Good day, and thank you for standing by. Welcome to the SimCorp Q2 2022 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link at any time during the conference. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, CEO Christian Kromann. Please go ahead. Thank you very much, and good morning and welcome to SimCorp Q2 2022. Let's get on with it. As always, we go to the disclaimer first. I think most of you would have read that a thousand times, but it's still important that it's there, and that we remember to look at it. Let's get on with the real stuff. Agenda today is key highlights presented by me, and then we will go into the financial review presented by CFO Michael Rosenvold. We will then address the outlook, and then we will go to Q&A both through the webcast, but also through the direct interaction. Before I kind of go into the numbers and the introduction, let me just start by saying that there's kind of two parts to the dynamic and the way we feel about Q2. First and foremost, as you can see, we are maintaining a high ARR growth. As we discussed the last couple of quarters, that is the central number. Inside SimCorp, that's the way we measure our transformation to a SaaS company, and I think generally we are pretty happy with that. It would obviously be difficult to go through Q2 this time without mentioning that, of course, we are super annoyed and somewhat disappointed with the fact that we haven't generated any new customers through Q2. I think reality, it's about timing, and obviously we will take you through why we are still very confident about the overall guidance on all three numbers as well through the webcast today. It was also important for me to mention, we mentioned it briefly last time, that we are going a bit more harder to the fact that we are transforming SimCorp to become a SaaS company. Last time we mentioned that we are doing that through a relatively fundamental review of the operating model, and you can now see this time that the result of that relatively fundamental walkthrough of the operating model is also that we are upgrading the team to make sure we actually execute on our SaaS ambitions to a substantially different extent than what we've done previously. That is both to upgrade the people that are capable of portraying the value proposition, ensuring that the product transformed to a SaaS and cloud-native product, but it's also very much aimed at the people that are responsible for generating margins on the back of the SaaS transformation. I would say the way I explain this internally, and I might as well explain that externally as well, is that once we realized where we were and what it takes to get there, we decided to do a very fundamental review of the upper management and you can use the metaphor that we decided to rip off the Band-Aid fully instead of ripping it off slowly. That also means that we can communicate internally, which I think is important, that this exercise will be done when we go on Christmas holiday end of this year. A relatively fundamental change, but I also have to say very needed change to get on the track and execute on what is in the end a massive opportunity for the company. It is important for me to put that in the context because you can also see that we are being specific about that from a cost point of view, and I'm sure some of you will have questions about that anyway. Let's get back into track, and let's follow the slideshow and get on with it. As I said, annual recurring revenue 11.9% year-on-year. We are excited about that number and we keep on pushing all the activities to keep that number as high as we possibly can. We can also see the revenue signed on the contract is record high and is also improving a bit more than EUR 21 million since we talked about it last time. I would say the forward-looking KPIs are certainly indicating that we're moving on the right track. If we then zoom in on Q2, we're back to what I said in the beginning. We're obviously disappointed about the order intake as such. When we compare it to last Q2, it obviously create a number that is negative 2.3%. I would say there's to a very large extent, timing. There was a couple of very significant deals that for all the right reasons was delayed into Q3 because they are so fundamental deals for SimCorp as well as for the customer, that if you don't get them done in the right way, it would haunt us negatively later than that. If those deals came to Q2, we would have a different conversation today, but that's the nature of the quarterly numbers and we've discussed that and we will certainly discuss that as long as we have a highly license-dependent business. That's the nature of the game. I hope we can have the opposite conversation in the next couple of quarters. EBIT is 6.2. Obviously directly impacted by low order intake, but also impacted by the special cost items that we already addressed in my introduction. That gives us a 4% rolling software updates growth. Which is actually a nice number. Here we're also starting to review the impact for next year linked to the inflation numbers gone up and some of the metrics we have in the contracts that can hopefully give us some help into next year on that. 4% for now, and that's, I would say, is a good number. Our professional services is actually growing a bit more than same time last year. There's a lot going on, and certainly that number is another witness to that. Obviously, a lot of that is driven by the transformative projects we are doing with existing customers, but there's still also a lot of work to be done on customers we've signed over the last quarters and years. A lot of activity going on there. In the end, very low free cash flow, once again impacted by the low activity from an order point of view, but also impacted by a few special items. I know Michael will go through that when we get there. All in all, that gets us to an H1 which is slightly above the H1 we had in 2021. It also obviously means that a lot of activity is going on in Q3 and Q4 to make sure that we hit our guidance. Obviously a lot of proofing has been done on that, going into this announcement today. There's a lot of activity going on with existing customers that is still driven very much from cloud transformation, but also from rationalization projects, somewhat driven also from what is a macroeconomic issue driving on the outside. There's also a real good pipeline building across the world