SDL PLC Trading Update (2636H)

TIDMSDL

RNS Number : 2636H

SDL PLC

18 June 2013

SDL plc

Trading update

18 June 2013 - Maidenhead, UK - SDL plc ("SDL": LSE: SDL), a leader in Customer Experience Management solutions, today provides an update on trading for 2013.

Performance for the first half of 2013 has remained below management expectations, and as a result, the Board has lowered its outlook for the current financial year. Profit before Tax and Amortisation ("profit") is now expected to be within the range GBP15-20 million in 2013 (2012: GBP35.5 million).

Technology

Across the Technology segments, first half licence revenues are below management expectations, primarily due to previously highlighted lack of sales and marketing investment over the last two years. Although we did not expect the recent sales and marketing investments to have any positive effect on revenues in the first half of 2013, we did expect to have continued sales momentum from 2012. Bookings have also been weaker than expected in the first half and this has resulted in a reduction in our forecast for the second half of 2013. As the weakness has been in licence sales there will be a significant impact on short term profitability of the Technology segments.

Services

Language Services revenue in the first half of 2013 is expected to be below management expectations, primarily due to the poor macroeconomic climate, resulting in our repeat customers reducing their volumes, and to a less extent, increased pricing pressure. First half profit for the Services division is expected to be significantly below management expectations due to the above revenue shortfall. It should be noted there was also an increased investment in infrastructure of automated translation, workflow and process management to improve efficiency as previously highlighted.

Investment and outlook

Highlights in the first half include:

1. We have achieved our aggressive hiring objectives, including the appointment of a Chief Marketing Officer, and the recruitment of 65 additional sales and marketing resources across Europe and North America. With the resources now in place, we expect to see the impacts of these investments in the second half of 2013, as per our plan.

2. Several product launches have strengthened SDL's leadership position in the Customer Experience Management market, with further releases planned for later in 2013:

SDL's Customer Commitment Dashboard, the first social data-enabled analytics framework that predicts customer behaviour.

www.freetranslation.com - an integrated machine translation and human translation platform

Release of SDL Marketing Intelligence Suite

3. We have recently hosted our annual Innovate conference in San Francisco, where many of our key customers and prospects attend. We received overwhelming positive feedback from customers, partners and analysts, providing some confirmation that our vision and product stack can deliver against the growing market demand for Customer Experience Management solutions.

4. Most importantly we are seeing pipeline improvement on both the technology and services side with licence bookings expected to increase significantly in the second half.

Although the performance in our technology and services businesses has been below budget for the first five months of 2013, the build in pipeline for both services and technology with just 1-2 months of our sales and marketing investments in place gives the Board confidence that sales will improve. However, the Board is taking a more cautious view of the speed of services volume recovery and licence sales growth. We are seeing very positive market feedback on our technology stack and are encouraged with pipeline increases in our technology as a result of our marketing and sales investments.

Commenting on the trading update, Chief Executive Officer, Mark Lancaster, said:

"We have achieved our ambitious Sales and marketing recruitment milestones. This has resulted in us building a stronger pipeline, which is expected to produce returns in the second half. Whilst we did not plan for investments to deliver revenue in the first half, we expected greater momentum from last year to carry into the first half of 2013. The necessary investments are being made to deliver our technology products and services into the Customer Experience Management market. As a consequence the business has incurred an increased short term impact to profits. These investments are important to deliver long term growth and profitability. We remain confident in our strategy and in the outlook for the business in the long term."

For further information please contact:

 
SDL plc                                     Tel: +44 (0)1628 
                                             410 127 
Mark Lancaster, Executive Chairman & Chief 
 Executive Officer 
Matthew Knight, Chief Financial Officer 
 
FTI Consulting                              Tel: + 44 (0)20 7831 
                                             3113 
Edward Bridges/Jon Snowball/Emma Appleton

About SDL

SDL enables global businesses to enrich their customers' experience through the entire customer journey. SDL's technology and services help brands to predict what their customers want and engage with them across multiple languages, cultures, channels and devices. SDL has over 1,500 enterprise customers, 400 partners and a global infrastructure of 70 offices in 38 countries. 42 out of the top 50 brands work with SDL. For more information, visit www.sdl.com. All trademarks are the property of their respective owners.

This information is provided by RNS

The company news service from the London Stock Exchange

END

TSTUWSVROWANARR

Sdl (LSE:SDL)
Historical Stock Chart
From Jun 2024 to Jul 2024