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Learn from Avaloq, the fintech company that has accelerated growth

The fintech company Avaloq has presented strong results for 2018. The key growth driver was the continued demand for the company’s SaaS, BPaaS and license solutions from new and existing customers, which accelerated growth in markets such as EMEA. For the full year, the company generated sales of CHF 579 million; this corresponds to an increase of 6% compared to the previous year (adjusted for special items). Adjusted EBITDA in 2018 was CHF 90 million. With a cash balance of over CHF 144 million, the company continues to have solid liquidity.

Avaloq has a significant number of successful “go-lives” and new customers for 2018

In particular, the migration of 253 separate Raiffeisen banks (246 banks, six branches and headquarters) to a single platform developed by Avaloq has successfully completed one of Switzerland’s largest IT projects. The platform is available to all 11,000 employees at 900 Raiffeisen locations in Switzerland. In addition, KASIKORNBANK, Pictet Group, Deutsche Bank and Edmond de Rothschild benefited from the successful roll-out of Avaloq solutions last year.

Numerous new customers

New customers in 2018 included Intesa Sanpaolo, Smith & Williamson in the UK and Industrial Bank Co. in China. Smith & Williamson deepened its relationship with Avaloq with the introduction of the SaaS solution in February 2019, underscoring the company’s success in its SaaS and BPaaS strategy. In December of last year, Avaloq announced the development of a highly innovative solution for crypto assets in cooperation with Gazprombank. This is the result of a project with the crypto-currency specialist Metaco, in which Avaloq acquired a 10% stake in April.

Avaloq was also able to expand its geographic presence in 2018: the EMEA revenue doubled to 27% – from 13% in 2017 – and the Asia-Pacific region’s revenue share rose to 10%, while 63% of revenue in the 12 months in Switzerland / Liechtenstein. Market opportunities in the EMEA region and Asia have continued to grow, with Avaloq strengthening its presence with new and larger offices in London, Madrid, Singapore and Sydney. The number of employees increased by 8%, with the greatest growth attributable to these locations.

Jürg Hunziker, Group CEO of Avaloq

“We continued our strong development in 2018, and at the same time successfully completed our largest digital transformation project of all time. In doing so, we are continuing to drive forward our international expansion and benefit from our innovations. One of the many things that I’m particularly proud of is our ability to successfully execute projects of vastly different size and scope – from the complete digital and process transformation of the Raiffeisen network in Switzerland to more specific solutions for projects at banks such as KASIKORNBANK or Intesa Sanpaolo, for whom we had windows of ten and nine months”.

New products and solutions, innovations and partnerships

Customer activity and revenue growth was augmented in 2018 with new products and solutions, as well as a number of innovations and partnerships, with a strong focus on further growth of the Avaloq ecosystem. In 2018, the open API offer was introduced, providing the community with 150 API endpoints. In October, avaloq.one, the next generation of the Avaloq ecosystem, received the Best of Show award at FinovateAsia.

Avaloq has announced an important strategic partnership with IBM to build the Swiss Banking Cloud. This includes a transformation of the way IT services are provided, building on IBM’s Infrastructure as a Service offering. The migration of Avaloq’s existing SaaS and BPaaS customers in Switzerland to the new private cloud facility is expected to begin in the course of 2019, with the ambition to implement the model in Asia and the EMEA region as well.

Jürg Hunziker continues: “The development of avaloq.one reflects the best of Avaloq and underlines our central role in the digitization of the financial services sector. The ecosystem also makes our business model future-proof and continuously gives our customers the best the world of the fintech sector has to offer.

Avaloq can rely on a solid pipeline for its future growth. A global leader in the fintech industry and integrated banking solutions, Avaloq is extremely well positioned to help its customers digitize their businesses and is increasingly considered the partner of choice”.

Publishing results to help others

Avaloq continuously publishes its results on an IFRS basis from year to year, including all necessary costs, provisions and accruals that reflect the Company’s business. The introduction of IFRS 15, the new standard for the recognition of revenue from contracts with customers, on January 1, 2018, would result in an improvement in adjusted EBITDA of CHF 4 million to CHF 94 million, which would be revenues of CHF 579 million adjusted to CHF 576 million.

Avaloq has maintained its credit rating of B (Standard & Poor’s) and B2 (Moody’s) 2018, both with a stable outlook.


Also published on Medium.

Published inFintech

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