•
Annual Report
01.07.2023 - 30.06.2024
Sitecore Holding II A/S
Vester Farimagsgade 3, 1606 Copenhagen V
CVR No. 37 62 40 71
The Annual Report was presented and adopted at the Annual
General Meeting of the Company on 15November 2024.
Chairperson of the ordinary general meeting: Victoria Forsberg
Contents
Company information .......................................................................................................................................... 3
Message from the CEO ........................................................................................................................................ 5
Management review ............................................................................................................................................. 6
Key figures ............................................................................................................................................................... 17
Entities list ............................................................................................................................................................... 22
Management’s statement .................................................................................................................................. 23
Independent auditor’s report on the financial statements ..................................................................... 24
Consolidated statement of profit and loss ................................................................................................... 29
Consolidated statement of comprehensive income ................................................................................. 30
Consolidated balance sheet .............................................................................................................................. 31
Consolidated statement of changes in equity ............................................................................................. 33
Consolidated cash flow statement ................................................................................................................. 34
Notes ......................................................................................................................................................................... 35
Profit and loss and other comprehensive income (Parent company) .................................................. 68
Balance sheet (Parent company) ..................................................................................................................... 69
Statement of changes in equity (Parent company) ................................................................................... 70
Cash flow statement (Parent company) ........................................................................................................ 71
Notes (Parent company) .................................................................................................................................... 72
2
Company information
Company
Denmark
CVR No. 37 62 40 71
Municipality of reg. office: Copenhagen
Phone: +45 70 23 66 60
Internet: www.sitecore.com
Board of Directors
Darren Roos (Chairperson)
Bjarne Kock Hansen
Christian Shin Hoegh Anderson
Marjorie Lao
Michael Ouissi
Saleah Hassen Laher
Margaret Buggie
Constance Lisa Pauline Minc ép. Choufani
Executive board
Dave O'Flanagan
Michael Bannon
Eric Stine
Auditor
KPMG P/S
3
Company profile
Sitecore creates human connections between brands and their
customers with rich end-to-end content, seamless commerce, and
always-on personalization so brands can thrive in a world where,
without a digital experience, there is no product.
People buy experiences, not just products. With industry-leading
content management, digital marketing and commerce solutions, our
enterprise-level SaaS and platform products empower brands to
deliver digital experiences that resonate.
Our Vision
Disrupt the market with innovative solutions that turn consumers
into fans.
Our Mission
Elevate leading brands through unforgettable digital connections
with their customers.
Our Purpose
Empower brands to create memorable experiences.
Our Core Values
• Simplicity - we keep things simple.
• Integrity - we do what is right.
• Grit - we see obstacles as opportunities.
4
Message from the CEO
Dear Sitecore Shareholders,
As we close FY24, I am pleased to present Sitecore’s Annual Report – my first as Chief Executive
Officer.
Change and resilience characterized the past year, and I believe put Sitecore in our strongest-ever
position to fulfil our strategic objective of leading the digital experience platform (DXP) market.
Sitecore met our net results target in FY24 and significantly improved operating profit and EBITDA to
achieve our best performance in recent years. We delivered our best revenue performance ever,
reaching an exciting milestone by surpassing US$500 million in annual recurring revenue. We anticipate
that our initiatives to improve efficiency and sharpen our go-to-market strategy will have a positive
impact on growth in FY25.
Flexible deployment options are also driving customer uptake of Sitecore’s solutions. Customers have
the power to choose PaaS with XM/XP, hybrid, or fully SaaS with XM Cloud – the fastest-growing
solution in our history. Sitecore is the only composable DXP provider to deliver this breadth of options.
To support customers at all stages of their work, Sitecore backs up our solutions with unified support,
our Sitecore360 offering, and close collaboration with our many solution partners.
As we build for the future, in April we debuted our marketer-first AI strategy. This is a key initiative that
expands our DXP portfolio to include new generative AI capabilities. We have already delivered several
important new AI-powered capabilities against this strategy, but this is just the start. As we look ahead,
we view a huge opportunity for our DXP to fundamentally transform the way marketing teams create
content and personalized digital experiences for their customers.
To begin to capture this opportunity, at our Symposium customer conference in October 2024, we
debuted Sitecore Stream – the start of a new era of Intelligent DXP that gives marketers the power to
build simpler, smarter, and more strategically with intelligence that understands their brand, marketing
campaigns, content, and customer data. The result for customers will be better conversion rates, better
customer loyalty, and more resonant digital experiences that engage audiences – even at a time when
marketers are being asked to do more with less.
Looking ahead to FY25, we intend to grow our position in key geographic regions, enhance our partner
ecosystem, and deepen strategic alliances. We believe these and other activities will grow revenue
during the coming fiscal year. We expect our economies of scale and productivity improvements to
accelerate EBITDA growth.
I am personally grateful to our customers, partners, and employees for the confidence they have in
Sitecore. As we take on these and other corporate objectives, we are guided by our values of simplicity,
integrity, and grit. People are at the core of everything we do. We remain committed to always acting in
accordance with our values and to maintaining a high degree of trust within our company, ecosystem,
and communities.
Thank you for your continued commitment to Sitecore.
Warmest regards,
Dave O’Flanagan
Chief Executive Officer
Sitecore
5
Management review
Industry analyst recognition and awards
During fiscal year 2024, we received accolades and recognition from leading industry analyst
organizations, which helps to promote our brand, increase understanding of our corporate and product
strategy, and nurture demand for our offerings.
• Gartner Personalization Engines MQ
◦ Leader
Date awarded: 6 September 2023
• Gartner Content Marketing Platforms MQ
◦ Leader
Date awarded: 8 May 2024
• IDC’s Headless Commerce MS and IDC Midmarket Growth for B2C Commerce
◦ Leader
Date awarded: 20 July 2024
• IDC’s WW Hybrid Headless CMS MS
◦ Leader
Date awarded: June 2023
• Forrester’s DXP Wave
◦ Strong performer
Date awarded: 5 Dec 2023
• IDC’s WW CDP Front-Office Users MS
◦ Leader
Date awarded: 2021-22 Vendor Assessment
• Gartner Digital Experience Platforms MQ
◦ Visionary
Date awarded: 21 Feb 2024
• IDC’s WW Full-Stack CMS MS
◦ Leader
Date awarded: June 2023
• IDC’s MarketScape Enterprise B2B and B2C Commerce MS
◦ Major player
Date awarded: 20 July 2024
• Forrester's Wave for B2B Commerce Solutions
◦ Strong performer
Date awarded: 5 May 2024
6
7
8
9
10
11
12
13
Anti-corruption and bribery
Content of policy
We are committed to ensuring good business conduct with a high level of integrity and standards of
ethics. Our Code serves as the foundation for the consistent application of these goals. In addition, the
Executive Leadership Team has formed a Legal Compliance Team which is headed by a Group
Compliance Counsel. The Code together with other corporate policies, rules, standards, guidelines, and
procedures, provides a strong governance structure and enforcement mechanism.
The Code is tracked against the following eight guiding principles: (1) We promote a respectful
workplace (2) We take ethics and compliance seriously, (3) We ask questions and report concerns, (4)
We foster a safe and healthy work environment, (5) We avoid conflicts of interest, (5) We protect the
Group’s assets and reputation, (6) We are trustworthy when conducting business, (7) We follow the
letter and spirit of the law, and (8) We believe in social responsibility.
Actions
The Code is distributed to all new employees and is promoted company-wide through training
campaigns (when employees join the company and annually thereafter) and other internal programs
describing its principles. Annually, all employees are trained on different aspects of the Code and
certify their review and compliance with the Code. Certification of compliance with the Code occurs on
a semi-annual basis for all employees. The Legal Compliance Team encourages compliance through
training and the monitoring of compliance with the assistance of the wider HR team. The Legal
Compliance Team maintains registers for any compliance related requests or exceptions to policies.
We have adopted a separate Anti-Bribery & Corruption (ABC) policy in combination with a reporting
hotline, specifically designed to allow for anonymous reporting of illegal, unethical or inappropriate
behaviour. The hotline is available 24 hours a day and is managed by a third-party vendor.
Due diligence
The Legal Compliance Team completes reviews of the Code and ABC policies and updates them
accordingly. Registers for exceptions of the policies are maintained and any exceptions are only given
after full due diligence of the exceptional circumstances.
Results
No breaches of our Anti-bribery or anti-corruption polices were detected and we are committed to
ongoing focus in this area to minimize risks.
14
Expectations for future work
Management will continue to encourage compliance and advertise the hotline in regular employees
Newsletter with the backing of the Chief Legal Officer & the Legal Compliance Team. We have achieved
a 100% completion rate for all compliance training (new hires and annual for existing employees).
We will continue to strive to maintain a zero breach of our Code and the ABC policies.
We are now fully signed up to the UN Global Compact which is the world’s largest corporate
sustainability initiative. From an ABC perspective, we have committed to the following principle under
the UN Global Compact:
• Principle 10: Businesses should work against corruption in all its forms, including extortion and
bribery
15
Guidelines issued by Active Owners Denmark
As a private-equity-owned company, we follow the recommendations of Active Owners Denmark as
described at www.aktiveejere.dk.
Status on changes in representation in leadership positions
Board of Directors
Changes to the Board of Directors in FY24 and up to the reporting date included:
Appointed: Christian Shin Høegh Andersen
Margaret Buggie
Michael Ouissi
Saleah Hassen Laher
Constance Lisa Pauline Minc ép. Choufani
Resigned: Jonas Persson
Bert Alfons Janssens
Craig Allen Conway
Carsten Oliver Thoma
Matteo Thun
Additionally, Darren Roos was appointed Chairperson of the Board in March 2024.
Executive Leadership
Dave O’Flanagan was appointed as CEO of Sitecore in April 2024. In addition, Sitecore appointed Kathie
Johnson as Chief Marketing Officer in November 2023, Sophie Gelsthorpe as Chief Human Resources
Office in June 2024, Eric Stine as Chief Operating Office in July 2024, and Michael Bannon as CFO in
September 2024. Eric Stine and Michael Bannon were appointed to the Executive Board in September
2024.
16
Key Figures – Consolidated accounts (EURm)
2023/24 2022/23 2021/22 2020/21 2019/20
Profit and Loss Accounts
Revenue from contracts with
customers
444,7 434,9 426,8 309,6 267,5
Gross profit 337,9 319,2 344,9 252,6 215,1
EBITDA (1) 51,9 (22,2) 2,0 14,2 9,7
Adjusted EBITDA (2) 85,2 19,5 31,6 45,0 26,2
Operating profit/(loss) 11,3 (82,6) (40,9) (20,4) (43,2)
Financial items, net (101,3) (63,7) (45,0) (25,2) (22,7)
Loss for the period (91,9) (150,5) (87,5) (20,1) (79,4)
Total assets 1.505,5 1.542,9 1.588,6 1.469,3 1.255,8
Equity 340,5 442,0 580,4 676,2 653,6
Cash flows
Operating activities 20,4 (5,4) (17,9) 28,0 37,1
Investment activities (15,1) (14,1) (80,1) (200,0) (10,4)
Investments in tangible fixed
assets
(1,4) (1,9) (5,9) (2,1) (4,0)
Financing activities (8,9) 35,6 70,2 176,2 12,4
Employees
Key ratios
Gross margin 76% 73% 81% 82% 80%
EBITDA as a % of revenue 11,7% (5,1)% 0,5% 4,6% 3,6%
Adj. EBITDA as a % of revenue 19,2% 4,5% 7,4% 14,5% 9,8%
(1) EBITDA for the periods represent earnings before interest/finance costs, income taxes, depreciation, and amortisation.
(2) Adjusted EBITDA for the periods represent earnings before interest/finance costs, income taxes, depreciation, and amortisation, adjusted for
non-recurring items primarily comprised of acquisition, restructuring related, and significant one-time costs.
Key ratios
The key figures and financial ratios have been prepared on a consolidated basis. The financial ratios
have been calculated in accordance with the following definitions:
• Gross margin is calculated as the gross profit divided by net revenue.
• EBITDA as a % of revenue is calculated as the EBITDA divided by revenue from contracts with
customers.
• Adj. EBITDA as a % of revenue is calculated as the Adjusted EBITDA divided by revenue from
contracts with customers.
17
Financial review – consolidated financial statements
Sitecore met the FY24 net results target outlined in the FY23 Annual Report and significantly improved
operating profit and EBITDA measures, both of which reflect the Group’s best performance in recent
history. Sitecore did not meet its projected revenue growth target outlined in the FY23 Annual Report,
primarily due to lower than expected new business. However, the Group successfully executed on cost
savings measures which more than offset this difference. Sitecore successfully executed on a number
of further efficiency initiatives in FY24 which management anticipates will have a favourable impact on
operating profit margins in future periods.
Financial statements
Revenue
Revenue for the year was EUR 444,7m against EUR 434,9m in the previous year, reflecting a year-over-
year growth of 2,3% driven by growth in Annual Recurring Revenue (ARR) per customer and new
bookings. As a result of the Company’s shift from subscription to SaaS, the majority of new bookings are
recognized ratably over time rather than up front (for subscription recognition), causing a temporary
drag on revenue growth until revenues have fully transitioned to ratable recognition.
Cost of sales
Cost of sales consists of royalty costs for third-party products sold, hosting costs associated with our
subscription offerings, salaries and related expenses of network operations, implementation, technical
support, allocated overhead and the amortisation of acquired technology intangible assets. We enter
into contracts with third parties for the use of their data centre facilities, and our data centre costs
largely consist of amounts we pay to these third parties, power, and similar items. Cost of sales
amounted to EUR106,8m against EUR 115,7m in FY23, resulting in a gross profit of EUR 337,9m against
EUR 319,2m in FY23. The increase in gross margin to 76,0%, as compared to 73,4% in fiscal year 2023
was primarily due to decreases in hosting and licensing costs and staff costs realized as a result of the
Company’s broader cost savings initiatives.
