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INTERIM REPORT

Unaudited condensed consolidated interim financial statements for the six months ended 30 June 2024

2024

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Interim management report 1
Unaudited condensed consolidated statement of comprehensive income6
Unaudited condensed consolidated statement of financial position 7
Unaudited condensed consolidated statement of changes in equity8
Unaudited condensed consolidated statement of cash flows 9
Notes to the unaudited condensed consolidated interim financial statements 10

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INTERIM MANAGEMENT REPORT

STRATEGY AND BUSINESS MODEL

Hybrid Software Group PLC is a public limited-liability company registered in England and Wales with its shares traded on Euronext Brussels under stock code HYSG. It is headquartered near Cambridge, UK.

Hybrid Software Group PLC is a software company which develops enterprise software for industrial print manufacturing processes which use inket and other printing techniques, with 288 employees worldwide and a pedigree stretching back more than 30 years. The Company's products are critical because efficiency and sustainability concerns are driving the conversion of manufacturing processes from traditional analogue methods to just-in-time digital production using inkjet printing. Applications for inkjet printing include a diverse range of goods, from labels and packaging, to textiles, tiles, laminates, wall coverings, additive manufacturing and 3D printing applications.

The Company is the only full stack supplier of all the critical core technologies needed for inkjet printing. Our principal customers are Original Equipment Manufacturers (OEMs) of digital printing equipment, including high-speed digital production presses, professional colour proofing devices, wide format colour printers, and industrial inkjet printers for ceramic tiles, packaging, textiles and additive manufacturing, as well as end users, primarily printing companies who purchase these devices to print and convert labels and packaging materials.

Hybrid Software Group has traditionally provided software components and printhead drive electronics to OEMs to enable them to build their own solutions. However, the strategic acquisitions made over the last several years now enable the Company to provide full turnkey solutions for OEMs which enable them to bring new digital printing devices to market faster and with higher quality. These solutions are higher value and provide more revenue to the Company per device installed. Furthermore, the OEM business is synergistic with the Company's end-user products, accelerating revenue growth and increasing the Company's market share in the inkjet space.

KEY FIGURES

From continuing operations for the 6 months ending 30 June (unaudited).

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BUSINESS REVIEW

CEO'S REVIEW

Hybrid Software Group performed well in the first half of 2024, with rising revenues in all business segments and a significant improvement in profitability. It's a pleasure to report this good news after several challenging years, with the COVID-19 pandemic, the war in Ukraine, and rising interest rates all impacting the global printing industry and our business results.

On the macro level, conditions haven't changed much. We've learned to live with COVID. The conflicts in Ukraine and Gaza are still ongoing. Interest rates haven't fallen, extending the challenging sales climate for capital equipment and enterprise software. So, the improvements in our figures in the first half of 2024 are mainly intrinsic to the company: effective sales strategies, improvements in operations, and revenue growth

as our OEM customers begin shipping new equipment built with HYSG technology and components.

Overall, our revenues grew 8.1% over the first half of 2024, with all three of our reporting segments seeing growth in the range of 7% - 10%. This indicates the overall health and continuing recovery of all segments. It's fair to question whether this revenue growth is a one-time boost from the Drupa trade show, a major industry event that took place in late May and early June. But that is not the case, and in fact the opposite is true. The second quarter brought higher costs as we paid for our 300-square meter stand at Drupa, but the revenue from the deals we closed at the show will mainly come in Q3 and Q4 as products are delivered to customers. In addition, the quarter before Drupa often brings a decline in sales, since customers tend to wait for new product announcements at the show before committing to purchase hardware or software.

Drupa was a successful show, and Hybrid Software was the only company (out of more than 1,600 exhibitors) showcasing a full solution stack developed in-house for digital printing. The market understands that our products are second to none and this will continue to benefit Hybrid Software Group in many ways, but Drupa was not the reason for our improved revenue in the first half of the year.

To explain this, it's necessary to look deeper into the underlying businesses. Printing Software benefited from a long-term contract renewal from a major OEM customer in Japan, as well as operational improvements from the streamlined organisation that was implemented last year. The number of digital printer vendors who have chosen our SmartDFE product as their Digital Front End continues to grow, and the sales funnel is quite healthy as we enter the second half of the year. Printhead Solutions saw improved margins as the chip shortage recedes and component prices continue to drop, as well as an increase in volume across a broad base of customers worldwide. And Enterprise Software, our largest segment, enjoyed a healthy recovery in Germany and North America, as well as continued strong sales throughout western Europe and Australia. Our hosted SaaS offerings continue to gain momentum with enterprise customers worldwide, and our sales team is pursuing many new opportunities resulting from Drupa.

One of the key issues discussed in our 2023 annual report was profitability. Our adjusted net profit improved in 2023 but was not at the level we would expect for a technology-driven company like Hybrid Software Group. The first semester also brought a significant boost in profitability, with our EBITDA up 75% and adjusted operating profit up 188% from last year's figures to €6.48 million and €4.38 million, respectively. With our continued focus on business efficiency and additional revenue growth foreseen, we expect further improvements in profitability in the second half of the year.

As the only full-stack technology provider for digital inkjet printing, we maintain our commitment to innovation on behalf of our customers and stakeholders as we continue to execute our growth strategy. I would like to personally thank our dedicated employees as well as all shareholders for your continued support.

Outcome of the Annual General Meeting

All of the proposed resolutions were passed by the shareholders at the Company's Annual General Meeting ("AGM") on 8 May 2024.

At the AGM, the Company's board of directors was appointed as follows:

Guido Van der Schueren, Chairman
Michael Rottenborn, Chief Executive Officer
Joachim Van Hemelen, Chief Financial Officer
Clare Findlay, Non-Executive Director
Luc De Vos, Non-Executive Director

Under the Company's articles of association, all directors must retire at every AGM, but are entitled to stand for re-election at that AGM. More information about the resolutions passed at the AGM can be found in the investor's section of the Company's website at https://www.hybridsoftware.group/investors/shareholders-annual-general-meeting.

