2015 was a transformative year for D+H – one that was marked with opportunity and growth as we significantly advanced in our journey to becoming 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 marketing-leading positions in other areas of the business. Nearly X% 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 $470 million, reflecting X% and Y% growth over 2014. Additionally, we increased our ranking on the IDC FinTech 100 (now #21) and expect to climb even further ahead in the coming year when the results of GTBS are fully aggregated.
LOOKING BACK
Throughout the acquisition and integration, the GTBS business successfully maintained its 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. There was solid demand for our financial messaging solution and we experienced a 25% increase in new client wins from 2014. We also saw strong demand for our payments hub technology, winning the majority of the competitive RFPs we participated in. We completed the implementation of a payments hub with one of the world’s largest credit card companies, which processes an estimated 450 million transactions valued in aggregate at US$1 trillion annually. We then completed a client exercise with a leading Latin American bank and surpassed their requirements by processing more than 10 million transactions in less than one hour.
To increase the cross-selling opportunities of our new payment technologies, we added a GTBS sales presence in Canada and leveraged our deep client relationships to open discussions with Canadian banks and other large corporate and institutional customers.
In Lending and Integrated Core, we continued to see record bookings, an indicator of positive sales results. We delivered on our agenda to broaden our customer base through cross-sell and increased the number of products sold to both our lending and 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 4% as of the end of the 2014. In core, we increased the number of products owned per client by 28%, compared to 16% in the same timeframe.
We also experienced significant growth in our 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 (Truth in Lending Act – Real Estate Settlement Procedures Act or “TILA-RESPA”) as our solution enabled lenders to be fully compliant from day one. We now have nearly 600 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 core products. The American Bankers Association endorsed the MortgagebotLOS solution for its easy-to-implement, software as a service (SaaS) capabilities, and Celent, an independent research firm, named PhoenixEFE® the 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 significant 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 finance 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 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 financial 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 five 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, and the U.K., as well as with a top 10 bank in the U.S. that chose our payments 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 financial services are delivered. D+H is ahead of the curve and has successfully integrated blockchain technology into our global payments hub, achieving an industry first.
IN CLOSING
I am confident about the future of D+H. W e 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 difficult 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 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. I would also like to thank our shareholders – maintaining your trust and confidence 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