SimCorp — Interim / Quarterly Report 2022

Aug 12, 2022

SimCorp
Company Announcement no. 36/2022
12 Aug 2022
Company reg. no: 15 50 52 81

Company Announcement

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

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.

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Company Announcement

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/Bl5af59555f28f4c2fbfec287365ed8dcb

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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Company Announcement

3

Financial highlights and key ratios for the SimCorp Group

EUR '000	2022 Q2	2021 Q2	2022 H1	2021 H1	2021 FY
Income Statement
Revenue	116,000	118,755	230,713	228,732	496,274
Earnings before interest, tax, depreciation, and amortization (EBITDA)	10,054	33,873	29,206	61,743	147,796
Operating profit (EBIT)	6,218	29,959	21,745	53,885	132,417
Financial items, net	4,965	-1,302	7,135	1,567	5,001
Profit before tax	11,183	28,657	28,880	55,452	137,418
Profit for the period	9,267	21,272	22,588	41,500	109,992
Balance Sheet
Share capital	5,441	5,441	5,441	5,441	5,441
Total equity	297,047	268,817	297,047	268,817	323,107
Bank loan / revolving credit facility	13,442	-	13,442	-	-
Intangible assets	90,778	94,182	90,778	94,182	92,691
Property, plant, and equipment	46,026	44,584	46,026	44,584	43,692
Receivables	115,007	83,077	115,007	83,077	96,543
Contract assets	217,557	187,344	217,557	187,344	221,000
Cash and cash equivalents	31,997	49,431	31,997	49,431	47,692
Total assets	528,867	479,992	528,867	479,992	526,312
Cash Flow
Net cash from operating activities	12,135	19,539	35,307	61,980	90,696
Net cash used in investing activities	-670	-417	-1,369	-894	-5,675
Net cash used in financing activities	-29,396	-21,402	-49,897	-64,920	-90,996
Free cash flow	10,134	16,511	30,225	55,863	78,628
Investment in property, plant, and equipment	-309	381	263	793	1,259
Change in cash and cash equivalents	-17,931	-2,280	-15,959	-3,834	-5,975
Employees
Number of employees at the end of the period	2,105	1,914	2,105	1,914	1,998
Average number of employees - FTE	2,029	1,861	2,003	1,855	1,871
ARR
Annual Recurring Revenue (ARR) Last Twelve Months (EUR '000)	294,426	263,059	294,426	263,059	277,352
Financial Ratios
Revenue growth (%)	-2.3	11.3	0.9	9.1	8.8
Organic revenue growth (%)	-6.1	12.7	-2.5	11.1	8.7
ARR growth (%)	11.9	9.4	11.9	9.4	10.5
ARR as share of total revenue (%)	59.1	55.4	59.1	55.4	55.9
EBIT margin (%)	5.4	25.2	9.4	23.6	26.7
ROIC (return on invested capital) (%)	11.1	46.1	16.3	41.1	44.7
Receivables turnover ratio	7.4	9.2	7.4	8.9	8.9
Equity ratio (%)	56.2	56.0	56.2	56.0	61.4
Return on equity (%)	12.6	32.5	13.2	29.3	35.4
Share Performance
Earnings per share - EPS (EUR)	0.24	0.54	0.57	1.05	2.76
Diluted earnings per share - EPS-D (EUR)	0.23	0.53	0.57	1.04	2.74
Cash flow per share - CFPS (EUR)	0.30	0.49	0.89	1.55	2.27
Number of Shares
Average number of shares (m)	39.3	39.7	39.4	39.7	39.9
Average number of shares - diluted (m)	39.6	40.0	39.7	39.9	40.1
EUR/DKK rate of exchange at end of period	7.4392	7.4362	7.4392	7.4362	7.4365

Please refer to the definition of ratios on page 67 of the Annual Report 2021. The interim report is unaudited and has not been reviewed by external auditors.

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Company Announcement

Management's report for the six months ended June 30, 2022

Update on the situation in Ukraine

The situation in Ukraine is similar to what we reported in Q1 2022. All our thoughts are with our more than 240 Ukrainian colleagues, more than 100 external consultants, and the Ukrainian people at this difficult time. SimCorp remains committed to its employees and our presence in Ukraine, where SimCorp has been for the last 15 years. The safety of the employees has been the top priority, and SimCorp has offered all the help and support it can, including relocation to all of our employees and their families. At the end of Q1, 2022, 87 of our Ukrainian colleagues (and families) had moved to other SimCorp locations, primarily Warsaw. At the end of Q2, 2022, some of these have moved back to Ukraine, and we have started hiring new employees in Ukraine again.

In Q2 2022, we incurred exceptional costs of EUR 1.3m in addition to the EUR 0.8m incurred in Q1 2022 (H1 2022: EUR 2.1m) to help and support our Ukrainian colleagues and their families, and we foresee total exceptional costs in 2022 of EUR 3-5m.

SimCorp has experienced, and may continue to experience, some interruptions in Product Development capacity, but SimCorp does not foresee any material impact on operations or the business in the future. SimCorp has strong business continuity plans in place. Furthermore, all Dimension IP rights are owned in Denmark and all work is stored in Denmark or elsewhere outside of Ukraine.

From a business perspective, SimCorp doesn't have any offices, operations, or clients in either Russia or Belarus.

Development in sales and orders

In Q2 2022, the total order intake was EUR 17.0m compared with EUR 30.2m signed in the same period last year. The lower order intake was primarily due to timing of deals as in 2022 some deals have shifted from Q2 to H2, and Q2 2021 was relatively strong.

One new SimCorp Sofia deal was signed in Italy in Q2 2022 with revenue and order intake to be recognized in Q3 2022.

A number of additional SimCorp Dimension license contracts were signed in Q2 2022, and one SimCorp - client communication solution (Coric) subscription agreement was signed with an existing SimCorp Dimension client.

In Q2 2022, SimCorp and Challenger, a leading Australian investment management firm, signed a non-binding memorandum of understanding in relation to a strategic partnership to launch a new stand-alone company to provide investment administration services to Challenger, Fidante Partners and third-party clients.

As part of the agreement, Challenger will move its current on-premise SimCorp platform to SimCorp's cloud-based solution, and the new company will be powered by SimCorp's full technology and service stack, including data management, client communications as well as Investment Accounting Services. The additional services are expected to be acquired in H2 2022 and are therefore not reflected in the H1 numbers.

Additional SimCorp Dimension licenses were acquired by Challenger in Q2 2022, and the existing perpetual license agreement was converted to a subscription license. These are reflected in the H1 numbers.

In Q2 2022, there was one conversion from a perpetual to a subscription license that increased additional license revenue by EUR 5.6m and order intake by EUR 5.7m compared with one conversion from perpetual to subscription-based licenses in Q2 2021, that positively impacted additional license revenue by EUR 3.7m and order intake by EUR 3.9m.

In H1 2022, order intake was EUR 43.0m compared with EUR 42.8m in the same period last year. In total, two initial subscription-based SimCorp Dimension license contracts and two SimCorp Sofia agreement were signed. In addition, three new clients were signed through our existing outsourcing partners, and three Investment Accounting Services (IAS) deals, were signed and wentlive.

