The heartbeat of packaging
& industrial printing
ANNUAL
REPORT
Hybrid Software Group PLC
annual report and financial
statements for the year
ended 31st December 2023.
2023
Hybrid Software Group PLC | Annual Report 2023
3
Contents
HYBRID SOFTWARE GROUP 5
Our company 6
Digital revolution in print manufacturing 8
Our value propositions 12
A year in review 14
Our markets 17
Labels & packaging 18
Ceramics 20
Textiles 22
Additive manufacturing 24
3D modelling 26
Our business segments 29
Enterprise software 30
Printhead solutions 32
Printing software 34
COMPANY STRATEGIC REPORT 37
Chairman’s statement 38
CEO’s review 40
CFO’s review 42
Principal risks and uncertainties 46
Key Performance Indicators 52
Environmental matters 54
Social and community 56
Employee matters 57
GOVERNANCE 61
Board of directors 62
Directors’ report 64
Corporate governance report 70
Audit committee report 72
Directors’ remuneration report 73
Independent auditor’s report 82
FINANCIAL STATEMENTS 93
Consolidated statement of comprehensive income 94
Consolidated statement of financial position 95
Consolidated statement of changes in equity 96
Consolidated statement of cash flows 97
Notes to the consolidated financial statements 98
Company statement of financial position 142
Company statement of changes in equity 143
Notes to the company financial statements 144
OTHER INFORMATION 151
Glossary 152
4 5
Hybrid Software Group PLC | Annual Report 2023
HYBRID
SOFTWARE
GROUP
Through its operating subsidiaries, Hybrid Software Group PLC (Euronext: HYSG)
is a leading developer of enterprise software and printhead drive electronics
for packaging and industrial print manufacturing. Customers include press
manufacturers such as HP, Canon, Durst, Roland, Hymmen, and hundreds of
packaging printers, trade shops, and converters worldwide.
Hybrid Software Group PLC is headquartered in Cambridge UK. Its subsidiary
companies are colour technology experts ColorLogic, printing software developers
Global Graphics Software, enterprise software developer HYBRID Software,
3D design and modelling software developers iC3D, industrial printhead drive
solutions specialist Meteor Inkjet, and pre-press workflow developer Xitron.
Our company
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Industrial print manufacturing
is when printing technology is used
in broader manufacturing processes where
it isn’t the print itself that is being sold.
Our company
Hybrid Software Group develops innovative technology for
industrial print manufacturing processes which use inkjet
and other printing techniques. The technology is critical
because efficiency and sustainability concerns are driving
the conversion of manufacturing processes from traditional
analogue methods to just-in-time digital production using
inkjet printing. Applications for inkjet printing include
a diverse range of goods, from labels and packaging,
to textiles, tiles, laminates, wall coverings, additive
Hybrid Software Group PLC is a public limited-liability company registered in England
and Wales with its shares traded on Euronext Brussels under stock code HYSG. It is
headquartered near Cambridge, UK. The Company employs approximately 280 employees
worldwide and has a pedigree stretching back more than 30 years.
Hybrid Software Group PLC
is headquartered near Cambridge, UK.
The Team poses for a photo after the end
of a successful show, Labelexpo Brussels.
manufacturing and 3D printing applications.
The Company is the only full stack supplier of all the
critical core technologies needed for inkjet printing. Our
principal customers are Original Equipment Manufacturers
(OEMs) of digital printing equipment, including high-speed
digital production presses, professional colour proofing
devices, wide format colour printers, and industrial inkjet
printers for ceramic tiles, packaging, textiles and additive
manufacturing, as well as end users, primarily printing
companies who purchase these devices to print and convert
labels and packaging materials. Hybrid Software Group has
traditionally provided software components and printhead
drive electronics to OEMs to enable them to build their
Our investment case
→ Inkjet adoption is increasing rapidly across
multiple industry sectors.
→ Analogue markets are converting to digital
production.
→ Hybrid Software Group enables customers
to migrate their traditional manufacturing
processes to digital inkjet.
→ Hybrid Software Group is the only vertically
integrated supplier to this market, supplying
products and technology to both manufacturers
of digital printing equipment and to
manufacturers of packaging and other printed
goods who operate them.
→ Component businesses are award-winning
technology leaders.
→ Synergies between companies in the Group,
following strategic acquisitions made during
the past 4 years, will accelerate innovation and
revenue growth.
own solutions. However, the strategic acquisitions made
over the last several years now enable the Company to
provide full turnkey solutions for OEMs which enable them
to bring new digital printing devices to market faster and
with higher quality. These solutions are higher value and
provide more revenue to the Company per device installed.
Furthermore, the OEM business is synergistic with the
Company’s end-user products, accelerating revenue growth
and increasing the Company’s market share in the inkjet
space.
6 7
Digital revolution in print manufacturing
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Digital revolution
in print manufacturing
The print manufacturing market is transitioning from analogue to digital at a rapid pace. A
number of factors have combined to accelerate this change: supply chain disruption caused
by the COVID pandemic, changing consumer demand for customised products, and the
growing realisation that the way for manufacturing industries to increase their business is
to go digital.
At the heart of this change in the printing market are the
innovations taking place in digital inkjet printing. Inkjet
printing makes it possible to change what is being printed
in real time on every object. It can be inserted at different
points in the production process, for instance during
product decoration, packaging or labelling. In addition,
inkjet can print on any surface, resulting in a revolution in
the way in which goods are produced and packaged and the
speed with which they are ready for market.
Jobfile
Computer
to plate
Prepress
Offset
printer
Digital
printer
Analogue versus digital workflow
In an analogue workflow, graphic designs are transferred
to a printing plate which is fed to the press to produce
multiples of the same item. In a digital workflow, a PDF
file created by the designer encapsulates all the data
required for printing. The PDF file is submitted to the digital
printing press via a digital front end (DFE), and can contain
different images and text for each product produced using
a technology known as Variable Data Printing (VDP).
Analogue
Digital
Image courtesy of Vollherbst.
A typical labelling workflow
Specialised software is used to prepare the PDF file for printing. This may
include merging a data stream to generate QR codes or barcodes for product
identification or security purposes; colour management to accurately match
specific brand colours; layout tools to ensure the most economical use of raw
materials; portals to review and approve the artwork on screen; and enterprise
software for workflow automation.
Other software embedded in the printing process ensures high-quality output
through rasterisation and screening depending on the specifications of the
printing device. As many as seven colours plus white and clear inks may be jetted
with different sizes of ink drops to achieve the desired output after careful
calibration to the printing device.
8 9
Digital revolution in print manufacturing
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Hybrid Software Group PLC | Annual Report 2023
3D printed
art
Digital textile
printing onto
bedsheets
Glass printing
onto windows
Direct to shape digital
printing onto cosmetic
tubes
Digital textile printing
onto furnishings
and curtains
Functional printing
onto screens
Digital inkjet
printing onto
corrugated boxes
Industrial / functional
printing onto car windscreens
and interiors
Photovoltaic
printing onto
solar panels
Digital decor
printing onto floors
and surfaces
Digital print onto
cereal boxes, wine bottles,
beer cans...
2024 Copyright © Adobe Stock
Digital print for manufacturing
Printing is part of the manufacturing process for thousands
of products that touch our everyday lives, as the illustration
shows below. Inkjet is the technology driver for digital
conversion of these processes and makes it possible to
produce products that were simply not possible with
analogue processes, such as customising vehicles, garage
doors, or even jetting onto the side of aircraft. Hybrid
Software Group enables its customers to migrate their
traditional manufacturing processes to digital inkjet
printing.
10 11
Our value propositions
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Hybrid Software Group PLC | Annual Report 2023
Our value
propositions
Hybrid Software Group is the only full stack supplier of all the critical core technologies
needed for inkjet printing. With a third of our headcount working in engineering and
approximately a third of revenues reinvested in R&D, we are dedicated to innovation on
behalf of our customers and maintain a strong IP position with numerous patents. Five new
patent applications were granted for Hybrid Software Group companies in 2023.
Original Equipment Manufacturers
(OEMs)
Our value proposition to OEMs of industrial digital printing
equipment, typically featuring inkjet technology, is to offer
turnkey solutions and individual components to enable
them to migrate analogue processes to digital and to bring
new digital printing devices to market faster and with
higher quality.
Print service providers and converters
Print service providers and converters are industrial
manufacturers of products, such as labels, cartons,
tiles, displays, fabrics, flooring, décor, etc. which are
typically produced using digital printers made by OEMs.
Our value proposition here is to offer a complete set of
software applications to maximise efficiency in production
workflows.
Courtesy of Koenig & Bauer. For illustration purposes only.
Photorealistic rendering of George Dickel Tennessee Whisky
performed by iC3D operated by Diageo, PLC.
Image courtesy of Koenig & Bauer.
12 13
A year in review
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Hybrid Software Group PLC | Annual Report 2023
A year in review
Announcing internal
startup to focus on 3D
software
HYBRID Software has created an
internal startup unit to develop and
advance the company’s software
solutions for the 3D & additive
manufacturing sector. The unit is
headed up by Kris Binon, the former
director of Flam3D, the Benelux
Additive Manufacturing Association.
2023 FLAG Brad Brown
Strategic Partner Award
Executive Vice President – Americas,
Michael Agness, has been awarded
the 2023 Brad Brown Strategic
Partner Award from the Flexo
Label Advantage Group (FLAG).
Award recipients are chosen based
on Commitment, Creativity, and
Excellence – three character traits of
Brad’s – in their support of FLAG.
Michael Agness shown receiving the
2023 FLAG Brad Brown Strategic
Partner Award.
Leveraging Group
synergy to win two 2023
Pinnacle Product Awards
The highly esteemed Printing United
Alliance Pinnacle Product Awards
recognize products that improve
or advance the printing industry
with exceptional contributions in
quality, capability, and productivity.
Global Graphics Software won a
2023 Pinnacle Product Award in the
Technology category for SmartDFE™.
This revolutionary digital front-end
solution plays a pivotal role in bridging
print jobs and printing devices and
includes ColorLogic’s cutting-edge
color management technology.
ColorLogic’s CoPrA 9 also won a
Pinnacle Product Award in the Non-
Output Device category, raising the
number of award-winning ColorLogic
products to three.
Barbara Braun-Metz of ColorLogic holds
the 2023 Product Pinnacle Award
for CoPrA.
Heath Luetkens has
been appointed Business
Manager for 3D Graphics
Heath was a key employee of
iC3D Software for more than 10
years prior to their acquisition by
HYBRID Software, making him the
perfect candidate to champion
further innovation in 3D graphics.
With the recent acquisitions of iC3D
visualization software and Quadraxis,
HYBRID Software has increased its
focus on 3D graphics software as
a strategic growth opportunity. In
his new role, Heath Luetkens will
oversee the development of these
products and their integration with
HYBRID Software’s PACKZ and STEPZ
PDF editors and its CLOUDFLOW
enterprise workflow software.
Guido Van der Schueren, Olivier
Moeyersoms, and Pascal Pernot
of Hybrid Software ring the bell to
celebrate a new order with Christophe
Seguin, Managing Director of ELC
Etiquettes.
New orders at
Labelexpo Europe
CEO Mike Rottenborn closes the deal
on a new partnership with Zhejiang
Weigang Machinery Co Ltd.
New partnerships at
All in Print China
Hybrid Software
appoints Igor Vandromme
as Business Manager, New
Market Segments
To champion growth into new
market segments, HYBRID Software,
the innovative software solutions
provider for labels and packaging,
announces the appointment of Igor
Vandromme as Business Manager for
New Market Segments.
February
April
March
July
September
November
August
Kris Binon,
former director of Flam3D.
14 15
A year in review
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Hybrid Software Group PLC | Annual Report 2023
Our
markets
The Company operates in all digital printing
and manufacturing segments, but sales
and marketing efforts target four strategic
growth markets: packaging, ceramics,
textiles, and 3D printing & additive
manufacturing. In each of these segments,
inkjet technology is giving brands the
flexibility to respond to changing customer
demands by just-in-time digital production,
and to create products that would not
be possible using analogue production
methods. Set against the transition to
digital printing, another trend is at play:
manufacturers of digital printing devices
are looking for turnkey software solutions
that are fast and flexible enough to power
the next generation of digital inkjet printers
at blistering production speeds. The
Company’s software engineering expertise
allows us to develop solutions to meet and
exceed these requirements.
Dan Harvey, Electronic Engineer, working at a print test rig
in Meteor Inkjet’s main laboratory.
16 17
Our markets
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This market requires specialised knowledge and advanced software solutions to provide
the speed and precision required for high-volume production of labels and packaging.
Hybrid Software Group offers OEMs and print service providers the full gamut of expertise
required, from 3D visualisation of packaging designs, faithful reproduction of brand
colours, layout and proofing tools, to the high-speed processing of variable data for
personalisation.
Labels & packaging
Innovation
It has been observed that the packaging industry seemed to
use the pandemic as a platform for growth and innovation
(a). There have certainly been many exciting developments
in recent years with water-based inks, paper pouches,
flexible films and recycled materials. One such is Direct-to-
Shape printing which prints the product “label”, including
full-colour images, text linework, and other special effects
directly onto cans, bottles, sleeves and other shaped
objects as an in-line step in the manufacturing process.
Flexibility
Whilst packaging produced by the flexographic process
accounts for the largest share of the market in Europe and
the US, the share of digitally printed labels and packaging
is rising significantly. This is due to a number of factors,
not least its flexibility whereby short runs can be produced
quickly in response to changing consumer demand. Most
packaging in Asia is still printed with gravure cylinders,
but this is also migrating toward flexographic and digital
printing methods. Asia is projected to be one of the highest
growth areas for digital label printing over the next five
years.
A closer look
According to “The Future of Digital Printing to 2032”
(b), in 2032 digital print will account for almost a
quarter of the global value of all print and printed
packaging by value, worth $230.5 billion. The same
report indicates that inkjet accounted for 61.4%
of digital print value with 62.4% of volume in 2022
and predicts that this will increase to 74.1% of
value and 77.5% of volume in 2032. Packaging will
see the biggest change, with digital print gaining
traction in corrugated, cartons, flexible packaging,
rigid plastics and metal. In 2022, Smithers estimated
that the overall package printing market was worth
$473.7 billion and would reach $551.3 billion by 2027
(constant 2021 prices), with a growth rate of 3.1% (c).
Sustainability
The rising prominence of the ESG - Environmental,
Social and Governance - agenda, new legislation, and
consumer pressure are fueling practical measures to
reduce environmental impacts. One of the first steps
towards sustainability is the reduction of waste, and since
digitally printed packaging can be produced in very precise
quantities, the digital conversion of packaging will continue
to be driven by sustainability initiatives.
Smart factories
As more consumer brands seek to incorporate inkjet
printing into their production lines, the Company has
developed SmartDFE™, a solution to add print into
Smart Factory and Industry 4.0 environments via a Smart
Digital Front End (DFE). This solution went into full scale
production with a number of OEM partners in 2022, with
more new partners added in 2023.
a. Dave Zwang https://whattheythink.com/articles/113241-time-thrive/
b. https://www.smithers.com/services/market-reports/printing/thefuture-of-digital-printing-to-2032
c. https://www.smithers.com/en-gb/services/market-reports/printing/ the-future-of-package-printing-to-2027
18 19
Our markets
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Hybrid Software Group PLC | Annual Report 2023
Inkjet becoming standard
Digital printing has revolutionised the decoration of ceramic tiles. Industrial inkjet systems are
now considered to be the industry standard and have rapidly replaced more than 90% of the
screen printers worldwide printing applications for ceramic tiles in most worldwide markets.
The ceramics market is heavily dependent on regional economic conditions and trends for
new construction and renovation projects. As residential or commercial construction projects
spring up around the globe there is more demand for ceramic tiles for interior and exterior
decoration. China is a key producer and consumer of ceramics although there is also a dynamic
industry in Europe, and growth opportunities in many other regions.
Dedicated features
The Company’s software and electronics solutions are compatible with all the leading
printheads used for ceramic tile decoration. Meteor Inkjet’s printhead drive electronics
and software provide scalable, customisable solutions for systems of any size, speed, or
complexity. Special features for ceramic tile printers include recirculating printheads and
ink systems to prevent the sedimentation and nozzle blocking to which heavily-pigmented
ceramic inks are prone. The Company’s products fully implement the necessary control
functions required of such systems.
Economical and flexible
Digital printing of ceramic tiles offers significant cost advantages over analogue screen
printing. Short production runs become economically feasible due to lower set-up
requirements and reduced stock of finished goods. Other manufacturing benefits include less
breakage/waste due to non-contact printing and ease of colour matching for repeat orders.
Inkjet-printed ceramic tiles offer attractive design benefits including: the ability to produce
realistic images of marble and other natural materials and to print large quantities of tiles
without repeating patterns; and ink systems to prevent the sedimentation and nozzle blocking
to which heavily-pigmented ceramic inks are prone. The Company’s products fully implement
the control functions required of such systems.
Ceramics
A closer look
The global ceramic tiles market size was estimated
at USD $355.31 billion in 2021 and is expected
to witness a CAGR of 7.1% from 2022 to 2030,
powered by demand from construction projects in
emerging economies of Asia Pacific including China
and India.
Although ceramics enjoys the highest percentage of
digital production of any industrial inkjet segment,
it is forseen that new printhead designs and ink
formulations will enhance market penetration even
further. The use of inkjet will also increase for tile
decoration in the future as it will be used not just
for printing designs but also for simulating textures
and highlights on ceramic tiles by applying glossy or
matte finishes in precise patterns.
Finally, ceramic tiles comply with green building
standards* and are gaining traction in flooring and
wall applications, but the majority of tile usage is still
in flooring applications (d).
2024 Copyright © Adobe Stock
Inkjet printers for ceramic tiles have long been one of the strongest markets for Meteor
Inkjet’s printhead drive electronics, and 2023 brought strong growth both in China and in
European markets.
d. www.grandviewresearch.com/industry-analysis/ceramic-tilesmarket
20 21
Our markets
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Hybrid Software Group PLC | Annual Report 2023
Many facets
The global digital textile printing market is segmented into
clothing/apparel, home décor, soft signage, and industrial.
Clothing & apparel was the largest digital segment and
made up of more than 53% of digital textile production in
2021 (e). Digital textile printing processes include either
Direct-to-Fabric where the design is printed onto a roll
of fabric that is later made into a garment, and Direct-to-
Garment such as the printing of designs onto t-shirts or
promotional merchandise. The disruption to supply chains
caused by the global pandemic has led many to believe that
a systemic change to the textile supply chain has begun
and that transformation is underway towards an increase
in digital production. In any event, the benefits of printing
on demand using digital inkjet are increasingly appreciated
by textile manufacturers. Smithers’ data show that as more
print service providers invest in dedicated inkjet textile
presses, equipment sales will pass the €1 billion per year
mark in 2026.
A key driver
Sustainability is a key driver for digital inkjet production
because it reduces water, energy usage, pollution and
waste. The latter is of special interest: the amount of textile
production ending in landfill is a particular focus for brands
who are increasingly aware of their consumers’ demand for
environmentally and socially responsible business practices.
It’s not only in retail where sustainability is a factor; there
is increasing demand for green credentials in the use of
textiles for public sector spaces.
Textiles
Shorter cycles benefit fashion
Digital inkjet enables brands to respond to changing consumer behaviour as fashion cycles
shorten and more goods are purchased on-line with scope for personalisation. In 2022,
additional supply chain disruption and increasing de-globalisation has accelerated the trend
towards producing closer to the consumer. Digital production provides more control over
inventory shortening supply chains and facilitating smaller and more flexible production runs.
A closer look
Recent forecasts indicate that the global digital
textile market will see a compound annual growth
rate of 12.7% by 2026, pushing global value to
€6.95 billion in 2026 (f). This will see inkjet’s share
of the total printed textile market – 52.7 billion
square metres (2019) – rise from 6% to 10% over the
forecast period.
This represents a significant opportunity for digital
textile OEMs. Dramatic increases in energy prices
have only served to highlight the efficiency benefits
of digital printing and reduce the payback time for
new investments in digital textile printing.
e. Grand View Research. https://www.grandviewresearch.com/industry-analysis/ digital-textile-printing-market-
report
f. The Future of Digital Textile Printing to 2026, Smithers. https://www.smithers.com/ services/market-reports/
printing/the-future-of-digital-textile-printing-to-2026
2024 Copyright © Adobe Stock
The steady transition to digital production is resulting in many new digital textile printers
coming to market. The Company’s reputation for high-speed software, colour management
technology, and expertise in inkjet drive electronics enables us to respond quickly to
manufacturers’ demands for turnkey solutions to drive these machines.
22 23
Our markets
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Hybrid Software Group PLC | Annual Report 2023
Beyond prototyping
Inkjet 3D printing is one of the most flexible additive
manufacturing technologies, supporting applications that
range from robust metal components to co-moulded parts
fabricated from multiple materials, including cutting edge
“functional” printing for manufacturing electronics. This
ability to create radical new products is helping to drive 3D
printing adoption in the traditional manufacturing space.
An industry that used to produce only prototypes is now
shifting to volume production.
Agile and just-in-time
There are two types of inkjet additive manufacturing: the
first type is known as binder jetting - using inkjet printheads
to jet a glue or binder on a bed of sand or powder. The
powder bed means there is less need for adding supports
Additive manufacturing
Kris Binon, AM Business Development
Manager, poses with the Meteor Inkjet team
during Formnext 2023 – the Hub for
Additive Manufacturing.
A closer look
Inkjet additive manufacturing has all the benefits of
digital printing. It is Industry 4.0 compliant, makes
hardware development agile, enables just-in-time
manufacturing for minimal inventory cost, and is
inherently low-waste with more opportunity for
sustainability. The estimated global market size
rose to USD $17 billion in 2021 compared with
USD $13.8 billion in 2020 (g). CAGR estimates are
quite optimistic, ranging from around 21% to 30%
over the next 7- 8 years. Key drivers for growth are
aerospace, bio-medical/healthcare and automotive
applications. Additive manufacturing for production
applications represents 38% of the total additive
manufacturing market in 2021 (h), a significant
shift from the predominantly prototyping use cases
where additive manufacturing first gained traction.
Inkjet 3D printing is expected to grow from about
2% to 10% of the global market by 2027, driven by
consumer electronics, functional printing, biosensing
and a government drive to adopt digital printing
policies (i).
2024 Copyright © Adobe Stock
Inkjet-enabled additive manufacturing builds on the technology developed for digital
printing. It is Industry 4.0 compliant, makes hardware development agile, enables just-
in-time manufacturing for minimal inventory cost, and is inherently low-waste with more
opportunity for sustainability.
to overhanging structures; the second type is materials
jetting - heating polymer filaments to a liquid state so they
can be deposited in layers using inkjet printing technology,
then cured with UV light. Materials jetting using UV cured
polymers has excellent detail and accuracy and a unique
capability for combining multiple materials and colours in
a single print job. Materials jetting is also the only additive
manufacturing technology capable of functional printing
for applications like printed circuit boards, embedded
electronics and batteries.
Through its subsidiary Meteor Inkjet, the Company helps
manufacturers harness the power of inkjet for additive
manufacturing applications without the distraction of
having to design electronics and software solutions in-
house. Meteor can radically simplify the path through
development to production for 3D inkjet printer
manufacturers and integrators.
g. Extrapolated from “https://www.grandviewresearch.com/industryanalysis/additive-manufacturing-market”
Additive Manufacturing Market Size Report, 2030
h. “https://www.fortunebusinessinsights.com/industry-reports/3d-printingmarket-101902” 3D Printing Market
Size, Growth | Global Research Report [2029] (fortunebusinessinsights.com)
i. “https://www.grandviewresearch.com/industry-analysis/additive-manufacturingmarket” Additive
Manufacturing Market Size Report, 2030 Copyright © Xaar Plc
24 25
Our markets
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Hybrid Software Group PLC | Annual Report 2023
3D modelling
Building on the recent purchase of the Quadraxis IP,
HYBRID Software has created Capture 3D, a technology for
on-the-mark 3D modelling and shrink sleeve quality. Reflex
cameras are used to accurately scan 360 degrees of the
model to perform 2D artwork to 3D modelling mapping.
This allows distortion of artwork due to metal forming or
heat shrinkage to be accurately compensated, and results
can be shared in a visually realistic 3D preview. With this
Pascal Wybo, Product Manager of PACKZ and STEPZ, demonstrates Capture 3D technology to
the market for the first time at Labelexpo Europe 2023.
iC3D software generates photorealistic 3D virtual mock-ups
for labels and packaging applications.
HYBRID Software purchased iC3D in early 2022 to provide a software platform for
3D modelling and photorealistic ray tracing for labels and packaging applications. By
accurately modeling the appearance of labels, cartons, bottles, and other types of
packaging in software, iC3D reduces the need for physical printing of product samples
and speeds time to market. In late 2022, HYBRID Software made an additional investment
by purchasing the intellectual property of Quadraxis, a French software company with
very specialised software for image capture and accurate measurement of distortion for
thermoformed packaging and metal containers.
innovative technology, precise and easy grid distortion
can take place in minutes instead of days, speeding up
customers’ time to market drastically while also increasing
quality. In the last step, the 3D artwork is mapped to a 3D
model, which can then be shared as part of the HYBRID
workflow for approvals and then sent on its way to print.
Processes which usually take days to perfect are integrated
into a smooth workflow and completed in minutes.
26 27
Business segments
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Hybrid Software Group PLC | Annual Report 2023
Our
business
segments
Enterprise software
file preparation and workflow automation
for print manufacturing
Printhead solutions
electronics and software for industrial
inkjet devices
Printing software
graphic processing engines for fast and
high-quality digital output
Xitron’s KeySetter can reduce make-readies by an average of 20-50%,
which increases operating profit by saving on labour, paper, and ink.
28 29
Business segments
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Enterprise software
HYBRID Software’s products are based on the company’s
extensive experience in the labels and packaging industry
as well as their commitment to industry standards: no
proprietary or legacy file formats are used by HYBRID
Software’s products, only industry standard formats like
PDF and TIFF.
Our products are used by thousands of customers
worldwide in all areas of pre-press and printing, including
labels and packaging, folding cartons, corrugated, and wide
format. HYBRID Software’s products are used both for
conventional and digital printing processes.
Under the HYBRID Software brand, we offer specialised production software designed
primarily for labels and packaging, including native PDF workflow and editing, variable data
embellishment and imposition, enterprise cloud and SaaS solutions, scalable technology
with low cost of ownership, and direct integration with leading Enterprise Resource
Planning (ERP) systems and output devices.