Sales and marketing
Sales and marketing expenses include costs associated with our sales, marketing, and customer
success personnel and consist of compensation and benefits, commissions and bonuses, promotional
and advertising expenses, travel and entertainment expenses related to these personnel, and allocated
overhead. Sales and marketing expenses were EUR 177,5m against EUR 230,6m in FY23, decreasing due
to non-recurring expenses related to FY23 investments and a reduction in staff costs.
General and administrative
General and administrative expenses include costs for executive, finance, human resources, information
technology, legal, and administrative support functions. This includes compensation and benefits,
professional services costs, and allocated overhead. General and administrative expenses were
EUR74,6m against EUR 100,8m in FY23. FY23 expenses include a EUR 12.4m impairment on intangible
assets where there was no similar cost incurred in FY24. In addition, the Group benefited from lower
staff costs and lower acquisition related costs.
Research and development
Research and development expenses include costs associated with the development of new products,
enhancements of existing products, and quality assurance activities. This includes compensation and
benefits, consulting costs, cost of software development tools and equipment, and allocated overhead.
Research and development expenses for the year were EUR 75,1m against EUR 72,0m in FY23 due to
increased investment on the development of our software products and allocation of overhead.
18
Finance costs
There was an increase in finance costs to EUR 101,3m from EUR 63,7m in FY23, primarily driven by higher
interest expense resulting from growth in bank debt and an increase in interest rates.
Tax expense
Income tax expense of EUR 1,9m against income tax expense of EUR 4,2m in FY23. The change in income
tax expense is primarily the result of a decrease in tax losses not recognized, partially offset by an
increase in non-deductible finance expenses.
Balance Sheet
Intangible and tangible assets
Intangible assets amount to EUR 1.225,5m (FY23: EUR 1.239,9m). The decrease is due to amortisation
recorded in the period and the effect of movements in exchange rates.
Property and equipment
Property and equipment amounted to EUR 19,1m against EUR 21,0m in FY23. The decrease is primarily
due to depreciation in the period.
Trade receivables
Trade receivables amount to EUR 103,4m against EUR 110,8m in FY23. The decrease is due to
improvements in DSO and the timing of billings in Q4. As at 30 June 2024, 64% of outstanding
receivables are current, compared to 71% as at 30June 2023.
Contract assets
Total contract assets amount to EUR 43,2m against EUR 54,9m in FY23. The decrease is due to the
timing of revenue recognition on contracts as revenue is recognized ratably over time instead of
recognizing a significant portion up front on a growing percentage of our contracts as we transition to
selling more SaaS products.
Non-current liabilities
Total non-current liabilities amount to EUR 851,2m against EUR 791,0m in FY23. This increase is primarily
the result of additional bank borrowings.
Current liabilities
Total current liabilities amount to EUR 313,8m against EUR 309,9m in FY23. The increase is primarily due
to an increase of contract liabilities, due to the timing of revenue recognition on contracts as revenue is
recognized ratably over time instead of recognizing a significant portion up front on a growing
percentage of our contracts as we transition to selling more SaaS products.
Cash flow
Cash flows from primary operating activities were a EUR 66,9m inflow against EUR 7,8m inflow in FY23.
This increase to a cash inflow was primarily driven by improvements in the Group’s net results before
interest and taxes as well as the effect of an increase in the Group’s changes in working capital.
Cash flows from investing activities were EUR 15,1m outflow against EUR 14,1m outflow in FY23. The
increase in cash outflow was driven primarily by an increase in development expenditures as compared
to FY23.
Cash flows from financing activities were EUR 8,9m outflow against EUR 35,6m inflow in FY23. This
change in cash flow was driven primarily by a decrease in net withdrawals of bank debt.
19
Treasury shares
The Group acquired 48.543 treasury shares during the period and holds a total of 4.295.521 treasury
shares as of 30 June 2024. The Group did not sell any treasury shares during the period. The total
acquisition cost of shares held as of 30June 2024 is EUR 8,0m. The treasury shares have been acquired
via repurchases from former employees pursuant to the shareholder agreement.
Capital resources
At the end of the period, the Group held EUR 47,0m in cash and cash equivalents. The Group also had
undrawn credit facilities of EUR 19,8m.
Subsequent events
On 30 July 2024, Sitecore shareholders approved a resolution to issue new A-shares with a total
subscription amount of EUR 70m. This capital increase was fully paid up and resulted in an increase in
Share Capital and Share Premium of EUR 1.0m and EUR 69.0m, respectively.
The Group made the following changes to its leadership subsequent to 30 June 2024:
• Eric Stine hired as COO and appointed to the Group Executive Board.
• Michael Bannon hired as CFO and appointed to the Group Executive Board.
• Constance Lisa Pauline Minc. Choufani appointed to the Board of Directors.
There have been no other significant events after the Balance Sheet Date.
Parent Company
Net loss for the period
Net loss for the period amount to EUR 14,6m against net loss of EUR 1,0m in FY23. The Parent Company
operates as a holding company for the group and incurs general and administrative expenses acting in
that capacity. The increase in loss relates to an increase in professional fees related to the entity’s role
as Parent Company of the Group
Recognition and measurement
In preparing the annual report, Management makes various accounting estimates and assumptions that
form the basis of presentation, recognition, and measurement of Sitecore’s assets and liabilities. The
most significant accounting estimates and judgments are made in relation to the accounting treatment
of:
• Revenue recognition • Share-based payments
• Impairment testing of goodwill • Deferred tax assets
• Development projects • Uncertain tax positions
There are no other significant uncertainties associated with recognition and measurement in the
preparation of the financial statements.
20
Financial outlook for 2024/25
We view a tremendous opportunity for our DXP to fundamentally transform the way marketing teams
create content and digital experiences. We will deliver on our strategy of leveraging AI to innovate
across digital content and experiences and bring maximum value to our customers and partners
globally. Focus on these efforts will support future revenue growth while, in parallel, we continue our
efforts to execute on initiatives that will improve the efficiency and profitability of the business.
Current plans and expectations involve growing on our strong position in several geographic regions,
expanding to new markets, enhancing the partner network, leveraging strategic alliances and the
continued release of improvements to our products and services through internal development.
We expect revenue to grow 5-10% during the next fiscal year. We further anticipate that cost-saving
measures taken with respect to hosting costs and other operating expenses, combined with the
scalability of the business, will positively impact EBITDA margin by 5-10% in the next fiscal year.
Risk factors
Critical risk management considerations include the following:
Liquidity and leverage
As of 30 June 2024, we have a substantial amount of outstanding debt. Our ability to service this debt
and meet all contractual obligations is dependent on our future performance, which can be impacted
by factors outside of our control. If we are unable to generate sufficient cash flows to service the debt
we may be required to attempt to refinance or renegotiate the terms of the debt, which may not be on
favourable terms.
Macroeconomic and geopolitical events
As our business has expanded globally, we have increasingly become subject to risks arising from
adverse changes in global economic and political situations, particularly in emerging markets. The past
several years have been characterized by pockets of weak global economic conditions, uncertain
political environments, volatile financial markets, and the war in Ukraine. The National Bank of Ukraine
has introduced a number of limits on money transfers abroad. Sitecore Ukraine primarily operates as a
R&D centre generating revenue through transfer pricing agreements. We mitigate risk associated with
cash transfers by funding the entity on a rolling short-term basis.
Foreign currency exposure
Because the vast majority of our revenue and costs are outside of Denmark and we make certain
business and resource decisions based on assumptions about foreign currency, we face minor
exposure to foreign currency exchange rates. These exposures may change over time as business
practices evolve and economic conditions change, and they could have a material adverse impact on
our financial results and cash flows.
21
Legal entities
Subsidiary Name Legal form Registered office location
Applicant’s
Ownership
Percentage
EMEA Entities
Sitecore Holding III A/S Corporation (A/S) Denmark 100 %
Sitecore Corporation A/S Corporation (A/S) Denmark 100 %
Sitecore Arabia for Information
Technology
Limited liability company Saudi Arabia 100 %
Sitecore Belgium NV Public limited company (NV) Belgium 100 %
Sitecore Bulgaria EOOD Limited liability company (EOOD) Bulgaria 100 %
Sitecore Danmark A/S Corporation (A/S) Denmark 100 %
Sitecore Deutschland GmbH Private limited company (GmbH) Germany 100 %
Sitecore España, S.L. Private limited company (S.L.) Spain 100 %
Sitecore France SAS Simplified joint-stock (SAS) France 100 %
Sitecore International A/S Corporation (A/S) Denmark 100 %
Sitecore Ireland Ltd. Private company limited (Ltd.) Ireland 100 %
Sitecore Italia Sr.L. Limited liability company (Srl) Italy 100 %
Sitecore Middle East DMCC Limited liability company (DMCC) United Arab Emirates 100 %
Sitecore Middle East FZ-LLC Limited liability company (LLC) United Arab Emirates 100 %
Sitecore Nederland BV Private limited company (BV) Netherlands 100 %
Sitecore Schweiz AG Corporation (AG) Switzerland 100 %
Sitecore Sverige AB Limited liability company (AB) Sweden 100 %
Sitecore Ukraine Foreign enterprise (FE) Ukraine 100 %
Sitecore UK Ltd. Private limited company (Ltd.) United Kingdom 100 %
Moosend Ltd. Private limited company (Ltd.) United Kingdom 100 %
Sitecore Greece Single Member PC Private capital company (PC) Greece 100 %
APJ Entities
Sitecore Australia Pty. Ltd.
Proprietary limited company (Pty.
Ltd.)
Australia 100 %
Sitecore Software (Shanghai) Co.
Ltd.
Limited liability company (Co. Ltd.) China 100 %
Sitecore Hong Kong Branch Hong Kong 100 %
Sitecore India Private Ltd. Private limited company (Ltd.) India 99,996 %
Sitecore Kabushiki Kaisha Limited liability company (Co. Ltd.) Japan 100 %
Sitecore Malaysia Sdn. Bhd.
Private limited company (Sdn.
Bhd.)
Malaysia 100 %
Sitecore Singapore Pte. Ltd. Private limited company (Pte. Ltd.) Singapore 100 %
AMS Entities
Sitecore USA Holding, LLC Limited liability company (LLC)
United States of
America
100 %
Frank, Inc. [Dormant] Corporation (Inc.)
United States of
America
100 %
Sitecore USA, Inc. Corporation (Inc.)
United States of
America
100 %
Reflektion Media Software Private
Ltd.
