logo image
  • News
    • People Moves
    • Deal Wins
    • Demand Drivers
    • M&A and Funding
    • Financial Results
    • Technology
    • Academia
    • Industry News
    • Features
    • Machine Translation
    • — Divider —
    • Slator Pro
    • — Divider —
    • Press Releases
    • Sponsored Content
  • Data & Research
    • Research Reports & Pro Guides
    • Language Industry Investor Map
    • Real-Time Charts of Listed LSPs
    • Language Service Provider Index
  • Podcasts & Videos
  • Events
    • Design Thinking – February 2021
    • — Divider —
    • SlatorCon Coverage
    • Other Events
  • Directory
  • RFP Center
  • Jobs
MENU
  • News
    • People Moves
    • Deal Wins
    • Demand Drivers
    • M&A and Funding
    • Financial Results
    • Technology
    • Academia
    • Industry News
    • Features
    • Machine Translation
    • — Divider —
    • Slator Pro
    • — Divider —
    • Press Releases
    • Sponsored Content
  • Data & Research
    • Research Reports & Pro Guides
    • Language Industry Investor Map
    • Real-Time Charts of Listed LSPs
    • Language Service Provider Index
  • Podcasts & Videos
  • Events
    • Design Thinking – February 2021
    • — Divider —
    • SlatorCon Coverage
    • Other Events
  • Directory
  • RFP Center
  • Jobs

Advertise on Slator! Download the 2021 Online Media Kit Now

  • Slator Market Intelligence
  • Slator Advertising Services
  • Slator Advisory
  • Login
Search
Generic filters
Exact matches only
Advertisement
SDL Wipes Slate Clean and Writes Off GBP 33m; Translation Business Strong

5 years ago

March 15, 2016

SDL Wipes Slate Clean and Writes Off GBP 33m; Translation Business Strong

Financial Results ·

by Florian Faes

On March 15, 2016

5 years ago
Financial Results ·

by Florian Faes

On March 15, 2016

SDL Wipes Slate Clean and Writes Off GBP 33m; Translation Business Strong

UK-based language service provider SDL reported results for the full year 2015 on March 15, 2016. Revenues for the group were up marginally to GBP 266.9m from GBP 260.4m in 2014. SDL also managed to slightly increase its profit before tax, impairments, and one-off factors to GBP 20.6m (2014: GBP 16.5m). Average headcount stood at 3,504 in 2015, up from 3,245 in 2014.

As reported by Slator at the end of January 2016, SDL is in the middle of major strategic realignment. The board admitted its customer experience strategy failed and put its campaign management, social media monitoring, marketing analytic, and Fredhopper units up for sale.

The strategy change comes with an impairment charge (writing off goodwill) of GBP 33.3m and other one-off costs of GBP 5.8m. As a result, SDL reported a full-year loss after tax of GBP 30.7m (2014: profit after tax GBP 6.6m).

Advertisement

It appears the board wants to take the full hit for the strategic realignment in 2015 and make sure the new leadership does not have too much legacy to deal with going forward.

The report did not provide an update on how the sale of the unit is progressing and if there has been any indication of interest from potential buyers.

“Our CXM strategy has failed to gain traction, resulting in a significant decline in new technology bookings in our CXM business, with a commensurate increase in losses from these products” – SDL Executive Chairman, David Clayton

CEO Recruitment

The board has been looking for a replacement for founder and long-time CEO Mark Lancaster since his departure in early October 2015. According to David Clayton, Executive Chairman, “CEO succession is a critical issue and the Nomination Committee is currently working with an international executive search firm to find the candidate.”

Language Services Saves the Day

As a result of the board’s business review, SDL has defined four operating segments, for which it reported 2015 results: Language Services, Language Technology, Global Content Technologies, and the Non-core Businesses it seeks to sell. The company restated 2014 results along the same lines.

Language Services, the company’s core translation services business, increased revenues from  GBP 146.8m in 2014 to GBP 152.8m in 2015. What is more impressive, however, is profitability. SDL managed to increase profit margins in the unit from 16.4% in 2014 to 19.9% in 2015, which resulted in a pre-tax profit of GBP 30.4m for the full year 2015.

The company’s three other units fared less well. Revenues were broadly flat compared to 2014: GBP 36.7m in Language Technology (2014: GBP 37.4m); GBP 50.9m in Global Content Technologies (2014: GBP 51.4m); 26.5 in Non-core Businesses (2014: GBP 24.8m).

But while in terms of profitability the Language Technology unit still eked out a pre-tax profit of GBP 1.3m, Global Content Technology and Non-core Businesses booked pre-tax losses of GBP 1.5m and GBP 9.6m respectively.

