2015 was a transformative year for D+H – one that was marked with opportunity and growth as we significantly advanced in our journey to become a leading global financial technology (FinTech) provider.
We began the year with an established North American operating model with revenues evenly distributed between Canada and the U.S., and approximately 6,000 clients and 4,000 employees. On April 30, 2015, we accelerated
our strategic agenda with the acquisition of Fundtech, now Global Transaction Banking Solutions (GTBS). It was our largest acquisition to date and it elevated the Company onto a global platform. We announced the formal
rebranding of the Fundtech business in October at Sibos, the world's premier financial services event, which was held in Singapore.
Today, D+H serves nearly 8,000 clients in more than 70 countries, including 29 of the top 50 global banks. We have 5,500 employees and 40 offices in nine countries, with leading research and development centers in Israel, India,
Switzerland, and the U.S. The addition of GTBS has allowed D+H to enter the growing global payments market with world-class capabilities and products. We are now well-positioned to compete in key growth segments in both payments and lending with a broad portfolio of solutions, while defending our market-leading positions in other areas of the business. Nearly 60% of our revenues are now generated outside of Canada, and we completed the year with Adjusted revenues of $1.5 billion and reported Adjusted EBITDA of $475 million, reflecting a 32% and 35% growth over 2014, respectively. Additionally, we increased our ranking on the IDC Financial Insights FinTech Rankings (now #21) and expect to climb even further ahead in the coming year when the results of GTBS are
fully aggregated.
LOOKING BACK
We successfully integrated the GTBS business and continued to generate organic sales momentum. In 2015,
GTBS constant currency sales bookings increased by 29%, surpassing the record sales year they had in 2014 as
Fundtech, and constant currency Adjusted revenues grew by 8% compared to the previous year. This was driven
by strong demand for our payment hub technology, where we won the majority of the competitive proposals we
participated in, and our ability to grow and meet the evolving needs of our clients. A top 10 U.S. bank signed a
contract for our payment hub solution to ensure a competitive position when faster payments becomes a part of the
U.S. landscape. Following a successful implementation, one of the world's largest credit card companies, which
processes an estimated 450 million transactions valued in aggregate at US$1 trillion annually, signed another
contract with us to expand our payment hub into more geographies. Also, in Latin America, we signed a contract
with a leading bank after surpassing their requirements by processing several million transactions in an hour.
Additionally, one of the world's largest financial institutions, a bank based in the UK and an existing customer of
our remote deposit capture solution, signed a contract for our cash management system to support their corporate
customers with evolving cross-border business needs, and we saw a 25% increase in new client wins from 2014 for
our financial messaging solution.
To increase the cross-selling opportunities of our new payment technologies, we expanded the GTBS sales
presence into Canada and leveraged our deep client relationships to open discussions with Canadian banks and
other large corporate and institutional customers.
on our agenda to broaden our customer base through cross-sell and increased the number of products sold to both
our Lending and Integrated Core clients. In Lending, where we have a base of more than 4,000 clients, the number
of products owned per client increased by 6% since the acquisition of Harland Financial Solutions in August 2013,
compared to an increase of 4% as of the end of 2014. In Integrated Core, we increased the number of products
owned per client by 28%, compared to an increase of 16% as of the end of 2014.
We also experienced significant growth in our Software-as-a-Service (SaaS) MortgagebotLOS solution, signing
more than 170 new customers. This growth was largely due to the new lending laws that came into effect
October 3, 2015 (Truth in Lending Act – Real Estate Settlement Procedures Act Integrated Disclosure or “TRID”) as
our solution enabled lenders to be fully compliant from day one. We now have approximately 570 MortgagebotLOS
clients, an increase of approximately 300% since 2012 when we acquired Avista, and expect to see further
increases in the coming year as lenders look for more efficient ways to meet compliance requirements.
In 2015, we continued to build industry recognition for our Lending and Integrated Core products. The American
Bankers Association endorsed the MortgagebotLOS solution for its easy-to-implement SaaS capabilities, and Celent, an independent research fi rm, named PhoenixEFE an overall winner in their Core Banking Systems for
Community Banks report, demonstrating the strength of our core banking offering.
In Canada, we experienced solid volumes throughout the year. The Enhancement Services business, which
is comprised of our multi-channel SaaS platform, saw signifi cant growth with the addition of a large Canadian
bank earlier in the year. In the fall, we signed a major multi-year contract with the auto fi nance division of another
large Canadian bank for our Collateral Management business, driving growth in the Recovery segment. We also
continued to build upon the successes achieved in prior years – D+H was recognized by Brand Finance as one
of the top 100 Canadian brands and, for the third consecutive year, named the top Canadian SaaS provider by
Branham300.
LOOKING FORWARD
I believe D+H is well positioned for growth. The global fi nancial services industry continues to be digitally disrupted
and technology, particularly payments technology, remains a top investment priority for banks. With the rapid
growth of payment volumes, types and channels, and the emergence of non-bank digital players, the technology
needed to support this is mission critical to banks as they look to keep their customers and their market share. D+H
is at the forefront of this technology.
A trend that will alter the payments industry and fuel growth for D+H is faster payments, also known as immediate
payments. Faster payments is poised to advance the industry by allowing any type of payment to reach a recipient
within fi ve seconds or less. Currently, there are 17 countries live with faster payments and many others, including
the U.S. and Canada, are in the developmental or investigative phase. D+H is a leader in this category and is
already a part of the faster payments transformation in Sweden, Singapore, the U.K., and as mentioned earlier, with
a top 10 bank in the U.S. that chose our payment hub solution to get ahead of the competition.
D+H has also established a leadership position at the forefront of new developments in technology. Blockchain is
emerging as a technology that may have far reaching potential to modernize infrastructures, move money quickly
and cheaply, improve access to liquidity, and dramatically change the way fi nancial services are delivered. D+H is
ahead of the curve and has successfully integrated Blockchain technology into our global payment hub.
IN CLOSING
I am confi dent about the future of D+H. We have a resilient business model characterized by highly recurring
revenues and long-term contracts, and hold market-leading positions with best-in-class, mission critical products
that operate deep within a bank's infrastructure, making it diffi cult to displace. Our executive and senior leadership
teams have both global IT and banking experience, allowing us to better understand our clients' needs and values.
This gives us a competitive edge as we combine this in-depth knowledge with leading research and development
capabilities to invest in relevant innovative technologies that are aligned with the biggest industry trends.
I'd like to close by recognizing the following people:
Firstly, I'd like to thank Helen Sinclair, who will not be standing for re-election at our upcoming annual meeting as
she has decided to retire from our Board. Helen's leadership and direction have been instrumental over the last
14 years and I would like to thank her for her time, dedication and guidance.
Secondly, our 5,500 talented, committed and passionate employees, who are more engaged today than ever
before. With an overall engagement score of 84%, a 16% increase from 2013, I am proud to be a part of a
remarkably committed team who give their best every day for our Company, our clients, and our shareholders.
Finally, I would like to thank our shareholders – maintaining your trust and confi dence remains a top priority and we
are grateful for your continued support.
Gerrard Schmid
Chief Executive Officer and Director
CHIEF EXECUTIVE OFFICER AND DIRECTOR
GERRARD SCHMID