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SUSE S.A.: Quarterly Statement Q3 2021, for the Three Months ended July 31, 2021

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DGAP-News: SUSE S.A. / Key word(s): Quarter Results/Quarterly / Interim Statement
16.09.2021 / 07:30
The issuer is solely responsible for the content of this announcement.

Strong Third Quarter with Growth Across the Business

- As a result of a strong Q3, SUSE now expects to report full year Adjusted Revenue in the top half of the guidance range and Adjusted Cash EBITDA above the top of the guidance range

- ACV grew 39% to $119.0 million in Q3. Core ACV grew 36% and Emerging ACV grew 59%

- Total ARR of $555.5 million, growth of 20% on prior year; SUSE ARR of $489.7 million, (+14%); Rancher ARR of $65.8 million, (+115%)

- Adjusted Revenue was $151 million, an increase of 21% above prior year

- Adjusted EBITDA of $55.2 million for Q3 is up 10% from prior year with a margin of 37%, as SUSE continues to invest in growth

- Adjusted Cash EBITDA was $65.0 million, an increase of 84% and a margin of 43%

- Net debt at quarter end was $653.1 million; representing a reduced leverage ratio of 2.6x

- SUSE S.A. was listed on the Frankfurt Stock Exchange during the quarter, enabling a reduction in outstanding debt

- New solutions are driving customers' cloud-native transformation

- Significant continued investment in innovation and sales to drive further growth

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

ACV

119.0

85.9

39%

 

365.6

293.0

25%

Adj Revenue

151.0

125.3

21%

 

421.9

365.7

15%

Adj EBITDA

55.2

50.4

10%

 

164.1

137.8

19%

Adj EBITDA Margin

37%

40%

 

 

39%

38%

 

Adj cash EBITDA

65.0

35.4

84%

 

226.5

150.5

50%

% Margin

43%

28%

 

 

54%

41%

 

Adj uFCF

39.0

30.9

26%

 

145.4

126.5

15%

Cash conversion

71%

61%

 

 

89%

92%

 

 

Note: This table contains Alternative Performance Measures as defined in Appendix 5 of this document. The presentation is based on pro forma numbers including Rancher on a coterminous basis in the prior year and in 2021 as if acquired on November 1, 2020. Statutory data for the year to date is given in Appendix 1.

Luxembourg - September 16, 2021 - SUSE S.A. (the "Company" or "SUSE"), an independent leader in open source software specializing in Enterprise Linux operating systems, Container Management and Edge software solutions, today announced its results for the third quarter of financial year 2021, which ended July 31, 2021.

"This is a strong quarter for SUSE," said Melissa Di Donato, SUSE CEO. "We continue to deliver upon our commitments, delivering strong results in our business across all segments and rolling out game-changing innovation that will drive further growth. The momentum of our business is proof that the foundation of SUSE is built for our future success."

"We have today strengthened our guidance as we continue to see strong growth across all our business areas," said Andy Myers, SUSE CFO. "All Routes to Market are powering significant and growing business in both Core and Emerging."

Financial and Business Review

The information in this section is based on the presentation of Alternative Performance Measures as defined in Appendix 5 and has not been audited. Historical data is also based on pro forma figures including Rancher prior to its acquisition by SUSE in December 2020. The Year to Date (YTD) numbers for 2021 include nine months for Rancher on a pro forma basis. A reconciliation to the IFRS financials is included in Appendix 2 and summary financial statements containing statutory data for 2021 year to date are included in Appendix 1. Results are shown using actual exchange rates.

Business Update

SUSECON Digital 2021, SUSE's principal annual commercial event, took place in early Q3. The Conference brings customers together for technical briefings and updates on new products and solutions, reinforcing SUSE's position as a global leader in innovative, reliable and enterprise-grade open source solutions. The conference was a resounding success, with attendance up almost 90% over the prior year's digital conference, demonstrating customer appreciation for SUSE's unique commitment to delivering truly open, interoperable products and solutions, giving them complete freedom, choice, and flexibility to define and easily adopt the IT strategy that best fits their needs.

This year's conference was not only an update on SUSE Linux products, it also introduced SUSE Rancher for the first time following the acquisition last year with an exciting announcement of a new SUSE Rancher product. This shows the rapid progress that has been made by the combination of Rancher and SUSE to accelerate new products and bring together complementary capabilities that are attractive to all customers of our company. It also enabled the announcement of a complete software stack, SUSE Hybrid IT, to run traditional and cloud-native applications in data center and cloud environments.

The key new product announcements were:

- SUSE Linux Enterprise Server 15 Service Pack 3 (SLES 15 SP3): the next evolution of our core operating system that helps IT operators and developers drive faster digital transformation.

- SUSE Rancher 2.6: Further increases the usability of Kubernetes at scale and delivers full lifecycle management of Microsoft AKS and Google GKE clusters, adding to existing support for Amazon EKS. Customers can now take advantage of the unique benefits of each public cloud service provider's Kubernetes service while leveraging the consistent management, advanced features, and automation provided by SUSE Rancher.

- SUSE Edge: An open, lightweight software infrastructure for customers to build, deploy and manage enterprise applications at the edge. SUSE Edge connects edge-based workloads to the cloud and on-prem data centers with an automated and secure management framework.

SUSE continued its investment in open source innovation and introduced its engagement in a number of new open source projects at the conference, including Harvester, Epinio, Opni and Trento. These projects and others are helping maintain and expand SUSE's technology leadership in both Linux and Kubernetes, and SUSE continues to engage with leading-edge projects to contribute, collaborate and help shape Kubernetes and Linux technologies to meet customer challenges today and tomorrow.

SUSE Rancher and Arm have continued to provide customers with a highly efficient cloud-native architecture at the edge with initiatives such as Project Cassini and the recently announced Scalable Open Architecture for Embedded Edge (SOAFEE). As part of SLES for Arm 15 SP3, new features have been added to achieve higher performance on Arm Neoverse-based platforms.

This level of innovation and increasing product features demonstrates SUSE's commitment to building on its strong commercial base and excellent reputation, facilitating increased sales across all business areas and building its presence in key growth markets such as containers and the edge, leveraging its scale and expertise to integrate and accelerate growth with SUSE Rancher.

