SimCorp Interim Report Q1 2023
Accelerating growth momentum in the first quarter of 2023
Q1 2023 highlights
- In Q1 2023, SimCorp accelerated its growth momentum across all revenue metrics. Forward-looking Annual Recurring Revenue (ARR) grew by 12.6% in local currency compared to ARR by the end of Q1 2022. Ratable revenue amounted to EUR 142.3 million in Q1 2023, reflecting local currency growth of 11.8%.
- Reported revenue was EUR 136.3 million in Q1 2023 (Q1 2022: EUR 114.7 million), equivalent to an increase of 18.8% in reported terms and 18.6% when measured in local currencies. EBIT excluding special items was EUR 28.3 million (EUR 16.3 million in Q1 2022), corresponding to an EBIT-margin of 20.8%. The execution of the cost efficiency program FuEL is on track and the cost reduction targets are confirmed. Restructuring costs amounted to EUR 5.4 million in the quarter (special items of EUR 0.8 million in Q1 2022).
- SimCorp generated Free Cash Flow of EUR 45.6 million in Q1 2023, representing a significant improvement compared to EUR 20.1 million in Q1 2022. The improvement was driven by stronger underlying profitability and enhanced working capital management.
- In Q1 2023, SimCorp signed two new clients: i) a US-based insurance company for Dimension SaaS solution, Investment Operation Solution and Data Management Services and ii) a large asset manager in Singapore for client reporting. A number of expansionary SimCorp Dimension license contracts were signed in Q1 2023, including two migrations from on-premise to SaaS.
- On 27 April, SimCorp and Deutsche Börse entered into an announcement agreement pursuant to which Deutsche Börse will make an all-cash voluntary recommended takeover offer to acquire all SimCorp shares at a price of DKK 735.0 per share. The offer is subject to a number of conditions, including necessary regulatory approvals.
- Based on the performance in Q1 2023, SimCorp confirms the financial guidance for 2023. Measured in local currency, it is expected that ARR will grow 12-17%, ratable revenue will grow 6-11% and the EBIT margin is expected to be 21-24%, excluding special items (costs related to the execution of Programme FuEl and M&A-related transaction costs).
SimCorp CEO, Christian Kromann, comments:
“The first quarter of 2023 has been a solid start to the year. We continue to transform the company across our product offering, our services and our organization. Our SaaS implementations are successful, and we see continued strong market demand for our offerings. We are today confirming our financial guidance for 2023 as well as our mid-term target of returning to record-high profitability”
Key financial highlights
| EUR million, unless otherwise stated | 2023 Q1 |
2022 Q1 |
2022 FY |
2023 Outlook |
| Organic ARR growth (%) | 12.6% | N/A | 11.7% | 12-17% |
| Organic growth of ratable revenue (%) | 11.8% | 11.3% | 5.3% | 6-11% |
| Ratable revenue | 142.3 | 124.3 | 489.0 | |
| Reported revenue | 136.3 | 114.7 | 561.0 | |
| EBIT-margin, excluding special items (%) | 20.8% | 14.2% | 24.2% | 21-24% (local currencies) |
| EBIT, excluding special items | 28.3 | 16.3 | 135.8 | |
| Special Items | -5.4 | -0.8 | -9.9 | |
| Reported EBIT | 22.9 | 15.5 | 125.9 |
Other financial highlights and key ratios for the SimCorp Group
| EUR ’000 | 2023 Q1 |
2022 Q1 |
2022 FY |
| Income Statement | |||
| Revenue | 136,319 | 114,713 | 560,968 |
| Earnings before interest, tax, depreciation, and amortization (EBITDA) | 26,684 | 19,152 | 140,739 |
| Operating profit (EBIT) | 22,919 | 15,527 | 125,856 |
| Financial items, net | -2,272 | 2,170 | 2,292 |
| Profit before tax | 20,647 | 17,697 | 128,148 |
| Profit for the period | 15,571 | 13,321 | 99,254 |
| Balance Sheet | |||
| Share capital | 5,441 | 5,441 | 5,441 |
| Total equity | 355,708 | 293,627 | 375,557 |
| Bank loan / credit facility | 26,844 | 20,167 | 6,724 |
| Intangible assets | 88,227 | 91,845 | 88,984 |
| Property, plant, and equipment | 41,492 | 41,848 | 41,459 |
| Receivables | 124,126 | 130,167 | 112,378 |
| Contract assets | 286,837 | 213,410 | 292,903 |
| Cash and cash equivalents | 66,382 | 49,768 | 40,546 |
| Total assets | 648,974 | 558,632 | 604,328 |
| Cash Flow | |||
| Net cash from operating activities | 48,327 | 23,172 | 60,340 |
| Net cash used in investing activities | -10,402 | -699 | -2,767 |
| Net cash used in financing activities | -11,855 | -20,501 | -64,822 |
| Free cash flow | 45,647 | 20,091 | 47,155 |
| Employees | |||
| Number of employees at the end of the period | 2,404 | 2,045 | 2,245 |
| Average number of employees - FTE | 2,316 | 1,994 | 2,067 |
| Alternative Performance measures | |||
| Annual Recurring Revenue (ARR) (EUR ‘000) | 367,935 | 326,767 | 352,224 |
| Financial Ratios | |||
| Revenue growth (%) | 18.8 | 4.3 | 13.0 |
| Organic revenue growth (%) | 18.6 | 4.1 | 9.4 |
| Organic ARR growth (%) | 12.6 | - | 11.7 |
| EBIT margin (%) | 16.8 | 13.5 | 22.4 |
| ROIC (return on invested capital) (%) | 25.0 | 21.2 | 35.6 |
| Receivables turnover ratio | 6.1 | 5.5 | 8.4 |
| Equity ratio (%) | 54.8 | 52.6 | 62.1 |
| Return on equity (%) | 16.2 | 16.3 | 26.0 |
| Share Performance | |||
| Earnings per share - EPS (EUR) | 0.40 | 0.34 | 2.52 |
| Diluted earnings per share - EPS-D (EUR) | 0.39 | 0.34 | 2.50 |
| Cash flow per share - CFPS (EUR) | 1.22 | 0.58 | 1.53 |
| Average number of shares (million) | 39.3 | 39.5 | 39.3 |
| Average number of shares - diluted (million) | 39.7 | 39.7 | 39.7 |
| EUR/DKK rate of exchange at end of period | 7.4485 | 7.4379 | 7.4365 |
Please refer to the definition of ratios on page 63 of the Annual Report 2022. The interim report is unaudited and has not been reviewed by external auditors.
Investor presentation
SimCorp’s Executive Management Board will present the report on a conference call on Wednesday, May 17, 2023 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
Webcast details
It will be possible to follow the presentation via this link:
https://edge.media-server.com/mmc/p/zab7z5ks
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.
Online registration: https://register.vevent.com/register/BI560c2316f3f4488caf8a396cbc9844ce
Enquiries regarding this announcement should be addressed to
Investor contacts
Christian Kromann, Chief Executive Officer, SimCorp A/S (+45 3544 8800, +45 2810 9090)
Michael Bjergby, Chief Financial Officer, SimCorp A/S (+45 3544 8800, +45 3137 4171)
Anders Hjort, Head of Investor Relations, SimCorp A/S (+45 3544 8800, +45 2892 8881)
Media contacts
Tobias Brun-Falkencrone, Group Communications Director, SimCorp A/S (+45 2938 1284)
Rune Jonassen, Internal Communication Manager, SimCorp A/S (+45 2320 1175)
Company Announcement no. 10/2023