on generating new customers. Just to put that into perspective, but I'm sure we're gonna come back to that as well. An order intake of EUR 43 million in H1, revenue grows just below 1%. That gives us an EBIT of EUR 21. Obviously, that is also impacted somewhat by a low Q2. We've already been through that. An order book that is close to EUR 30 million up, compared to June 30th, 2021, which I think is also kind of a relatively good number to indicate that it's not all about licenses. They're actually building a real order book up also from the SaaS sales that we're continuing to do. Good Q2 on professional services, slightly lower in Q1, but gives us a decent run rate into second half. As with professional services, it's right now actually all about building the right run rate into 2023 already. I would say we're coming into that with good momentum. EUR 30.2 million in free cash flow. Once again, the same comments as I just said before. New clients, I think I already addressed that and say that is modest. I would say I would be remiss not to mention that the Challenger deal that we announced in Q1 is now finally signed. It's actually the license component that is signed that allowed us to now launch the JV. The JV now has a board and is fully functioning and is very actively and aggressively pursuing the value proposition starting out in Australia, and the pipeline building there is extremely promising. There's yet another component of that deal that we are working on signing in Q3, which are also all the services element that would also be distributed through the JV. It's actually really exciting and it's yet another proof point on our ability to attack different parts of the market through partnerships. My expectation is that obviously I expect that we continue to win traditional customers in our normal segment, but I would also expect an uptick in smaller customers along what we've been discussing for quite a while, so we can continue to see a longer list on channel play. Not a lot more comments to new clients in Q2. As said, it's relatively modest, as I already said. Another thing I just quickly wanna circle around, because we also talked about that in Q1. We launched the Investment Accounting Services, and we actually also launched Investment Operations Services in Q1. We can now happily report that we signed four customers in Q1, and they're actually all live on SimCorp Dimension now, as we have this webcast. Most people that have known SimCorp for a while, to have customers live in three to four months is unprecedented. It's obviously because we are controlling the implementation, so we can drive hardcore standardization. The really important thing is that everything we learn through these implementations, we are applying to the overall value proposition regardless of what customer relationship you have. The three first customers on the Investment Accounting Services are now live. They're all in France. They're all powered by SimCorp Dimension. They're all run by our staff as a service, which means the end customer is receiving an outcome and are not actually using the application themselves. That's just super nice to see. Obviously, our ambitions are substantially higher, but it's important for me to link these go lives and this kind of client success back to the incremental investment we would do into this segment when we started out the year. A slight abbreviation of the same theme is what we now call Operations as a Service. Where Investment Accounting Services is predominant towards asset owners, then the Operations as a Service is predominantly towards asset managers, where we're ultimately going in and help them to put substantially better return on investment into their operations side, allowing them to concentrate on trading. Also here, we now have the first customer, Stone Pine. That was announced as going live, and they're actually fully up and running now, and it's also proving this part of our value proposition. Finally, what I also mentioned just before when we talk about new customer, the strategic partnership with Challenger is going ahead, and it's really accelerating. Super exciting. We signed the license deal. We formed the company, and I think the name will be launched in a couple of weeks. The board is together, has now announced an independent chairman, and we're basically getting out of the grid, flying, I would say. It's just a fantastic value opportunity in the Australian market. We talked about that a few times. The Australian market is amplified by a 10.5% mandatory pension scheme that all people in Australia has. As you could imagine, that creates a substantial inflow of money into the situation. All good, all executing according to plan. It also includes an investment that we are preparing to do, and that has a link to our buyback program that I think Michael will address later today. Then this final slide for me, we have now announced Michael Bjergby as the new CFO. He will start latest by beginning of January, so 1st of January 2023. We are very excited about having him on board, and we're gonna ensure a smooth transition from one Michael to the other. So very happy that we can put this behind us and start executing on that. We will give you a little bit of an information about the Capital Markets Day in the end of this presentation, also linked to the change of CFO. With those words, over to you, Michael, to go a little deeper on the numbers. Yes, thanks a lot, Christian. I'm now at slide number 14, and I think I will take slide number 14 and 15 at the same time because it is the same methods for both the Q2 and the combined H1 also, because Q2 is impacting H1 of course. I'll say both for Q2 and for H1, we have seen a quite modest revenue development. It is primarily due to low license sales compared with a relatively strong Q2 2021, where we did gain some quite significant new logos. Low sales this quarter and a relatively strong Q2 last year for new licenses. As you all know, license revenue flow straight through to the EBIT, and that also means that the EBIT margin is impacted by the timing of deals. Thereby, we saw a relatively modest EBIT margin both in Q2 and in H1. Also as Christian said, we have had some special costs, some exceptional costs and one-off costs. We had, for H1, EUR 2.1 million related to supporting our Ukraine colleagues and their families. As Christian also said, we have had a one-off cost of, in total, EUR 