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CFO'S REVIEW

The following information is unaudited.

Financial highlights

Revenue for the period was €26.92 million (2023: €24.91 million)
Gross profit for the period was €22.90 million or 85.1% of revenue (2023: €20.51 million or 82.3%)
Pre-tax profit for the period was €1.87 million (2023: €0.92 million loss)
EBITDA for the period was €6.48 million (2023: €3.71 million)
Cash at 30 June 2024 was €8.04 million (at 31 December 2023: €7.08 million)

Revenue

Revenue for the period was €26.92 million, compared with €24.91 million for the same period in 2023, an increase of 8.1%. At constant exchange rates (2024 restated at 2023 exchange rates), revenue would have been €26.68 million.

Printing Software segment revenue increased by 7.0% when compared to the prior period. During the period a customer in the Printing Software segment extended the term of their contract, which resulted in €3.32 million of license revenue being recognised in the period. During the first half of 2023 a first marquee sale of our new Digital Front End, SmartDFE closed in the Printing Software segment which resulted in the recognition of €2.61 million in license revenue.

Revenue in the Printhead Solutions segment increased by 9.3% when compared to the prior period.

Enterprise Software segment revenue increased by 8.4% when compared to the prior period.

For the Group as a whole, licence royalties accounted for 48.8% (2023: 44.6%) of revenue, maintenance and after-sale support accounted for 20.3% (2023: 21.6%), driver electronics accounted for 19.7% (2023: 19.2%), services accounted for 8.9% (2023: 12.3%), printer hardware and consumables accounted for 2.1% (2023: 2.1%) and other items accounted for 0.2% (2023: 0.2%).

Customer concentration and the reliance on a small number of customers for a high proportion of the Group's revenue has increased year on year. The ten largest customers represented 35.8% (2023: 33.0%) of the Group's revenue, the five largest customers represented 28.5% (2023: 26.2%) of the Group's revenue and the single largest customer represented 12.3% (2023: 10.9%) of the Group's revenue. There was one customer (2023: one) during the period that represented 10% or more of total revenue.

Pre-tax result

The pre-tax result was a profit of €1.87 million for the period, compared with a loss of €0.92 million for the same period in 2023.

Gross profit for the period was 85.1% of revenue. For the same period in the prior year, it was 82.3% of revenue.

The increase in margin percentage is primarily due to the revenue increase in software versus driver electronics related revenue during the period.

Total operating expenses decreased by €0.4 million, or 2.0% compared to the same period in the prior year.

The foreign exchange losses are primarily due to the revaluation of currency balances held at the balance sheet date and the change in exchange rates during the period.

EBITDA

EBITDA is reported as an alternative measure of profit and is calculated by adding back interest, tax, depreciation and amortisation to net profit.

EBITDA for the period was €6.48 million (2023: €3.71 million) and is reconciled to net profit as follows:

In thousands of euros (unaudited)	2024	2023
IFRS reported net profit/(loss) from continuing operations	2,151	(334)
Net finance expenses	38	124
Tax credit	(281)	(588)
Depreciation	740	760
Amortisation	3,835	3,745
EBITDA from continuing operations	6,483	3,707

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Cash

Cash balances were valued at €8.04 million on 30 June 2024 (31 December 2023: €7.08 million).

Loan repayments of €1.00 million were made to Congra Software S.à r.l., consisting of €0.90 million in principal repayments and €0.10 million of interest (see notes 14 and 18).

The Group continues to generate sufficient cash to fund its day to day operational expenditure and capital expenditure on property, plant and equipment and has overdraft facilities available if required.

Adjusted financial results

Management believes that evaluating the Group's ongoing results may not be as useful if it is limited to reviewing only IFRS financial measures, particularly because management uses adjusted financial information to evaluate its ongoing operations and for internal planning and forecasting purposes.

Management does not suggest that investors should consider these adjusted financial results in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. The Group presents adjusted financial results in reporting its financial results to provide investors with an additional tool to evaluate the Group's results in a manner that focuses on what the Group believes to be its underlying business operations. The Group's management believes that the inclusion of adjusted financial results provides consistency and comparability with past reports and comparability to similar companies in the Group's industry, many of which present the same or similar adjusted financial information to investors. As a result, investors are encouraged to review the related IFRS financial measures and the reconciliation of these adjusted results.

Reported operating profit/(loss) is adjusted as follows:

	For the six months ended 30 June
In thousands of euros (unaudited)	2024	2023
Reported operating profit/(loss)	2,344	(521)
Add severance fees	-	364
Deduct capitalised development expense	(1,737)	(2,065)
Add amortisation and impairment of capitalised development	1,671	1,365
Add amortisation of acquired intangible assets	2,159	2,380
Add other operating expenses	6	3
Deduct other income	(60)	(8)
Total adjustments to reported operating profit/(loss)	2,039	2,039
Adjusted operating profit	4,383	1,518

Reported net profit/(loss) is adjusted as follows:

	For the six months ended 30 June
In thousands of euros (unaudited)	2024	2023
Reported net profit/(loss) after tax	2,151	(334)
Adjustments to operating result above	2,039	2,039
Tax effect of abovementioned adjustments	(192)	(346)
Total adjustments to reported net profit/(loss)	1,847	1,693
Adjusted net profit	3,998	1,359

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PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties to the Group can be found on pages 46 to 51 of the Company's annual report for the year ended 31 December 2023.

For the remaining six months of this financial year, management's view is that the principal risks are credit risk from trade receivables and the economic slowdown of the world economy due to the effects of inflationary pressures and monetary tightening imposed by the World's most important central banks.

The Group does not have any operations in Ukraine and does not generate any revenue from either Russia or Ukraine, thus is not directly affected by the current situation. However, the Group sells to customers which are experiencing the effects of this on their businesses.

