SimCorp reports revenue growth of 3% and EBIT margin of 17% in Q1 2020

Company Announcement no. 25/2020

Q1 2020 highlights:

• Revenue and EBIT margin in Q1 2020 were in line with our expectations but EBIT margin was lower than the strong Q1 2019.
• Reported revenue was EUR 102.9m, an increase of 3.2% when compared with Q1 2019, and an increase of 2.5% when measured in local currencies. Measured in local currencies, and excluding M&A activities, the organic revenue was on same level as in Q1 2019.
• EBIT was EUR 17.5m compared with EUR 26.4m in Q1 2019.
• EBIT margin was 17.0% compared with 26.5% in Q1 2019. Organic EBIT margin was 18.7%.
• Net profit was EUR 13.4m compared with EUR 19.6m in Q1 2019.
• Total order intake from new and add-on licenses was EUR 19.9m compared with EUR 21.4m in the same period last year. We welcomed three new clients in Q1 2020.
• At March 31, 2020, the order book amounted to EUR 41.1m, an increase of EUR 2.9m when compared with the order book at December 31, 2019.
• Free cash flow was EUR 32.4m, an increase of 26% when compared with Q1 2019.
• In Q1 2020, we made a EUR 0.4m partnership investment in start-up Alkymi as part of a new machine learning initiative aimed at addressing the current strain and costly challenge of processing unstructured data for alternatives investments.
• SimCorp has launched an holistic managed data service, Datacare, in collaboration with Zurich Insurance Group and global buy-side institutions from the SimCorp Gain client community, providing a highly automated, multi-asset, front-to-back solution for market and reference data management.
• A Securities Financing Transaction Regulation (SFTR) cloud solution has been launched in partnership with deltaconX, three months ahead of the SFTR reporting requirement go-live in July 2020.
• SimCorp received two awards in Q1 2020, the IBM Beacon Awards for Outstanding Infrastructure Services Solution with our SCDaaS solution and the Wealth Briefing Awards for Best Client Reporting for SimCorp Coric.

Covid-19:

• As a consequence of Covid-19, most of our employees have been working from home since the beginning of March, however, productivity across SimCorp’s business has remained high due to a strong IT setup and high adaptability to virtual collaboration among our clients and employees working remotely on product development, ongoing projects, and sales cases.
• The future outlook is more uncertain than normal. It is difficult to predict the length and impact of lock-downs and restrictions, as well as how client behavior might change.
• In order to prepare for potentially lower license sales, and the resulting lower demand for professional services, in early March, SimCorp initiated several cost control measures, including a hiring freeze and postponement of planned salary increases. However, SimCorp remains committed to continue investing in its products, people and strategic priorities, including cloud lift, to realize its long-term growth ambitions.

Financial guidance: