Annual report Confidence. Determination. Ability. Ambition

Transcription

1 Annual report 2011 Confidence Determination Ability Ambition 1

2 Summary Key figures Business and mission 1 Message to our shareholders 2 Products 6 Strategy 7 Highlights Facing the future 12 Product strategy 14 Quality. Focusing on continuous improvement 18 Outlook for Governance 26 Glossary 34 Contact us 35 Financial calendar 36 Financial report 2011 If you don t find BSB s financial report 2011 inserted in the back of this document, you may request a copy by ing marketing@bsb.com The financial report is available in English or French. Ce rapport d activités est disponible en français.

3 Key figures 1 Consolidated data In K EUR Turnover 34,996 30,902 Cash flow from operations (EBITDA) ,523 Operating result (EBIT) -2,503 2,206 Consolidated profit before goodwill amortization and after taxes 2-2,924 1,279 Net result -3, Investments and cash at bank and in hand 1,371 3,451 Financial debts (current and non-current) 3,828 1,290 Capital 10,862 10,862 Capital and reserves (after allocation) 8,254 11,503 1 The accounts were drawn up in accordance with Belgian accounting standards. 2 Net earnings + depreciation on positive consolidation differences. Stock market information quotation on NYSE Alternext 2011 Market capitalisation at 31 December EUR millions Share value increase (loss) during the year (6.55%) Daily average number of shares exchanged 406 Average share price EUR Maximum share price EUR Minimum share price EUR 7.52 Total number of shares 2,133, Monthly change in share price in 2011 Monthly volume of shares traded in 2011 EUR Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

4 BSB employs about 400 people and has more than 100 customers in 23 countries in Europe, around the Mediterranean and in North Africa. CONSOLIDATED INCOME STATEMENT - In K EUR OPERATING INCOME (+) 40,212 34,197 Turnover 34,996 30,902 Fixed assets produced 1, Other operating income 3,364 2,507 OPERATING CHARGES (-) 42,716 31,991 Raw materials, consumables and goods for resale 1,541 2,768 Services and other goods 12,433 8,139 Remuneration, social security costs and pensions 26,977 19,730 Depreciation of and other amounts written off formation expenses and intangible fixed assets 1,719 1,317 Amounts written-off (increase +, decrease -) 0 0 Provisions for liabilities and charges (increase +, utilizations & decrease -) -6-5 Other operating charges OPERATING PROFIT (+) / LOSS (-) -2,503 2,206 FINANCIAL INCOME (+) Income from financial fixed assets 0 0 Income from current assets 2 1 Other financial income FINANCIAL CHARGES (-) Interest and other debt charges Depreciation on positive consolidation differences Other financial charges PROFIT (+) / LOSS (-) ON ORDINARY ACTIVITIES BEFORE TAXES -3,277 1,508 EXTRAORDINARY INCOME (+) 0 0 EXTRAORDINARY CHARGES (-) 0 0 PROFIT (+) / LOSS (-) FOR THE YEAR BEFORE TAXES -3,277 1,508 Deferred taxes (+) 2 6 Income taxes (-) Adjustment of income taxes and write back of tax provisions (+) Transfers and withdrawals from deferred taxes 0 0 CONSOLIDATED PROFIT (+) / LOSS (-) FOR THE YEAR -3, Attributable to minority interests 0 2 Attributable to the owners of the company -3, Net result per share (2,133,962 shares) In EUR

5 Our business BSB is a provider of business solutions and IT services for finance professionals and life insurers. Our solutions create efficiency by increasing automation, standardising processes, lowering costs and shortening time to market for new products. BSB s flagship products are Solife for life insurance administration and Soliam for institutional asset management and private client wealth management. The company also provides value-added services. Solfia is a wholly-owned subsidiary offering value-added services in a SaaS or ASP delivery model, based on Solife and Soliam. Our mission BSB works hand in hand with financial professionals to design and implement innovative software solutions, which support their business strategies and leave them free to focus on their day-today activity. We achieve this by providing in-depth business knowledge, IT expertise and software packages that are in tune with today s best practices and which anticipate tomorrow s. Each employee is committed to the successful delivery of every client project. a n n u a l report

