Today SimCorp’s Board of Directors reviewed and approved the Group’s annual report for 2015. In 2015 revenue grew 15.3% to EUR 278m and the company posted a record high EBIT of EUR 71m corresponding to an EBIT margin of 25.6%. In local currency revenue grew 10.1%.
SimCorp enters 2016 with EUR 180m of the 2016 revenue secured, an increase of EUR 11m compared with entering 2015. To enable and support further growth, SimCorp will introduce a new licensing model in 2016 where new SimCorp Dimension software sales will be based on annual subscription fees compared to the historic up front purchase of licenses and subsequent maintenance payments. In addition SimCorp will begin to offer to run clients’ SimCorp Dimension platforms in the form of an Application Solution Provider (ASP) service.
The new subscription based licensing model will in the initial years impact revenue and EBIT negatively, whereas the impact on cash flows is expected to be limited. In 2016, the introduction of the subscription based licensing model is expected to impact revenue growth negatively by around 5%-points and EBIT margin negatively by around 3%-points. In addition the introduction of the ASP service is expected to impact revenue growth positively by around 1% and EBIT margin negatively by between 0.5% and 1%-point in 2016.
To enable comparison of revenue and EBIT with the historic licensing model where new SimCorp Dimension licenses were sold on perpetual contracts, SimCorp will in 2016 disclose an adjusted non GAAP measure that illustrates what revenue and EBIT would have been, if all new SimCorp Dimension licenses had been sold under the perpetual model.
For 2016 SimCorp expects adjusted non GAAP revenue growth between 8% and 13% measured in local currencies, and adjusted non GAAP EBIT margin to be between 24% and 27% measured in local currencies. The impact of currency fluctuations is expected to be negative by around 2%- points on reported revenue and around 0.5%-point negative on EBIT margin.
At the company’s Annual General Meeting, SimCorp’s Board of Directors will suggest that dividend of EUR 28.4m be paid to the company’s shareholders, corresponding to DKK 5.25 per share of DKK 1, an increase of 17% over 2014.
In addition, given there are no specific requirements for liquidity, SimCorp expects to continue to buy back shares in 2016, with the intention to purchase shares for EUR 30m in the period from Q2 2016 to the reporting of the annual report for 2016 in February 2017.
The full annual report has been submitted to NASDAQ OMX Copenhagen A/S in pdf. The annual report is also available for download from SimCorp’s website www.simcorp.com.
Klaus Holse, SimCorp CEO comments: “The result in 2015 is the best ever in SimCorp’s history with record high EBIT of EUR 71m. New SimCorp Dimension licenses continued to grow in Q4 and was a key driver in the revenue growth for the full year of 15.3%. In addition the order book at the end of 2015 grew by an impressive 44% compared to last year. We are pleased to see that the investment we continue to make into R&D is paying off, enabling SimCorp to win new business across the value chain of investment management from Front to Back office.”
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SimCorp’s Board of Directors today considered and approved the Group’s annual report for the 12 months ended 31 December 2015. Highlights of the report are:
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Annual order inflow was EUR 70.7m compared with EUR 43.9m in the same period of 2014. Q4 order inflow was EUR 21.9m compared with Q4 2014 of EUR 26.9m.The order book increased by EUR 7.4m during the 12 months, and amounted to EUR 24.1m at 31 December 2015, compared with EUR 16.7m at the same time in 2014. Page 28/ 32 in the Annual Report 2015
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Annual revenue was up 15.3% y/y in reported currency to EUR 277.9m and 10.1% y/y in local currencies. Q4 revenue increased 9.0% in reported currency compared with the same period last year and amounted to EUR 83.8m of which currency fluctuations accounted for EUR 2.7m or 3.5%-points. Page 29/ 32 in the Annual Report 2015
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Income recognized from new licenses and add-on licenses amounted to EUR 64.9m in the 12-month period, an increase of 36% y/y of which currency fluctuations accounted for EUR 3.3m or 6.9%-points. In Q4 2015 income from new licenses and add-on licenses was EUR 27.5m compared with EUR 26.0m, an increase of 6% compared with Q4 2014 of which currency fluctuations accounted for 2.3%-points. Page 29/ 32 in the Annual Report 2015
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Professional service fees for the year were EUR 85.0m, up 6.5% relative to the same period last year of which currency fluctuations accounted for 5.6%-points. In Q4 professional service fees were EUR 23.3m, an increase of 8.4% compared with the same period last year of which currency fluctuations accounted for 3.3%-points. Page 29/ 32 in the Annual Report 2015