Although HYBRID Software supplies OEM customers who
manufacture equipment for package printing, most of its
customers are end users: companies who print and convert
labels and packaging to support brands and consumer
product companies. Selling directly to end users requires
specially trained employees in all major markets worldwide
to provide sales, support, training, installation and
integration services, and these employees are critical to the
success of HYBRID Software.
Key products
CLOUDFLOW
A modular production workflow suite for file processing,
asset management, soft proofing and workflow
automation. It is a flexible application platform specifically
tailored for packaging graphics with support for, among
other things, PDF colour separation, trapping, layout, and
variable data as well as rasterisation and screening using
the Company’s leading Harlequin Core RIP. CLOUDFLOW
can run on physical hardware as well as in public or private
cloud computing environments.
MyCLOUDFLOW
A multi-tenant version of CLOUDFLOW that is hosted in a
dedicated Amazon Web Services cluster and maintained
by HYBRID Software’s IT professionals instead of by their
customers’ local IT departments. It provides very high
uptime and data security with a cost-effective monthly
Software-as-a-Service pricing model.
PACKZ
The leading professional PDF editor for packaging and
label production using any printing method: flexography,
offset lithography, gravure, as well as digital printing.
PACKZ operates on native PDF files and uses 64-bit
multi-processing and multithreading facilities for high
performance. PACKZ provides a “Swiss Army Knife”
containing a full set of tools for packaging pre-press, and
its support for native PDF eliminates the need for file
conversions or proprietary file formats.
STEPZ
A specialised production tool derived from PACKZ but with
a feature set aimed specifically at digital printing of labels
and packaging. STEPZ contains the same powerful tools for
layout and variable data as PACKZ but drops functionality
such as trapping which is not required for digital printing.
iC3D
A full software suite that generates photorealistic 3D virtual
mock-ups and offers a large library of modelling templates
for digital packaging design and prototyping.
Capture3D
Capture3D allows distortion of artwork due to metal
forming or heat shrinkage to be accurately compensated,
and results can be shared in a visually realistic 3D preview.
With this innovative technology, precise and easy grid
distortion can take place in minutes instead of days,
speeding up customers’ time to market drastically while
also increasing quality.
MyCLOUDFLOW
MyCLOUDFLOW was released to the market in April
2023, presenting customers with rapid, hassle-
free access to CLOUDFLOW. Hosted by HYBRID
Software on the fastest cloud computing platforms,
MyCLOUDFLOW brings convenience and security to
the label & packaging industry, without requiring in-
house IT support or heavy capital investment.
PACKZ’s Content XML for dynamic content creation
using standard markup language.
Customer La Commerciale uses the Proofscope module
within CLOUDFLOW to ensure the wine label artwork
is optimised for print.
30 31
Business segments
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
The industrial inkjet market is very broad and fast growing,
and includes ceramic tiles, flooring and décor, wallpaper,
labels and packaging, functional and 3D printing, product
decoration, and textiles. Our software and proprietary drive
electronics send data to printheads inside inkjet devices
to control the output produced by these printheads.
Printheads are a critical component of an inkjet press and
generally contain multiple nozzles for jetting ink or other
fluids onto substrates.
The major industrial printhead manufacturers are our
route to identifying inkjet development projects around
the world. Consequently, we work closely with all leading
printhead vendors, including Xaar, FUJIFILM Dimatix,
Kyocera, Konica Minolta, Memjet, Toshiba TEC, SII, Ricoh,
Epson, and Xerox. We continually develop hardware and
software drivers for new printhead models and partner
with printhead manufacturers and OEMs to accelerate their
route to production.
Printhead solutions
Meteor’s HDC-2R26 drive electronics for the Ricoh TH6310F
printhead are easily scalable to systems of any size and, coupled with
Meteor’s comprehensive software, OEMs can significantly reduce the
effort and risk associated with the design and delivery
of industrial inkjet printers.
Our solutions are modular, scalable, and production-ready
and are supported by a world-class technical team, based
near Cambridge, UK as well as in key markets including
China and North America.
Customers
Our solutions reduce development risk and time to market
for manufacturers building new industrial inkjet printers.
Among our customers in this segment are Mark Andy, a
leading label equipment manufacturer in the US; Hymmen,
a leading printed laminate equipment manufacturer in
Germany; and China’s leading ceramic tile decoration
equipment manufacturer.
Under the brand of Meteor Inkjet, we develop and supply printhead drive electronics,
software, tools and services for industrial inkjet systems and printing devices.
Meteor Inkjet has been granted a US patent for
“Methods and Systems for Shell Formation in
3D Printing.“ Exploiting the powerful greyscale
capability of inkjet, Meteor’s patented ShellPro™
technology offers step-function savings in the
energy and materials required to create complex 3D
structures through binder jetting.
Key products
Meteor Inkjet supports the leading printheads demanded
by OEMs and print system integrators worldwide with
solutions that provide high-speed output, unmatched
quality, and rapid time to market for new product launches.
We collaborate closely with printhead manufacturers to
support the launch of new printheads with custom drive
electronics and software.
Electronics
Powerful, flexible and scalable drive electronics for all major
industrial inkjet printheads.
Software
OEMs can license an application-tuned Meteor Digital Front
End or develop bespoke software using a Meteor Software
Development Kit. Optional integrated Harlequin RIP and
ScreenPro Advanced Inkjet Screens are available, along with
NozzleFix™ and NozzleMask™ to compensate for missing
nozzles that cause artefacts in printed output as well as the
award-winning patented PrintFlat™ software for output
uniformity.
Tools and services
DropWatcher™ for analysing and tuning ink drops in flight,
as well as waveform development services for optimised
output quality of any ink and substrate combination.
32 33
Business segments
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Before graphic designs can be printed or displayed on
a monitor, they must be broken down into vector data
(mathematical drawing algorithms), raster data (image
pixels), and/or screened data (calibrated areas of ink or
pigment representing image data). Our Global Graphics
Software brand is one of the world’s foremost developers
of the graphic processing engines, known as Raster Image
Processors or RIPs, that are used for these tasks.
Colour management is also required for high-quality
output, a task which is especially difficult for digital
printing where the inks supported by the printer may not
be capable of exactly matching brand-specific spot colours
used for packaging and corporate branding. Our ColorLogic
brand provides a full set of products for these demanding
applications, as well as a Software Development Kit (SDK)
which allows OEMs to produce their own customised colour
management tools.
We develop software components and workflow solutions
for the high-speed digital printing of photo books,
labels, packaging, interior décor, textiles and ceramics.
The company’s combination of software and first-rate
engineering skills enables it to help press manufacturers to
respond to technical challenges with innovation, meeting
their speed and quality requirements, and getting them to
market quickly.
Printing software
For more than 30 years, our Printing Software business has been driven by the high-
performance Harlequin RIP, a Raster Image Processor which forms a critical part of the print
process for tens of thousands of customers worldwide. We have continued to enhance
Harlequin to meet the needs of the digital printing market: high-speed processing which runs
efficiently on off-the-shelf hardware while supporting fully variable print data.
Customers
Customers include Group companies HYBRID Software,
Meteor Inkjet, and Xitron plus OEMs such as Hewlett
Packard, Mimaki, Mutoh, Canon, Durst, Roland, Agfa, Kodak,
Kirk-Rudy, Postmark, Ryobi, Mitsubishi, Memjet, Presstek,
Printware and Neopost, as well as many others who embed
our printing software solutions into their own branded
Digital Front Ends (DFEs).
Licensing
Solutions are typically licensed under technology
agreements and reseller agreements. We are noted for
our flexible approach to licensing technology and pride
ourselves on being a trusted commercial and development
partner. This is facilitated by a Technical Services team who
work to accelerate each customer’s time to market, and
also by an experienced product support team.
Thorsten Braun with G7 System Certifications
for CoPrA and ColorAnt
Key products
Harlequin Core
A Raster Image Processor (RIP), specialised software that
converts text and image data from many file formats
including PDF, TIFF™ or JPEG into a format that a printing
device can understand and output. It produces unmatched
quality without sacrificing speed, which means that printing
devices which incorporate Harlequin can be kept running at
full rated speed, even on the most complex jobs, without
incurring high costs for computing hardware.
SmartDFE
A turnkey Digital Front End (DFE) based on Harlequin Direct,
CLOUDFLOW, and Meteor for digital printing of labels and
packaging within Industry 4.0 automated manufacturing
environments.
Harlequin Direct
Software that drives print data directly to the printer
electronics instead of buffering them on mass storage
devices, allowing the development of faster, wider and
higher resolution printing devices.
ScreenPro
Software that converts continuous tone image data into
ready-to-print halftones (dots of varying size and spacing) in
real-time with no compromise on quality.
Mako SDK
Software that creates, rasterises, converts, analyses and
optimises many different page description languages,
allowing print software developers full control over colour,
fonts, text, images, vector content and metadata with
precision and performance.
Colour management software
Colour accurate matching of brand colours for digital
production using four or up to seven process colours.
Products include CoPrA, ColorAnt, ZePrA, as well as a full
SDK for OEM licensing.
Navigator Harlequin RIP and workflow
Software that provides prepress environments with fast,
predictable, and reliable interpretation of PostScript, PDF,
and EPS format files.
Navigator DFE
Software that helps prepare jobs, manage colour, and
control digital output devices built with Memjet or any
standard inkjet printhead.
Output device interfaces
Hardware and software solutions to connect RIPs to
Computer-to-Plate devices, imagesetters, proofers, digital
presses, high-speed copiers, and inkjet printers, extending
the life of legacy equipment.
Xitron’s SmartFlexo optimises plates and press response
by selecting the AM to FM transition point. The technology
eliminates trailing edge voids and maintains dots in hard-to-
hold highlight areas with multiple SmartDot choices.
Standard
Screening
SmartFlexo
Screening
34 35
36 37
Hybrid Software Group PLC | Annual Report 2023
2023 proved to be another difficult year for many regions in the
world and for the industries we serve: packaging and industrial
printing. Nevertheless, we continued to invest in the development
of innovative solutions for our customers.
Group revenues increased by 2.9% over 2022, and by careful cost
management we delivered an adjusted net profit from continuing
operations that was 51.5% higher than 2022.
COMPANY
STRATEGIC
REPORT
Chairman's statement
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Chairman’s statement
Guido Van der Schueren,
Executive Chairman
2023 proved to be another difficult year for most regions
of the world and for the industries we serve: packaging and
industrial printing. Interest rates rose quickly to try and curb
inflation but this limited capital investment by many print
providers, especially in the United States. In addition, the
German “angst” over energy prices and the overall economy
impacted our sales in that key region.
While we can’t control the macroeconomic climate in which
we operate, we can and do control how we invest for the
growth of Hybrid Software Group. We’re deeply committed
to innovation on behalf of the industry, and we listen to our
customers’ requests to help shape our development planning.
With limited growth forecasted for 2023, we invested in
carefully selected areas to prepare for future growth.
In 2022 we began investing in a cloud-hosted, multi-tenant
SaaS version of our workflow software called MyCLOUDFLOW
which enables printing companies to add powerful workflow
automation tools without making a heavy capital investment
in servers and IT resources. Instead, Hybrid Software manages
MyCLOUDFLOW’s security and data integrity with our own
expert resources. I’m pleased to report that 2023 brought
real commercial success for MyCLOUDFLOW, with more
than ten major customers migrating their workflow to our
hosted environment and no unplanned outages or service
interruptions. This helps accelerate our transition from
revenues based largely on perpetual license sales to a much
higher blend of subscriptions and SaaS revenues from print
providers.
Additive manufacturing and 3D printing has been another
area of investment in 2023, with some strategic hiring and
sharing of R&D resources from our packaging business to
focus on software for additive manufacturing. This builds
on the success of Meteor Inkjet in the 3D space, where
they supply printhead drive electronics to dozens of device
manufacturers. As additive manufacturing moves from a
novel concept to a high-volume manufacturing process, our
experience in image processing and workflow automation will
provide enabling technology for 3D printing and we expect to
see real revenue growth in this segment beginning in 2024.
Guido Van der Schueren,
Executive Chairman
Economic conditions going into 2024 remain suboptimal in many of our most important
markets. The wars in Ukraine and Gaza are still a major concern, and the economic
conditions in Europe, China, and the UK could deteriorate further. But there are also
reasons to be optimistic: we never stopped investing in our people, products and customers
resulting in a stronger market position than ever before, hence we expect to continue to
grow into 2024 without relying on ideal economic conditions in order to achieve this. Our
sales to print providers in both Germany and the US (our two largest regions) have shown
a turnaround starting in Q4 and continuing through the present (Q1 of 2024) from the
disappointing results of early-mid 2023. To help support our customers, we have once again
held the line on price increases for software and maintenance in 2024.
2024 also brings the return of a critical trade fair that is a milestone for our industry and
for me personally. Drupa (from “Druck und Papier”) returns to Düsseldorf on May 28 after
an eight-year hiatus and will attract hundreds of thousands of suppliers and print providers
over eleven days. The COVID-19 pandemic caused the unfortunate postponement and
eventually the cancellation of Drupa 2020, so the last Drupa show took place in 2016. The
packaging and graphic arts industry is constantly changing; that’s the key to its longevity.
But it changes to the rhythm of Drupa, with each fair bringing a new wave of innovation and
advanced technology. This will be my eleventh Drupa, a real milestone for me personally. I
look forward to meeting with thousands of customers, industry colleagues, and friends at
Drupa and anticipate a strong year for the business as a result.
In closing, I would like to thank the stakeholders of Hybrid Software Group: our
shareholders, our 277 employees, our Board and management team, and last but certainly
not least, our customers for their continued support. Our investments in technology and
personnel and our dedication to the market put us in a very good position for growth in
revenue and profitability in 2024 and beyond.
“We’re deeply committed to
innovation on behalf of the industry,
and we listen to our customers’
requests to help shape our develop-
ment planning”
38 39
CEO's review
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
CEO’s review
One of the unique aspects of Hybrid Software Group is
the multiplicity of our revenue streams. Although we are
structured as a software company, we derive revenues not
just from software but from printhead drive electronics
for inkjet printing devices. Additionally, we sell both to
OEMs who manufacture inkjet printers and to the printing
companies who operate them to produce labels, packaging,
ceramic tiles, textiles, surfaces and wall coverings, and many
other products. These revenue streams are not perfectly
correlated—they rise and fall independently based on many
different factors—and this hedges our risk in challenging
economic environments like we encountered in 2023.
Our Enterprise Software segment creates software
to automate the production of high-quality labels and
packaging, which is sold mainly to print providers who
produce packaging for retail brands and manufacturers of
consumer goods. Interest rates rose rapidly in early 2023
to dampen inflation, but this also dampened consumer
spending and made it more difficult (and less necessary)
for packaging printers to invest in new equipment and
software. We saw strong growth in France and Benelux
but softer sales in the largest regions, North America and
Germany. As a result, Enterprise Software revenues fell by
4.2% in 2023.
However, our sales to OEMs who manufacture printing
devices were much stronger. Our Printhead Solutions
segment was severely hampered in 2022 by the limited
availability of various integrated circuits but they recovered
significantly in 2023, with revenues up 30.4% from 2022.
We attribute this to three factors: the emergence of China
as a global leader in inkjet printing, the advancement of 3D
and additive manufacturing based on inkjet technology, and
the design and development of many new inkjet printers by
our customers. Many of these machines are scheduled to be
launched in May at Drupa, the largest global industry trade
show, after which they will start shipping in volume.
Our Printing Software segment is the oldest part of Hybrid
Software Group, with Xitron and Harlequin Raster Image
Processors (RIPs) shipping for more than 30 years. This
segment was the focus of a significant restructuring effort
Mike Rottenborn,
Chief Executive Officer
Mike Rottenborn
Chief Executive Officer
in 2023 to better align the products and staffing with the needs of our customers for the
next 30 years. We added staff in the team that builds the SmartDFE—an intelligent Digital
Front End for high-speed inkjet devices built on our Harlequin Direct™ technology—while
redeploying or eliminating some positions in other areas. 2023 revenues dropped by
2.1% from the previous year, but as I write this (in Q1 of 2024), we’ve already announced
substantial new sales of both Harlequin and SmartDFE in 2024, and with an improved cost
structure I’m confident that 2024 will restore profitable growth to the Printing Software
segment.
I’m not satisfied with our profitability in 2023. Wage inflation had a significant effect
on staff cost, but careful cost management allowed us to deliver an adjusted net profit
from continuing operations that was 137% higher than 2022 (more information on this
is disclosed in the Alternative Performance Measures section of this report). I expect to
double our operating profit in 2024, as business activity is building within each of the
segments, with an optimised cost structure in place and tailwinds from the Drupa show to
be expected in the second and third quarter.
2023 saw the arrival of Artificial Intelligence (AI) and Large Language Models in force,
accompanied by lots of fanfare and hype but bringing uncertainty and doubt to many
companies in the industrial print and packaging space. I believe that AI is an important
technology—one of many—but will not fundamentally change the way packaging is
produced in the decades to come. We’ve invested in AI and even received a US patent in
2023 for “…Enhancing Raster Image Processing Using Artificial Intelligence” (a patent
which was filed long before AI became an everyday term and one of five patents we were
awarded in 2023). But producing high-quality labels and packaging has always been part
craftsmanship and part manufacturing, and AI will not change this. It will be useful in the
initial design ideation phase and in automating repetitive tasks like inspecting printed
packaging, but it will not replace human expertise in advanced production tasks anytime
soon. Our own development roadmap will remain focused on increasing the productivity of
our human customers, with AI as a useful tool but not an end in itself.
Our company vision, “The Heartbeat of Industrial Printing and Packaging”, is what drives the
team at Hybrid Software Group every day. We partner with our customers and share their
heartbeat as we work together to move our industry into the future. The last two years
have been challenging but I’m excited by the prospects for 2024 and beyond.
“I expect to double our operating
profit in 2024, as business activity is
building within each of the segments,
with an optimised cost structure in
place and tailwinds from the Drupa
show to be expected in the second
and third quarter”
40 41
CFO's review
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Revenue for the year was
€48.04 million
(2022: €46.69 million)
Gross profit for the year was
€39.37 million
(2021: €39.31 million)
Adjusted operating profit from
continuing operations was
€2.52 million
(2022: €2.11 million)
EBITDA* for the year was
€7.31 million
(2022: €10.90 million)
Cash at 31st December was
€7.08 million
(2022: €6.32 million)
CFO’s review
The following financial information relates
to continuing operations.
Revenue
Revenue from continuing operations for the year was
€48.04 million compared with €46.69 million in 2022,
an increase of €1.35 million (2.89%). Licence royalties
accounted for 43.6% (2022: 51.4%) of revenue, drive
electronics accounted for 20.4% (2022: 15.9%),
maintenance and support accounted for 22.5% (2022:
20.6%), services accounted for 10.7% (2022: 9.8%),
hardware and consumables accounted for 2.5% (2022:
2.2%) and other items accounted for 0.3% (2022: 0.1%).
Customer concentration and the dependence on a limited
number of customers improved this year. In 2023, the ten
largest customers represented 28.5% (2022: 29.9%) of the
Group’s revenue, the five largest customers represented
21.4% (2022: 24.5%) of the Group’s revenue and the
single largest customer represented 5.9% (2022: 9.8%)
of the Group’s revenue. There was no customer (2022: no
customer) during the year that represented 10% or more of
total revenue.
The Group’s sales are made in several different currencies,
thus fluctuations in exchange rates can affect the reported
revenue. During the year 32.3% (2022: 35.9%) were in
euros, 36.3% (2022: 40.5%) were in US dollars, 28.8%
(2022: 20.8%) were in pounds sterling, 1.1% (2022: 0.5%)
were in Japanese yen and 1.5% (2022: 2.3%) were in other
currencies.
→ Printing Software segment
Revenue for the Printing Software was €14.94 million for
the year (2022: €15.26 million). During 2023 a new contract
was agreed with an existing customer which resulted in
€2.6 million of revenue being recognised. (In 2022 a new
contract was agreed with an existing customer which
resulted in €1.6 million of revenue being recognised).
→ Printhead Solutions segment
Revenue for the Printhead Solutions segment was €11.30
million for the year (2022: €8.66 million). In 2022 revenue in
this segment had been severely impacted by the shortage
of its most commonly used chip. In 2023 it recovered
significantly throughout the year.
This segment is quite dependent on a limited number of
customers for a significant portion of sales. In 2023, the top
10 customers generated 69.6% of revenue (2022: 56.9%),
with the top customer generating 26.6% of revenue (2022:
21.9%).
→ Enterprise Software segment
Revenue for the Enterprise Software segment was €21.81
million for the year (2022: €22.78 million). In 2023 a five-
year licensing agreement with its largest customer ended,
resulting in a decline of €3.2 million in license revenues
year-over-year. Additionally the segment experienced
unfavourable business conditions in its two most important
markets, the United States and Germany, leading to subpar
results in these regions and for the segment as a whole. For
the segment year-over-year license royalty income declined
by €2.9 million which was partly offset by an increase in
maintenance and after-sale support services income (€1.49
million) and services income (€0.37 million).
Pre-tax result
The consolidated pre-tax result for continuing operations
was a loss of €1.67 million compared with a profit of €1.84
million in 2022. The decrease in profitability of €3.51 million
is due to:
→ an increase in revenue of €1.35 million;
→ an increase in cost of sales of €1.28 million;
→ an increase in selling, general and administrative expenses
of €0.73 million;
→ a decrease in research and development expenses of
€0.34 million;
→ no change in other operating expenses;
→ a decrease in other income of €3.11 million (the 2022
figure was favourably impacted by the sale of approx.
69,000 IPv4 addresses);
→ a decrease in net finance expenses of €0.13 million;
→ an increase in foreign exchange losses of €0.21 million.
Gross profit for the period decreased to 82% of revenue
(2022: 84.2%), primarily due to the higher mix of printing
electronics sales during the year, which have a lower level of
gross margin than software because of their manufacturing
costs.
Included in selling, general and administrative expenses is
amortisation of €0.97 million (2022: €1.17 million) related to
intangible assets recognised as a result of acquisitions.
Research and development expenses includes the
capitalisation and amortisation of internally generated
intangible assets and the amortisation of certain intangible
assets recognised as a result of acquisitions. During the
period there was a net capitalisation of development
expenditure of €1.39 million (2022: €2.02 million) and
amortisation of acquired intangible assets of €4.76 million
(2022: €5.14 million).
The net capitalisation of development expenditure was
comprised of €3.82 million (2022: €4.0 million) of capitalised
expenditure less €2.43 million (2022: €1.98 million) of
amortisation.
The third quarter of 2022 results were favourably impacted
by the sale of an unused asset (approximately 69,000 IPv4
internet addresses) for a net amount of €3.3 million which
closed in July 2022. Given the nature of the sale this income
is reported as “Other Income” and is not included in our
revenue figures, but it is accretive to EBITDA in 2022. No
comparable transaction occurred in 2023.
Total operating expenses increased by €0.4 million, or
0.96% compared to the same period in the prior year. The
increase is mainly due to higher sales & marketing-related
expenditures and increased amortisation of intangible
assets.
Foreign exchange gains and losses are primarily due to the
revaluation of currency balances held at the balance sheet
date and the change in exchange rates during the year.
Joachim Van Hemelen,
Chief Financial Officer
42 43
CFO's review
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Alternative performance measures
Alternative performance measures and adjusted financial information have not been audited by the Group’s auditors.
→ Revenue
To eliminate the impact of currency movements when comparing the current year to the comparative, the current year is
restated at the comparative’s actual exchange rates.
At constant exchange rates (“CER”) (2023 restated at 2022 exchange rates):
In thousands of euros
Reported
2023
CER
2023
Reported
2022
Revenue from continuing operations 48,043 48,671 46,693
→ Adjusted operating result and net profit
The Board believes that evaluating the Group’s ongoing results may not be as useful if it is limited to reviewing only IFRS
financial measures, particularly because management uses adjusted financial information to evaluate its ongoing operations,
for internal planning and forecasting purposes and for the measurement of performance-related bonuses.
The Group does not suggest that investors should consider these adjusted financial results in isolation from, or as a
substitute for, financial information prepared in accordance with IFRS. The Group presents adjusted financial results when
reporting its financial results to provide investors with additional performance measures to evaluate the Group’s results
in a manner that focuses on what the Group believes to be its underlying business operations. The Group’s management
believes that the inclusion of adjusted financial results provides consistency and comparability with past reports.
IFRS reported operating profit or loss from continuing operations is adjusted as follows:
In thousands of euros 2023 2022
IFRS reported operating (loss)/profit from continuing operations (1,161) 2,274
Add severance costs 493 -
Deduct capitalised development expense (see note 16) (3,824) (3,981)
Add amortisation of capitalised development 2,434 1,974
Add amortisation of acquired intangibles 4,760 5,137
Add other operating expenses (see note 8) 11 3
Deduct other income (see note 9) (196) (3,301)
Total adjustments to reported operating profit from continuing operations 3,678 (168)
Adjusted operating profit from continuing operations 2,517 2,106
Cashflow
Cash flow was positive for the year with a net cash inflow of €0.76 million (2022: net cash outflow of €2.74 million). Cash
flow from operating activities was positive at €6.86 million (2022: €4.02 million).
Loan repayments of €0.53 million were made to Congra Software SARL, consisting of €0.29 million in principal repayments
and €0.24 million of interest (see Note 26).
The Group continues to generate sufficient cash to fund its day-to-day operational expenditure and capital expenditure on
property, plant and equipment and has overdraft facilities available if required.
In the following tables the 2022 figures have been restated due to an error in the determination of the deferred tax liability.
See Note 36 ‘Restatement of Comparatives’ for further details.
IFRS reported net profit or loss from continuing operations is adjusted as follows:
In thousands of euros 2023 2022 Restated
IFRS reported net profit from continuing operations 1,319 1,063
Adjustments to operating result above 3,678 (168)
Tax effect of above-mentioned adjustments (876) (187)
Remeasurement of deferred tax liability (2,445) -
Total adjustments to reported net profit from continuing operations 357 (355)
Adjusted net profit from continuing operations 1,676 708
Adjusted net basic earnings per share for continuing operations €0.05 €0.02
Adjusted net diluted earnings per share for continuing operations €0.05 €0.02
→ EBITDA
EBITDA is also reported as an alternative measure of profit and is calculated by adding back interest, tax, depreciation and
amortisation to net profit from continuing operations.