SUSE's customer-focused innovation and high levels of customer service are, we believe, the primary reasons we once again increased our Net Promoter Score and delivered the strong financial growth set out below.

Annual Contract Value (ACV) and Revenue

 

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

 

ACV by Sol's

Core

101.5

74.9

36%

 

307.4

260.3

18%

 

Emerging

17.5

11.0

59%

 

58.2

32.7

78%

 

Total

119.0

85.9

39%

 

365.6

293.0

25%

 

 

 

 

 

 

 

 

 

Adj Revenue

Core

133.2

114.5

16%

 

373.2

335.6

11%

 

Emerging

17.8

10.8

65%

 

48.7

30.1

62%

 

Total

151.0

125.3

21%

 

421.9

365.7

15%

 

SUSE continued to see strong growth in Q3 with ACV growing across all business areas, most notably in the Emerging business where SUSE Rancher continues to gain traction. In the End User routes to market (RTM), the cloud service providers (CSPs), particularly the hyperscalers, contributed to strong growth. All geographical regions also contributed to the growth.

Core ACV grew by 36% year on year to $101.5 million for the quarter. This strong performance was driven by delivery of expected renewals and upselling within the End User and CSP RTMs and supported by two retrospective consumption contracts. This included a number of important multiyear renewals which contributed significantly to ACV growth and deferred revenue. The IHV RTM grew by 8% year on year, having seen a 2% decline in the previous quarter, as embedded sales increased significantly, offsetting continued weakness in IHV driven by hardware supply chain delays.

One particular Embedded win of note in Q3 was with a large U.S.-based Systems Integrator, where we have up-sold an existing $5.4 million ACV deal with an ACV renewal of $7.8 million. This includes expansion of additional workloads, and it also displaces competitor OS footprints within the account. Secured with this win is a binding commitment of recurring ACV over the next five years with a monetary value of $56 million. This win underscores the resiliency and mission criticality of SUSE's business model.

Core ACV Growth for the year to date was 18%, which is in line with our guidance for the year.

Emerging ACV grew 59%, delivering $17.5 million in the quarter as SUSE Rancher continued to perform well with a number of notable deals including several net new logos wins from incumbent suppliers and our first airline customer. The strongest growth in Emerging was in North America, with several large renewals in the Financial Services and Technology industries.

SUSE also entered into a strategic embedded partnership with UiPath, a leader in the Enterprise Software Automation space. UiPath will leverage SUSE Rancher to provide additional deployment options for UiPath customers to leverage the UiPath Platform.

All geographic regions showed strong growth, with the two largest, EMEA and North America, growing 36% and 39% respectively. North America benefited from the growth in SUSE Rancher and a strong performance in Core. The target growth markets of APJ and Latin America grew at 25% and 22% respectively. Greater China grew 69% to contribute $10.0 million of ACV, including two large contracts.

Overall weighted average contract length has remained stable at 19 months, because our success in signing multiyear End-user contracts has offset the growing proportion of Cloud on shorter contract lengths.

The impact of FX changes on ACV in Q3 was small, with year-on-year growth of 39% on an actual FX basis and of 37% on a constant currency basis. For the year-to-date figures, ACV reported growth was 25% on an actual FX basis and 21% using constant currency.

Adjusted Revenue in Q3 was $151.0 million, an increase of 21% over the prior year, with strong contributions from both Core and Emerging.

For the Year to Date, Adjusted Revenue was $421.9 million, up $56.2 million, or 15%, from the same period in 2020.

Core revenue growth of 16% in the quarter was powered by increased sales in the CSP channels, including the hyperscalers, and in the North America and EMEA regions. Growth was more modest in the independent hardware vendor (IHV) partner RTM where several large partners saw weaker sales, although the embedded customers did relatively well.

Emerging Revenue grew by 65% to $17.8 million as SUSE Rancher grew its sales and extended its presence in IHV and CSP channels.

The impact of FX changes on revenue in Q3 was negligible, with year-on-year growth of 21% on both an actual and constant currency basis. For the year-to-date figures there is a small effect from FX changes, with the reported growth of 15% on an actual FX basis being 14% using constant currency.

Annual Recurring Revenue and Net Retention Rate

USD $ millions

As at April 30

 

2021

2020

Change %

 

 

 

 

ARR - SUSE as of period end April '21

489.7

431.4

14%

ARR - Rancher as of period end April '21

65.8

30.6

115%

ARR - Total

555.5

462.0

20%

 

 

 

 

Net Retention Rate - SUSE as %

110.6%

110.5%

 

Net Retention Rate - Rancher as %

143.4%

137.4%

 

Note: ARR and NRR are reported one quarter in arrears, with ARR in USD millions at actual FX rates. These metrics are reported for each business separately, not pro forma.

 

ARR has again shown strong and accelerating growth, increasing 20% year on year to $555.5 million, demonstrating the continuing strength of our business and building on a long track record of increasing contracted revenues and expansion of the active subscription base. The 14% growth in the SUSE business is ahead of the broader market growth CAGR of 12%, while the 115% growth in Rancher shows the combined benefit of high market growth and the synergies with SUSE.

Overall, the reported ARR growth of 20% benefited from some FX change tail wind, and on the basis of constant currencies the reported growth would have been 17%, primarily impacting the SUSE business.

NRR for SUSE was 110.6%, steady year on year and increased by 2% points from Q2.

NRR for Rancher grew to 143.4%, having been 125% in the prior quarter, underlining the excellent progress being made since acquisition.

 

Costs

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Adj Revenue

151.0

125.3

21%

 

421.9

365.7

15%

Cost of sales

11.6

7.6

53%

 

30.2

22.2

36%

Gross profit

139.4

117.7

18%

 

391.7

343.5

14%

% Margin

92%

94%

 

 

93%

94%

 

Sales, Marketing & Operations

39.0

32.9

19%

 

106.4

102.4

4%

Research & Development

25.4

20.3

25%

 

69.8

60.7

15%

General & Administrative

19.8

14.1

40%

 

51.4

42.6

21%

Total operating expenses

84.2

67.3

25%

 

227.6

205.7

11%

Note: Operating expenses in this table excludes depreciation and amortization as well as certain other items included in the IFRS accounts, as set out in Appendix 1. All costs are pro forma, including Rancher from November 1 in all periods.