5.7 million related to our operating model resourcing program, both to consultancy payments and to redundancy payments. You can say excluding these one-off costs of EUR 7.8 million, then the EBIT margin would have been 12.8% organic. No, sorry, 12.8% is reported in H1. Not a 9.5%, but 12.8%. If we go to the next slide number 16, we show the development in order intake over the last six months or six quarters. It's very clear that we normally are back-end loaded, and we also expect to be very back-end loaded this year. This is what we have seen in prior years as well. The relatively modest order intake in Q2 2022 was, as I explained, beforehand, due to low new license sales compared to the strong Q2 2021. I will say in the EUR 17 million, the most prominent order contribution to the EUR 17 million was the Challenger deal, which Christian explained early on. In that number, there was one conversion, which was also the case in, sorry, Q2 2021. We had one conversion this quarter and one conversion in the same quarter last year. If we go to the next slide 17, we see the order book. As Christian said, the order book is EUR 30 million higher than one year ago. It's EUR 9 million higher than when we started the year. You can then say that in this quarter it is almost unchanged. We haven't added to the order book this quarter, but we have not either eaten from the order book. We have kept the order book constant in this quarter. If we look at the different revenue types on page 18, then quite clear that all revenue streams are growing. We are selling more to our existing clients. Our software update and support is increasing. Professional services increasing. Our hosting and other fees are increasing. You can say the only revenue stream which is not increasing, and that's a quite significant drop in this quarter, that is the initial license sales. But all other revenue streams are increasing. When we double click on the additional license sales on page 19. For this quarter, we do see that the additional regular license sales, so upselling to existing clients, that increased by EUR 2.2 million. If we go to the next slide, on slide 20, we see the same pattern in H1, where we have sold EUR 2.9 million more than H1 2021. On the next slide 21, the cost development. I think here I would like to start with stating what I also stated early on, that we have had extra costs of EUR 2.1 million to support our Ukrainian colleagues, and we have had the restructuring costs of EUR 5.7 million. As Christian said earlier on, the reason for having the restructuring program, that is to ensure that we have the right structure, we have the right people as we are becoming a true SaaS company. You can say organically the cost increased by 7.2% year-on-year in H1. If you exclude those one-off costs, then the increase was 12.7%, and that is actually in line with what our budgets were and what we expected for this period. If we double click on the different lines and then focus on Q2, then you can see that cost of sales that's increasing by almost 10%, and that is due to both activity but also to the planned investments in new SaaS operations and solutions. Then, as I said, a higher business activity. Looking at sales and marketing costs, an increase in this quarter of 17%, that is also heavily impacted by, we hosted our international user community meeting or conference, where we had more than 500 participants, customers and partners. A huge success. Very nice to be together with the clients physically for the first time in several years. Of course, there's also some costs related to hosting such an event, but we certainly believe that will fuel growth in the future, that we have this connection with our clients and show them all we can do for them. Admin expenses did increase quite a lot in Q2 from EUR 5.3 million to EUR 12 million, and that was mainly due to one-time costs, as mentioned above, as though most of them were classified as admin costs. Going to the cash flow development, which also were mentioned by Christian. We have had for the last three years a quite strong cash flow where we have had negative development in working capital. Of course, you cannot do that on a forever basis. And this year we have seen up until now a little of the opposite, that there has been some timing of payments where we see payments coming in later. That means we have had higher receivables at the end of Q2, and we have also paid more taxes than we have expensed. There's been some timing on the cash flow. Of course, also with a lower profit, lower activity that also have an impact on the cash flow. I will say my last slide before I hand over to Christian so he can end the presentation with just a little update on the Capital Markets Day. The full year guidance. What we are saying about the full year is that due to the pipeline we have in place, we have maintained our expectations despite, you can say, a modest H1. We believe that we have seen orders slipping into the second half, but we believe that there is a path to deliver on our full year expectations. Quite important to notice that the guidance is excluding exceptional costs related to Ukraine of approximately EUR 3million-EUR 5 million expected and excluding expected one-off costs of EUR 8million-EUR 10 million related to the restructuring program which Christian said, which will be completed in 2022. You can say of the three to five and the eight-10 we have incurred in the H1 EUR 2.1 million and EUR 5.7 million. Also, but that is included in the guidance. We will invest in our future, including our SaaS operations and our solutions. That was also communicated in connection with the annual report. There we still expect to make a short-term investment of 2% extra. I will say, despite the fact that we see a positive movement in the sales pipeline, I think it's fair to say that the full year outlook is more uncertain than normal. That is not least due to also the current geopolitical and macroeconomic turbulence. Of course, also the more you have deals being delayed, that also create more uncertainty. I think that is important also to notice. We will also say that while we are continuing investing in the future, should the market deteriorate, then of course we will look into potential cost savings, but we prefer actually to invest. If needed, we will also look into cost savings in the second half if that is needed. Then finally, I would say on the exchange