EBITDA from continuing operations was €7.30 million (2022: €10.90 million) and is reconciled to IFRS reported net profit
from continuing operations as follows:
In thousands of euros 2023 2022 Restated
IFRS reported net profit from continuing operations 1,319 1,063
Net finance expenses 240 390
Tax (credit)/charge (2,986) 772
Depreciation 1,529 1,559
Amortisation 7,204 7,111
EBITDA from continuing operations* 7,306 10,895
As a % of revenue from continuing operations 15% 23%
*Included within this figure in the year ended 31 December 2022 is other income of €3,297,000. See Note 9 ‘Other Income’ for
further details.
44 45
Principal risks and uncertainties
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Hybrid Software Group PLC | Annual Report 2023
Global economic conditions
2023 was characterised by high inflation in the Western world and monetary tightening by most of the central banks. Higher
interest rates increased financing costs for companies, which put more strain on our customers capital expenditure budgets.
In Germany, an important market for all of the Group’s business segments, the situation is more aggravated due to political
uncertainty and ecologically inspired governmental policy choices undermining Germany’s competitiveness, all affecting
negatively the business climate and economic activity.
In early 2024 Western economies have proven to be rather resilient or are showing early signs of recovering from the cyclical
headwinds experienced in 2022 and 2023.
War in the Middle East
The Group does not have any operations in Israel but has significant customers in the country. Currently this has only
marginally impacted business levels in the region.
If the situation were to worsen and spread to other countries, there could be a negative impact on the demand for the
Group’s products and services, which could impact the Group’s revenue and profitability.
Russia’s invasion of Ukraine
The Group does not have any operations in Ukraine and does not generate any significant revenue from either Russia or
Ukraine, thus is not directly affected by the current situation.
Two years later, the Board remains concerned about the economic and political uncertainty across the world.
If the situation were to worsen and spread to other countries, there could be a negative impact on the demand for the
Group’s products and services, which could impact the Group’s revenue and profitability.
Refer to note 2 to the consolidated financial statements for further details about going concern.
Principal risks
and uncertainties
Risks related to the Group’s financial situation
→ The Group’s business, results of operations and financial condition could be materially affected by global
economic and political conditions
The Group sells its products and services throughout the world and economic conditions that affect the global economy or
regional economies may significantly impact the demand for printing technology and therefore for the Group’s products
and services.
The current uncertainty around the global economy, international trade and the pace of growth in the countries and
industries in which the Group’s existing and prospective customers and suppliers operate may negatively affect the level
of demand for the Group’s products and services. A reduced demand for the Group’s products and services will reduce the
Group’s revenue and profitability.
→ A significant portion of the Group’s revenue comes from a small number of large customers
The Group is dependent on a relatively small number of large customers for a significant portion of its revenue. For the year
ended 31 December 2023, the Group’s ten largest customers represented 28.5% (2022: 29.9%) of the Group’s revenue,
with the single largest customer representing 5.9% (2022: 9.8%) of the Group’s revenue. If one or more of these customers
choose to source the products or services supplied by the Group from an alternative vendor the effect on revenue, and
therefore profitability, could be material.
→ Source dependency might lead to higher prices to be paid to suppliers or disruption in the production of certain of
the Group’s products and therefore impacts the Group’s business activities and profitability
On 5 December 2016, the Company announced that it had acquired the entire issued share capital of TTP Meteor Limited
(“Meteor”), specialists in printhead drive systems, from TTP Group plc (“TTP”) based near Cambridge, UK. Following the
acquisition of Meteor in 2016, the Group supplies electronic controls to device manufacturers.
These products include some key electronic components which are subject to shortage of supply from time to time. There
is a risk that some of the Group’s products could not be manufactured if there is a disruption to that supply, therefore
customer orders could be delayed or cancelled, which could result in a reduction in revenue and profits in the Group.
Revenue for these products is reported in the Group’s Printhead Solutions segment and for the year ended 31 December
2023, revenue from external customers for that segment was €11.29 million (2022: €8.66 million), which is equal to 23.51%
(2022: 18.55%) of the Group’s total revenue.
→ Certain contractual arrangements with customers contain extended payment terms which lead to an increased
credit risk on such customers
The Group sells its products and services to a range of established customers and generally takes payments in advance for
the sale of physical goods in the Printhead Solutions segment, thus minimising the credit risk. In the Printing Software and
Enterprise Software segments, certain licensing arrangements allow payments to be made over an extended period of time,
up to five years in some instances. These extended payment terms increase the credit risk and the chance that the Group
may not be paid. During the year ended 31 December 2023, €3.11 million (2022: €3.86 million) of revenue was recognised
in respect of a licensing arrangement that includes extended payment terms of up to five years. To date, for licensing
arrangements where revenue has been recognised in previous years, all contractually due payments have been received in
accordance with the contractual terms.
The Group does not have a dedicated risk management or internal audit function,
consequently the risk management review is carried out by the executive management
team. The risks and uncertainties described below are not necessarily set out in order of
priority or potential impact on the Group’s financial statements.
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Principal risks and uncertainties
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Hybrid Software Group PLC | Annual Report 2023
The current economic uncertainty has increased the likelihood of the materialisation of such risk, as the liquidity position of
certain customers could be affected by the consequences of a downward economy and the payment behaviour of certain
customers could change.
Risks related to the Group’s business activities and industry
→ The Group is dependent on the graphic arts and digital printing industries
The Group derives all of its revenues from products and services provided to the graphic arts and digital printing industries.
Accordingly, the Group’s future success significantly depends upon the continued demand for its products within such
industries.
The Board believes that an important factor to consider is the substantial change in the graphic arts and digital printing
industries, as evidenced by sustained growth in digital printing and low growth in conventional printing. The shift in inkjet
printing technology opens up opportunities to the Group when manufacturers develop new products.
If this environment of change were to slow, the Group could experience reduced demand for its products which could have
a material adverse effect on its operational results.
→ Security breaches and other disruptions could compromise the Group’s confidential and sensitive information and
expose the Company to liability, which would cause the Company’s business and reputation to suffer
The Group and certain third parties that it relies on for its operations collect and store confidential and sensitive
information, and their operations are highly dependent on information technology systems, including internet-based
systems, which may be vulnerable to breakdown, wrongful intrusions, data breaches and malicious attack. This information
includes, among other things, intellectual property (“IP”) and proprietary information, source codes and commercially
sensitive data, both of the Group and of its customers.
Although the Group has appropriate measures in place (including appropriate insurance coverage) to protect its business
from any potential interruptions, any attack or breach could compromise the Company’s networks or those of related third
parties and stored information could be accessed, publicly disclosed, lost, or stolen. For example, if the Group would as a
result of such an attack be unable to access its source code needed to develop new products, it might lose customers, which
will have an impact on its operational results. In addition, if IP were to be stolen from the Group, such stolen IP could be
used by competitors to improve their products or produce products which could reduce the Group’s competitive advantage
and therefore impact the Group’s operational results in the long term.
→ Following the acquisition of HYBRID Software in 2021, the Group serves, in addition to its traditional client base
of original equipment manufacturers, end-user customers and such customer mix needs to be carefully managed
to avoid an adverse impact on its business and results of operations
38.8% of the Group’s revenue for the year ending 31 December 2023 (2022: 38.9%) was generated by customers that are
original equipment manufacturers (“OEMs”), such as industrial inkjet press manufacturers, who embed the Group’s software
in their own products that they sell to end-users.
Although HYBRID Software does have a limited amount of OEM customers who manufacture products for package printing,
most of its customers are end-users (representing 98.8% of its revenue (2022: 96.1%)), i.e., companies that create packaging
files and packaging converting companies. Those companies purchase, in addition to the software of HYBRID Software, the
systems and equipment from OEMs including those who are customers of the Group. As a result of the HYBRID Software
acquisition, the Group directly serves certain clients of its own clients.
While the Board believes that this customer mix will not have an adverse effect on the Group, as is confirmed by the fact
that no OEM or end-user customers provided negative feedback on the acquisition, its customer mix needs to be carefully
managed in the future to avoid an impact on either the OEM sales or end-user sales and therefore on the profitability of the
Group.
→ The HYBRID Software acquisition made the environment in which the Group operates more competitive, which
could have a material adverse effect on the Group’s business and results of operations
Because of the highly technical nature of the products produced by both the Group and HYBRID Software, there is a high
barrier for competitors to enter the market. As a result, the limited number of competitors which do exist tend to be larger
companies with sufficient resources to compete in these demanding market segments.
The acquisition of HYBRID Software and merging its products and services mix with the products and services of the
Group, has increased the number of competitors the Group is facing, as companies that were used to be only competitors
of HYBRID Software will now also be competing with the Group. In addition, companies that were traditionally only
competitors of the Group might now also view the activities of HYBRID Software in a more competitive way.
Although HYBRID Software has been a long-standing partner of the Group and such relationship was already well known
in the industry, it cannot be excluded that such increased competition could result in a business disruption from both
customers and suppliers of the Group which could have a material adverse effect on the Group’s results of operations.
→ Recruitment and retention of key personnel
An important part of the Group’s future success depends on the continued service and availability of the Group’s senior
management, including its Chief Executive Officer and other members of the executive team. These individuals have
acquired specialised knowledge and skills with respect to the Group. The loss of any of these individuals could harm the
Group’s business.
The Group’s business is also dependent on its ability to attract, retain, and motivate talented, highly skilled personnel,
notably in software development, electronic engineering and technical support areas. Such personnel are in high demand
and competition for their talents is intense. Should the Group be unable to continue to successfully attract and retain key
personnel, its business may be harmed. The Group offers a competitive package of salary and benefits to directors and
employees and regularly benchmarks them against similar businesses to ensure that they remain attractive to current and
prospective employees.
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Principal risks and uncertainties
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Hybrid Software Group PLC | Annual Report 2023
→ As a result of Brexit, both Belgian and UK takeover regulations apply in their entirety to the Company, which may
render a potential takeover complex and costlier
As the Company is a public company limited by shares with its registered office in the United Kingdom, the provisions of
the UK City Code on Takeovers and Mergers (the “UK City Code”) apply to the Company. Simultaneously, as the Company’s
shares are listed on the regulated market of Euronext Brussels, a voluntary takeover bid for the Shares of the Company
would also be subject to the Belgian takeover legislation. Accordingly, any voluntary takeover bid for the Company would be
governed by both the UK and Belgian takeover legislation.
Contrary to what was the case before Brexit (where certain aspects were governed by UK law and certain other aspects by
Belgian law based on the provisions of the European Directive 2004/25/EC of 21 April 2004 (the EU Takeover Directive)), UK
and Belgian takeover legislations apply in their entirety to any potential voluntary takeover bid with respect to the Shares
and it could not be excluded that these regulations might be conflicting. This may have an impact on the information the
potential bidder must disclose, the envisaged timelines and the contents of the prospectus. Moreover, both the Financial
Services Market Authority (the “FSMA”) and the Panel on Takeovers and Mergers (the “Takeover Panel”) would be competent
authorities with respect to such takeover bid.
The process to make a successful bid could therefore be more complex and costlier. This could potentially discourage
potential bidders from launching a takeover attempt and thus deprive shareholders of the opportunity to sell their Shares at
a premium (which is typically offered in the framework of a takeover bid).
Internal control risk
→ The Company cannot guarantee that its disaster recovery and business continuity plans will adequately address
any potential issue in the future
The Company cannot guarantee that the Group’s disaster recovery and business continuity plans will be adequate in the
future for its critical business processes nor that they will adequately address every potential event. Although the Group
has insured major risks, the Company can give no assurance that the Group’s present insurance coverage is sufficient to
meet any claims to which it may be subject, that it will in the future be able to obtain or maintain insurance on acceptable
terms or at appropriate levels or that any insurance maintained will provide adequate protection against potential liabilities.
Any losses that the Group incurs that are not adequately covered by insurance may decrease the Group’s future operating
income. In addition, defending the Group against such claims may strain management resources, affect the Group’s
reputation and require the Group to expend significant sums on legal costs.
The Group’s business is currently operated from various locations across the UK, Europe, North America, China and Japan.
Some business critical IT infrastructure is concentrated at one site in the UK with a continuous backup of those systems and
data to a separate UK site. Business continuity plans are intended to ensure that business-critical processes and data are
protected from disruption and will continue even after a disastrous event (such as a major fire or weather, political or war
event). Without these plans, or if these plans prove to be inadequate, there is no guarantee that the Company or any of
its operating subsidiaries would be able to compete effectively or even to continue in business after a disastrous event or
major disruption to one or more of its operating subsidiaries. Accordingly, if critical business processes fail or are materially
disrupted as a result of a disastrous event or otherwise and cannot recover quickly, this could have a material adverse effect
on the Group’s business, financial condition and results of operations.
Legal and regulatory risk
→ Failure to adequately protect the Group’s intellectual property could substantially harm its business and
operating results
The Group’s success is heavily dependent upon its proprietary technology. To protect its proprietary rights, the Group
relies on a combination of patent, copyright, trade secret and trademark laws, as well as the early implementation and
enforcement of non-disclosure and other contractual restrictions. As part of its confidentiality procedures, the Group enters
into written non-disclosure agreements with its employees, prospective customers, OEMs and strategic partners and takes
steps to limit access to, and distribution of, its software, intellectual property and other proprietary information.
Despite these efforts, if such agreements are not made on a timely basis, complied with or enforced, the Group may be
unable to effectively protect its proprietary rights and the enforcement of its proprietary rights may be cost-prohibitive.
Unauthorised parties may attempt to copy or otherwise obtain, distribute, or use the Group’s products or technology.
Monitoring unauthorised use of the Group’s software products is difficult. Management cannot be certain that steps taken
to prevent unauthorised use of the Group’s proprietary technology, particularly in countries where the laws may not protect
proprietary rights as fully as in the UK, the EU or the United States, will be effective.
The Group’s source code is also protected as a trade secret. However, from time to time, the Group licenses its source code
to partners, which subjects it to the risk of unauthorised use or misappropriation despite the contractual terms restricting
disclosure, distribution, copying and use. In addition, it may be possible for unauthorised parties to obtain, distribute, copy
or use the Group’s proprietary information or to reverse engineer its trade secrets.
The Group holds patents, and has patent applications pending, in the United States and in the EU. There may be no
assurance that patents held by the Group will not be challenged, that patents will be issued from the pending applications
or that any claims allowed from existing or pending patents will be of sufficient scope or strength to provide adequate
protection for the Group’s intellectual property rights.
The failure to adequately protect the Group’s proprietary technology may adversely affect the Group’s business, financial
position, result of operations and prospects.
→ Enforcing, acquiring and defending intellectual property rights is costly and could have a material adverse effect
on the Group’s financial position and result of operations
In connection with the enforcement of its own intellectual property rights, the acquisition of third-party intellectual
property rights or disputes relating to the validity or alleged infringement of third-party rights, including patent rights,
the Group may be in the future subject to claims, negotiations or protracted litigation. Intellectual property disputes and
litigation are typically very costly and can be disruptive to the Group’s business operations by diverting the attention and
energies of management and key technical personnel. Although the Group has successfully defended or resolved past
litigation and disputes, it may not prevail in any future litigation and disputes.
Third-party intellectual property rights could subject the Group to significant expenditures, require the Group to enter into
royalty and licensing agreements on unfavourable terms, prevent the Group from licensing certain of its products, cause
disruption to the markets where the Group operates or require the Group to satisfy indemnification commitments with its
customers including contractual provisions under various license arrangements, any one of which could harm the Group’s
business and have a material adverse effect on the Group’s financial position and results of operations.
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Key performance indicators (KPIs)
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Hybrid Software Group PLC | Annual Report 2023
Key
Performance
Indicators
The Board monitors progress on the overall Group strategy
and the individual strategic elements by reference to
financial KPIs; specifically revenue, gross margin, operating
expenses, adjusted operating profit, EBITDA* and cash.
These KPIs have been addressed in more detail in the
Business review and future developments section above.
Section 172(1)
The Directors have considered the requirements of section
172(1) of the Companies Act 2006 and it is a core duty of
the Directors above. The key considerations are set out
below.
It is a core duty of the Directors to promote the success
of the company. To do so the Directors consider the main
issues and stakeholders when making significant decisions.
The Company has never paid a dividend, thus shareholders
are invested for capital growth and due to the nature
of the business, employees are critical to the success of
the Group’s products. The CEO and CFO communicate
regularly with analysts and shareholders are encouraged to
participate in an annual meeting.
Engagement with employees is two-way to ensure that
employees are kept well-informed about the business and
valuable feedback is received to ensure continuation of
being a trusted employer. Initiatives to ensure the well-
being of employees and their dependents are regularly
reviewed and enhanced.
Considering the capital growth aims of shareholders, the
Directors are focused on growing the revenue and product
portfolio to ensure that the Group continues to grow, whilst
remaining profitable, with the continuing move to digital
printing and manufacturing in the marketplace. This is done
by development of new products, for example ScreenPro™,
PrintFlat™ and SmartDFE in recent years and by strategic
acquisitions such as Meteor, Xitron, HYBRID Software,
ColorLogic and iC3D.
Products are developed based on an identified market
demand. In the case of ScreenPro™ and PrintFlat™, the
identification of quality issues when printing with inkjet
technology and in the case of SmartDFE, the evolution of
smart factories and Industry 4.0.
Acquisitions are evaluated not only for their financial
merits, but on the basis that they fit within the strategy
and culture of the Group and that synergies and further
opportunities can be developed through integration.
Relationships with customers and key suppliers are fostered
through a collaborative approach through the use of
technical services, evaluation software and products and
customer-specific product development where appropriate.
Commercial contracts are written to further strengthen
those relationships.
It is the Group’s policy to manage and operate worldwide
business activities in conformity with applicable laws and
regulations as well as with the highest ethical standards.
Both the Group’s Board of Directors and executive
management are determined to comply fully with the
applicable law and regulations, and to maintain the Group’s
reputation for integrity and fairness in business dealings
with third parties. A strict compliance with the provisions of
the Group’s Code of Ethics is mandatory for every member
of the Group’s Board, executive officers, every senior
executive and every employee at all locations.
The Directors consider the impact of the Company’s
operations on the environment and consider how it can
reduce any negative impact it might have. The Company’s
technology and products enable its customers to produce
more efficient and less resource-consuming products and
services, thus saving energy and raw materials and the
Company participates in a program to offset the carbon
footprint of all its employees, in both their personal and
work lives. For more information see page 54.
*For the EBITDA calculation see page 45
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52 53
Environmental matters
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Hybrid Software Group PLC | Annual Report 2023
Environmental matters
The Board of Directors is very aware of its responsibilities towards the environment and to
employees and believes that driving sustainability goals through the business is not only
the right thing to do for future generations but also makes for good business practice.
Indeed, in many of the Group’s key growth markets, such as packaging and textiles,
environmental factors are influencing how those markets develop.
The Group’s business is to develop and market software
solutions for printing and electronics for inkjet printing in
particular. As a result, management believes the Group has
no activities that are likely to have significant, detrimental
effects on the environment. In fact, an application of some
of the Group’s products is to limit ink use when printing and
inkjet printing is inherently more sustainable than analogue
printing: generating less waste in all aspects of production.
The Group has shown leadership in the industry, advertising
its commitment to Net Zero, and reiterating the strategic
importance of sustainability issues at industry conferences.
For several years the Group has implemented policies
aimed at minimising the Group’s environmental footprint,
including recycling waste from paper, ink, toner cartridges,
other computer consumables and computer hardware.
The Group is implementing policies to reduce Scope 1 and
Scope 2 footprint such as sourcing renewable energy and
prioritising low-carbon forms of travel and is talking with
supply chains to measure and push down on Scope 3 carbon
footprint. Since 2021, through a partnership with Ecologi,
the Group now offsets the carbon footprint of all Group
employees, whether from personal activities at home or
partnership
Since 2021, through a partnership with Ecologi,
the Group now offsets the carbon footprint of all
Group employees, whether from personal activities
at home or from (Scope 1 and Scope 2) activities
at work. Ecologi facilitates the funding of carbon
offset projects and tree planting around the world,
to generate high quality carbon offsets. Since this
partnership with Ecologi started, the Group has
achieved an offset of over 5000 tonnes of CO2e and
funded over 66,000 trees, which have contributed to
33 environmental projects across the globe.
66,850 trees planted
33 projects funded
5,168 tCO2e avoided
2024 Copyright © Adobe Stock
The Meteor Inkjet team rolled up their sleeves to collect
more than 16kg of litter in their community.
“As a Board we are very aware of our responsibilities towards the environment and to our
employees. Driving sustainability goals through the business is not only the right thing to do
for future generations but it makes good business sense too. For instance, in many of our key
growth markets, such as packaging and textiles, environmental factors are influencing how
those markets develop. Improving our environmental credentials shows our commitment to
the expansion of these markets as they continue to transition towards digital production.”
Guido Van der Schueren - Executive Chairman
from Scope 1 and Scope 2 activities at work. Ecologi facilitates the funding of carbon-offset
projects and tree planting around the world, to generate high-quality carbon offsets. Since
this partnership with Ecologi started, the Group has achieved an offset of over 5,100 tonnes
of CO2e and funded over 66,000 trees, which have contributed to 33 environmental projects
across the globe.
Starting in 2022, the Group has partnered with Octopus Electric Vehicles to allow UK-based
employees to lease electric vehicles via a salary sacrifice scheme. To date eight employees
have utilised the scheme and taken delivery of their electric vehicle.
Other employee events to encourage sustainability included hosting vegan lunches with
invited speakers to discuss environment issues, a green commute to work scheme, and litter-
picking around local streets.
54 55
Social and community
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Hybrid Software Group PLC | Annual Report 2023
Social and community
Staff are encouraged to participate in charitable and community activities. The Group
contributes to employee-led fundraising activities for local and national charities and
staff are permitted to take paid time off to participate in charitable activities. Activities
supported this year included Movember (focusing on men’s health issues), the BBC’s
Children-in-Need Day and Save the Children’s Christmas Jumper Day.
Donations
Donations to charities amounted to €19,375 (2022: €13,975) during the year. The Group
operates a peer-to-peer recognition system which allows UK employees to nominate awards
to colleagues for their outstanding performance. Some operating divisions also issues
employee of the quarter awards.
Human rights
The Group respects all human rights and in conducting its business the Group regards
those rights relating to non-discrimination, fair treatment and respect for privacy to be the
most relevant and to have the greatest potential impact on its key stakeholder groups of
customers, employees and suppliers.
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Employee matters
The Group places considerable value on the involvement of its employees and has
continued to keep them informed on matters affecting them as employees and on the
various factors affecting the performance of the Group. This is achieved through formal
company meetings presented by the CEO to all employees.
Employment policies
The Group gives full and fair consideration to applications
for employment from all persons where the candidate’s
aptitudes and abilities meet the requirements of the job. In
the event of any staff becoming disabled while employed
by the Group, every effort is made to ensure that their
employment by the Group continues and that appropriate
adjustments are made to their work environment. The
Group provides long-term health insurance for all staff if
they are unable to work due to illness or disability whilst in
employment.
As a responsible employer, the Group provides modern
and professional working environments in all locations.
Compliant with all relevant human resources and health and
safety regulations, the Group strives to offer competitive
Company level Number of females Number of males Total
Board
Management
Employees
1
3
36
4
29
204
5
32
240
Total Group 40 237 277
employment packages with opportunities for personal
and professional development. Staff surveys are carried
out with follow-up action plans alongside an internal
communications programme to provide regular updates on
performance.
Diversity
The Group does not discriminate on the grounds of age,
race, sex, sexual orientation or disability. It has a clear and
transparent recruitment process with annual appraisals
to provide feedback on staff performance and to create
individual objectives.
The table below shows the number of persons of each sex
who were directors, management and employees of the
Group as at 31 December 2023.
2024 Copyright © Adobe Stock
By order of the Board,
Mike Rottenborn
Chief Executive Officer
56 57
Employee matters
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Hybrid Software Group PLC | Annual Report 2023
The Xitron family gathered in September 2023 to celebrate
and say “Bon Voyage” to Pat French, who retired following
a stellar 25-years run at Xitron. Pat enjoyed success as
National Sales Manager, VP of Sales, and VP of Business
Development – serving countless customers both in the
USA and abroad.
In September, employees gathered to celebrate Mike
Williams, Pekka Pirinen and Jian Peng each achieving
an incredible milestone of 30 years’ service with Global
Graphics Software. Managing director, Justin Bailey, also
achieved 10 years’ service.
The Xitron family gathered in September 2023 to celebrate
and say “Bon Voyage” to Pat French, who retired following
a stellar 25-year run at Xitron. Pat enjoyed success as
National Sales Manager, VP of Sales, and VP of Business
Development – serving countless customers both in the
USA and abroad. Pat’s impressive career in the printing
industry spanned more than 40 years, including sales and
management positions with Itek, Varityper, Purup Eskofot,
and Taussigs Graphic Supplies.
Employees from Global Graphics Software enjoyed an autumn lunchtime walk around the Cambourne Nature Reserve
with The Wildlife Trust for Bedfordshire, Cambridgeshire & Northamptonshire, Global Graphics Software’s featured charity
for 2023.
Hybrid Software Group team sharing great moments during
the tour and dinner at Grimbergen Abbey in Belgium.
The Latin America HYBRID Software team, along with
Pascal Wybo, Product Manager of PACKZ and STEPZ PDF
editors, hosted the first PACKZ Operator Days in the
region. The company values such events, as it is a great
opportunity to connect in person and receive feedback
directly from our customers.
58 59
60 61
Hybrid Software Group PLC | Annual Report 2023
GOVERNANCE
The Board of Directors of Hybrid Software Group believes in strong corporate
governance and transparency, with open, clear, and frequent communications
to our shareholders.
Board od directors
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Guido Van der Schueren has been
Chairman of the Board since 2014 and
has close to 50 years of experience in
the graphic arts industry. In 1992 he
co-founded Artwork Systems and from
1996 to 2007 served as Managing
Director and Chairman of the Board of
Artwork Systems Company. He served
as Vice Chairman of the EskoArtwork
Company from June 2007 until
April 2011. He runs Powergraph, an
investment company mainly active in
graphic arts software and technology.
He is also the Chairman of Congra
Software, the holding company
which owns a majority stake in Hybrid
Software Group PLC.
Mike Rottenborn took up the position
of Chief Executive Officer in January
2020. He was formerly the President
and CEO of HYBRID Software Inc.,
which he founded in 2007. He has
spent more than 34 years working in
the graphic arts industry and began
his career as an electrical engineer
with DuPont Printing & Publishing.
After DuPont, he joined PCC Artwork
Systems to focus on prepress
workflow software for packaging
and commercial printing customers.
He received his Bachelor of Science
degree in Electrical Engineering from
Virginia Tech and his Master of Science
degree in Computer Science from
Villanova University.
