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Peter Tranberg
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SimCorp grows revenue by 12.9% in H1 2017 driven by a strong performance in Professional Services

H1 2017 reported revenue was EUR 148.2m, an increase of 12.9% when compared with restated H1 2016*, and an increase of 12.8% when measured in local currencies.

EBIT for H1 2017 was EUR 23.4m compared with EUR 22.6m in restated H1 2016. Currency fluctuations impacted EBIT positively by EUR 1.2m during first half year.

Net profit for H1 2017 was EUR 16.9m compared with EUR 16.9m in restated H1 2016.

At 30 June 2017, EUR 268m of the 2017 revenue had been contractually secured, EUR 33m more than at the same time last year.

SimCorp maintains its expectations for reported revenue growth between 9% and 14% measured in local currency for 2017, including 2% growth from the acquisition of APL Italiana (previously, before the acquisition, revenue growth was expected to be between 7% and 12%). As Professional Services are now expected to constitute a larger part of total revenue, the expectations for EBIT margin measured in local currencies is expected to be between 24% and 27% (previously 25% and 28%). The acquisition of APL Italiana is not expected to have a material impact on the EBIT margin.

Klaus Holse, SimCorp CEO comments: “We continue to see overall healthy growth in the business, primarily driven by Professional Services and additional license sales to existing customers. The intake of new SimCorp Dimension clients in the first six month of the year was lower than in the previous years, but our pipeline remains strong, which supports our revised guidance for the year.”

“Following the closing of the books for the first six month, we have welcomed two new SimCorp Dimension clients: one in Denmark and one in APAC.”

Other highlights of the interim report for the first six months of 2017 are: 

Total order intake from new licenses and add-on licenses for the first six months was EUR 16.5m compared with EUR 24.8m in H1 2016. Q2 order intake was EUR 10.9m compared with EUR 13.9m in Q2 2016. Income recognized from new subscription licenses and add-on licenses including renewal of subscriptions was EUR 19.9m, an increase of 4.7% compared with restated H1 2016.

The sale of professional services continued to be strong and grew 21.7% to EUR 56.0m when compared with same period last year.

Maintenance income was EUR 68.5m, an increase of 8.3% from H1 2016.

Total operating cost for the six months was EUR 124.9m, an increase of 14.8% compared with the same period in 2016. Currency fluctuations reduced costs by EUR 1.0m (0.9%-points). The cost increase primarily reflects additional resources to meet the demand for professional services.

The lower cash flow from operating activities was EUR 25.6m compared with EUR 32.3m in H1 2016. The lower cash flow of EUR 6.7m is related to the change from perpetual license agreement to subscription based agreement and higher payment of income taxes.

SimCorp has from 2017 chosen to make an early adoption of IFRS15 ‘Revenue from Contracts with Customers’ by recognizing a cumulative effect of EUR 20.9m as an opening balance increase to equity at 1 January 2017. Q2, H1 and full year 2016 results have been restated to IFRS15 for illustrative purposes and to improve transparency. The early adoption of IFRS15 will reduce the financial reporting impact of whether customers choose to acquire SimCorp’s Dimension on a perpetual license basis or on a subscription basis. In the opinion of the Board of Directors this reporting approach provides an improved basis for assessing the ongoing performance of the company. 

SimCorp will initiate a new share buyback program of EUR 7.5m to be executed in the period from 24 August 2017 to 31 December 2017.