03 September 2019

Avaloq announces record half-year revenues for H1 2019, profits up 5%

  • Group revenues up 5% year-on-year to CHF 288 million for the six months to 30 June 2019
  • Adjusted EBITDA at CHF 38 million
  • Rising market share for Avaloq’s SaaS, BPaaS and on-premise solutions from new clients, strong project activity and growth within its existing client base
  • Successful completion of one of Switzerland’s largest banking IT projects: the digital transformation of 253 Raiffeisen banks across almost 900 sites, which went live on one Avaloq platform
  • Leading UK wealth managers Smith & Williamson and Brewin Dolphin announced high-profile transformation programmes during the half-year period; LGT went live with the Avaloq Banking Suite in Austria
  • New banks joined the Avaloq Community in Asia and Switzerland and stronger collaborations were formed with existing clients across Europe
  • In April, Avaloq launched avaloq.one, an intuitive, unique platform which seamlessly connects leading fintechs and their solutions to Avaloq’s global financial clients
  • Acquisition of Derivative Partners AG, Switzerland’s leading information and data provider for structured products and derivatives, reflects Avaloq’s growth momentum and exceptional levels of confidence

Juerg Hunziker, Avaloq’s Group CEO, said: “We have had a very busy first half of the year, delivering solid results by winning a series of new customers, forging deeper relationships with existing customers, completing an important acquisition and expanding our market presence. The overarching theme of our Community Conference in June in Zurich was ‘future proofing’ business models which is where we believe Avaloq can help banks and wealth managers to stay ahead of the fast-changing digital and technological developments in the global financial services sector. We look forward to delivering further growth across the group at the full year.”

Dean Gluyas, Avaloq’s Group CFO, said: “Avaloq has once again delivered strong results and we are well on track to meet our financial goals and targets for full-year. It is clear that the services and innovative products Avaloq offers help meet the needs of both smaller and larger financial institutions at a time of profound industry change. For Avaloq, the sheer scale and repeatability of our SaaS and BPaaS solutions is a significant driver of sustainable income and growth and we will continue to build on this going forward.”

H1 2019 Review

Avaloq, the leading fintech and international provider of software as a service (SaaS), business process as a service (BPaaS), and on-premise solutions to banks and wealth managers, reported record half-year revenues of CHF 288 million, an increase of 5 percent year-on-year. Adjusted EBITDA was CHF 38 million for the period. The strong performance was driven by sustained demand for the firm’s SaaS, BPaaS and on-premise solutions from new and existing clients.

The half-year period saw Avaloq successfully complete its largest transformation project to date and one of the biggest financial services upgrade programmes globally. It involved the digital transformation of 253 Raiffeisen banks across almost 900 sites in Switzerland, available to all 11,000 employees at the bank, which completed the going live on one Avaloq platform in January. The initiative underscored Avaloq’s ability to undertake complex projects and allow scalability and digital performance with its solutions. In its home market in Switzerland, Avaloq has also seen growth having been selected to upgrade the digital infrastructure of a private bank with its customer base in Switzerland, Austria and Germany. Additional success stories in Europe include the Austrian unit of LGT, the international private banking and asset management group owned by the Princely House of Liechtenstein, going live with the Avaloq Banking Suite.

Avaloq’s strong growth during the first-half period was also driven by the UK market which saw a notable uptick in activity. In February, Avaloq announced that Smith & Williamson, the financial and professional services firm, enhanced its relationship by adopting Avaloq’s SaaS solution; in April, Avaloq announced the decision of Brewin Dolphin, the £34.9 billion wealth manager to implement Avaloq’s SaaS to significantly enhance its digital capabilities at a time of increasing market competition. In Asia, Avaloq can also report a strong pipeline of opportunities. One of its recent wins in the region includes the private banking business of a Malaysian tier 1 bank. In addition, Avaloq has also seen a strengthening of existing relationships with clients such as Maybank rolling out Avaloq’s solution across Hong Kong, Singapore and Malaysia.
In addition to strong organic growth and new product development, Avaloq continued to target M&A opportunities. At the end of the first-half period, the firm signed an agreement to acquire 100% of Derivative Partners AG, Switzerland’s leading information and data provider for structured products and derivatives. The acquisition allows Avaloq to offer established and new clients independent valuation, trading and management of highly complex financial instruments such as ETFs at a time when their use by banks and wealth managers is becoming increasingly more relevant.

In April, Avaloq announced the launch of its avaloq.one platform which seamlessly connects leading fintechs and their solutions to Avaloq’s global financial clients. Through standardised Open Application Programme Interfaces (APIs), fintechs will benefit from the platform’s easy self-onboarding and will also be able to self-test through its sandbox initiatives.

Avaloq is committed to being a catalyst for industry wide transformation and as such is focused on delivering new cutting edge and innovative products such as an independent wealth management platform, a relationship manager hub, an omni-channel client engagement platform, and an independent client onboarding solution.

Moody’s recently renewed its credit rating at B2 stable. Avaloq was rated initially in June 2017 just prior to the completion of private equity firm Warburg Pincus’ acquisition of a minority stake in Avaloq.

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.

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