S I MCOR P ANNUAL REPORT 2020 SimCorp A/S • Weidekampsgade 16 • 2300 Copenhagen S • Denmark • Company reg. no: 15505281 • www.simcorp.com SIMCORP ANNUAL REPORT 2020 | 2 A leading provider of fully integrated front-to-back, multi-asset, investment management solutions to the world’s largest institutional investment management companies Empowering unmatched operational efficiency and investment enablement MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS OF SIMCORP A/S 3 SimCorp at a glance 17 Financial review 2020 45 Income statement 93 Income statement 4 Business units, products and clients 24 Risk management 45 Statement of comprehensive income 93 Statement of comprehensive income 5 Business unit review 27 Corporate governance report 46 Cash flow statement 94 Cash flow statement 6 Performance and highlights 31 Shareholder information 47 Statement of financial position 95 Statement of financial position 7 CEO and Chairman letter 35 Board of Directors 48 Statement of changes in equity 96 Statement of changes in equity 9 Highlights 2016-2020 38 Executive Management Board 49 Notes 97 Notes 11 Vision and strategy 39 Group Management Committee 15 Financial targets 2021 40 Statements and signatures RELATED REPORTS Sustainability Report 2020 Remuneration Report 2020 www2.simcorp.com/SustainabilityReport2020 www2.simcorp.com/RemunerationReport2020 DISCLAIMER: SimCorp’s annual report includes certain forward-looking statements regarding the Group’s future financial situation. Such statements are based on SimCorp’s current plans, estimates, and projections. By nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and are thus not a guarantee of future performance. Accordingly, the actual performance may deviate materially from that expressed in such forward-looking statements due to a variety of factors. The main (but not all) factors of risk and uncertainty are dealt with in further detail under the heading “Risk Management” on pages 24-26 and in note 6.2 “Risk” in this annual report. Factors that may impact the Group’s revenue growth and profitability margin from year to year include, but are not limited to, the timing of large deals and investments. Unless required by law or corresponding obligations, SimCorp A/S is under no duty and undertakes no obligation to update or revise forward-looking statements after the distribution of this document, whether as a result of new information, future events, or otherwise. MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS OF SIMCORP A/S SIMCORP ANNUAL REPORT 2020 | SIMCORP AT A GLANCE 3 SIMCORP AT A GLANCE A leading provider of integrated LONG TRADITION OF INVESTING IN INNOVA- OUR PRODUCTS front-to-back, multi-asset, investment TION, EXPANSION, AND TRANSFORMATION management solutions to the world’s largest investment management A long-lasting partner Number of clients companies SimCorp’ core system provides fully integrated front-to-back multi-asset class support across 49 206 the investment value chain. years of experience (SimCorp Dimension) SEGMENTS Allocating around Average client tenure Asset Dedicated solution for client Treasury management communications and reporting 20% 11.7 automation. of revenue to R&D years (SimCorp Dimension) Fund Central management banks A GLOBAL AND DIVERSE COMPANY Dedicated enterprise data management solution for reference Sovereign Insurance and market data management. wealth Employees Culture Asset Wealth servicing management 1,901 Front-to-back investment management solution for the Italian insurance market. A truly diverse workplace Nationalities Life/ for our courageous, capable, and curious employees, who pension collaborate to create value Read more about our solutions 68 for our clients. www2.simcorp.com/Solutions MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS OF SIMCORP A/S SIMCORP ANNUAL REPORT 2020 | Business Units, Products AND Clients 4 BUSINESS UNITS, PRODUCTS AND CLIENTS EMEA APAC ALL PRODUCTS Revenue share 26% 11% +4 +4 150 of 570 potential clients 19 of 180 potential clients SimCorpDimension®% SimCorpGain™% SimCorpCoric®% SimCorpSofia™% Third-party% NORTH AMERICA TOTAL Shared clients +12 +1 7% 16% +4 +12 +0 +5 37 of 550 potential clients 206 of 1,300 potential clients SimCorp Dimension® SimCorp Gain™ Market share SimCorp Coric® SimCorp Sofia™ Figures are based on SimCorp estimates. Market share is calculated as number of Market potential New standalone clients in 2020 SimCorp Dimension clients relative to the number of potential clients in each market. New clients in 2020 MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS OF SIMCORP A/S SIMCORP ANNUAL REPORT 2020 | BUSINESS UNIT REVIEW 5 BUSINESS UNIT REVIEW EMEA NORTH AMERICA APAC