rate, everything we do in our guidance is in local currency. That's excluding impact from FX. It seems like this year we will have a tailwind from FX. That is not included in these numbers. That will, based on the currency of the exchange rates as of end of July, that would most likely give us a positive impact on revenue of 4.5% and on margin of positive impact on 1%. You would say the reason for the positive impact on the margin is because we have more cost than revenue in our Danish currency. Opposite, we have more revenue than cost in primarily U.S. related currencies. By this, I will end my part of the presentation and then. Oh, maybe Christian, you said we should share buyback. I don't have a slide for share buyback, but I think it's worth noting that as a subsequent event, we finalized our 20 million share buyback program at the end of July. As we always say, we distribute all surplus cash to the investors. It is surplus cash, and if we think that we have better use of the cash, so for instance, investing into acquisitions or organic growth, then we do that. We feel that a small investment in, among other things, the Challenger joint venture is a really good opportunity for the company and for the investors. We have decided to do that and not carry out a second share buyback program. By this I hand over to Christian. Super good, Michael. Thanks a lot. Maybe just also to some of the cost items you highlighted and the investment we do. Couple of other things that actually have happened after the close of Q2 is we actually took the biggest SaaS customer live ever, which is by far the biggest. It's a really good testament to how strong the backbone of our SaaS business has now come. We actually released the first three-tier version of the software as well. Some of you would have heard about that concept for quite a while, and now it's actually on the street. That's also a really good milestone that builds up confidence internally and hopefully also externally about our SaaS transformation. With those words, let me just quickly put a few words around the Capital Markets Day in London on October 6th. A lot of you have already signed up, which is really cool. As you now understand, there is a change in the CFO role in the end of the year. Because of that, we want to clarify what you should expect from the Capital Markets Day on October 6. It's gonna be, and based on what we are preparing, quite a detailed walkthrough of what we are actually doing inside the building, when it comes to both in terms of how we attack the markets, from a geographical point of view, who is doing it, but certainly also about what's the product transformation, what's the value proposition transformation, and then finally, what is going on in the operational part of SimCorp and how do we kind of work strategically around automating a lot of these processes. In the end, we can get an interesting margin out of the transformation we're doing as well. Ultimately, a very rich deep dive of the consequences of the strategic choices we are doing. We are not gonna give you updated financial guidance in that meeting. Even though I know that is normally how you associate a Capital Markets Day, it would be wrong for all parties to have the outgoing CFO giving that guidance and the incoming CFO coming a few months after, and then have to live with that for a while. Not that I don't trust both, but it would just be wrong process-wise. The plan therefore is to break the two, and I apologize if that's annoying, but that's the way it's gonna be. We're gonna have a deep dive where you're gonna meet a very large part of the upper management in London on October 6 th. I still really hope that we're gonna be a lot of people, and then we will come out with financial, kind of plans associated with what you hear on the sixth, as part of the Q1 discussions that we normally would have, where we obviously also give guidance for 2023. We will have that separation. I think in order to understand the numbers that you will get at some point better, we really, really hope that you will spend the time with us on October 6th anyway. It would be bad if you come and then you call me afterwards and say, "That was a complete waste of time because I didn't get what I wanted." Now you have it. That was the last slide. Let's go to Q&A and get some good questions. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone or use the Q&A box available on the webcast. Please stand by while we compile a Q&A roster. We will now take the first question. Please stand by. It comes from the line of Daniel Djurberg from Handelsbanken. Please go ahead. Your line is open. Thank you so much, operator. Hi, Christian and Michael. My question would first be on the delay that you saw in a couple of deals, especially you also mentioned a quite large one that was postponed. Did I catch you right that you have signed some of these already? Not yet. Not yet. If it's possible, can give some kind of ballpark number on the potential value for especially the larger one. I think that the movement was really, as I said, large strategic contracts that typically requires a lot of scope discussions to make sure that you don't sit in a year from now and have different opinions. It happens. I would say one of the good things about the types of deal we do these days is that they're bigger. One of the drawbacks of that is that they are more complex to get over. Since you know, maybe we would've pushed even harder if we were end of Q4, but this time we actually believe that it was better to have a kind of summer holiday to kind of think it through. I'm not gonna say exactly what it is because we're still negotiating with the counterpart, but it's enough to have moved the growth into the positive arena. But otherwise, let's not go too much into details on that. But I would say that that's the nature of the game, and that's to a certain extent also the risk in the pipeline for Q3 and Q4, is that it's large deals to a very large extent. But they also take time to get through. So I think it's not as in the older years where it was just a very large portfolio of really small deals. We kind of believe we have enough of them. We also have a hedge if some of them actually don't materialize, to get it into perspective. Thank you so much. Another question, if I may, on the Challenger. Concerning you talked about the service element that is up for grabs here. Is it possible to