GROWTH COURSE MAINTAINED
SimCorp stayed on the growth path in 2018, delivering revenue increase of 11% and improving EBIT by 16%. We added 12 new companies to our client list and
increased sales and service deliveries to existing clients.
During my first six years as CEO of SimCorp, we have accomplished a lot, and I cannot help feeling proud of being part of this journey. Over this period, our revenue has increased more than 80%, mainly from organic growth, and our EBIT margin has increased more than 4.5%-points, creating value for shareholders. Meanwhile, the number of SimCorp employees – the ones who have enabled these achievements – has increased from 1,113 at the end of 2012 to now 1,660. We have many opportunities and exciting challenges ahead to keep at the forefront of investment management technology; I believe we have a strong position and have the right strategy to meet these and continue our growth journey.
2018 was another satisfactory year for SimCorp. A robust combination of a gaining business with new clients and an ever-expanding relationships with our existing clients made it a successful year. We met our Vision 2020 target of delivering double-digit revenue growth and EBIT margin improvement year over year, particularly owing to a strong fourth quarter. A back-end loaded annual sales cycle is an inevitable operating condition for software companies and a busy year-end is a regular part of our business.
In 2018, we grew revenue by 11.4% and generated an EBIT margin of 27.0%, an increase of 1.1%-points compared with 2017.
We also welcomed 12 new clients to the SimCorp family, bringing the total number of SimCorp clients to more than 250, with 190 of these being SimCorp Dimension® clients and the remaining being SimCorp Sofia and SimCorp Coric® clients.
INVESTING IN OUR CLIENTS
Meeting the evolving demands of our clients and contributing to their success is our ambition and an integral part of our business model. SimCorp client loyalty as measured by the ‘Net Promoter Score’ (NPS) has increased significantly since its introduction in SimCorp in 2011. In 2018, we again reached a very high level of client satisfaction, and I would like to thank our clients, new as well as existing ones, for continuing to place their trust and business with SimCorp.
SimCorp’s strategy and main priorities have been consistent for several years, with only minor adjustments aimed at addressing new market trends. North America remains a key area of focus; the world’s single largest investment management market, including 550 companies of a size and nature to benefit from SimCorp Dimension. Having won 14 new North American clients in the last three years, we now have a market share of 6%1 and a strong foothold in this market. Equally important, we now have numerous large, renowned companies as reference clients. To increase our market share further, we will continue to build on the awareness of SimCorp and our offerings in North America.
Another strategic priority is our front office offering, where we now have a highly advanced suite of solutions, capable of competing with best-of-breed products in the market. More than 70% of our clients have adopted all or parts of our front office offering and we will continue our investments with the strategic objective of attaining market leadership within the front office space, particularly in North America.
On the product side, we keep investing heavily in our integrated alternative investments solution, addressing a market that increasingly turns to alternative assets but often without having the required technology and infrastructure to manage these. By offering integrated functionality for the efficient management of alternative investments, we claim the unique position in the market as the only vendor who supports all asset classes, including alternatives, in one solution.
Last but not least, we continue to invest strategically in two initiatives that will evolve and simplify the way we deliver our solutions. One is the SimCorp Standard Platform initiative, which aims to develop more standard configurations to ease our clients’ deployment of our best-practice solutions and shorten the implementation time. The other is our Enable Cloud strategic priority that will enable us to meet the increasing demand for outsourced, as-a-service (ASP), and cloud-based solutions, allowing our clients to focus less on implementing and managing software solutions and more on their core business of generating investment returns in the most efficient way.
INVESTING IN OUR EMPLOYEES
As SimCorp grows, it becomes increasingly important that we have the right programs and structures in place to attract, nurture, and support a thriving, motivated, and skilled staff, who work towards clearly defined and shared goals and who are able to deliver outstanding solutions to our clients. Therefore, education and development of our employees, including managers at all levels, is high on our agenda. Skilled, engaged, and motivated employees are the foundation for our ability to grow and develop SimCorp in accordance with our strategy, and I would like to thank each and every one of my colleagues for their dedicated effort in making 2018 a successful year for SimCorp and contributing to the success of our clients.
Finally, I would like to thank Jesper Brandgaard for his significant contributions as our Chairman for more than a decade. Jesper has been a key player in transforming SimCorp into a leading, global provider and member of Nasdaq Copenhagen’s blue chip index.
Chief Executive Officer
1. Refer to page 14 in the 2018 Annual Report for SimCorp Dimension© market share overview and definition.