Softline Financial Performance

Main article: Softline (Softline)

2023: Growth in turnover by 29% to 91.5 billion rubles

Softline, a provider of solutions and services in the field of digital transformation and, information security on February 15, 2024, shared TAdviser with its unaudited consolidated financial results for IFRS 2023. According to representatives of Softline, the group's turnover in the reporting year reached a historically record level of 91.5 billion rubles and showed significant growth (by 29%) compared to the same indicator in 2022.

The negative effect of the departure of a significant part of foreign software and equipment manufacturers was offset by the reorientation of the company's business to Russian suppliers and the expansion of its own product line. In addition, the turnover structure continues to change significantly, in which over 23% have already made up their own highly profitable solutions, Softline noted. Thus, during the reporting period, the turnover from the sale of own solutions increased more than 3 times. The most significant increase in the indicator was recorded from the sale of its own services and cloud solutions (+ 265% YoY) and from the sale of its own software and other products, the value of which increased by more than 14 times. At the same time, the turnover from the sale of third-party solutions also showed an increase of 9%.

For the 12 months of 2023, the net profit indicator amounted to 4.5 billion rubles against 6.5 billion rubles in 2022. The decrease in net profit was largely due to the high base of 2022, associated with one-time significant income from the revaluation of the fair value of financial instruments, the company explained. In addition, the growth of net profit in the reporting period was constrained by an increase in interest expenses. In addition, in 2023, atypical and one-time expenses were incurred related to numerous M&A transactions, obtaining public status by the company (placement of the company's ordinary shares on the Moscow and St. Petersburg exchanges, as well as the exchange of Noventiq GDRs for Softline PJSC shares), as well as the placement of the fifth bond issue of Softline PJSC.

According to the group, gross profit at the end of 2023 increased almost 2 times compared to 2022 and also reached a historic maximum of 23.6 billion rubles. The main reason for the growth of gross profit and gross profitability in the company is called the replacement of solutions of foreign manufacturers with a wide range of their own highly profitable products and services, as well as products of Russian IT manufacturers.

In the structure of gross profit, more than half of its share fell on highly profitable own decisions of the group. The indicator increased almost 4 times year-on-year, reaching 14.1 billion rubles. Of these, in particular, gross profit on the company's own services and cloud solutions increased almost 4 times - to 10.9 billion rubles, compared with 2.9 billion rubles a year earlier. At the same time, gross profit on the group's own software and other products increased by more than 15 times.

As a result, the company's gross turnover margin for 2023 increased year-on-year by 8.4 percentage points to 25.8%. The highest gross margin was recorded from the sales of own software and other products (97%) and from the sales of the company's own services and cloud solutions (70%). In general, gross profitability on sales of own solutions for the 12 months of 2023 amounted to 66.0%, from sales of third-party solutions - 13.5%.

Adjusted EBITDA for the 12 months of 2023 amounted to 4.4 billion rubles (+ 72% YoY). Adjusted EBITDA margin (as% of gross profit) was 18.8%, a slight decrease of 2.2 pp due to investments made by the group for business development, including in the future development of its own highly profitable products and services.

At the reporting date, the company's net debt amounted to 8.1 billion rubles. The ratio of net debt to adjusted EBITDA for the 12 months of 2023 was 1.8x, a comfortable level of debt burden for the company. At the same time, at the reporting date, the Group had liquid short-term financial investments totaling RUB 11.0 billion. Thus, the indicator of adjusted net debt minus investments in these instruments becomes negative.

A positive factor in maintaining the group's liquidity in 2023 was the receipt of funds from operating activities in the amount of 8.5 billion rubles.

The number of employees as of December 31, 2023 increased to 8,475, or 68% since the beginning of 2023, with the share of engineers and developers of the group exceeding 55% of the total number of employees.

Within the framework of the approved Softline budget for 2024, it is expected to increase the group's turnover to at least 110 billion rubles. Gross profit, according to the management forecast, will also grow to at least 30 billion rubles. In addition, the adjusted EBITDA indicator, according to the management forecast, in 2024 will increase to at least 6 billion rubles.

The group's adjusted net debt to adjusted EBITDA ratio at the end of 2024 is still expected to be no more than 2.

"The published results of PJSC Softline's activities exceeded our expectations. We were confident in the growth of the main financial indicators, but a favorable market situation, an effective new strategy and the productive work of our motivated team ensured the receipt of results exceeding the forecast announced by the company, - said Vladimir Lavrov, CEO of PJSC Softline. - In addition to strong positive dynamics of financial indicators, we consider our great achievement to be a change in the structure of turnover and gross profit. So, in 2023, the turnover from the sale of its own solutions increased more than 3 times, and the share of gross profit received also from the sale of IT products and services of its own production of PJSC Softline increased almost to 60%. The results of 2023 for us are a strong reserve for the future, in which we see ourselves as a backbone player in the IT market and an industry leader. "

2022

The division of business against the background of the conflict in Ukraine into Russian and foreign. Turnover in Russia - 78.833 billion rubles

In 2022, after the outbreak of an armed conflict in Ukraine, the Softline Group of Companies business was divided into Softline JSC (Russia) and Noventiq ( other countries).

At the end of 2022, the revenue of Softline Group of Companies in Russia (Softline JSC) amounted to 78.833 billion rubles, which is 52.6% lower than the global Softline Group of Companies in 2021. In the ranking "TAdviser100: The largest IT companies in Russia 2023," such an indicator allowed the company to take 9th place.

Net profit growth 7 times to 6.5 billion rubles

Softline Group, a provider of solutions and services in the field of digital transformation and information security, on April 12, 2023 shared with TAdviser the audited financial results of Softline JSC for 2022, and also published the audited consolidated financial statements of Softline JSC, prepared in accordance with international financial reporting standards (IFRS) for 2020-2022.