The Group does not have any operations in Israel but has significant customers in this country. Currently this has only marginally impacted business levels in the region. If the situation were to worsen and spread to other countries, there could be a negative impact on the demand for the Group's products and services, which could impact the Group's revenue and profitability.

The slowdown of economic activity in many markets where the Group operates is a concern for the Board of Directors, which continues to monitor the situation closely. If it were to worsen and spread to other countries, there could be a negative impact on the demand for the Group's products and services, which could impact the Group's revenue and profitability.

RESPONSIBILITY STATEMENTS UNDER THE DISCLOSURE AND TRANSPARENCY RULES

Each of the appointed directors listed on page 2 of this report confirm that to the best of their knowledge that:

the unaudited condensed consolidated interim financial statements, prepared in accordance with IAS 34 Interim Financial Reporting and applicable law, give a true and fair view of the assets, liabilities, financial position and results of the Company and the undertakings included in the consolidation taken as a whole; and
the interim management report contains a fair review of the important events and major transactions between affiliated parties which have occurred during the first six months of the current financial year and of their impact on the summary of the financial statements as well as a description of the principal risks and uncertainties for the remaining six months of the current financial year.

By order of the board,

Michael Rottenborn Director

2030 Cambourne Business Park Cambourne, CB23 6DW, UK 24 July 2024

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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June In thousands of euros (unaudited) Note 2024 2023 Continuing operations Revenue 4 26,922 24,906 Cost of sales (4,021) (4,398) Gross profit 22,901 20,508 Selling, general and administrative expenses (14,198) (14,608) Research and development expenses (6,413) (6,426) Other operating expenses (6) (3) Other income 60 8 Operating profit/(loss) 2,344 (521) Finance income 5 132 61 Finance expenses 5 (170) (185) Net finance expenses (38) (124) Foreign currency exchange losses (436) (277) Profit/(Loss) before tax 1,870 (922) Tax credit 9 281 588 Profit/(Loss) for the period 2,151 (334) Other comprehensive income Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences 824 456 Other comprehensive income for the period, net of tax 824 456 Total comprehensive income attributable to equity holders 2,975 122 Earnings per share Basic earnings per share (euro) 17 0.07 (0.01) Diluted earnings per share (euro) 17 0.07 (0.01)

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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros	Note	30 June 2024 (unaudited)	31 December 2023 (audited)
ASSETS
Non-current assets
Property, plant and equipment	6	1,503	1,547
Right-of-use assets	12	1,831	2,201
Other intangible assets	7	38,614	40,607
Goodwill	8	63,453	63,127
Financial assets		940	947
Deferred tax assets	9	1,687	1,633
Trade and other receivables due after more than one year	10	-	22
Contract assets due after more than one year		4,812	4,408
Other assets due after more than one year		19	18
Total non-current assets		112,859	114,510
Current assets
Inventories		3,882	3,912
Current tax assets		236	174
Trade and other receivables	10	7,966	5,409

Contract assets		5,056	4,185
Other current assets		750	375
Prepayments		1,649	1,827
Cash and cash equivalents		8,041	7,079
Total current assets		27,580	22,961
TOTAL ASSETS		140,439	137,471
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital	11	13,164	13,164
Share premium	11	1,979	1,979
Merger reserve	11	67,015	67,015
Treasury shares	11	(179)	(179)
Retained earnings		42,763	40,638
Foreign currency translation reserve		(9,846)	(10,670)
Total equity		114,896	111,947
Liabilities
Deferred tax liabilities	9	2,161	2,401
Lease liabilities	12	1,460	1,777
Retirement benefit obligations		997	982
Accrued liabilities		32	52
Loans & borrowings	14	6,000	7,800
Other liabilities	13	352	352
Contract liabilities	4, 15	433	477
Total non-current liabilities		11,435	13,841

Current liabilities
Current tax liabilities		151	506
Trade and other payables		3,670	3,502
Lease liabilities	12	822	824
Accrued liabilities		1,468	1,940
Loas & borrowings	14	900	-
Other liabilities	13	313	543
Contract liabilities	4,15	6,784	4,368
Total current liabilities		14,108	11,683
Total liabilities		25,543	25,524

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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

In thousands of euros (unaudited)	Note	Share capital	Share premium	Merger reserve	Treasury shares	Retained earnings	Foreign currency translation reserve	Total equity
Balance at 1 January 2023		13,164	1,979	67,015	(161)	39,847	(10,911)	110,933
Total comprehensive income
Net loss for the period		-	-	-	-	(334)	-	(334)
Total other comprehensive income		-	-	-	-	-	456	456
Total comprehensive income		-	-	-	-	(334)	456	122
Transactions with owners
Share-based payment transactions		-	-	-	11	(11)	-	-
Own share repurchased	11	-	-	-	(28)	-	-	(28)
Total transactions with owners		-	-	-	(17)	(11)	-	(28)
Balance at 30 June 2023		13,164	1,979	67,015	(178)	39,502	(10,455)	111,027
Balance at 1 January 2024		13,164	1,979	67,015	(179)	40,638	(10,670)	111,947
Total comprehensive income
Net profit for the period		-	-	-	-	2,151	-	2,151
Total other comprehensive income		-	-	-	-	-	824	824
Total comprehensive income		-	-	-	-	2,151	824	2,975
Transactions with owners Share-based payment transactions		-	-	-	26	(26)	-	-
Own share repurchased	11	-	-	-	(26)	-	-	(26)
Total transactions with owners		-	-	-	-	(26)	-	(26)
Balance at 30 June 2024		13,164	1,979	67,015	(179)	42,763	(9,846)	114,896

