SUSE S.A. — Interim / Quarterly Report 2023

Jul 6, 2023

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Non-IFRS measures

IFRS measures

All USD \$m unless otherwise stated FY23

ACV 130.6 139.4 (6)% (6)%

Adjusted Revenue 162.4 161.3 1% 1%

Adjusted EBITDA 52.2 58.6 (11)% (14)%

ARR (as at January 31) 657.5 619.1 6%

Adjusted uFCF 17.9 37.7 (53)%

Revenue 161.9 159.8 1%

Gross Profit 148.3 146.2 1%

Operating Profit Before D&A 11.7 31.7 (63)%

Net Cash Inflow From Operating Activities 4.3 25.0 (83)%

Adjusted EBITDA Margin 32% 36%

Q2

FY22

Q2

YoY Actual

YoY

CCY

Q2

Revenue 161.9 159.8 1% 330.3 313.3

Cost of sales (13.6) (13.6) 0% (27.2) (25.4)

Gross profit 148.3 146.2 1% 303.1 287.9

Operating expenses (136.6) (114.5) 19% (220.4) (220.8)

Amortization of intangible assets (34.3) (36.1) (5)% (68.4) (72.4)

Depreciation - PPE (1.1) (1.0) 10% (2.1) (1.9)

Depreciation - Right of Use Assets (1.6) (2.6) (38)% (3.0) (4.2)

Operating profit/(loss) (25.3) (8.0) 216% 9.2 (11.4)

Net finance costs (12.9) (10.0) 29% (27.6) (21.6)

Share of losses on associate (0.2) (0.5) (60)% (1.2) (1.4)

Profit/(loss) before tax (38.4) (18.5) 108% (19.6) (34.4)

Taxation 6.8 4.8 42% (5.9) 7.9

Profit/(loss) for the period (31.6) (13.7) 131% (25.5) (26.5)

FY22

Q2

YoY Actual FY23

H1

FY22

H1

YoY Actual

ACV by Solution

Adjusted Revenue by Solution

Q2

Core 107.5 113.6 (5)% (5)% 226.0

Emerging 23.1 25.8 (10)% (10)% 51.6

Total ACV 130.6 139.4 (6)% (6)% 277.6

ARR (as at January 31) 657.5 619.1 6% 657.5

Core 132.0 133.9 (1)% (1)% 269.5

Emerging 30.4 27.4 11% 11% 61.9

Total Adjusted Revenue 162.4 161.3 1% 1% 331.4

Adjusted Cost of Sales 13.4 13.1 2% 4% 26.8

Adjusted Gross Profit 149.0 148.2 1% 1% 304.6

Adjusted Gross Profit Margin 92% 92% 92%

Sales, Marketing & Operations 44.5 46.3 (4)% (2)% 86.5

Research & Development 31.7 27.1 17% 20% 59.7

General & Administrative 20.6 16.2 27% 31% 39.1

Total Operating Expenses 96.8 89.6 8% 11% 185.3

Adjusted EBITDA 52.2 58.6 (11)% (14)% 119.3

Adjusted EBITDA Margin 32% 36% 36%

NRR (as at January 31) 102.0% 109.4% (7)% 102.0% 109.4%

FY22

Q2

YoY

YoY

FY23

H1

CCY

Actual

Depreciation & Amortization	5.3	6.2	(15)%	10.1
Adjusted EBIT	46.9	52.4	(10)%	109.2
Net Finance Costs	12.9	10.0	29%	27.6
Adjusted Profit before Tax	34.0	42.4	(20)%	81.6
Notional Tax	11.5	12.9	(11)%	27.4
Adjusted Profit after Tax	22.5	29.5	(24)%	54.2
Weighted average shares in issue	170	169	0%	170
Basic Adjusted Earnings Per Share	0.13	0.17	(24)%	0.32
Diluted Adjusted Earnings Per Share	0.13	0.17	(25)%	0.31