The net profit of Softline JSC for the reporting period reached 6.5 billion rubles, an increase of almost seven times compared to 2021. According to company representatives, the growth in net profit was caused by a change in the fair value of financial instruments by 6.3 billion rubles. At the same time, in 2022, the company incurred atypical and one-time expenses (related to M&A, business separation, etc.) in the amount of 1.4 billion rubles, which is 433 million rubles more compared to 2021.

At the same time, the turnover of Softline JSC in 2022 decreased relative to the same indicator in 2021 by 9.1% to 70.6 billion rubles - due to the departure of a significant number of foreign software manufacturers (software) from the Russian market. The turnover of the Software and Cloud Solutions segment decreased by 19% year-on-year. Softline Group of companies proved the stability of its business model, demonstrating a decrease in turnover at a pace lower than in the market as a whole, the company noted.

In the same period, turnover in more profitable segments for the company, such as Equipment and Services, increased by 7% and 36% year-on-year, respectively. The turnover in the "Equipment" segment increased due to the intensification of sales of imported equipment in the first quarter of 2022 in anticipation of import restrictions. The turnover of the Services segment increased due to the work on import substitution, reconfiguration of the client's IT infrastructure for new products, consultations on the selection of optimal IT solutions in the new conditions. The turnover on its own decisions doubled and reached 6.6 billion rubles in 2022.

The gross profit of Softline JSC in 2022 increased by 3% compared to last year to 12.3 billion rubles. Gross turnover margin rose from 15.3% to 17.4% yoy. As explained in the company, the main factor in the growth of gross profit and gross profitability is the sale of more profitable products, including domestic software, equipment, as well as highly profitable own products and services.

The margin of gross margin in own decisions was 55% in 2022, while the margin of gross margin of third-party decisions in the reporting period was 14%. At the same time, the share of own decisions in gross margin increased to 29% in 2022 compared to 22% in 2021.

We see a steady increase in revenue in the main segments of our business - the sale of hardware, software, cloud solutions and information security services. I would especially like to note the increase in the share of our own products and services in the company's portfolio. Over the past two years, income from products and services of its own development has more than tripled and exceeded 6.6 billion rubles, - said Vladimir Lavrov, General Director of Softline Group of Companies.

The Group's adjusted EBITDA for 2022 was RUB 2.6 billion, a 28% year-on-year change. EBITDA margin (as% of gross profit) was 20.1%. Adjusted EBITDA in 2022 was driven by Softline's significant investment in its future growth. In the reporting year, Softline invested in motivation programs for employee retention, its own products and services, corporate governance and internal CRM and ERP systems and digital platforms. The company also invests in its own software development teams.

The company's net debt at the end of 2022 amounted to 1.7 billion rubles, which is 0.7x to adjusted EBITDA and is a comfortable level of debt burden for the company.

"The company's financial performance for 2022 clearly demonstrates the success of Softline's business transformation caused by the need to adapt to the new realities of the Russian IT market. The IT market in Russia has entered the zone of serious technological restructuring, the demand for an integrated approach has grown, taking into account the specific tasks of the customer, and we were able to offer customers in the shortest possible time the most popular products and services both on the basis of our own solutions and on the basis of solutions and technologies of Russian manufacturers and manufacturers from friendly countries, "- continued Vladimir Lavrov.

According to him, thanks to the implemented changes, the positive trend showed the gross profitability of the company. This, in turn, made it possible to compensate for the increase in operating costs, especially in terms of personnel costs. These expenses were aimed at attracting from the market the best highly qualified personnel released due to the departure of foreign companies from Russia, the top manager added.

We also note the effectiveness of investments in the acquisition of new assets in terms of their qualitative impact on the company's key indicators and on the implementation of our growth strategy in the next few years, "concluded Softline CEO.

3rd place in the ranking "Largest IT suppliers in the public sector of Russia"

Softline Group of Companies took 3rd place in the ranking TAdviser prepared on the basis of proceeds from the implementation IT of projects public sector Russia in 2022 and published in November 2023. More details here.

2nd place in the ranking "The largest providers of solutions in the field of information security in Russia"

Softline Group of companies took 2nd place in the TAdviser rating, prepared on the basis of revenue from the implementation of information security projects in Russia in 2022 and published in October 2023. The rating includes vendors, integrators and distributors of information security products. More 2022:_TAdviser_Security_100:_.D0.9A.D1.80.D1.83.D0.BF.D0.BD.D0.B5.D0.B9.D1.88.D0.B8.D0.B5_.D0.98.D0.91-.D0.BA.D0.BE.D0.BC.D0.BF.D0.B0.D0.BD.D0.B8.D0.B8_.D0.B2_.D0.A0.D0.BE.D1.81.D1.81.D0.B8.D0.B8 here.

Losses of $2.87 million due to withdrawal from the Ukrainian market

At the end of August 2022, it became known that Softline wrote off $2.87 million due to leaving the Ukrainian market, which the company has been working on since 2002. This is stated in the materials of the IT distributor.

According to Ukrainian corporate registers, by the end of August 2022, Softline Group Ukraine belongs to Anna Shcherbina-Kapliy. Softline at the end of January 2022 (about a month before the start of the special military operation of the Russian Federation in Ukraine) decided to terminate the agreement on the purchase of its subsidiary in Ukraine.

According to CNews, over the past two years, Softline has written off $51.19 million from the relinquishment of control in seven IT companies, most of which are associated with its founder Igor Borovikov. So, in fiscal 2022, $37.69 million was lost, in 2021 - $13.5 million.

Softline relinquished control of several companies in preparation for the IPO, which took place in late 2021. For the face value, the Russian company Softline Enterprise Solutions (LLC Softline Enterprise Solutions) was sold. It was bought by Softline Direct (Softline Direct LLC), wholly owned by Igor Borovikov. Because of this transaction, Softline wrote off $16.8 million.

Also, the Cypriot logistics company Bolucom Holdings was sold at face value. The amount of the corresponding write-offs amounted to $11.7 million. Its buyer was the structure of the Softline Group owned by Borovikov.

Similarly, the Danish company Softline Management was sold at face value. It was bought by Colbury Finance, owned by Borovikov through Softline Group. Because of this transaction, Softline wrote off $6 million.