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Company Announcement

Total order book was EUR 81.7m at June 30, 2022, which is an increase of EUR 29.6m compared with the order book at June 30, 2021 of EUR 52.1m. Compared with December 31, 2021, the order book increased by EUR 8.8m. The increase compared with December 31, 2021 was primarily due to renewal license sales signed in H1 2022 which will only be revenue recognized in H2 2022 and in later years once the current term expires.

Included in the order book is SimCorp Dimension Client-Driven Development (CDD) of EUR 11.2m (June 30, 2021: EUR 11.0m) related to orders where income will be recognized when the software is delivered, and subscription services orders of EUR 33.1m (June 30, 2021: EUR 25.1m) where the income will be recognized over the term of the agreement commencing with the start of service delivery.

SimCorp licenses, quarterly order intake and order book

Order intake and order book include initial licenses to new clients as well as additional licenses to existing clients. The order book is the total license value of signed license agreements, including Client-Driven Development (CDD) orders, that have not yet been recognized in income, and the order book includes subscription services such as Digital Engagement Portal, Data Management Services (Datacare), Investment Accounting Services (IAS), and Regulatory Reporting Platform (RRP) that are recognized over the term of the subscription service.

Revenue

Q2 2022 reported revenue of EUR 116.0m was a decrease of 2.3% relative to a relatively strong Q2 2021, where we signed two significant new clients. Measured in local currencies, the organic decrease was 6.0%.

H1 2022 reported revenue of EUR 230.7m was an increase of 0.9% relative to H1 2021. Measured in local currencies, the organic revenue decreased by 2.5%.

The currency impact on revenue growth is shown below:

Q2 2022 revenue growth

Q2 2021 revenue growth

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Company Announcement

H1 2022 revenue growth

H1 2021 revenue growth

The development and distribution of quarterly revenue is shown below:

Revenue

Q2 Revenue EURm	Revenue Q2 2022	Share of revenue Q2 2022	Revenue Q2 2021	Share of revenue Q2 2021	Revenue growth	Organic revenue growth in local currencies
Licenses - initial sales	1.1	0.9%	13.8	11.6%	-92.4%	-92.7%
Licenses - additional sales	14.6	12.6%	10.9	9.2%	34.5%	28.1%
Software updates and support	47.0	40.5%	44.2	37.2%	6.4%	3.2%
Professional services	43.3	37.3%	41.0	34.5%	5.6%	1.2%
Hosting and other fees	10.0	8.7%	8.9	7.5%	12.8%	7.8%
Total revenue	116.0	100.0%	118.8	100.0%	-2.3%	-6.0%
H1 Revenue EURm	Revenue H1 2022	Share of revenue H1 2022	Revenue H1 2021	Share of revenue H1 2021	Revenue growth	Organic revenue growth in local currencies
---	---	---	---	---	---	---
Licenses - initial sales	4.1	1.8%	17.3	7.6%	-76.1%	-76.9%
Licenses - additional sales	27.8	12.0%	25.6	11.2%	8.3%	3.8%
Software updates and support	93.4	40.5%	89.0	38.9%	4.9%	2.3%
Professional services	85.2	36.9%	81.4	35.6%	4.7%	0.8%
Hosting and other fees	20.2	8.8%	15.4	6.7%	31.6%	26.5%
Total revenue	230.7	100.0%	228.7	100.0%	0.9%	-2.5%

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Company Announcement

In Q2 2022, revenue recognized from initial and additional license sales was EUR 15.7m, a decrease of EUR 9.0m, or a decrease of 36.4% compared with Q2 2021. The decrease was due to low new license revenue in Q2 2022 compared with a relatively strong Q2 2021, where three new SimCorp Dimension orders and one new SimCorp Client Communication (Coric) order were signed.

In H2 2022, revenue recognized from initial and additional license sales was EUR 31.9m, a decrease of EUR 11.0m, or 25.7% compared with H2 2021. Currency fluctuations impacted total license fee positively by 3.1%. Measured in local currencies, the decrease was 28.8%.

Initial license sales in H1 2022 of EUR 4.1m was a decrease of 76.1%, and 76.9% measured in local currencies compared with H1 2021, as some deals shifted to H2.

Reported additional license sales in H1 2022 increased by 8.3%, and 3.8% measured in local currencies.

In Q2 2022, there was one conversion from perpetual to subscription-based license contract (Q2 2021: one conversion), which accounted for EUR 5.6m compared with EUR 3.7m in Q2 2021. Revenue from renewals decreased from EUR 1.2m in Q2 2021 to EUR 0.9m, primarily due to the relatively high impact from SimCorp Dimension and SimCorp's Client Communication solution (Coric) renewals in North America in Q2 2021.

In Q2 2022, revenue from conversions accounted for around 38% (Q2 2021: 34%) of the total additional license sales. Renewals accounted for around 6% (Q2 2021: 11%), and additional regular license sales accounted for around 56% (Q2 2021: 55%). Additional regular license sales of EUR 8.1m was EUR 2.2m higher than in Q2 2021.

In H1 2022, the additional order intake was positively impacted by EUR 7.4m and additional license revenue by EUR 7.3m from two clients converting their perpetual contract to a subscription-based license contract compared with additional order intake of EUR 3.9m and additional license revenue of EUR 3.7m from one conversion in H1 2021.

In H1 2022, revenue from conversions accounted for around 26% (H1 2021: 14%) of the total additional license sales, while renewals accounted for around 24% (H1 2021: 43%). Additional regular license sales of EUR 13.9m was EUR 2.9m higher than in H1 2021.

The split of additional license sales is shown below:

Q2 2022 add-on license sales split

Q2 2021 add-on license sales split

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Company Announcement

H1 2022 add-on license sales split

27.8 EURm

• Additional regular license sales 50%
• Renewals 24%
• Conversions 26%

H1 2021 add-on license sales split

25.6 EURm

• Additional regular license sales 43%
• Renewals 43%
• Conversions 14%

In Q2 2022, software updates and support revenue increased by 6.4% from EUR 44.2m in Q2 2021 to EUR 47.0m. Currency fluctuations impacted the software updates and support revenue positively by 3.2%-points, so organic growth in local currencies was 3.2%.

In H1 2022, software updates and support revenue increased by 4.9% from EUR 89.0m in H1 2021 to EUR 93.4m. Currency fluctuations impacted the software updates and support revenue positively by 2.6%-points, so organic growth in local currencies was 2.3%.

Fees from professional services amounted to EUR 43.3m in Q2 2022, against EUR 41.0m in Q2 2021. Organic professional services growth increased in local currencies by 1.2%.

In H1 2022, fees from professional services increased by 4.7% from EUR 81.4m in H1 2021 to EUR 85.2m. Currency fluctuations impacted the professional services revenue positively by 3.9%-points. Measured in local currencies, the increase was 0.8%.

In Q2 2022, hosting and other fees amounted to EUR 10.0m compared with EUR 8.9m in Q2 2021. The reported growth of 12.8% was primarily due to growth in fees from clients on a hosted as a service solution.

