SIMCORP a/s Weidekampsgade 16 2300 Copenhagen S 4535448800 www.simcorp.com 15505281 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 2021-01-01 2021-12-31 1871 https://www2.simcorp.com/SustainabilityReport2022 https://www2.simcorp.com/SustainabilityReport2022 https://www2.simcorp.com/SustainabilityReport2022 www.simcorp.com/corporate-governance Årsrapport 15505281 Simcorp A/S Weidekampsgade 16 2300 København S xWizard version 1.1.1176.4, by EasyX Aps. www.easyx.eu Revisionspåtegning Grundlag for konklusion Konklusion https://www2.simcorp.com/DataEthicsPolicy2022 33771231 33771231 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 0 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 1 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 2 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 0 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 1 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 2 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 3 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 4 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 5 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 6 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 7 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 8 5299000WVEJNSG42AK88 2021-01-01 2021-12-31 5299000WVEJNSG42AK88 2022-01-01 5299000WVEJNSG42AK88 2021-01-01 5299000WVEJNSG42AK88 2022-12-31 5299000WVEJNSG42AK88 2021-12-31 5299000WVEJNSG42AK88 2022-01-01 ifrs-full:IssuedCapitalMember 5299000WVEJNSG42AK88 2022-01-01 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 5299000WVEJNSG42AK88 2022-01-01 ifrs-full:RetainedEarningsMember 5299000WVEJNSG42AK88 2022-01-01 simcorp:DividendProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 ifrs-full:RetainedEarningsMember 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 simcorp:DividendProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember 5299000WVEJNSG42AK88 2022-12-31 ifrs-full:IssuedCapitalMember 5299000WVEJNSG42AK88 2022-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 5299000WVEJNSG42AK88 2022-12-31 ifrs-full:RetainedEarningsMember 5299000WVEJNSG42AK88 2022-12-31 simcorp:DividendProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember 5299000WVEJNSG42AK88 2021-01-01 ifrs-full:IssuedCapitalMember 5299000WVEJNSG42AK88 2021-01-01 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 5299000WVEJNSG42AK88 2021-01-01 ifrs-full:RetainedEarningsMember 5299000WVEJNSG42AK88 2021-01-01 simcorp:DividendProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember 5299000WVEJNSG42AK88 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 5299000WVEJNSG42AK88 2021-01-01 2021-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 5299000WVEJNSG42AK88 2021-01-01 2021-12-31 simcorp:DividendProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember 5299000WVEJNSG42AK88 2021-12-31 ifrs-full:IssuedCapitalMember 5299000WVEJNSG42AK88 2021-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 5299000WVEJNSG42AK88 2021-12-31 ifrs-full:RetainedEarningsMember 5299000WVEJNSG42AK88 2021-12-31 simcorp:DividendProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember 5299000WVEJNSG42AK88 2022-12-31 cmn:ConsolidatedMember 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 0 5299000WVEJNSG42AK88 2022-01-01 2022-12-31 cmn:ConsolidatedMember 1 iso4217:EUR iso4217:EUR xbrli:shares xbrli:pure
Annual
Report
2022
SimCorp A/S
Weidekampsgade 16
2300 Copenhagen S
Denmark
Company reg. no: 15505281
simcorp.com
The world of investment management is defined by ever
increasing complexity and pressure to generate alpha.
Every day, our clients are faced with new demands,
instruments, regulations, and technologies. But the real
problem is when the tools and services designed to deal
with this rapidly evolving set of challenges introduce yet
more fragmentation and complexity. Complexity that ties
up resources and prevents clients from reaching their full
potential and exploiting new opportunities.
That is why the SimCorp platform is designed to empower
the world’s institutional investors to simplify their operating
models so they can seize opportunities and grow profitably.
→ Learn more at simcorp.com
SimCorp Annual Report 2022
3
Contents
4 — 53
54 — 101
102 — 123
Management report
Consolidated ﬁnancial statements
Financial statements of SimCorp A/S
104
108
109
112
114
116
120
122
Statements
05
06
07
09
12
14
15
18
20
22
23
31
36
41
45
48
49
50
SimCorp at a glance
Performance and progress
CEO and Chair letter
Financial highlights and key figures
Market and trends
54
60
64
74
81
84
90
98
Statements
Section 1: Basis of preparation
Section 2: Revenue and clients
Section 3: Employees
Section 1: Basis of preparation
Section 2: Revenue and clients
Section 3: Employees
Section 4: Tax
Section 4: Tax
Section 5: Invested capital
Section 6: Financing items
Section 7: Other disclosures
Business model
Section 5: Invested capital
Section 6: Financing items
Section 7: Other disclosures
Strategy update
Case: ADIA
Outlook
Business unit review
Financial review 2022
Risk management
Corporate governance report
Shareholder information
Board of Directors
Sustainability Report 2022
https://www2.simcorp.com/SustainabilityReport2022
Executive Committee
Statements and signatures
Independent Auditor’s Reports
Remuneration Report 2022
https://www2.simcorp.com/RemunerationReport2022
SimCorp Annual Report 2022
Management report
4
Management
report
4 — 53
SimCorp Annual Report 2022
Management report
SimCorp at a glance
5
SimCorp at a glance
SimCorp offers an industry-leading front-to-back investment management
platform and ecosystem comprising partners, services and third-party
connectivity. Be it on our software as a service (SaaS) platform or as an
on-premise solution, we offer clients the operating efficiency and flexibility
they need to succeed in an increasingly complex world.
300+
clients
40%
of the top 100
global asset
managers/
asset owners.
More than
More than USD
2,245
75
50
30
employees
nationalities
across
years of
experience
trillion
managed on
our platform
27 locations
SimCorp Annual Report 2022
Management report
Performance and progress
6
Performance and progress
SimCorp delivered solid performance
and progress on its strategic priorities in
2022. We achieved our financial guidance
for the year, added 11 new clients, and
strengthened existing client relations.
We are well-positioned to continue our
growth trajectory in the years ahead.
Transforming to a full SaaS provider
With Annual Recurring Revenue (ARR) (backward-looking)
comprising more than half of total revenue, we are
progressing well in our transformation of SimCorp into
a technology-enabled service company. ARR (backward-
looking) constituted 57.4% of total revenue in 2022
compared with 55.9% in 2021.
Subscriptions
clients on
subscriptions
50% in 20221
(88% of new clients)
1
SimCorp Dimension only.
Recurring and non-recurring revenue
(EUR million)
Solid financial performance
(%)
600
450
300
150
0
80
60
40
20
0
23.4% 9.4% 12.1%
EBIT margin
Revenue growth
ARR (backward-
2020
2021
2022
(in local currencies)
(in local currencies)
looking) growth
Non-recurring
revenue
(left axis)
ARR (backward-
looking)
(left axis)
ARR (backward-
looking) share of
revenue (right axis)
(in local currencies)
SimCorp Annual Report 2022
Management report
7
Strengthening our
offering in a challenging
business environment
2022 was a defining year for SimCorp as we continue to
strengthen our front-to-back offering, delivering the industry's
strongest platform and partner ecosystem. Although the year
was characterized by turbulence and increasing geopolitical
turmoil, we expanded our engagement with existing and new
clients, delivering revenue of EUR 561.0 million, ARR-growth
(backward-looking) of 16.1% and EBIT of EUR 125.9 million.
Christian Kromann
Chief Executive Officer
Peter Schütze
Chair of the Board of Directors
In 2022, we took additional steps to focus our business.
To ensure that SimCorp has the right structure and people
as it transforms to a SaaS company, 2022 saw continued
investments into our SaaS operations and innovation. As
our SaaS and tech-enabled services business continues to
gain momentum, a key priority is to continuously strengthen
our foundation and lay the steppingstones for the next phases
of our growth journey. As part of that, we have sharpened
our core value proposition in 2022, equipping clients with
an ever-increasing array of choice when making key infra-
structure decisions and futureproofing their technology
platforms. Among other things, this was illustrated by a
significant front-to-back deal with a tier one US financial
institution for our full SaaS product suite. In total, we added
11 new logos to our client portfolio in 2022.