In addition, Softline decided to terminate the agreement on the purchase of control over CITM Exhibitor^[1]

Softline's business volume in India reached $500 million

India's role as one of the most important markets for Softline outside Russia has significantly increased. In 2020, the company's revenue in this country was about $230 million, and in fiscal 2021 (ended for the company on March 31, 2022) reached $500 million with a total group turnover of $2.2 billion. In addition, it is economically profitable to hire IT engineers in India, and the country is the third after Russia and Belarus for Softline in terms of the number of developers. Among the further prospects in this market, the company sees the development of custom development.

The development of business in India is probably an element of pride of all of us, because today the volume of business in India has exceeded $500 million. This is a rather huge turnover, and we are increasing our presence in the market segments of this huge country, increasing the number of customers with whom we work, the number of employees working professionally in the market, including the development of custom development, - answering TAdviser questions, said Softline Global CEO Sergei Chernovolenko on August 16 at an online meeting dedicated to quarterly results.

According to Chernovolenko, Softline aims to develop custom development services, so it looks at the companies that it can acquire.

Softline's acquisition portfolio already includes Indian companies. So, a few months ago, Softline acquired the local service provider Umbrella, a premium partner of Amazon Web Services. Now, due to this, Softline is developing a proposal for cloud services in India and abroad - in 60 countries. The company previously stated that through this transaction they expect to increase their presence in India and strengthen their offer in terms of cloud services.

Earlier, Softline also bought Embee, an Indian IT company, a leader in providing Microsoft's cloud solutions in the country.

According to Softline's annual report for 2021, its largest Indian subsidiary had about 800 employees. And the founder and CEO of Softline Igor Borovikov in December 2021 gave TAdviser an estimate that approximately 40-50% of Softline programmers fall on Russia, 30-40% - on Belarus, and 10-15% - on India.

Softline's annual report for fiscal year 2021 states that in terms of effective cost management, the company benefits from attracting talent in emerging markets: the average cost of an IT engineer is significantly lower in India, Russia and Vietnam compared to more developed markets like the United States. This factor contributed to the fact that the group's operating profit in 2021 increased from $25.2 million to $47.2 million^[2].

There, the company also cites analysts' estimates that there is a shortage of talent in developed markets, including in IT, and that this trend will continue. At the same time, the development of remote work and its greater acceptability allow companies in developed markets to gain access to the talents of emerging markets such as India, Eastern Europe, Africa and Southeast Asia.

In 2021, India was among several countries where Softline won the Great Place to Work (GPTW, "Great Place to Work") award. Vietnam is also among them.

In addition, 2021 was marked by a number of social programs in which Softline took part in India. For example, in collaboration with a local charity, the company participates in a program to combat hunger and malnutrition and sponsors the supply of lunches for schoolchildren. She was also involved in the supply of food for the health workers of one of the hospitals in Mumbai and in the program to combat oncology among children. Softline also collaborated with the rather famous Indian center for helping women from Mumbai slums Myna Mahila Foundation as part of an initiative to supply girls with hygienic products.

2021

Revenue growth by 26% to 166 billion rubles 4th place in the ranking TAdviser100

At the end of 2021, Softline's revenue amounted to 166,255 million rubles. (indicator of the global Softline Group of Companies), an increase of 26% compared to 2020, which allowed it to take 4th place in the ranking of TAdviser100: The largest IT companies in Russia 2022..

Growth of turnover in constant currency by 26% and gross profit - by 39%

On July 7, 2022, Softline, registered in Cyprus, a global provider of IT and digital transformation solutions headquartered in London, operating in almost 60 countries, announced the publication of audited results for the 2021 fiscal year ended March 31, 2022, in which it showed an increase in turnover in constant currency by 26% and gross profit by 39%.

Шаблон:Quote 'author = said Jacques Gears, Chairman of the Board of Directors.

EBITDA growth by 35.8% to $70.7 million

Softline on May 24, 2022 announced the results of 2021.

In the 2021 fiscal year ended March 31, 2022, adjusted EBITDA was $70.7 million, an increase of 35.8% from $52.1 million in fiscal 2020. Adjusted EBITDA margin based on gross profit remained the same at 23.1%. Adjusted EBITDA was impacted by significant investments Softline makes in its future growth, as well as unfavorable currency movements. In the reporting year, Softline invested in motivation programs for employee retention, continued diversification in the service segment (where the number of employees increased by 2 times), corporate governance and internal CRM and ERP systems, digital platforms, as well as development in new regions of operation.

In 2021, the increase in turnover was 48% compared to 2020. Turnover for the year in the services segment increased by 85.3% to $144.0 million in the reporting currency compared to the previous year. Due to the higher profitability of the services segment, gross profit increased by 95% compared to 2020.

In 2021, recurring turnover increased to more than 60% of total turnover from 56% in fiscal 2020.

Headcount increased by 52% compared to the end of 2021 and amounted to 8,384 employees as of March 31, 2022. Softline more than doubled the number of employees working in the service segment to 4,024 as of March 31, 2021.

Softline has a wide network of representative offices around the world. The company's headquarters are located in Moscow and London. As of 2021, Softline is represented in 100 cities in 50 countries of the world.

Following its release IPO , five M&A deals were announced and completed (), M&A supporting Softline's growth strategy. The successful completion of the tender offer on May 18, 2022, in which 4,420,277 GDRs were purchased at a price of 1 per dollar GDR, that the company's shareholders believe in a higher fundamental valuation of the company, as well as in the long-term growth potential of its value. The implementation of the industry-leading long-term partnership program with employees has been launched to help attract and preserve the most qualified personnel.

Gross profit in 2021 amounted to $306.2 million, an increase of 35.5% compared to $225.9 million in 2020. Gross margin based on turnover was 14.1% compared to 12.6% for the previous year, partly due to the contribution of the services segment.

Services remain the most profitable segment with a gross margin of 78%. Services account for 7% of the Group's turnover, and this segment generates 37% of total gross profit. The growth reflects the impact of acquisitions as well as strong organic growth.

