The past two years have brought us rapid technological advances, and new habits have been permanently established. A large part of the workforce has become accustomed to a flexible workweek. People like the flexibility of being able to choose whether to commute to the office or work from home. We travel less, as we have learnt that the majority of doing business can be conducted virtually. The flip side of these positives is limited social interaction. We are actively seeking opportunities for people to reconnect and engage.
The new work life also has a large impact on the need for computing. Pre-Covid, many businesses and authorities relied on critical systems to be accessed from the office. With the lockdowns, all employers had to move the access from a well-secured office to people’s homes. This in a world with increasing cyber-crime risks. The last year has thus been very busy for the IT departments. Lots of new hardware and software have been procured and most companies have coped. However, what this process has revealed is that old-fashioned computing with Windows, On-premise clients, is not really adapted to the new world.
In 2022, employees expect to be able to access business-critical systems from anywhere and from any device. Companies cannot rely on safe offices to limit access. The people are not there, but rather at home, on the beach, in vacation homes, in the car—yes anywhere. Hence systems have to be secure regardless of how and where they are accessed. Two-factor authentication is now the standard while it was just an option two years ago. Modern cloud computing has demonstrated its superiority.
The anywhere office situation promotes an even faster transition to cloud computing and close to 100% of all software innovation is on cloud-only products. Software companies that do not have a strong cloud delivery will struggle doing business in the future. At Visma we are happy to see that close to 80% of our business is now cloud-based, and in the next few years the remaining on-prem systems will be moved to the cloud.
Office flexibility contributes to more diversity. With less commute and travel, it is easier to combine a career and take care of family and kids. Your home location, ethnicity, gender, health and family situation may no longer limit your chances for success and ability to participate. Visma now has a dedicated sustainability team and in addition to diversity we have seen a further strengthening of employee engagement, actively reducing our CO2 footprint and supporting the UN Sustainable Development Goals.
The lockdown has, if anything, further accelerated the innovation, entrepreneurship and development of new companies within cloud software. 42 of these companies became part of the Visma family in 2021, and the high pace of acquisitions is carrying into 2022. Gradually, Visma is becoming a European software company. Spain and Austria are new markets added in 2021. Acquisitions are important to enter new markets, but also to get access to innovative new technologies. Most of the acquired companies will continue as legal entities with their own sales and development resources. For Visma it is important to retain the entrepreneurship and innovation adapted to their local markets.
As I write this in late February 2022, the recent events in Ukraine have been unbearable to witness. Visma does not have companies located in either Ukraine or Russia. However, we have employees and customers in countries neighbouring the conflict, and employees with families living in the affected areas.
As a company we have responded rapidly to provide help to those affected employees, giving them support as needed. We have also made a donation to UNICEF to help children affected by the ongoing tragedy. Our employees, located across Europe and Latin America, have also shown great unity and care for one another.
“Visma now has a dedicated sustainability team and in addition to diversity we have seen a further strengthening of employee engagement, actively reducing our CO2 footprint and supporting the UN Sustainable Development Goals.”Merete Hverven, CEO of Visma
For the full year, revenue was EUR 2.081bn constituting a growth of 19.5% over 2020. Our cloud business grew by more than 16%, and we naturally see a decline in the remaining on-premise business. While Visma was able to keep up the productivity and revenue growth, the continued Covid-19 situation kept some operational expenses at a low level. Our profitability remained strong during 2021 and exceeded our expectations. Cash EBITDA showed strong development, ending at EUR 528m, a growth of 20%. For the full year, the cash EBITDA margin was 25.4% and the EBITDA margin was 28.6%.
We continue to invest in the future
Investments in product development and innovation are key success factors for Visma. In 2021, R&D expenses amounted to approximately 17% of revenues. Visma operates in high-cost markets with a strong drive to increase efficiency. Through utilising advanced algorithms, big data and artificial intelligence, Visma is exploring more ways to automate business processes for customers to increase efficiency and competitiveness. We are particularly focusing on creating connected products, hence
APIs and solutions for integration are important.
Finding the right talent
Finding and keeping the right talent is a key to Visma’s future success, and the competition is tough for the best and brightest minds. Across our core geographies, Visma has worked consistently to build brand awareness among students in top-tier universities, resulting in increasing numbers and quality of applicants for our trainee programs. Visma is competing with larger global and regional companies and we are dependent on our nearshoring capacity, which today comprises operations in Lithuania, Latvia,
Slovakia, Poland, Romania, Spain, Ireland, Bulgaria, and Argentina. We are also excited to open our new nearshoring centre in Portugal during 2022. By the end of 2021, Visma had over 1 800 employees in these locations. Most resources are within software development and the level of employee engagement in these locations is among the highest in the Visma family.
Cyber security and Privacy
As a provider of mission-critical solutions, Visma takes its responsibility seriously when it comes to cyber security and privacy. Cyber attacks have increased in frequency and sophistication, but Visma has invested in talent, software and AI to protect ourselves and our customers. Our Visma Security Program aims to ensure a unified approach to cyber security across all Visma entities.
Continued growth ahead
Visma will continue to promote competitiveness by providing our customers with software that makes their business and administrative processes continuously more efficient.
In a rapidly changing world, it is hard to plan for all possible scenarios. The last years have shown that an agile, competent and engaged organisation is able to adapt to changes. We believe that an entrepreneurial culture backed by a solid structure and processes, a healthy financial position, modern cloud products tailored for our customer segments, a strong strategic position and more than 14 000 engaged and competent employees, are the best guarantee for future success. We will continue to promote a better world by being responsible for the environment, our employees, our customers and our local societies.