FY22

All USD \$m unless otherwise stated FY23

All USD \$m unless otherwise stated FY23

Q2

End User & Cloud 109.6 111.5 (2)% 235.8 234.0

IHV & Embedded 21.0 27.9 (25)% 41.8 49.2

Total ACV 130.6 139.4 (6)% 277.6 283.2

FY22

Q2

YoY Actual FY23

YoY Actual FY23

H1

FY22

H1

Q2

Europe, Middle East and Africa 57.4 50.6 13% 125.1 118.3

North America 54.8 62.1 (12)% 110.2 117.9

Total ACV 130.6 139.4 (6)% 277.6 283.2

Asia Pacific and Japan 9.9 8.2 21% 19.4

Greater China 5.1 9.6 (47)% 11.4

Latin America 3.4 8.9 (62)% 11.5

FY22

Q2

All USD \$m unless otherwise stated	FY23	FY22 YoY Actual		FY23	FY22
	Q2	Q2		H1	H1
Adjusted EBITDA	52.2	58.6	(11)%	119.3	110.9
Adjusted EBITDA Margin	32%	36%		36%	35%
Change in Deferred Revenue	(6.7)	17.3	n.m.	(4.2)	58.1
Adjusted Cash EBITDA	45.5	75.9	(40)%	115.1	169.0
Adjusted Cash EBITDA Margin	28%	47%		35%	53%

Adjusted Cash EBITDA 45.5 75.9 (40)% 115.1

Gross tangible capital expenditure (3.2) (2.7) 19% (5.6)

Change in core working capital (13.0) (19.9) (35)% 3.1

Commissions paid (net of amortization) (3.2) (8.2) (61)% (8.3)

Leases paid (2.2) (1.9) 16% (4.2)

Q2

FY22

Q2

YoY Actual FY23

H1

Cash taxes	(6.0)	(5.5) 9% 17.9 37.7 (53)%	(8.7)
Adjusted uFCF			91.4
Adj uFCF Converson from Adj EBITDA	34%	64%	77%

All USD \$m unless otherwise stated	FY23	FY22	YoY Actual
	End Q2	End Q2
Net Debt	543.8	654.5	(17)%
Adjusted Cash EBITDA (LTM)	241.3	285.7	(16)%
Leverage	2.3	2.3	(2)%

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Adjustments

Adjustments

Date	Event
September 21, 2023	Release of Q3 FY23 results
January 18, 2024	Release of Q4 FY23 results and publication of FY23 Annual Report

Q2

Q2

FY22

Q2

YoY Actual

FY22

Q2

YoY Actual

Revenue - IFRS 161.9 159.8 1%

Contract liability haircut amortized 0.6 1.6 (63)%

Contract asset haircut amortized (0.1) (0.1) 0%

Adjusted Revenue 162.4 161.3 1%

Operating profit/(loss) - IFRS (25.3) (8.0) 216%

All USD \$m unless otherwise stated FY23

Adjustments

Adjusted EBITDA	52.2	58.6	(11)%
Foreign exchange - unrealized	22.5	5.9	281%
Share-based payments - ER taxes	0.0	0.5	(100)%
Share-based payments - charge	12.1	12.7	(5)%
Non-recurring items	3.5	6.3	(44)%
Contract asset haircut amortized	(0.1)	(0.1)	0%
Contract liability haircut amortized	0.6	1.6	(63)%
Separately reported items	1.9	0.0	n.m.
Depreciation and Amortization	37.0	39.7	(7)%

Q2

Q2

FY22

Q2

YoY Actual FY23

FY22

Q2

YoY Actual

All USD \$m unless otherwise stated FY23

Change in Deferred Revenue (6.7) 17.3 n.m.

Contract liability haircut amortized 0.6 1.6 (63)%

Contract asset haircut amortized (0.1) (0.1) 0%

Change in deferred revenue - IFRS (6.2) 18.8 n.m.