Turnover in the software and cloud segment increased by 19.0% in 2021.

In 2021, the Group's portfolio of solutions included products and technologies from more than 6,000 international vendors, including Microsoft, AWS, Google, Oracle, VMware, HPE, etc. More than 150,000 customers from 55 countries have already used the group's services.

In 2021, the growth in the equipment segment amounted to 17.1% compared to 2020.

49% of the total turnover in 2021 falls on regions outside Russia. This is part of the commitment to further diversify Softline's business. Growth has been particularly strong in the Europe, Middle East and Africa and Asia-Pacific region, both organically and through recent acquisitions.

In addition to the GDRs acquired as part of the tender offer, Softline purchased 1,212,625 GDRs for a total of $7.8 million of operating cash flow and financial investments prior to the reporting date. As previously reported, this does not affect the company's investment strategy for IPO proceeds, as set out in the prospectus.

On April 28, 2022, a tender offer for ruble bonds was completed. Bonds totalling RUR 185.8 million were sold at 84.1% of the nominal bond price. This transaction made it possible to smooth out the debt repayment schedule.

As of December 31, 2021, the company had 16,508,117 unallocated options under the management long-term incentive program.

At the reporting date, the operating indicator "Net Debt/Adjusted EBITDA" was 0.34x. That does not include proceeds from the IPO and shares of Crayon. The share in Crayon as of March 31, 2022 was estimated at $63.3 million.

Cash as of March 31, 2022 amounted to $335 million.

Softline continues to operate with negative working capital, which amounted to $12.9 million as of March 31, 2022.

Revenue in fiscal $1.6 billion, 38% - software and licenses

Softline has been showing stable revenue growth of 20% per year since 2016. In fiscal year 2019 (ended March 31, 2020), the company's revenue amounted to $1.6 billion, in 2018 - $1.35 billion, in 2017 - $1.2 billion, in 2016 - $900 million. At the end of 2020, revenues of over $2 billion are expected.

In the revenue structure, 38% falls on software and licenses, 26% - on subscriptions, 20% - on cloud services, 12% - on equipment, 4% - on services. 64% of revenue fell on Russia, 28% - on Latin America, 8% - on the countries of Eastern and Central Europe.

The company's gross profit in 2019 amounted to $222 million, in 2018 - $204 million, in 2017 - $178 million, in 2016 - $107 million. Profitability to turnover in 2019 amounted to 3.1%, in 2018 - 2.9%, in 2017 - 2.5%, in 2016 - 2.9%.

Profitability to gross profit in 2019 amounted to 22.7%, in 2018 - 19.1%, in 2017 - 16.9%, in 2016 - 17.9%. EBITDA (profit before taxes, interest on loans and depreciation expenses) in 2019 amounted to $50.2 million. EBITDA margin was 3.1%, net debt/EBITDA ratio was 1.

In the debt structure, 80% is long, 20% is short. After the issue of the fourth bond loan, this ratio will be 50/50.

Over three years, the share of Microsoft software in Softline revenue decreased 36% to 27%

On November 12, 2021, it became known that the share ON Microsoft in revenue Softline in Russia decreased from 36% in fiscal 2017 to 27% in 2020 (ended March 31, 2021 calendar year). The company explained this dynamics by the growth of the share of products from other manufacturers.

These figures are given in Softline's IPO prospectus. If we take into account not only Russia, but also other countries where the company sells Microsoft solutions, then their share in Softline's turnover turns out to be equal to 48%. In 2020, the Russian company earned $860 million on these products, of which $292 million in Russia.

As Igor Borovikov, founder and chairman of the board of directors of Softline, told RBC in an interview, Microsoft's share in the company's turnover in Russia falls only in percent; in absolute terms, millions of dollars, the figure, on the contrary, is growing. However, sales of products from other vendors, as well as services, are growing at a much faster pace, he said.

Softline estimates its share in the total sales of Microsoft software in the Russian market at 43%. The American corporation, as a rule, works through partners and does not sell on its own.

Borovikov explained that Microsoft's share in the company's sales reflects the fact that now the average corporate client spends up to 50% of its IT budget on the products of this American company: Windows, Office, Azure, Microsoft Exchange, etc. He also pointed out that a number of Softline competitors - Crayon, Softchoice and others - have a share of Microsoft in the turnover of 60-70%.

At the same time, Borovikov stressed that relations with Microsoft serve as a foundation for Softline "for development in new countries."

In total, this company has 300 thousand partners around the world and only ten global ones. We are among them, responsible mainly for emerging markets, "he added.[3]

2020: Growth in turnover to 131.9 billion rubles or $1.8 billion and 5th place in the TAdviser100. Share of foreign business - 40%

On May 12, 2021, Softline shared with TAdviser the results of work for the fiscal year ended March 31, 2021. The turnover of Softline Group of Companies increased year-on-year by 22% in constant currencies and by 8.9% in US dollars (or 21.2% in rubles), amounting to $1.8 billion (or 131.9 billion rubles). This allowed her to take 5th place in the ranking of TAdviser100: The largest IT companies in Russia 2021. Read more about the biggest companies in the ranking here.

Summing up the results of fiscal 2020, Igor Borovikov, Chairman of the Board of Directors of Softline Group of Companies, said that the company adheres to the Group's global expansion strategy. As part of this strategy, Softline increased the share of international business to 40% (turnover of Softline Group of Companies excluding Russia) due to both organic growth and significant M&A transactions.

"Today we see significant potential for further value creation on the basis of Softline's global presence and are considering various opportunities for strategic development, including through a potential placement of the Company's shares on the stock exchange (IPO)," Igor Borovikov added.

{{quote 'Softline Global CEO Sergey Chernovolenko also noted:

"The COVID-19 pandemic has led to significant changes in business processes for entire industries, creating additional demand for cloud services, remote work solutions, process automation tools and data management. In these conditions, Softline focused on developing key services and competencies, continuing international expansion, as well as strengthening partnerships with the world's largest vendors.

