SimCorp Annual Report 2016: Record high order intake, EBIT Growth of 12.6% and breakthrough in North America
SimCorp’s Board of Directors has reviewed and approved the Group’s annual report for 2016. In 2016, revenue grew 6.5% to EUR 295.9m and the company reports EBIT of EUR 68.2m. In local currencies revenue grew 8.1% and EBIT margin was 22.8%.
Non-GAAP1 revenue grew 10.7% to EUR 307.7m and the company reports non-GAAP EBIT of EUR 80.0m. In local currencies non-GAAP revenue grew 12.4% and non-GAAP EBIT margin was 25.8%.
SimCorp will for the financial year 2017 adopt the new revenue standard IFRS15, which means that revenue recognition for subscription based license will be the same as revenue recognition for perpetual license. The non-GAAP reporting will therefore be discontinued from 2017.
On the transition to the new revenue standard, SimCorp will recognize in retained earnings the cumulative effect of initially applying the standard at 1 January 2017. Approximately EUR 28.5m will be released from order book and after provisions for deferred taxes of EUR 6.5m, a net of approximately EUR 22m will be transferred to retained earnings.
In 2017, SimCorp expects revenue growth after adopting IFRS15 to be between 7% and 12% measured in local currencies, and EBIT margin to be between 25% and 28% measured in local currencies. The impact of currency fluctuations is expected to be positive by around 0.4% points on reported revenue and around 0.3%-points positive on EBIT margin.
At the company’s Annual General Meeting, SimCorp’s Board of Directors will propose that a dividend of EUR 33.3m be paid to the company’s shareholders, corresponding to DKK 6.25 per share of DKK 1, an increase of 19% compared with 2015.
In addition, given there are no specific requirements for liquidity, SimCorp expects to continue to buy back shares in 2017, with the intention to purchase shares for EUR 35m in the the following 12 months in two half yearly buy-back programs of EUR 17.5 each.
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.
SimCorp CEO, Klaus Holse comments: “2016 was another good year for SimCorp with performance above our initial financial guidance, we achieved a total of 12 new SimCorp Dimension clients and the highest order intake in the company’s history. Five of the new clients came from North America, which is the best performance since 2012. We also expanded our footprint in Southern Europe with new clients in Italy and Spain and consolidated our position in the Nordic region with two new clients in Sweden.
Generally, we see an increasing appetite for broad-scoped, integrated solutions that help investment managers simplify their operations. SimCorp Dimension has a unique position in this space and we continue to invest around 20% of our annual revenue on the R&D to keep our solutions at the forefront of industry demands.”
 From 2016 SimCorp also offers SimCorp Dimension to new customers on subscription as opposed to the historical used perpetual licensing. To assist users of this report, adjustednon-GAAP figures are presented in addition to IFRS results as if the SimCorp Dimension orders were still made on perpetual license terms and consequently income recognized when signed.
SimCorp’s Board of Directors today considered and approved the Group’s annual report for the 12 months ended 31 December 2016. Highlights of the report are:
- Annual order inflow was EUR 85.1m compared with EUR 70.7m in 2015. Q4 order inflow was EUR 40.7m compared with EUR 21.9m in Q4 2015.The order book increased by EUR 20.7m during the 12 months, and amounted to EUR 44.8m at 31 December 2016, compared with EUR 24.1m at the same time in 2015. Mainly driven by the new license model for subscription based licenses. Page 45 in the Annual Report 2016
- Annual revenue was up 6.5% y/y in reported currency to EUR 295.9m and 8.1% y/y in local currencies. Q4 revenue increased 11.7% in reported currency compared with the same period last year and amounted to EUR 93.7m currency fluctuations reduced revenue for the year by EUR 0.8m or 1.0%-points. Page 46 and 62 in the Annual Report 2016
- Annual non-GAAP revenue was up 10.7% y/y in reported currency to EUR 307.7m and 12.4% y/y in local currencies. Q4 non-GAAP revenue increased 20.4% in reported currency compared with the same period last year and amounted to EUR 101.0m currency fluctuations reduced revenue with EUR 0.9m. Page 46 and 62 in the Annual Report 2016
- Full year EBIT was EUR 68.2m, a decrease of 4.0% compared with the same period last year of which currency fluctuations accounted for 0.5%-points. EBIT margin was 23.1% compared with 25.6% last year and in local currencies 22.8%. Q4 EBIT was EUR 30.3m, against EUR 28.0m same period last year. Q4 EBIT margin was 32.4% compared with 33.5% in Q4 2015 and in local currencies 31.4%. Page 48 and 62 in the Annual Report 2016
- Full year non-GAAP EBIT was EUR 80.0m, an increase of 12.6% compared with the same period last year of which currency fluctuations impacted negatively by 0.8%-points. EBIT margin was 26.0% compared with 25.6% last year and in local currencies 25.8%. Q4 EBIT was EUR 37.6m, against EUR 28.0m same period last year. Q4 non-GAAP EBIT margin was 37.3% compared with 33.5% in Q4 2015 and in local currencies 36.4%. Page48 and 62 in the Annual Report 2016
- Cash flow from operating activities increased by 20.7% to EUR 65.4m for the year compared with EUR 54.2m in the same period of 2015. In Q4 cash flow from operating activities was EUR 10.0m compared with EUR 13.3m in the same period of 2015. Page 63 in the Annual Report 2016
- SimCorp enters 2017 with EUR 207.3m of the 2017 revenue secured, an increase of EUR 27.3m compared with last year.
- For 2017 SimCorp will adopt the new revenue standard IFRS 15 which means that revenue recognition for subscription based licenses will be the same as revenue recognition for perpetual license, this eliminates the need for the non-GAAP reporting. SimCorp expects revenue to grow between 7% and 12% measured in local currencies and EBIT margin to be between 25% and 28% measured in local currencies in accordance with IFRS 15. Based on currency rates prevailing end of January 2017, reported revenue growth would be positively impacted by around 0.4% and EBIT margin would be positively impacted by around 0.3%-points. Page 41 in the Annual Report 2016
- The ASP offering as a service line is expected to impact revenue growth positively by around 0.5%-points in 2017 and have a minor negative impact on the EBIT margin in 2017, included in the guidance above. Page 42 in the Annual Report 2016
- SimCorp’s long-term target remains to generate double-digit revenue growth rates and to expand margins year on year. Page 42 in the Annual Report 2016