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Annual maintenance income was EUR 122.3m, an increase of 10.8% relative to the same period last year of which currency fluctuations accounted for 4.0%-points. Maintenance income in Q4 2015 was EUR 31.1m, an increase of 9.9% compared with the year-earlier period of which currency fluctuations accounted for 2.8%-points. Page 29/ 32 in the Annual Report 2015
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Total cost was EUR 207.4m, an increase of 12.7% compared with the same period in 2014 of which currency fluctuations accounted for 4.1%-points. In Q4 total cost was EUR 56.0m, an increase of 15.4% compared with the same period last year of which currency fluctuations accounted for 2.9%-points. Page 30/ 32 in the Annual Report 2015
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Full year EBIT was EUR 71.0m, an increase of 23.9% compared with the same period last year of which currency fluctuations accounted for 8.7%-points. Q4 EBIT was EUR 28.0m, against EUR 28.4m in Q4. Currency fluctuations impacted the EBIT margin positively in Q4 by 4.2%-points. Page 30/ 33 in the Annual Report 2015
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Cash flow from operating activities increased by 22% to EUR 54.2m for the year compared with EUR 44.4m in the same period of 2014. In Q4 cash flow from operating activities was EUR 13.3m compared with EUR 15.5m in the same period of 2014. Page 31/ 33 in the Annual Report 2015
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To enable and support further growth, SimCorp will in 2016 introduce a new licensing and delivery model. New SimCorp Dimension contracts will be offered on subscription based licensing terms and SimCorp will introduce its ASP offering and thereby run SimCorp Dimension on clients’ behalf. Page 16 in the Annual Report 2015
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The long-term financial impact of moving to a subscription based licensing model is expected to be positive to SimCorp following an initial transition period of around 5 to 7 years. Page 16 in the Annual Report 2015.
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The introduction of the subscription based licensing model is expected to impact revenue growth negatively by around 5%- points and EBIT margin negatively by around 3%-point. Page 19 in the Annual Report 2015
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For 2016 SimCorp expects revenue to grow between 3% and 8% measured in local currencies and EBIT margin to be between 21% and 24% measured in local currencies. Taking the effects of the introduction of the subscription based licensing model into perspective, adjusted non-GAAP revenue is expected to grow between 8% and 13% measured in local currencies, and adjusted non GAAP EBIT margin is expected to be between 24% and 27% measured in local currencies. Based on currency rates prevailing end of January 2016, revenue growth would be negatively impacted by around 2%-points and EBIT margin would be negatively impacted by around 0.5%- point. The currency impact is expected to be similar for both reported measures and adjusted non GAAP measures. Page 18 in the Annual Report 2015
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The introduction of ASP as a new service line is expected to impact revenue growth positively by around 1%-point in 2016 and EBIT margin negatively by between 0.5%- point and 1%- point in 2016, included in the guidance above. The ability to offer ASP to clients becomes an increasingly important prerequisite to be able to sell SimCorp Dimension to new clients. Page 19 in the Annual Report 2015
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SimCorp’s long-term target remains to generate double-digit revenue growth rates and to expand margins year over year. Page 20 in the Annual Report 2015
- SimCorp will initiate a share buyback program of EUR 30m to be executed during the period from Q2 and until the release of the annual report for 2016 in February 2017. Page 47 in the Annual Report 2015
Investor meeting
SimCorp’s Executive Management Board will present the annual report at an investor presentation to be held on Tuesday 23 February 2016 at 9:00 a.m. (CET) at the company’s headquarters, Weidekampsgade 16, 2300 Copenhagen S. The meeting will be open to the public, and a live webcast of the presentation can be followed via this link, where it will be possible to ask questions online: http://edge.media-server.com/m/p/ch5tbgha.
Enquiries regarding this announcement should be addressed to:
Klaus Holse, Chief Executive Officer, SimCorp A/S (+45 3544 8802, +45 2326 0000) or
Thomas Johansen, Chief Financial Officer, SimCorp A/S (+45 3544 6858, +45 2811 3828)
Company Announcement no. 07/2016