Our priorities are to quadruple the global development workforce, strengthen cybersecurity expertise, and create exclusive digital transformation solutions based on IoT, artificial intelligence, and RPA technologies. "}}

The largest growth in 2020 was shown by the directions of cloud technologies (47%), hardware solutions (12%) and software subscriptions (5.1%). These segments account for 25%, 13.6% and 28.9% of the Group's total turnover, respectively. 56% of total revenue came from recurring business.

The company works with all models of cloud services: Co-location, HaaS/Dedicated, IaaS, PaaS, SaaS, DaaS. In 2020, Softline became the leader among the largest IaaS suppliers in Russia according to CNews, in a similar SaaS rating it took second place.

Within the framework of cloud solutions, the company is engaged in the delivery, installation and implementation of software and hardware for building an infrastructure: from virtualization environments (VMware, Citrix, Microsoft, etc.), server and workstation OS, software for monitoring virtual resources to equipment.

One of Softline's cloud products is vCloud, a service for providing a virtual data center for various use cases. A fault-tolerant cloud infrastructure is built on VMware virtualization. The infrastructure is located in data centers of the TIRE III level - at its own sites in Moscow, St. Petersburg, Kazan, Yekaterinburg and Novosibirsk and at partner sites. There are also so-called managed services for migrating to Microsoft Azure, AWS, Google Cloud clouds and for migrating from hardware to the cloud. In addition, the company is developing the Softline Virtual Office product. It is a cloud environment that provides personal and collaborative work for all customer employees.

In line with the global expansion strategy, the company increased its share of turnover in Eastern Europe and Central Asia, Latin America and the APAC region. Most lines of business provided strong double-digit growth in constant currencies, increasing turnover by 22% or more.

The Group's portfolio of solutions for May 2021 includes products and technologies from more than 4,300 international vendors, including Microsoft, AWS, Google, Oracle, VMWare, HPE, VMWare, etc. More than 95,000 companies from 55 countries have already used the Group's services.

{{quote 'author = noted Chairman of the Board of Directors of Softline Group of companies Igor Borovikov. |

Despite global economy the decline in 2020, Softline has adapted well to the challenges and continued its strong growth, taking advantage of the opportunities opening up for the - IT industrial industry against the backdrop. As pandemics part of the Group's global expansion strategy, we increased our share of international business to 40% due to both organic growth and significant M&A transactions.

The Group has achieved significant success in the development of cloud services, one of the key areas of our business, whose turnover over the past three years has demonstrated double-digit growth annually. At the same time, we significantly strengthened the service direction and brought our capabilities in the field of custom development to a qualitatively different level.

We see significant potential for further value creation based on Softline's global presence and are considering various strategic development opportunities, including through a potential IPO ,}}

{{quote 'author = said Softline Global CEO Sergey Chernovolenko. |

The COVID-19 pandemic has led to significant changes in business processes for entire industries, creating additional demand for cloud services, remote work solutions, process automation tools and data management. In these conditions, Softline focused on the development of key services and competencies, the continuation of international expansion, as well as on strengthening partnerships with major global vendors.

Our priorities are to quadruple the global development workforce, strengthen cybersecurity expertise, and create exclusive digital transformation solutions based on IoT, artificial intelligence, and RPA technologies,}}

Inclusion in the TAdviser rating "The largest suppliers of Russian IT solutions"

The company Softline is included in the rating "Largest suppliers - the Russian IT solutions by revenue for 2020," prepared TAdviser in May 2021. More. here

Inclusion in the TAdviser rating "The largest IT suppliers in Russian retail"

The company Softline is included in the rating "Largest IT suppliers in" Russian retail by revenue for 2020, "prepared TAdviser in July 2021. More. here

Inclusion in the TAdviser rating "Largest IT suppliers in banks"

Softline is included in the rating "Largest IT suppliers in banks" by revenue for 2020, "prepared by TAdviser in July 2021. Read more here.

Inclusion in the TAdviser rating "The largest suppliers of information security solutions in Russia"

Softline is included in the rating "The largest suppliers of information security solutions in Russia" by revenue for 2020, "prepared by TAdviser in October 2021. Read more here.

Inclusion in the TAdviser rating "IT suppliers in the Russian industry"

The company Softline is included in the rating "Largest IT suppliers the Russian industries in by revenue for 2020," prepared TAdviser in December 2021. More. here

Inclusion in the TAdviser rating "The largest IT suppliers in the Russian public sector"

The company Softline is included in the rating "Largest IT suppliers public sector Russia in by revenue for 2020," prepared TAdviser in December 2021. More. here

2019: Softline turnover increased by 14.8% and amounted to 108.83 billion rubles or $1.54 billion

In calendar year 2019, the turnover of Softline Group of Companies increased by 14.8% compared to the same indicator the year before last and amounted to 108.83 billion. Turnover in dollars reached 1.54 billion, which is 13.2% more than in the 2018 calendar year. Softline also entered the TOP of the largest IT companies in Russia according to the results of its work for 2019 according to the TAdviser ranking. This was reported on May 21, 2020 by Softline Group of Companies.

2018: Increase in turnover by 32% to 94.82 billion rubles

The group's revenue Softline for the 2018 calendar year amounted to $1.36 billion, an increase of 19% over the year. Softline announced this in February 2019. rubles The turnover grew by 32%, to 94.82 billion. rubles

In 2018, Softline was represented in more than 50 countries, and its goal is to receive about half of the turnover from foreign markets, says Igor Borovikov, chairman of the group's board of directors.

The market is consolidating players, and only global players have a chance to survive in the future, Borovikov said.

To enter foreign markets, the company has previously invested about $50 million, he added. According to Borovikov, now the company is more faced with the task of developing in these markets than investing in new ones.

In 2018, Russia still accounted for the vast majority of Softline's business - 68%. The growth of turnover in Russia amounted to 17%. Latin America accounted for 17% of the group's revenue, the APAC region (Asia-Pacific) - 7% and the countries of Eastern Europe and Central Asia - 8%.