Having aligned our delivery roadmap with current market
needs during the year, we are in a strong position to
continue our growth and our journey towards 2025.
With the institutional investment industry facing new
demands as a result of market turbulence, inflationary
pressure and added operational and strategic complexity,
we implemented several key initiatives to expand our
offering. This included a number of new tech-enabled
business service solutions designed to remove complexity
from our clients’ non-core operations, as exemplified by the
comprehensive investment operations services deal with US
asset manager Intech.
Across all markets in general, we signed a number of full
front-to-back SaaS deals, and, during the year, we also
signed our first-ever clients in Africa and Malaysia, with that
continuing to increase our market presence in both EMEA
and APAC. In the latter, we also entered into a strategic
partnership with Challenger, a leading Australian investment
firm, to form a stand-alone investment operations company.
Moreover, the signing of a number of significant clients in
the US resulted in a stronger footprint in North America,
SimCorp Annual Report 2022
Management report
CEO and Chair letter
8
and at the turn of the year, we have leveraged now our
offering towards new and broader market segments.
client deals in the years to come. In addition, we continue to
see very high client retention rates and growing potential for
upselling within our existing client base.
Distribution of profit
In 2022, we paid dividends of EUR 39.9 million, equal to
DKK 7.50 per share, and acquired treasury shares for EUR
Challenging business environment
20 million. Based on the financial performance in 2022, the
Board of Directors intends to propose to shareholders at
the AGM a dividend of EUR 39.7 million, equal to DKK 7.50
per share, for the financial year 2022. We will continue to
maintain a conservative financial policy, and we will allocate
the necessary capital to successfully drive our trans-
formation and sharpen our run-rate cost-efficiency.
2022 was also a year marked by the war in Ukraine. With
more than 240 colleagues based in Kyiv, we were shocked
and saddened to witness the Russian invasion. The safety
and wellbeing of our employees remains a key priority, and
we have done and will continue to do whatever we can to
safeguard and support our colleagues and their families, i.e.
by offering relocation and additional flexibility and support.
To ensure that we further extend the breadth and depth of
our SaaS offering, leveraging the strongest and most
versatile front to back platform in the industry, we are
investing in three growth levers. These are explained in
greater detail on page 15:
• Platform leadership
• SaaS acceleration
• Ecosystem scaling
Our appreciations
It remains a testament to the resilience and determination
of our Ukranian colleagues that our development saw
minimal short-term and no sustained disruption – and we
thank them all for this.
Our highly committed and skilled staff remains the
foundation for us as a company. Our ability to deliver value
to our clients, to grow, to innovate and ultimately to deliver
sustained long-term growth is based on the contribution of
our many colleagues around the world. We thank everyone
at SimCorp for your loyal commitment, true engagement,
and relentless hard work, demonstrating the culture of our
company as captured in “the 5Cs”, by being caring, customer
success driven, collaborative, curious, and courageous.
As we continue our transformation towards 2025, the
continued delivery of these three core priorities will allow us
to offer the optimal platform for supporting our clients’
evolving operating models, enabling them to seize business
opportunities and support their operating model of choice.
We extend our admiration, thoughts and support, not only
to our strong Ukrainian employees, but to all the people of
Ukraine in these difficult times.
Our sustainability promise
Accelerating our growth
In 2022, we took important steps on our sustainability
journey to gain more data and knowledge, create more
transparency, and – ultimately - achieve bigger impact. Our
sustainability agenda and our business strategy are fully
aligned, and we are integrating sustainability steadily in all
our business operations, client offerings, and in our
commitment to our people and stakeholders.
As we ramp up and continue to invest in our SaaS offering,
we are well positioned reach our strategic ambitions
towards 2025, on which we made solid progress in 2022.
With more than 50 clients already running on our SaaS
platform, and a growing number of clients either joining or
migrating to our SaaS offerings, we continue to progress our
transformation.
Our thanks also goes to our shareholders for their support
of our strategy and to our business partners for their trust
and co-operation, all helping us in our efforts to increase
our value creation. Last but by no means least, we extend
our gratitude to our clients, new as well as existing ones,
who continue to show strong commitment to our company
in times of uncertainty.
We see a convergence of our goals and values with those of
our clients, investors, and other stakeholders, and with the
commitment of our employees to always do the right thing,
we are confident that we can reach new important
milestones in the coming year.
Looking ahead, we see several attractive growth drivers, and
the strong fit between our products and general industry
trends means that we continue to widen our target
addressable market, yielding a substantial potential for new
SimCorp Annual Report 2022
Management report
Financial highlights and key ﬁgures
9
Financial highlights and key figures
EUR ’000
2022
2021
2020
2019
2018
Revenue (EUR million)
Income statement
600
500
400
300
200
100
0
Revenue
560,968
140,739
125,856
2,292
496,274
147,796
132,417
5,001
455,970
140,390
124,296
-8,200
454,531
142,576
127,824
-23
382,626
109,268
103,345
-809
Earnings before interest, tax, depreciation, and amortization (EBITDA)
Operating profit (EBIT)
Financial items, net
Profit before tax
128,148
99,254
137,418
109,992
116,096
88,258
127,801
96,901
102,536
76,971
Profit for the year
Statement of financial position
Share capital
5,441
375,557
6,724
5,441
323,107
-
5,441
278,250
-
5,441
230,020
20,000
99,557
55,650
81,804
151,774
31,851
437,912
5,441
169,059
-
Equity
Bank loan/credit facility
Intangible assets
Property, plant, and equipment1
2018
2019
2020
2021
2022
88,984
41,459
112,378
292,903
40,546
604,328
92,691
43,692
96,543
221,000
47,692
526,312
95,725
47,650
82,513
175,928
53,051
470,842
40,444
5,377
Reported revenue
Revenue signed at Jan 1 for the coming year
Receivables
79,165
85,684
47,500
270,267
Contract assets
EBIT (EUR million)
Cash and cash equivalents
Total assets
150
Cash flow
125
100
75
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Free cash flow
60,340
-2,767
-64,822
47,155
1,524
90.696
-5,675
-90,996
78,628
1,259
104,565
-2,681
-80,242
91,809
2,399
82,505
-60,214
-38,249
70,903
1,722
82,215
-1,720
-64,444
80,153
1,950
Investment in property, plant, and equipment
Net change in cash and cash equivalents
EUR/DKK rate of exchange at December 31
-7,249
7.4365
-5,975
7.4365
21,642
7.4393
-15,958
7.4697
16,051
7.4673
50
2018
2019
2020
2021
2022
1
2018 does not include right-of-use-assets.