In H1 2022, hosting and selling of other third-party products amounted to EUR 20.2m compared with EUR 15.4m in H1 2021.

Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) for the last twelve months (LTM) covering the period Q3 2021-Q2 2022 was EUR 294.4m, an increase of 11.9% when compared with the period Q3 2020-Q2 2021, and an organic increase of 9.3% when measured in local currencies, due to solid growth in Software as a Service (SaaS) revenue. ARR LTM is a backward looking measure and is therefore not fully capturing the value of entering new SaaS deals. Consequently, from 2023 we intend to introduce a forward looking ARR measure.

ARR LTM EURm	Q2 2022 LTM	Share of total revenue Q2 2022 LTM	Q2 2021 LTM	Share of total revenue Q2 2021 LTM	Growth	Organic/ local currencies growth
Annual Recurring Revenue	294.4	59.1%	263.0	55.4%	11.9%	9.3%
LTM - Last Twelve Months

ARR of EUR 294.4m was equivalent to 59.1% of revenue for the period Q3 2021-Q2 2022 compared with ARR of EUR 277.4m, equivalent to 55.9% of revenue for the period Q1 2021 to Q4 2021, and ARR of EUR 263.0m, equivalent 55.4% of revenue for the period Q3 2020 to Q2 2021.

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Company Announcement

Operating Costs

SimCorp's total operating costs (including depreciation and amortization) were EUR 110.1m in Q2 2022 compared with EUR 89.0m in Q2 2021, an increase of 23.8% in reported currency, and 19.1% in local currencies. The annual salary increase of close to 5% took place with effect from April 1, 2022. In addition, FTEs increased by 9.0% from 1,861 in Q2 2021 to 2,029 in Q2 2022 as we invest in the future.

Q2 2022 was impacted by extra cost of EUR 1.3m in relation to helping and supporting our Ukrainian colleagues and their families. As part of our transformation, we have also initiated an operating model restructuring program, which has let to extra consultancy and redundant costs in Q2 2022. The operating model restructuring program has been initiated to ensure that SimCorp has the right structure and people as it transform to a SaaS company.

In addition, Q2 2022 was also impacted by costs related to the international user conference, IUCM 2022, held in Nice in April 2022, and higher meeting and travel activities catching up on meetings in person as this was possible for the first time in two years.

In H1 2022, the total operating costs (including depreciation and amortization) were EUR 209.5m compared with EUR 175.2m in H1 2021, an increase of EUR 34.3m or 19.6% in reported currency. Currency fluctuations increased the total operating costs by 2.4%. Measured in local currencies, the organic operating costs increased by 17.2% compared with H1 2021.

We have in H1 2022 incurred extra cost of EUR 2.1m in relation to helping and supporting our Ukrainian colleagues and their families and operating model restructuring costs of EUR 5.7m. Excluding these one-off costs of EUR 7.8m, the organic operating costs increased by 12.7% compared with H1 2021, which were as expected. The expectation for the full year 2022 is exceptional costs of EUR 3-5m in relation to Ukraine, and one-off costs of EUR 8-10m related to the operating model restructuring program, which will be completed in 2022.

Cost in H1 2022 was as expected impacted by investments in the future, including investments in new SaaS operations and solutions, such as Investment Accounting Services (IAS).

Salaries and staff related costs accounted for 67% of total costs, compared with 72% in Q2 2021.

Acquisition related amortization was EUR 1.6m in H1 2022 compared with EUR 1.9m in H1 2021.

The development and distribution of quarterly operating costs is shown below:

Operating Costs

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Company Announcement

| Q2 Operating costs
EURm | Costs
Q2 2022 | Share of costs
Q2 2022 | Share of Revenue
Q2 2022 | Costs
Q2 2021 | Share of costs
Q2 2021 | Share of revenue
Q2 2021 | Growth | Organic growth in local currencies |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Cost of sales | 56.0 | 50.8% | 48.3% | 48.6 | 54.6% | 40.9% | 15.2% | 9.6% |
| Research and development costs | 26.7 | 24.2% | 23.0% | 22.9 | 25.7% | 19.3% | 16.6% | 15.4% |
| Sales and marketing costs | 15.5 | 14.1% | 13.4% | 12.2 | 13.7% | 10.3% | 26.9% | 16.8% |
| Administrative expenses | 12.0 | 10.9% | 10.3% | 5.3 | 6.0% | 4.5% | 126.1% | 128.3% |
| Total operating costs | 110.1 | 100.0% | 95.0% | 89.0 | 100.0% | 74.9% | 23.8% | 19.1% |
| H1 Operating costs
EURm | Costs
H1 2022 | Share of costs
H1 2022 | Share of Revenue
H1 2022 | Costs
H1 2021 | Share of costs
H1 2021 | Share of revenue
H1 2021 | Growth | Organic growth in local currencies |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Cost of sales | 108.5 | 52.4% | 47.4% | 94.0 | 52.4% | 41.1% | 15.4% | 12.5% |
| Research and development costs | 51.4 | 25.5% | 22.5% | 46.2 | 25.5% | 20.2% | 11.1% | 10.6% |
| Sales and marketing costs | 29.2 | 14.3% | 12.8% | 23.1 | 14.3% | 10.1% | 26.6% | 21.3% |
| Administrative expenses | 20.4 | 7.8% | 8.9% | 11.9 | 7.8% | 5.2% | 72.1% | 73.0% |
| Total operating costs | 209.5 | 100.0% | 91.6% | 175.2 | 100.0% | 76.6% | 19.6% | 17.2% |

In Q2 2022, cost of sales, including costs for implementation consultants and hosting activities, increased by 15.2% to EUR 56.0m compared with EUR 48.6m in Q2 2021 as a consequence of a planned investments in new SaaS operations and solutions, and higher level of SaaS business activity. In local currencies, the increase was 9.6%. Costs of sales in Q2 2022 represented 48.3% of revenue compared with 40.9% in the same period last year.

In H1 2022, cost of sales, including costs for implementation consultants, was EUR 108.5m, compared with EUR 94.0m in H1 2021, an increase of EUR 14.5m or 15.4%. Measured in local currencies, the organic costs increased by 12.5%. The increase was partly related to an increase in the SaaS business activities of almost 30%, partly due to an internal restructuring in Q2 2021 moving staff from product division to customer support. Costs of sales in H1 2022 represented 47.4% of revenue compared with 41.1% in the same period last year.

Compared with Q2 last year, research and development costs increased by 16.6% in reported currency and 15.4% in local currencies as we continue to invest in the future. R&D costs in Q2 2022 represented 23.0% of revenue compared with 19.3% in Q2 2021.

Compared with H1 last year, research and development costs increased by 11.1% in reported currency and 10.6% in local currencies. The increase would have been higher, if we hadn't moved staff from our product division to business support in Q2 2021. R&D costs in H1 2022 represented 22.5% of revenue compared with 20.2% in H1 2021.