comment anything on the potential annualized revenue that it could be the scope of it, just ballpark again? I would say, we're still negotiating with Challenger, so once it's signed, I'm happy to go through, kind of how they roughly look, a bit like, the deal we shared a couple of quarters ago. It's ultimately what we're talking about here, that's the exciting part, is that, the JV has agreed to distribute all the business process services that SimCorp are launching. It's both the cloud services, but it's also further up the stack, including the investment accounting services. It's basically gonna amplify the access to the market for those services in the region. It's a sizable deal that, we will be happy to take you through once it's signed. Just so to make sure that you understand that part, so all these services is of course the new SaaS model, so that will be revenue recognized over time. It will not be- Yeah. It will not be something, you know, upfront recognition, but be recognized as We'll generate AR. Yeah, exactly. As we go. Yeah. Yeah. I got that. Finally, my final question would be on the growth catalyst that you had started a couple years back, but still, you know, working on to build the ESG alternatives and so forth. Can you comment a little bit on the outcome and the interest for these? Yeah. Obviously we haven't had the COVID hitting the fan and so on. How important are these now when building, rebuilding a funnel? Thanks. I would say ESG is extremely important. We sold a massive amount of ESG competencies to our existing customers. It's, I guess from an overall revenue generation point of view, it's just another asset class. What we're selling is the compliance capabilities and stuff like that, which is exciting, but it doesn't kind of make the bank explode, unfortunately. It's a testament to the value proposition as such. I would say alternatives, we more or less have sold to all the existing customers that have a serious alternative portfolio. That's still growing, so there's still an opportunity for that space. I would say the exciting things is that the solution is now so mature that we're starting to see the first kind of real embryos where people are considering buying SimCorp just for alternatives. That's new. I wouldn't put a value on it yet, but it's just a testament to how solid that foundation is. I think there's a macro question outstanding, which is that let's not forget that the reason why alternatives grew massively was because of a very low interest yield environment, where you were forced to create new investment vehicles to actually be able to generate any alpha. It's yet to be seen how the current macro environment is gonna impact alternatives, but ESG continues unchanged, I would say. There is some indication that there's more volumes coming back to both, you know, kind of traditional liquid instruments. I would say in our mind, it only underpins the fact that with a very volatile macro environment, the multi-asset capabilities of SimCorp becomes even more valuable. A little bit of a wobbly answer, but I have to say this particular impact from macro is still somewhat up in the air. We are continuing to maintain the multi-asset approach and let's see where that takes us. ESG is starting to go. Thanks so much. Welcome. That's great. Good luck here in Q3 as well. Thank you. Yep. See you soon. Bye. Thank you. We will now take the next question. Please stand by. The next question comes in the line of Klaus Holse from Nordea. Please go ahead. Your line is open. Thank you. Yeah. The first question goes to your restructuring program, which I think you really didn't talk a lot about during your presentation. You know, these EUR 8 million-EUR 10 million, can you please give some more details on what are you actually going to do, creating a more SaaS-oriented organization? That would be the first one. Let's start. Hi, Klaus. Let's do that. I think if we go a little bit back in time, and I'm gonna try to keep this within a relatively short time frame. SimCorp has been built around the fundamental assumption that we are building software, we're releasing software, implementing software, and then we go into a traditional maintenance relationship. You ultimately go on to the next one. That requires basically you can live with a relatively siloed approach because each of the functions was ultimately doing their own part of that value chain, if you will. I would say up until recently, that has still been the way that SimCorp was running. That was the way our scorecard was built and many other good things in that. If you wanna build a SaaS company, you cannot do that because there's basically a direct link between building the software, people implementing the software, and people running it afterwards. If you don't have that link, and you don't carefully assess how you do that, then there's a high likelihood that you're never gonna be standardizing anything, and there's a high likelihood that you're gonna end up basically doing something that you can't really earn money on. That cluster has we've somehow been pushed in front of us until now, where I said that that's ultimately gonna break, put a break on our transformation, both in terms of an execution point of view, but also reduce our ability to actually create a good contribution margin of the SaaS business. That's kind of the core of it. Once you realize that, then you have to start working in a different way. You also start to realize that you need people with special skills in generating a kind of high automation, high operational efficiency. You need different people to create the value proposition. You probably also need different people that can accelerate the cloud migration. To a certain extent, we kind of funnel through the entire organization from myself to my direct reports, and then further through the next levels of management by both saying, "This is how we're gonna work," and that's a relatively large investment because you need to change the way we work. Once you did that, we then started to ultimately slot all the positions, from a what's your job description? What do we need you to do? What competencies do you need to do? Once we did that, it became clear that we didn't have the right lineup. Once we realized that, we had a relatively deep and fundamental conversation about how do we deal with that. The conclusion was that the longer it takes to deal with that, the longer we'll