SimCorp Annual Report 2022
Management report
Financial highlights and key ﬁgures
10
Financial highlights and key figures (continued)
EUR ’000
2022
2021
2020
2019
2018
EBITDA margin (%)
Other non-IFRS measures
Ratable revenue (EUR '000)
Order book value2 (EUR ’000)
Order intake2 (EUR ’000)
35
30
25
20
15
10
5
489,065
109,500
190,600
338,480
321,948
451,202
72,953
431,816
56,069
115,102
-
388,441
38,182
99,679
-
346,888
45,508
137,604
302,912
277,352
105,877
Annual Recurring Revenue (ARR) (forward-looking) (EUR '000)
Annual Recurring Revenue (ARR) (backward-looking) (EUR ‘000)
Financial ratios
-
-
250,902
220,943
Revenue growth (%)
13.0
9.4
8.8
8.7
0.3
-0.1
18.8
15.5
12.0
8.8
11.4
9.5
-
Organic3 revenue growth (%)
Ratable revenue growth (%)
Organic3 ratable revenue growth (%)
ARR (backward-looking) growth (%)
Organic3 ARR (backward-looking) growth (%)
ARR (backward-looking) as share of total revenue (%)
EBITDA margin (%)
8.4
4.5
10.4
10.2
13.7
14.6
55.0
30.8
27.3
104.0
46.6
8.7
0
5.3
4.5
6.2
-
2018
2019
2020
2021
2022
16.1
12.1
57.4
25.1
22.4
47.5
35.6
8.4
10.5
10.3
55.9
29.8
26.7
71.5
44.7
8.9
-
-
-
48.6
31.4
28.1
73.3
65.3
9.3
-
28.6
27.0
104.1
82.4
8.2
62.6
59.7
EBIT margin (%)
EBIT margin (%)
30
25
20
15
10
5
Cash conversion
ROIC (return on invested capital) (%)
Receivables turnover ratio
Equity ratio (%)
62.1
26.0
61.4
35.4
59.1
33.4
52.5
46.5
Return on equity (%)
Employees
Number of employees at year-end
Average number of employees – FTE
2,245
2,067
1,998
1,871
1,901
1,840
1,871
1,703
1,660
1,554
0
2
3
2019 order book and order intake have been restated to include Subscription Services such as Datacare and
Regulatory Reporting Platform (RRP), and 2018 order intake has been restated to include SimCorp Italiana (Sofia).
Organic figures adjust for M&A impact and currency impact.
2018
2019
2020
2021
2022
SimCorp Annual Report 2022
Management report
Financial highlights and key ﬁgures
11
Financial highlights and key figures (continued)
2022
2021
2020
2019
2018
Earnings per share (EUR)
Share performance
3
Earnings per share – EPS (EUR)
Diluted earnings per share – EPS-D (EUR)
Cash flow per share – CFPS (EUR)
Book value per share at year-end – BVPS (EUR)
Dividend per share – DPS (EUR)
Dividend per share – DPS (DKK)
Dividend payout ratio (%)
2.52
2.50
1.53
9.55
1.01
7.50
39.9
60.3
2.76
2.74
2.27
8.11
1.01
7.50
36.4
72.9
2.22
2.20
2.64
7.02
1.01
7.50
45.2
56.5
2.44
2.42
2.08
5.81
0.90
6.75
37.0
49.9
1.95
1.93
2.08
4.27
0.87
6.50
44.7
44.7
2
1
0
Total payout ratio (%)
Market value ratios
2018
2019
2020
2021
2022
Share price at year-end – EUR
Share price at year-end – DKK
Price/book value per share – P/BV (EUR)
Diluted price earnings (P/E diluted)
Price/cash flow (P/CF)
64.30
478.2
6.73
25.5
42.0
40.5
39.3
39.7
2,529
96.12
714.8
11.9
34.8
42.2
40.5
39.9
40.1
3,831
121.72
909.5
17.3
101.41
757.5
17.5
59.67
445.6
14.0
30.9
28.6
40.5
39.5
39.9
2,362
55.2
41.9
46.2
48.7
Market capitalization (EUR million)
Share capital (million)
40.5
40.5
5,000
4,000
3,000
2,000
1,000
0
Average number of shares (million)
Average number of shares – diluted (million)
Market capitalization – EUR million
39.7
39.7
40.0
40.1
4,826
4,016
2018
2019
2020
2021
2022
SimCorp Annual Report 2022
Management report
Market and trends
12
SimCorp market shares and
target addressable market1
Market and trends
EMEA
Total
Macroeconomic and geopolitical turmoil impacted the investment
management industry in 2022. Changing market environments, new
regulatory expectations and increasing complexity accelerated the
need for investment firms to optimize operating models and transform
their business. As a result, the demand for cloud and SaaS offerings
continues to grow.
23%
187 of 805
potential clients
North America
Good traction across regions
For most players in the market, SaaS is now becoming a
Although 2022 saw significant market turbulence, the
EMEA business unit reported good traction within new and
existing client segments, including the largest SaaS
migration to date. Across most countries and jurisdictions in
the region, we see a strong fit between our solutions and
our clients' needs, coupled with a high and increasing
market penetration, illustrated by the signing of a deal with
a central bank and the successful closing of a deal with a
client in Africa.
matter of “when” rather than “if”, and the long-term growth
potential in all three regions remains strong with SimCorp
well positioned to increase its market share.
8%
Market segments
64 of 760
In North America and APAC, market activity is also picking
up, and we continue to make significant investments into
our market profile and our capacity to further boost our
commercial execution. For both regions, the SimCorp
service offering has strong market potential, demonstrated
by a breakthrough in Malaysia and a number of compre-
hensive deals with large institutions in the US.
Asset management
Fund management
Insurance
Asset servicing
Life/pension
Treasury
potential clients
15%
Central banks
Sovereign wealth
Wealth management
APAC
8%
271 of 1,815
20 of 250
potential clients
1
SimCorp Dimension.
potential clients
SimCorp Annual Report 2022
Management report
Market and trends
13
Global investment management is
shaped by several macro trends, which
impact clients’ strategies and result in a
growing need to future-proof operating
models and drive efficiencies.
Overall, 2022 emphasized the constantly evolving need for
future-proof tools and technology, adding pressure on
clients and prospects who have yet to invest in long-term
platform solutions. The current macroeconomic environment
accelerates the industry's pursuit of scale benefits and
strategic ambitions to focus on core business activities.
With added regulatory complexity and changing customer
expectations, clients' efforts to digitize are advancing,
leading to more interest in integrated platform solutions and
technology-enabled outsourcing of business processes.
Key trends impacting investment managers
Market drivers
Clients' strategic
priorities
Clients' operational
concerns
Increasing inflation
and interest rates
Alternatives/private
markets
Data
Global investment managers are experiencing increasingly
complex strategic and operational environments, rooted in a
range of internal and external factors, including:
Security and compliance
Operational resilience
Operational excellence
System upgrades
Integrations
Sustainable investing
Geopolitical tensions
Fee and cost pressure
OTC
ETF/passives
Cloud
• Mounting regulatory and transparency demands
• Increasing volume and diversity of data
• Cloud and other technology advances
• Emergence of new instruments and trading strategies
• Rising security and compliance concerns
• Inflationary pressure, rising interest rates and recession risk
Increased client
demands
AI/ML
Third party business
Operating Model Design
E S G
Staff and talent
shortage
New regulations
Market ecosystem
Scalability
Innovation and quant
strategies
As we progress our SaaS transformation, SimCorp has
continued to strengthen its value proposition to match this
overall market development, with our offering catering well
for the operating models of tomorrow and those firms in the
industry looking to optimize their investment infrastructure
and platforms.
Cyber security
Digitization
Regulatory complexity
Manual processes
Market expansion
SimCorp Annual Report 2022
Management report
Business model
14
Business model
Partner
ecosystem
Enhanced and expanded
by our partner ecosystem
SimCorp’s business model empowers global
institutional investors to tackle the growing
Business
services
Empowered by our tech-
enabled services
complexity of the world around us. Offering scale,
efficiency, and choice, all based on solid data, our
business model supports investment decisions
with an integrated front-to-back platform and the
industry’s broadest ecosystem of partnerships.
SaaS
platform
Offering full front to back,
multi asset coverage
Integrated data
& workflows
Based on our
strong data core
Front-to-back coverage across all asset classes
From front office to back office, SimCorp offers full
coverage across our clients’ investment management value
chain. We support key workflows and functions from
portfolio construction to accounting and reporting.
Covering our clients’
value chain end-to-end
Data
Investment
management
Accounting
& operations
Analysis
& reporting
management
Integrated data and workflows
Based on a strong data core comprising our market-leading
investment book of record (IBOR) and accounting book of
record (ABOR), our platform solves our clients’ data and
integration challenges. Providing new insights for investment
decisions and process efficiency, we constantly evolve our
data management services to replace complexity with
simplicity.
for SaaS services. Today, our SaaS value proposition is
stronger than ever and offers unparalleled flexibility to
clients’ operating environment.
made significant strides within managed business services,
successfully going live with Investment Accounting Services
and Investment Operations Services.