The largest growth - 83% - in 2018 showed the direction of cloud services. In the future, until 2021, the group plans to increase the share of cloud services in turnover to 50%. The company could not name TAdviser their share in the business in 2018, but noted that in Russia it still accounts for less than 50%, unlike a number of foreign markets such as Brazil and India.

In terms of app sales from the cloud, Microsoft holds the largest share, followed by Google services. Irina Krivenkova, director of Softline services, notes that one of the most popular services in 2018 was the migration from on-premium solutions to cloud ones. This is relevant both for Russia and for the global market.

The direction of hardware increased by 44% and its own services by 25%.

Among the new business areas that Softline is developing are energy service contracts, projects in the field of intelligent accounting of resources and "smart buildings." New is Apple's service as a service (AaaS), which leases Apple mobile devices with a range of services, including maintenance.

In addition to the solutions and services of global vendors, Softline plans to promote Russian products on the global market. Softline sees the greatest prospects abroad for office Russian products, as well as products created as part of venture partnerships, for example, a number of Skolkovo participants. Softline plans to conclude an agreement with Skolkovo to bring promising startups abroad, the company says.

Softline also plans to launch projects related to the infrastructure of smart helmets to foreign markets, allowing remote online compliance with industrial safety rules.

Over the year, the total number of group employees increased from 4.3 to 4.5 thousand people, of which about 3 thousand employees work in Russia.

2017: For 10 years, Softline's revenue grew 10 times to 71.68 billion rubles

Softline's revenue in 2017 amounted to 71,681 million rubles, the company told TAdviser. Compared to 2016, it increased by almost 25%, from 57,291 million rubles. Over the past 10 years, Softline's turnover has increased almost 10 times: in 2007 it amounted to about 7.4 billion rubles ^[4]

Over the year, the group also significantly expanded its staff - from 3.6 thousand to 4.3 thousand employees.

Irina Krivenkova, director of the services department of the Softline group of companies, explained to TAdviser that the driver of turnover growth in 2017, firstly, was Softline's international business. The solutions and services that the company has in Russia scale well to key regions for the company - in Latin America and Southeast Asia.

Secondly, the growth of turnover was facilitated by investments in a team of sales specialists and technical specialists. For example, Softline has one of the most motivating programs for sales managers and for solution sales manager (note TAdviser) in the market, says Krivenkova. It is suitable for specialists who can work and are looking for prospects to increase their income.

Thirdly, Softline is growing through mergers and acquisitions, a company spokeswoman added. More on these deals is below in the 2017 block.

Softline claims that in 2017, in general, all its divisions showed "confident positive dynamics." Irina Krivenkova here, in particular, identifies four areas: cloud services, cybersecurity, equipment sales and project business, including abroad.

Cloud services remain one of their priority vectors for Softline. The company invests a lot in the cloud infrastructure and in the development of the service portfolio. If we talk about infrastructure, in 2017 we created a single cloud based on seven data centers throughout Russia. As for the development of the service portfolio, during the reporting period we began selling Softline's Protected Cloud - this is a response to customer needs related to the need to operate cloud services and at the same time comply with personal data legislation, Krivenkova said in a conversation with TAdviser.

The growth in cybersecurity, she said, is not least due to the formation of a regulatory framework for the security of critical information infrastructure. There are many projects in this area. In 2017, Softline bought the Infosekuriti group of companies, which strengthened its market position and expanded its portfolio of information security services through the security operation center (SOC).

According to Irina Krivenkova, the Hardware-as-a-Service direction demonstrates excellent revenue growth dynamics. Softline has become a strategic partner of Apple Corporation, and this direction is also growing rapidly, she says.

In 2018, the company intends to develop in accordance with its strategy - to be a trusted partner in digital transformation and a provider of solutions in information security for customers. Among other things, attention will be paid to the development of managed services and the Internet of Things for customers of different sectors, - said TAdviser, director of services at Softline.

2016: Revenue growth by 20.5% to RUB 57.29 billion

In 2016, the revenue of the Softline group of companies amounted to 57.29 billion rubles, an increase of 20.5% compared to 2015. In the ranking " TAdviser100: The largest IT companies in Russia" at the end of 2016, the Softline group of companies took 4th place.

2014: Revenue - $908 million

According to the results of the 2014 financial year, the turnover Softline amounted to $908 million. Over the past 11 years, Softline's combined CAGR was 37.2%. Softline dynamics indicators are higher than the market average: for example, according to preliminary forecasts, the IDC volume of the Russian IT market in 2014 decreased by 16%. Russia The company's turnover in fiscal 2014 grew by 25%. CAGR over the past 5 years - 19.32%.

Cloud technologies, IT services and infrastructure solutions continue to be the main vectors of Softline's development. In fiscal 2014, Softline Cloud showed a turnover of $21,942,000, CAGR over the past 5 years - 75.34%. Softline's portfolio of solutions contains a variety of services related to the creation of public, private and hybrid "clouds" based on Softline data centers, as well as platforms of leading vendors. Its own cloud infrastructure operates in 4 cities of Russia (Moscow - 2 sites, St. Petersburg, Novosibirsk, Vladivostok). In 2015, cloud sites will be opened in Kyiv and Alma-Ata.

The company's turnover in IT services for the reporting period amounted to $51,738,000, CAGR over the past 5 years - 54.18%. The direction of Softline Hardware reached $75 256,000, while the CAGR over the past 5 years amounted to 159.95%.

According to 2014 data, Softline has an Information Security Center, a Virtualization Center, a Technical Support Center, a division of Softline Legal Support (legal support), as well as CAD Competence Centers, The MathWorks and Citrix.

2013: Turnover growth to $950 million Business abroad gives only 5% of sales

According to the results of the 2013 financial year, Softline reached a turnover of $950 million, the company said in May 2014. This is 18% higher than the indicators of the last reporting period. By 2014, Softline had implemented a total of over 1,000 IT projects. Among its largest customers over the past year are MTS, AtomEnergoProekt, KAMAZ, Uralkali, RusHydro and others.