6 Message to our shareholders 2 BSB - annual report 2011

7 To beat the competition, we must be first off the mark. Strategic thinking and responsiveness Despite the current economic climate, BSB increased its turnover by 13% compared to 2010 to 34.9 million EUR. This performance confirms the relevance of the company s strategy. Despite this good result, the year s financial performance was poor. Nonetheless, we laid plans to rebound in 2012 and during the following years. We posted a loss, with EBIT standing at -2.5 million EUR, and cash flow from operations (EBITDA) at -785 K EUR. There were two reasons for this: The first was major costs incurred during the latter half of 2011 in anticipation of an increase in business, which did not materialise by year-end and the second was a significant market turnaround, which led a a n n u a l report

8 Message to our shareholders large number of customers and prospective customers to defer investment. This loss, however, does not impair the group s strategy, nor the quality and ranking of its products. Our objective first to place our products among Europe s Top 5, and subsequently among the Global Top 5 remains. We see a trend of consolidation in the market for financial software companies, and the present downturn looks set to encourage this trend even further. In a bid to become one of the major players on the market, we have deployed a three-pronged strategy: financial, industrial and commercial. On the financial front we are taking steps to move ahead of our competitors by increasing our investment in product development. For the last four years, we have allocated significant amounts to R&D this is central to BSB s strategy. On the industrial front, though our policy is fully suited to a period of market growth, it is less well suited to a period of recession. We have therefore made several adjustments to increase our recurring revenue - among others, we have enlarged our product range with the creation of the Solfia SaaS platform (Software as a Service), first announced in May In the insurance and asset management sectors, the trend towards outsourcing of the IT department is consolidating and even gathering pace. This may extend in the future to parts of the back- and middle-offices so we are preparing for this. In view of the major growth potential in this market, we are confident that our Solfia subsidiary will contribute significantly to BSB s revenue over the next two years. On the commercial front, we have extended our distribution network in line with the trend towards globalisation. We now have customers in 23 countries in Europe, around the Mediterranean and in Africa, whereas our activity was limited to just five countries two years ago. This means we have more than tripled our commercial footprint. We are confident this will lead to an increase in turnover. To bolster our commercial position, we will focus our activity on our two flagship products, Solife and Soliam, which are renowned internationally and are benchmarked by several reputable business analysts. Nonetheless, we are retaining our services activity, albeit with a stronger focus on projects where we can demonstrate a competitive edge with the knowhow acquired with the Soliam and Solife packages, and our SAP activity. This is the case, for instance, with our Internet front-end projects for insurance companies and asset managers. 4 BSB - annual report 2011

9 We have also taken steps to reduce our operating costs by 7%, which should deliver savings of about three million EUR. And lastly, we have bolstered our expertise in several areas by engaging a new CFO, Olivier Tordeurs, and a new Corporate Sales Director, Didier Vankeerberghen. We have also recruited personnel skilled in the core businesses of our customers actuaries, asset managers, wealth managers etc. to enrich the content and functionality of our products. Though 2012 looks set to be another year of consolidation, we expect business to take off again by year-end. BSB is well-positioned to benefit from any upturn due to the competitive edge its products have acquired thanks to extensive investment and continuous development. Jean Martin CEO Michel Isaac Chairman of the Board of Directors a n n u a l report