Board of directors
The Board of Directors
guides the Company
to create growth and
shareholder value. With
decades of experience
in building successful
companies, the Board
supports the talented
individuals in the senior
management teams to
execute and deliver on
strategy.
Guido Van der Schueren
Executive Chairman
Mike Rottenborn
Chief Executive Officer
Joachim Van Hemelen was
appointed Chief Financial Officer,
Company Director and a member
of the Company’s executive team in
September 2022. He has management
responsibility over the firm’s global
finance, treasury and corporate
development functions. Prior to being
appointed he was CFO of HYBRID
Software which he joined in 2015.
Before this he worked as a corporate
finance advisor in an Antwerp-based
family office, Portolani, and as a
merger and acquisitions advisor in
a Flanders-based mid-market M&A
boutique. He started his professional
career in 2010 as a financial auditor
at BDO. Joachim earned his Master of
Science in Business Administration at
the Lessius Hogeschool Antwerp.
Clare Findlay was appointed an
independent non-executive director
of the Company in March 2019.
She was previously a non-executive
director of the Company from June
2011 until 2014 and has more than
20 years’ experience at senior level
positions in the computer software
industry, including as managing
director of the UK operations of
Concentrix Corporation, the global
business process outsourcing division
of SYNNEX. In 2013 Clare co-founded
Purple Demand, a Demand Creation
Agency.
Luc De Vos was appointed an
independent non-executive
director in February 2021. An
engineer by training, Luc is credited
with championing the early
implementations of the internet in
Europe and was the founding father
of the first sizeable pan-European
Internet Service Provider. A notable
business angel during the nineties’
new media and internet boom, he was
a key player in KPNQwest, Stepstone,
and Starlab and more recently,
CarsOnTheWeb (now ADESA Europe).
He has also been a non-executive
chairman to the first mediatech
venture capital fund (Arkafund) in
Belgium as well as a director to the
global leasing and fleet management
company Sofico, and advisor to unified
threat management security provider
AXS GUARD. In all, he has worked
with more than 60 companies with a
strong focus on growth and corporate
governance.
Joachim Van Hemelen
Chief Financial Officer
Clare Findlay
Non-executive Director
Luc De Vos
Non-executive Director
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Hybrid Software Group PLC | Annual Report 2023
Directors’ report
Directors
The Board are responsible for the appointment of Directors and the amendment of articles of association (“Articles”) and
meet regularly throughout the year.
Subject to the provisions of the Company’s Articles, any person who is willing to act as a director, and is permitted by law to
do so, may be appointed to be a director by ordinary resolution, or by a decision of the Directors, either to fill a vacancy or as
an addition to the existing Board provided that the appointment does not result in the total number of Directors exceeding
any maximum number fixed in accordance with the Company’s Articles.
At every annual general meeting all the Directors shall retire from office. If the Company, at the meeting at which a director
retires under, does not fill the vacancy, the retiring director shall, if willing to act, be deemed to have been reappointed
unless at the meeting it is resolved not to fill the vacancy, or unless a resolution for the reappointment of the director is put
to the meeting and lost.
The Directors who held office during the year under review were:
Guido Van der Schueren Executive Chairman
Michael Rottenborn Chief Executive Officer
Joachim Van Hemelen Chief Financial Officer
Clare Findlay Non-executive Director
Luc De Vos Non-executive Director
The Company maintains director and officers’ liability insurance.
Shareholdings
Ordinary shares are entitled to one vote each in any circumstance. Each share is entitled pari passu to dividend payments or
any distribution. The shares are not redeemable and there are no transfer restrictions on the shares.
Subject to the Company’s Articles, but without prejudice to the rights attached to any existing ordinary share, the Company
may issue shares with such rights or restrictions as may be determined by ordinary resolution.
The breakdown of the Company’s issued share capital as at 31 December 2023 was:
Number of ordinary
shares
% of issued share
capital
Congra Software S.à r.l. *** 26,940,166 81.86%
Christian Friberg 381,732 1.16%
Company-owned shares 58,584 0.18%
Free float 5,529,255 16.80%
Total 32,909,737 100.00%
*** Congra Software S.à r.l. is controlled by Guido Van der Schueren, the Company’s Chairman. Michael Rottenborn (Chief
Executive Officer) and Joachim Van Hemelen (Chief Financial Officer) are also shareholders of Congra Software S.à r.l.
Investment in own shares
The Company holds some of its own shares in treasury to meet its obligations arising from the Group’s employee share
programmes (see note 23 and 29 to the consolidated financial statements).
The total number of shares held in treasury at 31 December 2023 was 58,584 (2022: 58,996). Further information can be
found in note 23 to the consolidated financial statements.
During the year, the Company disposed of 19,000 treasury shares (2022: 15,000), transferred to employees to satisfy the
Company’s obligations under share schemes.
Corporate governance
Details of the Group’s corporate governance can be found in the Corporate governance report on page 70.
Political contributions
The Group made no political contributions during the year (2022: €nil).
Dividends
The Directors do not recommend the payment of a dividend (2022: €nil).
Research and development
The Group spent €13.15 million (2022: €13.49 million) on research and development during the year. Under IAS 38
Intangible Assets, €3.82 million (2022: €4.0 million) of research and development was capitalised and €2.43 million (2022:
€1.98 million) of capitalised research and development was amortised. There was no impairment of capitalised research and
development during the year (2022: €nil). The net effect of capitalisation, amortisation and impairment on profit in the year
was a decrease in expense of €1.39million (2022: €2.02 million decrease in expense).
The Directors present their annual report and the audited financial statements for the year
ended 31 December 2023.
Hybrid Software Group PLC (formerly Global Graphics PLC) is a public limited-liability
company registered in England and Wales with its shares traded on Euronext Brussels
under stock code HYSG. As analogue printing markets are converting to digital production,
Hybrid Software Group is the only vertically integrated supplier to this market, supplying
products and technology to both manufacturers of digital printing equipment and to
manufacturers of packaging and other printed goods who operate them.
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The Company continues to partner with Ecologi, the platform that facilitates the funding of carbon offset projects and tree
planting around the world, to offset its carbon footprint.
Since October 2021, the Group has been working towards compensating for the environmental footprint of every employee
in their work and personal life. At work, the Group is implementing policies to reduce Scope 1 and Scope 2 footprint such as
sourcing renewable energy and low-carbon travel, and is talking with supply chains to measure and push down on Scope 3
carbon footprint.
Through the partnership with Ecologi, the Group offsets the carbon footprint of all Group employees, whether at home or
at work.
Statement of Directors’ responsibilities in respect of the annual report and the
financial statements
The Directors are responsible for preparing the annual report and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year.
Under that law they are required to prepare the Group financial statements in accordance with UK-adopted international
accounting standards and applicable law and have elected to prepare the parent Company financial statements in
accordance with UK accounting standards and applicable law, including FRS 101 Reduced Disclosure Framework. In addition,
the Group financial statements are required to be prepared in accordance with International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (“IFRSs as adopted by the EU”).
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and parent Company and of the Group’s profit or loss for that period. In
preparing each of the Group and parent Company financial statements, the Directors are required to:
→ select suitable accounting policies and then apply them consistently;
→ make judgements and estimates that are reasonable, relevant, reliable and prudent;
→ for the Group financial statements, state whether they have been prepared in accordance with UK-adopted international
accounting standards and IFRSs as adopted by the EU;
→ for the parent Company financial statements, state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the parent Company financial statements;
→ assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and use the going concern basis of accounting unless they either intend to liquidate the Group or the
parent Company or to cease operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and
enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such
internal control as they determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report and a Directors’
Report that complies with that law and those regulations.
Post balance sheet events
Details of post balance sheet events are detailed in note 35 to the consolidated financial statements.
Financial risk management
Details of the Group’s financial risk management are disclosed in the Group strategic report and in note 30 to the financial
statements.
Streamlined Energy and Carbon Reporting (SECR)
The following Streamlined Energy and Carbon Report (SECR) provides environmental impact information in accordance with
the Companies Act 2006 (Strategic Report and Director’s Report) Regulations 2013 and the Companies (Directors’ Report)
and Limited Liability Partnerships (Energy and Carbon Reporting) Regulations 2018.
Global energy use and greenhouse gas (“GHG”) emissions from activities for which the Group is responsible for:
2023 2022
Energy used (kwh)
Electricity (scope 2) 379,631 364,332
Gas (scope 1) 259,515 191,969
Fuel (scope 1) 938,438 946,099
Total energy used (kwh) 1,577,584 1,502,400
United Kingdom 228,781 242,120
Rest of the world 1,348,803 1,260,280
Total energy used (kwh) 1,577,584 1,502,400
GHG emissions (CO2e tonnes)
Electricity (scope 2) 84.9 98.9
Gas (scope 1) 44.2 34.8
Fuel (scope 1) 224.4 242.5
Total GHG emissions (CO2e tonnes) (a) 353.5 376.2
United Kingdom 47.3 46.6
Rest of the world 306.2 329.6
Total GHG emissions (CO2e tonnes) 353.5 376.2
Intensity ratio
Average number of employees 277 289
GHG emissions per employee (CO2e kilogram) 1,276 1,301
Effect of the carbon offset program with Ecologi (CO2e tonnes) (b) (1,669.6) (2,751.0)
Net GHG offset (CO2e tonnes) (a+b) (1,316.1) (2,374.8)
Electricity and gas are used to power and heat the Group’s offices and transport fuel is used by company cars provided to
some employees. Where possible, primary data has been sourced (meter readings and supplier invoices), but where actual
energy figures are not available a reasonable approximation has been used to estimate energy usage.
There has been a continuation of the existing strategy to reduce the physical number of computers to consolidate into more
efficient servers where possible. A senior manager has been appointed to head up and implement group-wide sustainability
initiatives, including to reduce energy consumption across the Group’s offices.
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The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Directors are responsible for the preparation of the consolidated financial statements in electronic format in
accordance with the ESEF requirements set out in the regulatory technical standards as laid down in the EU Delegated
Regulation nr. 2019/815 of 17 December 2018.
Responsibility statements under the disclosure and transparency rules
We confirm that to the best of their knowledge:
→ the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole; and
→ the strategic report includes a fair review of the development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face.
Disclosure of information to auditor
The Directors confirm that:
→ so far as each director is aware there is no relevant audit information of which the Company’s Auditor is unaware; and
→ the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP were appointed during the year as auditor of the company.
By order of the Board,
Michael Rottenborn, Director
2030 Cambourne Business Park
Cambourne
Cambridge
CB23 6DW
21 March 2024
Image courtesy of Vollherbst.
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Corporate
governance report
Directors and Board
The Board comprises two executive directors, an executive
chairman and two non-executive directors. The Board
considers that the non-executive directors are independent.
See page 62 for further details about the Board of
Directors.
The roles of chairman and chief executive officer are
separate appointments and it is Board policy that this
will continue. The non-executive directors bring their
independent judgement to bear on issues of strategy,
performance, appointments, resources and standards of
conduct.
Board committees
Audit and remuneration committees provide additional
review and scrutiny of the Group’s activities.
Relations with shareholders
The Company’s executive directors communicate regularly
with analysts and private investors are encouraged to
participate in the Annual General Meeting.
Internal financial control
The Group has established policies covering the key areas of
internal financial control and the appropriate procedures,
controls, authority levels and reporting requirements which
must be applied throughout the Group.
The key procedures that have been established in respect
of internal financial control are:
→ internal control: the directors review the effectiveness of
the Group’s system of internal controls on a regular basis;
→ financial reporting: there is in place a comprehensive
system of financial reporting based on the annual budget
approved by the Board. The results for the Group are
reported monthly along with an analysis of key variances
to budget, and year-end forecasts are updated on a
regular basis; and
→ investment appraisal: applications for significant expenditure of either a revenue or
capital nature are made in a format which places emphasis on the commercial and
strategic justification as well as the financial returns.
All significant projects require specific Board approval.
No system can provide absolute assurance against material misstatement or loss but
the Group’s systems are designed to provide reasonable assurance as to the reliability of
financial information and ensuring proper control over income and expenditure, assets and
liabilities.
Going concern
The Directors have a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. The Directors have prepared
cash flow forecasts for a period of at least 12 months from the date of approval of these
financial statements and have no reason to believe that a material uncertainty exists that
may cast significant doubt about the Group’s ability to continue as a going concern, notably
because of a cash position of €7.08 million as at 31 December 2023 (2022: €6.32 million).
Those forecasts take into account reasonably possible downsides, including the potential
impact for increased costs of inflation. Thus, they continue to adopt the going concern basis
of accounting in preparing the annual financial statements.
Refer to note 2 of the consolidated financial statements for further details.
The Financial Conduct Authority’s Listing Rules (“the Listing Rules”) require that listed
companies (but not companies traded on an overseas EU market) incorporated in the UK
should state in their report and accounts whether they comply with the UK Corporate
Governance Code (“the Code”) and identify and give reasons for any area of non-
compliance. The Company is listed on Euronext Brussels and therefore is not required to
comply with the Listing Rules or the Code, however, several voluntary disclosures have
been given. The Board supports the principles and aims of the Code and intends to ensure
that the Group observes the provisions of the Code as it grows, as far as is practical.
However, the Board considers that at this stage in the Group’s development the expense of
full compliance with the Code is not appropriate.
The content of this report is unaudited.
2024 Copyright © Adobe Stock
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Hybrid Software Group PLC | Annual Report 2023
The members of the Committee are Luc De Vos (Chair of
the Committee) and Clare Findlay. The Committee oversees
the relationship with the Company’s external auditor,
monitors its effectiveness and independence and makes
recommendations to the Board in respect of the external
auditor’s remuneration, appointment and removal. The
Committee also reviews the findings from the external
auditor, including discussion of significant accounting and
audit judgements, levels of errors identified and overall
effectiveness of the audit process.
The Committee meets as required, typically at least three
times per year, at the beginning of the financial year to
agree on the audit and risk operational plan for that year; at
mid-year to evaluate any matters and issues that might have
arisen; and at the close of the financial year to review the
findings of the auditor and to ensure that the group’s audit
and risk objectives have been met.
As announced on 27 September 2023, the Company has
changed auditors and has appointed PKF Littlejohn LLP
(“PKF”) as the Group’s auditor for the year ending 31
December 2023 following a competitive tender process.
The Committee also considers significant financial reporting
issues, accounting policies and key areas of judgement or
estimation. This review also includes consideration of the
clarity and completeness of disclosures on the information
presented in the financial statements.
Audit committee report
The Audit Committee (the “Committee”) is appointed by the
Board and consists wholly of the non-executive directors.
The Board has delegated to the Committee responsibility
for overseeing financial reporting, the review and
assessment of the effectiveness of the internal control and
risk management systems and maintaining an appropriate
relationship with the external auditor.
Additionally, the Committee will:
→ review the effectiveness of the Company’s internal
financial control systems;
→ advise the Board on the Company’s risk strategy, risk
policies and current and emerging risk exposures,
including the oversight of the overall risk management
framework and systems;
→ assess the adequacy and security of the Company’s
arrangements for its employees and contractors to raise
concerns, in confidence, about possible wrongdoing
in financial reporting or other matters and to ensure
proportionate and independent investigation of such
matters;
→ and make recommendations to the Board as it deems
appropriate on any area within its remit where action or
improvement is required.
The Committee operates with clarity, simplicity, fairness,
predictability and is aligned to the culture of the
organisation.
Luc De Vos
Chair of the Audit Committee
Luc De Vos
Non-executive Director
Directors’
remuneration report
This report, prepared by the Remuneration Committee
(the “Committee”), is on the activities of the Board in
respect of the remuneration of directors for the year
ending 31 December 2023. It sets out the remuneration
policy and remuneration details for the executive
and non-executive directors of the Group. It has been
prepared in accordance with Schedule 8 of The Large
and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (the “Regulations”).
The members of the Committee are the independent, non-executive directors, Clare Findlay
(Chair of the Committee) and Luc De Vos.
The report is split into three main areas: the statement by the chair of the Committee, the
annual report on remuneration and the policy report.
The policy report will be subject to a binding shareholder vote at the 2024 Annual General
Meeting and the policy will take effect for the financial year beginning on 1 January 2024.
The annual report on remuneration provides details on remuneration in the period and
some other information required by the Regulations. It will be subject to an advisory
shareholder vote at the 2024 Annual General Meeting.
The Companies Act 2006 requires the auditors to report to the shareholders on certain parts
of the Directors’ remuneration report and to state whether, in their opinion, those parts of
the report have been properly prepared in accordance with the Regulations.
The chair’s annual statement
The information provided in this part of the Directors’ remuneration report is not subject to
audit.
The remuneration committee reviewed the current level of Board fees and salaries payable
to the chairman, the CEO and CFO.
Clare Findlay
Non-executive Director
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Hybrid Software Group PLC | Annual Report 2023
Annual report on remuneration
The information provided in this part of the Directors’ remuneration report is subject to audit.
The remuneration of the executive and non-executive directors of the Group in respect of services to the Group were as
follows:
For the year ended 31 December 2023:
In euros
Salary
and fees Benefits Bonus LTIP Pension Total
Total
fixed
Total
variable
Executive directors
Guido Van der Schueren
1
459,744 66,567 45,000 - 1,392 572,703 527,703 45,000
Michael Rottenborn, CEO 274,264 17,291 45,000 - 9,126 345,681 300,681 45,000
Joachim Van Hemelen, CFO 270,151 - 33,750 - - 303,901 270,151 33,750
Total executive directors 1,004,159 83,858 123,750 - 10,518 1,222,285 1,098,535 123,750
Non-executive directors
Clare Findlay 25,426 - - - - 25,426 25,426 -
Luc De Vos 20,000 - - - - 20,000 20,000 -
Total non-executive directors 45,426 - - - - 45,426 45,426 -
Total directors 1,049,585 83,858 123,750 - 10,518 1,267,711 1,143,961 123,750
For the year ended 31 December 2022:
In euros
Salary
and fees Benefits Bonus LTIP Pension Total
Total
fixed
Total
variable
Executive directors
Guido Van der Schueren
2
469,681 24,000 50,000 - 1,850 545,531 495,531 50,000
Michael Rottenborn, CEO 285,736 13,732 50,000 - 8,700 358,168 308,168 50,000
Joachim Van Hemelen, CFO
3
82,133 - 40,000 - 122,133 82,133 40,000
Graeme Huttley, CFO
4
123,439 6,129 - - 27,619 157,187 157,187 -
Total executive directors 960,989 43,861 160,000 - 38,169 1,183,019 1,043,019 140,000
Non-executive directors
Clare Findlay 21,605 - - - - 21,605 21,605 -
Luc De Vos 20,000 - - - - 20,000 20,000 -
Total non-executive directors 41,605 - - - - 41,605 41,605 -
Total directors 1,002,594 43,861 160,000 - 38,169 1,224,624 1,084,624 140,000
Salary and fees are the contracted annual salaries and Board fees that are payable. Each executive director received Board
fees, prorated where appointed or resigned during the year, which are included within the Salary and fees column.
Benefits include car allowance, travel allowance, home allowance and private medical insurance payments.
The executive directors’ total available bonus for the year was payable as follows:
→ up to 40% for achieving the Board approved group adjusted operating profit target,
→ up to 40% for achieving the Board approved group’s components adjusted operating profit targets, and
→ up to 20% for achieving specific KPIs as agreed and signed off by the Remuneration Committee.
Payments are made after approval by the Board. Whilst the Board approved targets for the year were not achieved, the
remuneration committee has approved the bonus amounts in the table above due to achieving individual objectives.
LTIP (long term incentive plan) is a cash award that will be payable after three years of continuous service from the date of
award.
Contributions totalling €11,000 (2022: €38,000) were made to the personal pension schemes of two (2022: three) of
the directors in accordance with their employment contracts. The Group operates a defined contribution scheme where
contributions are calculated as a percentage of gross salary. There are no defined benefit schemes.
→ Scheme interests awarded during the financial year
There were no share-based awards during the year and there are no outstanding share options as at 31 December 2023.
The aggregate amount of gains made by directors on the exercise of share options during the year was €nil (2022: €nil).
→ Directors and their interests in shares of the Company
The directors held the following interests in the shares of Hybrid Software Group PLC as at 31 December 2023:
Guido Van der
Schueren *
Michael
Rottenborn **
Joachim Van
Hemelen *** Clare Findlay Luc De Vos
Shares beneficially
owned
26,940,166 2,475 - 100 5,000
Total interest in
shares
26,940,166 2,475 - 100 5,000
The portion of the share-based compensation expenses which were attributable to the Group’s executive directors was:
In thousands of euros 2023 2022
Matching shares awarded for participating in the Share Incentive Plan - -
Total - -
* The interests of Guido Van der Schueren are held in the name of Congra Software S.à r.l., Together with his wife and children, he
owns approximately 70% of the shares of Congra Software S.à. r.l..
** Michael Rottenborn is also a shareholder of Congra Software S.à r.l., he owns approximately 0.47% of the shares of Congra
Software S.à. r.l..
*** Joachim Van Hemelen is also a shareholder of Congra Software S.à r.l., he owns approximately 0.60% of the shares of Congra
Software S.à. r.l..
1
includes the director’s daughter, who is also an employee of the Group
2
includes the director’s daughter, who is also an employee of the Group
3
appointed with effect from 1 September 2022
4
resigned with effect from 31 August 2022. Includes the director’s spouse, who is also an employee of the Group
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The information provided in the following sub-sections of the Directors’ remuneration report are not subject to audit.
→ Performance graph
The following graph shows the Company’s ordinary share price performance compared with the performance of the BEL
ALL-SHARE index from 31 December 2017 to 31 December 2023. The BEL ALL-SHARE index has been selected for this
comparison because the Company has been a constituent of that index throughout the period. No dividends have been paid
by the Company, so total shareholder return is the change in value of the share price.
-3 0%
-2 0%
-1 0%
0%
10%
20%
30%
40%
50%
60%
70%
Dec-2017
Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023
Hybrid Software Group
Ordinary Shares
BEL ALL-Share
Over the above six-year period, the Company’s share price has increased by 24.5% and the BEL ALL-SHARE index has
remained essentially flat.
→ CEO remuneration table
The following table shows the CEO’s remuneration and percentage achievement of annual bonuses and long-term
incentives over the past five years:
2019 2020 2021 2022 2023
Total CEO remuneration (in thousands of euros) 523 325 458 358 346
Annual bonus pay-out against maximum opportunity 75% 87.5% 100% 76% 18%
Long term incentive vesting rates against maximum opportunity n/a n/a n/a n/a n/a
→ Percentage change in remuneration of directors
The table below shows the percentage change over the preceding year, in the base payment currency of remuneration for
the directors and for all employees of the Group:
Salary and fees Benefits Bonus
Director 2022 2023 2022 2023 2022 2023
Guido Van der Schueren 0.0% (2.1%) 0.0% 177.4% (50.0%) (10.0%)
Michael Rottenborn
5
5.0% (1.2%) 0.0% 29.6% (50.0%) (10.0%)
Joachim Van Hemelen
6
n/a 5.0% n/a 0.0% n/a (15.6%)
Graeme Huttley
7
5.0% n/a 0.0% n/a n/a n/a
Clare Findlay
8
5.0% 20.1% 0.0% 0.0% 0.0% 0.0%
Luc De Vos
9
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
All employees average 3.9% 4.4% 0.0% 0.0% 0.0% 0.0%
For further information with regards to the changes in 2021 and 2022, please refer to the annual report for the relevant
financial year.
→ Relative importance of spend on pay
The main operating expense of the Group is the cost of its employees due to the nature of the work of the Group. In order
to attract and retain staff, pay and reward levels need to be competitive and commensurate with the highly technical skills
that are required.
The table below shows the amounts paid to employees (for continuing operations) and the amounts distributed to
shareholders.
In thousands of euros 2023 2022 % change
Staff expenses (see note 12 to the consolidated financial statements) 28,084 27,586 1.8%
Dividends paid to shareholders - - 0%
→ Statement of implementation of remuneration policy in the following financial year
There are no significant changes in the way that the remuneration policy will be implemented in the next financial year
compared to how it was implemented during this financial year.
The remuneration policy will be voted upon during the next AGM to be held during 2024.
5
Michael Rottenborn joined the Group in January 2020
6
Joachim Van Hemelen was appointed a Director in September 2022
7
Graeme Huttley resigned as a Director in August 2022
8
Clare Findlay joined the Group in March 2019
9
Luc de Vos joined the Group in February 2021
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Remuneration policy
The information provided in this part of the Directors’ remuneration report is not subject to audit.
The Board determines the Group’s policy for employee, executive and non-executive remuneration and the individual
remuneration packages for executive directors. In setting the remuneration packages, the Board considers the pay and
benefits that are offered to existing Group employees and the salaries, bonuses and benefits available to directors of
comparable companies and the continued commitment to the Group through appropriate long-term incentive schemes,
such as the award of shares and share options.
The Board did not consult with employees when drawing up the remuneration policy set out in this part of the report and no
views about the policy have been expressed by shareholders of the Company to the Board.
→ Remuneration of executive directors
Consistent with this policy, remuneration packages awarded to executive directors include a mix of basic salary and
performance related remuneration that is designed to incentivise the director to achieve the Group’s strategic objectives.
The remuneration packages usually include some or all of the following elements:
- base salary, as agreed by the Board;
- bonus scheme, with performance measured against annually set targets and personal objectives all reviewed and
approved by the Board;
- equity, by way of shares and share options;
- other benefits, such as car allowance, company contribution into a personal pension scheme, private medical insurance,
life assurance and long-term sickness insurance;
- and recruitment fee, notice period for termination of contract or payments for loss of office.
All of the above elements are negotiable between the Board and the prospective director.
There are no fixed term contracts and each director must resign and be reappointed at each AGM.
In the forthcoming year the above policy will be applied. The bonus payment for the Chairman, CEO and CFO is divided into
three elements:
- up to 40% for achieving the Board approved group adjusted operating profit target;
- up to 40% for achieving the Board approved group’s components adjusted operating profit targets;
- and up to 20% for achieving specific KPIs as agreed and signed off by the Remuneration Committee.
→ Remuneration of non-executive directors
The fees paid to non-executive directors are determined by the Board. The non-executive directors do not receive any other
fixed forms of remuneration or benefits.
Future policy table
The information provided in this part of the Directors’ remuneration report is not subject to audit.
The following table provides a summary of the key components of the remuneration package for executive directors:
Salary and fees
Purpose Rewards skills and experience and provides the basis for a competitive remuneration package.
Operation
Salaries and fees, including recruitment and loss of office payments, are agreed with the director with
reference to the role, the individual’s experience, and market practice and market data.
Opportunity 100% of contractual salary and fees are paid for services rendered to the Group.