Business services
Ecosystem and partnerships
Our technology-enabled business services help our clients
optimize their operations and allow them to focus on value-
creation in their core business, while we take responsibility
for their non-core business processes. In 2022, we have
Our platform is uniquely enhanced and expanded through
our partner ecosystem, which offers an unparalleled choice
of market-leading tools and third-party data and analytics,
all seamlessly embedded and integrated into our offering.
SaaS platform
With new as well as existing clients who are accelerating
their SaaS transformation, we continue to see high demand
SimCorp Annual Report 2022
Management report
Strategy update 2022
15
Strategy update 2022
As our transformation accelerates, we
remain fully committed to our strategic
ambition of offering everything as a
service. Our principal objective remains
to provide the investment industry with
market leading operating model
optionality through a superior SaaS
platform and services offering. This
strategy was first launched in 2019 and,
since then, we have been continuously
progressing on our priorities, achieving
several milestones over the past years.
With the implementation of a new
operating model program well underway,
we are reaching new maturity levels for
our SaaS and Business Process as a
Service (BPaaS) offerings and are
optimizing our ways of executing and
prioritizing.
In 2022, we accelerated our SaaS transformation, making
significant progress in the ways we work and deliver value
to clients. Looking to build on this momentum and further
ensure the continuous crystallization of our strategy into
outcomes, we have revisited our strategic imperatives
during 2022.
Having entered a full SaaS paradigm, our overall imperatives
have thus been further calibrated to cater for the rapidly
changing client needs and an operating environment that is
changing at an ever-increasing pace. Continuing our growth
journey towards 2025, we will be guided by three strategic
growth levers, designed to deliver the best possible
business outcomes for clients:
Platform leadership
SaaS acceleration
Ecosystem scaling
SimCorp Annual Report 2022
Management report
Strategy update 2022
16
Management, Front Office, Operations and Accounting and
Client Communications
Platform leadership
– a market leading
A strong front office potential
front-to-back platform
supporting all asset classes
Today our value proposition is as relevant as ever,
representing an optimal route for clients looking to ensure
operational efficiency based on consistent data and a
single version of the truth for investment decisions,
compliance, and reporting. With full asset class and
functional coverage, we offer the only truly front-to-back
platform providing seamless integration across clients’
value chain. Looking to 2025, a key focus for SimCorp will
be to build on our front-office capabilities and invest
significantly into the SaaS platform, with that further
optimizing our technology backbone.
•
•
•
Several front office deals signed in 2022
Continued investment into front office offering
Faster, smarter, actionable analytics and data
points
•
Increasingly leverage partnerships and
embrace APIs
Our platform remains our stronghold, and with its natively
integrated front-to-back functionality, it remains the
backbone of our value proposition for our clients. In 2022,
we have continued to invest a large portion of our R&D
capacity into our platform and the four key offers Data
•
•
Natively integrated alternatives and ESG factors
Workflow automation
Today, our SaaS value proposition is stronger than ever,
designed to remove complexity and offer flexibility to
clients’ operating models. Our SaaS and BPaaS offerings
enable clients to substantially increase competitiveness
through unique possibilities for scaling and simplification
without foregoing the value that only a fully integrated data
foundation can deliver.
SaaS acceleration
- enabling an agile
operating model
A mature SaaS business
•
•
•
•
•
•
+50 SaaS clients
First new tier 1 bank on SaaS
Client cloud transformations
Operations and investment accounting service
Competitive advantage in total cost of ownership
Building competitive and profitable SaaS business,
further enabled by strong BPaaS service
Use the full potential of infrastructure as code
The issue now faced by clients is that of addressing the
fundamental question of which mission critical infra-
structure serves them best in the next 10-15 years. As a
result, many are now advancing their evaluations of which
underlying technology platform they need to continually
evolve their business. To cater for that, we continue to
invest in our engineering platform and the extended use of
technology to further scale and accelerate our innovation
speed, with that continue to create value for clients and
their needs – today and as they evolve.
In 2019, we identified a series of strategic opportunities,
marking the beginning of our journey to become a full
technology-enabled services provider, and since then we
have remained fully committed to execute on this strategy.
With the implementation of our operating model well
progressed in 2022, we are now a more outcome-focused
partner to our clients, delivering value through our full SaaS
platform and substantial BPaaS engine.
•
SimCorp Annual Report 2022
Management report
Strategy update 2022
17
Through our platform, we offer interoperability and
Ecosystem scaling
– the power of open
unparalleled optionality, while also leveraging technology
partnerships such as Microsoft Azure for cloud solutions and
Snowflake for data solutions. Through that, we offer
enhanced competitiveness rooted in strong native solution
coupled with a truly open platform and seamless ecosystem.
The power of open
•
Curated fintech partners in functional areas where
differentiation adds real value
•
•
Fintech partnerships for innovation and optionality
Extended offering and market reach via servicing
partnerships and joint ventures
Interoperability with financial ecosystem such as
custodians
Our architecture is based on a core conviction that openness
offers improved choice, flexibility and innovation. We call it
“the power of open”, and that mindset is deeply embedded
into our offerings, ultimately designed to play a key role in
clients’ wider technology ecosystems.
In doing so, we adopt external innovation to strengthen our
own offering. Providing clients with the best of both worlds,
we have combined state of the art technology and
integrated partner solutions in the SimCorp Platform,
offering the market the full depth of our platform along with
third-party innovation. Combined with joint ventures and
channel partnerships, our ecosystem scaling strengthens
our core value proposition.
•
•
Expanding our partnership channels
From open innovation with fintech partners, co-creation
with clients, and connectivity with many players in the
broader capital markets ecosystem, our strategic focus on
creating a truly open platform remains integral to our
strategy and our value proposition.
SimCorp Annual Report 2022
Management report
Case: ADIA
18
Case: ADIA
ADIA leverages technology
to increase operational agility
and efficiency
With more than 40 years of experience, the Abu
Dhabi Investment Authority (ADIA) is one of the
world’s leading institutional investors.
its creation in 1976, and we recognize that the
pace of change today is faster than ever before.
To sustain success in this dynamic environment,
we have pursued numerous initiatives aimed at
increasing agility and efficiency, including the
adoption of new technologies to build new
operational capabilities” - ADIA
ADIA continually assesses how the external
environment, and the business of investing is
changing, looking beyond passing trends and
market cycles to focus on how ADIA can evolve
and prepare for the future.
A core element of this ongoing, multi-year
project has been to develop a operating model
powered by a cloud infrastructure and services
to help scale and secure investment operations.
SimCorp's SaaS platform plays an important
part in ADIA’s consolidation of its operations
across multiple asset classes, with its data
management services ensuring high quality data.
This long-term outlook requires an operating
model that embraces the latest technology to
enable greater agility, scale and efficiency.
“ADIA has continued to adapt to the evolving
nature of the global investment landscape since
SimCorp Annual Report 2022
Management report
19
ADIA expects to achieve significant optimization in
IT administration, development and testing time.
and optimizing the overall investment transaction
technology architecture. A prerequisite for those
objectives is a solid data foundation across all
asset classes with a modern cloud infra-
In doing so, ADIA aims to continually intensify the
pace and agility of execution, while simplifying
structure that facilitates ongoing innovation.
“ADIA has continued to adapt to the
evolving nature of the global investment
landscape since its creation in 1976, and
we recognize that the pace of change
today is faster than ever before. To sustain
success in this dynamic environment,
we have pursued numerous initiatives
aimed at increasing agility and efﬁciency,
including the adoption of new technolo-
gies to build new operational capabilities”.
ADIA
Read more about our services here
https://www2.simcorp.com/our-services
SimCorp Annual Report 2022
Management report
Outlook
20
Outlook
Mid-term financial target – returning to
record-high profitability
The current transformation to a full-scale SaaS provider is
materially changing the revenue, cost and profitability
structure of the company. The mid-term financial target is
to generate double-digit average growth rates and return to
record-high profitability (above 28% EBIT-margin).
