SimCorp A/S – Interim report January to September 2014

26 November 2014

SimCorp's Board of Directors today considered and approved the Group's interim report for the nine months ended 30 September 2014.

SimCorp signed three new contracts in the third quarter of the year – two related to SimCorp Dimension and one related to SimCorp Coric.

Total revenue for the first nine months of 2014 increased 5% measured in local currencies and 4% in EUR and amounted to EUR 164.1m, EUR 6.5m higher than for the same period last year.

By comparison with last year revenue from additional license sales to existing customers decreased by 31%.

EBIT for the nine-month period was EUR 28.8m, compared with EUR 31.8 for the year-earlier period. Currency exchange rate fluctuations have impacted EBIT positively by EUR 0.8m for the nine-month period.

Net profit for the nine-month period was EUR 21.2m compared with EUR 22.9m for the same period last year.

At 30 September 2014, contracts equaling EUR 210m of the projected 2014 revenue had been secured, EUR 6m more than at the same time last year.

SimCorp revises its guidance for revenue growth measured in local currencies to be around 7% (previously between 8% and 10%) and also revises its guidance for EBIT margin measured in local currencies to be around 24% (previously 24.5%).This is a reflection of the uncertainty in timing of a number of contracts that are in late stage negotiations with new as well as existing customers.

Based on the currency exchange rates at 31 October 2014 SimCorp now expects revenue growth in reported currency to be around 7% (previously between 7% and 9%) mainly driven by the development in the exchange rate in the USD. The reported EBIT margin is revised to be around 24% (previously 24.3%).

Klaus Holse, SimCorp CEO comments: “The growth of SimCorp in 2014 is being built on strong performance in Europe. In the important North American market the successful onboarding of the new leadership assures me that we are on the right track to unlock the long-term potential of SimCorp.“

SimCorp’s Board of Directors today considered and approved the Group’s interim report for the nine months ended 30 September 2014. Highlights of the report are:

  • 9M revenue was up 5% y/y in local currencies and 4% y/y in reported currency to EUR 164.1m, including revenue of EUR 3.5m from SimCorp Coric. Q3 revenue increased by 2% compared with the same period last year and amounted to EUR 55.8m, including revenue of EUR 1.6m from SimCorp Coric. 
  • 9M order inflow was EUR 15.9m compared with EUR 26.2m for the same period last year. Q3 order inflow decreased by 38% compared with Q3 2013 to EUR 6.8m. The order book increased by EUR 0.3m during the quarter, and amounted to EUR 10.0m at 30 September 2014, compared with EUR 14.9m at the same time in 2013. 
  • Income recognized from licenses and add-on licenses amounted to EUR 21.7m in the nine-month period, a decrease of 13% y/y, and amounted to EUR 7.5m in Q3 compared with EUR 10.6m the year-earlier period. 
  • Revenue from professional services continue to develop satisfactorily. Professional service fees for the first nine months of the year were EUR 58.3m, up 9% relative to the same period last year. In Q3 professional service fees were EUR 19.9m, an increase of 11% compared with the same period last year. 
  • Maintenance income for the nine months was EUR 82.1m, an increase of 6% relative to the same period last year. Maintenance income in Q3 2014 was EUR 27.9m, an increase of 8% compared with the year-earlier period. 
  • Total cost for the nine months amounted to EUR 135.4m, an increase of 8% compared with the same period in 2013. Excluding the impact of SimCorp Coric the growth was 4%. In Q3 total cost was EUR 43.8m, an increase of 7% on the same period last year. Excluding the impact from SimCorp Coric the growth was 2%. 
  • 9M EBIT showed a profit of EUR 28.8m, which is 9% or EUR 2.9m lower than the same period last year, including a negative impact of EUR 1.2m from SimCorp Coric. Q3 EBIT was EUR 12.0m, against EUR 13.5m in Q3 last year, including a negative impact of EUR 0.3m from SimCorp Coric. 
  • 9M cash flow from operating activities was EUR 27.9m compared with EUR 30.5m for the same period of 2013. Q3 cash flow from operating activities was EUR 12.1m compared with EUR 8.1m in the year-earlier period. 
  • The impact on the full year expectations from the Equipos Ltd. acquisition is maintained at a 2% point impact on revenue measured in both local and reported currencies and a 0.5% point negative impact on EBIT margin in both local and reported currencies. 
  • SimCorp revises its guidance for revenue growth measured in local currencies to be around 7% (previously between 8% and 10%) and also revises its guidance for EBIT margin measured in local currencies to be around 24% (previously 24.5%).This is a reflection of the uncertainty in timing of a number of contracts that are in late stage negotiations with new as well as existing customers. 
  • Based on the currency exchange rates at 31 October 2014 SimCorp now expects revenue growth in reported currency to be around 7% (previously between 7% and 9%) mainly driven by the development in the exchange rate in the USD. The reported EBIT margin is revised to be around 24% (previously 24.3%). 
  • At 30 September 2014, contracts equaling EUR 210m of the projected 2014 revenue had been secured, EUR 6m more than at the same time last year. The Group’s pipeline of potential license contracts supports the expected growth in revenue. 

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