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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June In thousands of euros (unaudited) Note 2024 2023 Cash flows from operating activities Net profit / (loss) for the period 2,151 (334) Adjustments to reconcile net profit to net cash: - Depreciation of property, plant, equipment and right-of-use assets 6,12 740 760 - Amortisation of other intangible assets 7 3,835 3,746 - (Gain)/Loss on disposal of tangible fixed assets (8) 4 - Net finance expense 5 38 124 - Net foreign currency exchange losses 436 276 - Tax credit 9 (281) (588) - Change in fair value of contingent consideration - 7 - Other items 134 (199) Total adjustments to net profit 4,894 4,130 Change in operating assets and liabilities: - Financial assets (105) (34) - Inventories 30 (241) - Trade and other receivables (2,536) (959) - Contract assets (89) (457) - Other current assets (263) (204) - Prepayments 169 (814) - Retirement benefit obligations 15 (77) - Trade and other payables 168 331 - Accrued liabilities (491) (747) - Contract liabilities 1,196 2,753 Total change in operating assets and liabilities (1,906) (449) Cash generated from operating activities 5,139 3,347 Interest received 5 64 19 Interest paid 5 (170) (185) Taxes paid (439) (850) Net cash flow from operating activities 4,594 2,331 Cash flows from investing activities Capital expenditures on property, plant & equipment 6 (337) (428) Capitalisation of development expenses 7 (1,737) (2,064) Net cash flow used in investing activities (2,074) (2,492) Cash flows from financing activities Repayment against loans and borrowings 14, 18 (900) (25) Contingent consideration paid (236) (416) Principal payments on lease liabilities 12 (496) (437) Own shares repurchased 11 (26) (28) Net cash flow used in financing activities (1,658) (906) Net increase/(decrease) in cash 862 (1,067) Cash and cash equivalents at 1 January 7,079 6,317 Effect of exchange rate fluctuations on cash held at 1 January 100 (25) Cash and cash equivalents at 30 June 8,041 5,225

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1. REPORTING ENTITY

Hybrid Software Group PLC (the "Company") and its subsidiaries (together the "Group") is a leading developer of integrated software platforms on which our partners create solutions for digital printing, digital document and PDF applications. It is also a leading supplier of drive electronics for industrial inkjet printing.

The Company is a public limited company, registered in England and Wales, domiciled in the United Kingdom and is quoted on Euronext in Brussels. The Company's registered office address is 2030, Cambourne Business Park, Cambourne, Cambridge, CB23 6DW.

2. BASIS OF PREPARATION

These unaudited condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting in conformity with the requirements of the Companies Act 2006 and in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union ("IFRS"). They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2023.

The accounting policies and methods of computation adopted are consistent with those as described in the Company's consolidated financial statements for the year ended 31 December 2023.

There are no new or amended interpretations or standards effective for the financial year commencing 1 January 2024 that have had a material impact on the Group.

These unaudited condensed consolidated interim financial statements were authorised for issue by the Company's board of directors on 24 July 2024.

Basis of measurement

These unaudited condensed consolidated interim financial statements have been prepared on the historical cost basis, except, if applicable, for the revaluation of derivative instruments at fair value through profit or loss.

Non-current assets are stated at the lower of amortised cost and fair value less disposal costs when applicable. The methods used to measure fair value are discussed in note 4 of the Company's annual report for the year ended 31 December 2023.

Functional and presentation currency

These unaudited condensed consolidated interim financial statements are presented in euros, which is the Company's functional and presentation currency.

All information which is presented in the following notes has been rounded to the nearest thousand, unless otherwise specified.

Use of accounting estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2023.

Going concern

On the date these unaudited condensed consolidated interim financial statements were approved, based on their review of cash flow projections prepared by management for the years ending 31 December 2024 and 2025, the members of the Company's board of directors have no reason to believe that a material uncertainty exists that may cast significant doubt about the Group's ability to continue as a going concern, primarily because of the cash position of €8.04 million as at 30 June 2024 (31 December 2023: €7.08 million), and the only committed, interest bearing debt is to the Company's major shareholder.

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3. OPERATING SEGMENTS

Identification of reportable segments

Management has determined the operating segments based on the reports reviewed by the Group's Chief Executive Officer ("CEO") that are used for deciding how to allocate resources and also in assessing both operating and financial performance of each segment. The Group's CEO is considered as the Group's chief operating decision maker ("CODM").

The Group's segments are:

Enterprise Software, for enterprise workflow software used primarily for the production of labels & packaging;
Printhead Solutions, for electronics and software developed for industrial inkjet printing;
Printing Software, for digital printing and colour management software; and
Group, for group related expenses that are not allocated to another segment.

Measurement of the operating segments' profit is assessed against revenue forecasts and expense budgets, excluding nonoperating IFRS items such as the amortisation of intangible assets acquired through acquisition.

The following tables provide information on revenue, profit, interest, depreciation and amortisation, tax and EBITDA as reported to the CODM for each of the Group's operating segments for the 6 months ended 30 June 2023 and 30 June 2024. The Group has disclosed these amounts for each reportable segment because they are regularly provided to the CODM or are required to be disclosed by IFRS 8. Assets and liabilities by segment are not regularly reported to the CODM.

Inter-segment revenues are included in cost of sales for the reciprocal segment and are eliminated on consolidation. Group amounts relate to expenses incurred by the Group's parent company (Hybrid Software Group PLC) and exchange gains and losses that are not attributable to a particular operating segment.

Segment EBITDA is calculated by adding back interest, depreciation, amortisation and tax to segment operating profit/(loss) after tax.