The turnover in the direction of IT services amounted to $33.208 million - 17.7% higher compared to 2012. The key drivers for the development of Softline's project business are information security, hardware solutions, virtualization and cloud technologies, as well as the development of customer infrastructure. The company expects that in 2014 this direction will demonstrate growth by about 80%.

As explained by TAdviser, Ruslan Belousov CEO of Softline, the share of project supplies ON for Russia 50%, and for far abroad - 70% of the company's turnover. The share of services in 2013 amounted to 25% of the company's margin, he added.

The direction of cloud services and virtualization showed an increase of 92%, from $6.47 to $12.4 million. By the end of the fiscal year, Softline had implemented more than 300 large projects, and the number of customers exceeded 3 thousand. The revenue of the Softline cloud provider ActiveCloud in 2013 increased by 58% in dollar terms. The total number of ActiveCloud customers at the end of the fiscal year amounted to more than 45 thousand.

"The turnover of cloud services grew by 92%. GARG 2009-2014 for cloud services is 143%. Since the volume of business has become larger, it is clear that the growth dynamics of "clouds" is becoming lower, "said Ruslan Belousov, answering a TAdviser question about why the growth rate in the" cloud "direction has decreased

.

Softline's new focus in 2012 - delivery, implementation and support of hardware, as well as comprehensive projects based on it - showed a 100% increase in the reporting period. According to representatives of Softline, it was provided by projects from large customers, active interaction with equipment vendors and the promotion of services for design deliveries of hardware to regional and international markets. According to the results of 2014, the company expects to double the growth of this area.

Of the most significant projects, including equipment supplies, Softline notes the construction of a data center for the Ministry of Health and Resorts of the Kabardino-Balkarian Republic, a project to modernize the IT services of the Belgorod State Technological University, provide MIPT with a new network infrastructure, etc.

In the direction of Softline electronic distribution, presented by online stores allsoft.ru and store.softline.ru, about 95% of orders are electronic software licenses. Online store Allsoft showed a 50% increase in the number of orders compared to last financial year, and its turnover doubled.

According to Softline's expectations, in 2014 its revenue should be about $1.2 billion, and the company expects to overcome the $2 billion turnover mark in 2017. Earlier, the company expected that it would reach $1 billion in revenue by the end of 2013.

The share of foreign business in 2013 amounted to 5% of the company's turnover. Softline's business growth in the markets of non-CIS countries during the reporting period amounted to 74.1%.

2012

Softline increases sales of hardware and increases turnover by 34% to $805 million

Revenue Softline for the 2012 fiscal year increased by 34% and reached $805 million, the company said on May 20, 2013. Licensing ON remains its main business: this area during the reporting period showed an increase of 30%, with half of the licensed products accounted for solutions. Microsoft

The fastest growing direction was the sale of software based on the SaaS model - in 2012 they grew by 400%, and the direction of cloud services as a whole showed an increase of 180-200%. Softline CEO Ruslan Belousov, in a conversation with TAdviser, noted that the share of cloud services in the company's total turnover remains not very significant - within 5-6%. The most popular cloud applications, he said, remain Office 365 and Google Apps.

It is worth noting that one of the fastest growing areas by the end of the year was also the sale of products traditionally non-core for Softline - hardware. As Igor Borovikov, Chairman of the Board of Directors of Softline, explained, the company began its deliveries last year within the framework of IT services: iron is part of complex projects for building an IT infrastructure.

In 2012, the company delivered equipment worth about $30 million, and in fiscal year 2013 it predicts an increase of 2-2.5 times, mainly due to the implementation of projects in the regions. The direction of IT services as a whole showed an increase of about 150%.

In 2013, Softline expects to overcome the $1 billion mark in terms of turnover and annually increase it by 40% over the next three years, Igor Borovikov said, noting that this is the top bar for growth, while real indicators may differ somewhat.

As a year earlier, in 2013, the company's priority remains the development of IT services and complex projects, as well as further geographical expansion into Latin America, the Middle East and Southeast Asia. In particular, Softline plans to open offices in Mexico, Ecuador and Puerto Rico in 2013.

Softline's previously announced strategic goals (April 2012) for the period up to 2015 also included bringing the share of services to 25%, the share of Cloud + SaaS - up to 10%, its own software - up to 5% in the company's turnover. The expected growth of the service direction is by 100% per year.

Turnover growth plan 5 times in 3 years to $2.5 billion

Softline's strategic plans (April 2012) until 2015 include an increase of five times with a turnover of $2.5 billion; bringing the share of services to 25%, the share of Cloud + SaaS - to 10%, own software - to 5% in the company's turnover. The expected growth of the service area - by 100% per year, software sales - by 30% per year.

Results of 2011 and plans for 2012-2014.

Plans, $ million	2011	2012	2013	2014
Revenue	$600	$840	$1 134	$1 474
Margin (Gross margin)	$111	$176	$261	$369
SOFTWARE	$94	$141	$196	$258
Services	$17	$35	$65	$111
% Sales Margin	19%	21%	23%	25%
Share of Software in Margin	85%	80%	75%	70%
Share of services in margin	15%	20%	25%	30%
EBITDA %	3%	3,6%	4,5%	5%
EBITDA$	$18	$30	$51	$73,7

Source: Softline

2011: Turnover up 32% to $600m

The group's total turnover for the reporting period amounted to more than $600 million, which is 32% more than in fiscal year 2010 ($456 million). Softline has 1900 employees. The company is represented in 23 countries and 65 cities around the world, in the 2011 fiscal year Softline continued its global expansion, opening new representative offices in Southeast Asia and Latin America.

According to the results of the annual study CNews Security 2011, Softline became one of the four leaders in information security solutions providers, showing outstripping growth in this market segment. During the reporting period - 2010 - the company's turnover in the field of information security increased by 64%, reaching 2,163,277 thousand rubles.