Limited liability company (Ltd.) India 100 %
Sitecore Canada Ltd. Limited liability company (Ltd.) Canada 100 %
22
23
24
25
Independent auditor's report
26
Independent auditor's report
27
Consolidated Statement of Profit and Loss
Note
01.07.2023-
30.06.2024
01.07.2022-
30.06.2023
€M
€M
Net revenue 4 444,7 434,9
Cost of sales 5,6,7 (106,8 ) (115,7 )
Gross profit 337,9 319,2
Other income 0,6 1,6
Sales and marketing costs 5,6,7 (177,5 ) (230,6 )
General and administrative expenses 5,6,7,8,12 (74,6 ) (100,8 )
Research and development costs 5,6,7 (75,1 ) (72,0 )
Operating profit / (loss) 11,3 (82,6 )
Finance costs, net 9 (101,3 ) (63,7 )
Loss before income tax (90,0 ) (146,3 )
Income tax (expense) 10 (1,9 ) (4,2 )
Loss for the period (91,9 ) (150,5 )
29
Consolidated Statement of Comprehensive Income
Note
01.07.2023-
30.06.2024
01.07.2022-
30.06.2023
€M €M
Loss for the period 11 (91,9 ) (150,5 )
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or
loss
Exchange differences on translation of subsidiaries (net) (3,9 ) 6,1
Other comprehensive income for the period, net of tax (3,9 ) 6,1
Total comprehensive loss for the period (95,8 ) (144,4 )
30
Consolidated Balance Sheet
Note
30.06.2024 30.06.2023
€M €M
Goodwill 12 1.001,6 999,6
Acquired technology, customer relationships, and brand portfolio 12 200,6 220,8
Development projects 12 22,6 18,2
Development projects in progress 12 0,7 1,3
Total intangible assets 1.225,5 1.239,9
Property and equipment 13 1,1 2,1
Other operating equipment 13 1,9 3,0
Construction in progress 13 — 0,0
Right-of-use assets 16 16,1 15,9
Total property and equipment 19,1 21,0
Leasehold deposits 1,0 0,8
Other financial assets — 1,6
Total financial assets 1,0 2,4
Deferred tax assets 14 1,4 2,5
Deferred expenses 26,6 27,1
Contract assets 4 4,5 5,3
Total other non-current assets 32,5 34,9
Total non-current assets 1.278,1 1.298,2
Trade receivables 15 103,4 110,8
Contract assets 4 38,7 49,6
Deferred expenses 19,4 17,4
Prepayments and other receivables 14,9 13,3
Income tax receivable 2,0 1,2
Contributed capital receivable 19 2,0 2,0
Total receivables 180,4 194,3
Cash and cash equivalents 47,0 50,4
Total current assets 227,4 244,7
Total assets 1.505,5 1.542,9
31
Consolidated Balance Sheet (continued)
Note
30.06.2024 30.06.2023
€M €M
Share capital 17 10,5 10,5
Unpaid share capital 17 (2,0 ) (2,0 )
Share premium 809,6 809,6
Exchange adjustment reserve (7,9 ) (4,0 )
Other reserves 14,5 20,1
Retained deficit (476,2 ) (384,3 )
Treasury shares (8,0 ) (7,9 )
Total equity 340,5 442,0
Bank debt 18 777,6 710,6
Contract liabilities 4 7,9 7,5
Income tax payables 10,1 12,8
Deferred tax liabilities 14 33,1 38,5
Lease liabilities 16 12,0 10,5
Accrued and other payables 10,5 11,1
Total non-current liabilities 851,2 791,0
Trade payables 39,2 50,4
Income tax payables 21,3 25,6
Interest payable 11,5 4,7
Accrued and other payables 70,4 75,7
Contract liabilities 4 166,8 147,9
Lease liabilities 16 4,6 5,6
Total current liabilities 313,8 309,9
Total liabilities 1.165,0 1.100,9
Total equity and liabilities 1.505,5 1.542,9
32
Consolidated Statement of Changes in Equity
Share
capital
Reserve for
unpaid
share
capital
Share
premium
Exchange
adjustment
reserve
Retained
deficit
Other
reserves
Treasury
shares
Total
€M
€M
€M
€M
€M
€M
€M
€M
Equity at 30.06.2022 10,5 (2,0 ) 809,6 (10,1 ) (233,8 ) 13,8 (7,6 ) 676,2
Loss for the period — — — — (150,5 ) — — (150,5 )
Other comprehensive income — — — 6,1 — — — 6,1
Total comprehensive loss for the period — — — 6,1 (150,5 ) — — (144,4 )
Transactions with owners in their capacity as owners
Purchase of treasury shares — — — — — — (0,3 ) (0,3 )
Equity-settled share-based payment expense — — — — — 9,4 — 9,4
Equity-settled share-based payment
settlements
Total transactions with owners in their
capacity as owners
Equity at 30.06.2023 10,5 (2,0 ) 809,6 (4,0 ) (384,3 ) 20,1 (7,9 ) 442,0
Loss for the period — — — — (91,9 ) — — (91,9 )
Other comprehensive income — — — (3,9 ) — — — (3,9 )
Total comprehensive loss for the period — — — (3,9 ) (91,9 ) — — (95,8 )
Transactions with owners in their capacity as owners
Purchase of treasury shares — — — — — — (0,1 ) (0,1 )
Equity-settled share-based payment expense — — — — — 0,6 — 0,6
Equity-settled share-based payment
settlements
Deferred tax impact on outstanding equity
awards
Total transactions with owners in their
capacity as owners
Equity at 30.06.2024 10,5 (2,0 ) 809,6 (7,9 ) (476,2 ) 14,5 (8,0 ) 340,5
33
Consolidated Cash Flow Statement
Note
01.07.2023-
30.06.2024
01.07.2022-
30.06.2023
€M €M
Loss for the period (91,9 ) (150,5 )
Adjustments to reconcile net loss to net cash flows
Depreciation, amortisation and impairment 7 40,6 60,4
Net finance costs 9 101,3 63,7
Share based payments, net of settlement (1,3 ) 9,3
Income taxes 10 1,9 4,2
Allowance for bad debt 15 2,6 2,0
Net foreign exchange differences (2,5 ) (0,5 )
Loss on Sale/write off of assets 13 0,2 —
Other non-cash items — (0,1 )
Changes in working capital, net of acquired assets and
assumed liabilities:
Decrease in contract assets 4 11,6 13,3
Decrease / (Increase) in accounts receivable 15 6,0 (11,6 )
Increase contract liabilities 4 17,5 32,7
Decrease in accounts payables and accrued liabilities (15,8 ) (8,3 )
Change in other net working capital (3,3 ) (6,8 )
Cash flow from primary operating activities 66,9 7,8
Interest paid on debt 18 (28,4 ) (19,5 )
Interest paid on leases 15 (1,0 ) (0,9 )
Income taxes (paid) / refunded (17,1 ) 7,2
Net cash flow from/(into) operating activities 20,4 (5,4 )
Purchase of property and equipment 13 (1,4 ) (1,9 )
Proceeds from disposal of property and equipment 13 — 0,2
Development expenditure 12 (13,7 ) (12,4 )
Net cash flow into investing activities (15,1 ) (14,1 )
Repayment of borrowings 18 (730,1 ) (38,0 )
Proceeds from borrowings, net of issuance costs 9, 18 728,8 80,0
Payment of lease liability 16 (5,8 ) (8,4 )
Repurchase of treasury shares (0,1 ) (0,3 )
Proceeds / (payments) for settlement of derivatives 9 (1,7 ) 2,3
Cash flow from/(into) financing activities (8,9 ) 35,6
Net cash flow for the year (3,6 ) 16,1
Cash and cash equivalents, beginning of the year 50,4 36,4
Effect of movements in exchange rates on cash held 0,2 (2,1 )
Cash and cash equivalents, end of the year 47,0 50,4
34
1
Notes
1. Corporate Information
2. Significant accounting policies
3. Critical accounting estimates and judgements
4. Revenue
5. Staff costs
6. Share based payments
7. Amortisation, depreciation, and impairment
8. Fees to the appointed auditor
9. Finance costs, net
10. Income tax
11. Proposed distribution of loss
12. Intangible assets
13. Property and equipment
14. Deferred tax
15. Trade receivables
16. Leases
17. Share capital
18. Borrowings
19. Related parties
20. Commitments and contingent liabilities
21. Financial risk management
22. Events after the balance sheet date
35
Notes
Consolidated Financial Statements
1. Corporate information
Sitecore Corporation A/S was founded on 26 April 2001. To effect an investment by EQT into Sitecore, Sitecore
Holding II A/S was created on 18 April 2016 and acquired a 100% interest in Sitecore Corporation A/S on 10 May
2016 through a wholly owned subsidiary, Sitecore Holding III A/S. The consolidated accounts include all subsidiaries
in which Sitecore Holding II A/S directly or indirectly holds more than 50% of the voting rights or otherwise has a
controlling interest.
The consolidated financial statements of Sitecore Holding II A/S and its subsidiaries (collectively the Group) for the
year ended 30June 2024 were authorized for issue in accordance with a resolution of the board of directors on
31October 2024.
2. Significant accounting policies
2.1 Basis of preparation
The consolidated financial statements for the Group have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by EU and additional Danish disclosure requirements applying to entities of
reporting class C (large).
The annual report is prepared according to standards and interpretations effective for the financial year beginning
on 1July 2023. No standards or interpretations have been adopted early.
The accounting policies used in the preparation of the financial statements are consistent with those of last year,
except changes made on classifications of prior year notes to comply with current year presentations.
The Financial Statements have been prepared under the historical cost method, except for the measurement of
certain financial instruments at fair value and lease liabilities, which are measured at present value.
2.2 Applying materiality
When preparing the annual report, management seeks to improve the value of the information in the report by
focusing on information that will help the understanding of Sitecore’s performance in the reporting period and the
financial position at year-end. The focus is on presenting information that is considered of material importance for
our stakeholders, rather than generic descriptions.
Disclosures that are required by IFRS are included in the annual report, unless the information is considered of
immaterial importance to users of the annual report.
Materiality is not applied for items where disclosures are required for control purposes.
2.3 Basis of consolidation
Consolidated subsidiaries are all entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and could affect those
returns through its power to direct the activities of the entity. The Group re-assesses whether it controls an entity
if facts and circumstances indicate that there are changes to one or more of the elements of control. Subsidiaries
are fully consolidated from the date on which control is obtained by the Group and will be deconsolidated from the
date that control ends.
On consolidation, elimination is made of intra-group income and costs, shareholdings, intra-group balances and
dividends, and realised and unrealised profits or losses on transactions between the consolidated companies.
36
2.4 Summary of significant accounting policies
2.4.1 Foreign currency translation
The financial statements are presented in Euros (EUR), due to the Group’s international activities. The financial
statements have been rounded to the nearest hundred thousand unless otherwise noted.
Items in the financial statements of each subsidiary of the Group are measured in the currency of the primary
economic environment in which the entity operates (the functional currency). We translate assets and liabilities of
foreign subsidiaries with functional currencies other than Euro at exchange rates in effect at the balance sheet
date. We translate revenue and expenses at the monthly average exchange rates. Accumulated net translation
adjustments are included in stockholders’ equity as Reserve for exchange rate translation.
2.4.2 Revenue from Contracts with Customers
Classes of revenue
Revenue is mainly derived from fees charged for Software as a Service (SaaS), software subscriptions and licenses,
cloud hosting, software maintenance, and services (consulting, education, and other).
SaaS
SaaS is a way of delivering software applications over the internet as a service. Unlike a term license arrangement
hosted by Sitecore, customers access the software through the internet where it is owned, delivered, and managed
remotely by Sitecore. Outside of the SaaS arrangement, there is no stand-alone value to the customer as they
never control or own the software. Sitecore’s SaaS arrangements typically have minimum commitments from one to
three years.
Software subscription and license
Software license revenue represents fees earned from the license or sale of software to customers for use on the
customer’s premises. In these arrangements, the customer has the right to use and take possession of the software
for installation on the customer’s premises or on hardware of third-party hosting providers unrelated to Sitecore or
hosted in Sitecore’s managed cloud environment. Software licenses are sold as perpetual licenses or as term
subscription licenses, limiting possession of the software to a specified term, typically a period of one to three
years.
For multi-element contracts, the basis for determining the transaction price for revenue recognition is an
assessment of the standalone selling prices for the identified performance obligations, including rebates, discounts,
and allowances.
Cloud hosting
Hosting services include hosting, monitoring, managing the installation of Sitecore software on Microsoft Azure’s
cloud platform. Hosting arrangements typically have minimum commitments from one to three years.
Software maintenance
Maintenance revenue represents fees earned from providing customers with technical product support and
unspecified future software updates, upgrades, and enhancements on an if-and-when available basis.
Services
Services revenue represents fees earned from consulting and education services.
Identify the contract:
We combine contracts entered into with the same customer within the same month if they are economically
interrelated. Significant judgment is required in determining if contracts are interrelated. Considerations include:
• Multiple contracts were negotiated as a single package with a single business objective,
• Price in one contract is tied to a price or performance of the other contract.
37
Identify performance obligations:
Our contracts with customers often include promises to transfer multiple software offerings and services to a
customer. Determining whether software and services are considered distinct performance obligations that should
be accounted for separately versus together may require judgement.
Contract elements discussed above in the Classes of Revenue section above generally qualify for accounting
purposes as separate performance obligations, except for promised software and services which may represent a
single performance obligation.
We frequently grant customers options to purchase additional software and services in future at a price defined in
current contracts. Significant judgment is required in determining if such options represent a material right that the
customer would not otherwise receive without entering into the current contract. Judgment includes evaluation if
the discount on an optional purchase is greater than the discount included in the current purchase as well as in
relation to a range of discounts historically provided to a similar class of customers or in a similar deal size.
Determine the transaction price:
Significant judgments are required to determine the amount of consideration to be received by Sitecore in
exchange for software and services. These include estimates of concessions based on prior history, evaluation of
rights of return and customer acceptance clauses in contracts, and assessment of variable consideration.
Our customer contracts do not have significant financing components. Customers are generally invoiced in
advance with payment due 30 days after the invoice date.
Allocate the transaction price:
Fixed term subscription and perpetual license performance obligations are sold for a broad range of amounts (that
is, selling price is highly variable) and a representative standalone selling price is not discernible from past
transactions or other observable evidence. As a result, the standalone selling price for fixed term subscriptions or
perpetual licenses included in a contract with multiple performance obligations is determined by applying a
residual approach whereby performance obligations with observable standalone selling prices are first allocated a
portion of the transaction price based on their respective standalone selling prices, with the residual amount of the
transaction price allocated to the fixed term subscription or perpetual license.
Standalone selling price for all SaaS, Cloud Hosting, Maintenance Services and other Services are determined based
on observable pricing.
Recognize Revenue:
SaaS and cloud hosting revenue are recognised evenly over time as services are provided. Our performance
obligation for SaaS arrangements is a right to access and use of our software for a certain term and with hosting
arrangements it is to host the software for a certain term. Performance for both types of obligations is measured on
a time elapsed basis. Therefore, revenue is recognised ratably over the contract term.
Software subscription and license revenue is recognised at a point in time, when the license key is delivered to the
customer enabling the customer to download the software, but not earlier than the start of the contractual license
term. Revenue for license renewals is recognised at the start of the renewal period. Where a license is sold as part
of a bundle and is not considered distinct in the context of the contract, revenue is recognized ratably over the
subscription period for which the bundled services are provided.
Maintenance revenue is recognised ratably over the term of the support arrangement, as the performance
obligation is satisfied over time. Maintenance services are a stand-ready performance obligation to provide
technical product support and unspecified updates, upgrades, and enhancements on a when-and-if- available
basis. Customers simultaneously receive and consume the benefits of these support services as Sitecore performs.
Education service revenue is recognised over time as services are delivered. Consulting services revenue is
recognised over time based on percentage of completion method measuring performance progress based on
actual time incurred compared to the estimated budgeted time required to fully deliver a service. Significant
judgment is required in estimating budgeted time. We use hour history with similar projects when estimating total
budgets required to deliver a consulting service.
38
Contract balances
Contract assets represent revenue recognised for contracts that have not yet been invoiced to customers,
typically for multi-year arrangements. Contract assets are transferred to receivables when the rights become
unconditional, generally this occurs when the Group issues an invoice to the customer.
Contract liabilities primarily reflect invoices due or payments received in advance of the Group transferring the
good or service to the customer. Our contract balances will be reported as net contract assets or liabilities on a
contract-by-contract basis at the end of each reporting period.
Costs to obtain a contract
The Group recognizes an asset for the incremental costs of obtaining contracts with customers that are directly
associated with the contract if those costs are expected to be recoverable and records them in “Deferred
Expenses” in the consolidated balance sheet. Incremental costs of obtaining contracts are those costs that the
Group incurs to obtain a contract with a customer that would not have been incurred if the contract had not been
obtained.
The costs capitalised are primarily sales commissions paid to our sales force personnel as well as third party
partners. Capitalised costs may also include portions of fringe benefits and payroll taxes associated with
compensation for incremental costs to acquire customer contracts and incentive payments to partners.
Capitalised costs to obtain a contract are amortized over the expected period of benefit, which we have
determined to be 4 years. Amortisation of capitalised costs are presented in sales and marketing expense in our
consolidated statements of profit and loss. Sales and partner commissions payable are presented in Accrued and
Other Payables and Trade Payables, respectively.
2.4.3 Operating expenses
Operating costs are allocated into cost of sales, sales and marketing, general and administrative, and research and
development expenses.
Cost of sales includes third-party royalty and cloud hosting costs associated with our subscription offerings,
salaries and related expenses of network operations, implementation, technical support personnel, and allocated
overhead.
Sales and marketing expenses include costs associated with sales, marketing and product marketing personnel and
consist of compensation and benefits, partner and sales commissions and bonuses, share-based compensation
costs, depreciation and amortisation, promotional and advertising expenses, travel and entertainment expenses
related to these personnel and allocated overhead.
