Thank you very much and a warm welcome to all of you that have decided to join our meeting today. Today, it is about Q1 2021 and the outlook for the rest of the year.

If you move to slide number two, there you have kind of the normal disclaimer that governs anything we are going to be saying in this call. So if you haven't read that before, then I would advise that you familiarize yourself with that.

On slide number three, we have the agenda. And the agenda is, we will give kind of a highlight of Q1.

I will do this and I will also give you a little bit on our cloud journey. Then Michael is going to dive a little bit deeper on the financial review and also the 20201 outlook.

And then, we will dive into the Q&A for today. If we move to slide number four, that has the highlights of the quarter, as such.

And as you can see, we grew revenue by almost 10%, 9.4%, if you look in local currency, 6.9% in reported and EBIT up over last year as well. The order intake was a little bit soft in the quarter.

We didn't sign any new initial licenses. We have to wait until early Q2 to get that signed.

Professional services continued to grow, 9.5%, based on all of the orders we got in Q4 and all of the activity that came there. We still see strong growth in our professional services business.

12-month software and updates is now at 3.2%. We have previously said, we expect that to be about flat to what we did end of year and we have given all of the reasons for that in previous call of all the conversions and so on that is happening.

But still 3.2% growth in the 12-month rolling for this quarter. Free cash flow, quite strong, EUR39 million, almost EUR40 million, an increase by EUR7 million over last year.

So quite a strong cash flow, good cash conversion. Michael is going to get back to that in a minute.

If we move to slide number five. We are trying to give you kind of an insight on the two new metrics that we think that are driving the business, the annual recurring revenue and then the revenue signed on contract until now.

To start with the last one first, we now have EUR341 million that have already been signed. That is up 6% compared to the same period last year.

So that is revenue that is on contract by now. Annual recurring revenue is looking at the last 12 months and that sits at EUR257 million so far.

That is up 13% in local currencies and almost 22% in reported currency. So our recurring revenue is now growing faster than our revenue, which means that an increasing part of the revenue generated is recurring revenue.

And we are quite pleased about that because that gives stability to the business also going forward. If we then move to the next slide, that is the flag list.

And as I said, there wasn't any new client in Q1. In Q2, we did sign two new clients, one for SimCorp Dimension and one for Coric, one in the U.S.

and one in Canada. Unfortunately, we can't give you the names yet.

That will come at a later date when we announce this. So a good start to the second quarter and hopefully a quarter were more gets listed before we meet again in August.

Moving on to slide number seven, we are going to for the next few slides a little bit about the cloud journey. And many of you have asked about this as we had calls overlap few months and quarters.

So I decided that we should give you a little more insight into this. Cloud journey, for us, is kind of three different things.

So it's a business model. We are already in subscription model.

We have been that for a while. We have an agreement with our clients that they will upgrade at least once a year.

And you cannot stop paying maintenance or stop paying the subscription unless you have to stop using the software. Exactly the same as any other SaaS business.

We have since 2016 delivered SimCorp Dimension as a cloud solution to a number of clients. And today, we have more than 50 that are on a solution by SimCorp that is hosted in the cloud, no all of them Dimension but quite a number of customers.

What we are doing now is technology upgrade. We are lifting the current application to the cloud and we are building all our new applications in the cloud.

So that's what I will focus on. I won't get into business model or the delivery model, but more the technology side of this.

If we move to the next slide, what you can see is that we are building what we call the unified platform that is currently isolating layer between all of the applications, the puzzle pieces that are on top, all of the application and that is how they connect to all the underlying service. In this case, on this slide, we shoes Microsoft Azure that is kind of a cloud provider we have chosen.

But the unified platform will also be able to connect to others, including customers that are on-premise. So if you have a server farm running Windows servers and so on in the old data center, then the unified platform is to connect to that which means that the applications we are building on top of the unified platform will be able to run both in a customer's data center, on Microsoft Azure and potentially also other cloud services should we decide so.

So far, we have decided for a cloud service to be on Microsoft Azure. If we move to slide number nine, then you see that the three pieces of the puzzle that is happening.

SimCorp Dimension as a Service is the current service we are offering in the cloud and by lifting that on top of the unified platform running on Azure, we are going to be able to get more flexibility for our client. We are going to be able to scale up and down more easily given that it is a cloud service that we are providing.

We are doing this three tier lift but I will get back to that in a minute what that means but we are spinning our applications from two tiers to three tiers. That is going to get us an opportunity to be more efficient in what we do.

It's going to provide better access to artificial intelligence, machine learning. It's going to enable us to have more APIs.

It's a better security model and so on, all technical, but something that's super important as we move forward. Lastly, we are on top of the unified platform also building a set of new cloud-native services.

I will get into some of those as we go. But in essence, we are lifting the existing applications on top of the unified platform.

We are upgrading the existing application to be three tier and we are building new cloud services on top of the unified platform. That's kind of the journey we are on, from a technology point of view.

We then move to the next slide. That's an overview side that says, SimCorp Dimension as a service.

We move to the next one. That tells the progress we are on.

We are on a progress from moving from an on-premise software paradigm where the client is responsible for most things, we are only responsible for the software as such, to a technology services paradigm where we do all of the technology enabled services. This is what we do today on SCDaaS, the SimCorp Dimension as a service technology and then the customer owns running the business processes on top of this.

The paradigm we are moving towards is one where we also take care of some of the services and a good example of that is the Datacare service that we provide where if this was in the old days and it was the Gain product we were selling which is kind of the core foundation of our Datacare, then we will sell the Gain software to the customer on the left hand on on-prem. They would host it.

They would have the different processes in place to actually do cleaning of the data. And what we are now doing is, if you go to right side of this that we are actually selling them clean data.

