At last, coronavirus appears to be loosening its grip on the world. But it is easy to forget that at the start of 2022, the pandemic was still in firm control. Later in January we saw governments call for new lockdowns, shutting down our markets and putting our employees in a home-office position we had become all too familiar with.
In February, things began to look up. At Visma we began toreconnect in person again! We were seeing great engagement through our hybrid work model, which we crafted in dialogue with each other.
And then came the shocking news that Russia had invaded Ukraine, a new humanitarian crisis requiring an immediate response. Visma has never had operations in Russia or Ukraine, but we have several hundred Russian and Ukrainian employees situated in other countries. In addition, a handful of colleagues living in Ukraine were in immediate danger. We also employ thousands of people in countries that border Ukraine or Russia – like Romania, Poland, Hungary, Slovakia, Lithuania, Latvia, Finland, and Norway, who were suddenly dealing with the fear and uncertainty that the war might cross their borders too.
Over the past year, our people have demonstrated admirable compassion – some have opened their homes to provide shelter for the refugees, others have conducted private fundraising. At Visma, we continued our financial support to UNICEF, contributing to helping children in the war zone. In addition, many companies within Visma have taken their own initiatives to financially support Ukraine and the refugees. Through our software, we were also able to support refugees to find new jobs in their new countries.
This year, I have spent a lot of time in our markets close to the war, and I have seen some of the effects firsthand. The ripple effect of sanctions, snowballing energy prices, military conflict on the doorstep, and people rightfully worried about what is to come. Inflation has driven up costs throughout our markets, over 20% in Hungary and the Baltic states. Furthermore, our suppliers have raised their prices, while the war and aftermath of Covid have created a global shortage of many hardware components.
Some economists argue we have not seen this level of political and macroeconomic uncertainty in at least 50years.
Every cloud has a silver lining
We still believe there are many positives to be found in the current situation and global trends, especially within the software industry and its potential in the coming years.
The hybrid work model has rightfully become a fixture in global businesses. It is clear that employee productivity and engagement are highest when people have the freedom to use business-critical systems wherever and whenever they need to.
As hybridity continues to mature, so too will the transition to cloud computing away from on-prem systems. Modern cloud software is both the present and future, with nearly 100% of all software innovation occurring in cloud-only products.
The innovation I am referring to is not only happening within Visma. It is being built by talented software entrepreneurs across Europe who know a thing or two about simplifying the lives of their local businesses and societies. New companies are joining Visma almost weekly, building us into the largest network of SaaS companies in Europe. Why? Because our joint efforts create value and growth. Companies that join the Visma Group keep ownership of their autonomy, brand, and people – while we all enjoy the benefits that come from new innovations, partnerships, connected products, and happy customers.
2022 was another landmark year for our M&A efforts, with a number of 42 new companies joining the Visma family through acquisitions. We also celebrated our market entry into France through the acquisition of Inqom. Our momentum continues in 2023; as I write this, Berlin-based companies H&H and BuchhaltungsButler have joined us, marking our entry into the German market and further expansion in continental Europe. Without a doubt, 2023 will be another exciting year for us.
Standardised software for Europe
Our customers demand software for smoother and more efficient business, and we have delivered it to them forover two decades. But in this turbulent economic climate, it is vital to recognise that an even more salient need is to have financial confidence.
In 2022, we have looked at how we can give our customers more of that confidence – to be there for them, in good times and bad times, so that they can focus on their business. And to help them focus, we have sharpened our focus.
To prime us for further growth, we’ve streamlined our business. In June, we divested our consulting division, provider of custom IT solutions for 8,000 customers across the Nordics. Later in the year came the divestment of our Cloud Infrastructure Services division, supplier of technical IT services to large Nordic companies.
With these divisions no longer a part of Visma, we are able to better meet our ambitious growth strategy by devoting our attention to our core business: standardised cloud products. We are also better situated to acquire innovative software companies that match our strategy and culture. From this unique position, Visma offers a vibrant base for European entrepreneurs to launch the next stage of their business.
What do we mean by standardised cloud products? These are software solutions, informed by years of well-funded research and development, conversations with customers, and on-the-ground experience with their particular segments, verticals, and needs. Our software products are efficient, secure, and so tailored to our customers and their local markets, that they preclude the need for customisation. Combining relevant products with seamless connections to other business-critical software gives our customers an edge they will not find anywhere else.
The icing on the cake
World-class security, privacy, technology, and sustainability are also vital features of our software.
Cyber security threats continue to grow globally, not just in frequency but also in professionalism and scope. Going above and beyond with our security and privacy measures is key to maintaining the trust and operability of our customers. Our efforts lead the industry and must continue to do so. In 2022, we continued our strong investments in security. We also published several papers and academic works to further contribute to global security.
Within technology, our investments in product development and innovation are key success factors for us. We go out of our way to meet and empathise with users to identify new and better ways for them to achieve their goals. We apply artificial intelligence, machine learning, and data science among other technologies to increase our customers efficiency and competitiveness. Additionally, connecting products through APIs remains a top priority, ensuring our customers have seamless data synchronisation across their business functions.
Our sustainability efforts continued in 2022. We became a proud participant of the UN Global Compact, where we take a principles-based approach to responsible business. We established a new sustainability governance structure to strengthen the collaboration between our companies across countries. We continued to look at new ways of reducing carbon emissions, not only in the development and hosting of our software, but also by providing our customers with solutions that help them be more sustainable. In our Diversity & Inclusion strategy, we pointed out clear goals for the year, and our employee engagement score (eNPS) at year’s end was 61, which is in the top 10% of the IT industry.
The proof is in the numbers
Our revenue in 2022 was € 2,06 billion, a growth of 19% over 2021. We now serve over 1,4 million customers across Europe and Latin America, with 21,7 million e-invoices and 11,1 million payslips flowing through our systems every month. We spent 20,6% of our total revenue on product development in 2022, among the highest in the IT industry. Part of this investment was a new technology center we opened in Porto, Portugal – our ninth competence location working to innovate security, AI, product design, and other areas.
As one would expect after societies re-opening early in the year, our operational expenses increased compared to 2021. Still our profitability remained strong throughout the year. End-of-year EBITDA was € 587 million, a growth of 11%. The EBITDA margin was 28,5%.
Continued growth ahead
Going forward, Visma will continue to do what we do best. We will build locally relevant and standardised cloud software that automates business administration, connects data, keeps societies running efficiently, and gives companies the financial confidence they are after. Through several key moves in 2022, we have sharpened our focus and further built up our vibrant ecosystem of companies who, like us, are champions of cloud software.
Geopolitical and macroeconomic instability will likely persist throughout 2023. But Visma remains in a very strong position and will continue to provide the mission-critical software that businesses and societies need. Our devoted and engaged people will lead the way, setting a global example for how to drive a dynamic and dedicated group of companies.