Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 86 87 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 6. OPERATING SEGMENTS (CONTINUED) Year ended 31 December 2022: In thousands of euros Printing Software Printhead Solutions Enterprise Software Group Total Revenue from external customers 15,262 8,657 22,774 - 46,693 Inter-segment revenue 274 - 109 - 383 Segment revenue 15,536 8,657 22,883 - 47,076 Segment operating profit/(loss) after tax 2,515 (414) 3,764 (591) 5,274 Included in the operating profit/(loss) after tax are: Interest income 34 1 - - 35 Interest expense (73) (26) (311) (15) (425) Depreciation and amortisation (2,265) (564) (747) - (3,576) Tax expense (1,150) (5) (500) - (1,655) Segment EBITDA 5,969 180 5,322 (576) 10,895 The Printing Software segment EBTIDA in the year ended 31 December 2022 includes the gain on disposal of IPv4 addresses of €3,297,000 (2021: €nil). See Note 9 ‘Other Income’ for further details. Year ended 31 December 2021: In thousands of euros Printing Software Printhead Solutions Enterprise Software Group Total Revenue from external customers 13,839 13,984 20,739 - 48,562 Inter-segment revenue 158 - 124 - 282 Segment revenue 13,997 13,984 20,863 - 48,844 Segment operating profit/(loss) after tax 1,374 3,210 5,313 (1,328) 8,569 Included in the operating profit/(loss) after tax are: Interest income 3 - - - 3 Interest expense (87) (31) (342) (6) (466) Depreciation and amortisation (1,533) (350) (583) - (2,466) Tax benefit/(expense) 149 1 (863) - (713) Segment EBITDA 2,842 3,590 7,101 (1,322) 12,211 Reconciliation of reportable segments’ operating profit after tax to consolidated profit after tax: In thousands of euros 2022 2021 Segment total operating profit after tax 5,274 8,569 Amortisation of acquired intangible assets (5,094) (4,717) Tax effect of above-mentioned items 1,120 1,062 Consolidated profit after tax 1,300 4,914 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 7. REVENUE Printing Software segment The segment licenses its software directly to end users as a standalone software licence and directly to equipment manufacturers through multi-year license and distribution agreements, some of which provide for the periodic payment of license royalties, the unit value of which has been contractually agreed at the outset of the agreement, and which is typically based upon either the volume sold by the customer or the sale value of those products into which the Group’s software has been integrated. These multi-year agreements also include specific provisions with respect to the delivery of maintenance and after-sale support services over the duration of the agreement. Such services are rendered against the payment of a fixed fee, which has been contractually agreed at the outset of the agreement and is typically charged on the anniversary date of the agreement. These agreements may also provide for the delivery of engineering services to ensure a seamless integration of the Group’s software into the customer’s products. Through its RTI-RIPS.COM brand, the Printing Software segment also has revenue from related printing hardware and consumables sales. Printhead Solutions segment Driver electronics and accompanying software are initially sold as a development kit to a new customer. Once the customer has completed their design process and their product is put into production, they will typically issue a purchase order for a quantity of products and will drawdown from that order as they require the inventory. Enterprise Software segment Enterprise workflow software is licensed primarily to end users by way of a perpetual software licence. Accompanying training and implementation services are often sold with the licences and customers increasingly purchase ongoing after-sale support services. Training and implementation services are rendered against the payment of a fixed fee, which has been contractually agreed in advance. On-going support and maintenance agreements are annual agreements that renew automatically unless cancelled by the customer within the terms of the cancellation provisions. An analysis of external sales by revenue type, primary geographical market and timing of recognition is shown below. The table also provides a reconciliation of disaggregated revenue with the Group’s reportable segments. Printing Software Printhead Solutions Enterprise Software Total In thousands of euros 2022 2021 2022 2021 2022 2021 2022 2021 Revenue type Licence royalties 11,729 10,977 808 862 11,462 12,236 23,999 24,075 Maintenance and after-sale support 2,208 1,858 65 52 7,329 5,431 9,602 7,341 Services 318 339 360 226 3,893 2,934 4,571 3,499 Printer hardware and consumables 956 495 - - 90 71 1,046 566 Driver electronics - - 7,424 12,844 - - 7,424 12,844 Other items 51 170 - - - 67 51 237 Total sales 15,262 13,839 8,657 13,984 22,774 20,739 46,693 48,562 Primary geographical markets United Kingdom 1,828 478 726 356 1,160 1,175 3,714 2,009 Europe, excluding United Kingdom 2,490 6,170 1,925 2,015 9,966 8,940 14,381 17,125 North & South America 9,217 5,869 2,312 2,656 10,684 9,447 22,213 17,972 Asia 1,727 1,322 3,694 8,957 964 1,177 6,385 11,456 Total sales 15,262 13,839 8,657 13,984 22,774 20,739 46,693 48,562 Timing of revenue recognition Recognised at a point in time 12,736 11,642 8,232 13,706 14,278 12,242 35,246 37,590 Recognised over time 2,526 2,197 425 278 8,496 8,497 11,447 10,972 Total sales 15,262 13,839 8,657 13,984 22,774 20,739 46,693 48,562 Revenue recognised over time is for performance obligations that are performed over time and include maintenance and after-sale support, some services and some licence royalties that are not perpetual licences. All other revenue is recognised as a point in time.
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