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SDL PLC  -  SDL   

Results Date & Segmental Results Re-classification

Released 07:00 15-Jun-2018

RNS Number : 4810R
SDL PLC
15 June 2018
 

15 June 2018

 

 

SDL plc

 

Notice of 2018 Interim Results

Re-classification of Segmental Results & Webcast

 

Notice of 2018 interim results

 

SDL plc ("the Company" or "the Group" / LSE: SDL), the global innovator in language translation technology, services and content management, will announce its interim results for the six months ended 30 June 2018 on Monday 6 August 2018. 

 

A presentation to analysts and investors hosted by Adolfo Hernandez, Chief Executive Officer, and Xenia Walters, Chief Financial Officer, will be held on 6 August 2018 at 9.30am BST at the offices of FTI Consulting, 200 Aldersgate Street , London, EC1A 4HD.

 

Re-classification of segmental results

 

Introduction

 

At the time of SDL's full year results in March 2018, management stated its intention to review the classification of its shared costs used to derive the profitability of each of its three business segments. In order to aid familiarity with the new classification and provide comparative information, SDL is today publishing the re-classification of its segmental profits for the six months ended June 2017 and the full year to December 2017. This re-classification does not impact overall Group profit or cash flow numbers, which are as previously reported.

 

Furthermore, this announcement today does not provide any new information about recent or current trading of the business.

 

Background

 

SDL's operating cost base is made up of direct and shared costs. In line with our strategic objective to operate as 'One SDL' and remove the silos and overlaps across segments, increasing proportions of our activities are operating across segments.

 

For the year ended 31 December 2017 SDL's total shared costs, as previously classified, accounted for £86.5m of our £127.0m cost base, with approximately 70% being apportioned on either a headcount or revenue basis by segment. This methodology has been consistently applied in previous years.

 

However, this methodology can result in better performing segments bearing more of the shared costs than might be appropriate. Accordingly, management has historically focused on segment gross profit as a more useful indicator of segment profitability.

 

Following a detailed review, SDL is re-classifying its shared costs as follows:

 

-     The corporate costs of running SDL PLC as a listed group have been separately disclosed as unallocated costs in the reconciliation of segment profit to Group profit. These costs amounted to £15.1m for the twelve months ended 31 December 2017 and £8.0m for the six months ended 30 June 2017; and

-     The remainder of the costs are reported in the operating segments on the basis of activity-based cost methodologies

 

SDL believes this re-classification provides investors and analysts with a clearer insight into the profit segments and cost centres of the Group. This reclassification is presented in the tables below.

 

In addition, research and development operating cost disclosures have been restated to only include directly attributable salary and external costs, and specifically exclude all allocations of support and central costs. This restatement has been performed to bring the basis of research and development operating costs disclosure in line with the basis of capitalised research and development costs, enabling users of the accounts to compare these disclosures on a like for like basis.  Accordingly research and development costs are being restated to £10.2m and £20.1m for the periods ended 30 June and 31 December 2017 (Previously reported: 1H: £15.9m and FY17 £26.4m).

 

A webcast hosted by Xenia Walters, Chief Financial Officer, will be held today at 11.30am BST.  Please pre - register with mhudson@sdl.com to obtain webcast details.

 

No new material information will be disclosed. A recording will also be made available on the investor relations section of SDL's website following the call.

 

 

For further information please contact:

 

SDL plc

01628 410100

Adolfo Hernandez, CEO

Xenia Walters, CFO




FTI Consulting LLP

0203 727 1000

Edward Bridges


Emma Hall


 

 

About SDL PLC

SDL (LSE: SDL) is the global innovator in language translation technology, services and content management. Over the past 25 years we've helped companies deliver transformative business results by enabling powerful, nuanced digital experiences with customers around the world.

 

 

 

Year ended 31 December Unaudited

 

Group and segmental revenue and PBTA results analysis for twelve months to 31 December 2017 (restated)

 

£m

Language Services

Language Technologies

Global Content Technologies

Consolidated






184.5

48.6

52.6

285.7

Gross Profit

74.8

38.6

35.6

149.0

Segment operating costs

(52.7)

(32.6)

(29.1)

(114.4)

R&D capitalisation

-

-

2.5

2.5

22.1

6.0

9.0

37.1

Corporate costs1




(15.1)




22.0

Non core - Discontinued Operations2




(3.0)




19.0

Profit on disposal




20.6

Amortisation and exceptional items




(9.7)




29.9









40.5%

79.4%

67.7%

52.2%

12.0%

12.3%

17.1%

7.7%





 

1 Corporate costs are the costs of running SDL PLC as a listed Group and are independent of operating segments

2 Results from the Non core segment have been disclosed separately to facilitate like for like comparison with the 2018 results to be published in due course

 

 

 

Group and segmental revenue and PBTA results analysis for twelve months to 31 December 2017 (as previously reported)

 

£m

Language Services

Language Technologies

Global Content Technologies

Consolidated






184.5

48.6

52.6

285.7

Gross Profit

75.9

38.1

35.0

149.0

Segment operating costs

(66.4)

(33.2)

(29.9)

(129.5)

R&D capitalisation

-

-

2.5

2.5

9.5

4.9

7.6

22.0

Corporate costs




--




22.0

Non core - Discontinued Operations




(3.0)




19.0

Profit on disposal




20.6

Amortisation and exceptional items




(9.7)




29.9









41.1%

78.4%

66.5%

52.2%

5.1%

10.1%

14.4%

7.7%

 

 

 

Six months to 30 June Unaudited

 

Group and segmental revenue and PBTA results analysis for six months to 30 June 2017 (restated)

 

£m

Language Services

Language Technologies

Global Content Technologies

Consolidated






89.5

22.8

26.8

139.1

Gross Profit

34.4

18.1

17.7

70.2

Segment operating costs

(24.9)

(15.6)

(13.7)

(54.2)

9.5

2.5

4.0

16.0

Corporate costs




(8.0)




8.0

Non core - Discontinued Operations




(3.1)




4.9

Profit on disposal




20.6

Amortisation and exceptional items




(4.9)




20.6





38.4%

79.4%

66.0%

50.5%

10.6%

11.0%

14.9%

5.7%

 

 

 

Group and segmental revenue and PBTA results analysis for six months to 30 June 2017 (as previously reported)

 

£m

Language Services

Language Technologies

Global Content Technologies

Consolidated






89.5

22.8

26.8

139.1

Gross Profit

34.1

18.7

17.4

70.2

Segment operating costs

(28.7)

(18.0)

(15.5)

(62.2)

5.4

0.7

1.9

8.0

Corporate costs




-




8.0

Non core - Discontinued Operations




(3.1)




4.9

Profit on disposal




20.6

Amortisation and exceptional items




(4.9)




20.6





38.1%

82.0%

64.9%

50.5%

6.0%

3.1%

7.1%

5.7%

 

 

Note: R&D capitalisation applied from the second half of 2017 only.

 

END


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Results Date & Segmental Results Re-classification - RNS