5 years ago
November 17, 2016
Language Industry Financial News: Donnelley, LanguageLine, Keywords
Donnelley Financial Solutions, parent company of language service provider Donnelley Language Solutions, which recently completed a lengthy spin-off process, reported results for the third quarter 2016.
Revenues for the quarter were USD 139.4m, down from 142.1m in the same quarter 2015. For the first nine months of the year, revenues were also down at USD 454.1m (2015: USD 479.9). Income from operations was lower too at USD 18m in Q3 2016 compared to USD 28.2m for the same period in 2015. Income for the first nine months fell to USD 99.5m in 2016 from USD 134.6m in 2015.
Donnelley Financial does not report Language Solutions as an individual business unit. The revenues generated in translation and language services are allocated into roughly equal proportions to the United States and International reporting segments.
Still, the filing indicates that business at Donnelley Language Solutions is going well. In the results comment for both US and International segments, the company mentions that an increase in translation services helped the bottom line and partially offset a decrease in other units.
LanguageLine Makes Its Debut
Another language service provider under the ownership of a larger entity is over-the-phone (OTP) interpreter LanguageLine. In the largest deal in language services to date, LanguageLine was sold to French call center operator Teleperformance in August 2016 for a whopping USD 1.5bn.
In its third quarter 2016 results, Teleperformance has now consolidated LanguageLine’s contribution, albeit only for a few days starting from September 19, 2016. In those 12 days, revenues attributed to LanguageLine were EUR 16m.
Teleperformance ended on an optimistic note in its full year 2016 results, projecting a healthy EBIT margin of 10.3% and highlighting that the addition of LanguageLine will “significantly reinforce this objective.”
In a call with analysts, Teleperformance CFO Olivier Rigaudy said they are “enthusiastic” about LanguageLine and said they are planning to leverage Teleperformance’s global footprint to develop LanguageLine’s business outside the US.
Keywords Now Worth More Than Lionbridge
Dublin-based game localizer Keywords Studios, continues to gobble up companies on its quest to dominate the video game localization market. On November 17, 2016, the company announced the acquisition of Canadian game testing vendor Enzyme Testing Labs for a total of CAD 4.9m (USD 3.65m).
In addition to its testing business, Enzyme also provides localization services, according to the Keywords press statement. Enzyme was founded in 2002 and is based in Saint-Jérôme, Canada with additional locations in Montreal, Canada, and Kawasaki, Japan.
The markets like Keywords’ continued drive for acquisitions with stock up 3% at the time of this writing. Keywords has delighted investors this year with its stock up 70% over the past six months. At USD 322.1m Keywords’ market capitalization has now surpassed that of revenue leader Lionbridge, which weighs in at USD 282.42m.