Sales and marketing costs were EUR 15.5m in reported currency, an increase of 26.9% compared with Q2 2021 and an increase of 16.8% in local currencies. The costs increase related to the International User Committee Meeting, and higher travel and meeting activities. Sales and marketing costs in Q2 2022 represented 13.4% of revenue compared with 10.3% in same period last year.

In H1 2022, sales and marketing costs were EUR 29.2m in reported currency, an increase of 26.6% compared with H1 2021. Measured in local currencies the organic costs increase was 21.3%. Sales and marketing costs in H1 2022 represented 12.8% of revenue compared with 10.1% in same period last year.

Administrative expenses increased from EUR 5.3m in Q2 2021 to EUR 12.0m. The increase is mainly due to one-off costs related to Ukraine, restructuring costs and internal project costs. Administrative expenses in Q2 2022 represented 10.3% of revenue compared with 4.5% in Q2 2021.

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Company Announcement

In H1 2022, administrative expenses increased by EUR 8.5m to EUR 20.4m. The increase was mainly due to one-time costs related to Ukraine, restructuring costs and internal project costs. Administrative expenses in H1 2022 represented 8.9% of revenue compared with 5.2% in H1 2021

Employees

At June 30, 2022, the Group had 2,105 employees, 191 (10%) employees more than at June 30, 2021.

The Group had on average 2,003 FTEs in the first six months of 2022 compared with 1,855 FTEs in the same period last year.

Group performance

In Q2 2022, the Group posted an EBIT of EUR 6.2m compared with EUR 30.0m in Q2 2021. The reported EBIT margin was 5.4% compared with 25.2% in Q2 2021. Currency rate fluctuations had a positive net impact on EBIT of EUR 1.9m or 1.7%-points in Q2 2022.

For H1 2022, the Group generated an EBIT of EUR 21.7m compared with EUR 53.9m in H1 2021. Exchange rate fluctuations had a positive net impact on EBIT of EUR 3.5m or 1.2%-points. The EBIT margin was 9.4% compared with the EBIT margin of 23.6% in H1 2021. The lower EBIT margin was primarily due to lower license revenue and exceptional costs of EUR 2.1m related to Ukraine and one-off costs of EUR 5.7m related to an operating model restructuring program incurred in H1 2022. Excluding these one-off costs of EUR 7.8m, the EBIT margin would have been 8.8%.

The currency impact on EBIT margin is shown below:

Q2 2022 EBIT Margin

Q2 2021 EBIT Margin

H1 2022 EBIT Margin

H1 2021 EBIT Margin

The development in quarterly EBIT is shown below:

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Company Announcement

EBIT

Profit and comprehensive income

Financial items for Q2 2022 comprised a net income of EUR 5.0m compared with a net expense of EUR 1.3m in same period last year. Financial income and expenses are primarily related to foreign exchange adjustments.

The Group posted pre-tax profit of EUR 11.2m in Q2 2022 against pre-tax profit of EUR 28.7m in Q2 2021.

Exchange rate adjustments on translation of foreign assets and liabilities amounted to a net income of EUR 1.3m in Q2 2022, which is included in other comprehensive income. Total comprehensive income for Q2 2022 was thus EUR 10.6m against EUR 20.8m in Q2 of last year.

Financial items for H1 2022 comprised a net income of EUR 7.1m compared with a net income of EUR 1.6m in same period last year.

The Group posted pre-tax profit of EUR 28.9m in H1 2022 against pre-tax profit of EUR 55.5m in H1 2021.

The estimated tax charge of EUR 6.3m in H1 2022 is equivalent to a tax rate of 21.8% compared with estimated taxes of EUR 14.0m or 25.2% in H1 2021. The effective tax rate in H1 2022 was impacted by refunds of withholding taxes related to prior years. The Group's net profit for H1 2022 amounted to EUR 22.6m against a profit of EUR 41.5m for the same period last year.

After exchange rate adjustments on translation of foreign assets and liabilities, a net income of EUR 1.7m, the total comprehensive income amounted to EUR 24.3m against EUR 42.9m in H1 2021.

Balance sheet

SimCorp's total assets were EUR 528.9m at June 30, 2022 compared with EUR 480.0m a year earlier, an increase of EUR 57.9m, due to higher contract assets and receivables.

Cash holdings amounted to EUR 32.0m. Draw on credit facilities was EUR 13.4m. Consequently, net cash holdings was EUR 18.6m compared with EUR 49.4m a year earlier, which was primarily due to lower free cash flow.

Receivables amounted to EUR 115.0m at June 30, 2022, representing an increase of EUR 31.9m compared with June 30, 2021, and EUR 18.5m higher than at December 31, 2021, partly due to some larger outstanding receivables, which have been settled in July 2022.

Contract assets was EUR 217.6m, an increase of EUR 30.3m compared with June 30, 2021. Compared with December 31, 2021, contract assets decreased by EUR 3.4m. New and additional

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Company Announcement

subscription-based licenses added EUR 25.4m to contract assets in H1 2022, finance income recognized added EUR 1.1m, foreign exchange adjustments added EUR 11.2m (mainly related to dollar denominated contracts), and reversal of expected credit loss provision added EUR 0.1m. Reductions stem from invoiced subscription-based license fees of EUR 41.2m in H1 2022.

The Group's total non-current assets were EUR 148.9m compared with EUR 147.3m at December 31, 2021 and EUR 146.1m at June 30, 2021.

Goodwill was EUR 61.4m at June 30, 2022 compared with EUR 61.6m at the end of 2021. No impairment to goodwill was made in H1 2022. The carrying amount of acquired software was EUR 9.0m compared with EUR 9.8m at the end of 2021 and the value of client relationships was EUR 20.4m compared with EUR 21.2m at the end of 2021. The decreases were due to amortization.

The carrying amount of leasehold assets was EUR 43.0m compared with EUR 40.1m at the end of 2021. The increase relates to new office leases in London and Singapore.

Other property, plant, and equipment amounted to EUR 3.0m against EUR 3.6m at the end of 2021.

Other financial assets of EUR 4.8m includes investments in partners, Alkymi and Domos.

The deferred tax asset was EUR 3.1m compared with EUR 3.1m at the end of 2021.

SimCorp's total liabilities were EUR 231.8m at June 30, 2022, compared with EUR 211.2m at June 30, 2021.

Cash flow

Operating activities generated a cash inflow of EUR 12.1m in Q2 2022 compared with EUR 19.5m in Q2 last year. Payment of income taxes amounted to EUR 3.9m, against EUR 4.1m in Q2 2021.

In H1 2022, operating activities generated a cash inflow of EUR 35.3m compared with EUR 62.0m in same period last year. Payment of income taxes amounted to EUR 13.6m of which EUR 4.4m relates to 2021, against EUR 10.4m in H1 2021.

EUR 0.7m was spent on investing activities, compared with EUR 0.4m in Q2 2021. In H1 2022, EUR 1.4m was spent on investing activities compared with EUR 0.9m in H1 2021. The increase was due to deposit payment in connection with new office lease in the UK.

Free cash flow (cash flow from operations reduced by CAPEX and reduced by the principal element of lease payments) was EUR 10.1m compared with EUR 16.5m in Q2 2021. The decrease was due to lower profit and timing of payments, which led to higher receivables in Q2 2022.

