SoftwareOne appoints Raphael Erb new CEO amid disappointing results
New appointment to get the company “back on its growth trajectory”
Software and cloud solutions provider SoftwareOne has named Raphael Erb as its new CEO, after disappointing 2023 results.
Far from being a SoftwareOne rookie, Erb joined the reseller in February 1999 as an inside sales team leader and has made his way up ever since.
He then went on to become country lead for Switzerland and Singapore in 2016, and the head of the services business in the German speaking markets in 2018.
He became CRO and a member of the executive board on 1 July.
Appointed by the board of directors, Erb will begin his new role on 1 November.
“I am absolutely convinced about SoftwareOne’s strengths and capabilities, and I see a large market opportunity as organisations continue to embrace the cloud and AI,” said Erb.
“With his many years of experience at SoftwareOne and his deep understanding of our clients and the industry, he is well suited to leading the company and restore double-digit growth,” said Daniel Von Stocker, chairman of the board of directors of SoftwareOne.
Disappointing results
This move comes as SoftwareOne’s overall performance in Q3 FY24 was below its own market predictions, after the reseller had already experienced a 1.3 per cent year-over-year dip in EMEA revenue in its Q1 FY24 results.
Despite revenue growing 3.1 per cent year-on-year in constant currency and 1.4 per cent year-over-year in reported currency to CHF 236.7m (£210.7m), adjusted EBITDA was down four per cent year-on-year to CHF 39.2m with a margin of 16.6 per cent, reflecting lower-than-expected growth.
But good results were driven by APAC and DACH, respectively delivering a 24.3 per cent and 11.3 per cent revenue growth year-on-year in Q3.
Revenue declined in the rest of the world, in EMEA, NORAM and LATAM, hit by a reduction in vendor incentives, the go-to-market model transformation implemented in mid-2024 causing disruption and sales execution issues - especially in NORAM -, as well as a more cautious spending environment in some markets.
All these issues are expected to persist in Q4.
“As our recent disappointing performance clearly shows, there are areas we need to address – which we will do swiftly and decisively,” commented Erb.
“I have no doubt that we can get SoftwareOne back on its growth trajectory by enhancing our focus on customers, empowering our people on the front line and improving our commercial model.”
Action and reaction
Measures have been taken to reposition the company.
Action is being taken so the declining regions can adapt faster to the new coverage model, and adjusted roll-out plans have been deployed for the other ones.
To increase efficiency and align costs with the current environment, cost-saving measures have been introduced since last quarter, with a target of more than CHF50m savings including the reduction of corporate overheads.
As a result of the company’s poor results this year, its outlook for Q4 has been saw a significant revision.
Revenue growth was expected to be between seven and nine per cent but is now predicted to fall between two and five per cent for the group in constant currency.
Adjusted EBITDA margin went from 24.5-25.5 per cent to 21-23 per cent.
Dividend pay-out ratio expectations have remained unchanged with 30-50 per cent of adjusted profit for the year.
2026 targets were revisited, with predictions in the double-digit rather than mid-teens, revenue growth in constant currency with an adjusted EBITDA margin approaching 27 per cent instead of 28 per cent.
Erb will be succeeding Brian Duffy, head of the company since May 2023, who will take on a new role in the US.
“It has been an honour to lead the organisation and begin the company’s go-to-market transformation journey, while fostering our deep relationships with employees, channel and hyperscaler partners, and customers,” said Duffy.
This is the second change of CEO in just five years for the reseller, as Duffy previously took on the role from Dieter Schlosser in 2019.