Avaloq announces strong 2018 results, driven by international expansion, new solutions and client growth
- SaaS , PaaS
- 26.03.2019 07:53 am
Avaloq, a leading fintech company and international provider of software as a service (SaaS) and business process as a service (BPaaS) solutions to banks and wealth managers, has reported strong results for 2018 driven by continued demand for the firm’s SaaS, BPaaS and on-premise solutions from new and existing clients and accelerated growth in markets such as EMEA. Overall, the firm generated full-year revenues of CHF 579 million, a year-on-year rise of 6% on an underlying basis1. Adjusted EBITDA for 2018 was CHF 90 million while the liquidity remains robust with cash on hand in excess of CHF 144 million.
Avaloq saw a significant number of successful ‘go-lives’ and new client wins in 2018. In particular, one of Switzerland’s biggest IT projects was successfully completed when 253 separate Raiffeisen entities (246 Raiffeisen banks, six branches and the central bank) moved to one platform developed by Avaloq. The platform is available to all 11,000 employees at 900 separate Raiffeisen sites throughout Switzerland. Separately, KASIKORNBANK, Pictet Group, Deutsche Bank and Edmond de Rothschild all benefited from the successful roll-out of Avaloq’s solutions last year.
New clients won in 2018 included Intesa Sanpaolo, Smith & Williamson in the UK, and China’s Industrial Bank Co. Underpinning the firm’s SaaS and BPaaS strategy, Smith & Williamson further upgraded its relationship with Avaloq by adopting its SaaS solution in February 2019. In December last year, Avaloq announced the development of a highly innovative crypto asset solution in partnership with Gazprombank, the result of a project with Metaco, the cryptocurrency specialist in which Avaloq acquired a 10% stake in April.
The year also saw Avaloq expand its geographic footprint: the share of revenues from EMEA region doubled to 27% – up from 13% in 2017 – and revenues from Asia Pacific increased to 10% while 63% of revenues were generated in Switzerland/ Liechtenstein over the 12-month period. Both EMEA and Asia regions continued to accelerate in terms of market opportunities, and Avaloq has continued to grow its presence with new and larger offices in London, Madrid as well as Singapore and Sydney. In terms of staff numbers, the workforce grew by 8%, mainly in these locations.
Juerg Hunziker, Avaloq’s Group CEO, said: “We continued our strong growth path in 2018 while successfully completing our largest digital transformation project ever, driving forward in terms of international expansion and capitalising on innovation. One of the many things I am particularly proud of is our ability to successfully complete projects of vastly different sizes and scope, from the complete digital and processing transformation of Raiffeisen’s network in Switzerland to more specific solutions for time-boxed projects at banks like KASIKORNBANK in 10 months and Intesa Sanpaolo in nine months.”
New products and solutions, innovations and partnerships
The growth in client activity and sales in 2018 was complemented by new products and solutions as well as a number of innovations and partnerships – with much of the focus on the further growth of the Avaloq ecosystem. The year saw the launch of Avaloq’s open API offering with 150 API endpoints made available to the community, while in October, avaloq.one, the firm’s ecosystem innovation, won “Best of Show” at FinovateAsia.
Avaloq announced a key strategic partnership with IBM to build the Swiss Banking Cloud, which will transform Avaloq’s IT service delivery model, leveraging on IBM’s Infrastructure as a Service offering. The migration of Avaloq’s existing SaaS and BPaaS clients in Switzerland to the new private cloud setup will start in the course of 2019, with the ambition for it then to be rolled out in Asia and EMEA.
Juerg Hunziker added: “The development of avaloq.one showcases the very best of Avaloq and our central role in the digitalisation of the financial services sector. It also future-proofs our business model and consistently gives our clients the finest that the world’s fintech sector has to offer.
“Looking forward, Avaloq’s growth is underpinned by a robust pipeline. As an international leader in fintech and integrated banking solutions, Avaloq is exceptionally well positioned to help its clients succeed in the digital transformation and is increasingly seen as a partner of choice.”
Avaloq reports its results on an IFRS basis consistently from year to year inclusive of all necessary charges, provisions and accruals reflecting the operations of the business. The implementation as of 1 January 2018 of IFRS 15, the new standard for revenue recognition requirements, would improve 2018 adjusted EBITDA by CHF 4 million to CHF 94 million and adjust revenues from CHF 579 million to CHF 576 million.