 

The gross margin of 92% remained at the same level as Q2, slightly down from prior year as the cost of sales increased due to third-party costs relating to the new government business in North America.

Total operating expenses were $84.2 million in the quarter, a 25% increase on the prior year. The main driver of this increase was additional staff, hired to support our investment in innovation and sales.

Increase in Sales, Marketing and Operations costs was 19% year on year, predominantly due to headcount increases but also due to some increase in marketing program spend as business starts to return to normal following the pandemic restrictions of the prior year.

Research and Development costs also grew as we added headcount, particularly in SUSE Rancher development, and we experienced some increased costs due to rising market salary levels.

General and Administrative costs rose year on year with a number of contributing factors. The overall increase was 40%, very similar to the increase seen at Q2. SUSE moved onto independent systems following the separation from Micro Focus, increased staffing to meet the new requirements of a public company as well as consulting costs and realized FX movement. Q3 costs were at the same level as the prior quarter.

 

Profitability

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Adj EBITDA

55.2

50.4

10%

 

164.1

137.8

19%

Adj EBITDA Margin

37%

40%

 

 

39%

38%

 

Change in deferred revenue

9.8

(15.0)

nm

 

62.4

12.7

nm

Adj Cash EBITDA

65.0

35.4

84%

 

226.5

150.5

50%

% Margin

43%

28%

 

 

54%

41%

 

 

Adjusted EBITDA for Q3 was $55.2 million, representing a margin of 37% and growth of 10% from the prior year. The margin is slightly down compared to the same period in the prior year as a result of continued investment in costs to support growth. In the year to date, however, the overall growth in Adjusted EBITDA is 19%, with a slightly improved margin of 39%.

Change in deferred revenue was $9.8 million resulting in Adjusted Cash EBITDA of $65.0 million, significantly higher than in the same quarter of the prior year. The difference in deferred revenue between the two years was $25 million contributing to a significant improvement in Adjusted Cash EBITDA and cashflow. This has been driven by strong ACV growth and continued success at selling multiyear contracts, paid in advance, during the quarter.

Cashflow

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Adjusted Cash EBITDA

65.0

35.4

84%

 

226.5

150.5

50%

 

 

 

 

 

 

 

 

Gross Capital Expenditure

(1.3)

(0.8)

63%

 

(2.1)

(1.8)

17%

Change in core working capital

(14.2)

8.8

nm

 

(41.8)

13.5

nm

IFRS 15

(8.3)

(6.5)

28%

 

(25.6)

(15.8)

62%

IFRS 16

(1.8)

(2.2)

-18%

 

(5.4)

(8.5)

-36%

Cash Taxes

(0.4)

(1.6)

-75%

 

(4.4)

(5.0)

-12%

Rancher Pro Forma uFCF

0.0

(2.2)

nm

 

(1.8)

(6.4)

-72%

Adjusted uFCF

39.0

30.9

26%

 

145.4

126.5

15%

Adj uFCF Conv from Adj EBITDA

71%

61%

 

 

89%

92%

 

 

Overall, Adjusted unlevered Free Cash Flow for the quarter was $39.0 million, an increase of 26% over the prior year. The key drivers for this were the increased profitability and higher positive movement in deferred revenue. The strong increase in bookings created a corresponding offsetting increase on working capital of $23 million, when compared to Q3 of last year.

Cash conversion for Q3 is 71%, a decline from Q2, with Q2 being high following collection of cash from Q1. The year-to-date conversion is 89%.

Leverage

USD $ millions

 

At July 31

 

 

2021

2020

Change %

 

 

 

 

Net debt

653.1

914.5

-29%

 

Net debt at July 31, 2021, was $653 million, a reduction of 29% from the prior year. It is also a significant reduction from the $1,205 million level at the end of Q2 as approximately $502 million of the IPO proceeds were applied to reducing the indebtedness of the company in Q3. The Second Lien Term Loan of $270 million was fully repaid and the balance of $232 million was applied to the reduction of the Term Loan B.

As a result, the leverage ratio, based on the last 12 months Adjusted Cash EBITDA up to July 31, 2021, was 2.6x. This is below the 3.1x pro forma level reported at the end of Q2 and is also below the maximum leverage specified at the time of the IPO of 3.5x.

Initial Public Offering

During the third quarter, SUSE was listed on the Frankfurt Stock Exchange through an initial public offering of shares. The prospectus relating to the IPO was published on May 5, 2021, and the listing took effect on May 19, 2021.

SUSE S.A. will be included in the SDAX as well as the TecDAX with effect from September 20, 2021.

ESG

Environmental, Social and Governance (ESG) concerns continue to lie at the core of SUSE's open and innovative business model, spanning from how we conduct business to our people and the impact we have on society. The ESG function is established under the direct authority of the CEO.

In Q3, SUSE cemented gains in corporate governance and internal policies management by launching relevant and refreshed versions of key policies including our Employee Code of Business Ethics (COBE), Diversity, Inclusion and Equal Opportunities, and Anti-Harassment and Anti-Bullying, to count others. This was complemented by mandatory companywide training on pertinent topics starting with Diversity & Inclusion.

We also made strides toward our 30% women in leadership goal, establishing key partnerships with organizations such as WeAreTechWomen to support the career progression of our women.

Our impact on society continued unabated as we closed our SUSE-Udacity cloud-native foundation course with over 4,000 learners from more than 100 countries completing the course. SUSE awarded 300 scholarships, and one scholarship recipient, Damilola Banjoko, commented, "The SUSE foundation scholarship gave me immense first-hand working knowledge on how to include cloud concepts in my existing work and how to apply that in future projects."

SUSE also continued to progress our Climate Action agenda, leveraging insights from our greenhouse gas emissions exercise to ensure our office sites are greener and more climate friendly spaces. We are also on track to set an ambitious climate impact target in line with best practice.

Progress also continues toward enhanced public disclosure which will be made from early 2022, based on the Global Reporting Initiative (GRI) Sustainability and CDP standards.

Outlook

Based on the strength of Q3 we now expect to report full year Adjusted Revenue in the top half of the previously specified pro forma range and to report Adjusted Cash EBITDA above the top of the pro forma range. The pro forma range is the original guidance range adjusted for the inclusion of Rancher from the start of the financial year.

