air traffic control systems, weather forecasting technologies, trains and satellites. This company also offers its services to multiple other industries including Automotive, Telecom, Banking and Financial Services, Healthcare, Manufacturing, Retail, Technology and Software and Federal.