General and administrative expenses include costs for executive, finance, human resources, information
technology, legal and administrative support functions. This includes compensation and benefits, share-based
compensation, professional services, depreciation and amortisation costs, and allocated overhead. Expenses are
recognized in the accounting period in which they are incurred.
Research and development expenses include costs associated with the development of new products,
enhancements of existing products for which technological feasibility has not been achieved and quality assurance
activities. This includes compensation and benefits, share-based compensation costs, consulting costs,
depreciation and amortisation costs, the cost of software development tools and equipment.
2.4.4 Financial income and expenses
Financial income and expenses comprise interest income and expenses, realized and non-realized capital gains/
losses on derivatives and transactions in foreign currency, amortisation of financial assets and liabilities, etc.
Interest earned is reported using the effective interest method.
2.4.5 Income tax and deferred tax
The Group is part of the mandatory joint taxation scheme in Denmark which covers parent company Sitecore
Holding II A/S and the Danish subsidiaries. The Danish income tax payable is allocated between the jointly taxed
39
Danish companies based on their proportion of taxable income (full absorption including reimbursement of tax
deficits).
The jointly taxed companies are taxed under the Danish tax payment scheme. Additions, deductions, and
allowances are recognised under financial income or financial costs.
The income tax expense or credit for the period is the tax effect on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses/credits.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the parent company and its subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred
income tax is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other
than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or
loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by
the balance sheet date and are expected to apply when the related deferred income tax asset is realised, or the
deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be
available, against which the temporary differences can be utilized.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in
subsidiaries, associates, and joint arrangements only to the extent that it is probable that the temporary difference
will reverse in the future and that there is sufficient taxable profit available, against which the temporary difference
can be utilized.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in
subsidiaries, except for deferred income tax liability where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where there is
an intention to settle the balances on a net basis.
Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. An uncertain
tax position arises when there is uncertainty over whether the approach we have applied will be accepted by the
tax authority. IFRIC 23 requires consistent judgments and estimates to be applied to current and deferred taxes.
The judgments and estimates made to recognize and measure the effect of uncertain tax treatments are also
reassessed whenever circumstances change or when there is new information that affects those judgments.
Although we believe we have adequately provided for the uncertain tax positions, we can provide no assurance that
the final tax outcome of these matters will not be materially different.
We adjust these allowances when facts and circumstances change, such as the closing of a tax audit or the
refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts
recorded, such differences will affect the provision for income taxes in the period in which such determination is
made and could have a material impact on our consolidated financial statements.
40
2.4.6 Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over
the Group’s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the
acquiree.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units
(CGU), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of
units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is
monitored for internal management purposes.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances
indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the
higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an
expense and is not subsequently reversed.
2.4.7 Intangible Assets
Acquired intangible assets other than goodwill comprise acquired customer contracts, technology, customer base,
and brand. At initial recognition, intangible assets acquired in a business combination are recognized at their fair
value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated
amortisation and impairment losses.
Intangibles assets with finite lives are assessed for impairment whenever there is an indication that the intangible
asset may be impaired. Intangible assets are amortized on a straight-line basis over their estimated useful lives, as
follows:
• Acquired customer relationships: 3-20 years
• Acquired technology: 3-9 years
• Acquired brand portfolio: 2-20 years
• Patents, trademarks, and product rights: 5 years
In the course of performing the annual assessment for FY24, we concluded that the useful life of certain customer
relationships should be shortened to align with customer churn experienced. The remaining customer relationships
intangible asset carrying value will be amortized over the new useful life prospectively in accordance with IAS 38.
Development costs are recognized as intangible assets when they are related to clearly defined and identifiable
products and processes, for which the technical rate utilization, adequate resources and a potential future market
or development opportunity in the enterprise can be established, and where the intention is to develop, market or
apply the product or process in question. Development costs which do not meet these criteria are recognized as
an expense in the income statement as incurred.
The cost of development projects includes salaries, benefits, and direct costs that are directly attributable to the
development projects.
Internal development projects are amortized on a straight-line basis over their estimated useful lives, typically 3
years. Amortisation begins when the development project is at a stage where its commercial potentials can be
utilized in the manner intended by management.
2.4.8 Impairment of non-financial assets, other than Goodwill
Intangible assets that have an indefinite useful life and intangible assets not yet available for use are not subject to
amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value, less cost of disposal, and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent
41
cash inflows. Prior impairment of non-financial assets (other than goodwill) is reviewed for possible reversal at each
reporting date.
2.4.9 Tangible assets
Property and IT equipment, Leasehold improvements, and Other operating equipment are measured at cost less
accumulated depreciation and accumulated impairment losses. Depreciation on these assets is calculated using
the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated
useful lives, as follows:
• Property and IT equipment: 1-4 years
• Leasehold improvements: Shorter of 5 years or lease term
• Other operating equipment: 2-5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Gains and losses arising from disposal of tangible assets are calculated as the difference between the sales price
less sales costs and the carrying amount at the time of sale. Gains and losses are recognised in the profit and loss
account under the relevant category.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount. An impairment loss is recognised in the income statement when
the impairment is identified.
2.4.10 Leases
Leased assets are capitalised at the commencement date of the lease and comprise of the initial lease amount,
initial direct costs incurred when entering into the lease less any incentives received and estimate of costs
expected to be incurred by the lessee in dismantling and removing the asset.
An impairment review is undertaken for any right-of-use lease asset that shows indicators of impairment and an
impairment loss is recognised against any right-of-use lease asset that is impaired.
The lease liability is measured at the present value of the fixed and variable lease payments net of cash lease
incentives that are not paid at the balance sheet date. Lease payments are apportioned between the finance
charges and a reduction of the lease liability using the incremental borrowing rate implicit in the lease to achieve a
constant rate of interest on the remaining balance of the lease liability. Lease payments for buildings exclude
service fees for cleaning and other costs.
Lease modifications are accounted for as a new lease with an effective date of the modification.
Leasehold deposits are initially recognised at the value paid to the landlord. Deposits are subsequently measured
at net realizable value based on the amount the Group expect to receive at the end of the lease.
2.4.11 Receivables
Receivables are initially recognised at fair value adjusted for any transaction costs. Subsequently, receivables are
measured at amortised cost, which usually corresponds to the nominal value.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade and unbilled receivables. To measure the expected credit losses, trade and
unbilled receivables have been grouped based on the days past due. Expected loss in the first 12 month is
estimated, and the receivables are monitored on an ongoing basis. If higher credit risk is identified for specific
customer(s) or credit risk is significantly changed the expected credit loss in the lifetime is measured. Receivable
balances are written off when there is no reasonable expectation of recovery.
42
2.4.12 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs. Borrowings are subsequently measured at
amortized cost. Any differences between the proceeds and the redemption value are recognised in the income
statement over the period of the borrowings using the effective interest method.
If a modification in borrowings occurs, the Group will assess whether the treatment of the modification should be
an extinguishment of old borrowings and issuance of new borrowings or loan modification to existing borrowings.
The discounted present value of the remaining cash flows of the original borrowings is calculated to perform the
assessment. Gains or losses are recognized and adjustments are made to the amortized cost of the financial
liabilities, as needed.
2.4.13 Share-based payment
The Group operates equity-settled, share-based compensation plans, under which the entity receives services
from employees as consideration for equity instruments of the Group. The fair value of the employee services
received in exchange for the equity grant is recognised as an expense and credited to Other Reserves equity
account. The total amount to be expensed is determined by reference to the grant date fair value of the equity
award.
When the options are exercised, the Group issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium.
The Group also operates a cash-settled, share-based compensation plan, under which the entity receives services
from employees as consideration for grants tied to the equity value of the Group that the Group intends to settle in
cash. The fair value of the Group’s obligations under this plan is calculated at the end of the period and recorded as
an expense and credited as a liability.
2.4.14 Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No
gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity
instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in the
share premium.
2.4.15 Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand and other short-term
highly liquid investments with original maturities of three months or less. As of 30 June 2024, cash and cash
equivalents is composed entirely of cash accounts at banks.
2.5 New and amended standards and interpretations
There are no new IFRS or IFRIC interpretations effective as of July1, 2024 that have a material impact on the Group.
2.6 New standards and interpretations not yet effective
There are no IFRS or IFRS Interpretations Committee (“IFRIC”) interpretations that are not effective that are
expected to have a material impact.
3. Critical accounting estimates and judgements
Management makes estimates, and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
The judgments, estimates, and assumptions made are based on historical experience and other factors that
management considers to be reliable, but which by their very nature are associated with uncertainty and
43
unpredictability. These assumptions may prove incomplete or incorrect, and unexpected events or circumstances
may arise. The most critical judgments, estimates, and assumptions for the individual items are described below.
The Group is also subject to risks and uncertainties that may lead to actual results differing from these estimates,
both positively and negatively.
3.1 Revenue recognition
Revenue recognition requires management to make judgements which are based on assumptions on historical and
forecast information, as well as on regional and industry economic conditions in which we or our clients operate. A
short description of main judgments made in relation to revenue recognition follows:
• Assessing whether it is probable that the consideration from contract with clients will be collected requires
judgement and might impact the timing and amount of revenue recognition.
• Establishing whether distinct goods or services are considered to be separate performance obligation requires
judgement and might impact the timing and amount of revenue recognition.
• Determining whether the Group is a principal or agent for a given contract.
• Evaluating whether a change in terms, conditions, or other aspects of the contract result in a contract
modification.
• The allocation of total transaction fee of a client contract to the distinct deliverables requires judgment in
determining standalone selling price and an apportionment which reflects the fair value measurement of each
performance obligation. This may impact the timing and amount of revenue recognised.
• Determining whether different contracts with the same client are accounted for as one agreement involves the
use of judgment as it requires us to assess whether the contracts are negotiated together or linked in any other
way. The timing and amount of revenue recognition can vary depending on whether two contracts are
accounted for separately or as one single arrangement.
• Calculation of revenue based on percentage of completion method for consulting projects requires significant
judgment in estimating budgeted time. We use prior history with similar projects when estimating total budgets
required to deliver a consulting service.
• Significant judgment is required in determining if options to purchase software or services at a price defined in
current contracts represent material right that the customer would not otherwise receive without entering into
the current contract. Judgment includes evaluation if the discount on an optional purchase greater than the
discount included in the current purchase as well as in relation to a range of discounts historically provided to a
similar class of customers or in a similar deal size.
3.2 Provision for expected credit losses of trade receivables and contract assets
Trade receivables and contract assets consist of sale of SaaS, subscriptions, licenses, maintenance, cloud, and
services to customers and have similar risk profiles. Provisions for bad debt are made in accordance with the
simplified expected credit loss model, considering Sitecore’s credit policy and debt collection procedures.
The provision is initially based on the Group’s historical observed default rates to determine expected loss ratios
for ageing buckets, which are reassessed at least annually. An additional specific provision is assessed, as needed,
to adjust the expected credit loss with forward-looking information. For example, if a specific customer exists
where we are aware of financial difficulties, or cases where a balance is outstanding for a significant length of time,
an additional provision amount may be captured.
The assessment of the expected loss ratios and forecasted future economic conditions are significant estimates.
The Group’s historical credit loss experience, driving the expected loss ratios may not be representative of
customer’s actual default in the future. The forecast of economic conditions may also not be representative of
customer’s actual default in the future.
Refer to note 15 for additional information on the Group’s trade receivables and contract assets.
44
3.3 Impairment testing of intangible assets, including goodwill
The Group tests for impairment in accordance with the accounting policy stated in note 2. Significant judgments
are required in determining the number of CGU’s within the Group, the recoverable amount of the CGU (or CGU’s),
including the use of estimates over future revenue, cash flows, discount rates, and valuation multiples (note 12).
3.4 Development projects
For development projects in progress, management estimates on an ongoing basis whether each project is likely to
generate future economic benefits for the Group in order to qualify for recognition. The development projects are
evaluated on technical as well as commercial criteria. Management also uses judgment in determining which costs
to include as part of the accounting for the project.
Refer to note 12 for additional information on carrying value and amortisation of development projects.
3.5 Share-based payments
Determination of fair value of the options requires significant judgment regarding fair value of the underlying shares,
expected life, and volatility. The expected life of the options is based on the assumption that the holder will
exercise the options upon an exit event. Actual exercise patterns may differ from the assumption used herein.
The expected volatility is based on peer group data and reflects the assumption that the historical volatility over a
period similar to the life of the equity awards is indicative of future trends, which may not necessarily be the actual
outcome. The peer group consists of listed companies that management believes are similar to the Group in
respect to industry and stage of development.
Fair value of the options issued, assumptions applied regarding the valuation, and additional information on
expenses recorded are disclosed in note 5.
3.6 Deferred Tax Assets
A deferred tax asset is recognised for deductible temporary differences, unused tax losses and unused tax credits
to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences can be utilized. Management regularly review the deferred tax assets for recoverability based on
historical taxable income, projected future taxable income, the expected timing of the reversals of existing
temporary differences and tax planning strategies. Management’s judgment regarding future profitability may
change due to many factors, including future market conditions and the ability to successfully execute our
business plans and tax planning strategies.
3.7 Uncertain Tax Positions
Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. An uncertain
tax position arises when there is uncertainty over whether the approach, we have applied will be accepted by the
tax authority. IFRIC 23 requires consistent judgments and estimates to be applied to current and deferred taxes.
The judgments and estimates made to recognize and measure the effect of uncertain tax treatments are also
reassessed whenever circumstances change or when there is new information that affects those judgments.
Although we believe we have adequately provided for the uncertain tax positions, we can provide no assurance that
the final tax outcome of these matters will not be materially different. We adjust these allowances when facts and
circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the
final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision
for income taxes in the period in which such determination is made and could have a material impact on our
consolidated financial statements.
45
4. Revenue
Set out below is the disaggregation of the Group’s revenue from contracts with customers. The Group does not
disclose segment information because the Group operates as a single operating unit.
