UK-headquartered language service provider RWS held a capital markets event for investors and analysts on October 9, 2018. The company provided an update on progress made by the group throughout the second half of its financial year 2018, ended September 30, 2018.
The press release issued prior to the capital markets event confirmed that the “Group’s trading performance for the financial year ended 30 September 2018 was at least in line with expectations. A full trading update will be provided on 18 October, as previously announced.”
RWS’s posted H1 2018 revenues of GBP 139.6m (USD 187.9m), up 82% vs H1 2017. RWS’s Moravia division, which the company acquired in November 2017, contributed much of the growth and generated GBP 52.1m in revenues in the five months since its sale to RWS. Underlying revenue growth excluding acquisitions (Moravia, Luz and Article One Partners) and currency effects was a more modest 5%.
In H2 2018, Moravia now accounts for over 40% of the Group’s pro-forma revenues, making it more significant than RWS’s “core” Patent Translation and Filing division, which accounted for more than three quarters of RWS revenues in 2015, but now accounts for one third. Moravia also provides more than 50% of the Group’s 2,479 staff (FTE).
At the capital markets event, RWS updated investors and analysts about the Group’s now five divisions: Patent Translation and Filing, Patent Information, Life Sciences, Language Solutions, and Moravia. According to the presentation accompanying the capital markets event, the 2018 pro forma revenue contributions per division were as follows:
Moravia
The Moravia division, which was re-branded to RWS Moravia at the start of October 2018, provides localization and managed services. For the financial year 2018, localization services, including software, transcreation, and machine translation & post-editing generated 67.4% of Moravia’s revenues, while managed services, such as SEO, linguistic testing and UX testing, accounted for 12.1%, with project management, DTP and media, content creation and management, engineering and testing, and “other” making up the rest.
The Moravia acquisition is also credited with allowing RWS to “leverag[e] Moravia’s experience and expertise to selectively introduce machine translation into existing production processes,” according to the capital markets day presentation. RWS Moravia currently uses machine translation (MT) and post-editing in its workflows and says that MT “covers more content than there would be budget for otherwise.”
RWS Moravia now plans to drive cross-divisional collaboration with the smaller Language Solutions division, using the non-patent / non-life sciences translation division as an “incubator.”
Life Sciences
According to the presentation, the Life Sciences division has 300 employees and provides translation and linguistic validation services. In FY 2017, the revenue split for these services was 72% and 28% respectively. The division services customers across the Life Sciences sector, generating revenues from Pharma & Biotech (71%), CROs (13%) and Medical Devices (16%). The RWS Life Sciences division is newly integrated with the RWS Moravia Life Sciences vertical and plans to expand capabilities, enter new markets, benefit from RWS referrals, make technology investments and explore machine translation.
Patent Translation and Filing
The Patent Translation and Filing division employs 130 internal translators. Aside from translation services, the division operates a global subscription patent search database, called PatBase, provides IP research services, and offers automated filing services through its Inovia platform.
The presentation also highlights how the Patent division intends to harness machine translation across Patent Information and Patent Translation and Filing services. “RWS staff translation team are in PEMT production pilot,” the presentation said. “Test results show significant productivity gains for junior translators, but are less persuasive for seniors,” according to the presentation. RWS also highlighted the fact that one of its clients attempted to do MT post-editing in-house but returned to RWS after poor results.
“Test results show significant productivity gains for junior translators, but are less persuasive for seniors”
RWS says post-editing is now a component in some of the RFPs they participate in but concludes that the IP industry is still “inherently change-averse”.
Finally, the PatBase platform, which launched MT in 2017, now delivers over 60 billion words per year of raw MT output “across all key patent languages,” the presentation stated.
In the concluding remarks, Andrew Brode, Chairman of RWS, highlighted China and America as growth opportunities for the Group. Additional opportunities identified were from use of technology, and specifically “more work being performed by machine translation.” Meanwhile, the near- to mid-term strategic priorities are to drive organic growth, cross-sell, harness technology and pursue selective acquisitions.
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