The original guidance for Full Year 2021 Adjusted Revenue, given at the time of the IPO, was for a range of $550 million to $570 million. This was based on the inclusion of Rancher from acquisition, one month after the start of the SUSE financial year. As we are now primarily using Alternative Performance Metrics on a pro forma basis, including the extra month of November for Rancher, the comparable range for the guidance is $554 million to $574 million (as Rancher had revenues of $3.7 million in the month of November 2020).

Given our strong performance so far this year and our visibility for the rest of the year, we are now confident the outcome for the full year will be in the top half of the adjusted pro forma revenue range and still expect to achieve an Adjusted EBITDA margin for the year of mid-30s percent.

The original guidance for Full Year 2021 Adjusted Cash EBITDA, given at the time of the IPO, was for a range of $245 million to $265 million. On a pro forma basis, including the extra month of November for Rancher, the comparable range for the guidance is $246 million to $266 million (as Rancher had Adjusted Cash EBITDA of $0.9 million in the month of November 2020).

Given the revised expectations for Adjusted Revenue, and the continued increase in longer term contracts that we see contributing to Deferred Revenue (powering future revenue unwind and predictability), we now expect to report Adjusted Cash EBITDA above the upper end of the previously communicated range, with Deferred Revenue in the low to mid-teens as a percentage of revenue.

Apart from these adjustments, our guidance for 2021 and the medium-term guidance remains unchanged.

 

Additional Information

About SUSE

SUSE is a global leader in innovative, reliable and enterprise-grade open source solutions, relied upon by more than 60% of the Fortune 500 to power their mission-critical workloads. We specialize in Enterprise Linux, Kubernetes Management, and Edge solutions, and collaborate with partners and communities to empower our 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 agility to tackle innovation challenges today and the freedom to evolve their strategy and solutions tomorrow. The company is headquartered in Luxembourg and employs nearly 2000 people globally. SUSE is listed in the regulated market (Prime Standard) of the Frankfurt Stock Exchange.

For more information, visit www.suse.com.

Contacts

Investors: 
Jonathan Atack 
Investor Relations, SUSE 
Phone: +44 7741 136019 
Email: IR@suse.com 

Media:
Finn McLaughlan
Kekst CNC
Phone: +44 77 1534 1608
Email: finn.mclaughlan@kekstcnc.com


Webcast Details

Melissa Di Donato (CEO) and Andy Myers (CFO) will host an analyst and investor conference call at 2:00 PM CEST / 1:00 PM BST on September 16, 2021, to discuss the results.

The audio webcast can be followed via https://www.webcast-eqs.com/suse20210916. A replay will be available on the Investor Relations website. The accompanying presentation can also be downloaded from the Investor Relations website.

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.

Financial Calendar

Date

Event

Jan 20, 2022

Release of Q4 results / Analyst conference call

Mar 24, 2022

Annual General Meeting

 

 

APPENDIX 1 Statutory Financials

IFRS Income Statement

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Revenue

148.0

111.7

32%

 

407.7

327.4

25%

Cost of sales

(12.1)

(5.8)

109%

 

(32.0)

(19.6)

63%

Gross profit

135.9

105.9

28%

 

375.7

307.8

22%

Operating expenses

(126.1)

(50.2)

151%

 

(437.9)

(186.6)

135%

Amortization of intangible assets

(37.7)

(29.3)

29%

 

(111.1)

(89.4)

24%

Depreciation - PPE

(1.1)

(1.6)

-31%

 

(3.4)

(3.4)

0%

Depreciation - Right of Use Assets

(1.5)

(1.9)

-21%

 

(4.6)

(7.8)

-41%

Operating loss

(30.5)

22.9

nm

 

(181.3)

20.6

nm

Net finance costs

(8.1)

(5.8)

40%

 

(38.1)

(46.1)

-17%

Share of losses on associate

(0.5)

(0.8)

-38%

 

(1.6)

(2.0)

-20%

Loss before tax

(39.1)

16.3

nm

 

(221.0)

(27.5)

nm

Taxation

8.8

(2.9)

nm

 

51.0

4.9

nm

Loss for the period

(30.3)

13.4

nm

 

(170.0)

(22.6)

nm

 

 

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the nine months ended 31 July 2021

 

 

Nine months ended 31 July 2021

 

Nine months ended 31 July 2020

 

 

 

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

 

407,730

-

407,730

 

327,351

-

327,351

Cost of sales

 

(32,024)

-

(32,024)

 

(19,587)

-

(19,587)

Gross profit

 

375,706

-

375,706

 

307,764

-

307,764

Selling and distribution costs

 

(107,831)

-

(107,831)

 

(101,384)

-

(101,384)

Research and development costs

 

(73,441)

-

(73,441)

 

(53,773)

-

(53,773)

Administrative expenses

 

(243,060)

(14,061)

(257,121)

 

(30,866)

(605)

(31,471)

Reversal of / (impairment loss) on trade receivables

 

433

-

433

 

86

-

86

Operating (loss)/ profit before depreciation and amortization

(48,193)

(14,061)

(62,254)

 

121,827

(605)

121,222

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

(111,063)

-

(111,063)

 

(89,426)

-

(89,426)

Depreciation - Property, plant and equipment

 

(3,365)

-

(3,365)

 

(3,388)

-

(3,388)

Depreciation/impairment - Right of use assets

 

(4,632)

-

(4,632)

 

(7,792)

-

(7,792)

Operating (loss)/profit

 

(167,253)

(14,061)

(181,314)

 

21,221

(605)

20,616

 

 

 

 

 

 

 

 

 

Finance costs

 

(38,086)

-

(38,086)

 

(57,514)

-

(57,514)

Finance income

 

8

-

8

 

11,462

-

11,462

Net finance costs

 

(38,078)

-

(38,078)

 

(46,052)

-

(46,052)

 

 

 

 

 

 

 

 

 

Share of losses on associate

 

(1,582)

-

(1,582)

 

(2,008)

-

(2,008)

Loss before tax

 

(206,913)

(14,061)

(220,974)

 

(26,839)

(605)

(27,444)

 

 

 

 

 

 

 

 

 

Taxation

 

48,553

2,393

50,946

 