push our SaaS transformation in front of us. Part of it is, as Michael said, an investment into getting help to actually get this structured. The other half is redundancy packages, basically, without going into. And the- Further detail. These are part of the EUR 8 million-EUR 10 million redundancy packages. Yeah. Yeah, yeah. Yeah. 100%. That sounds good. Not firing people, obviously. They're not very hard. Creating a more SaaS-oriented company. Can you put some numbers? Are we talking about 20%, 30%, 40%, 10% of your employees that you need to replace? Yeah. I think there's two parts to that, Klaus. What we decided to say is that the focus in the beginning is on putting the right leadership kind of team into play, right? That's obviously typically where you see it's expensive to do the changes. We're not suggesting that we're gonna do kind of extraordinary cost for changing the entire company because then it's kind of something we need to figure out ourselves. What we're talking about here is senior leadership positions that have either been removed and then a new structure is in place, or we have changed the people that was in that box. That's what we're talking about. Once we're done, I would say it's because as part of this, you're also growing the company. It's not like I'm gonna say, "All right, these 20% of staff we take out, and then we hire another 20%." It's more gonna be the mix of competencies, both in terms of what they do, but as you've probably also seen where they sit. I think that's also a very important part of our cost efficiency mindset that we need to push through the organization. The EUR 8 million-EUR 10 million is to set the right management team. Okay. In absolute numbers, it's not a huge number of FTEs that you need to change, so to speak. Oh, it's probably somewhere between 10 and 15 people that has been affected directly in this. That is done, so no more changes from FTE point of view. From my side. If you look at the numbers, you can realize that there's still work to be done before the end of the year. Okay, what I'm trying to figure out is when you did the changes in the sales organization a few years back, then that had a significant negative impact, short term, at least. How do you make sure that, first of all, these changes and uncertainty do not put a pause to the organization, so to speak. Secondly, what we have seen also for the last couple of years, it has been relatively difficult to hire new employees. There's been a lot of vacant positions for quite a while. That will be just a follow-up. The first one is in the end, why it is we decided to do it fast, right? Because otherwise you would have to live with that uncertainty for quite a while. There is you know people in SimCorp now realize that SaaS transformation is not something we do on the side. That's the center of the company. We are changing the tone. Malene, who is Chief HR Officer, is working a lot with culture, and it's kind of the full shebang. Of course it creates uncertainty, but that's also why we say it's a spike that we wanna get done now. Also my personal approach to these things is the only thing you can do is to make it clear to people what you expect, and then you can either help them to get in the right direction or you can agree to depart if there's no match. That's what we are currently doing. We do it right from the top and down, because only by having the right leadership you would actually be able to drive the organization in the right place. If you do that, to your second point, you're actually able to attract talent. I would say the people we have now got in are either from the outside or have promoted into these roles are really talents that we're gonna build the future on. I would say the other more kind of broad-based response is that I would say our investments into alternative locations actually has paid off. We've been able to hire much better in the last quarter than before because we've done a lot of work with both our internal recruiting teams but also building more locations in the spectrum. I would say so far so good, but I think the world outside is still volatile and there's probably gonna be yet another push on the salary base if inflation stays high. Otherwise, I actually. It's funny with these things, once you get your head around that you need to be open and transparent about the magnitude of changes, then suddenly the dynamic also changes. It's good. Good question. I think. Claus, just a side remark regarding this about our ability to attract new talent. I know that you have been, I think, pointing that out for a while, which I think is super fair. I hope you also saw in the announcement that our FTE was actually increasing by 9%. It is actually possible for us to also attract talent. It's not without hard work and so on, but we do see that our workforce is increasing. Yeah, I noticed that. Okay. Let me jump to my second topic, and that is the guidance. Have you changed your assumptions as to the impact from client conversions and Dimension renewals, as part of 2022 guidance? No, I don't. No, I don't think we have. I think we are. It's just a question. Yeah. I think we are quite open about the fact that the cloud transformations are driving conversions. I would say it's a relatively healthy mix between ILF deals or new customers, upselling existing customers, conversions and renewals. Sorry for using internal abbreviations. I don't think it's necessarily changed. No. How much do you expect these two let's call it revenue streams will contribute this year? No, but I think that and that's also for part of the risk assessment is that we're gonna continue to see a very healthy growth on what we do with existing customers. I'm pretty confident we're also gonna start to see some real interesting new names dropping in. It's clear in our risk assessment towards the keeping the guidance is we see an overweight from existing customers. If it. Especially in the current macro environment, I think, is also an important statement. Just the reason why I'm asking is that in the past you have been, you know, giving some color on the magnitude of the impact from client conversions and renewals. I didn't find any comments in the report at least about this, so was just curious to what extent, how much we should expect in the full year. Yeah. What we do now is that we do it when we announce the actual numbers, so then you will see the full impact from