Donnelley Financial on Language Industry’s Future Bread and Butter

While many big language service providers have been busy consolidating the field through acquisitions, one of the larger players, Donnelley Language Solutions, has remained quiet since its February 2014 deal to acquire Canada’s MultiCorpora.

Yet it has been an eventful 18 months for the LSP and its Paris-based Managing Director Christophe Djaouani, as its parent company split into three separate divisions, each re-listed on the New York Stock Exchange. Language Solutions became part of the newly formed Donnelley Financial with Djaouani appointed Senior Vice President of the new entity.

Donnelley Financial, whose shares began trading in late September 2016 under the ticker DFIN, generated nearly one billion US dollars in revenue last year and had a market capitalization of USD 630m at press time. The company is headquartered in Chicago and led by CEO Dan Leib.

Slator reached out to Djaouani and Donnelley Financial COO Tom Juhase for an update on the split and on what’s next for Donnelley Language Solutions.

There are no plans to report results of the Language Solutions offering on a global basis

“We completed the hard spin on October 1st 2016,” they said, adding, “Since that date, DFIN has been operating as a separate company in every aspect. We did have some locations where employees from the three resulting entities moved to separate offices prior to the hard spin. Throughout the process, it was business as usual because, for us, the most important thing was to not impact our clients.”

DFIN has some 3,600 employees in 18 countries working at 61 facilities. Donnelley Language Solutions has 300 full-time staff and reports into COO Tom Juhase on a group level.

Christophe Djaouani

Translation Offsets Decline Elsewhere

Asked how Language Solutions fits into the parent company’s overall strategic vision, Djaouani and Juhase said, “At a high level, and looking at the total revenue mix for Donnelley Financial, the Language Solutions group with its recurring revenue and near year-on-year double-digit growth creates a nice balanced portfolio of recurring and nonrecurring revenue in our transactional business.”

Donnelley Financial reports the results of its language services business in two separate categories (Language Solutions and International) and, according to the two executives, there are “no plans to report results of the Language Solutions offering on a global basis.” Still, back in April 2016, Slator estimated combined language services revenues to be around USD 81.5m for 2015.

According to Djaouani and Juhase, the consolidated Language Solutions has grown for 15 consecutive years and, in 2016, posted a 9.4% increase over the prior year. This would mean the business generated around USD 90m in revenues in 2016. In a call with analysts on February 28, 2017, Donnelley Financial CFO Dave Gardella pointed to growth in “translation services” partially offsetting declines in other business lines.

“Financial” in a Broad Sense

Slator asked Djaouani and Juhase whether the “Financial” in Donnelley Financial does not represent a branding and marketing challenge for Language Solutions, which generates substantial business outside the financial industry in verticals such as legal and life sciences.

Consolidation, so far, hasn’t inspired much creativity and innovation in the industry

The pair acknowledged the challenge, but immediately highlighted opportunities in areas where verticals intersect, such as offering services around life sciences IPOs or providing the company’s virtual data room services to pharma clients.

In the core financial services market, the extra emphasis on “financial” will be an advantage, of course. In arcane regulatory niches, such as the preparation and translation of so-called packaged retail and insurance-based investment products (PRIIPs), Language Solutions can tap into group resources and structure end-to-end solutions most financial LSPs would struggle to put together.

Tom Juhase


With Multitrans, TextBase, and TermBase, Donnelley Language Solutions owns a fairly comprehensive set of translation management capabilities, which are also licensed to other LSPs or direct clients (e.g., the Swiss Federal Government).

On the flip side of technological-independence are substantial R&D costs, which are likely to rise as competitors like SDL and Lilt push forward with productivity boosters such as adaptive machine translation.

Exactly What We Expected

As regards the competitive landscape, Djaouani and Juhase said the industry consolidation of the past couple of years was “exactly what we expected.” They added that consolidation, so far, “hasn’t inspired much creativity and innovation in the industry.”

It is the products and services sold alongside translation that will become the bread and butter of the language services industry

They are not worried about the absence of Language Solutions from the current M&A cycle. “Our focus has mainly been to put in place the right foundation and company culture to ensure DFIN’s success. We were really focused on that and, as a result, it was very successful. Yes, there was a flurry of M&A activity, but the industry still remains both fragmented and evolving with new entrants due to new technology.”

For future acquisitions, Djaouani and Juhase will focus on technology, services, and highly regulated markets. Competition for attractive niche players will heat up even more.

New Bread and Butter

The two executives see organic growth in services that complement the core language services component: “Pricing may fluctuate and change for individual services. For instance, we have seen a huge drop in the price per word. But it is the products and services sold alongside translation that will become the bread and butter of the language services industry. It is not just about the word any more but also imagery and concepts, which is why we are seeing the growth of fairly new services like transcreation.”

In terms of services, Djaouani and Juhase said they will focus on expanding in four areas: transcreation, website localization, video dubbing and subtitling, and machine translation post-editing.

In some of these areas, Donnelley Language Solutions faces formidable competitors such as Hogarth in transcreation, or Zoo, Deluxe, and TransPerfect in media localization. Website localization, of course, is probably one of the single most competitive corners of the language services market.