In H1 2022, free cash flow was EUR 30.2m compared with EUR 55.9m in H1 2021, a decrease of EUR 25.7m. The decrease was due to lower profit and timing of payments, which led to higher receivables and higher paid income and salary related taxes in H1 2022.

In Q2 2022, cash used in financing activities of EUR 29.4m related to the payment of dividends taxes of EUR 10.1m, purchase of treasury shares of EUR 10.3m, repayment of lease liabilities of EUR 2.3m, and repayment on credit facilities of EUR 6.7m.

Cash used in financing activities in H1 2022 related to the payment of dividends of EUR 39.6m, purchase of treasury shares of EUR 18.9m, repayment of lease liabilities of EUR 4.8m, use of EUR 20.2m from credit facilities as part of financing dividends payments and share buyback, and repayment on credit facilities of EUR 6.7m, compared with payment of dividends of EUR 40.1m, purchase of treasury shares of EUR 19.5m, repayment of lease liabilities of EUR 5.3m in H1 2021.

Changes in equity

The company's equity amounted to EUR 297.0m at June 30, 2022. This was a decrease of EUR 26.1m from December 31, 2021. Equity was reduced by the purchase of treasury shares of EUR 18.9m and by the declared dividends of EUR 39.9m. Equity was increased by comprehensive income for H1 2022 of EUR 24.3m as well as the effects of share-based remuneration of EUR 8.4m, net of tax.

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Company Announcement

Outlook for the financial year 2022*)

SimCorp's intake of license contract orders and revenue recognition varies considerably from one period to the next.

The H1 2022 intake of orders was EUR 43.0m compared with EUR 42.8m Q2 2021. SimCorp enters Q3 2022 with signed revenue of EUR 419m for 2022, compared with EUR 398m at the same time in 2021.

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 Annual Recurring Revenue (ARR) in local currency to grow 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 program, which will be completed in 2022.

In the Annual Report 2021, we assumed that H1 2022 would be impacted by COVID-19 restrictions, while H2 2022 was expected to be less impacted as the world returns to more normal working conditions. We do see positive movements in our sales pipeline, but the full year outlook is more uncertain than normal due to the current geopolitical and macroeconomic turbulence, and the timing of some expected deals shifting from H1 to H2. This also means that while we are continuing investing in the future, we are also identifying potential cost savings should the market deteriorate.

Included in the expected EBIT margin for 2022 is a negative short-term impact of around 2%-points from planned investments in the future, including investments in the new SaaS operations and solutions, such as Investment Accounting Services (IAS).

The salary increase in 2022 of close to 5% is approximately 3% higher compared with recent years due to higher inflation and demand for skilled labor.

Based on the exchange rates prevailing at July 31, 2022, SimCorp estimates reported revenue to be positively impacted from currency fluctuations by around 4.5% (previously positive 2.0%) and reported EBIT margin to be positively impacted from currency fluctuations by around 1.0%-points (previously positive 0.5%-points).

*) This announcement contains certain forward-looking statements and expectations in respect of the 2022 financial year. Such forward-looking statements are not guarantees of future performance, and involve risk and uncertainty, and actual performance may deviate materially from that expressed in such forward-looking statements due to a variety of factors. Readers are warned not to rely unduly on such forward-looking statements which apply only as at the date of this announcement. The Group's revenue will continue to be impacted by relatively few but large system orders, and such orders are expected to be won at relatively irregular intervals. The terms agreed in the individual license agreements will determine the impact on the order book and on license income for any specific financial reporting period. Accordingly, license revenue is likely to vary considerably from one quarter to the next. Unless required by law or corresponding obligations SimCorp A/S is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.

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Company Announcement

Other information

Significant risk and uncertainty factors

SimCorp operates in a dynamic and complex business environment, where performance relies heavily on the ongoing achievement of a number of success criteria. Pages 31-36 of SimCorp's Annual Report 2021 describe the most important general risk factors and the risk management measures applied in everyday operations. Management believes that the description of these potential risks still pertains to the current situation.

New CFO appointed

SimCorp has appointed Michael Bjergby as new Chief Financial Officer (CFO). Michael Bjergby joins SimCorp from global facility services company ISS, where he most recently has served as SVP and Head of Group Finance. Prior to that, Michael has held various finance positions in large Danish OMXC25 companies and has been Group CFO of private equity-owned HTL-Strefa. Michael holds a Master in Economics from Copenhagen University.

Michael Bjergby will step into his new position no later than January 1, 2023. SimCorp's current CFO, Michael Rosenvold, will remain in his position until a proper handover to Michael Bjergby has been completed.

Michael Bjergby's remuneration in SimCorp is in accordance with the remuneration guidelines approved at the Annual General Meeting held on March 24, 2022. As part of the service agreement, Michael Bjergby will as a non-recurring compensation be allocated restricted stock units comprising SimCorp shares with a total market value of DKK 5 million vesting over a period of 5 years. The restricted stock units are subject to Michael Bjergby being employed as CFO of SimCorp on the vesting dates. Further, the allocation of restricted stock units is subject to an investment by Michael Bjergby in SimCorp shares prior to January 1, 2023, at a market price of at least DKK 2.5 million.

IUCM 2022

The 2022 international user conference (IUCM) was held in Nice in April 2022. During the three days, more than 500 clients and partners got the opportunity to get industry insights, network and catch up with the latest developments at SimCorp.

Due to the pandemic, the 2020 IUCM was cancelled, and the 2021 was held in virtual format only. After this involuntary three-year break, the physical networking, dialogue, and interaction was extra rewarding.

During the conference the Abu Dhabi Investment Authority (ADIA) was announced as the winner of the 2022 IUCM Award for Best Transformation Project.

Update on sustainability and ESG initiatives

Driven by our ambition and commitment to mobilize the company around the actions that will generate the biggest sustainability impact, we have during H1 2022 made solid progress on integrating sustainability across our business operations and geographies.

We acknowledge that demands for our commitment to sustainability are rapidly increasing, driven by regulations, disclosure frameworks, demands for ESG investment support, and stakeholder expectations. To meet these demands, we have ensured:

Better integration

• Linked sustainability to our commercial and transformation strategy through our cloud hosting in Microsoft Azure that offers our clients more energy-efficient services compared to traditional on-premise data centers.
• Connected sustainability to our financial strategy through a new loan facility linked to ESG targets for:
• Moving the majority of our operations from on-premise data centers to more energy-efficient cloud hosting by 2025,
• annually on-boarding 10 new and 10 existing clients to energy-efficient cloud solutions in 2022-2024,
• and promoting diversity - increasing the share of women within the company, overall and in management positions to 40% by 2030.
• Linked sustainability to our development strategy by establishing a Green Software Engineering Discovery Team that will explore ways of establishing best practices for developing energy-efficient client services to help our clients achieve their sustainability goals.

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Company Announcement

Better governance

• Strengthened and anchored governance with the establishment of our Sustainability Committee, chaired by our CEO, and expanded our Sustainability Team under the Head of Sustainability to ensure momentum and progress.