Net cash inflow from operating activities 4.3 25.0 (83)%

Interest paid 12.4 7.0 77%

Tax paid 6.0 5.5 9%

Cash generated from operations 22.7 37.5 (39)%

Adjusted Unlevered Free Cash Flow	17.9	37.7	(53)%
Cash taxes	(6.0)	(5.5)	9%	(8.7)
Leases paid	(2.2)	(1.9)	16%	(4.2)
Commissions paid (net of amortization)	(3.2)	(8.2)	(61)%	(8.3)
Change in core working capital	(13.0)	(19.9)	(35)%
Gross tangible capital expenditure	(3.2)	(2.7)	19%	(5.6)
Adjusted Cash EBITDA	45.5	75.9	(40)%	115.1
Change in deferred revenue	(6.7)	17.3	n.m.	(4.2)
Adjusted EBITDA	52.2	58.6	(11)%	119.3
Foreign exchange - Unrealized	22.5	5.9	281%	(0.7)
Share-based payments - ER taxes	0.0	0.5	(100)%
Share-based payments - charge	12.1	12.7	(5)%
Non-recurring items	3.5	6.3	(44)%
Contract asset haircut amortized	(0.1)	(0.1)	0%	(0.1)
Contract liability haircut amortized	0.6	1.6	(63)%
Separately reported items	1.9	0.0	n.m.
EBITDA per IFRS Statements	11.7	31.7	(63)%
Depreciation and Amortization	37.0	39.7	(7)%
Operating profit/(loss) per IFRS	(25.3)	(8.0)	216%
Cash-settled share-based payments	1.3	0.0	n.m.
Movements in deferred revenue	6.7	(17.3)	n.m.
Movements in contract related assets	8.4	12.0	(30)%
Movements in provisions	2.1	0.8	163%
Movement in other pensions	0.4	0.2	100%
Movements - other working capital	11.2	21.9	(49)%	(2.8)
Addbacks - non cash items	(78.1)	(63.1)	24%	(110.0)

Working Capital Movements - IFRS

Remove non-recurring items:

ACV by Solution

Adjusted Revenue by Solution

Movements in trade receivables (21.0) (13.4) 57%

Movements in other receivables (3.1) (2.0) 55%

Movements in trade payables 5.5 (3.7) n.m.

Movements in other payables 7.4 (2.7) n.m.

Total Working Capital Movements - IFRS (11.2) (21.8) (49)%

Third party consulting fees (0.3) (0.6) (50)%

Transaction costs 0.1 2.5 (96)%

Integration costs (1.6) 0.0 n.m.

Total Working Capital Adjustments (1.8) 1.9 n.m.

Change in core working capital (within uFCF) (13.0) (19.9) (35)%

All USD \$m unless otherwise stated FY21 FY22

Core 101.5 98.7 119.9 113.6 93.2

Emerging 17.5 26.3 23.9 25.8 21.2

Total ACV 119.0 125.0 143.8 139.4 114.4

Core 133.2 133.4 130.2 133.9 142.9

Q2

Q3 Q4 Q1 Q2 Q3

FY22

Q2

YoY Actual

Emerging	17.8	20.6	24.8	27.4	28.3
Total Adjusted Revenue	151.0	154.0	155.0	161.3	171.2
Adjusted Cost of Sales	11.6	10.8	11.8	13.1	13.3
Adjusted Gross Profit	139.4	143.2	143.2	148.2	157.9
Adjusted Gross Profit Margin	92%	93%	92%	92%	92%
Sales, Marketing & Operations	39.0	45.7	43.0	46.3	45.0
Research & Development	25.4	24.8	27.0	27.1	27.1
General & Administrative	19.8	24.7	20.9	16.2	20.7
Total Operating Expenses	84.2	95.2	90.9	89.6	92.8
Adjusted EBITDA	55.2	48.0	52.3	58.6	65.1
Adjusted EBITDA Margin	37%	31%	34%	36%	38%
Change in deferred revenue	9.8	3.7	40.8	17.3	(18.9)
Adjusted Cash EBITDA	65.0	51.7	93.1	75.9	46.2
Adjusted Cash EBITDA Margin	43%	34%	60%	47%	27%