conversions. I will say we do also have some substantial conversions included in our guidance, but that has been the case from the beginning. As part of our guidance, we do expect the conversions because that is what we see. That is especially with the clients want to go from an on-premise solution to a cloud solution, then it's a very natural step as this is on an SPL agreement that they then convert that perpetual agreement to an SPL agreement at the same time. In the guidance, there are significant conversions included. That has been the case all year. It's more than last year. As I recall, the communication after Q1 was that conversion will be more this year than last year. Is it correct? Remember? I agree. Just the final one. I'm sorry about these three questions, but SimCorp's ambition is to grow the revenue more by more than 10% per year. If you look at your professional service and also your software update revenue streams, both are growing organically and not a lot, which obviously will put more pressure on the other revenue lines to more than compensate, obviously. How should we actually think about a professional service growing at nearly 3% organically and software updates not more than that? I think software updates is obviously a function of the license base, if you will. Hopefully, at least to compensate some of the cost pressure we get from inflation, you can start to see an uptick in that. We need to see that net of customers leaving, which is currently at a very low point. Professional services is a very interesting, and as I said, this is right in the center of some of the conversations we wanna have at the Capital Markets Day because kind of the one-off professional services we want to decline. However, what we want to see substituting and more than substituting that is what we would call the recurring services. As you can see, they are also growing quite healthy at the moment. Here we are still in a situation where what we have signed of these kinds of transformations you can't see anywhere, because it doesn't go into the order book, and it doesn't go into anything until it gets into the revenue and hits the last twelve months AR. I think it's that component that we wanna be a bit more specific on how that's gonna look in the future and how we're gonna track it in the future. Then once we have that clear, we can allow new Michael to come in and have a think about how do we portray that in terms of what we guide on. Nevertheless, you're not gonna get through the right number anyway without having software components as part of these sales and that kind of need to cater for the rest is the way I look at it. Once you start to move these things around, you know, you would have to see what's kind of the end result from a long-term point of view. That's really the work we do at the moment. Also just remember that when we do conversions, yes, we do take license upfront, but that is also offset by a reduction in the software updates and support. Whenever we do conversions, it actually has a negative impact typically on the software updates and support revenue. Yeah. You, you're front-loading revenue, but sure. Okay. That was all for me. Thanks. Thank you. Thank you. Thank you. We will now take the next question. One moment, please. Okay, go on. It comes from the line of Thomas Poutrieux from Exane BNP Paribas. Please go ahead. Your line is open. Good morning. Thank you very much for taking this question. I've got a couple actually. Starting with the order books, it looks like the order book for subscription services specifically declined like in Q1 and Q2. Can you comment on the dynamics here? I mean, is it just perhaps a short-term effect from the restructuring plan? Can we expect a return to growth sequentially in Q3 and Q4, even if we exclude that what may come from Challenger in that specific metric? Can I just so I'm making sure that I'm answering the question correctly. Is your question that you have seen subscription services in the order book going down from Q1 2022 to Q2 2022? Yeah. Yeah. A slight decline. Yeah. I can certainly explain that. As we sign new subscription agreements, then they are included in the order book. As we are then, you can say, delivering our services, then we recognize revenue and thereby reducing the order book. You can say if there is a small decline in subscription services from one quarter to another, it means that we have recognized revenue more than we have gained in order intake. You're absolutely right that in Q2, that is also the reason why the order intake is relatively modest with EUR 70 million. We didn't sign any significant subscription service agreements. Therefore, it's a natural consequence that as we are then recognizing revenue, we are taking it from the order book. If you look at the order book quarter to quarter, it's almost unchanged. It's not like that we have taken a big piece of our order book in this quarter. It's almost at the same level. In general, not only on subscription services. Yes. Yes. Okay. Second question perhaps on the U.S. competitive landscape. I mean, in Q2, we had Clearwater Analytics that has announced first pension from a client in the U.S. I think it has been quite successful with this segment of the market in that specific geography. At the same time, I think BlackRock also in Q2 said about getting a little traction with their new Aladdin accounting product. Could you perhaps update us on the competitive environment in the U.S. specifically, if you can see any strengthening on that front as a result of the evolution I just mentioned. Yeah. No, I certainly can. That's right back at why we are investing in creating those type of services to be competitive in that space. The way we've gone around it geographically is that we started in Europe. That's where we have a lot of kind of brand recognition. We have a lot of customers that are willing to take these things. That's also why the first three customers on this service is close to home, if you will, to get that going. I would say so far, and I think even Clearwater mentioned that in their earnings call, is that they have more headwind in Europe than they expected. I think that's because we are launching our services in Europe. Step number two has been to get those services to APAC. Not necessarily because it was a priority, but the challenge opportunity kind of materialized, and it was a relatively easy decision to say, let's