The drivers of the SaaS gross margin are a combination of
both time and number of clients (scale). By investing in
product enhancements and automation, costs related to
infrastructure and managed services reduce. This enables
service of a growing client base with fewer FTEs per client,
while maintaining the highest service quality.
This development represents a key milestone for achieving
record-high profitability such that the initial negative impact
from the adverse revenue mix is more than offset by a
steadily increasing SaaS gross margin.
Revenue acceleration and operating leverage
The growth potential stems from the development of the
core platform combined with expansion opportunities in
SaaS and BPaaS offerings. SaaS and BPaaS clients initially
require higher cost to serve while building capabilities and
scale. The larger share of revenue from SaaS and BPaaS
combined with accelerated investments to build scale are
drivers of the current profitability development.
The investments in SaaS are enabling growth potential
across the strategic pillars. Additional investments in Front
Office and the revamp of the commercial organization are
key enablers for growth in SimCorp’s core stronghold, full
front-to-back functionality deals. The increasing growth
momentum is evidenced by two large and front-to-back
deals signed in Q4 2022, in EMEA and US respectively.
The five key profitability drivers of the current
transformation can be summarized as follows:
These negative margin drivers are targeted to be more than
offset by future scale and efficiency in the SaaS and BPaaS
offerings combined with an acceleration of revenue growth.
Founded in these drivers, SimCorp targets to return to
record-high profitability at a significantly higher revenue
level.
The SaaS investments will enable SimCorp to accommodate
the continued market demand for cloud solutions and
tech-enabled services. SimCorp continues to target new
clients within the SaaS and BPaaS offerings, upsell of
additional functionalities and more than 10 conversions of
current on-premise customers to the SaaS platform per
year.
1) Higher share of revenue from SaaS and BPaaS
-
offerings (unfavorable gross margin mix)
2) Accelerated investments in the transformation
-
(building automation and scalability)
3) Introduction of cost efficiency program
Key drivers to reach record-high profitability
Improving gross margin of SaaS services
+
+
Finally, SimCorp is entering new Fintech partnerships and
strives to grow from ecosystem scaling growth and
expanding offering and market reach. In January 2023,
SimCorp’s Joint Venture with Challenger was formally estab-
lished with an already growing pipeline of customers.
4) Increasing scale and profitability of SaaS and
The gross margin of the SaaS offering has steadily improved
since SimCorp onboarded its first SaaS customer. Today,
SimCorp has made the offering profitable through initial
automation and experience but with significant further
potential.
BPaaS offerings
5) Revenue acceleration (and operating leverage)
+
SimCorp Annual Report 2022
Management report
Outlook
21
Outlook for the financial year 2023
The financial outlook for 2023 represents the ongoing SaaS
transformation, with accelerated transformation investments,
and the initiation of a new cost efficiency programme. The
investments are expected to generate solid business growth
in 2023, while the profitability deterioration from investments
is roughly offset by the cost efficiency program. SimCorp is
building scale and is targeting to return to increasing margin
development and operating leverage in coming years.
will be partly offset by the current inflationary environment,
including high cost increases related to salaries, cloud storage
and offices. More revenue is also expected to be derived from
SaaS and BPaaS with relatively lower gross margin and,
simultaneously, SimCorp is ramping up and front-loading
new SaaS and BPaaS customers (such as Intech) creating a
time lag between cost incurred and revenue generation.
EBIT-margin bridge (local currencies and excl. special items)
+1% to 3% -1% to -2%
-2.5%
24.2%
+4.0%
21-24%
-3.5%
Finally, SimCorp’s accelerated investments are expected to
add costs corresponding to 3.5%-points to the current
run-rate. These investments are more than offset by the
cost efficiency program targeting EUR 25 million of in-year
cost reductions, equivalent to approximately 4%-points
EBIT-margin effect.
Forward-looking ARR was EUR 338.5 million by the end of
2022, representing organic growth of 11.7% compared to
ARR by the end of 2021. The business is expected to
continue to grow at accelerating growth rates throughout
2023, ending with forward-looking ARR growth of 12-17%
by the end of 2023.
Based on the exchange rates at the end of January 2023, it
is estimated that the foreign exchange rate development
will impact revenue negatively by 1-2% and EBIT-margin
negatively by 0-1%.
With the strong finish of 2022, SimCorp enters 2023 with
signed revenue of EUR 364 million for 2023, compared with
EUR 323 million at the same time in 2022. Ratable revenue
is expected to grow by 6-11% in 2023. Reported revenue
growth is expected to be in line with Ratable revenue growth.
Exchange rates
The EBIT-margin is impacted by a number of factors. The
positive impact from revenue growth (operating leverage)
Exchange rates
ARR (forward-looking) development during 2022
Main currencies
EUR per 100
January 31,
2023
Average
rates 2022
Average
rates 2021
(EUR million)
36
339
USD
CAD
AUD
SGD
GBP
CHF
NOK
SEK
92.31
68.63
64.62
70.09
113.54
99.68
9.17
95.43
73.05
66.04
69.17
117.03
99.90
9.90
84.65
67.52
63.39
63.02
116.52
92.60
9.85
303
Financial Outlook for 2023
All numbers in local currencies,
excluding special items
2022 2023 Financial
Achieved
Outlook
12-17%
6-11%
Forward-looking ARR growth, (%)
Ratable revenue growth (%)
Total cost growth (incl. investments) (%)
EBIT-margin (%)
11.7%
5.3%
14.3%
24.2%
7-15%
ARR end
of 2021
Net new wins,
net expansions,
indexation & other
ARR end
of 2022
8.81
9.39
9.85
21-24%
SimCorp Annual Report 2022
Management report
Business unit review
22
Business unit review
EMEA
North America
APAC
SimCorp Sofia
The EMEA business unit performed well
with total revenue increasing by 17%
compared with 2021. Three new SimCorp
Dimension clients were signed, of which
most notable is an asset owner to leverage
on SimCorp’s full front-to-back product
suite across the institution’s entire range of
assets, including public and private
markets. The move to SimCorp will enable
the client more efficient execution of its
global investment strategies, streamlining
and consolidating the institution's solution
landscape and setup - driving efficiency
and ensuring agility. Furthermore, SimCorp
signed a new standalone front-office client
in Luxembourg highlighting SimCorp’s
competitiveness within front office. Finally,
SimCorp signed its first client in Africa in
2022 to automate the client's front-to-back
operations.
After a difficult 2021 due to COVID-19, the
activity in North American business unit has
returned throughout 2022. Total revenue
increased by 5% compared with 2021. SimCorp
signed five new clients in North America in
2022. In the beginning of the year, SimCorp
signed its first Investment Operations Service
(IOS) client with a Canadian Asset manager. In
late 2022, SimCorp signed its second IOS client
with an US based asset manager. The agree-
ments cover the integration of SimCorp's full
lifecycle management service to support all of
Intech's post-trade, performance, compliance,
and IBOR-related activities. Furthermore,
SimCorp signed a new SimCorp Dimension full
front-to-back SaaS client in the US. The client
selected SimCorp in order to modernize its
infrastructure and enabling innovation to
keep up with new investment mandates and
regulatory requirements. In addition, the client
expects to reduce operational complexity and
costs. Finally, a US based asset manager
selected SimCorp for client reporting in order
to reduce operational complexity.
The APAC business units total revenue
increased by 25% y-o-y in 2022 with two
new clients signed. Both of the new clients
signed in 2022 are based in Malaysia and
covers front-to-back delivered as SaaS. The
clients have selected a full front-to-back
SaaS offering that will provide a flexible and
scalable investment monitoring solution with
full transparency on exposure and financial
returns, all consolidated into one automated
platform. SimCorp also signed a strategic
partnership with Australian based investment
manager Challenger to launch a new stand-
alone company. The new company will be
Australia’s first cloud-based front-to-back
investment operations platform, providing
fully integrated investment administration
services for asset managers and owners
across Australia and APAC. Two SimCorp
Dimension clients canceled their contracts,
bringing the total number of clients to 20.
