RWS’ Full-Year 2021 Profit Beats Expectations on SDL Acquisition

Translation Agency RWS Financial Results 2021

On September 26, 2021, UK-based language service provider (LSP) RWS released a trading update and notice of results for the year ended September 30, 2021.

The London-listed company said revenue is expected to be “within the range of market expectations,” with adjusted profit before tax coming in “ahead of market consensus.”

Based on information from analysts, compiled by RWS, full-year revenue is expected to be in the range of GBP 694–711.3m (USD 957–980m), with consensus placing the figure around GBP 700m (USD 965m). 

Meanwhile, RWS said analysts arrived at a consensus of GBP 111.6m (USD 153.8m) for adjusted profit before tax, and the figure is expected to fall within the GBP 109.8m–113.2m (USD 151–156m) range.

For reference, RWS generated revenues of GBP 355.8m in 2020, roughly flat from 2019. Adjusted profit before tax was also largely unchanged in 2020 at GBP 70.2m (2019: GBP 74.2m), but has climbed by around GBP 40m plus in 2021.

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RWS said the 2021 performance “reflects a stronger than expected margin driven by both an improved margin mix and the early stages of operational efficiencies from the integration of SDL into the Group.”

RWS’ Ian El-Mokadem, who succeeded Richard Thompson as CEO in July 2021, said the company’s results were “strong” and demonstrated “a robust revenue performance combined with a stronger than anticipated margin, following the acquisition of SDL.”

RWS completed the acquisition of SDL, formerly its closest rival by revenue, on November 4, 2020, and the 2021 figures include around 11 months of SDL contributions. RWS also acquired Japan’s Horn & Uchida Patent Translation for around USD 3m in July 2021.

One-Horse Race to a Billion

Although RWS will not report the full set of results for its financial year 2021 until mid-December, the trading update effectively ends the company’s head-to-head race to a billion with US-based rival TransPerfect.

TransPerfect is still steadily closing in on that particular target, looking likely to do so by calendar year-end — and to retain its title as world’s largest LSP by revenue, for now. 

Arguably, as a publicly traded company in the UK, RWS is likely more concerned with how the market reacts to its announcements than a dollar-based revenue target.

Shares in RWS climbed nearly 3% on the day the trading update was released, and are up almost 17% year to date. RWS’ market capitalization currently stands at GBP 2.44bn (USD 3.4bn), and the company remains, by far, the world’s most valuable publicly-traded LSP.