SoftwareOne appoints new CEO, cuts revenue growth forecasts
Updates with share price fall, comments from executives, paragraphs 5-7
ZURICH, Oct 31 (Reuters) -SoftwareOne SWON.S on Thursday appointed Raphael Erb as CEO from Nov. 1 as the Swiss company slashed its full-year revenue growth forecast on a weaker-than-expected third quarter, sending its shares plunging more than 25%.
The company cut its 2024 revenue growth target to 2-5% from 7-9%, after underperformance in markets except Asia-Pacific and the German-speaking region resulted in revenue growth of 3.1%, undershooting its own and market expectations.
The company's full-year adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin is now seen at 21-23% of revenue, down from 24.5-25.5% previously.
SoftwareOne, which helps customers buy and manage software from other providers such as Microsoft, SAP and Adobe, said the results miss was driven by vendor incentive changes, sales execution issues and a more cautious spending environment.
Most of the incentives are linked to Microsoft, CFO Rodolfo Savitzky told analysts on a call alongside Erb.
Erb said SoftwareOne could return to being an industry leader but that it had homework to do, which alongside "some market issues" meant it would "take a bit of time".
"On the Microsoft incentive part, going into 2025 maybe specifically, we generally expect continued headwinds from those changes from Microsoft," he said, without giving more detail.
The firm said it has enacted cost-saving measures from the third quarter and plans savings of over 50 million Swiss francs ($58 million).
The executive board change comes as the Swiss software services company has attracted renewed takeover interest.
"Discussions regarding a potential going-private transaction are progressing, but remain challenging given the general business environment," the company said.
Erb is "well-suited to lead the company and restore double-digit growth" due to his many years of experience at SoftwareOne, said board of directors chairman Daniel von Stockar about the Swiss national who has been at the firm for more than 25 years.
($1 = 0.8655 Swiss francs)
Reporting by Kirsti Knolle, additional reporting by Dave Graham; editing by Miranda Murray and Jason Neely
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