Performance
measures
Reviewed annually and executive directors’ salaries are generally increased in line with company-
wide pay increases. Exceptional changes are tied to significant changes in the Group or exceptional
performance.
Recovery No provision for recovery or withholding of payments unless breach of contract.
Taxable benefits
Purpose Protects against risks and provides other benefits.
Operation
The provision of benefits to executive directors includes private medical cover, life insurance and ill-
health income protection.
Opportunity 100% of the premiums due are paid on behalf of the executive director.
Performance
measures
There are no performance measures associated with the benefits other than being a current
executive director.
Recovery No provision for recovery or withholding of payments unless breach of contract.
Bonuses
Purpose
Rewards delivery of the near-term business targets set each year, the individual performance of the
executive directors in achieving those targets, and contribution to delivering the Group’s strategic
objectives.
Operation
Bonuses are agreed in the employment contract with the executive director. The level of bonus
payable is determined based on the role, the individual’s experience, and market practice and market
data.
Opportunity
Generally 50% to 100% of the annual bonus is achievable on meeting the revenue and expense
targets as set by the Board. Adjustments can be made to the plan for specific, strategic objectives.
Performance
measures
The performance objectives include only financial measures. The financial measures are generally
related to revenue and controlling expenses.
Recovery
Payment of annual bonuses is usually withheld until the Group’s auditors have cleared the audit and
the Board have approved payment of the bonuses.
Pension
Purpose Enables executive directors to build long term retirement savings.
Operation The Group pays defined contributions into a pension plan on behalf of the executive director.
Opportunity
100% of the contributions due are paid directly to the pension company on behalf of the executive
director.
Performance
measures
There are no performance measures associated with the benefits other than being a current
executive director.
Recovery No provision for recovery or withholding of payments unless breach of contract.
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The following table provides a summary of the key components of the remuneration package for non-executive directors:
Board fees
Purpose
Attract and retain individuals with the required skills, experience and knowledge so that the Board is
able to effectively carry out its duties.
Operation Fees are paid monthly or quarterly.
Opportunity 100% of contractual fees are paid for services rendered to the Group.
Performance
measures
Reviewed annually and increased only in exceptional circumstances.
Recovery No provision for recovery or withholding of payments if performance obligations have been fulfilled.
→ Recruitment remuneration
For the appointment of a new director, the aforementioned components will be included in their remuneration package
and negotiated with consideration of the role, their experience and market data. The fees that may be agreed may include
sign-on payments to incentivise the director to take the appointment. These sign-on fees will be negotiated taking into
consideration the role, their experience and market data.
→ Pay policy for other employees
The Company values its total workforce and aims to provide remuneration packages that are geographically competitive,
comply with any local statutory requirements and are applied fairly and equitably across the Group. Where remuneration is
not determined by statutory regulation, the following key principles are applied:
- to reward in a manner that allows for stability in the business and for sustainable long-term growth;
- to reward fairly and consistently for each role with due regard to peers, the economy, the marketplace and the technical
skills required.
→ Service contracts
It is the Group’s policy that executive directors should have contracts with an indefinite term. Non-executive directors are
appointed for an initial six-year term, with provisions for extension, subject to mutual agreement.
All Directors offer themselves for annual re-election at each AGM in accordance with the UK Corporate Governance Code.
Service agreements and letters of appointment are available for inspection at the registered office address of the Company
None of the directors are entitled to any specific indemnity which would be due or liable to be due on termination of their
appointment.
Date of contract
Date of
appointment
Notice from
the Company
Notice from
the director
Unexpired
term on 31
December
2023
Guido Van der Schueren 4 April 2017 16 May 2014 12 months 12 months -
Michael Rottenborn 1 January 2020 2 January 2020 12 months 12 months -
Joachim Van Hemelen 1 January 2021 1 September 2022 12 months 12 months -
Clare Findlay 1 March 2019 1 March 2019 - - 14 months
Luc De Vos 4 February 2021 15 February 2021 - - 37 months
→ Application of the policy
The table below shows the level of remuneration that would be received by the directors in accordance with the directors’
remuneration policy.
Euro 000s
Minimum
performance Medium performance
Maximum
performance 2023 actual
Guido Van der Schueren 528 592 657 573
Michael Rottenborn 301 354 408 346
Joachim Van Hemelen
10
270 316 363 304
Clare Findlay 25 25 25 25
Luc De Vos 20 20 20 20
The scenarios have been illustrated for each executive director based on the following:
Minimum
performance
- Base salary/fee, taxable benefits and pension
- No bonus pay-out
- No long term incentive plan
Medium performance: - Base salary/fee, taxable benefits and pension
- 50% bonus pay-out
- 50% long term incentive plan
Maximum
performance:
- Base salary/fee, taxable benefits and pension
- 100% bonus pay-out
- 100% long term incentive plan
The report was approved by the Board of directors on 21 March 2024 and signed on its behalf by:
Clare Findlay
Chair of the Remuneration Committee
10
appointed with effect from 1 September 2022
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Independent
auditor’s
report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HYBRID SOFTWARE GROUP PLC
Opinion
We have audited the financial statements of Hybrid Software Group plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statements of Changes in
Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent company financial statements, as applied in accordance with
UK Generally Accepted Accounting Practice (‘UK GAAP’) and the provisions of the Companies Act 2006.
In our opinion:
→ the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31
December 2023 and of the group’s profit for the year then ended;
→ the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
→ the parent company financial statements have been properly prepared in accordance with UK GAAP, including FRS 101
Reduced Disclosure Framework, and as applied in accordance with the provisions of the Companies Act 2006; and
→ the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Separate opinion in relation to IFRSs as adopted by the European Union
As explained in note 2 to the group financial statements, the group, in addition to complying with its legal obligation to
apply UK-adopted International Accounting Standards, has also applied International Financial Reporting Standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies to the European Union (EU-endorsed IFRSs).
In our opinion, the group financial statements give a true and fair view of the consolidated financial position of the group as
at 31 December 2023 and of its consolidated financial performance and its cash flows for the year then ended in accordance
with EU-endorsed IFRSs.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s
and parent company’s ability to continue to adopt the going concern basis of accounting included the following audit
procedures:
→ Obtaining an understanding of the controls in place around the preparation of the going concern forecast and future
plans for the group through discussions with management;
→ Obtaining management’s assessment for the going concern period to 31 March 2025 and checking the mathematical
accuracy of the cash flow forecasts and budgets prepared;
→ Comparing budgeted performance for the year ended 31 December 2023 against actual to assess management’s
historical forecasting accuracy;
→ Challenging management where appropriate on the reasonableness of key inputs and assumptions underpinning the
going concern model. These challenges included but not limited to:
- Performing sensitivity analysis on key inputs and assumptions to assess the headroom across the going concern period.
Key inputs and assumptions included: (i) sales growth rates, (ii) loss of key customers and (iii) levels of operating
expenditure.
- Assessing management’s reverse stress testing performed and corresponding mitigating actions;
- Assessing the prospective accuracy of management’s forecast in 2024 against post year-end bank statements and
management financial reports;
→ Reviewing the terms of loan facilities within the group to confirm their availability across the forecast period and to
ensure compliance with any conditions attached;
→ Undertaking a review of subsequent events on matters impacting the going concern assessment; and
→ Considering the adequacy of the disclosures and accounting policies in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group’s or parent company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
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Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature,
timing and extent of audit procedures on the individual financial statement line items and disclosures in evaluating the
effect of misstatements, both individually and in aggregate, on the financial statements as a whole.
Financial statements - group Financial statements – parent company
Overall materiality €480,000 €400,000
Basis for
determining overall
materiality
1% of revenue
2% of net assets as constrained by the
allocation of overall group materiality
Rationale for the
benchmark applied
The group derives the majority of its revenue
from software licensing, subscription sales
and service contracts. While revenue is not the
sole financial metric with which management
and stakeholders measure and assess financial
performance, the nature of the business
activities and operations result in the group
being highly revenue-driven.
We consider total revenue to be the most
appropriate basis for determining overall
materiality for the group as it provides users
of the financial statements with a more stable
measure year-on-year of financial performance,
compared to profit before tax which has
historically been volatile.
On this basis, revenue was determined to be
an appropriate basis for determining overall
materiality.
We considered the nature of the parent
company, being a holding company for
the investment activities of the group, and
determined that net assets was an appropriate
basis for the calculation of the overall
materiality given the significant asset base as at
31 December 2023.
Performance
materiality
€312,000 €260,000
Basis for determining
performance
materiality
65% of the group overall materiality 65% of the parent company overall materiality
Financial statements - group Financial statements – parent company
Rationale for the
benchmark applied
In determining the performance materiality, we have considered the following factors:
- The level of significant judgements and estimates;
- The risk assessment and aggregation of risk and the effectiveness of controls;
- The control environment and the group’s financial reporting controls and processes;
- First year audit engagement; and
- The stability of key management personnel.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining
sample sizes.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
€24,000 for the audit of the consolidated financial statements and €20,000 for the parent company financial statements as
well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
For each component in the scope of the group audit, we allocated a materiality that was less than the overall group
materiality. The range of overall materiality allocated across the components was between €117,000 and €312,000.
Our approach to the audit
In designing our audit approach, we determined materiality and assessed risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant accounting estimates and judgements by the directors,
including the recognition of revenue, the impairment of goodwill and other identifiable intangible assets and the
capitalisation of development costs. Procedures were then performed to address the risk identified and for the most
significant assessed risks of misstatement, the procedures performed are outlined below in the key audit matters section of
this report. We re-assessed the risks throughout the audit process and concluded that the scope remained in line with that
determined at the planning stage of the audit.
An audit was performed on the financial information of the group’s significant operating components which, for the year
ended 31 December 2023, were located in the United Kingdom (UK), the United States of America (USA) and Belgium. The
audit of the group and parent company financial statements was undertaken by the group audit team based in London,
with meetings being held with group management over video-link or in person in Belgium. The component in Belgium
was audited by a component auditor operating under our instruction. We communicated regularly with the component
audit team during all stages of the audit and we were responsible for the scope and oversight of the audit process. This, in
conjunction with additional procedures performed by the group audit team, provided sufficient appropriate audit evidence
for our opinion on the group and parent company financial statements.
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As a result of our materiality and risk assessments, we determined which components required a full scope audit of their
financial information, with consideration of their significance to the group based on their contribution to overall revenue
and their risk characteristics. On this basis. we scoped in four components requiring a full scope audit of their financial
information for group purposes and three components which were subjected to specified audit procedures due to specific
risk characteristics and due to the presence of material classes of transactions and account balances. The remaining
components were subjected to analytical procedures at the group level.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matter How our scope addressed this matter
Revenue recognition (note 7)
Under ISA (UK) 240, there is presumption that revenue
recognition is a significant fraud risk.
The risk is further increased as the group has three revenue
streams across all components, being Printing Software,
Printhead Solutions and Enterprise Software. Each
revenue stream has a unique recognition criterion which is
applicable, with contracts containing multiple performance
obligations crossing over the year-end. Significant
judgement is therefore required of management in relation
to the recognition of revenue at a point in time or over
time. In addition, the use of different IT systems across
material components within the group adds additional risk
of misstatement around revenue recognition.
A material error in this balance could affect the decision
making of users of the financial statements.
As a result, there is a risk of fraud or error in revenue
recognition due to the potential to inappropriately
recognise revenue, and therefore revenue recognition is a
key audit matter.
In addition to the procedures required by ISA (UK) 240, our
work on this key audit matter included:
→ Documenting our understanding of the information
system and related controls relevant to each material
revenue stream;
→ Evaluating the appropriateness of the information system
and the effectiveness of the design and implementation
of the related controls;
→ Substantive transactional testing of income recognised in
the financial statements, including deferred and accrued
income balances recognised at the year-end. This included
selecting a sample of sales from the ledger and vouching
to customer order, invoice and delivery information;
→ Verifying the recognition of revenue through review of
supporting information regarding the satisfaction of
performance obligations; and
→ Reviewing revenue contracts active during the current
year and particularly around the year end to ensure
revenue had been recognised in the correct period and
that performance obligations had been met.
Impairment of goodwill and other identifiable
intangible assets (note 16)
Goodwill on consolidation arises from the acquisitions of multiple
subsidiaries acquired throughout the existence of the group as
follows at 31 December 2023:
Cash Generating Unit €’000
Global Graphics Software 6,784
Meteor Inkjet 2,238
Xitron 1,793
HYBRID Software 51,110
ColorLogic 1,202
In line with the requirements of IAS 36 Impairment of Assets,
goodwill is tested annually for impairment by management for each
Cash Generating Unit (CGU) identified. Management determine the
recoverable amount of each CGU by calculating a value-in-use (VIU)
which is based on financial forecasts for five years to 31 December
2028 and then into perpetuity using a terminal growth rate.
Impairment is recognised thereon where the carrying amount of the
CGU exceeds the recoverable amount calculated by management.
Significant judgement is required from management in the
determination of the carrying amounts of each CGU with respect to
the allocation of only those assets and liabilities that can be directly
attributed, or assigned on a reasonable and consistent basis, to the
CGU and that will generate future cash inflows used in arriving at the
VIU of the CGU.
The calculation of the VIU of each CGU is based on significant
assumptions and estimations by management. Such key areas
of subjectivity and uncertainty include revenue growth rates,
gross margins, pre-tax discount rates, terminal growth rates and
forecasted cash flows incorporated by management.
Given recent financial performance and the inherent uncertainty and
subjectivity of key inputs and assumptions within the impairment
assessment, there is a significant risk of material misstatement that
the goodwill balances are not recoverable and require impairment.
On this basis, we have determined that the carrying value of
goodwill as at 31 December 2023 is a key audit matter.
Our work in this key audit matter included the following:
→ Understanding the design and implementation of the
group’s controls over the impairment assessment process;
→ Evaluating the appropriateness of management’s
identification of the Group’s CGUs in line with the
requirements of IAS 36;
→ Challenging management on the appropriateness of
the impairment models and the reasonableness of the
assumptions used through performance of the following:
- Reviewing the group’s key market-related assumptions
in the impairment models, including discount rates,
long-term growth rates and cash flows against external
data;
- Assessing the reliability of management’s forecasts
by comparing historical budgets against actual
performance;
- Testing the mathematical accuracy of management’s
impairment models;
- Performing a range of sensitivity analysis on key
assumptions;
- Obtaining an understanding of the commercial viability
of projects and assets;
- Using a PKF internal valuation specialist to test the
appropriateness of the key inputs and assumptions
within the determination of the discount rates for each
CGU; and
→ Assessing the disclosures made in the financial
statements for their adequacy and appropriateness.
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Capitalisation of development costs (note 15)
Software development costs are recorded as assets on the
balance sheet as and when they meet the criteria to be
capitalised in line with
IAS 38 Intangible Assets. During the financial year a
total of €3.8m of internally developed research and
development costs were capitalised to Intangible assets.
The capitalisation of costs has a material impact on the
group’s profitability.
Management exercises significant judgement in
determining whether projects, and subsequently
development costs, meet the qualifying criteria set out
under IAS 38.
Incorrect application of the accounting standard and
qualifying criteria by management could result in a material
misstatement and significantly impact the user’s view
of the group’s performance and financial statements.
On this basis, we have determined the capitalisation of
development costs as a key audit matter.
Our work in respect of this key audit matter included the
following:
→ Obtaining an understanding of the group’s process for
capitalising development costs, including the criteria
used to determine whether development costs meet
the definition of an internally generated intangible asset
under IAS 38. This included the group’s procedures for
identifying, measuring and recording development costs;
→ Substantively testing the accuracy and classification of a
sample of employee and contractor time capitalised as
internally generated development costs by vouching to
the timesheets and pay rates and ensuring the project
met the criteria for capitalisation as per IAS 38; and
→ Reviewing the associated disclosures in the financial
statements and assessing the appropriateness of such
disclosures.
Other information
The other information comprises the information included in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the group and parent company financial statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
→ the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
→ the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
→ adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
→ the parent company financial statements are not in agreement with the accounting records and returns; or
→ certain disclosures of directors’ remuneration specified by law are not made; or
→ we have not received all the information and explanations we require for our audit.
European Single Electronic Format (ESEF)
Hybrid Software Group plc has prepared consolidated financial statements in the form of an electronic file in the European
Single Electronic Format (ESEF), which comprise the Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and
the related notes. The requirements for this format are set out in the regulatory technical standards as laid down in the EU
Delegated Regulation.
The Board of directors are responsible for the preparation, in accordance with the ESEF requirements in the EU Delegated
Regulation, of the digital consolidated financial statements identified.
We were engaged by Hybrid Software Group plc to report on whether the digital consolidated financial statements
are prepared, in all material respects, in compliance with the ESEF regulation under the Delegated Regulation. Our
responsibility, under the terms of our engagement, is to obtain sufficient and appropriate information to conclude whether
the format and the tagging of the digital consolidated financial statements complies, in all material respects, with the ESEF
requirements under the Delegated Regulation.
In our opinion, based on our work performed, the format and the tagging of information in the digital consolidated financial
statements as per 31 December 2023, complies in all material respects, with the ESEF requirements under the EU Delegated
Regulation.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of
the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group and
the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.
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Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud is detailed below:
→ We obtained an understanding of the group and parent company and the sector in which they operate to identify laws
and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management, industry research and experience of the sector.
→ We determined the principal laws and regulations relevant to the group and parent company in this regard to be those
arising from:
- The Companies Act 2006;
- UK-adopted International Accounting Standards;
- EU-endorsed International Financial Reporting Standards (EU-endorsed IFRSs)
- United Kingdom Generally Accepted Accounting Practice (UK GAAP);
- The UK Corporate Governance Code;
- General Data Protection Regulation;
- The Bribery Act 2010;
- Serious Organised Crime and Police Act 2005;
- Proceeds of Crime Act 2002;
- Euronext Listing Rules;
- UK tax legislation; and
- Tax legislation applicable in other jurisdictions.
→ We designed our audit procedures to ensure the audit team considered whether there were any indications of non-
compliance by the group and parent company with those laws and regulations. These procedures included, but were not
limited to:
- Making enquiries of management;
- Reviewing Board minutes;
- Reviewing legal expenditure nominal ledger accounts; and
- Reviewing Regulatory News Services announcements.
→ We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition
to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the potential
for management bias was identified in relation to revenue recognition, the impairment of goodwill and other intangible
assets and the capitalisation of development costs. We addressed this by challenging the assumptions and judgements
made by management when auditing these significant accounting estimates. Please refer to the Key audit matters section
of our report for further information.
→ As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence
of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course
of business.
→ As part of the group audit, we have communicated with the component auditor the risks associated with the components
of the group, including the risk of fraud as a result of management override of controls. To ensure that this has been
completed, we reviewed the component auditor working papers in this area and obtained responses to our group
instructions from the component auditors.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we
will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone, other than the company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
21 March 2024
90 91
92 93
Hybrid Software Group PLC | Annual Report 2023
FINANCIAL
STATEMENTS
The following pages contain the detailed audited financial statements
for Hybrid Software Group PLC and its subsidiary companies.
Consolidated statement of comprehensive income
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
| For the year ended 31December | |||
In thousands of euros | Note | 2022 | 2023 |
| Restated | |||
| Continuing operations | |||
Revenue | 7 | ||
Cost of sales | ( | ( | |
Gross profit | |||
Selling, general and administrative expenses | ( | ( | |
Research and development expenses | ( | ( | |
Other operating expenses | 8 | ( | ( |
Other income | 9 | ||
Operating (loss)/profit | ( | ||
Finance income | 13 | ||
Finance expenses | 13 | ( | ( |
Net finance expenses | ( | ( | |
Foreign currency exchange losses | ( | ( | |
(Loss)/Profit before tax | ( | ||
Tax credit/(charge) | 18 | ( | |
Profit from continuing operations | |||
| Other comprehensive income/(loss) | |||
| Items that may be reclassified subsequently to profit or loss: | |||
Foreign currency translation differences | ( | ||
Other comprehensive income/(loss) for the year | ( | ||
Total comprehensive income attributable to equity holders | |||
| Earnings per ordinary share | |||
Basic earnings per share (euro) | 28 | ||
Diluted earnings per share (euro) | 28 |
The notes on pages 98 to 141 are an integral part of these consolidated financial statements.
Consolidated statement of comprehensive income
| For the year ended 31December | |||||
In thousands of euros | Note | 2023 | 2022 | Restated | 1 January 2022 |
| Restated | |||||
| ASSETS | |||||
| Non-current assets | |||||
Property, plant and equipment | 14 | ||||
Right-of-use assets | 24 | ||||
Other intangible assets | 15 | ||||
Goodwill | 16 | ||||
Financial assets | 17 | ||||
Deferred tax assets | 18 | ||||
Trade and other receivables due after more than one year | 7, 20 | ||||
Contract assets due after more than one year | 7 | ||||
Other assets due after more than one year | |||||
Total non-current assets | |||||
| Current assets | |||||
Inventories | 19 | ||||
Current tax assets | |||||
Trade and other receivables | 7, 20 | ||||
Contract assets | 7 | ||||
Other current assets | 21 | ||||
Prepayments | |||||
Cash and cash equivalents | 22 | ||||
Total current assets | |||||
TOTAL ASSETS | |||||
| EQUITY AND LIABILITIES | |||||
| Equity attributable to owners of the Parent | |||||
Share capital | 23 | ||||
Share premium | 23 | ||||
Merger reserve | 23 | ||||
Treasury shares | 23 | ( | ( | ( | |
Retained earnings | |||||
Foreign currency translation reserve | ( | ( | ( | ||
Total equity | |||||
| Non-current liabilities | |||||
Deferred tax liabilities | 18 | ||||
Lease liabilities | 24 | ||||
Retirement benefit obligations | |||||
Accrued liabilities | |||||
Loans & borrowings | 26 | ||||
Other liabilities | 25 | ||||
Contract liabilities | 7, 27 | ||||
Total non-current liabilities | |||||
| Current liabilities | |||||
Current tax liabilities | |||||
Trade and other payables | |||||
Lease liabilities | 24 | ||||
Accrued liabilities | |||||
Loans & borrowings | 26 | ||||
Other liabilities | 25 | ||||
Contract liabilities | 7,27 | ||||
Total current liabilities | |||||
Total liabilities | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
The notes on pages 98 to 141 are an integral part of these consolidated financial statements.
These financial statements on pages 94 to 97 were approved and authorised for issue by the Board of Directors on 21 March 2024 and were
signed on its behalf by:
Michael Rottenborn
Director
Company registered number: 10872426
Consolidated statement of financial position
94 95
Consolidated statement of changes in equity
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
| Foreign | ||||||||
| currency | ||||||||
| Share | Share | Merger | Treasury | Retained | translation | |||
In thousands of euros | Note | capital | premium | reserve | shares | earnings | reserve | Total equity |
Balance at 31 December 2021 as previously reported | ( | ( | ||||||
Prior year adjustment | 36 | ( | ( | |||||
Balance at 31 December 2021 as restated | ( | ( | ||||||
| Total comprehensive income for the year | ||||||||
Net profit for the year as previously reported | ||||||||
Foreign currency translation differences | ( | ( | ||||||
| Total comprehensive income for the year | ( | |||||||
| as previously reported | ||||||||
Prior year adjustment | 36 | ( | ( | |||||
| Total comprehensive income for the year | ( | |||||||
| as restated | ||||||||
| Transactions with owners | ||||||||
Share-based payment transactions | 24,29 | ( | ||||||
Acquisition – newly issued shares | 24,33 | ( | ( | |||||
Total transactions with owners | ( | ( | ||||||
Balance at 31 December 2022 as restated | ( | ( | ||||||
| Total comprehensive income for the year | ||||||||
Net profit for the year | ||||||||
Foreign currency translation differences | ||||||||
Total comprehensive income for the year | ||||||||
| Transactions with owners | ||||||||
Share-based payment transactions | 23 | ( | ||||||
Own shares re-purchased | 23 | ( | ( | |||||
Total transactions with owners | ( | ( | ( | |||||
| Balance at 31 December 2023 | ( | ( |
The notes on pages 98 to 141 are an integral part of these consolidated financial statements.
Consolidated statement of changes in equity
| For the year ended 31 December | ||||
In thousands of euros | Note | 2023 | 2022 | Restated |
| Cash flows from operating activities: | ||||
Net profit for the year | ||||
| Adjustments to reconcile net profit to net cash: | ||||
- Depreciation of property, plant, equipment and right-of-use assets | 14,25 | |||
- Amortisation of other intangible assets | 15 | |||
- Gain on disposal of IPv4 addresses | 9 | ( | ||
- Gain on disposal of tangible fixed assets | ( | |||
- Net finance expense, net of loan forgiveness | 13 | |||
- Net foreign currency exchange losses | ||||
- Tax (credit)/charge | 18 | ( | ||
- Change in fair value of contingent consideration | 9,26 | ( | ||
- Other items | ( | |||
Total adjustments to net profit | ||||
| Change in operating assets and liabilities: | ||||
- Financial assets | 17 | ( | ||
- Inventories | 20 | ( | ( | |
- Trade and other receivables | 19,21 | ( | ||
- Contract assets | ||||
- Other current assets | 22 | ( | ||
- Prepayments | ( | |||
- Retirement benefit obligations | ( | |||
- Trade and other payables | ( | |||
- Accrued liabilities | ( | ( | ||
- Contract liabilities | 27 | |||
Total change in operating assets and liabilities | ( | |||
Cash generated from operating activities | ||||
Interest received | 13 | |||
Interest paid | 13 | ( | ( | |
Taxes paid | ( | ( | ||
Net cash flow from operating activities | ||||
| Cash flows from investing activities: | ||||
Capital expenditures on property, plant & equipment | 14 | ( | ( | |
Capital expenditures on other intangible assets | 15 | ( | ( | |
Capitalisation of development expenses | 15 | ( | ( | |
Proceeds on disposal of discontinued operation, net of cash disposed of | ||||
Proceeds on disposal of IPv4 addresses | 9 | |||
Acquisition, net of cash acquired | 33 | ( | ||
Net cash flow used in investing activities | ( | ( | ||
| Cash flows from financing activities: | ||||
Repayment against loans and borrowings | 26 | ( | ( | |
Deferred consideration paid | 26 | ( | ( | |
Contingent consideration paid | 26 | ( | ( | |
Principal payments on lease liabilities | 25 | ( | ( | |
Net cash flow used in financing activities | ( | ( | ||
Net increase/(decrease) in cash | ( | |||
Cash and cash equivalents at 1 January | ||||
Effect of exchange rate fluctuations on cash at 1 January | ( | |||
Cash and cash equivalents at 31 December |
The notes on pages 98 to 141 are an integral part of these consolidated financial statements.
