Press release

SDL plc Final Results for the Year Ended 31 December 2019

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SDL plc (“SDL” or the “Group”), the intelligent language and content company, announces its full year results for the twelve months ended 31 December 2019.

2019 Financial Highlights

Audited Results




12 months to 31 December













Pro forma1









Operating profit









Adjusted operating profit2









Profit before tax









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Basic earnings per share









Diluted earnings per share









Adjusted basic earnings per share3









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Pro forma is used for illustrative purposes based on unaudited management accounts of the pre-acquisition period of DLS


Adjusted operating profit: Operating profit before acquisition related amortisation and exceptional items (as reconciled on the income statement)


Adjusted earnings: Profit after tax before the impact of exceptional items and acquisition related amortisation (as reconciled in note 7)

  • Results include maiden full year contribution of the acquisition of Donnelley Language Solutions (“DLS”), completed in July 2018
  • All business segments delivered growth in revenues and adjusted operating profit

    • Language Services gross margin rose to 42.9% (2018: 42.0%)
  • Before IFRS 16 adjustments, adjusted operating profit was £35.6m
  • Strong cash conversion: adjusted cash flow from operations of £50.5m (2018: £45.6m), representing cash flow to adjusted EBITDA conversion of 98% (2018: 133%)
  • Currently gross cash is in excess of £98.0m with drawn credit facilities of £63.0m (net cash c. £35m)

2019 Operational Highlights

  • Key Performance Indicators:

    • Premium Services revenue increased to £100.5m (2018: £63.5m), equating to 38% of Language Services revenue (2018: 29%)
    • Language Services Repeat Revenue of 96% (2018: 97%) and Annual Recurring Contract Value of £71.9m (2018: £67.5m)
  • 280 cross and upsell deals (2018: 220)
  • Progress with Business Process Automation programme:

    • 90% of addressable Language Services customer accounts on Helix by December 2019, enabling a rise in average Linguistic Productive Utilisation to 67% (2018: 64%) and a reduction in work outsourced to 59% (2018: 62%)
  • Investment in market-leading innovations, including the industry’s first end-to-end, AI-enabled translation platform, SDL Language Cloud, which was successfully launched in June 2019
  • Cost-saving programme delivered in-year savings of £5.9m and annualised savings of £8.5m

Post Year-End Update – COVID-19

  • SDL’s Global Business Continuity Plans activated at the end of January 2020

    • No degradation to date of SDL’s delivery capability for clients
    • Large-scale remote working measures in place in all countries and regions subject to public health controls. The majority of staff are either on voluntary or mandatory working from home arrangements
    • Effectiveness of response has been enabled by SDL’s investments in Helix (Business Process Automation platform), networking and virtualised cloud storage
  • No material direct impact in the first quarter of 2020 on revenues from the pandemic. However, it is early days for most of SDL’s customers and the Group believes it is prudent to anticipate a reduction in constant currency revenues across SDL’s Language Services and technology businesses
  • A multi-phased plan is in place to offset some of the impact of any reductions, depending on the severity and length of the crisis. Phase 1, equating to cost reductions of £8m, is being executed now
  • As SDL enters a period of uncertainty caused by the COVID-19 pandemic, the Board considers it prudent not to recommend a final dividend for 2019. SDL will revisit its dividend policy when it has sufficient clarity of outlook
  • The Group is in a strong financial position. The Group has access to a £70m committed RCF financing facility, plus a £50m accordion facility, which matures in July 2023, and has drawn down £63m on the RCF facility to ensure that it has sufficient short-term liquidity. Covenants on the RCF are limited to a net debt to EBITDA ratio of 3:1 and a minimum of 4:1 on EBITDA to interest. The Board acknowledges that the conservation of funds is critical at this time of intensified uncertainty and has therefore taken steps to further strengthen its financial position
  • SDL has modelled a number of different potential scenarios of different durations and severity, and assessed the impact on both profitability and cash flow over the next 12 months. With the actions being taken to preserve cash and the financial resources available, the Group is well placed to withstand an extended period of reduced trading, should it occur
  • Full-year financial guidance remains suspended and SDL will provide further updates as appropriate

Adolfo Hernandez, CEO of SDL plc, said: SDL’s 2019 financial results reflect a year of successful execution and the hard work and investments of prior years. We made strong progress against our strategic objectives. We significantly grew our premium services revenues, benefited from systems investment and our business process automation programme, and delivered industry-leading product innovation, most notably with the launch of SDL Language Cloud and our world-class Neural Machine Translation product suite.

“In 2020, SDL has responded at speed and scale to the new circumstances imposed by the global public health crisis. We have moved the majority of our employees to home-working and to date have seen no degradation in service delivery. The feedback from customers has been very positive. Although normal revenue performance has persisted to date, it is still too early to assess the potential impact on sales in the coming quarters. However, it is prudent to assume that the disruption to business activity globally could lead to a reduction in sales across Language Services and SDL’s technology businesses. We have therefore put a phased set of mitigation plans in place. In the first phase, SDL is taking steps to control variable external costs, discretionary costs and optimise working capital. We are keeping the situation under close review and will take further actions as necessary.”

To view the full announcement, please visit the investor relations section of our website.

About SDL

SDL (LSE: SDL) is the intelligent language and content company. Our purpose is to enable global understanding, allowing organizations to communicate with their audiences worldwide, whatever the language, channel or touchpoint. We work with over 4,500 enterprise customers including 90 of the world’s top brands and the majority of the largest companies in our target sectors. We help our customers overcome their content challenges of volume, velocity, quality, fragmentation, compliance and understanding through our unique combination of language services, language technologies and content technologies.