Strategic Performance Indicators
Strategic Performance Measure Performance
Indicator
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Revenue Change % +17.6%
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Profit before tax and
amortisation Change % -10.4%
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Net cash flows from operating
activities Change % -46%
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% of group
Technology revenues total 44% (2011: 41%)
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Acquisitions Transactions Completed acquisition
of Alterian on 27
January 2012
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Number of product
Innovation releases 41 (2011: 37)
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Number of cross
sold enterprise
Cross selling customers 420 (2011: 380)
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Innovation
Innovation remains core to the SDL business. To ensure the
delivery of our technology vision for the future, investment in
research and development was maintained at GBP21.8 million or 18%
of combined Technology segment revenues. At the same time we
continue to carefully manage our cost base to deliver profitable
technologies and services. Five significant new products were
released in 2012:
-- SDL Campaign Manager and SDL Customer Analytics. This latest
version enables our customers to manage and execute personalised
cross channel communication to individually targeted customer
groups within a campaign audience of up to 100 million.
-- SDL SM2. This new version of SDL's Social Media business
intelligence platform includes new reporting and sentiment analysis
functionality. SM2 is also the first fully featured
enterprise-class social media platform to provide convenient online
provisioning for small-midsize businesses.
-- SDL Fredhopper. This new version addresses arguably the
biggest challenge associated with global eCommerce - presenting the
right products to each individual customer based on what they want,
while also complementing the retailer's local merchandising
strategy.
-- SDL Studio Groupshare.This collaboration hub for small and
medium size localisation teams using SDL Trados Studio and SDL
Multiterm enables groups to work via a single platform sharing
translation memories and terminology, and has been named the winner
of a Silver People's Choice Stevie(R) Award for favourite new
products.
-- SDL Live Content. This is a new family of software products,
comprising editing, storage and delivery tools that enable
companies to meet all their customers' technical information needs
through all the relevant touch points in the customer journey.
In addition to the main product releases, SDL continues to
deliver updates on existing product lines and closer integrations
between the different SDL solutions.
Revenue
Headline revenue growth of 17.6% was driven by underlying
organic growth at constant currency of 6.7%, acquisition effects of
12.4% and currency translation effects of -1.5%.
Headline revenue growth was strongest in North America and Asia.
Continental Europe was up 8% (4% organically) where continued
economic uncertainty in Eurozone countries is affecting economic
sentiment in the region. The Language Services segment saw
strongest growth, where a 12.4% underlying increase at constant
currency was achieved, a testament to the continued value our
clients derive from these solutions. A diverse mix of regions,
industry verticals and customers provided some degree of buffering
for the group from the declining performance of Technology as a
whole and weaker European performance. Group revenues by reporting
segment are shown in table 1 and a geographic split by destination
is shown in table 2.
Analysis of revenue by segment (Table 1)
2012 2011
----------------------------------- ----- -----
Language Services 56% 59%
----------------------------------- ----- -----
Language Technologies 15% 18%
----------------------------------- ----- -----
Content Management Technologies 21% 23%
----------------------------------- ----- -----
Campaign Management Analytics and 8% -
Social Intelligence
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Geographic Split of Sales by Destination (Table 2)
2012 2011
--------------- ------ ------
UK 12.0% 9.6%
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Europe 31.1% 33.8%
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USA 38.7% 38.9%
--------------- ------ ------
Canada 5.8% 7.7%
--------------- ------ ------
Rest of World 12.4% 10.0%
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With new business wins, the customer concentration profile
continues to improve with the 20 largest customers contributing 27%
(2011: 29%) of revenue in 2012. It remains that no single customer
contributes more than 5% of Group revenues.
We continue to expand our presence by vertical market sector. In
2012, there were 10 sectors contributing more than GBP10 million of
revenue (2011: 8), including Information Technology, Consumer
Electronics, Healthcare, Pharmaceuticals, Financial Services,
Communications, Entertainment & Leisure, Construction &
Machinery and Automotive.
Performance by Segment
For management purposes the Group is organised into business
units based on products and services, and has four reportable
segments.
Content Management Technologies (contributing GBP57.8 million or
21% of revenue to the group and GBP10.4 million or 29% of Group
PBTA) (2011: contributing GBP52.7 million or 23% of revenue to the
group and GBP8.8 million or 22% of group PBTA).
This segment comprises Web Content Management Solutions,
eCommerce Technologies and Structured Content Technologies. Whilst
total segment revenues grew by 9.6%, the acquisition of Alterian's
web content business contributed a 13.4% increase, with an
underlying organic decline of 2.7% and a 1.1% negative foreign
exchange effect.
Flat performance in Web Content and reduced licence revenue in
Structured Content was partially offset by strong growth in the
eCommerce business, where sales order bookings for new SaaS
licences increased by 41% in the year. At a headline level, the
former Alterian Web business contributed good levels of support and
maintenance and professional services revenues, having proved more
resilient than expected when the acquisition was made in January
2012. The segment PBTA margin was 18.0% (2011: 16.7%).
Strategically, we continue to make good progress in Web Content,
with Gartner naming SDL Tridion for the fifth consecutive time in
the Leadership Quadrant for Web Content Management. In particular
the usability and interoperability of SDL Tridion was cited, which
we are particularly proud of, having launched a new user interface
in the year and enhanced the integration of Tridion with other SDL
products. We also launched our Global Multinational Alliance
Programme (GMAP), which brings together a community of system
integrators, strategic consultancies, creative agencies and
technology alliances to jointly participate in certification,
training and the sharing of best practices. Growth in Asia was a
highlight, where organic revenue increased by
62%. Renewal rates in the installed base were also very strong at 95%.
In Structured Content, the strategic focus in 2012 has been the
full launch of SDL LiveContent, a new family of software products
that transforms how end users' technical information needs are met
by harnessing the power of XML. Replacing traditional ad hoc tools
and processes, SDL LiveContent is an integrated end-to-end solution
that delivers better quality content, faster time to delivery and
improved searches. The solution comprises components for the simple
creation of advanced content, storage that enables reuse, sharing
and delivery to any channel and interactive output that enables a
unique combination of collaboration and feedback with users of
content.
We are also pleased that SDL has been awarded two distinctions
from KM World for its best of breed content management
technologies, "100 companies that matter in knowledge management"
and induction into the KM World 2012 Hall of Distinction. The KM
World Hall of Distinction is a first time award for SDL and is
given to companies that offer innovative technologies and
contribute to outstanding thought leadership in knowledge
management.
New clients in 2012 include KLM Royal Dutch Airlines, US
Government Printing Office, AGCO and Acme Packet.
Language Technologies (contributing GBP39.2 million or 15% of
revenue to the group and GBP2.5 million or 7% of Group PBTA) (2011:
contributing GBP40.1 million or 18% of revenue to the group and
GBP5.2 million or 13% of group PBTA).
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