Hybrid Software Group PLC reports strong 2022 results with €46.7 million revenue and €10.9 million EBITDA

Hybrid Software

12/04/2023 06:00

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PRESS RELEASE – REGULATED INFORMATION

HYBRID SOFTWARE GROUP PLC REPORTS STRONG 2022 RESULTS WITH €46.7 MILLION
REVENUE AND €10.9 MILLION EBITDA

Cambridge (UK), 12 April 2023 (07:00 CEST): Hybrid Software Group PLC
(Euronext: HYSG) announces that it has published its annual report and
financial statements for the financial year ended 31 December 2022.

The full document is available to download from the financial reports section
of the Company’s web site at:
https://www.hybridsoftware.group/investors/financial-reports.

CEO Mike Rottenborn comments, “We entered 2022 with bullish growth
projections until the economic downturn began to affect our OEM and our
end-user business. In addition, during the first half of the year our revenues
were impacted by the global shortage of semiconductor chips. Meteor Inkjet’s
revenue fell short of projections by more than £4 million during this period.
Their team quickly redesigned a critical circuit board using a chip that was
more widely available, but the lost first-half revenue was not fully recovered
in 2022. I’m pleased to say that 2023 has started very strongly for Meteor,
with revenues recovering to healthy levels and demand from China increasing
rapidly.

“Despite all the challenges, we completed two strategic acquisitions, sold
an old and unused intangible asset for net €3.3 million, achieved four new
patents, and drew the constituent parts of the business closer together into
one company, reorganising R&D resources and pushing ahead with product
innovation to the benefit of our customers. There’s no doubt that Hybrid
Software Group has emerged from 2022 as a stronger company. We have
best-in-class technology, a sound business plan focussed on markets that are
trending upwards, and strong cash position of Euros 6.3 million.”

Executive Chairman Guido Van der Schueren adds, “2022 was a year of mixed
results and we fell short of our growth projections in both revenue and net
profit. We acted quickly in response, taking prudent steps to conserve cash
and reduce our cost structure, especially external spending. But we never
sacrificed the long-term value of Hybrid Software Group. We did not cut any of
our key personnel or reduce R&D spending, and if anything, we stepped up our
sales efforts and increased the company’s presence at key trade shows and
industry events. We have broadened our potential customer reach by offering
successful products for all digital printing applications and I anticipate a
much higher level of growth and profitability in the very near future.”

Financial highlights

 For the year ended 31 December                                              
 In thousands of euros                                       202 2   2021    
 Continuing operations                                                       
 Revenue                                                     46,693  48,562  
 Operating profit                                            2,274   4,770   
 Profit before tax                                           1,835   4,565   
 Tax (charge)/credit                                         (535)   349     
 Profit from continuing operations                           1,300   4,914   
                                                                             
 EBITDA - continuing operations                              10,895  12,211  
                                                                             
 Adjusted operating profit - continuing operations           2,106   7,308   
 Adjusted net profit - continuing operations                 945     6,390   
                                                                             
 Basic earnings per share (euro) - continuing operations     0.04    0.15    
 Adjusted earnings per share (euro) - continuing operations  0.03    0.20    
                                                                             
 Available cash                                              6,317   9,234   

The consolidated pre-tax result for continuing operations was €1.84 million
compared with a profit of €4.57 million in 2021. The decrease in
profitability of €2.73 million was due to:
* a decrease in revenue of €1.87 million;
* a decrease in cost of sales of €1.09 million;
* an increase in selling, general and administrative expenses of €4.38
million;
* an increase in research and development expenses of €0.78 million;
* a decrease in other operating expenses of €0.18 million;
* an increase in other income of €3.27 million;
* an increase in net finance expenses of €0.79 million; and
* a decrease in foreign exchange losses of €0.55 million.
Revenue for the Printing Software segment was €15.26 million for the year
(2021: €13.84 million).

Revenue for the Printhead Solutions segment was €8.66 million for the year
(2021: €13.98 million). This segment was severely impacted by the shortage
of its most commonly used chip until a critical circuit board was redesigned
using a different component in mid-2022.

Revenue for the Enterprise Software segment was €22.78 million for the year
(2021: €20.74 million).

Gross profit for the period increased to 84.2% of revenue (2021: 82.5%),
primarily due to the higher mix of
software related sales during the year, particularly higher margin sales to
end users by HYBRID Software.

Included in selling, general and administrative expenses is amortisation of
€1.17 million (2021: €0.84 million)
related to intangible assets recognised as a result of acquisitions.

Research and development expenses includes the capitalisation and amortisation
of internally generated intangible assets and the amortisation of certain
intangible assets recognised as a result of acquisitions. During the period
there was a net capitalisation of development expenditure of €2.00 million
(2021: €2.39 million) and amortisation of acquired intangible assets of
€5.10 million (2021: €3.93 million).

The net capitalisation of development expenditure comprised €4.0 million
(2021: €3.40 million) of capitalised expenditure less €2.0 million (2021:
€1.01 million) of amortisation.

