13 September 2018

Avaloq announces strong H1 2018 results*, driven by increased customer activity and international expansion

  • Adjusted EBITDA at CHF 36 million as at the end of June. Group revenues up 8% year-on-year to over CHF 273 million
  • Continued strong shift in customer demand towards Avaloq’s Software as a Service (SaaS) and Business Process as a Service (BPaaS) solutions from banks and wealth managers in Asia Pacific, Switzerland, the UK and EMEA
  • New customers in H1 2018 include UK wealth management firm Smith & Williamson, Industrial Bank Co., Ltd. and Intesa Sanpaolo Private Banking Suisse
  • 29 clients, including 23 banks in the Raiffeisen group, went live with Avaloq solutions, as well Deutsche Bank Luxembourg and the BBVA mobile app
  • Liquidity remains extremely robust with strong positive cash flows and a significant year to year increase in cash on hand
  • H1 2018 corporate activity included the acquisition of a 10% stake in Swiss cryptocurrency specialist Metaco, a new office in Singapore, a strengthened management team in Australia, and the establishment of the private Swiss banking cloud in conjunction with IBM
  • In mid-2018, Standard & Poor’s and Moody’s reaffirmed ratings of B and B2 respectively for Avaloq, both with stable outlooks


Avaloq, the international fintech and leader in integrated banking solutions, has reported an 8% year-on-year increase in revenue for H1 2018 to CHF 273 million, with adjusted EBITDA for the period at CHF 36 million as at the end of June. The half-year has seen Avaloq build on the strong momentum it developed in 2017 with continued uptake in its Software as a Service (SaaS) and Business Process as a Service (BPaaS) solutions with a number of customers going live.

Across the six-month period to the end of June, new customers included UK wealth management firm Smith & Williamson, Industrial Bank, Co. Ltd. and Intesa Sanpaolo Private Banking Suisse. In total, across the period, four new customers selected Avaloq and 29 went live with Avaloq solutions - including 23 of the 246 banks in the Raiffeisen group in Switzerland. Raiffeisen and Avaloq are making good progress on their project, with further banks going live in the coming months.

The first half of 2018 also saw Avaloq undertake a significant amount of corporate activity, particularly with regard to its international expansion strategy. In May, the firm opened new, state-of-the-art Asia Pacific regional headquarters in Singapore. At the start of June, Avaloq strengthened its team in Australia with the appointments of Anantha Ayer as General Manager & Head of Avaloq Australia, and James Land as Managing Director. Continuing its investment in its SaaS and BPaaS solutions, Avaloq also announced in June its agreement to launch the private Swiss Banking Cloud with IBM Switzerland.

In addition to strong organic growth, Avaloq continues to target additional M&A opportunities. In April, the firm acquired a 10% stake in Metaco, a Lausanne-based blockchain and crypto-currency specialist. The acquisition saw Francisco Fernandez, Avaloq’s founder and Group Chairman, join Metaco’s Board of Directors.

At Avaloq’s Community Conference held in Zurich in June, which was attended by more than 450 industry participants, Avaloq Ecosystem partners, analysts and journalists, Avaloq announced it will launch in excess of 150 API endpoints in the second half of 2018 – an indication of the importance the firm places on developing the wider Avaloq ecosystem and its focus on innovation. In addition, more than 1,300 third-party developers now work with Avaloq and over 90 fintech solutions are available on the Avaloq Software Exchange platform.

In mid-2018 Standard & Poor’s (S&P) and Moody’s both released their updated credit opinions for Avaloq. S&P held its rating at B with a stable outlook while Moody’s has kept its rating at B2, also 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.

Juerg Hunziker, Avaloq’s Group CEO, said: “The first half of 2018 has been an exceptionally busy period for Avaloq, capped by the record attendance at our annual conference in Zurich. We are also delighted with the progress made with the Raiffeisen group in Switzerland. We have capitalised further on our SaaS and BPaaS expertise with new customer growth, expanded across key territories such as EMEA and Asia-Pacific, and strengthened relationships with key partners such as IBM. As financial institutions look to capitalize on the tech-driven changes impacting - and transforming - the sector, Avaloq is very well positioned as their partner of choice.”

Dean Gluyas, Avaloq’s Group CFO, said: “Avaloq delivered robust results in H1 and we are well on track to achieve our financial goals for the year. We continue to grow outside of our core home market, have outperformed in generating free cash flows which in turn drove a significant reduction in net debt leverage and related interest expense.”

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.

 

Results reported by WP / AV CH Holdings I B.V, and subject to final audit.

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