Consolidated statement of cash flows
96 97
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
2. BASIS OF PREPARATION
→ Basis of measurement
These consolidated financial statements have been prepared on the historical cost basis. Non-current assets are stated at the lower
of amortised cost and fair value less disposal costs when applicable. The methods used to measure fair value are discussed in Note 4
‘Determination of fair values’.
Company name | Functional currency |
Hybrid Software Group PLC | Euro (EUR) |
Global Graphics (UK) Limited | Pound sterling (GBP) |
Global Graphics Software Limited | Pound sterling (GBP) |
Global Graphics Software Incorporated | United States dollar (USD) |
Global Graphics Kabushiki Kaisha | Japanese yen (JPY) |
Global Graphics EBT Limited | Pound sterling (GBP) |
Meteor Inkjet Limited | Pound sterling (GBP) |
Xitron, LLC | United States dollar (USD) |
HYBRID Software Group S.à r.l. | Euro (EUR) |
eXplio NV | Euro (EUR) |
HYBRID Software Development NV | Euro (EUR) |
HYBRID Integration LLC | United States dollar (USD) |
HYBRID Software NV | Euro (EUR) |
HYBRID Software China Co. Limited | Chinese yuan (CNY) |
HYBRID Software GmbH | Euro (EUR) |
Notes to the consolidated financial statements
Company name | Functional currency |
HYBRID Software Italy SRL | Euro (EUR) |
HYBRID Software France SAS | Euro (EUR) |
HYBRID Software UK Limited | Pound sterling (GBP) |
HYBRID Software Australia Pty Limited | Australian dollar (AUD) |
HYRBID Software Iberia S.L.U. | Euro (EUR) |
ColorLogic GmbH | Euro (EUR) |
Previous disclosure | New disclosure |
| Non-current assets – trade and other receivables due | |
| Non-current assets – trade and other receivables due after more than one | after more than one year |
| year | Non-current assets – contract assets |
| Non-current assets – other assets | |
| Current assets – trade and other receivables | Current assets – trade and other receivables |
| Current assets – contract assets | |
| Non-current trade and other payables | |
| Non-current liabilities – other liabilities | Non-current loans & borrowings |
| Non-current other liabilities | |
| Non-current liabilities – accrued liabilities | Non-current employee benefit obligations |
| Non-current accrued liabilities | |
| Current liabilities – other liabilities | Current loans & borrowings |
| Current other liabilities |
2. BASIS OF PREPARATION (CONTINUED)
98 99
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
→ Alternative performance measures
The Strategic Report includes IFRS revenue and profit, constant exchange rate (“CER”) revenue, adjusted profit and EBITDA. See page 44 for
further details.
CER revenue eliminates the impact of currency movements when comparing the current year to the comparative year. The current year is
restated at the comparative year’s actual exchange rates.
Adjusted profit, in management’s view, reflects the underlying operating performance of the business and provides a more meaningful
comparison of how the business is managed and measured from year to year by adjusting for non-recurring or uncontrollable factors which
affect the IFRS reported amounts.
EBITDA is also reported as an alternative measure of profit and is calculated by adding back interest, tax, depreciation and amortisation to
net profit. EBITDA is a common measure used by investors and analysts to comparatively evaluate the financial performance of companies.
The Board believes that evaluating the Group’s ongoing results may not be as useful if it is limited to reviewing only IFRS financial measures,
particularly because management uses adjusted financial information to evaluate its ongoing operations, for internal planning and
forecasting purposes and for the measurement of performance related bonuses.
The Board does not suggest that investors should consider these adjusted financial results in isolation from, or as a substitute for, financial
information prepared in accordance with IFRS. The Board presents EBITDA and adjusted financial results when reporting its financial results
to provide investors with additional tools to evaluate the Group’s results in a manner that focuses on what the Board believes to be its
underlying business operations. The Board believes that the inclusion of adjusted financial results provides consistency and comparability
with past reports.
→ Parent Company financial statements
The parent Company financial statements present information about the Company as a separate entity and not about its group. The
Company has elected to prepare its parent company financial statements in accordance with FRS 101. These are presented on pages 142 to
149.
3. MATERIAL ACCOUNTING POLICIES
The principal accounting policies applied in the presentation of these consolidated financial statements are set out below. These policies
have been consistently applied to all the years presented.
In addition, the Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023.
The amendments require the disclosure of ‘material’ rather than ‘significant’ accounting policies. Although the amendments did not result
in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed within Note 3 in certain
instances. There are no other new or amended interpretations or standards effective for the financial year commencing 1 January 2023 that
have had a material impact on the Group.
2. BASIS OF PREPARATION (CONTINUED)
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
100 101
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
leasehold improvements | 3 to 10 years, or the remaining lease term |
computer equipment and office equipment | 3 to 5 years |
motor vehicles | 5 years |
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
trademarks | 10 years |
patents and patent applications | 3 to 10 years |
know-know | 1 year |
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
102 103
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
3. MATERIAL ACCOUNTING POLICIES 3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
104 105
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
106 107
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
3. MATERIAL ACCOUNTING POLICIES (CONTINUED)
108 109
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
6. OPERATING SEGMENTS
→ Identification of reportable segments
Management has determined the operating segments based on the reports reviewed by the Group’s Chief Executive Officer (“CEO”) that
are used for deciding how to allocate resources and also in assessing both operating and financial performance of each segment. The
Group’s CEO is considered as the Group’s chief operating decision maker (“CODM”).
The Group’s segments are:
- Enterprise Software, for enterprise workflow software used primarily for the production of labels & packaging;
- Printhead Solutions, for electronics and software developed for industrial inkjet printing;
- Printing Software, for digital printing and colour management software; and
- Group, for group related expenses that are not allocated to another segment.
Measurement of the operating segments’ profit is assessed against revenue forecasts and expense budgets, excluding non-operating IFRS
items such as the amortisation of intangible assets acquired through acquisition.
The following tables provide information on revenue, operating profit, interest, depreciation and amortisation and tax as reported to the
CODM for each of the Group’s operating segments for the years ended 31 December 2022 and 31 December 2023. The Group has disclosed
these amounts for each reportable segment because they are regularly provided to the CODM or are required to be disclosed by IFRS 8.
Assets and liabilities by segment are not regularly reported to the CODM, hence are not disclosed within this note.
Inter-segment revenues are included in cost of sales for the reciprocal segment and are eliminated on consolidation. Unallocated amounts
relate to expenses incurred by the Group’s parent company (HYBRID Software Group PLC) and exchange gains and losses that are not
attributable to a particular operating segment.
Segment EBITDA is calculated by adding back interest, depreciation, amortisation and tax to segment operating profit/(loss) after tax.
The operating segments are unchanged from the previous year.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Year ended 31 December 2023:
| Printing | Printhead | Enterprise | |||
| In thousands of euros | Software | Solutions | Software | Group | Total |
Revenue from external customers | 14,937 | 11,293 | 21,813 | - | 48,043 |
Inter-segment revenue | 322 | - | 1,012 | - | 1,334 |
Segment revenue | 15,259 | 11,293 | 22,825 | - | 49,377 |
Segment operating profit/(loss) after tax | 158 | 753 | 5,416 | (1,126) | 5,201 |
| Included in the operating profit/(loss) after tax are: | |||||
Interest income | 140 | 23 | 11 | - | 174 |
Interest expense | (59) | (20) | (294) | (41) | (414) |
Depreciation and amortisation | (2,398) | (703) | (873) | - | (3,974) |
Tax (charge)/credit | (257) | 43 | 2,323 | - | 2,109 |
Segment EBITDA | 2,732 | 1,410 | 4,249 | (1,085) | 7,306 |
Year ended 31 December 2022 Restated:
| Printing | Printhead | Enterprise | |||
| In thousands of euros | Software | Solutions | Software | Group | Total |
Revenue from external customers | 15,262 | 8,657 | 22,774 | - | 46,693 |
Inter-segment revenue | 274 | - | 109 | - | 383 |
Segment revenue | 15,536 | 8,657 | 22,883 | - | 47,076 |
Segment operating profit/(loss) after tax | 2,515 | (414) | 3,527 | (591) | 5,037 |
| Included in the operating profit/(loss) after tax are: | |||||
Interest income | 34 | 1 | - | - | 35 |
Interest expense | (73) | (26) | (311) | (15) | (425) |
Depreciation and amortisation | (2,265) | (564) | (747) | - | (3,576) |
Tax (charge) | (1,150) | (5) | (737) | - | (1,892) |
Segment EBITDA | 5,969 | 180 | 5,322 | (576) | 10,895 |
The Printing Software segment EBTIDA in the year ended 31 December 2022 includes the gain on disposal of IPv4 addresses of €3,297,000
(2021: €nil). See Note 9 ‘Other Income’ for further details.
Reconciliation of reportable segments’ operating profit after tax to consolidated profit after tax:
In thousands of euros | 2023 | 2022 | Restated |
Segment total operating profit after tax | 5,201 | 5,037 | |
Amortisation of acquired intangible assets | (4,760) | (5,094) | |
Tax effect of above-mentioned items | 878 | 1,120 | |
Consolidated profit after tax | 1,319 | 1,063 |
6. OPERATING SEGMENTS (CONTINUED)
110 111
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Printing Software | Printhead Solutions | Enterprise Software | Total | |||||
In thousands of euros | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Revenue type | ||||||||
Licence royalties | 11,514 | 11,729 | 872 | 808 | 8,582 | 11,462 | 20,968 | 23,999 |
Maintenance and after-sale support | 1,903 | 2,208 | 66 | 65 | 8,817 | 7,329 | 10,786 | 9,602 |
Services | 488 | 318 | 383 | 360 | 4,266 | 3,893 | 5,137 | 4,571 |
Printer hardware and consumables | 984 | 956 | 146 | - | 59 | 90 | 1,189 | 1,046 |
Driver electronics | - | - | 9,809 | 7,424 | - | - | 9,809 | 7,424 |
Other items | 48 | 51 | 17 | - | 89 | - | 154 | 51 |
Total sales | 14,937 | 15,262 | 11,293 | 8,657 | 21,813 | 22,774 | 48,043 | 46,693 |
| Primary geographical markets | ||||||||
United Kingdom | 499 | 1,828 | 495 | 726 | 1,400 | 1,160 | 2,394 | 3,714 |
Europe, excluding United Kingdom | 4,939 | 2,490 | 2,306 | 1,925 | 10,684 | 9,966 | 17,929 | 14,381 |
North & South America | 6,177 | 9,217 | 2,318 | 2,312 | 8,296 | 10,684 | 16,791 | 22,213 |
Asia | 3,322 | 1,727 | 6,174 | 3,694 | 1,433 | 964 | 10,929 | 6,385 |
Total sales | 14,937 | 15,262 | 11,293 | 8,657 | 21,813 | 22,774 | 48,043 | 46,693 |
| Timing of revenue recognition | ||||||||
Recognised at a point in time | 13,032 | 12,736 | 11,227 | 8,232 | 11,666 | 14,278 | 35,925 | 35,246 |
Recognised over time | 1,905 | 2,526 | 66 | 425 | 10,147 | 8,496 | 12,118 | 11,447 |
| Total sales | 14,937 | 15,262 | 11,293 | 8,657 | 21,813 | 22,774 | 48,043 | 46,693 |
In thousands of euros | next 12 months | 12-24 months | after 24 months | Total |
After-sale support | 2,032 | 346 | 131 | 2,509 |
Products and services | 2,232 | 13 | - | 2,245 |
Total | 4,264 | 359 | 131 | 4,754 |
In thousands of euros | 2023 | 2022 |
Trade receivables (see note 20) | 5,431 | 6,210 |
Contract assets | 8,593 | 8,384 |
Contract liabilities (see note 27) | (4,845) | (3,879) |
In thousands of euros | 2023 | 2022 |
Acquisition related expenses (see note 33) | - | 3 |
Loss on disposal of tangible fixed assets | 5 | - |
Other operating expenses | 6 | - |
Total other operating expenses | 11 | 3 |
7. REVENUE (CONTINUED)
112 113
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
In thousands of euros | 2023 | 2022 |
Fair value adjustment to contingent consideration | - | 4 |
Gain on disposal of IPv4 addresses | - | 3,297 |
Gain on disposal of tangible fixed assets | 18 | - |
Government grants | 63 | - |
Other income | 115 | - |
Total other income | 196 | 3,301 |
In thousands of euros | 2023 | 2022 |
Employee benefit expense | 26,473 | 26,343 |
Depreciation expenses (see note 14 and 25) | 1,532 | 1,559 |
Capitalisation of R&D expenses (see note 15) | (3,824) | (3,981) |
Amortisation of intangible assets (see note 15) | 7,194 | 7,101 |
Other operating expenses, net of other operating income (1) | 9,158 | 6,009 |
Total operating expenses, net of other operating income | 40,533 | 37,031 |
In thousands of euros | 2023 | 2022 |
Interest income | 41 | 23 |
Finance income on net investment in leases | 18 | 20 |
Total interest income | 59 | 43 |
Other financial income | 115 | - |
Total finance income | 174 | 43 |
Interest expense | (1) | (29) |
Interest expense on loan from related undertaking (see note 31) | (235) | (245) |
Interest on lease liabilities (see note 24) | (127) | (150) |
Remeasurement of deferred consideration on ColorLogic GmbH acquisition | (41) | - |
Other financial charges | (10) | - |
Total finance expenses | (414) | (424) |
Net finance expenses | (240) | (381) |
12. EMPLOYEE INFORMATION
The average number of people, including executive Directors, employed by the Group during the year was:
2023 | 2022 | |
| By activity | ||
Research and development | 99 | 102 |
Sales, maintenance and support | 139 | 146 |
General and administrative | 39 | 41 |
Total average number of people employed | 277 | 289 |
In thousands of euros | 2023 | 2022 |
Wages and salaries | 22,970 | 22,942 |
Social security contributions | 2,856 | 2,757 |
Medical insurance contributions | 437 | 478 |
Pension contributions to defined contribution plans | 773 | 986 |
Other employee related expenses | 1,048 | 423 |
Total employee benefit expenses | 28,084 | 27,586 |
114 115
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
| Leasehold | Computer | Office | Motor | ||
| In thousands of euros | improvements | equipment | equipment | vehicles | Total |
| Cost | |||||
At 31 December 2021 | 1,025 | 1,983 | 1,515 | 483 | 5,006 |
Additions | 35 | 230 | 177 | 363 | 805 |
Additions – business combinations (see note 33) | - | 16 | - | - | 16 |
Disposals | - | (9) | (117) | (72) | (198) |
Effect of movement in exchange rates | (46) | (78) | (65) | (9) | (198) |
At 31 December 2022 | 1,014 | 2,142 | 1,510 | 765 | 5,431 |
Additions | 9 | 272 | - | 354 | 635 |
Transfers | - | 678 | (678) | - | - |
Disposals | - | (97) | (36) | (84) | (217) |
Effect of movement in exchange rates | 17 | 46 | (6) | 3 | 60 |
At 31 December 2023 | 1,040 | 3,041 | 790 | 1,038 | 5,909 |
| Depreciation | |||||
At 31 December 2021 | 762 | 1,483 | 1,081 | 18 | 3,344 |
Charge for the year | 84 | 278 | 232 | 144 | 738 |
Disposals | - | (6) | (111) | (72) | (189) |
Effect of movement in exchange rates | (39) | (68) | (55) | (2) | (164) |
At 31 December 2022 | 807 | 1,687 | 1,147 | 88 | 3,729 |
Charge for the year | 83 | 376 | 95 | 215 | 769 |
Transfers | - | 656 | (656) | - | - |
Disposals | - | (92) | (32) | (43) | (167) |
Effect of movement in exchange rates | 15 | 20 | (5) | 1 | 31 |
At 31 December 2023 | 905 | 2,647 | 549 | 261 | 4,362 |
| Net book value | |||||
At 31 December 2022 | 207 | 455 | 363 | 677 | 1,702 |
At 31 December 2023 | 135 | 394 | 241 | 777 | 1,547 |
| Customer | |||||||
| Software | relation | Driver | |||||
| In thousands of euros | technology | ships | Patents | Trademarks | Know-how | electronics | Total |
| Cost | |||||||
At 31 December 2021 | 83,089 | 21,476 | 2,879 | 617 | 1,032 | 3,712 | 112,805 |
Additions – purchased | 75 | - | - | - | - | - | 75 |
Additions – internally developed | 3,349 | - | - | - | - | 632 | 3,981 |
Additions – business combinations (see note 33) | 1,458 | - | - | - | 378 | - | 1,836 |
Effect of movement in exchange rates | (2,020) | (694) | (144) | (31) | (6) | (211) | (3,106) |
At 31 December 2022 | 85,951 | 20,782 | 2,735 | 586 | 1,404 | 4,133 | 115,591 |
Additions – purchased | 5 | - | - | - | - | - | 5 |
Additions – internally developed | 3,301 | - | - | - | - | 523 | 3,824 |
Effect of movement in exchange rates | 1,761 | 256 | 54 | 12 | (3) | 90 | 2,170 |
At 31 December 2023 | 91,018 | 21,038 | 2,789 | 598 | 1,401 | 4,746 | 121,590 |
At 31 December 2021 | 44,718 | 15,333 | 2,735 | 617 | 857 | 3,340 | 67,600 |
Charge for the year | 5,512 | 908 | 10 | - | 458 | 223 | 7,111 |
Effect of movement in exchange rates | (2,025) | (705) | (137) | (31) | (6) | (175) | (3,079) |
At 31 December 2022 | 48,205 | 15,536 | 2,608 | 586 | 1,309 | 3,388 | 71,632 |
Charge for the year | 5,875 | 871 | 10 | - | 95 | 353 | 7,204 |
Effect of movement in exchange rates | 1,751 | 259 | 59 | 12 | (3) | 69 | 2,147 |
At 31 December 2023 | 55,831 | 16,666 | 2,677 | 598 | 1,401 | 3,810 | 80,983 |
| Net book value | |||||||
At 31 December 2022 | 37,746 | 5,246 | 127 | - | 95 | 745 | 43,959 |
At 31 December 2023 | 35,187 | 4,372 | 112 | - | - | 936 | 40,607 |
In thousands of euros | 2023 | 2022 |
Cost of sales | 10 | 10 |
Selling, general and administrative expenses | 966 | 1,366 |
Research and development expenses | 6,228 | 5,735 |
Total amortisation charge | 7,204 | 7,111 |
116 117
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
In thousands of euros | Remaining amortisation period | 2023 | 2022 |
Cloudflow | 9 to 11.5 years | 16,342 | 17,480 |
ColorLogic | 1.5 to 8 years | 2,439 | 2,647 |
EDL | 1.1 years | 252 | 418 |
Harlequin RIP | 1.4 years | 1,927 | 1,649 |
iC3D | 8 to 10 years | 1,300 | 1,385 |
Other software | 2 to 6 years | 120 | 125 |
Packz | 9 to 11.5 years | 11,826 | 12,652 |
Xitron | 0.2 to 4.8 years | 981 | 1,390 |
Total software technology | 35,187 | 37,746 | |
Customer relationships | 0.8 to 7.8 years | 4,372 | 5,246 |
Patents | 11 years | 112 | 127 |
Know-how | - | - | 95 |
Driver electronics | 0.2 to 4.8 years | 936 | 745 |
15. OTHER INTANGIBLE ASSETS (CONTINUED)
In thousands of euros | Total Goodwill |
| Cost | |
| At 31 December 2021 as previously reported | 70,729 |
| Prior year adjustment (see note 36) | (2,842) |
| At 31 December 2021 as restated | 67,887 |
| Additions – business combinations (see note 33) | 1,578 |
| Effect of movement in exchange rates | (630) |
| At 31 December 2022 as restated | 68,835 |
| Effect of movement in exchange rates | 97 |
| At 31 December 2023 | 68,932 |
| Amortisation or impairment | |
| At 31 December 2021 | 6,051 |
| Effect of movement in exchange rates | (301) |
| At 31 December 2022 | 5,750 |
| Effect of movement in exchange rates | 55 |
| At 31 December 2023 | 5,805 |
| Net book value | |
| At 31 December 2022 as restated | 63,085 |
| At 31 December 2023 | 63,127 |
In thousands of euros | 2023 | 2022 | Restated |
Global Graphics Software | 6,784 | 6,721 | |
Meteor Inkjet | 2,238 | 2,195 | |
Xitron | 1,793 | 1,857 | |
HYBRID Software | 51,110 | 51,110 | |
ColorLogic | 1,202 | 1,202 | |
Total goodwill | 63,127 | 63,085 |
118 119
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
16. GOODWILL (CONTINUED)
2023 | 2022 | |
Revenue growth rate | (44bps) | (94bps) |
Discount rate | 41bps | 356bps |
2023 | 2022 | |
Revenue growth rate | (237bps) | (61bps) |
Discount rate | 79bps | 201bps |
2023 | 2022 | |
Revenue growth rate | (41bps) | (232bps) |
Discount rate | 44bps | 831bps |
16. GOODWILL (CONTINUED)
120 121
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
In thousands of euros | 2023 | 2022 |
Rent and other deposits | 32 | 49 |
Financial assets not classified as cash or cash equivalent | 803 | 726 |
Non-current finance lease receivables (see note 24) | 112 | 180 |
Total financial assets | 947 | 955 |
18. TAX
→ Corporation tax
Analysis of the tax credit / (charge) in the year:
In thousands of euros | 2023 | 2022 | Restated |
| Current tax | |||
Current year charge | (500) | (1,579) | |
Withholding tax | - | (8) | |
Credit related to previous periods | 49 | - | |
Total current tax | (451) | (1,587) | |
| Deferred tax | |||
Arising from the capitalisation and amortisation of development expenses | (47) | (269) | |
Impact of rate change | - | - | |
Recognition of previously unrecognised tax losses | (26) | 199 | |
Origination and reversal of temporary differences | 3,510 | 885 | |
Total deferred tax | 3,437 | 815 | |
Total tax credit / (charge) | 2,986 | (772) |
16. GOODWILL (CONTINUED)
The tax credit / (charge) for the year differs from that calculated by applying the standard rate of corporation tax of the Company to profit
or loss before taxation. The differences are as follows:
In thousands of euros | 2023 | 2022 | Restated |
(Loss) / Profit before tax | (1,667) | 1,835 | |
Expected tax credit / (charge) at the Company’s tax rate of 23.5% (2022: 19%) | 392 | (349) | |
Effect of differences in tax rates in foreign jurisdictions | 200 | (527) | |
Effect of expenses not deductible and items not taxable | 1,156 | 8 | |
Deferred tax not recognised | (1,713) | (984) | |
Impact of rate change | 2,445 | (237) | |
Effect of R&D enhanced expenditure | 498 | 674 | |
Effect of withholding tax | (16) | (8) | |
Recognition of previously unrecognised tax asset | 24 | 651 | |
Total tax credit / (charge) recognised | 2,986 | (772) |
An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021.