The third quarter results were favourably impacted by the sale of an unused
asset (approximately 69,000 IPv4 internet addresses) for a net amount of
€3.3 million which closed in July. Given the nature of the sale this income
is reported as “Other Income” and is not included in our revenue figures,
but it is accretive to EBITDA.

Total operating expenses increased by €4.98 million, or 14.1% compared to
the same period in the prior year. The increase was mainly due to higher sales
& marketing related expenditures, increased amortization expenses and higher
staff cost resulting from the acquisitions of ColorLogic and Hybrid Iberia in
Q4 2021, and iC3D in Q1 2022.

Foreign exchange gains and losses were primarily due to the revaluation of
currency balances held at the balance sheet date and the change in exchange
rates during the year.

The Company presents EBITDA (earnings before interest, tax, depreciation and
amortisation) and adjusted profit when 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.

Additional commentary and analysis of the Company’s consolidated results for
the year ending 31 December 2022 can be found in the annual report and
financial statements.

Should you wish to receive a printed copy of the annual report, please send an
e-mail to investor-relations@hybridsoftware.group or make your request in
writing, for the attention of the Company’s Chief Financial Officer, to 2030
Cambourne Business Park, Cambourne, Cambridge, CB23 6DW, UK.

Annual General Meeting
The Company will hold its annual general meeting on Wednesday 24 May 2023. The
official notice of the meeting will be available on the Company’s website
at:
https://www.hybridsoftware.group/investors/shareholders-annual-general-meeting.

About Hybrid Software Group
Through its operating subsidiaries, Hybrid Software Group PLC
(https://www.globenewswire.com/Tracker?data=O7ccavepukOIrIu2yr_W7MXvTaJXiXq23b4Fpoi5Tk5GceJ9XwvKA07JV7SEMrrDPqvdKx5_EFxqm4e2S26ASQ_d2yEWwXUuYQQKnB7Ib48nS3CbhjU9z11jrhwhGFyJ)
(Euronext: HYSG
(https://www.globenewswire.com/Tracker?data=yrLsZZMKgU7EDX7b3qJJMxnmZRAoEzS9_1uCfqbkI2mvu9LbVAz3DDiD_8XIgEbcaQkLjjkZKNLyxvaEriqs9mN52oLt1kFA81aISsfJYXQr2YKM2uawYOVLqyCU8Ds5)) is
a leading developer of enterprise software for industrial print manufacturing.
Customers include press manufacturers such as HP, Canon, Durst, Roland,
Hymmen, and hundreds of packaging printers, trade shops, and converters
worldwide.

Hybrid Software Group PLC is headquartered in Cambridge UK. Its subsidiary
companies are colour technology experts ColorLogic
(https://www.globenewswire.com/Tracker?data=OC9_Wca23AfDzwIqX3eES8um33WJqf1aWFgQYQRZD1Wp_vuMJ9Zhz5PQ77mXzqMMXTPY3qRhiGI8gttHFLgS-A==),
printing software developers Global Graphics Software
(https://www.globenewswire.com/Tracker?data=hsr9p49IJIa5But_FNafzBgbKq68PA_TCYsZ0vTzmqy7axR8e0Eej9tvBfrXRu4Z3bc6vZb8Gj8JlkFUwWARzsjSZ0UCMhy4E8KTngkSRuE=),
enterprise software developer HYBRID Software
(https://www.globenewswire.com/Tracker?data=eACMf_WuUa_bKKw1feLikE7ShP3tyQ9tFFYo1N2TSF6t6RYaYBnpWzIx3sA7hs4g5fUvZxm4QQIlKOx9uB2MHbSGn0bB5wvsOQvYjIvuOSg=),
3D design and modelling software developers iC3D
(https://www.globenewswire.com/Tracker?data=vo6P71OQaBTQnmYkDdzaMuVslJMQdQw-qjgYOZTEGdfy56kijh-f1CUF1lUlRX0h49khfHwhwdKJ7lVP933d6GUsRiar7BLUdwjFwLmjdDk=),
the industrial printhead driver solutions specialists, Meteor Inkjet
(https://www.globenewswire.com/Tracker?data=js-PIIzXrdbtyEOd8KQHXUos7c2k5FOFf0J3uuS5Ilgt4ff2TsjzI3a5Np8IBuHxQRKWVilOwdfJpwLEFeofA8FSj_GfK7j08b0eEcu5tYw=)
and pre-press workflow developer Xitron
(https://www.globenewswire.com/Tracker?data=I0ey5IWBXLCUIDSDqUr6WdkM9vFSKzclBP8tRCoGF7xNI_rBhXKNTntemuHxkaHYVxUaMEL78sYqnuSOSLSqRA==).

Contacts

 Joachim Van Hemelen             Jill Taylor                              
 Chief Financial Officer         Corporate Communications Director        
 Tel: +32 (0) 329 57 53          Tel: +44 (0) 1223 926489                 
 joachimvh@hybridsoftware.group  Email: jill.taylor@hybridsoftware.group