Q3 2022 highlights
- Revenue was EUR 124.2m, an increase of 15.7% compared with Q3 2021.
- EBIT was EUR 20.2m (EUR 24.2m in Q3 2021) and the EBIT margin was 16.2% (22.6% in Q3 2021). Q3 2022 was impacted by extra cost of EUR 0.8m to help and support our Ukrainian colleagues and their families.
- Net profit was EUR 18.3m (EUR 20.0m in Q3 2021).
- Total order intake was EUR 22.9m (EUR 27.8m in Q3 2021), due to lower order intake of data management solutions.
- First new SimCorp Dimension clients signed in Africa and Malaysia.
- Strategic agreement signed with existing client in Europe, adding front office, risk, alternative investments and ESG to their SimCorp platform. Front office deal signed with existing client in North America.
9M 2022 highlights
- Annual Recurring Revenue (ARR) for the last twelve months (LTM) was EUR 309.9m, an increase of 15.2% when compared with the period Q4 2020-Q3 2021. ARR for the last twelve months was equivalent to 60.2% of reported revenue for the last twelve months compared with 55.7% for the equivalent period Q4 2020 to Q3 2021.
- Revenue was EUR 354.9m, an increase of 5.6% compared with 9M 2021. SaaS revenue increased by more than 30%.
- One-off consultancy and redundancy costs of EUR 5.7m were incurred in 9M 2022 to ensure that SimCorp has the right structure and people as it transforms to a SaaS company. Exceptional costs of EUR 2.9m were incurred in 9M 2022 to support our Ukrainian colleagues and their families. Excluding these exceptional and one-off costs of EUR 8.6m, the operating costs increased by 18.1% (15.3% in local currencies) compared with 9M 2021, which was as expected.
- EBIT was EUR 41.9m (EUR 78.1m in 9M 2021) and the EBIT margin was 11.8% (23.2% in 9M 2021). The lower EBIT and EBIT margin were primarily due to lower license revenue in Q2, exceptional and one-off costs incurred, and investments in the future in support of continued investments, including in new SaaS operations and solutions. Excluding exceptional and one-off costs incurred (as mentioned above) of EUR 8.6m, the EBIT margin would have been 14.2%.
- Net profit was EUR 40.9m (EUR 61.5m in 9M 2021).
- Order intake was EUR 65.9m (EUR 70.6m in 9M 2021), due to lower order intake of data management solutions, while order intake of licenses was higher than in 9M 2021.
- At September 30, 2022, the order book amounted to EUR 84.3m, an increase of EUR 23.8m when compared with the order book at September 30, 2021, and an increase of EUR 11.3m when compared with the order book at December 31, 2021.
- Free cash flow was EUR 44.7m compared with EUR 79.8m in 9M 2021, due to lower profit and timing of payments.
- Capital Market Day held in October 2022 with more than 100 physical and virtual participants.
- Since the end of Q3, 2022, SimCorp has signed a new SimCorp Dimension client in North America.
Financial guidance 2022
- The pipeline is strong, however clients have become more cautious making decisions in the current macroeconomic climate. Consequently, SimCorp expects to be at the lower end of the guidance ranges for 2022 which were announced in the 2021 Annual Report. This means that, for 2022 we now expect to grow revenue in local currencies at the lower end of the range 7% - 12%, to grow Annual Recurring Revenue (ARR) for the last twelve months (LTM) in local currencies at the lower end of the range 10% - 15%, and to generate an EBIT margin measured in local currencies at the lower end of the range 23.0% - 26.0%. The EBIT margin guidance excludes the effect of expected 2022 exceptional costs of EUR 3-5m in relation to supporting our Ukrainian employees and their families, and excludes the effect of expected one-off costs of EUR 8-10m relating to the operating model restructuring programme.
SimCorp CEO, Christian Kromann, comments: ”Our efforts to transform SimCorp into a true SaaS company are progressing well with Annual Recurring Revenue growth for the last twelve months of 15.2%, and now representing approximately 60% of annual revenue. In Q3, we signed our first clients in Africa and Malaysia, and we expanded our engagement with existing clients, for example, through new strategic agreements to add front office offerings for a client in Europe and a client in North America. However, the continued macroeconomic turmoil negatively impacts our operating environment, causing delays in order intake, client dialogue and client decision-making processes, affecting short-term revenue and margins. Looking ahead, we nevertheless remain optimistic about the longer-term pipeline and potential for our SaaS offering.
During the quarter, we have unfortunately seen escalation of the war in Ukraine, but despite this, our Ukrainian colleagues continue to make remarkable contributions to our business, and I sincerely thank them for their immense commitment and dedication to SimCorp. We remain committed to supporting our colleagues in Ukraine and their families in these difficult times.”
SimCorp’s Executive Management Board will present the report on a conference call on Tuesday, November 15, 2022 at 11:00 am (CET).
At the end of the presentation there will be a Q&A session.
The presentation will be available prior to the conference call via SimCorp’s website www.simcorp.com/en/about/investor/presentations-and-events/quarterly-and-annual-investor-meetings
It will be possible to follow the presentation via this link:
Telephone conference registration
Participants are required to register in advance of the conference using the link provided below. Upon registering, each participant will be provided with Participant Dial In Numbers, and a unique Personal PIN.
Enquiries regarding this announcement should be addressed to
Christian Kromann, Chief Executive Officer, SimCorp A/S (+45 3544 8800, +45 2810 9090)
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)