4,886

-

4,886

Loss for the period

 

(158,360)

(11,668)

(170,028)

 

(21,953)

(605)

(22,558)

Attributable to:

 

 

 

 

 

 

 

 

Equity shareholders of the parent

 

(158,360)

(11,668)

(170,028)

 

(21,953)

(605)

(22,558)

Non-controlling interests

 

-

-

-

 

-

-

-

Loss for the period

 

(158,360)

(11,668)

(170,028)

 

(21,953)

(605)

(22,558)

 

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the nine months ended 31 July 2021

 

Nine months ended 31 July 2021

 

Nine months ended 31 July 2020

 

 

Separately

 

 

 

Separately

 

 

Headline

reported items

Total

 

Headline

reported items

Total

 

US$'000

US$'000

US$'000

 

US$'000

US$'000

US$'000

 

 

 

 

 

 

 

 

Loss for the period

(158,360)

(11,668)

(170,028)

 

(21,953)

(605)

(22,558)

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items not to be reclassified to income statement:

 

 

 

 

 

 

 

Remeasurement of defined benefit pension schemes

1,068

-

1,068

 

30

-

30

Related tax impact

(288)

-

(288)

 

(8)

-

(8)

 

 

 

 

 

 

 

 

 

 

 

Currency translation differences

(12,000)

-

(12,000)

 

(45,967)

-

(45,967)

Cash flow hedge - changes in fair value

(610)

-

(610)

 

(7,385)

-

(7,385)

Cash flow hedge - reclassified to income statement

6,702

-

6,702

 

4,290

-

4,290

Related tax impact

(1,495)

-

(1,495)

 

772

-

772

Other comprehensive losses for the period

(6,623)

-

(6,623)

 

(48,268)

-

(48,268)

 

 

 

 

 

 

 

 

Total comprehensive loss for the period

(164,983)

(11,668)

(176,651)

 

(70,221)

(605)

(70,826)

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Equity shareholders of the parent

(164,983)

(11,668)

(176,651)

 

(70,221)

(605)

(70,826)

Non-controlling interests

-

-

-

 

-

-

-

Total comprehensive loss for the period

(164,983)

(11,668)

(176,651)

 

(70,221)

(605)

(70,826)

 

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Financial Position (unaudited)
As at 31 July 2021

 

 

As at
31 July 2021

As at
31 October 2020

 

 

US$'000

US$'000

Non-current assets

 

 

 

Goodwill

 

2,573,318

2,134,881

Intangible assets

 

538,503

519,370

Property, plant and equipment

 

7,065

7,624

Right of use assets

 

11,089

13,677

Investment in associate

 

14,593

16,174

Derivative asset

 

-

11

Long-term pension assets

 

1,100

1,039

Other receivables

 

8,037

7,895

Deferred tax assets

 

170,014

107,347

Contract related assets

 

45,677

25,761

 

 

3,369,396

2,833,779

 

 

 

 

Current assets

 

 

 

Trade and other receivables

 

132,844

101,042

Current tax receivables

 

1,523

1,523

Cash and cash equivalents

 

135,013

94,933

Contract related assets

 

26,153

19,649

 

 

295,533

217,147

Total assets

 

3,664,929

3,050,926

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

113,352

93,128

Borrowings

 

3,600

3,600

Lease liabilities

 

5,654

5,721

Provisions

 

4,093

7,199

Current tax liabilities

 

8,698

10,584

Deferred income - contract liabilities

 

319,539

246,485

 

 

454,936

366,717

Non-current liabilities

 

 

 

Borrowings

 

740,730

934,660

Lease liabilities

 

7,428

10,729

Provisions

 

2,336

2,329

Non-current tax liabilities

 

6,601

6,601

Deferred tax liabilities

 

96,505

68,695

Retirement benefit obligations

 

6,672

7,541

Share-based payments

 

539

13,019

Deferred income - contract liabilities

 

179,455

155,989

Derivative liabilities

 

7,645

25,440

Other payables

 

8,339

11,861

 

 

1,056,250

1,236,864

Total liabilities

 

1,511,186

1,603,581

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Financial Position (unaudited)
As at 31 July 2021

 

 

As at
31 July 2021

As at
31 October 2020

 

 

US$'000

US$'000

Equity

 

 

 

Share capital

 

16,830

14

Share premium

 

2,494,004

1,604,251

Retained losses

 

(334,336)

(130,824)

Other reserves

 

12,449

3,200

Cash flow hedging reserve

 

(6,706)

(12,798)

Foreign currency translation reserve

 

(28,498)

(16,498)

Total equity

 

2,153,743

1,447,345

 

 

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Changes in Equity (unaudited)
For the nine months ended 31 July 2021

 

 

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 2020

 

14

1,604,251

(130,824)

3,200

(12,798)

(16,498)

1,447,345

 

 

 

 

 

 

 

 

 

Loss for the period

 

-

-

(170,028)

-

-

-

(170,028)

Other comprehensive income/(expense) for the period

-

-

(715)

-

6,092

(12,000)

(6,623)

 

 

 

 

 

 

 

 

Total comprehensive income/(expense) for the period

-

-

(170,743)

-

6,092

(12,000)

(176,651)

 

 

 

 

 

 

 

 

 

Transactions recorded in equity:

 

 

 

 

 

 

 

 

Contribution of share premium

 

-

174,036

-

-

-

-

174,036

Contribution of share capital

 

16,816

(16,816)

-

-

-

-

-

Gross proceeds from Initial Public Offering

 

-

669,451

-

-

-

-

669,451

Purchase of own shares

 

-

63,082

-

-

-

-

63,082

Capitalized transaction costs

 

-

-

(32,769)

-

-

-

(32,769)

Equity settled share-based payments

 

-

-

-

9,249

-

-

9,249

 

 

 

 

 

 

 

 

 

Total transactions with owners

 

16,816

889,753

(32,769)

9,249

-

-

883,049

 

 

 

 

 

 

 

 

 

As at 31 July 2021

 

16,830

2,494,004

(334,336)

12,449

(6,706)

(28,498)

2,153,743

 

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Changes in Equity (unaudited)
For the nine months ended 31 July 2020

 

 

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 2019

 

14

1,604,251

(80,037)

839

(11,961)

10,102

1,523,208

 