Better reporting

• Decided to publish our first TCFD report to provide investors and other stakeholders insight into SimCorp's climate change related risks and opportunities, and a SASB (Sustainability Accounting Standards Board) index to provide information on sector-specific ESG standards. The TCFD report and SASB Index will be part of our Sustainability Report 2022.
• Expanded our disclosure to leading ESG indices and frameworks to meet our clients' and prospects increasing request for insight into our commitment to sustainability as part of the contract renewal or vetting phase.

Strengthened offering

• Enhanced and expanded our ESG investment offering. Since its launch in 2021, we have successfully onboarded 26 clients, and are on track to reach our targets for 2022. Our ESG offer roadmap is designed to meet the future demands of our regional markets that are guided by regulations like the EU Taxonomy and the Taskforce on Climate-related Financial Disclosure (TCFD), which is expected to become mandatory across key markets.

Across all these areas, we will continue to expand our collaboration with stakeholders and partners to ensure progress and momentum. Climate change and the need for social change require that we all learn from each other and collaborate. Ultimately, our ambition is to make SimCorp a bold, ambitious, and competitive sustainability leader, reducing our own negative impact, offering our employees a meaningful work life, and actively helping our clients.

New committed loan facility

In Q2 2022, we entered into a committed Multicurrency Revolving Credit Facility (RCF) of DKK 275 (EUR 36.7) million with expiry date on 30 May 2025 with a one-year extension option.

In addition, we entered into a Seasonal Accordion Commitment facility of DKK 250 (EUR 33.3) million, which we can draw on request in the period from 15 March to 15 October in a given year. This facility is also running until 30 May 2025 with a one-year extension option.

Shareholder information

Restricted stock units

Allotment of restricted stock units

In Q2 2022, in accordance with the remuneration policy approved by the shareholders at the AGM, the Board of Directors have granted restricted stock units for the year 2022. A total of 60,227 restricted stock units was granted, including 23,821 restricted stock units to the Executive Management Board and 187 restricted stock units to employee-elected members of the Board of Directors. The fair value of these restricted stock units amounted to EUR 4.0m at the time of allotment. The value adjusted for dividends will be included in the income statement over the vesting period of three years. The restricted stock units will vest after three years, subject to continued employment. Furthermore, the restricted stock units are subject to conditions with respect to average annual minimum ARR growth and annual minimum average net operating profit after tax for the financial years 2022 to 2024. If the two last conditions are only partially satisfied, the number of shares transferred after three years will be reduced and may possibly lapse completely.

In addition, 4,614 restricted stock units were granted to four employees in Q2 related to sign-on and incentive programs.

354 shares vested in Q2 2022 and were transferred to an employee, in terms of sign-on program, who have fulfilled the programs' criteria.

376,643 restricted stock units are outstanding at June 30, 2022. The restricted stock units will be transferred in whole or in part between 2022 and 2025 to program participants still employed when the stock units vest, some subject to performance conditions.

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Company Announcement

Holding of treasury shares

In Q2 2022, 354 treasury shares vested, and the Company transferred the treasury shares in relation to the restricted stock unit programs in accordance with the approved remuneration policy for the Board of Directors, Executive Management, and employees.

The Company has purchased 145,600 treasury shares in Q2 2022 at an average price of DKK 489.66 per share, totaling EUR 9.6m. In comparison, SimCorp purchased 84,000 treasury shares at an average price of DKK 790.96 per share, totaling EUR 8.9m, in Q2 2021.

In total, the Company purchased 274,400 treasury shares in H1 2022 at an average price of DKK 512.95 per share, totaling EUR 18.9m. In comparison, the Company purchased 185,400 treasury shares at an average price of DKK 780.97 per share, totaling EUR 19.5m, in H1 2021.

At June 30, 2022, the Company's holding of treasury shares amounted to 1,224,873 treasury shares, equal to 3.0% of the Company's issued share capital.

In addition to the purchases in Q2 2022, the Company has in the period from July 1 to July 29, 2022 acquired 15,648 treasury shares at a total price of EUR 1.1m under the EUR 20.0m "Safe Harbour" program that completed on July 29, 2022.

At July 29, 2022, the Company's holding of treasury shares amounted to 1,240,521 treasury shares, equal to 3.1% of the Company's issued share capital.

SimCorp will not initiate additional share buy backs in H2 2022 in view of planned investments, including in the strategic business partnership with its current client and leading investment manager, Challenger. As part of the strategic partnership, Simcorp will make a minority investment of approximately EUR 10m in the jointly held legal entity which will undertake investment administration operations in Australia, New Zealand, and Asia.

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Company Announcement
18

Signatures

The Board of Directors and the Executive Management Board have today considered and adopted the interim report for the period January 1 – June 30, 2022.

The interim report, which is unaudited and has not been reviewed by the Company's auditors is presented in accordance with IAS 34 "Interim financial reporting" as adopted by the EU and Danish disclosure requirements for interim reports for listed companies.

In our opinion, the interim financial statements give a true and fair view of the Group's assets, liabilities and financial position as at June 30, 2022 and of the profit of the Group's operations and cash flow for the period January 1 – June 30, 2022.

Besides what has been disclosed in the interim report, there are no significant changes to the Group's risks and uncertainties, as disclosed in the Annual Report 2021.

Furthermore, in our opinion the management's report gives a true and fair view of developments in the activities and financial position of the Group, the results for the period and of the Group's financial position in general, and outlines the significant risk and uncertainty factors that may affect the Group.

Copenhagen, 12 August 2022

Executive Management Board

| Christian Kromann
Chief Executive Officer | Michael Rosenvold
Chief Financial Officer | Georg Hetrodt
Chief Operating Officer |
| --- | --- | --- |

Board of Directors

| Peter Schütze
Chair | Morten Hübbe
Vice Chair | Simon Jeffreys |
| --- | --- | --- |
| Susan Standiford | Adam Warby | Joan A. Binstock |
| Charlotte Søndergaard
Klausen | Neil Cook | Sven Rinke |

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Company Announcement

Consolidated income statement

EUR '000	2022 Q2	2021 Q2	2022 H1	2021 H1	2021 FY
Revenue	116,000	118,755	230,713	228,732	496,274
Cost of sales	55,981	48,590	108,486	94,016	196,982
Gross profit	60,019	70,165	122,227	134,716	299,292
Other operating income	370	206	549	346	709
Research and development costs	26,689	22,896	51,378	46,227	91,771
Sales and marketing costs	15,500	12,217	29,222	23,077	50,230
Administrative expenses	11,982	5,299	20,431	11,873	25,583
Operating profit (EBIT)	6,218	29,959	21,745	53,885	132,417
Share of profit after tax in associates	11	7	60	45	174
Financial income/expenses, net	4,954	-1,309	7,075	1,522	4,827
Profit before tax	11,183	28,657	28,880	55,452	137,418
Tax on the profit for the period	1,916	7,385	6,292	13,952	27,426
Profit for the period	9,267	21,272	22,588	41,500	109,992
Earnings per Share
Earnings per share - EPS (EUR)	0.24	0.54	0.57	1.05	2.76
Diluted earnings per share - EPS-D (EUR)	0.23	0.53	0.57	1.04	2.74