Six months ended 30 June 2024:

	Printing	Printhead	Enterprise
In thousands of euros (unaudited)	Software	Solutions	Software	Group	Total
Revenue from external customers	9,186	5,960	11,776	-	26,922
Inter-segment revenue	156	-	160	-	316
Segment revenue	9,342	5,960	11,936	-	27,238
Segment operating profit/(loss) after tax	2,514	652	1,447	(493)	4,120
Included in the operating profit/(loss) are:
Finance income	(81)	(26)	(25)	-	(132)
Finance expense	27	12	131	-	170
Depreciation and amortisation	1,490	410	516	-	2,416
Tax credit	(301)	(59)	269	-	(91)
Segment EBITDA	3,649	989	2,338	(493)	6,483

Six months ended 30 June 2023:

	Printing	Printhead	Enterprise
In thousands of euros (unaudited)	Software	Solutions	Software	Group	Total
Revenue from external customers	8,585	5,455	10,866	-	24,906
Inter-segment revenue	128	-	852	-	980
Segment revenue	8,713	5,455	11,718	-	25,886
Segment operating profit/(loss) after tax	459	389	1,385	(532)	1,701
Included in the operating profit/(loss) are:
Finance income	(47)	(9)	(5)	-	(61)
Finance expense	28	10	147	-	185
Depreciation and amortisation	1,349	309	467	-	2,125
Tax charge	(146)	(97)	-	-	(243)
Segment EBITDA	1,643	602	1,994	(532)	3,707

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3. OPERATING SEGMENTS (CONTINUED)

Reconciliation of reportable segments' operating profit after tax to consolidated profit/(loss) after tax:

In thousands of euros (unaudited)	2024	2023
Segment total operating profit after tax	4,120	1,701
Amortisation of acquired intangible assets	(2,159)	(2,380)
Tax effect of above-mentioned items	190	345
Consolidated profit/(loss) after tax	2,151	(334)

4. REVENUE

The Group's operations and main revenue streams are those described in the last annual financial statements. The Group's revenue is derived from contracts with customers.

An analysis of external sales by revenue type and primary geographical market is shown below. The table also provides a reconciliation of disaggregated revenue with the Group's reportable segments (see Note 3 'Operating Segments').

For the six months ending 30 June:

	Printing		Printhead Software Solutions			Enterprise Software		Total
In thousands of euros (unaudited)	2024	2023	2024	2023	2024	2023	2024	2023
Revenue type
Licence royalties	7,521	6,842	445	345	5,166	3,923	13,132	11,110
Maintenance and after-sale support	896	966	39	29	4,540	4,387	5,475	5,382
Services	274	293	131	265	2,001	2,495	2,406	3,053
Printer hardware and consumables	480	470	54	38	34	15	568	523
Driver electronics	-	-	5,310	4,771	-	-	5,310	4,771
Other items	15	14	(19)	7	35	46	31	67
Total sales	9,186	8,585	5,960	5,455	11,776	10,866	26,922	24,906
Primary geographical markets
United Kingdom	945	2,908	159	327	785	697	1,889	3,932
Europe, excluding United Kingdom	1,048	985	1,264	1,146	6,078	5,715	8,390	7,846
North America	2,680	3,682	1,279	1,146	4,286	3,887	8,245	8,715
Asia	4,513	1,010	3,258	2,836	627	567	8,398	4,413
Total sales	9,186	8,585	5,960	5,455	11,776	10,866	26,922	24,906
Timing of revenue recognition
Recognised at a point in time	8,290	7,618	5,921	5,426	6,313	5,878	20,524	18,922
Recognised over time	896	967	39	29	5,463	4,988	6,398	5,984
Total sales	9,186	8,585	5,960	5,455	11,776	10,866	26,922	24,906

Revenue recognised over time is for performance obligations that are performed over time and include maintenance and aftersale support, some services and some licence royalties that are not perpetual licences. All other revenue is recognised at a point in time.

The ten largest customers represented 35.8% (2023: 33.0%) of the Group's revenue, the five largest customers represented 28.5% (2023: 26.2%) of the Group's revenue and the single largest customer represented 12.3% (2023: 10.9%) of the Group's revenue. There was one customer (2023: one) during the year that represented 10% or more of total revenue.

During the period a customer in the Printing Software segment extended the term of their contract, which resulted in €3.32 million of license revenue being recognised in the period. During the first half of 2023 a first marquee sale of our new Digital Front End, SmartDFE closed in the Printing Software segment which resulted in the recognition of €2.61 million in license revenue.

The following table shows revenue expected to be recognised in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of 30 June 2024.

In thousands of euros (unaudited)	0 to 12 months	12 to 24 months	after 24 months	Total
After-sale support services	4,893	297	137	5,327
Product and consultancy	1,891	-	-	1,891
Total	6,784	297	137	7,218

The Group applies the practical expedient in paragraph 63 of IFRS 15 and does not adjust the promised amount of consideration for the effects of a significant financing component for contracts where payments are due within one year.

{14}------------------------------------------------

5. FINANCE INCOME AND FINANCE EXPENSES For the six months ended 30 June In thousands of euros (unaudited) 2024 2023 Interest income 54 12 Finance income on net investment in leases (see note 12) 10 7 Other financial income 68 41 Government grants - 1 Total finance income 132 61 Interest expense - - Interest expenses on loan from related undertaking (see notes 14 and 18) (109) (118) Lease liability interest (see note 12) (56) (60) Other financial charges (5) (7) Total finance expenses (170) (185) Net finance expenses (38) (124)

6. PROPERTY, PLANT AND EQUIPMENT

	Leasehold	Computer	Office	Motor
In thousands of euros	improvements	equipment	equipment	vehicles	Total
Cost
At 31 December 2022	1,014	3,041	1,510	765	5,431
Additions	9	272	-	354	635
Transfers	-	678	(678)	-	-
Disposals	-	(97)	(36)	(84)	(217)
Effect of movement in exchange rates	17	46	(6)	3	60
At 31 December 2023 (audited)	1,040	3,041	790	1,038	5,909
Additions	-	114	14	209	337
Disposals	-	(21)	(2)	(42)	(65)
Effect of movement in exchange rates	22	89	11	(2)	120
At 30 June 2024 (unaudited)	1,062	3,223	813	1,203	6,301
Accumulated depreciation
At 31 December 2022	807	1,687	1,147	88	3,729
Charge for the year	83	376	95	215	769
Transfers	-	656	(656)	-	-
Disposals	-	(92)	(32)	(43)	(167)
Effect of movement in exchange rates	15	20	(5)	1	31
At 31 December 2023 (audited)	905	2,647	549	261	4,362
Charge for the period	39	176	46	113	374
Disposals	-	(19)	(2)	(37)	(58)
Effect of movement in exchange rates	20	92	9	(1)	120
At 30 June 2024 (unaudited)	964	2,896	602	336	4,798