 

 

 

 

 

 

 

 

Loss for the period

 

-

-

(22,558)

-

-

-

(22,558)

Other comprehensive income/(expense) for the period

-

-

794

-

(3,095)

(45,967)

(48,268)

 

 

 

 

 

 

 

 

Total comprehensive income/(expense) for the period

-

-

(21,764)

-

(3,095)

(45,967)

(70,826)

 

 

 

 

 

 

 

 

 

Transactions recorded in equity:

 

 

 

 

 

 

 

 

Equity settled share-based payments

 

-

-

-

1,008

-

-

1,008

 

 

 

 

 

 

 

 

 

Total transactions with owners

 

-

-

-

1,008

-

-

1,008

 

 

 

 

 

 

 

 

 

As at 31 July 2020

 

14

1,604,251

(101,801)

1,847

(15,056)

(35,865)

1,453,390

 

 

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Cash Flows (unaudited)
For the nine months ended 31 July 2021

 

 

Nine months ended
31 July 2021

Nine months ended
31 July 2020

 

 

US$'000

US$'000

 

 

 

 

Loss for the period

 

(170,028)

(22,558)

Net finance costs

 

38,078

46,052

Taxation

 

(50,946)

(4,886)

Share of losses on associate

 

1,582

2,008

Operating (loss)/profit for the period

 

(181,314)

20,616

Addback:

 

 

 

Depreciation - Property, plant and equipment

 

3,365

3,388

Depreciation - Right of use assets

 

4,632

7,792

Amortization of intangible assets

 

111,063

89,426

Amortization of contract related assets

 

6,370

1,888

Contract liabilities - fair value haircut

 

10,455

14,975

Share based payments expense

 

166,099

7,338

Restructuring charges

 

1,407

-

Foreign exchange movements

 

10,004

(13,808)

Impairment (credit)/loss on trade receivables

 

(433)

(86)

Movements:

 

 

 

Movements in trade receivables

 

(17,216)

11,347

Movements in other receivables

 

(476)

14,723

Movements in trade payables

 

(1,421)

1,796

Movements in other payables

 

(11,455)

10,018

Movement in other pensions

 

(121)

(367)

Movements in provisions

 

(4,506)

2,100

Movements in contract related assets

 

(32,791)

(20,812)

Movements in contract liabilities

 

59,701

5,223

Cash generated from operations

 

123,363

155,557

Interest paid

 

(40,470)

(38,072)

Interest received

 

8

17

Tax paid

 

(4,434)

(4,955)

Net cash inflow from operating activities

 

78,467

112,547

 

 

 

 

Cash flow from/(used in) investing activities

 

 

 

Purchase of property, plant and equipment

 

(2,095)

(1,768)

Purchase and development of intangible assets

 

(3,201)

(33,629)

Acquisition of a business, net of cash

 

(489,432)

(15,964)

Proceeds from IPO, net of underwriting costs

 

659,409

-

Settlement of share-based payments

 

(112,686)

-

Net cash inflow/(outflow)from investing activities

 

51,995

(51,361)

Net cash inflow before financing activities

130,462

61,186

 

SUSE S.A. and its subsidiaries ("the SUSE Group")

Interim Condensed Consolidated Statement of Cash Flows (unaudited)
For the nine months ended 31 July 2021

 

 

Nine months ended
31 July 2021

Nine months ended
31 July 2020

 

 

US$'000

US$'000

 

 

 

 

Cash flows from/(used in) financing activities

 

 

 

Proceeds from contribution of share premium

 

135,338

-

Proceeds from bank borrowings

 

300,000

-

Payment of arrangement fees

 

(3,764)

-

Repayment of bank borrowings

 

(513,062)

(2,700)

Payment of interest rate swap premia

 

(6,702)

(4,290)

Lease payments

 

(3,680)

(8,121)

Loan repaid by intermediary parent undertaking

 

1,500

-

Net cash outflow from financing activities

(90,370)

(15,111)

 

 

 

 

Net increase in cash and cash equivalents

40,092

46,075

Foreign exchange movements

 

(12)

(559)

Cash and cash equivalents at beginning of period

 

94,933

38,197

Cash and cash equivalents at end of period

 

135,013

83,713

 

 

APPENDIX 2 Reconciliation from IFRS to Adjusted Pro Forma Figures

IFRS Revenue to Adjusted Revenue

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Revenue - IFRS

148.0

111.7

32%

 

407.7

327.4

25%

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Contract liability haircut amortized

3.0

3.9

-23%

 

10.5

15.0

-30%

Pro Forma Rancher

0.0

9.7

-100%

 

3.7

23.3

-84%

 

 

 

 

 

 

 

 

Adjusted revenue

151.0

125.3

21%

 

421.9

365.7

15%

 

 

Note: The Pro Forma Rancher adjustment is 1 month in 2021 Q3YTD, and for the full periods in 2020 Q3 and Q3 YTD.

 

IFRS Operating Loss to Adjusted EBITDA

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Operating loss - IFRS

(30.5)

22.9

nm

 

(181.3)

20.6

nm

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Depreciation and Amortization

40.3

32.8

23%

 

119.1

100.6

18%

Separately reported items

4.9

0.6

nm

 

14.1

0.6

nm

Contract liability haircut amortized

3.0

3.9

-23%

 

10.5

15.0

-30%

Non-recurring items

5.0

6.8

-26%

 

18.3

20.8

-12%

Share-based payments - charge

18.3

3.0

nm

 

166.1

7.3

nm

Share-based payments - ER taxes

1.2

0.0

nm

 

7.0

0.0

nm

Foreign exchange - unrealized

13.0

(15.9)

nm

 

12.1

(15.0)

nm

 

 

 

 

 

 

 

 

Adjusted EBITDA - Non Pro Forma

55.2

54.1

2%

 

165.9

149.9

11%

 

 

 

 

 

 

 

 

Pro Forma Rancher

0.0

(3.7)

-100%

 

(1.8)

(12.1)

-85%

 

 

 

 

 

 

 

 

Adjusted EBITDA - Pro Forma

55.2

50.4

10%

 

164.1

137.8

19%

 

Note: The Pro Forma Rancher adjustment is 1 month in YTD 2021, and for the full periods in 2020 Q3 and YTD.