SimCorp Sofia delivered a solid performance
in 2022, driven by continued performance
within professional services mainly focused
by the concentration of IFRS 9 with projects
for several insurance clients. SimCorp Sofia
signed two new clients in 2022 in Italy
confirming the competitiveness of SimCorp
Sofia as the main investment management
system for the Italian insurers. Four clients
canceled their contracts.
EUR million
2022
2021 Change
357.6 17%
EUR million
2022
2021 Change
114.9 5%
EUR million
2022
2021 Change
46.3 25%
EUR million
2022
2021 Change
23.6 0%
Total segment
revenue
Total segment
revenue
Total segment
revenue
Total segment
revenue
418.5
120.1
58.5
23.6
SimCorp Annual Report 2022
Management report
23
Financial
review 2022
2022 review
SimCorp generated revenue of EUR
561.0 million in 2022, an increase of
13.0% compared with 2021 and Annual
Recurring Revenue (ARR) (backward-
looking) of EUR 321.9 million, a growth of
16.1%. The order intake was EUR 190.6
million an increase of EUR 53.0 million or
38.5% compared with 2021, and the
order book increased in 2022 by EUR
36.5 million to EUR 109.5 million,
2022 was characterized by unusually high macroeconomic
turmoil. The increase in inflation and interest rates combined
with the Russian invasion in Ukraine negatively impacted
the business environment and customers from the beginning
of the year. The deal activity was low in the first half of 2022
but improved during the year and ended with a strong
fourth quarter, both with respect to number of deals signed
and revenue.
SimCorp was shocked and saddened by the Russian invasion.
The safety of our employees has been top priority throughout
the year, and SimCorp has offered all the help and support
it can. SimCorp offered relocation to all affected employees
and their families at the outbreak of the invasion and again
during the winter period. SimCorp remains fully committed
to its employees and presence in Ukraine, where SimCorp
has been for the last 15 years.
contributing to positive business growth.
SimCorp generated EBIT of EUR 125.9
million. The EBIT margin was 22.4%.
Financial expectations and results 2022
In local
currencies
Achieved
2022
Annual Report 2021
Feb. 15, 2022
2022 was also a year where additional investments were
made in the SaaS transformation to expand the long-term
business opportunities and further enhance competitiveness.
The investments related predominantly to the SaaS offering
including initiation of technology-enabled services offerings
(BPaaS). As part of the transformation, SimCorp also imple-
mented a large operating model restructuring to change the
Revenue growth
9.4%
12.1%
23.4%
7-12%
ARR (backward-
looking) growth
10-15%
23-26%
EBIT margin
SimCorp Annual Report 2022
Management report
Financial review 2022
24
leadership structure and improve collaboration and
integration of functions.
Datacare order intake was EUR 6.0 million compared with
an order intake of EUR 17.5 million in 2021.
Revenue development (EUR million)
600
500
400
300
200
100
0
Financial expectations and results 2022
SimCorp Dimension license solutions were sold to eight new
clients in 2022, all except one on subscription-based terms,
with a total order intake of EUR 17.0 million, compared with
sales to four new clients in 2021 with a total order intake of
EUR 16.4 million. The average size of initial SimCorp
Dimension license deals decreased from EUR 4.1 million
in 2021 to EUR 2.1 million in 2022. Of the initial SimCorp
Dimension license orders entered into in 2022, three of the
orders were signed in North America, two orders in APAC
and three orders in EMEA.
In the 2021 Annual Report, SimCorp announced 2022
expectations for revenue growth measured in local
currencies of between 7% and 12%, backward-looking ARR
growth of between 10% and 15% and an EBIT margin
measured in local currencies of between 23% and 26%.
During 2022, SimCorp announced that exceptional costs
would impact EBIT with EUR 3 – 5 million related to the
support of our Ukrainian colleagues and with additional
EUR 8 – 10 million in one-off costs related to the operating
model restructuring program. Excluding these costs, the
financial results were in line with expectations.
2018
2019
2020
2021
2022
EUR 93.5 million of the additional order intake was due to
eighteen clients converting their perpetual contracts to
subscription-based license contracts. For the eighteen clients
converting in 2022, the annual subscription-based payments
will be higher than the software updates and support fees
under the perpetual contracts due to the sale of additional
functionality in connection with the conversions, but the
annual software updates and support fees will be around
EUR 15.3 million lower, as the subscription license revenue
under IFRS 15 is recognized up-front on contract completion.
The realised revenue growth measured in local currencies
was 9.4%, backward-looking ARR growth was 12.1% and
EBIT margin before exceptional costs measured in local
currencies was 23.4%. Reported EBIT margin was 22.4%.
The financial guidance and the realized financial results
can be seen in the table on page 23.
EBIT (EUR million) and EBIT margin %
(%)
140
120
100
80
30
25
20
15
10
5
Order intake and order book
60
In 2022, total order intake of EUR 190.6 millon was an
increase of EUR 53.0 million compared with 2021. The
increase was primarily due to higher order intake for
SimCorp Dimension, primarily driven by several significant
deals signed with existing clients.
Total order book increased by EUR 36.5 million from January
1, 2022 to EUR 109.5 million on December 31, 2022. The
order book includes SimCorp license solutions EUR 56.3
million, SimCorp Dimension Client-Driven Development
(CDD) of EUR 9.2 million and EUR 44.6 million related to
subscription services. The order book is a consequence of
40
20
0
0
2018
2019
2020
2021
2022
SimCorp Annual Report 2022
Management report
Financial review 2022
25
income recognition being deferred until certain conditions
are fulfilled or subscription services revenue recognized
over the contract period.
Total contract value outstanding, excluding as a Service
offering, at December 31, 2022, was around EUR 567 million
(December 31, 2021: EUR 423 million), of which around EUR
144 million is payable in 2023 (2021: EUR 107 million
payable in 2022).
2022 revenue (EUR million)
72
561
489
The total value of the installed SimCorp Dimension license
base is EUR 926 million in 2022 compared with EUR 934
million in 2021. The total value of the installed license base
for SimCorp Dimension clients who have an installed license
base above EUR 2 million accounted for 93% of the value of
the total installed license base compared with 92% in 2021.
At the end of 2022, 64 clients covering Dimension, Coric,
and Gain, are as a Service clients on a SaaS solution.
In 2022, six clients canceled SimCorp Dimension and three
clients canceled SimCorp Gain contracts. The annual
software updates and support fee for the canceled
contracts amounted to EUR 4.3 million, equivalent to 0.7%
of 2022 revenue compared with EUR 1.8 million in 2021,
equivalent to 0.4% of 2021 revenue.
The share of subscription-based license agreements in the
installed SimCorp Dimension license base increased from
35% at the end of 2021 to 50% at the end of 2022. In total,
103 (equivalent to 50%) out of 207 SimCorp Dimension
clients are on subscription-based license agreements, while
the remaining 104 SimCorp Dimension clients are on a
perpetual license agreement. In comparison, 79 (equivalent
to 38%) out of 206 SimCorp Dimension clients were on
subscription-based license agreements in 2021.
Reported
revenue
Ratable
revenue
Upfront
revenue
recognition
impact
At year-end 2022, the average length of subscription-based
license agreements at signing was around six years for
SimCorp Dimension, around five years for SimCorp Coric,
around six years for SimCorp Gain, and approximately one
year for SimCorp Sofia. The remaining average length before
renewal was 3.7 years for SimCorp Dimension, 2.7 years
for SimCorp Coric, 5.6 years for SimCorp Gain, and around
one year for SimCorp Sofia as most agreements are
renewed annually at the beginning of the year.