Net book value
At 31 December 2023 (audited)	135	394	241	777	1,547
At 30 June 2024 (unaudited)	98	327	211	867	1,503

{15}------------------------------------------------

7. OTHER INTANGIBLE ASSETS In thousands of euros Software technology Customer relationships Patents Trademarks Know-how Driver electronics Total Cost At 31 December 2022 85,951 20,782 2,735 586 1,404 4,133 115,991 Additions – purchased 5 - - - - - 5 Additions – internally developed 3,301 - - - - 523 3,824 Effect of movement in exchange rates 1,761 256 54 12 (3) 90 2,170 At 31 December 2023 (audited) 91,018 21,038 2,789 598 1,401 4,746 121,590 Additions – internally developed 1,410 - - - - 327 1,737 Effect of movement in exchange rates 1,185 337 65 14 21 114 1,736 At 30 June 2024 (unaudited) 93,613 21,375 2,854 612 1,422 5,187 125,063 At 31 December 2022 48,205 15,536 2,608 586 1,309 3,388 71,632 Charge for the year 5,875 871 10 - 95 353 7,204 Effect of movement in exchange rates 1,751 259 59 12 (3) 69 2,147 At 31 December 2023 (audited) 55,831 16,666 2,677 598 1,401 3,810 80,983 Charge for the period 3,144 449 5 - - 237 3,835 Effect of movement in exchange rates 1,107 335 63 14 21 91 1,631 At 30 June 2024 (unaudited) 60,082 17,450 2,745 612 1,422 4,138 86,449 Net book value At 31 December 2023 (audited) 35,187 4,372 112 - - 936 40,607 At 30 June 2024 (unaudited) 33,531 3,925 109 - - 1,049 38,614

{16}------------------------------------------------

7. OTHER INTANGIBLE ASSETS (CONTINUED)

Intangible assets that are subject to amortisation are reviewed annually for indicators of impairment or whenever events or changes in accounting estimates indicate that the carrying amount may not be recoverable. If an indicator of impairment is identified, a full impairment review is performed with the calculations being based on the discounted cash flows over the remaining period of amortisation of the capitalised development expense and use the same discount rate and exchange rates that were used for the impairment review of Goodwill (see Note 8 'Goodwill'). These intangible assets are also allocated to a CGU containing goodwill and are tested annually for impairment as part of the goodwill impairment review (see Note 8 'Goodwill').

There was no significant change during the period to the calculations and assumptions used at 31 December 2023 to identify any requirement to impair any of these intangible assets. It was concluded that there were no indicators of impairment and no impairment was required for the six months ended 30 June 2024 (2023: €nil).

For individual intangible assets material to the financial statements, the following table shows the remaining amortisation periods and the carrying amounts:

		30 June 2024	31 December 2023
In thousands of euros	Remaining amortisation period	(unaudited)	(audited)
Cloudflow	9 to 11.5 years	15,734	16,342
ColorLogic	1.5 to 8 years	2,297	2,439
EDL	1.1 years	203	252
Harlequin RIP	1.4 years	1,820	1,927
iC3D	8 to 10 years	1,278	1,300
Other software	2 to 6 years	102	120
Packz	9 to 11.5 years	11,371	11,826
Xitron	0.2 to 4.8 years	726	981
Total software technology		33,531	35,187
Customer relationships	0.8 to 7.8 years	3,925	4,372
Patents	11 years	109	112
Driver electronics	0.2 to 4.8 years	1,049	936

8. GOODWILL
In thousands of euros	Total Goodwill
Cost
At 31 December 2022	68,835
Effect of movement in exchange rates	97
At 31 December 2023 (audited)	68,932
Effect of movement in exchange rates	522
At 30 June 2024 (unaudited)	69,454
Amortisation or impairment
At 31 December 2022	5,750
Effect of movement in exchange rates	55
At 31 December 2023 (audited)	5,805
Effect of movement in exchange rates	196
At 30 June 2024 (unaudited)	6,001
Net book value
At 31 December 2023 (audited)	63,127
At 30 June 2024 (unaudited)	63,453

{17}------------------------------------------------

8. GOODWILL (CONTINUED)

The Group is required to test annually, or more frequently if facts and circumstances justify a review, if goodwill and other intangible assets with indefinite useful lives have suffered any impairment during the year.

Having reviewed the revenue and operating result for the six months ended 30 June 2024 against the forecast used for the impairment review at 31 December 2023, it was concluded that there were no indicators of impairment and no impairment was required for the six months ended 30 June 2024 (2023: €nil).

Goodwill is allocated to cash-generating units (CGUs) for the purposes of impairment testing. The CGUs identified were Global Graphics Software, Meteor Inkjet, Xitron, HYBRID Software and ColorLogic.

The table below shows the allocation of goodwill to the CGUs.

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Global Graphics Software	7,002	6,784
Meteor Inkjet	2,291	2,238
Xitron	1,848	1,793
HYBRID Software	51,110	51,110
ColorLogic	1,202	1,202
Total goodwill	63,453	63,127

9. TAX

Corporation tax

Analysis of the tax credit in the period:

		For the six months ended 30 June
In thousands of euros (unaudited)	2024	2023
Current tax
Charge during the period	(21)	(22)
Credit related to previous periods	-	123
Total current tax (charge)/credit	(21)	101
Deferred tax
Arising from the capitalisation and amortisation of development expenses	36	(39)
Arising from the amortisation of acquired intangibles	266	526
Total deferred tax credit	302	487
Total tax credit	281	588

Deferred tax

The Group had recognised deferred tax as follows:

