Visma achieved 17.1% growth in revenues in 2015. Growth from cloud computing and SaaS Software was even higher at 57,9%. EBITDA grew by 18.2%, and the EBITDA-margin improved from 20.7% to 20.9%. The growth was partial organic and partial through strategic acquisitions. The macroeconomic situation was rather unstable in 2015, but with heterogenous nature of the Nordic economies ensures a high degree of recession resilience.
2015 was a year of dramatic political events. The continued conflict in Syria led to a wave of immigrants to Europe causing substantial problems for the Western-European welfare states. The climate between Russia and Nato deteriorated as trade restrictions from 2014 remained in force. The later hurting especially the Finnish economy. The dramatic fall in crude oil prices posed a challenge to the Norwegian economy. Unemployment has increased sharply along the Norwegian west coast. The low oil price has also meant a much weaker NOK, and the non-oil part of Norwegian business see improved competitiveness and good growth. The Norwegian economy as a whole had close to zero growth in 2015, and a small GDP growth is expected in 2016 as other industries take up the slack from the oil industry.
2015 was a good year in both the Swedish and Danish economy stimulated by record low interest rates. We believe in continued GDP growth in 2016, but maybe as a somewhat slower pace. The Dutch economy developed positively in 2015 and we expect this to continue into 2016. Finland is in a recession or no more than 0 growth phase, but the well educated workforce generates healthy growth and much innovation in all technology sectors. With its lower cost base and lean public sector Latvia, Lithuania and Estonia will continue with faster growth than the Nordics.
Visma continues its strongest growth in our two So!ware divisions. Year on year, revenues in Sofware SMB grew by 23.1% while revenues in Software Government and Large Account grew by 17.2%. The BPO division continued the trend in increasing revenue growth rate, growing at 7.8% percent for the year.
Visma’s SaaS business matured considerably during 2015. Revenue from SaaS software grew 57.9 percent to NOK 1,308 million and accounted for 15.7 percent of total revenues in 2015 vs 11.6 percent in 2014. This was driven by the macro-trend for companies to utilise cloud computing and mobility for almost any applications, including ERP, HR and Payroll. The Visma eAccounting entry-level ERP system passed 50 000 customers by the end of 2015, a growth of almost 100%. We expect continued growth in 2016.
In June 2015, Visma acquired e-conomic, the Danish leading SaaS ERP company. With revenues at about NOK 230m, e-conomic is leading in Denmark, but also the largest cloud ERP company in the Nordics. Organic revenue growth in e-conomic remained at over 25% during 2015 and continues in 2016. Along with e-conomic, Visma acquired the Swedish cloud ERP company Speedledger, adding a total of over 100 000 SaaS customers.
Visma has concentrated its operations to the Nordic, Baltic and the Dutch markets. This priority has made it possible to achieve strong market positions, high brand awareness, operational efficiencies and competitiveness.
Visma´s ambition is to be the national and regional leader in its product categories, an advantage versus global competitors. Rather than overextending resources, Visma intends to be the strongest and most profitable supplier in the markets where we operate. There are still multiple growth opportunities. In the coming years, Visma consider expansion to new geographies, most likely in Eastern Europe and through acquisition of market leading local companies. We will remain loyal to the strategy about being a strong and sizeable player in each market, rather than spreading thin globally.
Investments in product development and innovation are key success factors for Visma. During the decade from 2010 to 2020 Visma will re-create all it’s Windows solutions to cloud solutions. This means complete rewrite of code, not converting or upgrades. Thus investments in the years 2013 through 2017 will be at a peak as we continue to maintain on premises solutions as well. In 2015, and R&D expenses amounted to approximately 12% of revenues. About 60% of R&D investments are related to SaaS projects.
Visma is competing with larger global and regional companies and we are dependent on our off-shoring capacity. The Nordic cost level combined with insufficient access to competent human resources have been the drivers behind the build-up of our off-shoring activities, which today comprise operations in Romania, Lithuania, Latvia, Poland, Ireland and Spain. At the end of 2015 we had 989 full time employees in these locations, and the plan is to increase this to around 1300 FTE by the end of 2016. Most resources are within so!ware development and accounting/payroll outsourcing. The offshoring operations are necessary to facilitate development of new SaaS solutions, to win larger consulting contracts and to be able to be competitive on outsourcing business.
While 2016 will be challenging in the Norwegian economy, there are plenty of good growth opportunities in our other markets. The growth in SaaS is expected to continue and as Visma launches innovative new products. 2016 will be even more active than 2015 on acquisitions, and our targets are mid-sized SaaS ERP/Payroll/HR companies.
In a changing world with tough competition it is hard to plan for all eventualities. However, an agile, competent and engaged organisation is able to adapt to new technology and new challenges. The later years the employee engagement surveys in Visma have showed an increasing trend. Combined with a good inflow of new talent, Visma shall be able to prosper and grow in the coming years.
CEO of Visma
Early in 2016 a sale process of the BPO Division of Visma was initiated, which attracted significant interest from multiple investors. The sale process has now been finalized, and BPO’s new owner will be HgCapital.
By selling the BPO division, Visma group becomes a “pure-play” SaaS/software business. Visma has grown fast organically and through over 150 acquisitions to become the largest software company in Northern Europe and the largest SaaS/cloud company for business customers in Europe. Visma will use the proceeds from the sale of BPO, combined with its already strong cash resources, to continue to grow rapidly both organically and via acquisition.