Classification
2023/24
Share of
Revenue
2022/23
Share of
Revenue
€M €M
License* 114,0 26% 125,6 29%
Maintenance 101,8 23% 110,4 25%
SaaS and cloud 180,6 41% 150,5 35%
Services and other 48,3 11% 48,4 11%
Total revenue 444,7 434,9
*License includes both term license and perpetual license revenues. Perpetual license revenues were EUR 3,0m and EUR 1,9m for fiscal 2024 and
2023, respectively.
Timing of Revenue Recognition
2023/24
Share of
Revenue
2022/23
Share of
Revenue
€M €M
At a point in time 114,0 26% 125,6 29%
Ratably over the contract term 305,0 69% 282,3 65%
Over time as SaaS/cloud services are provided 25,7 6% 27,0 6%
Total revenue 444,7 434,9
Significant changes in the contract assets and the contract liabilities balances are as follows in the table below:
Changes in Contract Assets and Liabilities
Contract
Assets
Contract
Liabilities
€M €M
30 June 2023
54,9
155,4
Amount transferred to trade receivables from contract assets
(49,6)
—
Contract assets additions
37,9
—
Performance obligations satisfied during the period that were included in the
contract liability balance at the beginning of the period
— (147,9)
Increases due to invoicing prior to satisfaction of performance obligations
—
167,2
30 June 2024
43,2
174,7
The Group records a provision for credit risk associated with contract assets in accordance with the expected loss
matrix in note 15.
Remaining performance obligations
Remaining performance obligations represent contracted revenue that has not yet been recognised and amounts
that will be invoiced and recognised as revenue in future periods. As of 30 June 2024, the Group’s remaining
performance obligations were EUR 483,5m (30June 2023: EUR 437,9m), approximately 56% (30June 2023: 56%)
of which it expects to recognize as revenue over the next 12 months and the remaining balance thereafter.
Deferred contract costs
During the year ended 30June 2024, the Group had a total of EUR 46,0m (30June 2023: EUR 44,5m) of contract
costs recorded as deferred expenses, of which EUR 44,5m related to open contracts as of 1July 2023 (30June
2023: EUR 35,7m related to contracts as of 1July 2022). For the year ended 30June 2024, amortisation associated
with the assets arising from contract costs was EUR 27,7m (30June 2023: EUR 25,7m).
46
5. Staff costs
2023/24 2022/23
€M €M
Wages and salaries 210,2 241,3
Pensions, defined contribution plans 7,2 8,1
Share based payments (note 6) (1,8) 11,5
Social costs 22,2 24,5
Other staff costs 28,4 23,0
Total staff cost 266,2 308,4
Average number of full-time employees 1.756 1.874
Staff costs recognised in the income statement: 2023/24 2022/23
€M
€M
Cost of sales 28,1 32,3
Sales and marketing costs 109,1 134,8
General and administrative expenses 38,3 44,2
Research and development costs 61,7 64,4
Total 237,2 275,7
Staff costs capitalized through R&D: 2023/24 2022/23
€M
€M
Development projects 9,0 7,7
Staff costs capitalized through deferred expenses: 2023/24 2022/23
€M
€M
Costs to obtain a contract 20,0 25,0
Key management compensation
Key management includes Board of Directors (BoD) and Executive Management (EM). EM includes members of the
Executive Board. The compensation paid to key management for employee services is shown in the following table:
2023/24 2023/24 2022/23 2022/23
€M
€M
€M
€M
BoD
EM
BoD
EM
Wages and salaries 0,8 3,1 0,4 3,2
Share based payments (note 6) — 0,5 0,3 1,8
Total key management compensation 0,8 3,6 0,7 5,0
6. Share-based payments
Share-based payments
Share-based payments to employees are made by the Group under a Share Option incentive plan, a Management
Incentive Program (“MIP”), and an Employee Incentive Plan (“EIP”). The Share Option plan is a performance-based
plan wherein certain employees are offered Class A share options subject to certain vesting conditions. The MIP is a
co-investment plan wherein key employees make a personal investment in the Group by purchasing restricted
ClassA or B shares which are subject to a repurchase option at a price determined based upon certain conditions.
47
The EIP is an incentive program where the Group, upon the event of a sale or IPO, will pay a bonus to the employee
based on the number of options held, up to a pre-defined cap. Share Option grants, MIP investments, and EIP grants
fully vest upon an IPO or change in control as defined in the plan documents.
Share Option Plan
Share Options are granted to employees under the 2016 Global Share Incentive Plan. Option grants are subject to
continued employment with 50% designated as Time Options that vest over five years (1/5th vest on each
anniversary of the grant date), and 50% designated as Performance Options that vest subject to the Group’s
sponsor achieving a certain rate of return on investment. Unexercised options expire 10 years from the grant date.
The grant date fair value of Time Options was determined utilizing a Black Scholes Option Pricing Model. The grant
date fair value of Performance Options was determined using a Monte Carlo simulation model.
The fair value calculation of the options requires the input of subjective assumptions such as:
• The share price based on the most recent semi-annual valuation performed by an external valuation firm.
• The expected life of options is based on Management’s expectation of future exercises
• The expected volatility is based on a peer group analysis of publicly listed companies comparable to Sitecore
• The risk-free rate is based on interpolated U.S. Treasury yields corresponding to the assumed term
• Dividend Yield: The expected dividend yield is assumed to be 0.0% as the Group does not anticipate paying
dividends in the foreseeable future
Share Options
2023/24 2022/23
Granted during the year 465.000 3.025.000
Assumptions applied
Share price EUR 2,13 EUR 2,16
Expected life of options 0,6 1,53
Expected volatility 47.0% 67%
Risk free interest rate 5.4% 4%
Expected dividend 0% 0%
Each Share Option grants the holder the right to buy one share of Class A common stock at the stated exercise
price, which is equal to the Class A share price at the time of grant.
Fair value
The total grant date fair value of Time Options totals EUR 11,1m (30June 2023: EUR 14,8m) while the grant date fair
value of Performance Options totals EUR 4,9m (30June 2023: EUR 9,7m). The prior year balances in the table below
have been revised to ensure classification of awards aligns with current year for consistency. Board of Directors
and Executive Management represent individuals consistent with the respective groups as defined within this
48
report. Role changes that occurred during the year for individuals that retained awards are captured within
reclassification of employees.
Share Options
Board of
Directors
Executive
Management
Weighted
Average
Exercise
Price*
Other
Weighted
Average
Exercise Price
Total
Outstanding as at 30
June 2022
5.967.335 3.500.000 1,72 50.812.988 1,77 60.280.323
Granted during the year — — — 3.025.000 2,16 3.025.000
Exercised during the year — — — (709.225) 0,97 (709.225)
Reclassification of
employees
— 2.000.000 2,14 (2.000.000) 2,14 —
Forfeited during the year — — — (3.369.141) 2,03 (3.369.141)
Outstanding as at 30
June 2023
5.967.335 5.500.000 1,80 47.759.622 1,77 59.226.957
Granted during the year — — — 465.000 2,13 465.000
Exercised during the year — — — (227.763) 0,60 (227.763)
Reclassification of
employees
(4.077.335) 300.000 1,14 3.777.335 1,14 —
Forfeited during the year — — — (19.745.625) 2,01 (19.745.625)
Outstanding as at 30
June 2024
1.890.000 5.800.000 2,19 32.028.569 1,55 39.718.569
*Calculated based on the aggregate balances of Board of Directors and Executive Management.
As of year-end, the weighted average remaining contractual life of share options outstanding is 5,65 with an
exercise price of EUR 0,35 - 2,45. 19.630.250 options are currently exercisable (30June 2023: 19.034.608).
Management Incentive Plan (“MIP”)
The MIP is designed to align the performance of the Group with the remuneration of key employees. Under the MIP,
employees make a personal investment in the Group by purchasing Class A or Class B shares. Class B shares were
added to the plan in FY21.
Under the MIP, Class A shares are subject to a repurchase option at a price equal to original cost if the employee
terminates under conditions defined as a Bad Leaver, or at current fair market value if the employee terminates
under conditions defined as a Good Leaver. The Good Leaver determination is primarily determined based on
whether the employee leaves (a) involuntarily but without cause or (b) voluntarily after an employment of five years
or more (three years if shares were issued to holder as part of the purchase consideration in an acquisition).
49
Class B shares are divided into 50% Time Vesting shares and 50% Performance Vesting shares that vest in the
same pattern as the Time Options and Performance Options described above.
There were no new MIP grants issued in FY24 or FY23.
MIP - Class A Shares
Board of
Directors
Executive
Management
Weighted-
Average
Exercise
Price*
Other
Weighted-
Average
Exercise Price
Total
Outstanding as at 30 June 2022 68.306 290.697 1,74 24.704.943 1,59 25.063.946
Granted during the year — — — — — —
Reclassification of employees — — — — — —
Buy-back during the year — — — (124.553) 2,11 (124.553)
Outstanding as at 30 June 2023 68.306 290.697 1,74 24.580.390 1,59 24.939.393
Granted during the year — — — — — —
Reclassification of employees — 3.404.838 1,82 (3.404.838) 1,82 —
Buy-back during the year — — — (48.543) 1,03 (48.543)
Outstanding as at 30 June 2024 68.306 3.695.535 1,83 21.127.009 1,43 24.890.850
*Calculated based on the aggregate balances of Board of Directors and Executive Management.
MIP - Class B Shares
Executive
Management
Weighted-Average
Exercise Price
Other
Weighted-Average
Exercise Price
Outstanding as at 30 June 2022 6.200.000 0,43 — —
Granted during the year — — — —
Buy-back during the year — — — —
Outstanding as at 30 June 2023 6.200.000 0,43 — —
Granted during the year — — — —
Reclassification of employees (6.200.000) 0,43 6.200.000 0,43
Buy-back during the year — — — —
Outstanding as at 30 June 2024 — — 6.200.000 0,43
As of year-end, the weighted average remaining contractual life of Class A and Class B shares outstanding are 5,73
and 6,45 , respectively, with an exercise price of EUR 0,43 - 2,14. 5.155.000 grants are current exercisable (30June
2023: 1.939.802).
Employee Incentive Plan (“EIP”)
Grants made under the EIP only vest in the event of an exit, through a sale or an IPO, meeting a specific financial
valuation and only provided that the select employee is employed with the Group at the relevant time of exit.
Provided the conditions are met, the Group will pay a cash bonus to the employee based on the number of
incentive options held, up to a pre-defined cap. In the event an employee leaves the Group prior to an exit, all
incentive options are cancelled with no compensation.
There were no EIP grants made to members of the Board of Directors or to Executive Management.
50
EIP
2023/24 2022/23
Granted during the year
5.017.088 1.152.158
Assumptions applied at: 30 June 2024 30 June 2023
Share price EUR 0,96 EUR 2,01
Expected life of options 2,5 1,0
Expected volatility 60% 65%
Risk free interest rate 4,5% 5%
Expected dividend 0% 0%
EIP
Grants
Weighted-Average
Exercise Price
Outstanding as at 30 June 2022 34.711.049 2,45
Granted during the year 1.152.158 2,07
Forfeited during the year (8.247.987) 2,45
Outstanding as at 30 June 2023 27.615.220 2,44
Granted during the year 5.017.088 2,13
Forfeited during the year (10.948.552) 2,41
Outstanding as at 30 June 2024 21.683.756 2,39
As of year-end, the weighted average remaining contractual life of shares outstanding is 8,1 with an exercise price
of EUR 2,01 - 2,45.
Forfeits of grants and changes in assumptions applied during the fiscal year have resulted in a net reversal of
expense in the current year. Share based compensation expense/(reversal) is recognized in the income statement
as follows:
2023/24
2022/23
€M
€M
Sales and marketing costs (1,6) 6,6
General and administrative expenses (0,5) 3,4
Research and development costs 0,3 1,5
Total share-based compensation (1,8) 11,5
51
7. Amortisation, depreciation, and impairment
2023/24
2022/23
€M
€M
Amortisation of intangible assets 30,5 34,7
Depreciation on property and equipment 3,3 4,4
Depreciation on right-of-use asset 6,8 8,9
Impairment of intangible assets — 12,4
Total amortisation, depreciation, and impairment 40,6 60,4
Amortisation, depreciation and impairment are recognised in the income statement:
Cost of sales 4,2 6,6
Sales and marketing costs 15,6 21,3
General and administrative expenses 9,9 25,6
Research and development costs 10,9 6,9
Total amortisation, depreciation and impairment 40,6 60,4
8. Fees to the appointed auditor
2023/24
2022/23
€M
€M
Statutory audit 0,7 0,9
Other assurance engagements 0,2 0,1
Total audit fees 0,9 1,0
9. Finance costs, net
2023/24
2022/23
€M
€M
Interest expense 91,7 64,6
Amortisation of financing fees 2,9 2,1
Fees from extinguishment of debt 5,1 —
Other finance costs, including bank fees 0,6 0,9
Interest on leases 1,0 0,9
Exchange rate adjustments, expenses (0,8) 0,2
Fair value loss/(gain) of interest rate swaps 1,6 (3,8)
Interest income, external (0,8) (1,2)
Total finance costs, net 101,3 63,7
52
10. Income tax
2023/24
2022/23
Current tax:
€M €M
Current tax on profits for the year 5,3 14,9
Current tax on profits for previous years 0,7 2,5
Total current tax expense 6,0 17,4
Deferred tax:
Deferred tax benefit for the year and previous years (4,3) (14,9)
Deferred tax charge/(benefit) as a result of tax rate changes 0,2 1,7
Total deferred tax (4,1) (13,2)
Income tax expense for the period 1,9 4,2
Income tax benefits are specified as follows:
Calculated 22,0% tax on profit for the year before income tax (19,8) (32,2)
Tax effects of:
Higher/Lower tax rate in subsidiaries 2,4 5,9
Non-deductible finance expenses 9,5 4,1
Non-deductible expenses 2,5 0,2
Adjustments in respect of prior years 0,7 2,6
Tax losses not recognized 9,0 22,9
Non-deductible earn out expenses — 0,8
Other (2,4) (0,1)
Total income tax expense for the period 1,9 4,2
Effective tax rate (2,1)% (2,9)%
Non-deductible finance expenses relate to costs which are not deductible under the Danish interest ceiling rules.