10 Our products Soliam for private wealth management Soliam is a portfolio management tool for financial advisors, private bankers and insurers active in discretionary or advisory wealth management. Soliam enables advisors to optimize their efficiency significantly thanks to its simplicity, rich functionality and high performance CRM module. Soliam for institutional wealth management Soliam is a powerful portfolio management tool for insurers, holdings and bankers wanting to manage own funds, mutual funds and company investments. Soliam is renowned for its front-to-back integration, its user-friendliness and its multi-bank, multicurrency and multi-accounting capabilities. Solife for life insurance Solife is a back-office solution with a distribution front-end for the administration of life insurance policies. It addresses multiple needs such as the management of products, contracts, claims and distributors. Solife includes a flexible and intuitive product workbench, which considerably shortens time to market. The solution includes a presales internet portal which increases the efficiency of the distribution network. Solfia Solfia is a subsidiary offering SaaS (Software as a Service) and ASP (Application Service Provider) services. These services have a broad range of features, including remote access, management and consolidation of own and client assets across multiple custodians, and high-quality reporting. Clearstream Services hosts the platform. Solfia has been granted PSF (Professionnel du Secteur Financier) status by Luxembourg s financial supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF). Services BSB offers consultancy and IT services and has extensive expertise in numerous areas, including: electronic document management implementation of multichannel distribution networks development and implementation of web portals for banking and insurance. 6 BSB - annual report 2011

11 Our strategy Strategy The driving force behind BSB s growth The strategy, which successfully steered the group through its stock market flotation in 2008 and led to continuous growth since, is now being taken to the next level and it will define the company s business development for the next four years. BSB s short term objective is to ensure its profitability in 2012 by aiming at those market segments in which the company has already shown good performance with its present range of products and services. In the medium- to long-term, BSB aims to seize new opportunities arising from strong market trends, such as: The growth in Western Europe of private pension solutions. An increasing number of private banking customers are reaching retirement age, which is forcing financial advisors to manage new requirements in terms of financial planning. Increasingly, customers under management include a younger clientele who are keen on new technology. The environment of BSB s customers is therefore entering a phase of profound change. Furthermore, emerging countries are experiencing strong economic growth and they have a young population. This younger generation will be demanding a wide range of financial products supported by innovative solutions. Insurance and asset management companies wishing to establish themselves in emerging economies will have to adapt their traditional business model and find ways in which they can differentiate themselves. BSB can provide guidance for the deployment of their products in these countries. These prospects are guiding the evolution of BSB s products. a n n u a l report

12 Highlights innovation Internet portal Stock market flotation 2008 July 2008 The strategy of internationalisation envisioned in 2007 was implemented with the stock market flotation on Alternext. BSB thus acquired the necessary resources to accelerate the development of its products and of its European distribution network. September 2008 BSB embraced innovation and adopted SOA architecture to offer its customers front-end RIA technology (Rich Internet Application), thereby combining the ergonomics of desktop computing with the flexibility of the internet. December 2008 Solife, the life insurance software, gets an internet portal for brokers and their customers. Called esolife, the tool assists with the selling process and insurance portfolio management and provides functionalities to consult partners business operations. 8 BSB - annual report 2011

13 Going global Quality 1 st 2009 March 2009 The stock market flotation is bearing fruit. BSB organizes itself to provide customers with industrial type processes and higher quality of service. September 2009 The opening of a sales branch in Dublin marks another step towards increased internationalisation. October 2009 BSB wins its first customer in Eastern Europe. Credit Europe Life selects Solife to accelerate the growth of its insurance product range and to manage its sales network throughout Russia. 9 BSB - annual report 2011

14 Since its stock market flotation in 2008, BSB has established itself as a leading European provider of financial software with its Solife and Soliam solutions. This progression is the result of a strategy of international expansion as well as the continuous alignment of its products with the needs of pan-european insurance companies and financial institutions. 100 Challenger R&D 2010 May th customer reference for Soliam, a solution for asset and wealth management. The list of customers features many of the top names in the world of European finance. June 2010 From the outset, BSB has invested heavily in research and development. This policy gives it a major operational and technological advantage over the competition, for the benefit of its customers. The R&D activity is now spread across Belgium, Ireland and Luxembourg. December 2010 Gartner, the IT advisory company, grants Solife the position of Challenger from among a number of life insurance solutions providers. The opinion applies not just to the product but also to the viability of the supplier, the customer references and the customers experience. a n n u a l report