In thousands of euros | 2023 | 2022 | Restated |
| Deferred tax assets | |||
Capital allowances | 1,756 | 1,677 | |
Unused tax losses | 1,085 | 1,109 | |
Total recognised deferred tax assets before set-off | 2,841 | 2,786 | |
Deferred tax set-off | (1,208) | (717) | |
Net deferred tax assets | 1,633 | 2,069 | |
| Deferred tax liabilities | |||
Capitalised development expenses | 966 | 834 | |
As a result of business combinations | 2,643 | 6,179 | |
Total recognised deferred tax liabilities before set-off | 3,609 | 7,013 | |
Deferred tax set-off | (1,208) | (717) | |
Net deferred tax liabilities | 2,401 | 6,296 |
18. TAX (CONTINUED)
122 123
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
19. INVENTORIES
In thousands of euros | 2023 | 2022 |
Finished goods | 1,823 | 2,174 |
Components | 2,089 | 1,739 |
Total inventories | 3,912 | 3,913 |
In thousands of euros | 2023 | 2022 |
Trade receivables | 6,024 | 6,546 |
Allowance for doubtful debts | (593) | (336) |
Total trade and other receivables | 5,431 | 6,210 |
In thousands of euros | 2023 | 2022 |
Under 90 days | 4,970 | 5,860 |
Over 90 days and provided for | 461 | 336 |
Over 90 days but not provided for | - | 14 |
Total trade receivables | 5,431 | 6,210 |
In thousands of euros | 2023 | 2022 |
At 1 January | 336 | 134 |
Charge during the year | 257 | 202 |
At 31 December | 593 | 336 |
In thousands of euros | 2023 | 2022 | Restated |
| Deferred tax assets | |||
Balance as at 1 January | 2,786 | 2,756 | |
Amounts (charged)/credited to profit & loss | (26) | 199 | |
Foreign currency translation differences recognised in other comprehensive income | 81 | (169) | |
Total recognised deferred tax assets before set-off as at 31 December | 2,841 | 2,786 | |
| Deferred tax liabilities | |||
Balance as at 1 January as previously reported | 9,381 | 10,166 | |
Prior year adjustment (see note 36) | (2,368) | (2,605) | |
Balance as at 1 January as restated | 7,013 | 7,561 | |
Amounts credited to profit & loss | (3,463) | (853) | |
Prior year adjustment (see note 36) | - | 237 | |
Foreign currency translation differences recognised in other comprehensive income | 59 | 68 | |
Total recognised deferred tax liabilities before set-off as at 31 December | 3,609 | 7,013 |
18. TAX (CONTINUED)
In thousands of euros | 2023 | 2022 |
VAT receivable | 260 | 294 |
Current finance lease receivables (see note 24) | 60 | 85 |
Other items | 55 | 46 |
Total other current assets | 375 | 425 |
In thousands of euros | 2023 | 2022 |
Cash at bank and in hand | 7,079 | 6,317 |
Total cash and cash equivalents | 7,079 | 6,317 |
23. CAPITAL AND RESERVES
SERVES
2023 | 2022 | |||
In thousands of euros, except number of shares | Number | Value | Number | Value |
As at 31 December | 32,909,737 | 13,164 | 32,909,737 | 13,164 |
In thousands of euros | 2023 | 2022 |
As at 31 December | 1,979 | 1,979 |
In thousands of euros | 2023 | 2022 |
As at 31 December | 67,015 | 67,015 |
2023 | 2022 | |||
In thousands of euros, except number of shares | Number | Value | Number | Value |
As at 1 January | 58,996 | 161 | 73,996 | 202 |
Disbursement of shares to employees | (19,000) | (54) | (15,000) | (41) |
Own shares re-purchased | 18,588 | 72 | - | - |
As at 31 December | 58,584 | 179 | 58,996 | 161 |
124 125
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
| Land and | Motor | ||
| In thousands of euros | buildings | vehicles | Total |
Balance at 31 December 2021 | 3,469 | 137 | 3,606 |
Additions | - | 67 | 67 |
Remeasurements | 123 | - | 123 |
Disposals | - | (11) | (11) |
Depreciation charge for the year | (722) | (99) | (821) |
Effect of movement in exchange rates | (36) | (16) | (52) |
Balance at 31 December 2022 | 2,834 | 78 | 2,912 |
Additions | - | 45 | 45 |
Depreciation charge for the year | (694) | (69) | (763) |
Effect of movement in exchange rates | 8 | (1) | 7 |
Balance at 31 December 2023 | 2,148 | 53 | 2,201 |
In thousands of euros | 2023 | 2022 |
Current | 824 | 834 |
Non-current | 1,777 | 2,560 |
Total lease liabilities | 2,601 | 3,394 |
In thousands of euros | 2023 | 2022 |
Interest on lease liabilities | 127 | 150 |
Expenses relating to short-term leases | 93 | 99 |
Total recognised in profit or loss | 220 | 249 |
In thousands of euros | 2023 | 2022 |
Lease liability interest | 127 | 150 |
Principal payments | 880 | 935 |
Total cash outflow for leases | 1,007 | 1,085 |
In thousands of euros | 2023 | 2022 |
Within 1 year | 953 | 972 |
Between 1 and 2 years | 911 | 919 |
Between 2 and 3 years | 547 | 883 |
Between 3 and 4 years | 164 | 527 |
Between 4 and 5 years | 160 | 160 |
After 5 years | 160 | 320 |
Total undiscounted lease liabilities at 31 December | 2,895 | 3,781 |
In thousands of euros | 2023 | 2022 |
Income received from subleasing right-of-use assets | 96 | 49 |
Finance income on net investment in leases | (18) | (20) |
Total amount recognised in profit or loss | 78 | 29 |
In thousands of euros | 2023 | 2022 |
Within 1 year | 72 | 103 |
Between 1 and 2 years | 72 | 78 |
Between 2 and 3 years | 52 | 72 |
Between 3 and 4 years | - | 53 |
Between 4 and 5 years | - | - |
After 5 years | - | - |
Total undiscounted lease payments receivable | 196 | 306 |
Unearned finance income | (24) | (41) |
Net investment in the lease | 172 | 265 |
In thousands of euros | 2023 | 2022 |
Current (see note 21) | 60 | 85 |
Non-current (see note 17) | 112 | 180 |
Total finance lease receivable | 172 | 265 |
24. LEASES (CONTINUED)
126 127
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
In thousands of euros | 2023 | 2022 |
Contingent consideration | 233 | 635 |
Deferred consideration | 662 | 932 |
Other liabilities | - | 152 |
Total other liabilities | 895 | 1,719 |
In thousands of euros | 2023 | 2022 | Restated |
Current | 543 | 688 | |
Non-current | 352 | 1,031 | |
Total other liabilities | 895 | 1,719 |
In thousands of euros | 2023 | 2022 | Restated |
Current | - | 93 | |
Non-current | 7,800 | 8,000 | |
Total loans and borrowings | 7,800 | 8,093 |
In thousands of euros | 2023 | 2022 |
Customer advances | 1,477 | 1,015 |
Deferred revenue | 3,368 | 2,864 |
Total contract liabilities | 4,845 | 3,879 |
In thousands of euros | 2023 | 2022 |
Current | 4,368 | 3,835 |
Non-current | 477 | 44 |
Total contract liabilities | 4,845 | 3,879 |
28. EARNINGS PER SHARE
The basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the year, excluding those held in treasury. For diluted earnings per share, the weighted average
number of ordinary shares in issue during the year, excluding those held in treasury, is adjusted to assume conversion of all dilutive potential
ordinary shares. At the year end, those share options where the exercise price is less than the average market price of the Company’s
ordinary shares were the only dilutive potential ordinary shares.
In thousands of euros unless otherwise stated | 2023 | 2022 | Restated |
Weighted average number of shares (basic), in thousands of shares | 32,852 | 32,850 | |
Profit from continuing operations | 1,319 | 1,063 | |
Basic earnings per share, in euros | 0.04 | 0.03 | |
Diluted earnings per share, in euros | 0.04 | 0.03 |
29. SHARE BASED PAYMENTS
At 31 December 2023, the Group has the following shared based payment arrangements.
→ Free shares
On 24 April 2009 the Group established an HMRC approved Share Incentive Plan (“SIP”) in the UK and also operates an Enterprise
Management Incentive Scheme (“EMI”) to enable its UK employees and Directors to participate in a tax efficient manner in the ownership
of the Company’s shares. Under these schemes, free shares can be granted by the Board to eligible employees and Directors. For non-
UK employees and Directors, free shares can be granted directly to the employee. Free shares granted by the Board to employees and
Directors, either directly or through the SIP or EMI, have a 3 or 4 year vesting period and free shares granted outside of the SIP or EMI have
vesting periods of either 12 or 24 months.
Employees participating in the SIP are also granted free matching shares in proportion to the partnership shares that they purchased
through a deduction from their gross pay before tax, subject to current HMRC limits. The matching shares have a vesting period of 3 years.
128 129
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
The number of free shares granted, exercised, lapsed or withdrawn during the year was as follows:
| As at 31 December | As at 31 December | |||||
| 2022 | Granted | Exercised | Withdrawn | Lapsed | 2023 | |
| Number | Number | Number | Number | Number | Number | |
SIP matching shares | 23,366 | - | (3,788) | (4,304) | - | 15,274 |
Free shares granted | 58,112 | - | (22,506) | (15,606) | - | 20,000 |
81,478 | - | (26,294) | (19,910) | - | 35,274 |
→ Measurement of fair value
The fair value of free shares granted as matching shares under the SIP was assumed to be equal to the purchase price of corresponding
partnership shares which were acquired by participants in the SIP.
The fair value of free shares granted was assumed to be the closing price reported for the Company’s shares on the last trading day
immediately preceding the date when the shares were granted. It was also considered that all of the grantees would be in employment at
the date of vesting.
During the year the Group recognised €nil (2022: €nil) of share-based payment expense in these financial statements.
29. SHARE BASED PAYMENTS (CONTINUED)
| Pounds | Japanese | Canadian | Chinese | Australian | |||
In thousands of euros | Euros | US dollars | sterling | yen | dollars | yuan | dollars |
| At 31 December 2023 | |||||||
Trade and other receivables | 1,688 | 2,664 | 836 | 160 | - | 45 | 16 |
Contract assets | 1,646 | 1,415 | 899 | 56 | 40 | 121 | 8 |
Other current assets | 171 | - | 161 | 9 | - | 34 | - |
Trade and other payables | (1,904) | (636) | (924) | (31) | - | - | (7) |
Accrued liabilities | (925) | (76) | (894) | (19) | - | (24) | (2) |
Other liabilities | (276) | (34) | (233) | - | - | - | - |
Net exposure | 400 | 3,333 | (155) | 175 | 40 | 176 | 15 |
| At 31 December 2022 Restated | |||||||
Trade and other receivables | 2,262 | 2,459 | 1,131 | 125 | 10 | 110 | 76 |
Contract assets | 1,661 | 1,846 | 202 | 728 | 47 | 219 | 17 |
Other current assets | 208 | 2 | 168 | 13 | - | 34 | - |
Loans & borrowings | (93) | - | - | - | - | - | - |
Trade and other payables | (1,626) | (614) | (654) | (10) | - | (13) | (2) |
Accrued liabilities | (1,072) | (186) | (1,015) | (14) | - | - | - |
Other liabilities | (269) | - | (419) | - | - | - | - |
Net exposure | 1,071 | 3,507 | (587) | 842 | 57 | 350 | 91 |
| Pounds | Japanese | Canadian | Chinese | Australian | |||
In thousands of euros | Euros | US dollars | sterling | yen | dollars | yuan | dollars |
| At 31 December 2023 | |||||||
Trade and other receivables | - | 22 | - | - | - | - | - |
Contract assets | 1,930 | 1,052 | 1,309 | 13 | 104 | - | - |
Other non-current assets | 8 | 8 | - | - | - | - | 2 |
Retirement benefit obligations | (982) | - | - | - | - | - | - |
Loans & borrowings | (7,800) | - | - | - | - | - | - |
Accrued liabilities | (52) | - | - | - | - | - | - |
Other liabilities | (352) | - | - | - | - | - | - |
Net exposure | (7,248) | 1,082 | 1,309 | 13 | 104 | - | 2 |
| At 31 December 2022 Restated | |||||||
Trade and other receivables | - | 37 | - | - | - | - | - |
Contract assets | 2,137 | 1,336 | 13 | 62 | 116 | - | - |
Other non-current assets | 6 | 10 | - | - | - | - | 1 |
Retirement benefit obligations | (797) | - | - | - | - | - | - |
Loans & borrowings | (8,000) | - | - | - | - | - | - |
Accrued liabilities | (24) | (113) | (213) | - | - | - | - |
Other liabilities | (814) | - | (217) | - | - | - | - |
Net exposure | (7,492) | 1,270 | (417) | 62 | 116 | - | 1 |
30. FINANCIAL RISK MANAGEMENT (CONTINUED)
130 131
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Average rate for | Rate at 31 December | |||
2023 | 2022 | 2023 | 2022 | |
US dollar | 0.9261 | 0.9506 | 0.9060 | 0.9382 |
Pound sterling | 1.1497 | 1.1734 | 1.1527 | 1.1303 |
Japanese yen | 0.0066 | 0.0073 | 0.0064 | 0.0071 |
Canadian dollar | 0.5934 | 0.7303 | 0.5928 | 0.6897 |
Chinese yuan | 0.1316 | 0.1413 | 0.1279 | 0.1354 |
Australian dollar | 0.6156 | 0.6595 | 0.6165 | 0.6348 |
In thousands of euros | 2023 | 2022 | Restated |
Equipment manufacturers | 1,891 | 899 | |
Resellers and end users | 3,540 | 5,311 | |
Total trade receivables | 5,431 | 6,210 |
30. FINANCIAL RISK MANAGEMENT (CONTINUED)
| Between 1 and | |||
In thousands of euros | Within 1 year | 10 years | Total |
| At 31 December 2023 | |||
Retirement benefit obligations | - | 982 | 982 |
Loans & borrowings | - | 7,800 | 7,800 |
Trade payables | 3,502 | - | 3,502 |
Accrued liabilities | 1,940 | 52 | 1,992 |
Other liabilities | 543 | 352 | 895 |
Total | 5,985 | 9,186 | 15,171 |
| At 31 December 2022 Restated | |||
Retirement benefit obligations | - | 797 | 797 |
Loans & borrowings | 93 | 8,000 | 8,093 |
Trade payables | 2,919 | - | 2,919 |
Accrued liabilities | 2,287 | 350 | 2,637 |
Other liabilities | 688 | 1,031 | 1,719 |
Total | 5,987 | 10,178 | 16,165 |
In thousands of euros | 2023 | 2022 | Restated |
| Capital | |||
Total equity | 111,947 | 110,459 | |
Less cash and cash equivalents | 7,079 | 6,317 | |
104,868 | 104,142 | ||
| Overall financing | |||
Total equity | 111,947 | 110,459 | |
Plus borrowings | 7,800 | 8,093 | |
119,747 | 118,552 | ||
Capital to overall financing ratio | 1:1.14 | 1:1.14 |
30. FINANCIAL RISK MANAGEMENT (CONTINUED)
132 133
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Carrying amount | Fair value | ||||
| Financial | |||||
| assets at | Other financial | ||||
| In thousands of euros | FVTPL | amortised cost | liabilities | Total | Level 2 |
| At 31 December 2023 | |||||
| Financial assets not measured at fair value | |||||
Financial assets (see note 17) | - | 947 | - | 947 | 947 |
Trade and other receivables (see note 20) | - | 5,431 | - | 5,431 | 5,431 |
Cash and cash equivalents (see note 22) | - | 7,079 | - | 7,079 | 7,079 |
- | 13,457 | - | 13,457 | 13,457 | |
| Financial liabilities measured at fair value | |||||
Contingent consideration (see note 25) | 233 | - | - | 233 | 233 |
Deferred consideration (see note 25) | 662 | - | - | 662 | 662 |
Unsecured loan from related party (see note 26) | 7,800 | - | - | 7,800 | 7,800 |
8,695 | 8,695 | 8,695 | |||
| Financial assets not measured at fair value | |||||
Trade and other payables | - | - | 3,502 | 3,502 | 3,502 |
- | - | 3,502 | 3,502 | 3,502 |
| At 31 December 2022 Restated | |||||
| Financial assets not measured at fair value | |||||
Financial assets (see note 17) | - | 955 | - | 955 | 955 |
Trade and other receivables (see note 20) | - | 6,210 | - | 6,210 | 6,210 |
Cash and cash equivalents (see note 22) | - | 6,317 | - | 6,317 | 6,317 |
- | 13,482 | - | 13,482 | 13,482 | |
| Financial liabilities measured at fair value | |||||
Contingent consideration (see note 25) | 635 | - | - | 635 | 635 |
Deferred consideration (see note 25) | 932 | - | - | 932 | 932 |
Other liabilities (see note 25) | 152 | - | - | 152 | 152 |
Unsecured loan from related party (see note 26) | 8,093 | - | - | 8,093 | 8,093 |
9,812 | - | - | 9,812 | 9,812 | |
| Financial assets not measured at fair value | |||||
Trade and other payables | - | - | 2,919 | 2,919 | 2,919 |
- | - | 2,919 | 2,919 | 2,919 |
30. FINANCIAL RISK MANAGEMENT (CONTINUED)
In thousands of euros | 2023 | 2022 |
Short-term employee benefits | 3,066 | 3,289 |
Post-employment benefits | 136 | 172 |
Other long-term benefits | - | 20 |
Termination payments | 115 | - |
Shares sold to Hybrid Software Group PLC | 22 | - |
Total key management personnel expenses | 3,339 | 3,481 |
134 135
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
| Ownership interest % | ||||||
| Country of | ||||||
Company name | Registered office address | incorporation | 2023 | 2022 | ||
| Global Graphics (UK) | 2030 | Cambourne Business Park, Cambourne, CB23 | United Kingdom | 100% | 100% | |
| Limited | 6DW, UK | |||||
| Global Graphics Software | 2030 | Cambourne Business Park, Cambourne, CB23 | United Kingdom | 100% | 100% | |
| Limited* | 6DW, UK | |||||
| Global Graphics Software | 6601 | S.Tamiami Trail, Suite 176, Sarasota, FL 34231, | United States of | 100% | 100% | |
| Incorporated* | USA | America | ||||
| Global Graphics Kabushiki | 610 | AIOS Nagatacho Bldg, 2-17-17 Nagatacho, Chiyoda- | Japan | 100% | 100% | |
| Kaisha* | ku, Tokyo 100-0014, Japan | |||||
| Global Graphics EBT | 2030 | Cambourne Business Park, Cambourne, CB23 | United Kingdom | - | 100% | |
| Limited^ | 6DW, UK | |||||
| Meteor Inkjet Limited | Harston Mill, Royston Road, Harston, Cambridge, CB22 | United Kingdom | 100% | 100% | ||
| 7GG, UK | ||||||
| Xitron, LLC* | 4750 | Venture Drive, Suite 200A, Ann Arbor, Michigan | United States of | 100% | 100% | |
48108, | USA | America | ||||
| HYBRID Software Group | 19-21 route d’Arlon, LU-8009 Strassen, Luxembourg | Luxembourg | 100% | 100% | ||
| S.à r.l. | ||||||
| eXplio NV* | Guldensporenpark 18, Block B, 9820 Merelbeke, | Belgium | 100% | 99.93% | ||
| Belgium | ||||||
| HYBRID Software | Guldensporenpark 18, Block B, 9820 Merelbeke, | Belgium | 100% | 100% | ||
| Development NV* | Belgium | |||||
| HYBRID Integration LLC* | Eight Neshaminy Interplex, Suite 111, Trevose, | United States of | 100% | 100% | ||
| Pennsylvania 19053, USA | America | |||||
| HYBRID Software NV* | Guldensporenpark 18, Block B, 9820 Merelbeke, | Belgium | 100% | 100% | ||
| Belgium | ||||||
| HYBRID Software China | 25 th Floor, Building 2, No. 900 Yishan Road, | Room 2504, | China | 100% | 100% | |
| Co. Limited* | Xuhui District, Shanghai, China | |||||
HYBRID Software GmbH* | Uhlandstrabe 9, 79102 Freiburg, Germany | Germany | 100% | 100% | ||
| HYBRID Software Italy | Viale Sondrio 2, IT-20124 Milano, Italy | Italy | 100% | 100% | ||
| SRL* | ||||||
| HYBRID Software France | 15 Rue Marsollier, F-75002 Paris, France | France | 100% | 100% | ||
| SAS* | ||||||
| HYBRID Software UK | 2030 | Cambourne Business Park, Cambourne, CB23 | United Kingdom | 100% | 100% | |
| Limited* | 6DW, UK | |||||
| HYBRID Software Australia | Suite 2, Level 14, 9 Castlereagh Street, Sydney, NSW | Australia | 100% | 100% | ||
| Pty Limited* | 2000, | Australia | ||||
| HYBRID Software Iberia | Riera dels Frares, 8 – E08907 L’Hospitalet, Barcelona, | Spain | 100% | 100% | ||
| S.L.U.* | Spain | |||||
| ColorLogic GmbH | Landersumer Weg 40, D-48431 Rheine | Germany | 100% | 100% | ||
| See Note 3 ‘Investments’ of the company financial statements for the principal activities of each company. | ||||||
31. RELATED PARTIES (CONTINUED)
33. ACQUISITION
→ Acquisition of iC3D
On 12 March 2022, the Group acquired the trade and assets of Creative Edge Software LLC (“iC3D”) from Creative Edge Software LLC
(“Creative”).
3D and additive manufacturing applications are one of the Group’s fastest-growing market segments for printhead drive electronics and
software, but visualisation of packaging designs in 3D was a gap in our technology portfolio. The acquisition of iC3D strengthens our 3D
offering and closes the loop between the design of high-end labels and packaging and industrial print manufacturing. We already have an
integration of iC3D in our PACKZ and CLOUDFLOW software with a substantial installed base of users that have licensed the iC3D option
and we look forward to broader integration of iC3D in our Digital Front Ends (DFEs) and other software products.
The acquisition date fair value of the consideration was made up of:
| In thousands of euros | |
Cash, paid on closing | 3,664 |
Working capital adjustment, cash receivable | (234) |
Total consideration | 3,430 |
The identifiable assets acquired and liabilities assumed were:
| Fair value | |||
In thousands of euros | Book value | adjustment | Total |
Property, plant and equipment (see note 14) | 16 | - | 16 |
Other intangible assets (see note 15) | - | 1,836 | 1,836 |
Total identifiable net assets acquired | 16 | 1,836 | 1,852 |
The intangible assets recognised have been valued as follows:
Intangible asset | Valuation method |
Technology | The average of the present value of cashflows from operating activities in relation to owned technology over a |
| 10 year period (using a post-tax discount rate of 15.40%, a forecasted profit level, an assumption that revenue | |
| will grow during the valuation period and there will be a churn of recurring revenue over the forecast period). | |
Know how | The present value of cashflows from operating activities in relation to customer relationships existing at |
| acquisition date for the remaining terms of the agreements, using a post-tax discount rate of 15.40% and a | |
| forecasted profit level. |
Goodwill was recognised as a result of the acquisition as follows:
| In thousands of euros | |
Total consideration payable | 3,430 |
Fair value of identifiable net assets | (1,852) |
Total Goodwill (see note 16) | 1,578 |
The goodwill represents the ability to develop new technology to attract potential new customers, any value of intangible assets into
perpetuity over their limited useful lives and the assembled workforce that does not meet separate recognition criteria. None of the
goodwill recognised is expected to be deductible for tax purposes.
During the year, the Group incurred acquisition-related costs of €3,000 in respect of this acquisition, which have been included in ‘Other
operating expenses’ in the consolidated statement of comprehensive income.
For the period from acquisition to 31 December 2022, the revenues and the loss before tax generated by this acquisition were €589,000
and €135,000 respectively.
If the acquisition had taken effect at the beginning of the reporting period in which the acquisition occurred (1 January 2022), on a pro
forma basis, revenue of the combined Group for the year ended 31 December 2022 would have been increased by €341,000 and loss before
tax would have decreased by €173,000.
136 137
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
In thousands of euros | Lease liabilities | Other liabilities | Total |
Balance at 31 December 2022 | 3,394 | 9,812 | 13,206 |
Loan repayment | - | (293) | (293) |
Deferred consideration paid | - | (310) | (310) |
Contingent consideration paid | - | (367) | (367) |
Principal payments of lease liabilities | (880) | - | (880) |
Total cashflows | (880) | (970) | (1,850) |
Contingent consideration fair value adjustment | - | 41 | 41 |
Recognition of new lease liabilities | 84 | - | 84 |
Disposal of expired lease liabilities | (59) | - | (59) |
Other non-cash items* | 127 | (235) | (108) |
Exchange rate effects | (65) | 47 | (18) |
Total non-cash items | 87 | (147) | (60) |
Balance at 31 December 2023 | 2,601 | 8,695 | 11,296 |
In thousands of euros | Lease liabilities | Other liabilities | Total |
Balance at 31 December 2021 | 3,821 | 11,174 | 14,995 |
Loan repayment | - | (307) | (307) |
Deferred consideration paid | - | (310) | (310) |
Contingent consideration paid | - | (715) | (715) |
Principal payments of lease liabilities | (935) | - | (935) |
Total cashflows | (935) | (1,332) | (2,267) |
Contingent consideration fair value adjustment | - | (4) | (4) |
Recognition of new lease liabilities | 314 | - | 314 |
Remeasurement of existing lease liabilities | 126 | - | 126 |
Other non-cash items* | 138 | (26) | 112 |
Exchange rate effects | (70) | - | (70) |
Total non-cash items | 508 | (30) | 478 |
Balance at 31 December 2022 | 3,394 | 9,812 | 13,206 |
35. SUBSEQUENT EVENTS
There are no post balance sheet events requiring disclosure in the financial statements for the year ended 31 December 2023.
36. RESTATEMENT OF COMPARATIVES
As part of the annual impairment test analysis management identified that a significant error had been made in the determination of the
deferred tax liability position which has arisen from the acquisition of HYBRID Software in January ’21, leading to a material misstatement
in the consolidated group figures. Under the initial modelling certain elements have not been included properly, in effect the intragroup
transfers of both the Cloudflow and Packz intellectual property rights by respectively Congra Software S.a.r.l. and Hybrid Software Group
S.a.r.l. to Hybrid Software Development NV in September 2020 and June 2021. Under the initial modelling, a deferred tax liability has
been computed based on the values as determined in the initial purchase price allocation study. The initial modelling failed to consider the
intragroup transfers hence the amortization of the acquired intangibles by Hybrid Software Development NV and the effects on corporate
income taxes thereof.
This correction affected the following items in the 2022 income statement:
- Tax charge – increase by €237,000 (2021: €237,000)
- Profit from continuing operations – decrease by €237,000 (2021: €237,000)
This correction affected the following items in the balance sheet as at 1 January 2022:
- Goodwill – decrease by €2,842,000 (1 January 2021 €2,842,000)
- Deferred tax liabilities – decrease by €2,605,000 (1 January 2021 €2,842,000)
- Retained earnings – decrease by €237,000 (1 January 2021 €nil)
This correction affected the following items in the balance sheet as at 31 December 2022:
- Goodwill – decrease by €2,842,000 (31 December 2021 €2,842,000)
- Deferred tax liabilities – decrease by €2,368,000 (31 December 2021 €2,605,000)
- Retained earnings – decrease by €474,000 (31 December €237,000)
A decrease in retained earnings of €474,000 was restated in the year ended 31 December 2022.
In accordance with IAS1.40B the Company has presented a third Statement of Financial Position as at 1 January 2022.