In thousands of euros	30 June 2024 (unaudited)	31 December 2023 (audited)
Deferred tax assets
Capital allowances	1,771	1,756
Unused tax losses	1,085	1,085
Total recognised deferred tax assets before set-off	2,856	2,841
Set-off of tax	(1,169)	(1,208)
Net deferred tax assets	1,687	1,633
Deferred tax liabilities
Capitalised development expenses	948	966
As a result of intangible assets arising from business combinations	2,382	2,643
Total recognised deferred tax liabilities before set-off	3,330	3,609
Set-off of tax	(1,169)	(1,208)
Net deferred tax liabilities	2,161	2,401

{18}------------------------------------------------

9. TAX (CONTINUED)

Deferred tax (continued)

Deferred tax assets are recognised for tax losses available for carrying forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. Deferred tax is measured at the tax rates that are expected to apply to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. On 24 May 2021 the UK tax rate increase from 19% to 25% from 1 April 2023 was substantively enacted. This will have a consequential effect on the group's future tax charge, but no estimates of the potential effect have been made. Notes to the unaudited condensed consolidated interim financial statements (continued)

The deferred tax asset at 30 June 2024 has been calculated based on the rates expected to be in force at the time of utilisation. The deferred tax liability at 30 June 2024 has been recognised as a result of acquisitions in different tax jurisdictions at the rates prevailing in those jurisdictions. The rates range from 17% to 30%.

10. TRADE AND OTHER RECEIVABLES

In thousands of euros Trade receivables	30 June 2024 (unaudited) 8,397	31 December 2023 (audited) 6,024
Allowance for doubtful debts	(431)	(593)
Total trade and other receivables	7,966	5,431

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Current	7,966	5,409
Non-current		- 22

Under some licensing arrangements, the Group recognises revenue at the commencement of the contract and payments become due during the term of the agreement.

Total trade and other receivables 7,966 5,431

11. CAPITAL AND RESERVES

Ordinary shares of €0.40 allotted, called up and fully paid:

	For the six months ended			For the year ended
	30 June 2024 (unaudited)		31 December 2023 (audited)
In thousands of euros, except number of shares	Number	Value	Number	Value
At the end of the period	32,909,737	13,164	32,909,737	13,164

Share premium:

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
At the end of the period	1,979	1,979

Merger reserve:

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
At the end of the period	67,015	67,015

Treasury shares:

The Company's investment in its own shares in treasury is as follows:

	For the six months ended 30 June 2024 (unaudited)		31 December 2023 (audited)	For the year ended
In thousands of euros, except number of shares	Number	Value	Number	Value
At the start of the period	58,584	179	58,996	161
Disbursement of shares to employees	(7,000)	(26)	(19,000)	(54)
Own shares repurchased	6,869	26	18,588	72
At the end of the period	58,453	179	58,584	179

{19}------------------------------------------------

12. LEASES

Group as lessee

The Group leases office facilities and motor vehicles. The office leases typically run for a period of 6 years with an option to renew the lease at the end of the term and motor vehicle leases typically run for 3.5 years. Lease payments are agreed at the inception of the lease and at any subsequent renewal.

Right-of-use assets

	Land and	Motor
In thousands of euros	buildings	vehicles	Total
Balance at 31 December 2022	2,834	78	2,912
Additions	-	45	45
Depreciation charge for the year	(694)	(69)	(763)
Effect of movement in exchange rates	8	(1)	7
Balance at 31 December 2023 (audited)	2,148	53	2,201
Remeasurements	(30)	-	(30)
Depreciation charge for the period	(350)	(16)	(366)
Effect of movement in exchange rates	26	-	26
Balance at 30 June 2024 (unaudited)	1,794	37	1,831

These right-of-use assets are depreciated on a straight-line basis over the remaining term of the rental agreement. As at the date of these financial statements, the remaining terms range from 3 months to 5.5 years. Remeasurements are the result of an extension to the term of an existing lease.

Lease liabilities

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Current	822	824
Non-current	1,460	1,777
Total lease liabilities	2,282	2,601

It is expected that as a lease matures it will either be extended or replaced by a new lease on similar terms. There are no variable lease payments, all lease payments are for fixed amounts agreed at the outset of the lease.

Amounts recognised in the Consolidated Statement of Comprehensive Income:

	For the six months ended 30 June
In thousands of euros (unaudited)	2024	2023
Interest on lease liabilities (see note 5)	56	60
Expenses relating to short-term leases	14	38
Total amount recognised in profit or loss	70	98

A short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less. The Group has elected to apply the recognition exemption under paragraph 5 of IFRS 16 and recognise the associated payments in profit or loss. The shortterm leases are leases for office space with a duration of 12 months or less.

Cash out flow for leases:

	For the six months ended 30 June
In thousands of euros (unaudited)	2024	2023
Lease liability interest (see note 5)	56	60
Principal payments	496	437
Total cash outflow for leases	552	497

{20}------------------------------------------------

12. LEASES (CONTINUED)

Group as lessor – finance leases

The Group has cancellable leases, as intermediate lessor, of motor vehicles. The terms of these leases vary. The following amounts are recognised in the Consolidated Statement of Comprehensive Income:

	For the six months ended 30 June
In thousands of euros (unaudited)	2024	2023
Income received from subleasing right-of-use assets	58	46
Finance income on net investment in leases (see note 5)	(10)	(7)
Total amount recognised in profit or loss	48	39

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Current	134	60

Non-current 109 112 Total finance lease receivable 243 172

13. OTHER LIABILITIES

Financial liabilities measured at fair value.

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Contingent consideration	-	233
Deferred consideration	662	662
Other liabilities	3	-
Total other liabilities	665	895

In thousands of euros	30 June 2024 (unaudited)	31 December 2023 (audited)
Current	313	543
Non-current	352	352
Total other liabilities	665	895

Contingent consideration is the balance of the amount that is expected to be paid for the 2016 acquisition of TTP Meteor Ltd (now Meteor Inkjet Ltd).

Deferred consideration primarily relates to the 2021 acquisition of ColorLogic GmbH.