Statement of comprehensive income

EUR '000	2022 Q2	2021 Q2	2022 H1	2021 H1	2021 FY
Profit for the period	9,267	21,272	22,588	41,500	109,992
Other comprehensive income
Items that will not be reclassified subsequently to the income statement:
Remeasurements of defined benefit plans	-	-	-	-	1,934
Tax, remeasurement of defined benefit plans	-	-	-	-	-396
Items that may be reclassified subsequently to the income statement, when specific conditions are met:
Foreign currency translation differences for foreign operations	1,318	-434	1,723	1,437	2,500
Other comprehensive income after tax	1,318	-434	1,723	1,437	4,038
Total comprehensive income	10,585	20,838	24,311	42,937	114,030

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Company Announcement

Consolidated balance sheet

| EUR '000 | Jun. 30
2022 | Jun. 30
2021 | Dec. 31
2021 |
| --- | --- | --- | --- |
| Assets | | | |
| Goodwill | 61,395 | 61,558 | 61,645 |
| Software | 8,964 | 10,641 | 9,801 |
| Client relationships | 20,419 | 21,983 | 21,245 |
| Total intangible assets | 90,778 | 94,182 | 92,691 |
| Leasehold | 43,008 | 40,700 | 40,095 |
| Technical equipment | 675 | 983 | 860 |
| Other equipment, fixtures, fittings and prepayments | 2,343 | 2,901 | 2,737 |
| Total property, plant, and equipment | 46,026 | 44,584 | 43,692 |
| Investments in associates | 787 | 788 | 909 |
| Deposits | 3,378 | 2,103 | 2,123 |
| Deferred tax | 3,074 | 3,905 | 3,091 |
| Other financial assets | 4,844 | 524 | 4,843 |
| Total other non-current assets | 12,083 | 7,320 | 10,966 |
| Total non-current assets | 148,887 | 146,086 | 147,349 |
| Receivables | 110,768 | 83,077 | 96,543 |
| Contract assets | 217,557 | 187,344 | 221,000 |
| Income tax receivables | 4,239 | 2,222 | 2,060 |
| Prepayments | 15,419 | 11,832 | 11,668 |
| Cash and cash equivalents | 31,997 | 49,431 | 47,692 |
| Total current assets | 379,980 | 333,906 | 378,963 |
| Total assets | 528,867 | 479,992 | 526,312 |
| EUR '000 | Jun. 30
2022 | Jun. 30
2021 | Dec. 31
2021 |
| Liabilities and Equity | | | |
| Share capital | 5,441 | 5,441 | 5,441 |
| Exchange adjustment reserve | -502 | -3,288 | -2,225 |
| Retained earnings | 292,108 | 266,664 | 280,003 |
| Proposed dividend | - | - | 39,888 |
| Total equity | 297,047 | 268,817 | 323,107 |
| Lease liabilities | 33,342 | 31,741 | 32,088 |
| Deferred tax | 34,287 | 29,746 | 33,121 |
| Provisions | 10,201 | 11,261 | 9,743 |
| Total non-current liabilities | 77,830 | 72,748 | 74,952 |
| Bank loan / revolving credit facility | 13,442 | - | - |
| Lease liabilities | 8,617 | 9,491 | 8,577 |
| Prepayments from clients | 57,620 | 48,739 | 31,239 |
| Trade payables | 30,704 | 23,003 | 29,126 |
| Other payables | 38,161 | 48,994 | 49,993 |
| Income tax payables | 4,443 | 7,767 | 8,886 |
| Provisions | 1,003 | 433 | 432 |
| Total current liabilities | 153,990 | 138,427 | 128,253 |
| Total liabilities | 231,820 | 211,175 | 203,205 |
| Total liabilities and equity | 528,867 | 479,992 | 526,312 |

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Company Announcement

Consolidated cash flow statement

EUR '000	2022 Q2	2021 Q2	2022 H1	2021 H1	2021 FY
Profit for the period	9,267	21,272	22,588	41,500	109,992
Depreciation/amortization	3,837	3,912	7,462	7,856	15,379
Share of profit after tax in associates	-11	-7	-60	-45	-174
Financial income	-5,198	1,067	-7,535	-2,022	-5,774
Financial expenses	244	242	460	500	947
Tax on the profit for the period	1,916	7,385	6,292	13,952	27,426
Other non-cash	5,317	101	7,435	3,696	12,904
Adjustment share based remuneration	2,566	2,088	8,862	4,383	11,332
Change in provisions	560	142	1,029	-144	-1,663
Changes in contract assets	1,442	-11,330	9,421	-11,284	-44,861
Changes in working capital	-3,830	-1,239	-6,821	14,067	-11,169
Financial income received	5	7	7	7	5
Financial expenses paid	-107	-34	-195	-131	-319
Income tax paid	-3,873	-4,067	-13,638	-10,355	-23,329
Net cash from operating activities	12,135	19,539	35,307	61,980	90,696
Purchase of property, plant, and equipment, net	309	-381	-263	-793	-1,259
Sale and purchase of financial assets, net	-1,113	-118	-1,240	-183	-4,507
Dividends from associates	134	82	134	82	91
Net cash used in investing activities	-670	-417	-1,369	-894	-5,675
Dividends paid	-10,068	-9,819	-39,599	-40,125	-40,086
Purchase of treasury shares	-10,293	-8,936	-18,921	-19,471	-40,102
Repayment of lease liability	-2,310	-2,647	-4,819	-5,324	-10,808
Proceeds, credit facilities / loans	-	-	20,167	-	-
Repayment, credit facilities / loans	-6,725	-	-6,725	-	-
Net cash used in financing activities	-29,396	-21,402	-49,897	-64,920	-90,996
Change in cash and cash equivalents	-17,931	-2,280	-15,959	-3,834	-5,975
Cash and cash equivalents at beginning of period	49,768	51,732	47,692	53,051	53,051
Foreign exchange adjustment of cash and cash equivalents	160	-21	264	214	616
Cash and cash equivalents end of period	31,997	49,431	31,997	49,431	47,692