138 139
Notes to the consolidated financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
| 31 December | ||||||
| 2021 as | ||||||
| previously | 1 January | |||||
| In thousands of euros | reported | Adjustment | Re-presented | 2022 | Restated | |
| ASSETS | ||||||
| Non-current assets | ||||||
Property, plant and equipment | 1,662 | - | - | 1,662 | ||
Right-of-use assets | 3,606 | - | - | 3,606 | ||
Other intangible assets | 45,205 | - | - | 45,205 | ||
Goodwill | 64,678 | (2,842) | - | 61,836 | ||
Financial assets | 935 | - | - | 935 | ||
Deferred tax assets | 2,236 | - | - | 2,236 | ||
Trade and other receivables due after more than one year | 3,682 | - | (3,467) | 215 | ||
Contract assets due after more than one year | - | - | 3,467 | 3,467 | ||
Other assets due after more than one year | - | - | - | - | ||
Total non-current assets | 122,004 | (2,842) | - | 119,162 | ||
| Current assets | ||||||
Inventories | 2,308 | - | - | 2,308 | ||
Current tax assets | 71 | - | - | 71 | ||
Trade and other receivables | 10,915 | - | (3,715) | 7,200 | ||
Contract assets | - | - | 3,715 | 3,715 | ||
Other current assets | 297 | - | - | 297 | ||
Prepayments | 1,684 | - | - | 1,684 | ||
Cash and cash equivalents | 9,234 | - | - | 9,234 | ||
Total current assets | 24,509 | - | - | 24,509 | ||
TOTAL ASSETS | 146,513 | (2,842) | - | 143,671 | ||
| EQUITY AND LIABILITIES | ||||||
| Equity attributable to owners of the Parent | ||||||
Share capital | 13,164 | - | - | 13,164 | ||
Share premium | 1,979 | - | - | 1,979 | ||
Merger reserve | 67,015 | - | - | 67,015 | ||
Treasury shares | (202) | - | - | (202) | ||
Retained earnings | 38,624 | (237) | - | 38,387 | ||
Foreign currency translation reserve | (10,629) | - | - | (10,629) | ||
Total equity | 109,951 | (237) | - | 109,714 | ||
| Non-current liabilities | ||||||
Deferred tax liabilities | 9,646 | (2,605) | - | 7,041 | ||
Lease liabilities | 3,060 | - | - | 3,060 | ||
Retirement benefit obligations | - | - | 837 | 837 | ||
Accrued liabilities | 1,316 | - | (837) | 479 | ||
Loans & borrowings | - | - | 5,600 | 5,600 | ||
Other liabilities | 7,407 | - | (5,600) | 1,807 | ||
Contract liabilities | 427 | - | - | 427 | ||
Total non-current liabilities | 21,856 | (2,605) | - | 19,251 | ||
| Current liabilities | ||||||
Current tax liabilities | 821 | - | - | 821 | ||
Trade and other payables | 1,931 | - | - | 1,931 | ||
Lease liabilities | 761 | - | - | 761 | ||
Accrued liabilities | 4,261 | - | - | 4,261 | ||
Loans & borrowings | - | - | 2,800 | 2,800 | ||
Other liabilities | 3,767 | - | (2,800) | 967 | ||
Contract liabilities | 3,165 | - | - | 3,165 | ||
Total current liabilities | 14,706 | - | - | 14,706 | ||
Total liabilities | 36,562 | (2,605) | - | 33,957 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 146,513 | (2,842) | - | 143,671 |
| 31 December | |||||
| 2022 as | |||||
| previously | 31 December | ||||
| In thousands of euros | reported | Adjustment | Re-presented | 2022 | Restated |
| ASSETS | |||||
| Non-current assets | |||||
Property, plant and equipment | 1,702 | - | - | 1,702 | |
Right-of-use assets | 2,912 | - | - | 2,912 | |
Other intangible assets | 43,959 | - | - | 43,959 | |
Goodwill | 65,927 | (2,842) | - | 63,085 | |
Financial assets | 955 | - | - | 955 | |
Deferred tax assets | 2,069 | - | - | 2,069 | |
Trade and other receivables due after more than one year | 3,718 | - | (3,681) | 37 | |
Contract assets due after more than one year | - | - | 3,664 | 3,664 | |
Other assets due after more than one year | - | - | 17 | 17 | |
Total non-current assets | 121,242 | (2,842) | - | 118,400 | |
| Current assets | |||||
Inventories | 3,913 | - | - | 3,913 | |
Current tax assets | - | - | - | - | |
Trade and other receivables | 10,893 | - | (4,720) | 6,173 | |
Contract assets | - | - | 4,720 | 4,720 | |
Other current assets | 425 | - | - | 425 | |
Prepayments | 1,611 | - | - | 1,611 | |
Cash and cash equivalents | 6,317 | - | - | 6,317 | |
Total current assets | 23,159 | - | - | 23,159 | |
TOTAL ASSETS | 144,401 | (2,842) | - | 141,559 | |
| EQUITY AND LIABILITIES | |||||
| Equity attributable to owners of the Parent | |||||
Share capital | 13,164 | - | - | 13,164 | |
Share premium | 1,979 | - | - | 1,979 | |
Merger reserve | 67,015 | - | - | 67,015 | |
Treasury shares | (161) | - | - | (161) | |
Retained earnings | 39,847 | (474) | - | 39,373 | |
Foreign currency translation reserve | (10,911) | - | - | (10,911) | |
Total equity | 110,933 | (474) | - | 110,459 | |
| Non-current liabilities | |||||
Deferred tax liabilities | 8,664 | (2,368) | - | 6,296 | |
Lease liabilities | 2,560 | - | - | 2,560 | |
Retirement benefit obligations | - | - | 797 | 797 | |
Accrued liabilities | 1,147 | - | (797) | 350 | |
Loans & borrowings | - | - | 8,000 | 8,000 | |
Other liabilities | 3,931 | - | (2,900) | 1,031 | |
Contract liabilities | 44 | - | - | 44 | |
Total non-current liabilities | 16,346 | (2,368) | 5,100 | 19,078 | |
| Current liabilities | |||||
Current tax liabilities | 1,366 | - | - | 1,366 | |
Trade and other payables | 2,919 | - | - | 2,919 | |
Lease liabilities | 834 | - | - | 834 | |
Accrued liabilities | 2,287 | - | - | 2,287 | |
Loans & borrowings | - | - | 93 | 93 | |
Other liabilities | 5,881 | - | (5,193) | 688 | |
Contract liabilities | 3,835 | - | - | 3,835 | |
Total current liabilities | 17,122 | - | (5,100) | 12,022 | |
Total liabilities | 33,468 | (2,368) | - | 31,100 | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 144,401 | (2,842) | - | 141,559 |
140 141
Company statement of financial position
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
For the year ended 31December
In thousands of euros Note 2023 2022
Non-current assets
Investments 3 101,121 101,121
Trade and other receivables 4 10,000 1,755
Total non-current assets 111,121 102,876
Current assets
Trade and other receivables 4 289 548
Cash and cash equivalents 420 39
Total current assets 709 587
Current liabilities
Creditors: Amounts falling due within one year 5 (1,847) (11,759)
Net current liabilities (1,138) (11,172)
Creditors: Amounts falling due in more than one year 6 (343) (866)
Net assets 109,640 90,838
Capital and reserves
Called up share capital 8 13,164 13,164
Share premium account 8 1,979 1,979
Merger reserve 8 67,015 67,015
Treasury shares 8 (179) (161)
Profit and loss account 27,661 8,841
Total shareholders’ funds 109,640 90,838
The notes on pages 144 to 149 form part of these financial statements.
Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own income statement and
related notes. The result for the year ended 31 December 2023 was a profit of €18,874,000 (2022: €184,000).
There are no recognised gains or losses for the current year or preceding year other than those disclosed above.
These financial statements were approved and authorised for issue by the Board of Directors on 21 March 2024 and were signed on its
behalf by:
Michael Rottenborn
Director
Company statement of financial position
In thousands of euros Note
Called
up share
capital
Share
premium
account
Merger
reserve
Treasury
shares
Profit
and loss
account Total equity
Balance at 31 December 2021 13,164 1,979 67,015 (202) 8,734 90,690
Total comprehensive income for the year
Net profit for the year - - - - 184 184
Total comprehensive income for the year - - - - 184 184
Transactions with owners
Share-based payment transactions 9 - - - 41 (41) -
Acquisition – newly issued shares 8 - - - - (36) (36)
Total transactions with owners - - - 41 (77) (36)
Balance at 31 December 2022 13,164 1,979 67,015 (161) 8,841 90,838
Total comprehensive income for the year
Net profit for the year - - - - 18,874 18,874
Total comprehensive income for the year - - - - 18,874 18,874
Transactions with owners
Share-based payment transactions 9 - - - 54 (54) -
Own shares re-purchased 8 - - - (72) - (72)
Total transactions with owners - - - (18) (54) (72)
Balance at 31 December 2023 13,164 1,979 67,015 (179) 27,661 109,640
The notes on pages 144 to 149 form part of these financial statements.
Company statement of changes in equity
142 143
Notes to the company financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Notes to the company financial statements
1. PRINCIPAL ACCOUNTING POLICIES
Hybrid Software Group PLC is a company incorporated and domiciled in the United Kingdom.
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
Company’s financial statements.
→ Basis of preparation
These financial statements were prepared in accordance with Financial Reporting Standard 101 - Reduced Disclosure Framework (“FRS
101”).
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-
adopted international accounting standards but makes amendments where necessary to comply with Companies Act 2006 and has set
out below where advantage of the FRS 101 disclosure exemptions has been taken.
The Company is an ultimate parent undertaking and is included in the Company’s consolidated financial statements. The consolidated
financial statements are prepared in accordance with IFRS and are available to the public and may be obtained from 2030 Cambourne
Business Park, Cambourne, CB23 6DW.
In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following disclosures:
- A Cash Flow Statement and related notes;
- Comparative period reconciliations for share capitals;
- Disclosures in respect of transactions with wholly owned subsidiaries;
- Disclosures in respect of capital management;
- The effects of new but not yet effective IFRS; and
- Disclosures in respect of the compensation of Key Management Personnel.
As the consolidated financial statements of the Company include the equivalent disclosures, the Company has also taken the
exemptions under FRS 101 available in respect of the following disclosures:
- IFRS 2 Share Based Payments in respect of group settled share based payments;
- Certain disclosures required by IFRS 3 Business Combinations in respect of business combinations undertaken by the Company; and
- Financial instruments.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
financial statements. Group accounting policies also apply to the Company, in addition to those stated below.
→ Investments
Investments in subsidiary undertakings are stated at cost, less provision for any impairment in value.
→ Foreign currencies
The functional and presentation currency of the Company is euro.
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date or at a
contracted rate if applicable and any exchange differences arising are taken to the profit and loss account.
→ Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, and it is probable that the Company will
be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the
obligation at the balance sheet date and are discounted to present value where the effect is material.
→ Taxation
The charge for taxation is based on the profit or loss for the year and takes into account taxation deferred because of timing differences
between the treatment of certain items for taxation and accounting purposes. Deferred taxation is recognised, without discounting, in
respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not
reversed by the balance sheet date, except as required by IAS 12.
→ Share based payments
The share option programme allows employees of the Group to acquire shares of the Company. The fair value of the options and shares
granted is recognised as an employee expense, with a corresponding increase in equity, and is measured at grant date and spread over
the period during which the employees become unconditionally entitled to the options or shares. The fair value of the options granted is
measured using an appropriate valuation model, taking into account the terms and conditions upon which the options were granted. At
each reporting date, the amount recognised as an expense is adjusted to reflect the actual number of share options or shares for which the
related service and non-market conditions are met. The proceeds received, net of any directly attributable transaction costs, are credited to
share capital for the par value of the shares issued and to share premium for the balance, when the share options are exercised.
→ Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future. The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these
financial statements and have no reason to believe that a material uncertainty exists that may cast significant doubt about the Group’s
ability to continue as a going concern, notably because of a cash position of €7.08 million as at 31 December 2023 (2022: €6.32 million).
Those forecasts take into account multiple reasonably possible downsides. Thus, they continue to adopt the going concern basis of
accounting in preparing the annual financial statements. Refer to Note 2 ‘Basis of preparation’ of the consolidated financial statements for
further details.
→ Estimates and Judgements
Investments are assessed at each reporting date to determine whether there is any indication of impairment. If such indication exists, then
the asset’s recoverable amount is estimated.
Amounts owed by group undertakings are assessed for impairment but are deemed by the Directors to be recoverable in more than 12
months.
1. PRINCIPAL ACCOUNTING POLICIES (CONTINUED)
2. EMPLOYEES AND REMUNERATION OF DIRECTORS
The Company employed an average of nil employees (including executive Directors) during the year (2022: nil). Directors’ emoluments are
disclosed in the Directors’ remuneration report on pages 73 to 81 and in Note 12 ‘Remuneration of Directors’ of the consolidated financial
statements.
144 145
Notes to the company financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
3. INVESTMENTS
In thousands of euros
Shares in subsidiary
undertakings
Cost
At 31 December 2022 and 31 December 2023 158,879
Provision
At 31 December 2022 and 31 December 2023 57,758
Net book value
At 31 December 2022 101,121
At 31 December 2023 101,121
Investments are assessed at each reporting date to determine whether there is any objective evidence that they are impaired. An
investment is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated
future cash flows of that investment. An impairment loss in respect of an investment is measured as the difference between its carrying
amount and the present value of the estimated future cash flows.
The estimated fair value of the investments has been determined by the present value of future cash flows over a five-year period from
2024 to 2028 using the same discount rate and exchange rates that were used for the impairment review of Goodwill in the consolidated
financial statements (see Note 16 ‘Goodwill’ of the consolidated financial statements). Management considers the use of a five-year period
is justified because the underlying businesses have been established for between 10 and 25 years, have recurring revenues and continue to
develop new products and gain new customers.
At 31 December 2023 the Company had the following interests in the ordinary share capital of group undertakings:
Class of
shares
held
Ownership interest
Company name Registered office address Principal Activities
2023 2022
Global Graphics (UK)
Limited
2030 Cambourne Business Park,
Cambourne, CB23 6DW, UK
Dormant holding company. Ordinary 100% 100%
Global Graphics
Software Limited*
2030 Cambourne Business Park,
Cambourne, CB23 6DW, UK
Computer software development,
sales and technical support.
Ordinary 100% 100%
Global Graphics
Software Incorporated*
6601 S.Tamiami Trail, Suite 176,
Sarasota, FL 34231, USA
Computer software development,
sales and technical support.
Ordinary 100% 100%
Global Graphics
Kabushiki Kaisha*
610 AIOS Nagatacho Bldg, 2-17-17
Nagatacho, Chiyoda-ku, Tokyo 100-
0014, Japan
Technical support of computer
software.
Ordinary 100% 100%
Global Graphics EBT
Limited^
2030 Cambourne Business Park,
Cambourne, CB23 6DW, UK
Dormant. Ordinary - 100%
Meteor Inkjet Limited
Harston Mill, Royston Road, Harston,
Cambridge, CB22 7GG, UK
Design and supply of technology
for digital inkjet printing.
Ordinary 100% 100%
Xitron, LLC*
4750 Venture Drive, Suite 200A, Ann
Arbor, Michigan 48108, USA
Computer software development,
sales and technical support.
n/a 100% 100%
HYBRID Software
Group S.à r.l.
19-21 route d’Arlon, LU-8009
Strassen, Luxembourg
Holding company. Ordinary 100% 100%
eXplio NV*
Guldensporenpark 18, Block B, 9820
Merelbeke, Belgium
Computer software development,
sales and technical support.
Ordinary 100% 99.93%
HYBRID Software
Development NV*
Guldensporenpark 18, Block B, 9820
Merelbeke, Belgium
Computer software development,
sales and technical support.
Ordinary 100% 100%
HYBRID Integration
LLC*
Eight Neshaminy Interplex, Suite 111,
Trevose, Pennsylvania 19053, USA
Computer software sales and
technical support.
Ordinary 100% 100%
HYBRID Software NV*
Guldensporenpark 18, Block B, 9820
Merelbeke, Belgium
Computer software sales and
technical support.
Ordinary 100% 100%
Class of
shares
held
Ownership interest
Company name Registered office address Principal Activities
2023 2022
HYBRID Software
GmbH*
Uhlandstrabe 9, 79102 Freiburg,
Germany
Computer software sales and
technical support.
Ordinary 100% 100%
HYBRID Software Italy
SRL*
Viale Sondrio 2, IT-20124 Milano, Italy
Computer software sales and
technical support.
Ordinary 100% 100%
HYBRID Software
France SAS*
15 Rue Marsollier, F-75002 Paris,
France
Computer software sales and
technical support.
Ordinary 100% 100%
HYBRID Software UK
Limited*
2030 Cambourne Business Park,
Cambourne, CB23 6DW, UK
Computer software sales and
technical support.
Ordinary 100% 100%
HYBRID Software
Australia Pty Limited*
Suite 2, Level 14, 9 Castlereagh
Street, Sydney, NSW 2000, Australia
Computer software sales and
technical support.
Ordinary 100% 100%
HYBRID Software Iberia
S.L.U.*
Riera dels Frares, 8 – E08907
L’Hospitalet, Barcelona, Spain
Computer software sales and
technical support.
Ordinary 100% 100%
ColorLogic GmbH
Landersumer Weg 40, D-48431
Rheine, Germany
Computer software development,
sales and technical support.
Ordinary 100% 100%
*
indirectly held by the Company.
^ Company was dissolved on 17 October 2023.
4. TRADE AND OTHER RECEIVABLES
In thousands of euros 2023 2022
Amounts owed by group undertakings 10,000 1,755
Other receivables 289 548
Total trade and other receivables 10,289 2,303
In thousands of euros 2023 2022
Current 289 548
Non-current 10,000 1,755
Total trade and other receivables 10,000 1,755
There are no formal intercompany agreements. Amounts owed by group undertakings are interest free and would be repayable on demand.
3. INVESTMENTS (CONTINUED)
146 147
Notes to the company financial statements
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
5. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
In thousands of euros 2023 2022
Trade and other payables 154 72
Amounts owed to group undertakings 582 10,255
Accruals 578 762
Contingent consideration (see note 6) 233 411
Deferred consideration (see note 6) 300 259
Total creditors due within one year 1,847 11,759
There are no formal intercompany agreements. Amounts owed to group undertakings are interest free and would be repayable on demand.
6. CREDITORS: AMOUNTS FALLING DUE IN MORE THAN ONE YEAR
In thousands of euros 2023 2022
Contingent consideration - 224
Deferred consideration 343 642
Total other liabilities 343 866
→ Fair value adjustment to contingent consideration
Certain assumptions about revenue growth were used when calculating the acquisition date fair value of contingent consideration for the
acquisition of TTP Meteor Limited (now Meteor Inkjet Limited) in the year ending 31 December 2016.
During the year, cash payments of €367,000 (2022: €717,000) were paid against the contingent consideration due for the acquisition of
Meteor Inkjet Limited. The underlying liability is denominated in pounds sterling, thus there is a movement due to changes in exchange
rates used to convert to Euros at the reporting date.
→ Deferred consideration
Deferred consideration relates to the acquisition of ColorLogic GmbH. During the year, cash payments of €300,000 (2022: €300,000) were
paid against the deferred consideration.
7. TAX
Deferred tax assets are recognised for tax losses available for carrying forward to the extent that the realisation of the related tax benefit
through future taxable profits is probable. The Company had no recognised or unrecognised deferred tax assets as at 31 December 2023
(2022: €nil).
8. SHARE CAPITAL AND RESERVES
Ordinary shares of €0.40 allotted, called up and fully paid:
2023 2022
In thousands of euros, except number of shares Number Value Number Value
As at 31 December 32,909,737 13,164 32,909,737 13,164
→ Share premium:
In thousands of euros 2023 2022
As at 31 December 1,979 1,979
→ Merger reserve:
he movement during the year is as follows:
In thousands of euros 2023 2022
As at 31 December 67,015 67,015
→ Treasury shares:
The Company’s investment in its own shares in treasury is as follows:
2023 2022
In thousands of euros, except number of shares Number Value Number Value
As at 1 January 58,996 161 73,996 202
Disbursement of shares to employees (19,000) (54) (15,000) (41)
Own shares re-purchased 18,588 72 - -
As at 31 December 58,584 179 58,996 161
9. SHARE BASED PAYMENTS
Information about share based payments for Directors and employees is detailed in Note 30 ‘Share based payments’ of the consolidated
financial statements.
10. RELATED PARTY TRANSACTIONS
The controlling party is Congra Software S.à r.l. (“Congra”), which owns the majority of the voting rights of the Company. Congra is
controlled by Powergraph BV and Powergraph BV is controlled by the Group’s chairman, Guido Van der Schueren.
The remuneration paid to the Directors is detailed in the Directors’ remuneration report on pages 73 to 81. Other related party
relationships are detailed in Note 31 ‘Related parties’ of the consolidated financial statements.
The Company has taken advantage of the exemption under paragraph 8(k) of FRS 101 for transactions with wholly owned group companies.
11. SUBSEQUENT EVENTS
Details of post balance sheet events requiring disclosure in the financial statements for the year ended 31 December 2023 are in Note 35
‘Subsequent events’ of the consolidated financial statements.
8. SHARE CAPITAL AND RESERVES (CONTINUED)
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Hybrid Software Group PLC | Annual Report 2023
OTHER
INFORMATION
Glossary
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Additive manufacturing
Building physical product by digitally ‘printing’ it, often with
technology similar to the inkjet heads used for 2D printing.
The term “3D printing” is often used for home and small-
scale additive manufacturing.
Binder jetting
A class of additive manufacturing in which the solid form is
created by jetting a binder fluid into a bed of powder. This
technique can be used for metals, polymers and glass.
Colour separation
Colour can be specified in many different ways in the digital
world, but printing uses only a small set of inks. All colours
in the source document must be transformed into a set
of separations, one for each of the inks to be used. Most
commonly in commercial print, labels and packaging this
means Cyan, Magenta, Yellow and Black (see also “Extended
Gamut”).
Converting
The design for a label or package is converted from a
primary copy, such as a PDF file, through printing on a
substrate and then one or more processes such as cutting,
folding and gluing to create a label that can be applied or a
carton that can be filled.
CTP
Computer to Plate – imaging a printing plate directly from
digital data rather than imaging a film and using that to
image the plate.
Digital Front End (DFE)
The controller that manages and drives a digital press,
consuming source files such as PDF, processing them as
necessary and sending colour separations to the
printhead.
Enterprise software
Computer programs that have common business
applications. In relation to printing these typically manage
customer relationships, estimation, billing, production
management and shipping.
EPS
Encapsulated PostScript; a subset of the PostScript PDL
with extra commenting rules designed to allow graphics to
be placed within a larger page in a design application.
Extended gamut
Printing in the commercial, labels and packaging sectors is
often done using four inks: Cyan, Magenta, Yellow and Black
(CMYK). Together these can deliver good approximations
of most colours. An extended gamut ink set can be used
to reproduce more vibrant colours, including some brand
colours. This is often achieved by adding one or more of
Orange, Green and Violet inks to the CMYK set.
Flexo/Flexography
A conventional printing technology in which flexible
plates with raised areas are used to transfer ink onto the
substrate. Widely used in labels and packaging.
Functional printing
Applying substances to a substrate that do more than
represent colour or some other aspect of appearance such
as gloss, using a process that’s normally used for printing.
Examples include conductive tracks for printed electronics,
or materials that change colour in the presence of certain
gases for food safety, etc.
Gravure
Conventional print technology in which a cylinder is
engraved with cells which carry ink to transfer it to the
substrate. Very expensive to prepare cylinders for each job,
so it’s most used for jobs with extremely long run lengths
(millions of copies), such as long-run magazines and wall-
coverings.
Glossary
Image setter
Machine for imaging from digital data to film or
photographic paper. The result would then be used
to image a plate. Obsolete for offset lithography and
increasingly so for other conventional press technologies;
replaced by plate setters.
Imposition
Laying out multiple pages or multiple jobs together to
maximise usage of the area of a printing press.
Industrial inkjet
A term that is used with various different meanings, but
is best applied to printing where the substance being
printed is a part of the final product, as opposed to carrying
information (e.g. in commercial print) orto protect a
product (e.g. in packaging). Examples of industrial print
include applications of colour and functional coatings to
textiles, ceramics and other décor.
Industry 4.0
A term for fully automated production, where equipment
performing different processes are interconnected and
share information.
Inkjet printing
Application of coloured or functional fluids to a substrate
by jetting as drops.
JPEG
Joint Photographic Experts Company’; a committee (ISO/
IEC JTC1/SC29) and the format that they defined for storing
images in a very compact way using (mainly) compression.
There are now variants such as JPEG 2000 and JPEG-XR that
use rather different and incompatible techniques.
Litho
Offset lithography – conventional printing press technology
using plates treated to make some areas hydrophilic and
others hydrophobic (attracting and rejecting water) to
control where ink will adhere to them. ‘Offset’ here means
that the ink is transferred from the plate to a blanket
before then being applied to the media being printed on.
Mass customisation
Mass produced products where every item is unique.
Examples include personalized labels, tee-shirts, phone
cases and the like.
OEM
OEM, or original equipment manufacturer, is an
organisation that makes devices from component parts
bought from other organisations.
Piezoelectric
Electricity resulting from pressure and latent heat. Piezo
printheads are all based on the principle that a particular
type of crystal expands or contracts when an electric
current is passed though it and switched off again. This
expansion/contraction is used as the basis of a pump in the
ink chamber.
PDF
Portable Document Format, a universal file format that
is maintained by the International Standards Organisation.
In printing it can contain all the information required to
produce an item that matches exactly what the graphic
designer intended in terms of fonts, colour specifications
etc.
PostScript
Page description language (PDL) created in the mid 1980s
by Adobe Systems; the first general PDL to be widely
adopted for both office and production printing, replacing
proprietary languages from each vendor. Still used for
office printing, but largely replaced by PDF for production
printing.
Pre-press
A department or series of software processes that prepare
files for printing.
Printhead driver solutions
Our software and proprietary driver electronics send
data to printheads inside inkjet devices to control the
printing process.
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Glossary
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Hybrid Software Group PLC | Annual Report 2023
Image courtesy of Vollherbst.
Printheads
Printheads are a component of an inkjet press and generally
contain multiple nozzles for jetting ink or other fluids onto
substrates.
Proofer
Device used to make colour-managed prints configured
to match the appearance of the same job on a production
printing press for use in approval workflows. Increasingly
replaced by “soft proofing”, using a calibrated computer
display for approval rather than creating printed copy
Rasterisation
The process of transforming a page description language
( see PostScript), comprising text, vector graphics, images
and other complex constructs, into a rectangular grid
of pixels that is suitable for delivering to an inkjet head,
plate setter or other imaging device. Often equated to
‘rendering’.
RIP/ RIPping
A Raster Image Processor converts graphic designs into
raster data (image pixels) for onward processing by the
printing device.
Screening
Screening (sometimes called halftone screening) converts
graphical designs from raster data (such as that delivered
by a RIP) into a slightly different format. The process
compensates for the fact that most printing technology
cannot represent more than a very small number of
different tints of each ink. Screening places very small and
carefully structured collections of areas of ink in such a way
that the human eye is fooled into seeing additional tints
from the intended viewing distance.
Screen printing
In screen printing ink is applied to a surface through a
stencil held on a mesh attached to a frame.
Smart factory
Smart factories are designed to autonomously run
the entire production process and this will include the print
subsystems.
Trapping
A process to avoid unpleasant visible effects when the
colour separations being printed are not perfectly aligned
with each other (in register). It typically works by enlarging
some objects slightly, and contracting others.
Variable data processing or VDP
Printing items where every instance varies at least slightly
from the others, often with some graphics in common as
well. Examples range from adding serial numbers to labels,
through direct mail and variations designed to ensure that
packaging has more shelf appeal.
Waveform
The way in which the voltage applied to an inkjet head is
varied over time in order to deliver well-formed ink drops of
the desired size and at the desired speed.
Wide format
Printing on devices with a width that’s usually more than
50cm, usually using inkjet and often related in some way to
marketing or photo finishing, including banners, stickers,
soft signage and sportswear.
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Info
Hybrid Software Group Strategic report Governance Financial statements Other information
Hybrid Software Group PLC | Annual Report 2023
Country of incorporation: England and Wales
Legal form: Public limited company
Company number: 10872426
Directors
- Guido Van der Schueren
- Michael Rottenborn
- Joachim Van Hemelen
- Clare Findlay
- Luc De Vos
Secretary
Peter Goodwin
Auditors
PKF Littlejohn LLP,
15 Westferry Circus, Canary Wharf, London E14 4HD
Lawyers
Mills & Reeve LLP, Botanic House,
100 Hills Road, Cambridge, CB2 1AR
Share registrar
Link Company, 6th Floor,
65 Gresham Street, London, EC2V 7NQ
Stock market: Euronext Brussels
Stock ticker: HYSG
Legal Entity Identifier (LEI): 213800ZFW446QIHAB654
Shares ISIN: GB00BYN5BY03
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