15 In 2012, BSB will roll out a new four-year strategic plan with the objective of enabling expansion into the emerging markets of Asia and Latin America. 23 countries +45% 2011 March 2011 In just 3 years, BSB has increased its revenue by about 45% by taking an extremely industrial and highly professional approach to product development, deployment and marketing. July 2011 BSB expands its sales network and opens subsidiaries and offices in Germany, the Netherlands, Switzerland and the United Kingdom. The company now has customers in 23 countries in Europe, around the Mediterranean and in North Africa. December 2011 The subsidiary Solfia is granted the status of Financial Sector Professional (PSF) by the Luxembourg financial authorities. Solfia offers high added-value multidepository portfolio management services in SaaS (Software as a Service) or ASP (Application Service Provider) mode. a n n u a l report

16 Facing the future. BSB is committed to helping finance professionals navigate through these turbulent times, combining an innovative approach with world-class products that support the often conflicting challenges of managing risk, growth and efficiency. the confidence and boldness required to advance despite difficult economic times. And we have the vision, focus and determination to take us and our customers forward to new successes. The financial crisis of forced profound change on to the global financial markets, especially on to the asset and life insurance industries. Financial shocks can no longer be contained and now they spread quickly across geographies, asset classes and financial players. Today, asset managers, insurers and firms that service their needs are confronted by a new risk-prone environment, which presents new sets of challenges. Effective risk management lies at the heart of our strategy and business processes, ensuring that we control both those we take for our own business as well as for our customers. We believe our success lies in providing the most appropriate information technology delivering state-of-the-art products without compromising the intrinsic quality, flexibility, efficiency and competitiveness that underpin BSB s reputation. As a business, we have a unique set of attributes that set us apart. We have the expertise gained over many years and changing market conditions, learning important lessons that have made us stronger. BSB is well-prepared to face the future deploying 12 BSB - annual report 2011

17 confidently Confidence Determination Ability Ambition a n n u a l report

18 Product strategy [ Trust ] 14 BSB - annual report 2011

19 Thanks to our strong business and IT knowledge, you can bet your future on our solutions. Products tailored to our customers requirements BSB s products are designed to support businesses in the financial sector life insurance, asset and wealth management companies. The latter have recently faced a variety of challenges: Economic pressure resulting in rising costs and diminishing returns. Pressure due to new regulation, further reducing margins and forcing them to adapt their product range. Pressure from the market and from customers, who are demanding increased transparency, more information and easily accessible advice, thereby creating a greater need for interaction. The trend is also towards spreading assets across multiple financial institutions. Furthermore, given the strong growth expected in emerging nations, financial players are preparing to diversify their operations, both in terms of their product range and geographical coverage. With this background, they are now in need, more than ever before, of flexible solutions that are reliable and durable and also good value for money. Solife (life insurance software), Soliam (asset and wealth management software) and the Solfia SaaS platform have been specially designed to meet this plethora of evolving requirements. a n n u a l report

20 Product strategy Our approach Solife: Unique capabilities for the insurance market Favouring new strategies BSB s goal is to maximise Solife s flexibility and is developing a product workbench to enable insurance companies to develop insurance products extremely quickly and efficiently, whilst increasing its functionality (See text box). Soliam enables users to manage various types of interactions with their clients independent management, advisory management or discretionary management and to switch easily between them. Solife s architecture facilitates the creation of combination products. The software currently covers personal life insurance and the BSB teams are now working on collective life insurance. Thanks to its innovative UPL (Unified Product Logic), Solife can pride itself on being unique because its high level of flexibility enables the development of combined products. Another essential feature is Solife s actuarial curve simulation engine facilitating the fast development of innovative insurance products. 16 BSB - annual report 2011