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Company Announcement

Statement of changes in equity

EUR '000	Share capital	Exchange adjustment reserve	Retained earnings	Dividends for the year	Total
2022
Equity at January 1	5,441	-2,225	280,003	39,888	323,107
Net profit for the period	-	-	22,588	-	22,588
Total other comprehensive income	-	1,723	-	-	1,723
Total comprehensive income for the period	-	1,723	22,588	-	24,311
Transactions with owners
Dividends paid to shareholders	-	-	52	-39,888	-39,836
Share-based payment	-	-	8,862	-	8,862
Tax, share-based payment	-	-	-476	-	-476
Purchase of treasury shares	-	-	-18,921	-	-18,921
Equity at June 30	5,441	-502	292,108	-	297,047
2021
Equity at January 1	5,441	-4,725	237,409	40,125	278,250
Net profit for the period	-	-	41,500	-	41,500
Total other comprehensive income	-	1,437	-	-	1,437
Total comprehensive income for the period	-	1,437	41,500	-	42,937
Transactions with owners
Dividends paid to shareholders	-	-	38	-40,125	-40,087
Share-based payment	-	-	6,842	-	6,842
Tax, share-based payment	-	-	346	-	346
Purchase of treasury shares	-	-	-19,471	-	-19,471
Equity at June 30	5,441	-3,288	266,664	-	268,817
Net profit for the period	-	-	68,492	-	68,492
Total other comprehensive income	-	1,063	1,538	-	2,601
Total comprehensive income for the period	-	1,063	70,030	-	71,093
Transactions with owners
Share-based payment	-	-	4,490	-	4,490
Tax, share-based payment	-	-	-662	-	-662
Purchase of treasury shares	-	-	-20,631	-	-20,631
Proposed dividends to shareholders	-	-	-39,888	39,888	-
Equity at December 31	5,441	-2,225	280,003	39,888	323,107

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Company Announcement

Notes

Accounting policies

The interim report is presented in accordance with IAS 34 "Interim financial reporting" as adopted by the EU and Danish disclosure requirements for interim reports of listed companies.

The accounting policies applied are consistent with those of the Annual Report 2021. See the Annual Report 2021 for a comprehensive description of the accounting policies applied.

Change in accounting policies

Effective 1 January 2022, a number of new accounting standards and interpretations have been implemented which do not have any monetary effect on the SimCorp Group's result, assets, liabilities or equity.

Judgments and estimates

The preparation of interim reports requires management to make accounting judgments and estimates that affect the use of accounting policies and recognized assets, liabilities, income and expenses. Actual results may differ from these estimates.

The most significant estimates made by management when using the Group's accounting policies and the most significant judgment uncertainties attached hereto are the same for the preparation of the interim report as for the preparation of the Annual Report 2021.

Segment information

Revenue disclosures are based on SimCorp's market units and development activities, while asset allocation is based on the physical location of the assets. Unallocated assets relate to headquarter assets, cash and investments in associates. "Research and development" and "Corporate functions" and "Elimination/Not allocated" are not operating segments, and the disclosure forms part of the reconciliation of segment data to the group income statement rather than being information about operating segments.

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Company Announcement

EUR '000	EMEA	Asia and Australia	North America	SimCorp Sofia	Research and development	Corporate functions	Elimination/Not allocated	Group
April 1 - June 30, 2022
Licenses - initial sales	461	413	176	-	-	-		1,050
Licenses - additional sales	4,158	8,538	1,618	313	-	-		14,627
Software updates and support	34,707	3,675	7,257	1,271	106	-		47,016
Professional services	25,354	4,245	10,209	3,497	-	-		43,305
Hosting and other fees	5,688	1,030	2,782	2	307	193		10,002
External revenue	70,368	17,901	22,042	5,083	413	193	-	116,000
Revenue between segments	9,985	1,336	2,392	9	35,534	9,962	-59,218	-
Total segment revenue	80,353	19,237	24,434	5,092	35,947	10,155	-59,218	116,000
EBITDA	11,594	1,341	3,105	1,957	11,173	-19,116	-	10,054
Depreciation and amortization	935	161	402	296	956	1,086	-	3,836
Segment operating profit (EBIT)	10,659	1,180	2,703	1,661	10,217	-20,202	-	6,218
Financial items, net								4,965
Profit for the period before tax								11,183
January 1 - June 30, 2022
Licenses - initial sales	2,645	915	516	60	-	-		4,136
Licenses - additional sales	11,680	8,637	3,885	3,552	-	-		27,754
Software updates and support	69,134	7,371	14,109	2,568	209	-		93,391
Professional services	48,592	8,868	20,872	6,886	-	-		85,218
Hosting and other fees	11,494	2,260	5,714	2	530	214		20,214
External revenue	143,545	28,051	45,096	13,068	739	214		230,713
Revenue between segments	22,025	2,199	4,487	17	73,298	20,007	-122,033	-
Total segment revenue	165,570	30,250	49,583	13,085	74,037	20,224	-122,033	230,713
EBITDA	22,116	2,507	6,703	7,065	29,083	-38,268	-	29,206
Depreciation and amortization	2,076	352	764	592	1,650	2,027	-	7,461
Segment operating profit (EBIT)	20,040	2,155	5,939	6,473	27,433	-40,295	-	21,745
Financial items, net								7,135
Profit for the period before tax								28,880
Total assets	242,384	58,514	104,661	50,437	59,713	3,647	9,511	528,867

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Company Announcement

EUR '000	EMEA	Asia and Australia	North America	SimCorp Sofia	Research and development	Corporate functions	Elimination/Not allocated	Group
April 1 - June 30, 2021
Licenses - initial sales	10,631	423	2,733	-	-	-		13,787
Licenses - additional sales	9,376	198	771	533	-	-		10,878
Software updates and support	32,907	3,700	6,354	1,171	65	-		44,197
Professional services	22,078	3,908	12,434	2,607	-	-		41,027
Hosting and other fees	5,482	489	2,557	12	360	-34		8,866
External revenue	80,474	8,718	24,849	4,323	425	-34	-	118,755
Revenue between segments	9,400	640	3,564	279	46,912	13,973	-74,768	-
Total segment revenue	89,874	9,358	28,413	4,602	47,337	13,939	-74,768	118,755
EBITDA	11,957	544	3,679	1,612	27,525	-11,444	-	33,873
Depreciation and amortization	1,102	175	310	408	1,291	628	-	3,914
Segment operating profit (EBIT)	10,855	369	3,369	1,204	26,234	-12,072	-	29,959
Financial items, net								-1,302
Profit for the period before tax								28,657
January 1 - June 30, 2021
Licenses - initial sales	11,313	864	5,161	-	-	-		17,338
Licenses - additional sales	14,691	375	7,309	3,261	-	-		25,636
Software updates and support	66,126	7,526	12,874	2,341	147	-		89,014
Professional services	44,176	8,221	23,665	5,316	-	-		81,378
Hosting and other fees	8,776	1,231	4,909	12	423	15		15,366
External revenue	145,082	18,217	53,918	10,930	570	15		228,732
Revenue between segments	17,442	1,315	5,529	691	93,404	22,358	-140,739	-
Total segment revenue	162,524	19,532	59,447	11,621	93,974	22,373	-140,739	228,732
EBITDA	19,733	1,799	6,655	5,568	50,975	-22,987	-	61,743
Depreciation and amortization	2,246	347	623	821	2,081	1,740	-	7,858
Segment operating profit (EBIT)	17,487	1,452	6,032	4,747	48,894	-24,727	-	53,885
Financial items, net								1,567
Profit for the period before tax								55,452
Total assets	185,374	44,463	84,440	42,993	75,732	20,922	26,068	479,992

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Company Announcement

Contingent liabilities

No material changes have occurred to the contingent liabilities referred to in the Annual Report 2021.

Events after June 30, 2022

No significant events have occurred after the balance sheet date that affect the interim report other than described separately in this interim report.