SDL plc Half Year Results for the Six Months Ended 30 June 2019

Successful strategic and financial execution

SDL plc (“SDL” or the “Group”), the global innovator in language translation technology, services and content management, today announces its half year results for the six months ended 30 June 2019.

Financial Highlights

Half Year Results

1Proforma is used for illustrative purposes based on unaudited management accounts of the pre-acquisition period of DLS
2Adjusted operating profit: Operating profit before acquisition related amortisation and exceptional items (as reconciled on the income statement to the half year results)
3Adjusted earnings: Profit after tax before the impact of exceptional items and acquisition related amortisation (as reconciled in note 5 of the half year results)
41H18 results have not been restated for the impact of IFRS 16 – Leases (see note 1 of the half year results) 

  • Revenue benefited from Pound Sterling to US Dollar exchange rate 
  • Before IFRS 16 adjustments, adjusted operating profit was £15.5m 
  • Group gross margin of 51.5% (1H18: 52.9%), reflecting increased contribution to total revenue from Language Services 
  • Net cash5 at 30 June 2019 was £1.1m (31 December 2018: £14.4m). At 31 July 2019, the Group’s net cash balance was £11.0m 

Operational Highlights 

  • The acquisition of Donnelley Language Solutions (“DLS”) (acquired in July 2018) has performed very well, accelerating SDL’s strategy and receiving positive feedback from customers and employees 
  • Positive momentum from sales and marketing strategy, delivering growth in premium regulated services, strategic accounts, machine translation and new customer wins 
  • Strong growth in premium services6 revenues to £52.0m (1H18: £18.6m), accounting for 40% of Language Services revenues (1H18: 20%) 
  • Improved productivity in Language Services resulting in higher gross margin at 42.1% (1H18: 41.8%), including presently lower margin DLS 
  • Further progress with the Language Services automation programme, with 80% of addressable clients on Helix in June 2019. Linguistic Utilisation7 increased to 57.6% for the first half (1H18: 54.3%) 
  • Actions on corporate overheads and synergies on track to deliver £8m of annualised savings by year end 
  • Investment into market-leading innovations, including the industry’s first end-to-end, AI-enabled translation platform, SDL Language Cloud, which will be launched in September 

5Net cash: Net cash comprises cash and cash equivalents and external borrowings
6Premium Services revenue: Comprises Regulated Language Services (Finance, Legal, Life Sciences) plus Marketing Solutions
7Linguistic Utilisation: The percentage of time in-house linguists spent on billable work across the financial period 

Adolfo Hernandez, CEO of SDL plc, said: 

“We are pleased to have delivered a good start to the year, which resulted in a 14% increase in adjusted diluted EPS over the prior year, benefiting from the acquisition of DLS and strong growth in key areas such as premium services and machine translation. During the first half, we continued to deliver on our transformation strategy, including the roll out of our automation programme, Helix, and completed the development of our next generation end-to-end translation platform, SDL Language Cloud, ahead of its launch in September. We enter the traditionally stronger second half with good sales momentum and a healthy sales pipeline. This, alongside the actions that we are taking on productivity, gives us confidence of delivering improved profitability for the full year, in line with management expectations.” 

To see the full press release, please visit the investor relations section of our website.

Enquiries 

SDL plc      01628 410100
Adolfo Hernandez, CEO
Xenia Walters, CFO 

Luther Pendragon      0207 618 9100
Harry Chathli, Claire Norbury, Alexis Gore

Contact

About SDL

SDL (LSE: SDL) is the global leader in content creation, translation and delivery. For over 27 years we’ve helped companies communicate with confidence and deliver transformative business results by enabling powerful experiences that engage customers across multiple touchpoints worldwide. 

Are you in the know? Find out why 90 of the top 100 global companies work with and trust us on SDL.com. Follow us on Twitter, LinkedIn and Facebook

Copyright © 2019 SDL plc. All Rights Reserved. The SDL name and logo, and SDL product and service names are trademarks of SDL plc and/or its subsidiaries, some of which may be registered. Other company, product or service names are the property of their respective holders.