14. LOANS AND BORROWINGS
	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Current	900	-
Non-current	6,000	7,800
Total other liabilities	6,900	7,800

An unsecured loan has been granted by Congra Software S.à r.l. ("Congra") to HYBRID Software Development NV. During the year, payments totalling €1,009,000 have been made to Congra in respect of the loan. €900,000 has been paid as a repayment against the principal and €109,000 has been paid for interest. Interest is calculated and payable at a fixed rate of 3% per annum on the outstanding balance. The balance of the loan outstanding at 30 June 2024 was €6,900,000 (2023: €7,975,000).

On 16 February 2023, an addendum to the loan agreement was executed in which an adjustment to the repayment scheme has been agreed to. Subject to the amended repayment scheme, €93,000 was to be repaid in 2023 and the balance in 8 equal quarterly instalments of €1,000,000 each of which the first in the 1st quarter of 2025 and the last in the 4th quarter of 2026. The loan is due to be fully repaid on 31 December 2026.

{21}------------------------------------------------

15. CONTRACT LIABILITIES

In thousands of euros	30 June 2024 (unaudited)	31 December 2023 (audited)
Customer advances	526	1,477
Deferred revenue	6,691	3,368
Total contract liabilities	7,217	4,845

	30 June 2024	31 December 2023
In thousands of euros	(unaudited)	(audited)
Current	6,784	4,368
Non-current	433	477
Total contract liabilities	7,217	4,845

The contract liabilities primarily relate to consideration received in advance of the provision of services. Customer advances relate to consideration received in advance of the provision of engineering and consultancy services and delivery of product. Deferred revenue relates to the consideration received for support and maintenance performance obligations that will be recognised as revenue over a period of time. Movements in the balance are driven by individual contracts and are not expected to necessarily be consistent year on year.

16.SHARE BASED PAYMENTS

Share option plan (unaudited)

No new options have been granted since 31 December 2023 and there are no share options outstanding as at 30 June 2024.

Free shares (unaudited)

No free shares have been awarded since 31 December 2023.

Share-based payment expense (unaudited)

For the six months ended 30 June 2024, the Group has recognised €nil (2023: €nil) of share-based payment expense in these financial statements in relation to free shares previously issued.

17.EARNINGS PER SHARE

The basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding those held in treasury. For diluted earnings per share, the weighted average number of ordinary shares in issue during the year, excluding those held in treasury, is adjusted to assume conversion of all dilutive potential ordinary shares. At the period end, those share options where the exercise price is less than the average market price of the Company's ordinary shares were the only dilutive potential ordinary shares.

		As at 30 June
In thousands of euros unless otherwise stated (unaudited)	2024	2023
Weighted average number of shares (basic), in thousands of shares	32,852	32,852
Profit/(Loss) from continuing operations	2,151	(334)
Basic earnings per share, in euros Diluted earnings per share, in euros	0.07 0.07	(0.01) (0.01)

{22}------------------------------------------------

18. RELATED PARTY TRANSACTIONS

The controlling party is Congra Software S.à r.l. ("Congra"), which owns the majority of the voting rights of the Company. Congra is controlled by Powergraph BV "(Powergraph") and Powergraph BV is controlled by the Group's chairman, Guido Van der Schueren. Congra and Powergraph do not produce consolidated financial statements that are publicly available.

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed.

Remuneration of key management personnel

A service agreement between Hybrid Software Group PLC and Powergraph BV provides an arrangement for the remuneration of Guido Van der Schueren.

Michael Rottenborn has an employment contract with Global Graphics Software Inc. that entitles him to salary, bonus and other benefits in addition to the board fees. A service agreement between Hybrid Software Group PLC and Bellevarde Financial BV provides an arrangement for the remuneration of Joachim Van Hemelen.

Congra

Additionally, Congra recharges some minor expenses to HYBRID and HYBRID was liable for some additional consideration that was payable in respect of a transfer of intangible assets prior to joining the Group. The minor expenses totalled €nil (2023: €11,000) and the additional consideration was €nil. At 30 June 2024, €nil (2023: €nil) was owed to Congra in respect of these items.

Powergraph

In accordance with the aforementioned service agreement for Guido Van der Schueren, a total of €223,680 (2023: €274,000) was paid during the period by HYBRID to Powergraph and €5,700 (2023: €35,700) was payable to Powergraph as at 30 June 2024.

Other related parties

Powergraph and Congra have interests in other businesses. During the year, HYBRID Software NV made sales of €2,400 (2023: €9,000) to those entities and at 30 June 2024, €nil (2023: €nil) was owed to HYBRID Software NV by them.

19.SUBSEQUENT EVENTS

There are no post balance sheet events requiring disclosure in these interim financial statements for the period ended 30 June 2024.

{23}------------------------------------------------

COUNTRY OF INCORPORATION: England and Wales

LEGAL FORM: Public limited company

COMPANY NUMBER: 10872426

DIRECTORS

Guido Van der Schueren

Michael Rottenborn

Joachim Van Hemelen

Clare Findlay

Luc De Vos

SECRETARY

Peter Goodwin

STOCK MARKET: Euronext Brussels

STOCK TICKER: HYSG

LEGAL ENTITY IDENTIFIER (LEI): 213800ZFW446QIHAB654

SHARES ISIN: GB00BYN5BY03

AUDITORS: PKF Littlejohn LLP, 15 Westferry Circus, Canary Wharf, London, E14 4HD

LAWYERS: Mills & Reeve LLP, Botanic House, 100 Hills Road, Cambridge, CB2 1AR

SHARE REGISTRAR: Link Company, 6th Floor, 65 Gresham Street, London, EC2V 7NQ

{24}------------------------------------------------

CONTACT US:

www.hybridsoftware.group [email protected]

Hybrid Software Group PLC 2030 Cambourne Business Park Cambourne, Cambridge CB23 6DW UK Tel: +44 (0) 1954 283100