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SimCorp reports ARR (LTM) growth of 11.9% in H1 2022, as the journey towards being a SaaS provider progresses as planned

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Company Announcement no.  36/2022

Q2 2022 highlights

  • Total order intake was EUR 17.0m (EUR 30.2m in Q2 2021).
  • Strategic agreement signed with Challenger to launch a new stand-alone company to provide investment administration services.
  • Revenue was EUR 116.0m, a decrease of 2.3% compared with a relatively strong Q2 2021.
  • EBIT was EUR 6.2m (EUR 30.0m in Q2 2021) and the EBIT margin was 5.4% (25.2% in Q2 2021).
  • Net profit was EUR 9.3m (EUR 21.3m in Q2 2021).
  • User conference held in Nice in Q2 2022 with more than 500 clients and partners participating.
  • Appointment of Michael Bjergby as new CFO with start date no later than January 1, 2023.

H1 2022 highlights

  • Annual Recurring Revenue (ARR) for the last twelve months was EUR 294.4m, an increase of 11.9% when compared with the period Q3 2020-Q2 2021. ARR for the last twelve months was equivalent to 59.1% of reported revenue for the last twelve months compared with 55.4% for the period Q3 2020 to Q2 2021 equivalent.
  • Revenue was EUR 230.7m, an increase of 0.9% compared with H1 2021.
  • An operating model restructuring program was initiated in H1 2022 to ensure that SimCorp has the right structure and people as it transforms to a SaaS company. One-off consultancy and redundant costs of EUR 5.7m related to the program were incurred in H1 2022.
  • Exceptional costs of EUR 2.1m were incurred in H1 2022 to support our Ukrainian colleagues and their families.
  • EBIT was EUR 21.7m (EUR 53.9m in H1 2021) and the EBIT margin was 9.4% (23.6% in H1 2021). The lower EBIT and EBIT margin were primarily due to lower license revenue, exceptional and one-off costs incurred, and investments in the future, including investments in new SaaS operations and solutions. 
  • Net profit was EUR 22.6m (EUR 41.5m in H1 2021).
  • Order intake was EUR 43.0m (EUR 42.8m in H1 2021).
  • At June 30, 2022, the order book amounted to EUR 81.7m, an increase of EUR 29.6m when compared with the order book at June 30, 2021, and an increase of EUR 8.8m when compared with the order book at December 31, 2021.
  • Free cash flow was EUR 30.2m compared with EUR 55.9m in H1 2021, due to lower profit and timing of payments.

Subsequent events

  • The EUR 20.0m share buy back program was completed on July 29, 2022. SimCorp will not initiate additional share buy backs in H2 2022 in view of planned investments, including in the strategic business partnership with Challenger.

Financial guidance 2022

  • SimCorp maintains its expectations for 2022 as announced in its Annual Report 2021, i.e. the expectations for 2022 are to grow revenue in local currencies by between 7% and 12%, and to grow Annual Recurring Revenue (ARR) in local currencies by between 10% and 15%, and to generate an EBIT margin measured in local currencies of between 23.0% and 26.0%, excluding expected exceptional costs in 2022 of EUR 3-5m in relation to supporting our Ukrainian employees and their families, and excluding expected one-off costs of EUR 8-10m related to the operating model restructuring programme.

SimCorp CEO, Christian Kromann, comments: “Whilst we acknowledge a lack of new license deals in Q2 due to client delays, we continue to see good traction and momentum in our strategy, with Annual Recurring Revenue (ARR) increasing by 11.9%, good progress on our new operating model implementation, good progress on our move to a three tier architecture, first clients live on Azure, strong client interest in our SaaS offerings, and a solid pipeline in place. Across all markets, we see client activity has mostly returned to pre-covid levels, despite the current geopolitical and macroeconomic turbulence and the timing of some expected deals shifting from H1 to H2.

I would be remiss if I failed to mention the significant contribution of our more than 240 Ukrainian colleagues during the first half of the year. I thank them for their incredible resilience and dedication, despite the terrible hardships they continue to endure. As the war drags on, we continue to hope for a resolution, and our thoughts remain with our colleagues and the Ukrainian people.”

Investor presentation

SimCorp’s Executive Management Board will present the report on a conference call on Friday, August 12, 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

Webcast details

It will be possible to follow the presentation via this link:

https://edge.media-server.com/mmc/p/jfpymzra

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/BI5af59555f28f4c2fbfec287365ed8dcb

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 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)

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)

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