SimCorp Annual Report 2022
Management report
Financial review 2022
26
Income statement 2022
License revenue split
Revenue
On-premise software updates and support revenue was
EUR 168.4 million or 2.3% higher than last year. Growth in
on-premise software updates and support from new and
existing customers is partly offset by customer conversions
from on-premise to SaaS.
SimCorp is transforming from a traditional Software company
to a full-scale Software-as-a-Service provider. As a conse-
quence of the transformation to a SaaS company, SimCorp
will steadily change its business focus from license and
maintenance revenue to subscription, hosting and technology-
enabled services. SimCorp is converting perpetual license
contracts to SaaS subscription agreements, and the gradual
transition into a full SaaS business will inherently be a
multi-year journey. Therefore SimCorp has changed it
revenue segmentation to reflect the transformation.
Conversions 46%
(2021: 21%)
11%
Additional regular
license 19%
(2021: 32%)
13%
Renewals 13%
(2021: 14%)
Total SaaS revenue was EUR 88.7 million an increase of
EUR 21.0 or 31.1% compared with 2021 mainly driven by
SaaS services with the completion and implementation of
new client installations and new functionalities to existing
clients. SaaS revenue consists of SaaS license sales and
SaaS Services including software updates and support.
SaaS License sales was EUR 17.0 million a decline of EUR
0.7 million compared with last year.
46%
Initial license 11%
(2021: 16%)
Other license 11%
(2021: 17%)
19%
11%
In 2022, the ARR was EUR 321.9 million, which was equiva-
lent to 57.4% of total revenue. In 2021, the ARR was EUR
277.4 million, which was equivalent to 55.9% of total
revenue. The ARR growth in 2022 was 16.1% in EUR, and
12.1% in local currencies. The current ARR is based on the
backward-looking revenue. In 2023, SimCorp will report on a
forward-looking ARR (see definition on page 63).
Revenue
Share of
revenue
2022
Share of
revenue
2021
Revenue
growth local
currencies
Revenue
growth
EUR '000
2022
14,045
117,612
8,411
2021
SimCorp generated total revenue of EUR 561.0 million in
2022 compared with EUR 496.3 million in 2021, equivalent
to an increase of 13.0%. Exchange rate fluctuations for the
period had a positive impact on revenue of 3.6%. Measured
in local currencies, revenue thus increased organically by 9.4%.
On-premise initial licenses
On-premise additional licenses
On-premise other licenses
On-premise software updates and support
Total on-premise revenue
SaaS initial licenses
2.5%
21.0%
1.5%
15,679
84,107
12,403
164,645
276,834
5,854
3.2%
16.9%
2.5%
-10.4%
39.8%
-32.2%
2.3%
-4.6%
37.4%
-33.5%
-1.2%
8.9%
168,367
308,435
3,831
30.0%
55.0%
0.7%
33.2%
55.8%
1.2%
11.4%
-34.6%
-7.3%
55.0%
43.6%
31.1%
7.9%
Total on-premise revenue was EUR 308.4 million, an increase
of EUR 31.6 million or 11.4% compared with 2021. On-premise
revenue consists of on-premise license sales from initial
licenses to new clients and additional licenses to existing
clients and on-premise software updates and support revenue.
-39.2%
-14.9%
45.5%
36.8%
24.2%
3.9%
SaaS additional licenses
SaaS other licenses
7,784
1.4%
8,399
1.7%
5,371
1.0%
3,466
0.7%
Saas services incl. software updates and support
Total SaaS revenue
71,704
88,690
163,843
560,968
12.8%
15.9%
29.1%
100.0%
49,944
67,663
151,777
496,274
10.1%
13.7%
30.5%
100.0%
Professional services
On-premise license sales was EUR 140.1 million corre-
sponding to a growth of 25.0% compared with 2021.
Total revenue
13.0%
9.4%
SimCorp Annual Report 2022
Management report
Financial review 2022
27
SaaS Services including software updates and support was
EUR 71.7 million corresponding to a growth of 43.6%
compared with last year driven by completion and imple-
mentation of new client installations and new functionalities
to existing clients.
signed revenue for the full year of EUR 364 million – an
increase of EUR 41 million or 12.6% compared with the
beginning of 2022.
The increase in operating costs was primarily a result of
increased staffing and an increase of around 5% in annual
salaries. The average number of full-time employees
increased by 196 or 10.5% from 1,871 in 2021 to 2,067 in
2022. The number of employees (headcount) was 2,245 at
Costs
Total operating costs and other operating costs (including
depreciation and amortization) increased by 16.8% from EUR
364.6 million in 2021 to EUR 426.0 million excluding EUR 9.9
million in special items. Currency fluctuations decreased the
total operating costs by 2.5%. Measured in local currencies,
the operating costs increased by 14.3% compared with 2021.
the end of 2022 compared with 1,998 at the end of 2021, an
increase of 247 employees. 67% of SimCorp’s total operating
costs were directly related to employees compared with 70%
in 2021.
Professional Services which now mainly consists of imple-
mentation of new or existing clients was EUR 163.8 million
compared to EUR 151.8 million in 2021.
Revenue distribution
Cost of sales increased by 16.0% to EUR 228.6 million.
Measured in local currencies, the organic increase in cost
of sales was 12.7%. The increase was partly related to an
increase in the new SaaS operations. Cost of sales
The ten largest clients generated 25% (2021: 23%) of SimCorp’s
total revenue. In 2022, the largest client accounted for 5.8%
(2021: 4.0%) of the revenue. SimCorp entered 2023 with
represented 40.7% of revenue compared with 39.7% in 2021.
Research and development costs increased by 15.8% to EUR
106.3 million. Measured in local currencies, research and
development costs increased by 15.7%. The increase was
due to continued investment in our offerings. Research and
development costs were 18.9% of revenue in 2022,
compared with 18.5% in 2021.
Operating costs
Sales and marketing costs increased by 20.6% to EUR 60.6
million. Measured in local currencies, sales and marketing
costs increased by 15.9%. The cost increase primarily relates
to higher staff costs, user meetings, and higher travel and
meeting activities. Sales and marketing costs represented
10.8% of revenue compared with 10.1% in 2021.
Costs
excl. special
items
Reported
costs
FY 2022
Special
items
FY 2022
Growth local
currencies
FY 2022
Costs
FY 2021
Growth
FY 2022
EUR million
FY 2022
Cost of sales
228.6
107.0
61.5
35.9
2.9
-
0.7
0.9
5.4
2.9
9.9
228.6
106.3
60.6
30.5
-
197.0
91.8
50.2
25.6
-
16.0%
15.8%
20.6%
19.2%
-
12.7%
15.7%
15.9%
18.8%
-
Research and development costs
Sales and marketing costs
Administrative expenses
Other operating costs
Total operating costs
Administrative expenses increased by 19.2% to EUR 30.5
million. Measured in local currencies, administrative
expenses Increased by 18.8%. Administrative expenses were
5.4% of revenue compared with 5.2% in 2021.
435.9
426.0
364.6
16.8%
14.3%
SimCorp Annual Report 2022
Management report
Financial review 2022
2022 EBIT margin
28
Other operating costs of 2.9 million occurred in 2022, are
related to help and support for our Ukrainian colleagues.
tax was EUR 99.3 million compared with EUR 110.0 million
in 2021. After the net effect of foreign currency translation
differences and remeasurements of defined benefit plans
of EUR 0.1 million, the total comprehensive income amounted
to EUR 99.4 million against EUR 114.0 million in 2021.
1.8%
24.2%
-0.8%
23.4%
Profitability
22.4%
SimCorp generated an EBIT of EUR 125.9 million compared
with EUR 132.4 million in 2021, a decrease of EUR 6.5 million.
The reported EBIT margin was 22.4% compared with the
EBIT margin of 26.7% in 2021. When measured in local
currencies, the EBIT margin was 21.6% in 2022.
