On March 18, 2020, SimCorp withdrew its 2020 guidance due to the escalation of, and uncertainty caused by, the global Covid-19 outbreak, and as the negative impact on SimCorp’s 2020 performance could not be estimated at the time.
There is still a high degree of uncertainty in the market, but based on the assumption that the global industry returns to more normal working conditions after the holiday break in July and August, but with some expected delays in signing deals, our new revised 2020 guidance is between -5% and 5% revenue growth measured in local currencies, and an EBIT margin of between 22.0% to 27.0% measured in local currencies. It is the expectation that the revenue and EBIT margin will be higher in the second half of 2020 than in the first half.
Prior to the withdrawal of the 2020 guidance, SimCorp’s expectations for the full year were between 5% and 10% revenue growth measured in local currencies, and an EBIT margin of between 24.0% to 27.0% measured in local currencies. Approximately 2%-point of the expected revenue growth was related to the acquisition of AIM Software. The acquistion was expected to impact the EBIT margin negatively by approximately 1%-point due to lower initial profitability and integration costs.
The expected impact of the acquisition of AIM Software remains as above, implying expected organic revenue growth of between -7% and 3% and an EBIT margin of between 23.0% to 28.0%.
Based on the exchange rates prevailing at April 30, 2020, SimCorp estimates reported revenue to be positively impacted from currency fluctuations by around 0.5%. The impact from currency fluctuations on reported EBIT margin is expected to be positive by around 0.1%-points. In the previous reporting (Annual Report 2019), the currency impact on reported revenue was expected to be positive by around 0.7% and on EBIT margin, no impact from currency fluctuations was expected.
Enquiries regarding this announcement should be addressed to:
Anders Hjort, VP, Head of Investor Relations, SimCorp A/S (+45 3544 8822)
Mette Trier, Communications Principal, SimCorp A/S (+45 4060 8296)
Mittal Shah, PR Manager – SimCorp UK, North America, Asia Pacific (+44 (0)207 397 8072)
*) This announcement contains certain forward-looking statements and expectations in respect of the 2020 financial year. Such forward-looking statements are not guarantees of future performance, and involve risk and uncertainty, and actual performance may deviate materially from that expressed in such forward-looking statements due to a variety of factors. Readers are warned not to rely unduly on such forward-looking statements which apply only as at the date of this announcement. The Group’s revenue will continue to be impacted by relatively few but large system orders, and such orders are expected to be won at relatively irregular intervals. The terms agreed in the individual license agreements will determine the impact on the order book and on license income for any specific financial reporting period. Accordingly, license revenue is likely to vary considerably from one quarter to the next. Unless required by law or corresponding obligations SimCorp A/S is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.
Company Announcement no. 24/2020