double down on that. That also means that now the time is coming to North America, getting those services launched full scale, hire the team and all of that so we can absolutely both take part in the party but also make sure that we offer our current customer base that opportunity. That's something we are literally just embarking on. I would say right now obviously they have a stronger footprint we have purely by the fact that they are coming out of North America. We have real work to do. We got a good customer base, and we are most likely gonna take the same approach as we've done in APAC to that. More update on that later in the year. All right. That answers my question. Thank you very much. Welcome. Thank you. There are no more questions on the phones. Please continue. Yeah, I think we have some questions here on the live chat. Although I do believe that we have answered a lot of it. Nevertheless, the question comes from Heinz Dever from Investor AM regarding the operating model restructuring program. How much will the total cost be, and what is the eventual goal of this program? SimCorp is already partly a SaaS company as AR is around 59% of total sales. Why the program now? To the last one, I hope I explained myself a little bit earlier, but I think, yes, a big part of our company is already SaaS. But I'm also, I think, hitting the nail on the head, and linked to many questions I've had for the past years. You know, it's all good that you are taking these SaaS transformations, but what, how you're gonna kinda make money on it in the end, which I guess it's only interesting to take on that work if you're gonna actually make money on it. I think that's a, you know, very important element to it. I would say the total cost of transforming SimCorp, I think is quite massive. What we are thinking about is to get the management layers intact, and the number is what we say it will be, and it will be done in 2022. The rest of the costs, I expect to cover through normal changes in the organization. There's the second question also from Heinz. What is the difference in the capabilities you need as a SaaS company versus the company SimCorp is now? Does this mean that you have to hire a lot of new outside talent? Yes. I think there's many, but if we double down on the one we just talked about is that you need to have the mindset and the experience of driving a high level of automation. You also need to have the experience of running a global always on team because we are still talking about some of the large financial institutions of the world. They do expect a premium service. They are, in most cases, prepared to pay for a premium service, and that's kind of the mindset you need to put in place. I think a lot of the talent we have that we're gonna continue to keep are experts in SimCorp. But since only very few people have tried to do this elsewhere, we need to kind of map that up with that experience base. You have both the SimCorp skills, but you also have the skills of running a global operational unit to the extent that we do here. As I said, we only have 50 out of 300 customers. Just imagine what the company looks like when you're starting to take a bigger share of the remaining 250. Unless you get that right from the get-go, you will fail very badly. That's ultimately the steer we're taking now. There's actually just a follow-up question, but on a completely different topic, in terms of currency impact. The currency effect will add a positive on top of the current guidance. Did I understand that correct? Yeah. I will say we guide on local currency because then we don't have to explain why we miss a guidance due to currency or why we overshoot the guidance due to currency. We always guide in local currency. Same, so with no impact from currency. The reported numbers are, of course, the reported numbers based on the currency in place. That means that you will have a positive impact on the reported numbers on top of our guidance. Great. I think that was all for the webcast, but I think there was another hand raised from the audio, right? Yes. One moment, please. It comes from the line of Poul Jessen from Danske Bank. Please go ahead. Your line is open. Yes. Thank you. I have two questions. One is on the strategy update you're doing. You have earlier talked about also reviewing your U.S. setup and the go-to-market over there. Is it just adding more people, or are you in a position to update on eventual fundamental changes on how you handle the U.S. market? Yes, but that has to be a massive cliffhanger for October 6th because that is part of the agenda. I would say it's a bit of both, Poul. There are certainly many good things that we've done over the years and continue to do, but I also believe there's a different tack required. Okay. It's on October? Yeah. Okay. The second question is on your ARR. You said that you are growing healthy on the ARR with your 12% or little below 10% in fixed currencies. But if you compare it to other companies which actually report the ARR, which you're competing, then you're growing at the lowest rate- Yeah. At least among those five companies. What level would you be satisfied with? Because you and I all think two conversions. I think there's many elements to that. That's certainly part of the number that we need to be much more comfortable with before we communicate. That is the key number, Poul. I didn't mean to say- Are you? I didn't mean to say healthy because. Are you looking at the 10 of Charles River, or are you looking at the 10 of Aladdin? Probably somewhere in between. I would say. I think healthy for me means that is within the guidance clearly for this year. I would say once you get the ARR defined correctly and you get the full cloud impact in, then I think we're gonna start to look at some interesting numbers. We wanna do the math before we kind of become external about that. Okay. Thank you. Thank you. There are no more questions on the phone, so I would like to hand back over to the speakers for final remarks. That'll be short. Thanks for joining, and I wish you a wonderful weekend. Yeah, I really hope that you can find the time for October 6th and, despite the clarification we gave today, because I think a lot of the questions that you continuously have, we will hopefully give more insight to at that event. Take care, everybody, and see you somewhere. That does conclude the conference. Participants. You may all disconnect.