Adjusted Deferred Revenue to IFRS Deferred Revenue

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Movement in contract liabilities: Pro Forma

(9.8)

15.0

nm

 

(62.4)

(12.7)

nm

Pro Forma Rancher

0.0

3.0

nm

 

2.7

7.5

-64%

Movement in contract liabilities: Non Pro Forma

(9.8)

18.0

nm

 

(59.7)

(5.2)

nm

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

Contract liability haircut amortized

(3.0)

(3.9)

-23%

 

(10.5)

(15.0)

-30%

Movement in contract liabilities - IFRS

(12.8)

14.1

nm

 

(70.2)

(20.2)

nm

 

 

Note: The Pro Forma Rancher adjustment is 1 month in YTD 2021, and for the full periods in 2020 Q3 and YTD.

IFRS Net Cash inflow from Operating Activities to Adjusted uFCF

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Net cash inflow from operating activities

26.7

21.8

22%

 

78.5

112.5

-30%

Interest paid

11.7

10.9

7%

 

40.5

38.1

6%

Tax paid

0.4

1.6

-75%

 

4.4

5.0

-12%

Cash generated from operations

38.8

34.3

13%

 

123.4

155.6

-21%

 

 

 

 

 

 

 

 

Addbacks - non cash items

(76.9)

(22.2)

246%

 

(313.0)

(111.0)

182%

Movements - other working capital

4.8

(11.8)

nm

 

30.6

(37.9)

nm

Movement in other pensions

0.2

0.5

-60%

 

0.1

0.4

-75%

Movements in provisions

1.4

(3.7)

nm

 

4.5

(2.1)

nm

Movements in contract related assets

11.0

7.8

41%

 

32.8

20.8

58%

Movements in contract liabilities

(9.8)

18.0

nm

 

(59.7)

(5.2)

nm

 

 

 

 

 

 

 

 

Operating loss per IFRS Statements

(30.5)

22.9

nm

 

(181.3)

20.6

nm

Depreciation and Amortization

40.3

32.8

23%

 

119.1

100.6

18%

EBITDA per IFRS Statements

9.8

55.7

-82%

 

(62.2)

121.2

nm

 

 

 

 

 

 

 

 

Separately reported items

4.9

0.6

nm

 

14.1

0.6

nm

Non-recurring items

5.0

6.8

-26%

 

18.3

20.8

-12%

Share-based payments - charge

18.3

3.0

nm

 

166.1

7.3

nm

Share-based payments - ER taxes

1.2

0.0

nm

 

7.0

0.0

nm

Deferred revenue haircut

3.0

3.9

-23%

 

10.5

15.0

-30%

Foreign Exchange - Unrealized

13.0

(15.9)

nm

 

12.1

(15.0)

nm

 

 

 

 

 

 

 

 

Adjusted EBITDA

55.2

54.1

2%

 

165.9

149.9

11%

Rancher Pro-Forma Adjustment

0.0

(3.7)

-100%

 

(1.8)

(12.1)

-85%

Adjusted EBITDA (SUSE & Rancher Pro Forma)

55.2

50.4

10%

 

164.1

137.8

19%

Movement in contract liabilities

9.8

(15.0)

nm

 

62.4

12.7

nm

Adjusted Cash EBITDA (SUSE & Rancher Pro Forma)

65.0

35.4

84%

 

226.5

150.5

50%

 

 

 

 

 

 

 

 

IFRS 15

(8.3)

(6.5)

28%

 

(25.6)

(15.8)

62%

IFRS 16

(1.8)

(2.2)

-18%

 

(5.4)

(8.5)

-36%

Change in core working capital

(14.2)

8.8

nm

 

(41.8)

13.5

nm

Gross capital expenditure

(1.3)

(0.8)

63%

 

(2.1)

(1.8)

17%

Tax expense

(0.4)

(1.6)

-75%

 

(4.4)

(5.0)

-12%

Other adjustments - Rancher Pro Forma

0.0

(2.2)

-100%

 

(1.8)

(6.4)

-72%

 

 

 

 

 

 

 

 

Adjusted Unlevered Free Cash Flow

39.0

30.9

 

 

145.4

126.5

 

 

Note: The Pro Forma Rancher adjustment is 1 month in YTD 2021, and for the full periods in 2020 Q3 and YTD.

APPENDIX 3 Supplementary Information

Adjusted Profit Before Tax

USD $ millions

Q3

Q3

Growth

 

Q3 YTD

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Adj Revenue

151.0

125.3

21%

 

421.9

365.7

15%

Adj EBITDA

55.2

50.4

10%

 

164.1

137.8

19%

Depreciation - PPE

1.1

1.6

-31%

 

3.4

3.4

0%

Depreciation - Right of Use Assets

1.5

1.9

-21%

 

4.6

7.8

-41%

Net Finance Costs

8.1

5.8

40%

 

38.1

46.1

-17%

Adj Profit Before Tax

44.5

41.1

8%

 

118.0

80.5

47%

Adj Profit Before Tax %

29%

33%

 

 

28%

22%

 

 

 

 

ACV - By Route to Market

USD $ millions

Q3

Q3

Growth

 

Q3 YTD (3mR)

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

ACV by RTM

 

 

 

 

 

 

 

End User

97.8

66.2

48%

 

301.2

233.5

29%

IHV

21.2

19.7

8%

 

64.4

59.5

8%

Total

119.0

85.9

39%

 

365.6

293.0

25%

 

ACV - By Region

USD $ millions

Q3

Q3

Growth

 

Q3 YTD (3mR)

Q3 YTD

Growth

 

2021

2020

%

 

2021

2020

%

 

 

 

 

 

 

 

 

Europe, Middle East and Africa

39.9

29.3

36%

 

160.7

136.8

17%

North America

56.8

40.8

39%

 

143.5

109.9

31%

Asia Pacific and Japan

9.0

7.2

25%

 

26.1

20.4

28%

Greater China

10.0

5.9

69%

 

26.4

19.9

33%

Latin America

3.3

2.7

22%

 

8.9

6.0

48%

Total

119.0

85.9

39%

 

365.6

293.0

25%

 

APPENDIX 4 Comparable Data for Prior Periods

 

 

2020

 

 

 

 

2021

 

 