In Non-core Businesses, the losses over the past two years now stand at GBP 20m. It is clear the board decided they had seen enough and pulled the plug; or, as Executive Chairman David Clayton put it, “Our CXM strategy has failed to gain traction, resulting in a significant decline in new technology bookings in our CXM business, with a commensurate increase in losses from these products.”

Clayton sees the failure in “SDL’s focus of investing in and selling consolidated integrated platforms whereas the market continues to favour the purchase of specialist point solutions.”

North America Strong, Europe Less So

It is also worth taking a look at SDL’s revenues by geography, as they confirm some of the broader market trends. North America led the way at SDL with revenues up 18% in 2015 compared to the previous year. Asia-Pacific also grew and clocked up 9% growth for the year. EMEA was down 3% with SDL attributing the decrease to price pressure from legacy customers and high inflation in Southern and Eastern Europe.

Trados Litigation Settled

The report contained a number of other interesting bits and pieces. SDL has a remarkably broad client base with no single customer contributing more than 4% of revenues. The report lists dozens of new client wins in 2015 such as Huawei, Mitsubishi Electric, and PayPal. However, SDL also said it lost the majority of its Microsoft account toward the end of 2015 “due to unattractive pricing.”

In a further move to wipe the slate clean for the incoming CEO, the company settled its longstanding litigation over the acquisition of Trados. In February 2016, SDL paid USD 1.85 million in “full and final settlement of all claims.”

For now, the markets has not reacted strongly to the full-year results, with the shares currently trading barely changed for the day. SDL’s stock has gained around 30% since the beginning of October 2015, when Lancaster’s departure was announced.

TAGS

David ClaytonMark LancasterSDLTrados
SHARE
Florian Faes

By Florian Faes

Co-Founder of Slator. Linguist, business developer, and mountain runner. Based in the beautiful lakeside city of Zurich, Switzerland.

Advertisement

SUBSCRIBE TO THE SLATOR WEEKLY

Language Industry Intelligence
In Your Inbox. Every Friday

SUBSCRIBE

SlatorSweepSlatorPro
ResearchRFP CENTER

PUBLISH

PRESS RELEASEDIRECTORY LISTING
JOB ADEVENT LISTING

Bespoke advisory including speaking, briefings and M&A

SLATOR ADVISORY
Advertisement

Featured Reports

See all
Slator 2020 Language Industry M&A and Funding Report

Slator 2020 Language Industry M&A and Funding Report

by Slator

Slator 2021 Data-for-AI Market Report

Slator 2021 Data-for-AI Market Report

by Slator

Slator 2020 Medtech Translation and Localization Report

Slator 2020 Medtech Translation and Localization Report

by Slator

Pro Guide: Sales and Marketing for Language Service Providers

Pro Guide: Sales and Marketing for Language Service Providers

by Slator

Press Releases

See all
Live Stream Smartling’s Global Ready Conference on April 14, 2021

Live Stream Smartling’s Global Ready Conference on April 14, 2021

by Smartling

Rheinschrift Language Services – Strategic Improvements and Workforce Expansion in 2021

Rheinschrift Language Services – Strategic Improvements and Workforce Expansion in 2021

by Rheinschrift Language Services

Memsource Acquires Phrase

Memsource Acquires Phrase

by Memsource

Upcoming Events

See All
  1. Memsource MT Post-Editing Pricing Models Webinar

    Pricing Models for MT Post-Editing Workshop

    by Memsource

    · February 3

    Hear a panel of innovative localization professionals share different approaches for MT post-editing pricing.

    More info FREE

Featured Companies

See all
Text United

Text United

Memsource

Memsource

Wordbank

Wordbank

Protranslating

Protranslating

Seprotec

Seprotec

Versacom

Versacom

SDL

SDL

Smartling

Smartling

Lingotek

Lingotek

XTM International

XTM International

Smartcat

Smartcat

Translators without Borders

Translators without Borders

STAR Group

STAR Group

memoQ Translation Technologies

memoQ Translation Technologies

Advertisement

Popular articles

Why Netflix Shut Down Its Translation Portal Hermes

Why Netflix Shut Down Its Translation Portal Hermes

by Esther Bond

Top Language Industry Quotes of 2020

Top Language Industry Quotes of 2020

by Monica Jamieson

The Slator 2020 Language Service Provider Index

The Slator 2020 Language Service Provider Index

by Slator

SlatorPod: The Weekly Language Industry Podcast

connect with us

footer logo

Slator makes business sense of the language services and technology market.

Our Company

  • Support
  • About us
  • Terms & Conditions
  • Privacy Policy

Subscribe to the Slator Weekly

Language Industry Intelligence
In Your Inbox. Every Friday

© 2021 Slator. All rights reserved.

Sign up to the Slator Weekly

Join over 13,000 subscribers and get the latest language industry intelligence every Friday

Your information will never be shared with third parties. No Spam.