Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 106 107 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 33. GROUP ENTITIES Ownership interest % Company name Registered office address Country of incorporation 2022 2021 Global Graphics (UK) Limited 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK United Kingdom 100% 100% Global Graphics Software Limited* 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK United Kingdom 100% 100% Global Graphics Software Incorporated* 5996 Clark Center Avenue, Sarasota, FL 34238, USA United States of America 100% 100% Global Graphics Kabushiki Kaisha* 610 AIOS Nagatacho Bldg, 2-17-17 Nagatacho, Chiyoda-ku, Tokyo 100-0014, Japan Japan 100% 100% Global Graphics EBT Limited 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK United Kingdom 100% 100% Meteor Inkjet Limited Harston Mill, Royston Road, Harston, Cambridge, CB22 7GG, UK United Kingdom 100% 100% Xitron, LLC* 4750 Venture Drive, Suite 200A, Ann Arbor, Michigan 48108, USA United States of America 100% 100% HYBRID Software Group S.à r.l.^ 19-21 route d’Arlon, LU-8009 Strassen, Luxembourg Luxembourg 100% 100% eXplio NV*~ Guldensporenpark 18, Block B, 9820 Merelbeke, Belgium Belgium 99.93% 99.93% HYBRID Software Development NV* Guldensporenpark 18, Block B, 9820 Merelbeke, Belgium Belgium 100% 100% HYBRID Integration LLC* Eight Neshaminy Interplex, Suite 111, Trevose, Pennsylvania 19053, USA United States of America 100% 100% HYBRID Software NV* Guldensporenpark 18, Block B, 9820 Merelbeke, Belgium Belgium 100% 100% HYBRID Software China Co. Limited* Room 2504, 25th Floor, Building 2, No. 900 Yishan Road, Xuhui District, Shanghai, China China 100% 100% HYBRID Software GmbH* Uhlandstrabe 9, 79102 Freiburg, Germany Germany 100% 100% HYBRID Software Italy SRL* Viale Sondrio 2, IT-20124 Milano, Italy Italy 100% 100% HYBRID Software France SAS* 15 Rue Marsollier, F-75002 Paris, France France 100% 100% HYBRID Software UK Limited* 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK United Kingdom 100% 100% HYBRID Software Australia Pty Limited* Suite 2, Level 14, 9 Castlereagh Street, Sydney, NSW 2000, Australia Australia 100% 100% HYBRID Software Iberia S.L.U.*+ Riera dels Frares, 8 – E08907 L’Hospitalet, Barcelona, Spain Spain 100% 100% ColorLogic GmbH # Landersumer Weg 40, D-48431 Rheine Germany 100% 100% * indirectly held the the Company. ~ eXplio NV is 9.93% owned by the Group. The comprehensive income and equity attributable to non-controlling interests in this subsidiary are not material. ^ HYBRID Software Group S.à r.l was acquired on 12 January 2021. # ColorLogic GmbH was acquired on 27 October 2021. + HYBRID Software Iberia S.L.U. was acquired on 21 December 2021. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 34. ACQUISITIONS Acquisition of iC3D On 12 March 2022, the Group acquired the trade and assets of Creative Edge Software LLC (“iC3D”) from Creative Edge Software LLC (“Creative”). 3D and additive manufacturing applications are one of the Group’s fastest-growing market segments for printhead drive electronics and software, but visualisation of packaging designs in 3D was a gap in our technology portfolio. The acquisition of iC3D strengthens our 3D offering and closes the loop between the design of high-end labels and packaging and industrial print manufacturing. We already have an integration of iC3D in our PACKZ and CLOUDFLOW software with a substantial installed base of users that have licensed the iC3D option and we look forward to broader integration of iC3D in our Digital Front Ends (DFEs) and other software products. The acquisition date fair value of the consideration was made up of: In thousands of euros Cash, paid on closing 3,664 Working capital adjustment, cash receivable (234) Total consideration 3,430 The identifiable assets acquired and liabilities assumed were: In thousands of euros Book value Fair value adjustment Total Property, plant and equipment (see note 15) 16 - 16 Other intangible assets (see note 16) - 1,836 1,836 Total identifiable net assets acquired 16 1,836 1,852 The intangible assets recognised have been valued as follows: Intangible asset Valuation method Technology The average of the present value of cashflows from operating activities in relation to owned technology over a 10 year period (using a post-tax discount rate of 15.40%, a forecasted profit level, an assumption that revenue will grow during the valuation period and there will be a churn of recurring revenue over the forecast period). Know how The present value of cashflows from operating activities in relation to customer relationships existing at acquisition date for the remaining terms of the agreements, using a post-tax discount rate of 15.40% and a forecasted profit level. Goodwill was recognised as a result of the acquisition as follows: In thousands of euros Total consideration payable 3,430 Fair value of identifiable net assets (1,852) Total Goodwill (see note 17) 1,578 The goodwill represents the ability to develop new technology, opportunities expected from access to potential new customers, any value of intangible assets into perpetuity over their limited useful lives and the assembled workforce that does not meet separate recognition criteria. None of the goodwill recognised is expected to be deductible for tax purposes. During the year, the Group incurred acquisition-related costs of €3,000 in respect of this acquisition, which have been included in 'Other operating expenses’ in the consolidated statement of comprehensive income. For the period from acquisition to 31 December 2022, the revenues and the loss before tax generated by this acquisition were €589,000 and €135,000 respectively. If the acquisition had taken effect at the beginning of the reporting period in which the acquisition occurred (1 January 2022), on a pro forma basis, revenue of the combined Group for the year ended 31 December 2022 would have been increased by €341,000 and loss before tax would have decreased by €173,000.
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