Non-deductible expenses include non-deductible meals and entertainment and non-deductible legal and professional fees.
Tax losses not recognized relate to EUR 1.5M losses generated in Ireland and EUR 10.3M in the United States during the current period for which a
deferred tax asset is not recognized. Irish tax losses can be carried forward indefinitely. United States can be carried forward indefinitely if they were
incurred 1 July 2019 or later. The company has acquired losses that are limited in the United States.
Management concluded the previously recognized prior year tax losses and previously recognized deductible temporary differences cannot be
realised in the United States. This is due to current and forecasted income is not sufficient and it is not certain that suitable taxable profits will exist
in future years against which this deferred tax asset may be offset.
Recognition of Uncertain Tax Positions relates to the recognition of a potential exposure pursuant to IFRIC 23.
Non-deductible earn-out expenses related to non-deductible contingent consideration, related to the acquisitions are not considered to be part of
the purchase price consideration.
53
11. Proposed distribution of loss
2023/24 2022/23
€M €M
Retained earnings (91,9) (150,5)
12. Intangible assets
Cost:
Goodwill
Acquired
technology
Acquired
customer
relationship
s
Acquired
brand
portfolio
Patents,
trademarks
& product
rights
Internal
development
projects
Internal
development
projects in
progress
Total
€M €M €M €M €M €M €M €M
At 01.07.2022 1.004,8 157,0 238,1 69,5 3,1 38,7 3,8 1.515,0
Additions during the
year
— — — — — — 12,8 12,8
Transfers to completed
development projects
— — — — — 16,1 (16,1) —
Effect of movements in
exchange rates
(5,2) (1,5) 0,1 (0,1) — (1,0) 0,8 (6,9)
At 30.06.2023 999,6 155,1 238,2 69,4 3,1 53,8 1,3 1.520,5
Amortisation and impairment:
Goodwill
Acquired
technology
Acquired
customer
relationship
s
Acquired
brand
portfolio
Patents,
trademarks
& product
rights
Internal
development
projects
Internal
development
projects in
progress
Total
€M €M €M €M €M €M €M €M
At 01.07.2022
— 110,5 71,7 20,0 3,1 28,8 — 234,1
Amortisation charge
— 6,7 12,3 8,9 — 6,8 — 34,7
Impairment
— 12,4 — — — — — 12,4
Effect of movements in
exchange rates
— (0,2) (0,2) (0,2) — — — (0,6)
At 30.06.2023
— 129,4 83,8 28,7 3,1 35,6 — 280,6
Carrying amount
30.06.2023
999,6 25,7 154,4 40,7 — 18,2 1,3 1.239,9
54
Cost:
Goodwill
Acquired
technology
Acquired
customer
relationships
Acquired
brand
portfolio
Patents,
trademarks
& product
rights
Internal
development
projects
Internal
development
projects in
progress
Total
€M €M €M €M €M €M €M €M
At 01.07.2023 999,6 155,1 238,2 69,4 3,1 53,8 1,3 1.520,5
Additions during the
year
— — — — — 13,1 0,6 13,7
Transfers to completed
development projects
— — — — — 1,2 (1,2) —
Disposals — — — — — (1,0) — (1,0)
Effect of movements in
exchange rates
2,0 0,3 0,2 — — 0,1 — 2,6
At 30.06.2024 1.001,6 155,4 238,4 69,4 3,1 67,2 0,7 1.535,8
Amortisation and impairment:
Goodwill
Acquired
technology
Acquired
customer
relationships
Acquired
brand
portfolio
Patents,
trademarks
& product
rights
Internal
development
projects
Internal
development
projects in
progress
Total
€M €M €M €M €M €M €M €M
At 01.07.2023 — 129,4 83,8 28,7 3,1 35,6 — 280,6
Amortisation charge — 4,5 12,4 3,6 — 10,0 — 30,5
Disposals — — — — — (1,0) — (1,0)
Effect of movements in
exchange rates
— 0,2 0,2 (0,2) — — — 0,2
At 30.06.2024 — 134,1 96,4 32,1 3,1 44,6 — 310,3
Carrying amount
30.06.2024
1.001,6 21,3 142,0 37,3 — 22,6 0,7 1.225,5
Impairment test for goodwill
Goodwill is monitored by management at group level. Goodwill and acquired intangible assets relate to prior
acquisitions completed by the Group.
The Group tests whether goodwill has suffered any impairment on an annual basis. The Group operates and is
financially monitored as one CGU and there is no allocation of goodwill. As of 30June 2024, the carrying value of
goodwill for the Group’s single CGU was EUR 1.001,6m (30June 2023: EUR 999,6m)
For the year ended 30June 2024, an assessment was completed and management did not identify any impairment
for goodwill or intangible assets during the annual assessment.
Impairment testing at 30.06.2024
For the year ended 30June 2024, the recoverable amount of the CGU was determined based on an average of the
Discounted Cash Flow and Guideline Public Company methods.
The key assumptions used in the estimation of value in use were as follows:
Discounted cash flow method
Assumptions FY24* FY23
Revenue CAGR 8,6% 13,7%
Long term growth rate 3,0% 3,0%
Pre-tax discount rate 17,6% 14,3%
Average EBITDA margin 26,5% 17,2%
55
* In previous years the Group leveraged a ten-year forecast in its DCF. For FY24, the Group updated its methodology to use forecasted cash flow for
a five-year period, after which a residual free cash flow value is calculated. A long-term growth rate into perpetuity after the five-year period has
been determined to reflect estimated GDP rates for the countries in which the Group operates.
The discount rate used in determining the value in use is based on the rate of 20-year US Treasury bonds, adjusted
for a risk premium that reflects the increased risk associated with investing in equities generally, the countries in
which the Group operates, and factors such as size and the rate of growth of the Group. The increase in the
discount rate was due to a 0,6% increase in the risk-free rate of return, a 2,5% increase in the company-specific
risk premium, 0,9% due to an increase in the Equity Beta, offset by a decrease in credit spreads and an adjustment
in the assumed capital structure of the Group, in line with its increase in debt as compared to equity in FY23.
Revenue CAGR decreased as compared to FY23 to reflect slower growth over the forecast period, consistent with
management’s updated assumptions for a path of profitable growth. Average EBITDA margin increased from the
prior year to reflect the Group’s leverage of the previous years’ investments and various cost savings initiatives put
in place in FY24. The Group regularly updates its outlook and financial forecasts to reflect current and changing
economic conditions.
Guideline public company method
Input FY24 FY23
Revenue Multiple of next fiscal year net sales 3,15x 4,75x
Revenue Multiple of next fiscal year + 1 net sales 2,75x 3,75x
EBITDA Multiple of next fiscal year net sales 18,30x N/A
EBITDA Multiple of next fiscal year + 1 net sales 11,09x N/A
The guideline public company method multiplies historical and anticipated financial metrics of the Group by
multiples derived from an analysis of comparable publicly traded companies. When selecting appropriate multiples,
factors such as industry, financial size, historical and projected growth, risk, and profitability are considered. In FY24,
the Group updated its methodology to include EBITDA multiples as part of its assessment.
Sensitivity analysis
The following table shows the amount or percentage points by which assumptions would need to change
individually for the estimated recoverable amount to be equal to the carrying amount.
Sensitivity Input FY24 FY23
Revenue CAGR (1) (3,1)% points (7,8)% points
Long term growth rate (2) (4,5)% points (20,1)% points
Pre-tax discount rate 3,0% points 7,3% points
Average EBITDA margin (5,9)% points (11,3)% points
Revenue Multiple of next fiscal year net sales (0,8x) (2,2x)
Revenue Multiple of next fiscal year + 1 net sales (0,6x) (1,4x)
EBITDA Multiple of next fiscal year net sales (8,0x) N/A
EBITDA Multiple of next fiscal year + 1 net sales (2,3x) N/A
(1) Sensitivity calculations for Revenue CAGR include derived effect on correlated costs.
(2) The Company used a 5-year forecast in FY24, as compared to a 10-year forecast in FY23. Holding other variables constant, this change has made
the valuation model more sensitive this input.
The Group had no accumulated goodwill impairment losses at the beginning of the period. As a result of the
analysis performed at the end of the period, the estimated recoverable amount is greater than the carrying value
and management did not identify an impairment for the Group’s goodwill as of the end of the reporting period
(30 June 2023: EUR 0,0m). Management identified an impairment of certain acquired brand intangible assets
totalling 0,0m as of the end of the reporting period (30June 2023: EUR 12,4m).
56
13. Property and equipment
Cost:
Property and IT
Equipment
Other operating
equipment
Construction in
progress
Total
At 01.07.2022 10,5 12,7 0,1 23,3
Additions during the year 0,5 0,5 0,9 1,9
Transfer — 1,0 (1,0) —
Disposals during the year (0,1) (0,1) — (0,2)
Effect of movement in exchange rates (0,4) (0,7) — (1,1)
At 30.06.2023 10,5 13,4 — 23,9
Depreciation:
Property and IT
Equipment
Other operating
equipment
Construction in
progress
Total
At 01.07.2022 7,1 8,2 — 15,3
Depreciation charge 1,7 2,7 — 4,4
Reversed depreciation, disposed assets — (0,1) — (0,1)
Effect of movement in exchange rates (0,4) (0,4) — (0,8)
At 30.06.2023 8,4 10,4 — 18,8
Carrying amount 30.06.2023 2,1 3,0 — 5,1
Cost:
Property and IT
Equipment
Other operating
equipment
Construction in
progress
Total
At 01.07.2023 10,5 13,4 0,0 23,9
Additions during the year 0,7 0,5 0,2 1,4
Transfer — 0,2 (0,2) 0,0
Disposals during the year (0,2) (5,6) — (5,8)
Effect of movement in exchange rates — (0,1) — (0,1)
At 30.06.2024 11,0 8,4 — 19,4
Depreciation:
Property and IT
Equipment
Other operating
equipment
Construction in
progress
Total
At 01.07.2023
8,4
10,4
—
18,8
Depreciation charge 1,6 1,7 — 3,3
Reversed depreciation, disposed assets
(0,1)
(5,5)
—
(5,6)
Effect of movement in exchange rates
—
(0,1)
—
(0,1)
At 30.06.2024
9,9
6,5
—
16,4
Carrying amount 30.06.2024
1,1
1,9
—
3,0
57
14. Deferred tax
2023/24 2022/23
€M €M
Deferred tax, beginning of year
36,0
49,3
Deferred taxes added as a result of benefit from uncertain tax position 1,0 (0,9)
Deferred tax related to share-based compensation 5,0 4,8
Deferred tax recognized in the income statement (10,3) (17,2)
Deferred tax at end of year 31,7 36,0
Deferred tax relates to:
Intangible assets
16,6
30,2
Property and equipment
3,0
0,4
Contract assets and contract liabilities
0,4
2,2
Tax loss carry-forwards
(30,8)
(34,6)
Right-of-use assets
1,6
1,2
Lease liabilities
(1,2)
(0,6)
Accrued and other payables
(2,6)
(2,8)
Share-based compensation
—
(5,0)
Disallowed interest
(21,1)
(11,1)
Prepaid and deferred expenses
4,5
3,7
Other temporary differences
—
(1,4)
Gross deferred taxes before valuation allowance
(29,6)
(17,8)
Valuation allowance on deferred tax assets
61,3
53,8
Net deferred taxes
31,7
36,0
Of which presented as deferred tax assets
1,4
2,5
Of which presented as deferred tax liabilities
33,1
38,5
Total 31,7 36,0
As part of the adoption of IFRIC 23 in FY20, the Group recognized a portion of deferred tax asset related to Intangible Amortization. In FY22,
Management concluded the previously unrecognized deferred tax asset related to Intangible Amortization in relation to IFRIC 23 can be realized. This
is due to the forecasted income as a result of the intercompany transfer pricing arrangements in its operating model effective on 1 July 2021 and
forward. As part of the adoption of IFRS 15 in FY20 the Group has recognized deferred tax liabilities related to the Contract Cost and Contract
Liability balances. The Company has not recognized a deferred tax asset of EUR 11.6M and 1.2M on its carried forward tax losses and temporary items,
respectively, in Ireland as there is no sufficient certainty that suitable taxable profits will exist in future years against which this deferred tax asset
may be offset. In Ireland, unused tax losses may be carried forward indefinitely. The Company has not recognized a deferred tax asset of EUR 18.7M
and EUR 29.8M on its carried forward tax losses and deferred tax assets related to temporary items in United States, respectively. There is not
sufficient certainty that suitable taxable profits will exist in future years against which this deferred tax asset may be offset. In the United States,
unused tax losses may be carried forward indefinitely.
As part of operating a global business there are inherent risks, one of these risks is that tax authorities may challenge the company’s current global
operating model, Management believes that the provisions made pursuant to IAS 12 and IFRIC 23 are adequate. Any necessary reserves for uncertain
tax positions are properly assessed and reflected on the Company’s financials as of the balance sheet date.
58
15. Trade receivables
The below tables reflect the manner in which receivable and contract asset ageing was reviewed by management
during the period. Carrying amounts of trade receivables and contract assets represent a reasonable
approximation of fair value.
