2009 was both a challenging and rewarding year for Visma. The way we tackled a tougher business environment and the results we achieved are demonstrating the strengths of Visma’s business model and operations. Markets look healthier at the outset of 2010 and even though many of our customers may continue to focus on cost control rather than growth, we believe we have a strong foundation to sustain growth and improved margins also this year.
Despite the general effects of the financial crisis we saw healthy demand for the products and services of Visma during 2009. The need to increase productivity means companies have continued to invest in modern software solutions, and we also see that more companies consider outsourcing accounting and payroll functions to reduce costs and make their expenses more variable.
Visma’s revenues increased by 11% in 2009 and EBITDA improved by 23% compared to the previous year. The EBITDA margin of 20.2% was an all-time high. The development reveals a highly scalable business model with considerable operational leverage.
This strong performance is partly explained by the well diversified business of Visma, with more than 220,000 companies/organisations as customers, including both small and larger enterprises, customers in both private, non-profit and government organisations, and customers in any vertical. Visma supplies “must-have” products at high quality and at relatively low prices. The long-term effort to ensure high quality and high customer satisfaction goes to explain customer churn at an all-time low in an overall challenging year such as 2009.
Visma has confined its operations to the Nordic and Dutch markets. This concentration has made it possible to achieve strong market positions, high brand-awareness, operational efficiencies and competitiveness, also when comparing us with global competitors. Rather than attempting to conquer the world, Visma tries to be the strongest and most profitable supplier in the few markets where we operate. There are still plenty of growth opportunities and the market size allows for a doubling of Visma in our current markets.
Investments in product development and innovation are key success factors for Visma. The willingness to invest in these areas has to be maintained even in periods like the one we have experienced since the end of 2008, and we spent approximately 19,0 per cent of the Software division’s revenue on R&D last year. Visma will continue to invest in R&D, and will in 2010 launch several new product families, particularly within Software as a Service (SaaS) or so-called On-Demand solutions. Visma had a very limited SaaS offering only two years ago but had grown its SaaS customer portfolio to more than 10,000 users already by the end of 2009. During 2010, Visma plans to be a major and very visible supplier of SaaS solutions. The SaaS solutions are provided through all four divisions of Visma, as an integrated and important part of the product and services offerings. To our customers, SaaS means a faster way to get access to advanced software without large investments. We see a clear market-trend that customers are moving away from capital expenditures over to operational expenses based on usage.
Cross selling between software and outsourcing services improved, and this was one of the reasons explaining Visma’s growth in 2009. There is still a substantial potential for further cross selling between Visma’s divisions as more customers see the attractiveness of combining software and services, and of having Visma as a “one-stop-shop” for finance, accounting and payroll.
2009 has proven that Visma continues to grow at a significantly higher rate than its quoted and non quoted competitor peers both in good and bad economic periods. Visma's overall revenue growth and its EBITDA growth (when adjusted to remove foreign exchange effects) was 2 to 3 times greater than its peers and than the overall market for each year in the period 2007 - 2009. We believe this superior growth is a result of consistent investment over the last decade in product development, R+D and innovation that is a core competency of Visma, a dedication to superior customer support and service and to investing in our people and systems over a similarly long timeframe. Because of these long term investments made over many years we believe that Visma will be able to sustain consistent growth ahead of its peers and the market for many years into the future as it has in the past
In a market that still feels the effects of the recession we believe many companies will continue to focus on controlling expenses and on achieving operational excellence. The products and services of Visma cater directly to those needs. Visma offers necessary, and to some extent even mandatory, products and services that can help companies to become more efficient and cost effective, and to improve financial control. As a result, Visma plays a crucial role in helping our customers emerge from the financial crisis as stronger companies.
Visma's mission is to help North European companies and government bodies maintain their competitive edge through the automation of administrative processes. Even with higher labour costs and a high tax level restricting outsourcing to other countries, Northern European companies have achieved world-class productivity through their investments in modern ERP and CRM solutions.
Visma and its owners see a bright future for the business for many years ahead and as part of their longer term plans for the growth and development of the business will actively consider a re-listing of the business on the Oslo stock exchange at some point provided stock market conditions are positive and receptive. In 2009 Visma made two major acquisitions - Teemuaho in Finland and Esscom in Sweden. More and even larger acquisitions are expected in 2010, and the first has already been made with the acquisition of OPIC in Sweden in February.
2010 will be a challenging year for everyone in business, but in a somewhat different way than 2009. Cost control and process improvement will still be important but further companies are expected to change their attention to growth initiatives. Customer satisfaction and retention, and acquisition of new customers will be main themes for Visma in 2010. Our customers are expected to spend more on CRM-systems, customer support and market research in 2010, and Visma will assist our customers in their quest to capture market shares in a cost-effective manner.
Øystein Moan
CEO
Visma