USD $ millions

 

Q1

Q2

Q3

Q4

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

 

ACV by Sol's

Core

95.1

90.3

74.9

84.7

 

111.3

94.6

101.5

 

Emerging

13.4

8.3

11.0

13.0

 

26.3

14.4

17.5

 

Total

108.5

98.6

85.9

97.7

 

137.6

109.0

119.0

 

 

 

 

 

 

 

 

 

 

Adj Revenue

Core

106.1

115.0

114.5

122.2

 

118.6

121.4

133.2

 

Emerging

8.8

10.5

10.8

11.2

 

15.5

15.4

17.8

 

Total

114.9

125.5

125.3

133.4

 

134.1

136.8

151.0

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

7.1

7.5

7.6

8.4

 

8.1

10.5

11.6

Gross Profit

 

107.8

118.0

117.7

125.0

 

126.0

126.3

139.4

% Margin

 

94%

94%

94%

94%

 

94%

92%

92%

 

 

 

 

 

 

 

 

 

 

Sales, Marketing & Operations

 

35.4

34.1

32.9

42.5

 

31.5

35.9

39.0

Research & Development

 

20.3

20.1

20.3

22.2

 

22.0

22.4

25.4

General & Administrative

 

14.5

14.0

14.1

24.5

 

11.8

19.8

19.8

Total operating expenses

 

70.2

68.2

67.3

89.2

 

65.3

78.1

84.2

 

 

 

 

 

 

 

 

 

 

Adj EBITDA

 

37.6

49.8

50.4

35.8

 

60.7

48.2

55.2

Adj EBITDA Margin

 

33%

40%

40%

27%

 

45%

35%

37%

 

 

 

 

 

 

 

 

 

 

Change in deferred revenue

 

18.3

9.4

(15.0)

(7.0)

 

46.4

6.2

9.8

Adj Cash EBITDA

 

55.9

59.2

35.4

28.8

 

107.1

54.4

65.0

% Margin

 

49%

47%

28%

22%

 

80%

40%

43%

 

 

Note: The Q3/Q4 20 Adjusted AEBITDA has been revised since the publication of the pro forma history on the Company website. This represents a phasing adjustment, reducing Cash AEBITDA by $3.9m in Q3 20, and increasing Cash AEBITDA Q4 '20 by $3.9m.

 

APPENDIX 5 Alternative Performance Measures (APM)

This document contains certain alternative performance measures (collectively, "APMs") including ACV, ARR, NRR, ACV to Revenue Conversion, Adjusted Revenue, Adjusted EBITDA, Adjusted Cash EBITDA, Adjusted Cash EBITDA margin, Adjusted uFCF, Cash Conversion, and Net Debt 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. APMs such as ACV, ARR, NRR, ACV to Revenue Conversion, Adjusted Revenue, Adjusted EBITDA, Adjusted Cash EBITDA, Adjusted Cash EBITDA Margin, Adjusted uFCF, Cash Conversion, RPO and Net Debt are not measurements of SUSE's performance or liquidity under IFRS, Luxembourg GAAP or German GAAP and should not be considered as alternatives to results for the period or any other performance measures derived in accordance with IFRS, Luxembourg GAAP, German GAAP or any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities.

SUSE has defined each of the following APMs as follows:

"Annual Contract Value" or "ACV": ACV represents the first 12 months monetary value of a contract. If total contract duration is less than 12 months, 100% of invoicing is included in ACV;

"ACV to Revenue Conversion": expressed as a percentage, this APM represents revenue in a given period expressed as a percentage of ACV generated over the same period. The conversion percentage is dependent on the duration and timing of new contracts in the period as well as the renewal timing of existing contracts for any given quarter or fiscal year;

"Annual Recurring Revenue" or "ARR": ARR represents the sum of the monthly contractual value for subscriptions and recurring elements of contracts in a given period, multiplied by 12. ARR for SUSE is calculated three months in arrears, given backdated royalties relating to IHV and Cloud, and hence reflects the customer base as of three months prior;

"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;

"Adjusted Revenue": Revenue as reported in the statutory accounts of the Company, adjusted for fair value adjustments;

"Adjusted EBITDA": this APM represents earnings before net finance costs, share of loss of associate and tax, adjusted for depreciation and amortization, share based payments, fair value adjustment to deferred revenue, statutory separately reported items, specific non-recurring items and net unrealized foreign exchange (gains)/losses;

"Adjusted Cash EBITDA": this APM represents Adjusted EBITDA plus changes in contract liabilities in the related period and excludes the impact of contract liabilities - deferred revenue haircut;

"Adjusted Cash EBITDA Margin": expressed as a percentage, this APM represents Adjusted Cash EBITDA divided by Adjusted Revenue;

"Adjusted Unlevered Free Cash Flow" or "Adjusted uFCF": this APM represents Adjusted Cash EBITDA less capital expenditure related cash outflow, working capital movements (excluding deferred revenue, which is factored into Adjusted Cash EBITDA, and non-recurring items), cash taxes and the reversal of non-cash accounting adjustments relating to IFRS 15 and IFRS 16;

"Cash Conversion": expressed as a percentage, this APM represents Adjusted uFCF divided by Adjusted EBITDA;

"Adjusted PBT": is Adjusted EBITDA (post IFRS 15 and 16), less D&A (excluding intangible amortization) less net financial expense;

"Contractual Liabilities and Remaining Performance Obligations" or "RPO": RPO represents the unrecognized proportion of remaining performance obligations towards subscribers (e.g., the amount of revenue that has been invoiced, but not yet recognized as revenue) plus amounts for which binding irrevocable commitments have been received but have yet to be invoiced; and

"Net Debt": this APM represents the sum of non-current financial liabilities, non-current lease liabilities, current financial liabilities and current lease liabilities less cash and cash equivalents as of the respective balance sheet date (excluding capitalized debt arrangement fees (net of amortization) and gains on loan modifications).


16.09.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de

Language:

English

Company:

SUSE S.A.

26 A, Boulevard Royal

2449 Luxembourg

Luxemburg

ISIN:

LU2333210958

WKN:

SUSE5A

Listed:

Regulated Market in Frankfurt (Prime Standard); Luxembourg Stock Exchange

EQS News ID:

1233761


 

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