30.06.2023 Gross balance
Expected loss
ratio
Expected loss Total
€M €M €M
Current 78,8 0,25% 0,2 78,6
0-30 days 19,8 0,50% 0,1 19,7
30-60 days 3,7 1,0% — 3,7
60-90 days 2,1 2,0% 0,1 2,0
Over 90 days 7,1 10,0% 0,7 6,4
Trade receivables, excluding higher risk 111,5 1,1 110,4
Higher risk trade receivables
2,1
45,0-100% 1,7
0,4
Total trade receivables
113,6
2,8
110,8
Contract assets
55,1
0,3% 0,2
54,9
Total trade receivables and contract assets
168,7
3,0
165,7
30.06.2024 Gross balance
Expected
loss ratio
Expected loss Total
€M €M €M
Current 66,7 0,3% 0,3 66,4
0-30 days 22,3 0,5% 0,2 22,1
30-60 days 4,1 1,0% 0,1 4,0
60-90 days 4,4 2,0% 0,2 4,2
Over 90 days 6,9 10,0%
0,7 6,2
Trade receivables, excluding higher risk 104,4 1,5 102,9
Higher risk trade receivables
3,7
90% - 100%
3,2 0,5
Total trade receivables 108,1 4,7 103,4
Contract assets, excluding higher risk
43,4
0,3% 0,2
43,2
Higher risk contract assets
0,7
90% - 100% 0,7
—
Total trade receivables and contract assets 152,2 5,6 146,6
Movement on the Group provision for impairment of receivables are as
follows:
2023/24 2022/23
€M €M
Allowances during the year based on expected credit loss model (2,7) (2,2)
Write-offs during the year 0,3 0,2
Reversed allowances (0,2) —
(Increase)/Decrease of provision for impairment of receivables (2,6) (2,0)
16. Leases
The Group leases certain properties that relate to office space. The Group also has lease contracts for vehicles
used in its operations. Leases of office space generally have lease terms between 2 and 10 years and leases of
vehicles generally have lease terms between 3 and 4 years. The Group currently does not act in the capacity of a
lessor.
59
Right-of-use Assets:
Buildings Vehicles Total
€M €M €M
At 01.07.2022 17,6 — 17,6
Additions 4,8 1,2 6,0
Modifications 4,3 — 4,3
Depreciation expense (8,5) (0,4) (8,9)
Disposals (0,8) — (0,8)
Effect of movement in exchange rates (1,9) (0,4) (2,3)
At 30.06.2023 15,5 0,4 15,9
Right-of-use Assets:
Buildings Vehicles Total
€M €M €M
At 01.07.2023 15,5 0,4 15,9
Additions 3,9 0,1 4,0
Modifications 3,0 — 3,0
Depreciation expense (6,5) (0,3) (6,8)
Disposals (0,2) (0,1) (0,3)
Effect of movement in exchange rates 0,4 (0,1) 0,3
At 30.06.2024 16,1 — 16,1
The increase in carrying value of buildings primarily results from additions offset by depreciation expense during
the period. The Group has not generated any income from subleasing right-of-use assets during the financial year.
Lease Liabilities:
FY2024 FY2023
Total Lease at beginning of period 16,1 19,2
Additions 6,7 7,2
Principal repayment (5,8) (8,4)
Effect of movements in exchange rates (0,4) (1,9)
At end of period 16,6 16,1
Non-current 12,0 10,5
Current 4,6 5,6
Undiscounted lease liabilities:
FY2024 FY2023
Payable within 1 year 5,7 5,8
Payable within 2 to 5 years 12,2 8,9
Payable after 5 years 1,6 2,2
The interest expense on liabilities for FY24 is EUR 1,0m (FY23: EUR 0,9m). Expense related to the short-term leases
for FY24 is EUR 0,1m (FY23: EUR 0,6m).
60
17. Share capital
The share capital comprises 788.425.198 Class A shares of a nominal value of EUR 0,01 each and 6.200.000 Class B
shares of a nominal value of EUR 0,4258 each, authorised and issued. No shares carry any special rights.
Class A Shares Class B Shares Total
Changes in share
capital:
€M
Number of
shares
€M
Number of
shares
€M
Number of
shares
Share capital at
30.06.2020
7,7 771.499.331 — — 7,7 771.499.331
Capital increases 0,2 15.085.298 2,6 6.200.000 2,8 21.285.298
Share capital at
30.06.2021
7,9 786.584.629 2,6 6.200.000 10,5 792.784.629
Capital increases — 1.840.569 — — — 1.840.569
Share capital at
30.06.2022
7,9 788.425.198 2,6 6.200.000 10,5 794.625.198
Capital increases — — — — — —
Share capital at
30.06.2023
7,9 788.425.198 2,6 6.200.000 10,5 794.625.198
Capital increases — — — — — —
Share capital at
30.06.2024
7,9 788.425.198 2,6 6.200.000 10,5 794.625.198
The Group acquired 48.543 treasury shares with a nominal value of EUR 2,00 during the period and holds a total of
4.295.521 treasury shares as of 30June 2024. Shares acquired during the period and held at year end represent
0,01% and 0,5% of total shares outstanding, respectively. The Group did not sell any treasury shares during the
period. The total acquisition cost of shares held as of 30June 2024 is EUR 8,0m. The treasury shares have been
acquired via repurchases from former employees pursuant to equity compensation arrangements.
As of 30June 2024, the Group has EUR 2,0m of unpaid shares separately presented on the balance sheet within
equity.
Capital Management
The Group’s objectives when managing capital (cash and cash equivalents, and equity) are to safeguard the
Group’s ability to continue as a going concern, to provide returns for shareholders and benefits for other
stakeholders, and to maintain an optimal capital structure to reduce cost of capital. Any surplus liquidity is used to
reduce debt. The Board of Directors monitors the share and capital structure to ensure that the Group’s capital
resources support the strategic goals.
61
18. Borrowings
The borrowings comprise term loans as well as revolving facilities to fund the ongoing operations. There are
covenants attached to the loan facilities. Carrying amount of borrowings represent a reasonable approximation of
fair value.
Principal
amount,
Effective
interest
rate
Currency Maturity
Borrowing
amount,
2023/24
Borrowing
amount,
2022/23
€M €M €M
Facility B 150,0 9.14% (Variable) EUR 12 March 2026 — 163,8
Facility B 111,3 10.44% (Variable) USD 12 March 2026 — 131,9
Acquisition Facility 120,0 9.14% (Variable) EUR 12 March 2026 — 131,0
Acquisition Facility 89,0 10.44% (Variable) USD 12 March 2026 — 105,1
(Sept 2021) Incremental
Acquisition Facility
76,3 10.81% (Variable) USD 12 March 2026 — 87,0
(July 2022) Incremental
Facility
40,0 10.23% (Variable) EUR 12 March 2026 — 42,1
GS Facility 14,9 7.97% (Variable) EUR 12 March 2026 — 14,9
2023 Incremental Facility 18,4 13.63% (Variable) USD 12 March 2026 — 18,4
Revolving Credit Facility 19,5 8.15% (Variable) EUR 15 September 2028 19,5 24,1
Facility B (EUR) 374,3 11.63% (Variable) EUR 12 March 2029 386,2 —
Facility B (USD) 327,5 13.06% (Variable) USD 12 March 2029 339,3 —
Acquisition Facility (USD) 44,0 13.06% (Variable) USD 12 March 2029 45,6 —
Total bank borrowings 790,6 718,3
Under the Senior Facilities Agreement, the Group can elect to have interest periods of 1, 3 or 6 months. In June
2023, the Group agreed with the lenders that an interest period of 12 months could be selected for one year. A
portion of the debt will remain on 1, 3 or 6 month terms for FY24. This interest period election was in place until the
refinancing of debt in November 2023. See below for more details of current interest period election.
In June 2023, the Group entered into an incremental term facility whereby it borrowed USD 20m to finance the
portion of debt that will be subject to 1, 3 or 6 month interest periods in FY25.
In November 2023, Sitecore undertook a refinancing whereby all existing facilities and accrued interest were
subsumed by EUR Facility B, USD Facility B and Acquisition USD 2. The maturity date was extended to March 2029.
After November 2023, all facilities have reverted to 1, 3, or 6 months interest periods.
All facilities are repayable in full at the maturity date. Term facilities include a Payment-in-Kind (PIK) provision
whereby the borrower can elect at 50% of accrued interest to the principal amount for the initial 24 months of the
facility starting on 17 November 2024. The total amount of interest added under the PIK provision in 2023/24 was
EUR 55,7m (2022/23 EUR 42,3m).
62
In compliance with IAS 7, the following disclosure aims to enable users of financial statements to evaluate changes
in liabilities arising from repayments and currency revaluations:
2023/24 2022/23
€M €M
Total bank borrowings at beginning of period 723,0 647,7
Repayment of bank debt (730,1) (38,0)
Withdrawal of bank debt 741,2 83,1
Payment-in-kind principal accrual 55,7 42,3
Interest accrual 35,3 21,4
Interest paid (28,4) (19,5)
Currency revaluations of debt denominated in USD 5,4 (14,0)
Total bank borrowings including interest at end of period 802,1 723,0
Non-current interest payable — —
Current interest payable 11,5 4,7
Amortised loan costs (13,0) (7,7)
Total Bank Debt as presented in the Balance Sheet at end of period 777,6 710,6
Non-current bank debt 777,6 710,6
Current bank debt — —
19. Related parties
For both periods ending 30June 2024 and 30June 2023, the Group was controlled by Dynamite Holding I S.á r.l.
The Group’s ultimate controlling party is EQT VII. “Key management compensation” is disclosed in note 5.
During 2023/24 revenue from other companies within the EQT AB fund structures amount to EUR 1,1m (2022/23:
EUR 1,0m). As of the reporting date, receivables from these related parties were EUR 0,7m (30June 2023: 0,7m).
Unpaid share capital (see note 17) and Contributed capital receivable are amounts due related to an investment by
former executive management under the management incentive plan (see note 5). There are no provisions
associated with these amounts.
The Group repurchased shares totalling EUR 0,1m from employees during the period (30June 2023: 0,3m). Notes
totalling EUR 5,6m have been written associated with these repurchases and is recorded within Other payables -
non current.
20. Commitments and contingent liabilities
Owner’s mortgage of EUR 6,0m in:
• Sitecore Corporation A/S, Sitecore Danmark A/S and Sitecore International A/S
The following companies have issued a negative pledge:
• Sitecore International A/S, Sitecore Danmark A/S, Sitecore Corporation A/S, Sitecore UK Ltd., Sitecore USA Inc.,
Sitecore USA Holding Inc. and Sitecore Australia Pty Ltd.
Pledge of Intellectual properties:
• The Group has pledged its Intellectual properties of EUR 223,9m, net of accumulated amortisation (30 June
2022: EUR 240,3m, net of accumulated amortisation)
The aggregate value of Intellectual properties and financial assets provided as security for credit facilities amount
to EUR 847,4m (30June 2023: EUR 824,0m), including EUR 29,3m of cash (30June 2023: EUR 35,8m).
63
Bank Guarantees:
• The Group has issued guarantees with a total value of EUR 0,7m (30June 2023: EUR 0,8m).
Contingent liabilities
The Group's Danish entities are jointly and severally liable for tax on the Group's jointly taxed income and for certain
withholding taxes such as dividend tax and royalty tax as well as for the joint registration for VAT. Any subsequent
corrections of the taxable income subject to joint taxation or withholding taxes on dividends, etc., may entail an
increase in the entities' liability. The Group as a whole is not liable to any other parties. The Group's Danish entities
are jointly and severally liable for the joint registration concerning VAT.
21. Financial risk management
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (currency and interest risk), credit risk, and
liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and
seeks to minimize potential adverse effects on the Group’s financial performance.
The Financial risks of the Group are managed centrally. The overall risk management guidelines and policies have
been approved by the board of directors. The board provides written principles for overall risk management, as well
as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of
derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. The
CFO manages contracts and risk exposures and reports to the board of directors on a regular basis.
Market Risk
Foreign exchange risk
As a consequence of the Group’s structure, most net sales and expenditure in foreign currency are set off against
each other, so that the Group is not exposed to major exchange-rate risks.
The foreign exchange risk is related to the USD loans.
The Group’s revenue and expenses are mostly in the functional currency of the operating entity creating a natural
currency hedge. Consequently, the Group treasury’s risk management policy is to not to hedge foreign exchange
rate risks.
Sensitivity analysis
The Group is primarily exposed to changes in EUR/USD exchange rate. The sensitivity of profit or loss to changes in
the exchange rates arises mainly from USD denominated financial liabilities.
As at 30.06.2023
Impact on
pre tax profit
Impact on other
components of
equity
€M €M
EUR/USD exchange rate – increase 10%
31,6
—
EUR/USD exchange rate – decrease 10%
(38,6)
—
All other variables are held constant
64
As at 30.06.2024
Impact on
pre tax profit
Impact on other
components of
equity
€M €M
EUR/USD exchange rate – increase 10%
35,0
—
EUR/USD exchange rate – decrease 10%
(42,8)
—
All other variables are held constant
Interest rate risk
The Group’s interest rate risk arises from long-term borrowings related to the acquisitions and to fund ongoing
operations. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued
at fixed rates expose the Group to fair value interest rate risk. As of 30 June 2024, the Group’s bank debt was
comprised entirely of variable rate instruments (see note 18).
In November 2024, the Group entered into 2-year interest rate swap agreements with Nordea Bank Abp to hedge
against floating rate risk on its long-term borrowings. These swaps are accounted for at fair value with changes in
fair value recognized in profit and loss.
Sensitivity analysis
Profit or loss is sensitive to higher/lower interest from borrowings as a result of changes in interest rates.
As at 30.06.2023
Impact on
pre tax profit
Impact on other
components of
equity
€M €M
Interest rates – increase by 100 basis points
(7,3)
—
Interest rates – decrease by 100 basis points
7,3
—
All other variables are held constant
As at 30.06.2024
Impact on
pre tax profit
Impact on other
components of
equity
€M €M
Interest rates – increase by 100 basis points
(8,0)
—
Interest rates – decrease by 100 basis points
8,0
—
All other variables are held constant
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as
credit exposures to customers, including outstanding receivables. For banks and financial institutions, only
independently rated parties with a minimum rating of ‘A’ are accepted.
For customers individual risk limits are set based on internal or external ratings in accordance with limits set by the
board and the utilization of credit limits is regularly monitored. The largest individual customer balance represents
1,8% of outstanding gross Trade Receivable and the total of the largest 10 customer balances represent 11,3% of
outstanding gross Trade Receivables. The maximum exposure corresponds to the carrying amount of receivables.
Liquidity risk
Cash flow forecasting is performed on group level by management. Management monitors rolling forecasts of the
Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining
sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach
borrowing limits or covenants (where applicable) or any of its borrowing facilities. Such forecasting takes into
consideration the Group’s debt financing plans and covenant compliance.