21 Solfia: Services on demand Facilitating geographic expansion In Luxembourg, several insurance companies are using the esolife portal to distribute their products across the whole of Europe. Soliam is evolving towards a hub model designed to enable the management of a firm s business activity across an entire geographical region. Supporting mobility BSB will offer Solife and Soliam applications for tablets and smartphones. This support for mobile communication will enable financial players to interact at will with their customers and respond to their concerns about transparency, information availability and instant advisory management. The Solfia platform, launched in May 2011, gives financial advisors and private banks access to the Soliam software in SaaS (Software as a Service) mode. They can thus outsource all of the data management and yet retain a consolidated view of their customers assets at their fingertips. The other advantages of the solution are the speed of implementation and access-based invoicing. BSB intends to offer this method of deployment to the life insurance sector in the near future. Business Process Outsourcing: The future A developing trend is the outsourcing of entire business processes to achieve maximum cost-efficiency. BSB is well positioned to benefit from this with Solfia. a n n u a l report

22 Quality [ Determination ] 18 BSB - annual report 2011

23 The world is facing turbulent times. We are resolved to developing better and smarter solutions which help our customers navigate future challenges confidently. A focus on continuous improvement Since BSB s early beginnings, quality has always been and shall always remain at the heart of the group s strategy. We are only too aware that the software market, similar to other markets in the past, is now focusing on achieving zero defects. Since 2010, we have taken numerous steps to ensure we meet this requirement. In 2010, we set up an internal acceptance team in the BSB Software Factory. This team steps in at the end of the software design stage to validate the product s compliance with the specifications. The team operates in total independence from the software design team to ensure outstanding product quality prior to delivery. regression testing also reduces the risk of regression in the corrected versions. We have also recruited to double the size of our quality teams, which now number some 20 people. Since the start of 2012, we have an experienced Quality Manager on board. The competencies he brings will enable BSB to quickly improve its processes by adopting risk-based testing, for example. This technique ranks the risks for our end-users and prioritises their potential impact. Very importantly, his experience will also enable us to speed up the process by which we upgrade our processes to achieve total quality. This specifically implies formalising and setting up governance for those processes, whilst creating new indicators to measure the impact of every initiative we take. In 2011, we strengthened this team by equipping it with a tool that is capable, among other things, of performing automatic test runs. This enables us to drastically reduce the time lapse between the fault occurring and its detection. The introduction of automatic Our process of improvement is on-going and we expect our performance in 2012 to exceed the market standards. a n n u a l report

24 Prospects [ Skill ] 20 BSB - annual report 2011

25 With BSB, you have the assurance of accessing the latest technologies and best experts to remain ahead of the competition. Prospects for 2012 their content and their functionality to maintain our lead on the competition. Despite the poor economic situation, BSB made three investments in 2011 to further underpin its growth in Nonetheless, BSB will maintain its advisory services, particularly on projects in which we stand out from the competition thanks to our vast expertise acquired with the Soliam, Solife and SAP software. The first investment is the SaaS platform. Within the insurance and fund management industries, there is currently a growing trend towards outsourcing IT services. We believe that, in the future, this trend will extend to the back- and middleoffices. The SaaS platform of our subsidiary Solfia has been granted PSF (Financial Sector Professional) status by the Luxembourg authorities and puts BSB in an excellent position to develop itself further in this market. The second investment is productrelated. We will continue to focus on our core business of software development and we will focus our activity around our two proven products, Solife and Soliam. These have gained international renown and are viewed by analysts as benchmark products. Our aim is to further enrich We are also taking steps to stay ahead of our competitors by continuing to invest in product development. Investment is an integral part of BSB s strategy which will enable it to take maximum advantage of the first signs of an economic upturn. Finally, BSB has also invested in its sales network. In two years, the number of countries in which the company has a presence has more than tripled and now stands at 23. We therefore expect to increase our turnover. In 2011, we opened subsidiaries and offices in Switzerland, Germany, the Netherlands and in the United Kingdom and can therefore also rely on this increased local presence to boost sales. a n n u a l report

