In addition, the group closed a deal to acquire one of the leaders

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M&A strategy

Softline CFO Artem Tarakanov emphasized that Softline has an active M&A strategy: "In 2023, we acquired seven companies, and another deal may take place before the end of 2023. In 2024, we may also acquire two or three companies." According to Artem Tarakanov, the group does not acquire companies if it does malaysia whatsapp number database
not have control over them as a result, and even if the group does not buy 100% of the company, all revenue, including the revenue of this company, is taken into account in the financial results.

In 2023, the Softline Group acquired Citros LLC, a Russian developer of products for building a document management ecosystem, as well as three manufacturers of corporate business applications (BOSS. Personnel Systems JSC, Robin LLC and Preferentum LLC) and the rights to the software products of these companies from Aplana Group .

Iin custom development on the Russian market - Bell Integrator; a developer of certified secure computing equipment - JSCB "Barrier" and a 50.1% stake in the Borlas Group of Companies, which specializes in management and IT consulting services.

According to Softline, the number of employees as of September 30, 2023 increased to 8.3 thousand people, or 64% since the beginning of the year.

"The business continues to grow both organically, in which we are helped by favorable market conditions, and inorganically - due to successful M&A transactions. We continue to implement the strategy aimed at expanding our own product offering at an accelerated pace. According to the results of the first nine months of 2023, the share of gross profit from the sale of the group's own solutions was almost equal to the share of gross profit from third-party solutions," said Vladimir Lavrov, CEO of Softline PJSC.

Financial analyst Artem Tuzov noted that the restructuring of the business to a line of in-house products and a focus on domestic software developers was reflected in the financial statements: "If you look at the data from the company's report and the data according to Russian accounting standards of PJSC Softline for the nine months of 2023, you can see a significant discrepancy in revenue and net profit. This suggests that the issuer's business has become highly dependent on the combined financial results of the entire group, including the IT companies that the issuer acquired in 2023."

"M&A transactions allow the company to replace large foreign manufacturers that have closed their business in Russia, so they directly affect revenue and EBITDA. Thus, in the first nine months of 2023, the effect of M&A transactions added 38.25% to the growth of adjusted EBITDA. M&A transactions added 31.02% to the growth of gross profitability, and 8.67% to turnover. Plans to purchase another company by the end of 2023 will also increase Softline's revenue in the future and add growth to the main operating indicators," says Vladimir Chernov.