65
The Group has undrawn revolving credit facilities of EUR 19,8m (30June 2023: EUR 14,65m) that may be available
for future operating activities and to settle capital commitments.
The table below analyses the Group’s non-derivative and derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows.
For floating rate borrowings, the rate at the balance sheet date has been applied.
The primary objective of Sitecore’s capital management is to ensure that the Group is able to fulfil all its obligations
as set out in the Senior Facilities Agreement. Financial covenants are calculated and reported to the syndicate
banks with a compliance certificate on a quarterly basis. The following covenants are tested on a quarterly basis:
• Recurring Revenue Leverage Ratio: Total Net Debt / Annualised Recurring Revenue
• Priority Debt Net Leverage Ratio: Net Priority Secured Debt Total / Cash EBITDA
• Where Cash EBITDA is defined as EBITDA calculated on the basis of billings instead of Revenue from contracts
with customers.
• The covenants are all met up to 30 June 2024. Based on current budgets and expectations, the Group
anticipates it will continue to be compliant with all covenants throughout FY25.
Note that the Bank debts / Borrowings amounts below include both principal and interest payments due over the periods noted.
As at 30.06.2023
Less than 1
year
1-5 years >5 years Total Carrying Value
€M €M €M €M €M
Bank debt and interest payable
78,6
868,6
—
947,2
715,3
Trade payables
50,4
—
—
50,4
50,4
Accrued and other payables
75,7
11,1
—
86,8
86,8
Total
204,7
879,7
—
1.084,4
852,5
As at 30.06.2024
Less than 1
year
1-5 years >5 years Total Carrying Value
€M €M €M €M €M
Bank debt and interest payable
50,1
1.209,5
—
1.259,6
789,1
Trade payables
39,2
—
—
39,2
39,2
Accrued and other payables
70,4
10,5
—
80,9
80,9
Total
159,7
1.220,0
—
1.379,7
909,2
22. Events after the balance sheet date
On 30 July 2024, Sitecore shareholders approved a resolution to issue new A-shares with a total subscription
amount of EUR 70m. This capital increase was fully paid up and resulted in an increase in Share Capital and Share
Premium of EUR 1.0m and EUR 69.0m, respectively.
The Group made the following changes to its leadership subsequent to 30 June 2024:
• Eric Stine hired as COO and appointed to the Group Executive Board.
• Michael Bannon hired as CFO and appointed to the Group Executive Board.
• Constance Lisa Pauline Minc. Choufani appointed to the Board of Directors.
There are no other significant events after the Balance Sheet Date.
66
01.07.2023 - 30.06.2024
67
Profit and Loss and Other Comprehensive Income (Parent company)
Note
2023/24 2022/23
€M €M
General and administrative expenses (14,4) (0,9)
Operating loss (14,4) (0,9)
Financial income 4 0,8 3,0
Finance costs 5 (0,8) (0,9)
(Loss) / Profit before income tax (14,4) 1,2
Income tax (expense) 6 (0,2) (2,2)
Loss for the period (14,6) (1,0)
Comprehensive loss for the period (14,6) (1,0)
68
Balance sheet (Parent company)
Note
2023/24 2022/23
€M €M
Assets
Investment in subsidiaries 7 813,8 817,4
Total financial assets 813,8 817,4
Total non-current assets 813,8 817,4
Receivables from related parties 8 61,0 82,5
Income tax receivable 0,1 —
Prepayments and other receivables 0,1 0,1
Contributed capital receivable 2,0 2,0
Total receivables 63,2 84,6
Total current assets 63,2 84,6
Total assets 877,0 902,0
Equities and Liabilities
Share capital 10,5 10,5
Unpaid share capital (2,0) (2,0)
Share premium 809,6 809,6
Treasury shares (8,0) (7,9)
Other reserve 14,5 20,1
Retained earnings (12,9) 1,7
Total equity 811,7 832,0
Other payables 14 6,0 8,4
Total non-current payables 6,0 8,4
Trade payables 14 1,0 —
Accrued and other payables 14 13,0 0,8
Income tax payable — 24,5
Payables to related parties 45,3 36,3
Total current liabilities 59,3 61,6
Total liabilities 65,3 70,0
Total equity and liabilities 877,0 902,0
69
Statement of changes in equity (Parent company)
Share
capital
Reserve for
unpaid share
capital
Share
premium
Retained
earnings /
(deficit)
Other
reserves
Treasury
shares
Total
€M
€M
€M
€M
€M
€M
€M
Equity at 01.07.2022 10,5 (2,0) 809,6 2,7 13,8 (7,6) 827,0
Loss for the period — — — (1,0) — — (1,0)
Total comprehensive income for the period — — — (1,0) — — (1,0)
Transactions with owners in their capacity as owners
Purchase of treasury shares
— — — — — (0,3) (0,3)
Equity-settled share-based payment expense
— — — — 9,4 — 9,4
Equity-settled share-based payment settlements
— — — — (3,1) — (3,1)
Total transactions with owners in their capacity
as owners
— — — — 6,3 (0,3) 6,0
Equity at 30.06.2023 10,5 (2,0) 809,6 1,7 20,1 (7,9) 832,0
Loss for the period — — — (14,6) — — (14,6)
Total comprehensive income for the period — — — (14,6) — — (14,6)
Transactions with owners in their capacity as owners
Purchase of treasury shares — — — — — (0,1) (0,1)
Equity-settled share-based payment expense — — — — 0,6 — 0,6
Equity-settled share-based payment settlements — — — — (2,4) — (2,4)
Deferred tax impact on outstanding equity awards
— — — — (3,8) — (3,8)
Total transactions with owners in their capacity
as owners
— — — — (5,6) (0,1) (5,7)
Equity at 30.06.2024 10,5 (2,0) 809,6 (12,9) 14,5 (8,0) 811,7
70
Cash flow Statement (Parent company)
Note
2023/24 2022/23
€M €M
Loss for the period (14,6) (1,0)
Income tax expenses 0,2 2,2
Non-cash items 0,4 (2,1)
(Increase) / Decrease in receivables from related parties 21,4 (43,8)
Increase / (Decrease) in payables to related parties (2,8) 15,6
Increase / (Decrease) in income tax payable — 24,5
Increase / (Decrease) in accrued and other payables 9,8 0,2
Changes in trade payables 1,0 0,2
Cash flows from primary operating activities 15,4 (4,2)
Income taxes (paid) / refunded (12,9) 7,6
Net cash flow from/(into) operating activities (12,9) 7,6
Net cash flow from investing activities — —
Settlement of share based options (2,4) (3,1)
Purchase of treasury shares (0,1) (0,3)
Net cash flow from financing activities (2,5) (3,4)
Net cash flow for the year — —
Cash and cash equivalents, beginning of the year — —
Cash and cash equivalents, end of the year — —
71
Notes (Parent company)
1. Accounting policies
2. Critical accounting estimates and judgements
3. Staff costs
4. Financial income
5. Finance costs
6. Income tax
7. Investment in subsidiaries
8. Related parties
9. Commitments and contingent liabilities
10. Events after the balance sheet date
11. Capital management
12. Financial instruments
13. Audit fees
14. Liquidity risk
72
Notes (Parent company)
1. Accounting policies
The Financial Statements of Sitecore Holding II A/S (“Parent” or “Company”) have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)
and as adopted by the European Union as well as additional Danish disclosure requirements applying to entities of
reporting class C (large).
The principal activities of the entity is to serve as the ultimate parent for the Group. Ownership of the Group and
issuance of share based compensation is managed through the equity of the Company.
The annual report is prepared according to standards and interpretations effective for financial years beginning on
1July 2023. No standards or interpretations have been adopted early.
The Parent has the same accounting policies for recognition and measurement as the Group. The Parent’s
accounting policies deviate from the Group’s accounting policies as described below. For a detailed description of
the Group’s accounting policies please refer to the consolidated financial statements, note2.
Functional and reporting Currency
The financial statements are presented in euros (EUR) and the functional currency of the entity is in EUR, as the
Company’s most significant transactions are settled in EUR.
Share-based payment
Fair value of equity instruments granted as share-based payment to employees of subsidiaries is recognized as an
investment in the respective subsidiaries and credited to equity.
Investments in subsidiaries
Investments in subsidiaries are measured at cost.
Dividend
Dividends from investments in subsidiaries are recognized in the income statement in the financial year in which
the dividend is declared.
2. Critical accounting estimates and judgements
For a description of other significant accounting estimates, assumptions and uncertainties please refer to the
consolidated financial statements, note 3.
It is management’s judgement that all critical accounting estimates with respect to the parent company are
included in note 3 of the consolidated financial statements and that there are no critical accounting estimates
which are unique to the Parent.
3. Staff costs
There are no employees hired at the Parent and therefore no related staff costs. The Key Management function is
executed via intercompany agreement. Please refer to note 5 in the consolidated financial statements for Key
Management remuneration.
73
4. Financial income
2023/24
2022/23
€M
€M
Interest income, affiliates
0,6
2,0
Interest income, external
0,2
1,0
Total financial income
0,8
3,0
5. Finance costs
2023/24
2022/23
€M
€M
Exchange rate adjustment
(0,2)
(0,7)
Other finance costs
(0,6)
(0,2)
Total finance costs
(0,8)
(0,9)
6. Income tax expense/(benefit)
2023/24
2022/23
Current tax:
€M €M
Income tax (benefit) / expense for the year
(0,2)
0,1
Income tax expense for the previous year 0,4 2,1
Total current tax expense 0,2 2,2
Income tax benefit is specified as follows:
Calculated 22,0% tax on income/(loss) for the year before income tax
(3,2)
(0,2)
Tax effects of:
Non-deductible expenses
2,7
0,1
Tax losses not recognized
1,0
—
Adjustments in respect of prior years
(0,3)
2,3
Total income tax expenses
0,2
2,2
7. Investment in subsidiaries
2023/24
2022/23
Cost:
€M €M
At beginning of year
817,4
806,2
Other movements
2,0
(0,3)
Effect of share based payments (5,6) 11,5
At end of year 813,8 817,4
74
Owned by Sitecore Holding II A/S:
Subsidiaries
Legal
form
Registered
office
Voting
shares
& stakes
Profit / (Loss)
(FY24)
€M - Unaudited
EQ (FY24)
€M -
Unaudited
Profit / (Loss) (FY23)
-
€M
EQ (FY23) -
€M
Sitecore Holding
III A/S
A/S
Copenhagen,
Denmark
100% (61,8) (604.1) (29,5) (665,8)
Impairment of investment in subsidiary
Impairment tests are performed on investments in subsidiaries if events or changes in circumstances indicate that
their carrying amount may not be recoverable. If cost exceeds the recoverable amount, the carrying amount is
written down to the recoverable amount.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
The judgments, estimates, and assumptions made are based on historical experience and other factors that
Management considers to be reliable, but which by their very nature are associated with uncertainty and
unpredictability. These assumptions may prove incomplete or incorrect, and unexpected events or circumstances
may arise. The most critical judgments, estimates, and assumptions for the individual items are described below.
The Company is also subject to risks and uncertainties that may lead to actual results differing from these
estimates, both positively and negatively.
The Group annually evaluates whether the investment in subsidiaries has suffered any impairment, in accordance
with the accounting policy stated in note 2 of consolidated financial statements. The assessment performed
utilized the figures evaluated through the Group goodwill impairment assessment and therefore the assumptions
and sensitives are consistent. Please refer to note 12 in the consolidated financial statements for assumptions and
sensitivities. There was no impairment on investment in subsidiaries recognized during the year ending 30 June
2024 (30June 2023: nil).
In addition, receivables from subsidiaries are evaluated for potential impairment and impaired if the Group
concludes that the subsidiary will not be able to repay the loan. There was no impairment on receivables from
subsidiaries recognized during the year ending 30June 2024 (30June 2023: nil).
8. Related parties
Related party transactions include compensation paid to Board of Directors and Executive Management.
For Key Management remuneration and details on staff costs please refer to note 3.
Related party transactions consist of financing transactions carried out at market rates.
Transactions presented as Receivables/Payables from/to related parties on the Balance Sheet are those that are
receivable/payable from group companies. Group companies are entities that are members of the same group as
the Company, including all subsidiaries of the Parent.
75
9. Commitments and contingent liabilities
Securities
As collateral for credit facilities in Sitecore Holding III A/S and Sitecore USA, Inc., the Company has provided a first
priority pledge of the entire share capital of Sitecore Holding III A/S, any future shares and other present and future
securities issued by Sitecore Holding III A/S to Wilmington Trust (London) Limited.
Other contingent liabilities
There are no pending court and arbitration cases.
As Management Company, the Company is jointly taxed with other Danish group entities and is jointly and severally
with other jointly taxed group entities liable for payment of income taxes as well as withholding taxes on interest,
royalties and dividends falling due for payment.
The Company has issued letters of support to subsidiaries within the Group.
10. Events after the balance sheet date
There are no significant events after the balance sheet date in addition to those disclosed in the consolidated
financial statements, note 22.
11. Capital management
For a description of capital management please refer to the consolidated financial statements, note 17.
12. Financial instruments
Sitecore Holding II A/S does not have exposure to financial instruments. Financial debt and all operations of the
Sitecore Group is carried out through subsidiaries of Sitecore Holding II A/S and affiliated companies.
13. Audit fee
Audit fees are not disclosed with reference to section 96(3) of the Danish Financial Statements Act. The group
audit fee is specified in the consolidated financial statements, note 8.
14. Liquidity risk
Cash flow forecasting is performed on group level by management. Refer to Note 21 for more details.
The table below analyses the Group’s non-derivative and derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows.
76
As at 30.06.2023
Less than 1 year 1-5 years >5 years Total Carrying Value
€M €M €M €M €M
Trade payables — — — — —
Accrued and other payables 0,8 8,4 — 9,2 9,2
Total 0,8 8,4 — 9,2 9,2
As at 30.06.2024
Less than 1 year 1-5 years >5 years Total Carrying Value
€M €M €M €M €M
Trade payables 1,0 — — 1,0 1,0
Accrued and other payables 13,0 6,0 — 19,0 19,0
Total 14,0 6,0 — 20,0 20,0
77