Annual Contract Value or ACV	represents the first 12 months value of a contract. If total contract duration is less than 12 months, 100% of invoicing is included in ACV.
Annual Recurring Revenue or ARR	represents the sum of the monthly contractual value for subscriptions and recurring elements of contracts in a given one month period, multiplied by 12. ARR is calculated three months in arrears, given backdated royalties relating to IHV and Cloud Service Providers, and hence reflects the customer base as of three months prior.
Adjusted Cash EBITDA	represents Adjusted EBITDA plus changes in contract liabilities (also referred to as deferred revenue) in the related period and excludes the impact of contract liabilities haircut (also referred to as deferred revenue haircut).
Adjusted Cash EBITDA Margin	expressed as a percentage, this APM represents Adjusted Cash EBITDA divided by Adjusted Revenue.
Adjusted Gross Profit	represents Adjusted Revenue less cost of sales adjusted for non-recurring items.
Adjusted Gross Profit Margin	expressed as a percentage, this APM represents Adjusted Gross Profit divided by Adjusted Revenue.
Adjusted Earnings per share	represents Adjusted Profit after Tax divided by the weighted average number of ordinary shares in issue during the period. Diluted Adjusted Earnings Per Share takes into account

	potential dilution from outstanding share grants and options.
Adjusted EBITDA	represents earnings before net finance costs, share of loss on associate and tax, adjusted for depreciation and amortization of intangible assets, share— based payments, contract liabilities haircut, separately reported items, specific non-recurring items and net unrealized foreign exchange (gains)//losses.
Adjusted EBITDA Margin	expressed as a percentage, this APM represents Adjusted EBITDA divided by Adjusted Revenue.
Adjusted Effective Tax Rate	represents the IFRS effective tax rate adjusted for the tax effect of adjusting items (those items adjusted for to arrive at Adjusted Profit before Tax).
Adjusted Profit Before Tax	represents Adjusted EBITDA, less depreciation and amortization (excluding intangible amortization for customer relationships, intellectual property and non-compete agreements) less net finance costs.
Adjusted Profit After Tax	represents Adjusted Profit Before Tax less notional tax.
Adjusted Revenue	represents Revenue as reported in the statutory accounts of the Group, adjusted for contract liability fair value adjustment (also referred to as deferred revenue haircut).
Adjusted unlevered Free Cash Flow or Adjusted uFCF	represents Adjusted Cash EBITDA less tangible capital expenditure related cash outflow, working capital movements (including commissions paid net of amortization of contract-related assets and excluding non-recurring items), cash

	taxes paid and leases paid.
Cash Conversion	expressed as a percentage, this APM represents Adjusted uFCF divided by Adjusted EBITDA.
Contractual Liabilities and Remaining Performance Obligations or "RPO"	a Contract Liability is an entity's obligation to transfer goods or services to a customer and is recognized in the Statement of Financial Position, when a payment from a customer is invoiced, before a related performance obligation is satisfied. A remaining performance obligation is a promise to transfer goods or services to a customer (with a contract agreed), at a point in the future, but is yet to be invoiced or recognized in the Statement of Financial Position.
Leverage	expressed as a multiple, Leverage is Net Debt divided by Adjusted Cash EBITDA.
Net Debt	represents the sum of current and non- current interest bearing borrowings (excluding un-amortized capitalized arrangement fees, gains or losses on loan modifications), current and non- current lease liabilities, less cash and cash equivalents.
Net Retention Rate or NRR	expressed as a percentage, NRR indicates the proportion of ARR that has been retained over the prior 12-month period, which is inclusive of up-sell, cross-sell, down-sell, churn and pricing. It excludes ARR from net new logo End user customers. The NRR is calculated three months in arrears, aligned to the calculation of ARR.
Notional Tax	represents total income tax charge/credit for the year less the taxation charge/credit associated with

	adjusting items (those items adjusted for to arrive at Adjusted Profit before Tax).
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Language:	English
Company:	SUSE S.A.
	11-13 Boulevard de la Foire
	1528 Luxembourg
	Luxemburg
ISIN:	LU2333210958
WKN:	SUSESA
Indices:	SDAX,
Listed:	Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange
EQS News ID:	1673569
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