26 Prospects Key figures Financial information 1 Consolidated data In K EUR Turnover 34,996 30,902 Cash flow from operations (EBITDA) ,523 Operating result (EBIT) -2,503 2,206 Consolidated profit before goodwill amortization and after taxes 2-2,924 1,279 Net result -3, Investments and cash at bank and in hand 1,371 3,451 Financial debts (current and non-current) 3,828 1,290 Capital 10,862 10,862 Capital and reserves (after allocation) 8,254 11,503 1 The accounts were drawn up in accordance with Belgian accounting standards, 2 Net earnings + depreciation on positive consolidation differences, Commentary: Turnover amounted to 34.9 million EUR, a 13% increase over Software sales generated 64% of the revenue whereas consultancy generated 36%. The software activity increased 35% whilst the consultancy activity declined 14%. The latter is due to the completion of a major French project. Note: Rounded Off Figures Some financial and statistical information contained within this annual report has been rounded off. Consequently, the sum of the individual figures may not match the total. 22 BSB - annual report 2011

27 Consolidated cash flow statement (in K EUR) - Before profit appropriation Income for the year after taxes (group share) -3, Depreciation of assets 1,719 1,317 Depreciation of consolidation differences Provisions for liabilities and charges and for deferred taxes Change in third party interests -8 2 Change in working capital requirements Financial income Interest, other debt charges and other financial charges CASH FLOW FROM OPERATING ACTIVITIES 90 3,138 Acquisition of tangible, intangible and financial assets -3,574-1,302 CASH FLOW FROM INVESTING ACTIVITIES -3,574-1,302 Change in capital 0 0 Distribution of dividends Change in capital subsidies Change in amounts payable after one year and in current portion of amounts payable after one year 1, Change in Financial debt 1,455 0 Financial income Interest, other debt charges and other financial charges CASH FLOW FROM FINANCING ACTIVITIES 1, Change in reserves (dividends to be paid) Dividends to be paid CHANGE IN SOURCE AND APPLICATION OF FUNDS -2,080 1,898 Liquidity and equivalents at the beginning of the year 3,450 1,552 Liquidity and equivalents at the year-end 1,370 3,451 CHANGES IN CASH POSITION -2,080 1,899 a n n u a l report

28 Prospects Dividend Stock market listing 2010). The price peaked at EUR on 27 January 2011 and The Board of Directors of BSB will BSB is quoted on NYSE Alternext, was at its lowest at 7.52 EUR on propose to the Annual General a market specifically created for 15 September In 2010, the Meeting of 21 May 2012, not to SMEs. Between 1 January 2011 amounts were respectively pay a dividend for the financial year and 31 December 2011, the share EUR and 5.50 EUR For the financial year 2010, price went from EUR to the company paid out a dividend of EUR, losing 6.55% (+18% BSB was listed for the first time on 0.36 EUR per share. No dividend in 2010). The market capitalization 18 July 2008, with a share price of was paid in at 31 December 2011 amounted EUR. to million EUR versus million at 31 December The average share price in 2011 was EUR (versus 7.69 EUR in ). The share price 9 fluctuated 71 6 times with a daily average trading volume of 406 securities (444 in Monthly change in share price in 2011 Monthly volume of shares traded in 2011 (in EUR) , , ,346 6,108 1,852 2, ,645 6,570 5,486 3,788 1, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec BSB - annual report 2011

29 Shareholding On 27 March 2012, and to the knowledge of the Board of Directors, the shareholding is as follows: Shareholders % of the Number % of Voting voting of shares capital rights rights JM Consulting SA 480, % 480, % Michel Isaac - Ingénieur Conseil sprl 474, % 474, % Van Steenwinkel - Conseil sprl 469, % 469, % UFG-Siparex / FCPI Diademe Innov 3 188, % 188, % Miguel Danckers - Ingénieur Conseil sprl 152, % 152, % Amundi Private Equity Funds/ Fonds Innovation Technologies 2 and Multi Stratégies Innovation 141, % 141, % DVK Consulting sprl 111, % 111, % Other shareholders 115, % 115, % Total 2,133, % 2,133, % Staff The average number of employees increased from 252 FTEs in 2010 to 376 FTEs in a n n u a l report