Statement of financial position
SimCorp had total assets of EUR 604.3 million at December
31, 2022 compared with EUR 526.3 million at December 31,
2021. The increase of EUR 78.0 million was primarily related
to changes in contract assets of EUR 71.9 million. Cash
holdings decreased by EUR 7.2 million from EUR 47.7 million
at December 31, 2021 to EUR 40.5 million.
EBIT adjusted for special items (EUR 9.9 million), covering
costs related to the operating model programme for the trans-
formation to a SaaS company, EUR 7.0 million and support
of our Ukrainian colleagues EUR 2.9 million, was EUR 135.7
million. The adjusted EBIT margin was 24.2% and measured
in local currencies, the adjusted EBIT margin was 23.4%.
Reported
Special
items
Reported
excl.
special
items
FX
impact
Local
currencies
excl. special
items
Compared with December 31, 2021 contract assets
increased by EUR 71.9 million from EUR 221.0 million to
EUR 292.9 million. New and additional subscription-based
licenses added EUR 133.9 million to contract assets, foreign
exchange adjustments added EUR 6.6 million, and finance
income recognized added EUR 2.2 million. Reductions in
2022 stem from invoiced subscription-based license fees of
EUR 70.8 million. There was no change to expected credit
loss provision in 2022.
2021 EBIT margin
Share of profit after tax in associates of EUR 0.1 million,
financial income of EUR 3.2 million, and financial expenses
of EUR 1.0 million resulted in a net financial income of EUR
2.3 million in 2022 compared with a net financial income of
EUR 5.0 million in 2021. The net financial income in 2022
and 2021 were primarily related to foreign exchange
adjustments.
0.2%
26.9%
26.7%
Receivables increased by EUR 15.9 million from EUR 96.5
million at December 31, 2021 to EUR 112.4 million. In
accordance with IFRS 9 ‘Financial Instruments’, SimCorp
has made an expected credit loss provision of EUR 1.3
million related to contract assets and receivables at
December 31, 2022 (December 31, 2021: EUR 1.4 million).
Profit before tax was EUR 128.1 million against EUR 137.4
million in 2021. The estimated tax charges for 2022 amounted
to EUR 28.9 million against EUR 27.4 million in 2021. The
effective tax rate was 22.5% compared with 20.0% in 2021,
the effective tax rates were impacted by refunds of with-
holding taxes related to prior years. The effective tax rate of
22.5% was slightly lower than the expectation announced in
the 2021 Annual Report of an expected effective tax rate
for 2022 of between 23% and 25%. The Group profit after
Reported
FX
impact
Organic/
Local
currencies
The Group’s total non-current assets were EUR 142.4
million compared with EUR 147.3 million on December 31,
2021. Goodwill was EUR 61.3 million at December 31, 2022
SimCorp Annual Report 2022
Management report
Financial review 2022
29
compared with EUR 61.6 million at December 31, 2021.
No impairment of goodwill was made in 2022.
Changes in contract assets were EUR 70.6 million compared
with EUR 44.9 million in 2021, due to higher subscription-
based license revenue in 2022 than in 2021. Changes in
working capital were negative at EUR 4.7 million. Payment of
income taxes amounted to EUR 22.3 million, against EUR
23.3 million in 2021. Other non-cash items of EUR 4.0
million were primarily related to unrealized exchange gains
and other adjustments. There was a net cash outflow of
EUR 2.8 million from investing activities compared with EUR
5.7 million in 2021.
Treasury shares
In 2022, SimCorp purchased 269,795 treasury shares with
a nominal value of DKK 1 at an average price of DKK 514.47
per share, totaling EUR 20.0 million. SimCorp delivered
134,558 treasury shares with a nominal value of DKK 1 on
the vesting of restricted stock units.
The carrying amount of acquired software was EUR 8.1
million compared with EUR 9.8 million at the end of 2021
and the value of client relationships was EUR 19.6 million
compared with EUR 21.2 million at the end of 2021. The
decreases were due to amortization.
Furthermore, 2,532 treasury shares will be delivered after
publication of this annual report as remuneration to the
Board of Directors in accordance with a resolution adopted
by shareholders at the Annual General Meeting 2022.
The carrying amount of leasehold assets was EUR 38.3
million compared with EUR 40.1 million at the end of 2021.
The decreases were due to amortization. Other property,
plant, and equipment amounted to EUR 3.2 million compared
with EUR 3.6 million at the end of 2021. Other financial assets
amounted to EUR 4.8 million. Deferred tax assets were EUR
2.8 million compared with EUR 3.1 million at the end of 2021.
Free cash flow (cash flow from operations reduced by
CAPEX and lease payments) was EUR 47.2 million compared
with EUR 78.6 million in 2021, a decrease of EUR 31.4
million. Cash conversion, defined as free cash flow divided
by profit for the year, was 48% compared with 71% in 2021.
The cash conversion of 48% was below the expectation
announced in the 2021 Annual Report of an expected cash
conversion for 2022 of between 70% and 80%.
SimCorp’s total liabilities were EUR 228.8 million at
December 31, 2021, compared with EUR 203.2 million a year
earlier. The increase relates mainly to higher trade payables.
Free cash flow/ Cash flow to shareholders (EUR million)
100
The lower cash conversion was primarily due to lower profit
for the year and larger effect on the cash generation from
change in contract assets (higher effect of IFRS 15 upfront
revenue recognition in 2022 compared to 2021).
Changes in equity
75
50
25
0
The Group’s equity amounted to EUR 375.6 million on
December 31, 2022. This was an increase of EUR 52.5
million compared with December 31, 2021. Equity was
reduced by the purchase of treasury shares of EUR 20.0
million and dividends of EUR 39.9 million. Equity was
increased by comprehensive income in 2022 of EUR 99.4
million as well as effects of share-based remuneration of
EUR 12.9 million, net of tax.
Cash used in financing activities in 2022 of EUR 64.8 million
related to dividend payments of EUR 39.9 million, purchase
of treasury shares of EUR 20.0 million, repayment of lease
liabilities of EUR 11.7 million, proceeds from credit facilities
/ loans of EUR 26.9 million and repayment from credit
facilities of EUR 20.1 million. Cash used in financing activities
in 2021 of EUR 91.0 million was dividends of EUR 40.1
million, purchase of treasury shares of EUR 40.1 million, and
repayment of lease liabilities of EUR 10.8 million in 2021.
2018
2019
2020
2021
2022
Cash flow statement
Operating activities generated a net cash inflow of EUR 60.3
million against EUR 90.7 million last year.
Free cash flow
Dividends
Purchase of treasury shares
SimCorp Annual Report 2022
Management report
Financial review 2022
30
At December 31, 2022, SimCorp held 1,228,084 treasury
shares with a nominal value of DKK 1 each (3.0% of the total
share capital) at a cost of EUR 98.1 million and a market
value of EUR 79.0 million. At December 31, 2021, SimCorp
held 1,072,118 treasury shares with a nominal value of DKK
1 each (2.6% of the total share capital) at a cost of EUR 85.6
million and a market value of EUR 103.1 million.
The parent company SimCorp A/S
In 2022, the parent company generated revenue of EUR
263.4 million, an increase of EUR 13.2 million compared
with 2021. The parent company received dividends totalling
EUR 31.5 million from subsidiaries in 2022 compared with
EUR 20.3 million in 2021. Profit before tax for the year was
EUR 108.5 million against EUR 110.7 million in 2021.
Income tax amounted to EUR 16.1 million compared with
EUR 15.8 million in 2021. Net profit was EUR 92.4 million
compared with EUR 94.9 million in 2021. Equity increased
from EUR 291.2 million at December 31, 2021 to EUR 336.7
million at December 31, 2022.
Profit allocation
The Board of Directors intends to recommend to shareholders
at the Annual General Meeting 2023 that, of the total
recognized comprehensive income of EUR 92.5 million,
dividends of EUR 39.7 million be declared, representing
DKK 7.50 per share of DKK 1, and that EUR 52.7 million be
transferred to retained earnings.