SIMCORP SOFIA The merged business unit EMEA comprises In the North American business unit, which In APAC, the business unit, which now also SimCorp Sofia, continuing as a separate busi- sale of SimCorp Dimension, SimCorp Coric, now also includes the region’s sales of includes the sales of SimCorp Coric and ness unit, has developed above expectations and SimCorp Gain across Europe, Middle East, SimCorp Coric and SimCorp Gain, total rev- SimCorp Gain in the region, total revenue decli- in 2020. SimCorp Sofia delivered total revenue and Africa, where SimCorp entered South Af- enue increased by 10% compared with 2019. ned by 31% compared with 2019. The decline growth of 3%, driven by a continued strong rica in 2020. Despite the impact of COVID-19, The revenue was primarily driven by new license was mainly driven by exceptionally high sales performance of additional license sales to the business unit performed satisfactorily sales, professional services sales, and hosting in 2019, which included a large deal in South existing clients. One new SimCorp Sofia client with total revenue increasing by 2% compared revenue. Four new SimCorp Dimension clients Korea and the revenue recognition of a large was signed in 2020, while two clients canceled with 2019. The growth was primarily driven were signed, while two SimCorp Dimension deal signed in 2018. Four new SimCorp their contracts, bringing the total number of by strong additional license sales, including clients canceled their contracts, bringing the Dimension clients were signed in 2020, of SimCorp Sofia clients to 42. a new business partnership with State Street total number of clients up to 37, equaling which two are based on SimCorp’s as a service Bank International GmbH providing a fully an estimated market share of 7% in North (hosted) offering, while two clients canceled integrated, front-to-back investment out- America. Three out of the four new license their contracts. With the two net new SimCorp sourcing solution for insurance firms in EMEA. deals signed in 2020 are based on SimCorp’s Dimension clients added in 2020, SimCorp Four new SimCorp Dimension clients were as a service (hosted) offering. In addition, serves 19 SimCorp Dimension clients in the signed in 2020, while one client canceled its five new standalone SimCorp Coric clients, APAC region, corresponding to an estimated contract, bringing the total number of clients and one together with SimCorp Dimension, market share of 11%. The total value of the up to 150. The new client wins and the order were signed in 2020. Total installed SimCorp installed SimCorp Dimension license base was intake from additional licenses increased the Dimension license base was EUR 136m at the EUR 66m at the end of 2020. SimCorp serves value of the total installed SimCorp Dimension end of 2020. two standalone SimCorp Coric clients and two license base by EUR 15m, reaching EUR 674m. standalone SimCorp Gain clients in APAC. EURm 2020 2019 Change EURm 2020 2019 Change EURm 2020 2019 Change EURm 2020 2019 Change Revenue 323.8 316.6 2% Revenue 106.5 96.5 10% Revenue 37.9 54.6 -31% Revenue 20.8 20-2 3% Dimension clients 150 147 Dimension clients 37 35 Dimension clients 19 17 Clients 42 43 Coric clients 42 43 Coric clients 26 21 Coric clients 2 2 Gain clients 41 47 Gain clients 6 7 Gain clients 2 2 MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS OF SIMCORP A/S SIMCORP ANNUAL REPORT 2020 | Performance & HIGHLIGHts 6 PERFORMANCE & HIGHLIGHTS Revenue Revenue growth DELIVERING THROUGH THE PANDEMIC EUR million (local currencies) 456.0 1.4% With a total of 17 new clients signed and but not least a deeply committed team have 2019: 454.5 2019: 16.9% strong sales to existing clients during 2020, enabled us to sustain SimCorp’s innovative our win rate and performance have been solution delivery and business continuity satisfactory despite the challenges caused by through a time of significant market volatility, the COVID-19 pandemic. A resilient operating and with a workforce largely working from EBIT margin EBIT model, a highly loyal client base, and last home. EUR million (local currencies) 124.3 27.6% 15.5% INCREASE VIRTUAL GO-LIVE RELEASES AND IN ORDER INTAKE IMPLEMENTATIONS UPGRADES ON TIME 2019: 127.8 2019: 27.7% Customer experience Virtual go-lives Releases and upgrades A highly dedicated custo- Thanks to highly skilled Our hardworking and mer experience team and implementation consultants highly professional Product Net profit Free cash flow strong, long-lasting client and close collaboration Development and Global EUR million EUR million relationships have enabled with our loyal clients, we Support teams have man- us to increase the order have together managed