Q4 2019 highlights:
- Reported Q4 2019 revenue of EUR 127.8m, EBIT of EUR 34.0m and EBIT margin of 26.6% were, as expected and in accordance with our guidance, lower than the particularly strong Q4 2018 reported revenue of EUR 129.1m, EBIT of EUR 50.8m and EBIT margin of 39.4%.
- Five new SimCorp Dimension and one new SimCorp Gain license deals were signed in Q4 2019. Total order intake was EUR 34.6m, a decrease of EUR 26.3m compared with Q4 2018, due to a very large new order in Asia in Q4 last year, a decrease in order intake from Client-Driven Development (CDD) of EUR 9.6m, and EUR 3.0m lower additional license order intake than in the same period last year. Order intake has been more evenly spread over the year compared with 2018.
FY 2019 highlights:
- Reported revenue was EUR 454.5m, an increase of 18.8% when compared with 2018, and organic revenue growth was 15.5%.
- Reported EBIT was EUR 127.8m compared with EUR 103.3m in 2018.
- Reported EBIT margin was 28.1% compared with 27.0% in 2018, primarily driven by strong license revenue from new clients. The underlying organic EBIT margin increased by 1.7%-points from 26.9% in 2018 to 28.6%.
- Measured in local currencies, SimCorp achieved revenue growth for 2019 of 16.9% and an EBIT margin of 27.7%, which was at the top end of the guidance range for the year of revenue growth between 12% and 17% and an EBIT margin between 25.0% and 28.0%, both measured in local currencies.
- Net profit was EUR 96.9m compared with EUR 77.0m in 2018.
- Total order intake was EUR 97.7m, a decrease of EUR 8.2m or 7.7% compared with 2018, as order intake from CDD accounted for EUR 2.8m compared with EUR 16.8m last year. A total of twelve new SimCorp Dimension, three new SimCorp Coric and one new SimCorp Gain agreements were signed in 2019.
- At December 31, 2019, the order book amounted to EUR 36.4m, a decrease of EUR 9.1m when compared with the order book at year-end 2018, due to the revenue recognition of the large new license agreement with an Asian investment company, signed in Q4 2018.
- Free cash flow was EUR 70.9m compared with EUR 80.2m in 2018. Free cash flow was impacted by an increase in subscription-based license sales, which resulted in an increase in contract assets of EUR 63.5m compared with EUR 35.7m in 2018.
- The net cash position was EUR 11.9m compared with EUR 47.5m at year-end 2018. The decrease was primarily due to the acquisition of AIM Software (renamed SimCorp Gain).
- Total assets were EUR 437.9m at December 31, 2019 compared with EUR 270.3m at year-end 2018. The increase of EUR 167.6m was primarily related to the impact of the acquisiton of AIM Software of EUR 72.5m, the capitalization of leases of EUR 51.0m on the adoption of IFRS 16 ‘Leases’, and a net increase in contract assets of EUR 63.5m.
- At December 31, 2019, SimCorp has drawn EUR 20.0m on the facilities obtained to finance the acquisition of AIM Software.
- SimCorp entered 2020 with EUR 278.8m of the full year’s revenue signed, an improvement of EUR 38.1m or 16% compared with last year.
- The Board of Directors intends to recommend to shareholders at the Annual General Meeting 2020 that dividends of EUR 39.9m be declared at the rate of DKK 7.50 per share compared with DKK 6.75 last year, equivalent to 41% of profit for the year and 56% of free cash flow in 2019.
- In addition, provided there will be no specific requirements for liquidity, SimCorp expects to initiate a new share buyback program in 2020. The intention is to purchase shares for EUR 20m over the next 12 months in two half yearly buy-back programs of EUR 10m each.
Financial guidance 2020:
- For 2020, SimCorp expects revenue to grow between 5% and 10% and EBIT margin to be between 24% and 27%, measured in local currencies. Research and development costs are expected to increase from 18% of revenue in 2019 to 20% in 2020 due to extra investments in cloud lift, and extra investments in internal IT systems will continue into 2020. The integration of SimCorp Gain is expected to impact EBIT margin negatively by 1%-point in 2020.
Klaus Holse, SimCorp CEO comments:
“2019 was a good year for SimCorp with organic revenue growth of 15.5% and a record high EBIT margin of 28%. I believe the results are a testament to the strength of our integrated solutions, our strategic position in the market, and our clients’ buy-in to the company’s strategic direction.”
“During the year, we bolstered our data management capabilities with the acquisition of AIM Software and updated our corporate strategy, setting the direction for SimCorp as the leading global provider of integrated front-to-back, multi-asset, investment management solutions. We are now focused on execution of the strategy, which includes a gradual transition to a cloud-based as-a-service company, opening up for a wider ecosystem of solutions around SimCorp Dimension, and strengthening the outcomes we deliver to enable our clients’ success.”
Against the backdrop of a particularly strong 2019, we expect to see more modest revenue growth in 2020. We will also invest in fully integrating SimCorp Gain and in internal IT systems, and we will invest an additional 2% of our revenue in R&D to take a significant step towards realizing our cloud strategy. As a result our EBIT margin expectation for 2020 is lower than in 2019.”
SimCorp’s Executive Management Board will present the report at a conference call on Wednesday, February 5, 2020 at 11:00 am (CET). Please use any of the following phone numbers to dial in to the conference call:From Denmark: +45 3272 8042
From USA: +1 631 510 7495
From other countries: +44 (0) 2071 928000
Pin code to access the call: 8156377
At the end of the presentation there will be a Q&A session.
It will also be possible to follow the presentation via this link:
The presentation will be available prior to the conference call via SimCorp’s website
The Annual Report 2019 is available via this link
Enquiries regarding this announcement should be addressed to:
Klaus Holse, Chief Executive Officer, SimCorp A/S (+45 3544 8800, +45 2326 0000)
Michael Rosenvold, Chief Financial Officer, SimCorp A/S (+45 3544 8800, +45 5235 0000)
Anders Hjort, Head of Investor Relations, SimCorp A/S (+45 3544 8800, +45 2892 8881)
Anders Crillesen, Group Communications Director, (+45 3544 8800, +45 2779 1286)
Company Announcement no. 1/2020