In the list of the top 30 largest Russian companies working in the field of information protection, Softline took sixth place and entered the top four leaders in information security solutions, showing significant growth in this market segment (64%). The leading rating positions in 2010 were taken by major software manufacturers - Kaspersky Lab and Acronis, with which Softline has been fruitfully cooperating for many years, offering its customers comprehensive solutions based on partner products.

After the crisis of 2008-2009. Today, there is a deferred demand for information security solutions and services. Experts also associate the growth of the market with interest in information security services from government agencies, the financial sector (primarily banks), strengthening the control and supervisory functions of state regulators and, as a result, the need to meet the requirements (FZ-152, STO BR-IBBS, PCI DSS, protection of trade secrets, etc.).

The area of ​ ​ information security for Softline is the highest priority in the strategic development of the company. In 2010, the range of information security products and services was significantly expanded, cooperation with new software manufacturers began, positions were fixed in relations with long-term partners, competencies in the field of system integration were strengthened, the number of personnel employed in information security projects increased significantly.

The Company offers its customers comprehensive protection of information, including personal data, in full compliance with the requirements of Russian legislation, world standards and practices in the field of security. Softline provides the selection and formation of an optimal information security strategy, assistance in choosing an effective solution, support and development of existing information security systems.

2010:58% increase in turnover to $456 million

The group's total turnover for fiscal year 2010 amounted to $456 million, which is 58% higher than in fiscal year 2009 ($290 million).

Software licensing continued to grow, Borovikov says, but he calls IT services in general and cloud services in particular the main development priorities.

"Now the share of IT services in the company's total revenue is at the level of 5-7%, by 2013 we want to bring this figure to 20%," said Borovikov^[5] of^[5]for the provision of services from remote capacities, their share in Softline's income over the same period should grow from 0.5% to 10

%."

Based on these estimates, in fiscal 2010, the company earned no more than $30 million in IT services, of which only about $2.15 million was spent on cloud services.

In addition to Active, Softline's cloud direction includes Softline Cloud Services, which is responsible for selling such services, and Softcloud, which was launched a year ago, through which you can, for example, buy access to accounting, CRM and mail systems. "Today, the total investment in this area is $4 million (with $1-3 million aimed at buying control in Active - approx. CNews)," says Igor Borovikov. "Over the next three years, only in the development of Active Cloud (the brand under which services are provided) we will invest $10 million."

Including this amount will go to the purchase of Russian hosting providers (to obtain a client base), negotiations with which are already underway, says Borovikov. He does not name specific candidates for the purchase. The CIS market will also be mastered. In addition Belarus Russia to Active representative offices over the next two weeks should open in, and Georgia Armenia Azerbaijan, says Oleg Tyagunov. Over the next 3 months, offices should appear in, and Kazakhstan Uzbekistan Turkmenistan.

2009: Revenue - 8.5 billion rubles

According to the CNews100 rating: The largest IT companies in Russia in calendar year 2009, Softline's revenue amounted to about 8.5 billion rubles, the company employed 1,500 employees.

Earlier it was announced that by 2012 the turnover should reach $1.2 billion. It was also planned to hold an IPO before 2012 (in 2009 these plans are not mentioned).

In 2009, the Company demonstrated a significant increase in turnover in the field of information security, which, compared to 2008, increased by more than 100% (in 2008, the Company's revenue in this area amounted to 642,602 thousand rubles, in 2009 - 1,318,725 thousand rubles). This fact allowed Softline to move from the 11th to the 5th stage of the CNewsSecurity 2010 rating. In general, the dynamics of the information protection segment in 2009 remained positive, most companies showed growth rates from 3 to 19%. General market results allow us to talk about the growing amount of information security costs in Russian companies and government agencies. Experts explain the growing interest in information security on the part of business by increasing the importance of information, increasing attention to personal data (the impact of the 152-FZ of the "Law on Personal Data") and the activity of cybercriminals.

2008: Turnover quadrupled in three years to $364m

According to the company itself, its turnover over the past three years has quadrupled - from $98 million in 2006 to $364 million in 2008. 90% of the total revenues in 2008 were delivered software - this is the direction and provided the lion's share of turnover growth (in the sales structure Softline 70% - the share of buyers from small and large businesses, and 30% is accounted for by affiliate sales). The turnover of the online store for sale, ON Allsoft.ru numbering about 50 thousand customers, is included in the same 90%. The remaining 10% of revenue was provided by training, consulting, legal support and software audit.

2007: Turnover growth by 180% to RUB 7.45 bln

According to the results of 2007, the total revenue of the company reached the level of 7,451,671 thousand rubles, which is 180.7% higher than the same indicator in 2006, which amounted to 2,654,426 thousand rubles. (according to CNews Analytics).

The year was the most successful since Softline was founded. A new area is opening and actively developing - legal support provided by Softline Legal Support. Geography of business: 10 countries, 32 cities. More than 1,000 employees on staff. Softline is an international IT company that can conduct large IT projects in the field of software licensing, training and technical support throughout Russia and the CIS.

1998-2005: Growth in turnover from $1.5 million to $44.9 million

• 2005 - Turnover of $44.9 million Development of IT consulting - a new division of Softline Consulting Services. HR Consulting is a division of Softline IT Employment. Opening of new regional offices in Rostov-on-Don, St. Petersburg, Samara, Ufa and Bishkek (Kyrgyzstan).

• 2004 - Turnover of $27.8 million A joint venture between Softline and Microsoft is the Microsoft Solutions Center. Entering the market of the distribution company AXOFT. Softline opens representative offices in Kazakhstan (Almaty) and Uzbekistan (Tashkent), Novosibirsk and Yekaterinburg.

• 2002 - Turnover of $10.3 million The year of development of regional representative offices - offices were opened in Kyiv, Khabarovsk and Nizhny Novgorod.

• 2003 - Turnover of $17.2 million The company is exploring new markets - the start of the work of the consulting company Softline Solutions.

• 2001 - Turnover of $5.4 million

• 1998 - First successes. Turnover is more than $1.5 million per year. The staff is 35. Marketing innovations.