So that's the difference in this. So that's kind of the broad progress we are on with many of the product we have from just selling the software to providing the software as a technical foundation to actually also providing services on top of these pieces of software.

If we move to the next slide, that's just a detailing of the current offering, the SimCorp Dimension as a service offering that we have. That means that all of the modules that we have today is running on top of a cloud service and we are providing all of the services around this.

We are doing all of the -- we have a single point of contact for the customer. So if they need support, it's us that does this.

It's 24x7. We are hosting this in an environment where it has security, it has the certifications, it's SOC2 compliant and so on.

So it's all driven by a set of SLAs that we have with the customer. The customer interacts with us, we provide the service.

So that's good journey towards everything as a service and today we do this for all of the modules that is inside of SimCorp Dimension. If you move to the next slide, that gives you kind of a technical lift, the cloud lift we are doing.

And again, to the next slide, which is slide 14, then as I said, we are doing what we call a lift to a three tier architecture for all of the applications we have today. So all of the 20 modules you saw on the previous slide, all of those are two tier today.

They are client/server, as they are called. And we are now moving that to a three tier architecture.

That means splitting the presentation layer from the application layer. So that means we will have one where there is a database server running, there is an application server that facilitates running all the applications.

That is new for us. This is where the unified platform fits in.

That is that application server that everything then sits on top of and then the presentation layer is just thin client like a browser or something like that. It allows you to have multiple clients on top it and so on.

That is the split we are doing of the existing software. So that application that's going to sit on top of the unified platform will be this three tier application that is a lot more flexible in the way it runs.

It's a more secure way of doing it because it's all centralized and so on. So it also a more scalable as it has shared resources and so on.

We will have the unified platform built with this all of the existing applications on top of that, that's the cloud lift we are doing. We will build all of our new application on top of the unified platform as well, which is what we will talk about now.

If you move to slide number 15, that gives you the cloud native services. And moving to 16, that gives you that all of the service we are now building, we are building on top of this unified platform and we are moving to a paradigm where we will have the applications running but we will also potentially provide services on top of this.

As I said, Datacare is a good example of where we are providing a business process as a service. We see other opportunities for doing this as well and providing a SLA to the customer, service level agreement, to the customer of a service rather than just a piece of software.

If we move to slide number 17, there's two examples of this. We have now a client digital engagement portal that allows asset managers to engage with all of their customers in a digital way.

We are running that. We are providing an SLA to the customer of a service that is set for that.

And the customer then, they can put their data into this and their customers can access that. So something we are operating fully as a service.

Something we are building as a service such as performance analytics, that's a product that we are building out right now. We have a performance attribution module inside of SimCorp Dimension today.

But to make that truly scalable and real-time, we want to move that through a cloud-native model. And that's one of the services we will be building, again something where customers can sign up for this performance analytics.

They can host their own data in this and get performance analytics on the fly. So that's kind of the explanation of the cloud services.

Summarizing, we are building the unified platform that allows us to run on pretty much any service that be Microsoft Azure, on-premise, whatever. We are moving all of our applications that is in SimCorp Dimension to that.

We are doing that by doing this move from a two tier model to a three tier model. And we are building all of the new applications on top of the unified platform.

So that's the cloud journey we are on from a technical point of view. From a business model, we have been there for a long time.

From a deployment model, we have been there for a long time. And with that, Michael and all the technical explanations, over to the technical explanation of the financials of Q1.

Yes. Thank you Klaus.

And I will do it relatively short and the reason for doing it relatively short is that we believe that our Q1 results are very much like we expected. And maybe as an opening remark, I just want to remind you on what we stated in connection with our annual report where we gave the guidance for the full year, where we also quite clearly stated that we expected H1 to be impacted by the COVID restrictions and that we also expected H2 to see more opening up of the societies and thereby also influencing, you could say our interactions with prospects and clients.

And we will come back to that. But we stick to that prediction.

So going straight into slide number 19, where you have the traditional waterfall diagram showing the revenue growth and the EBIT margin. And we believe that we have a resilient business model that generated 9% organic growth for the quarter.

And just in comparison to Q1 2020, we have 7% growth organic. So you can say, on a like-for-like we went from 0% growth in Q1 2020 to 9.4% organic growth in Q1 2021.

Looking at the EBIT margin, again a like-for-like comparison in local currency, 22.5% margin compared to 17% in Q1 2020. So 2.5% percentage point increase in the margin.

And the reported margin was 22%. Then moving on to slide 20.

I will say a modest order intake as we also expected at EUR13 million order intake. And that was, of course, impacted by what Klaus also said that we didn't add any new clients in Q1.

Good thing is that we added two new clients in April, one Dimension client and one Coric client, both in the North American market. And we have signed some additional license sales and then also there's no new clients coming in, in Q1.

We also saw a lower order intake of Datacare and other subscription services in Q1 compared to Q1 last year. Then moving on to slide number 21, looking at the order book.

We did have a large increase in the order book in Q4 last year. And some of it was from a revenue recognition point of view, depending on some conditions to be met and those conditions were, as expected, met in Q1 and therefore we could again, as expected, revenue recognize those in Q1 2021.

That has the impact that the order book declined by EUR7 million compared to year-end last year. But if you compare to one year ago, so end of Q1 2020, actually the order book increased by EUR8 million.

And that increase of EUR8 million was primarily related to subscription services like Datacare that we have seen that now account for EUR17 million in our order book, while it was EUR6 million one year ago. So we have seen a big increase in the order book related to subscription services, which will be revenue recognized as we go over time.

If we look at different revenue lines, they actually all increased in Q1, some more than others. But all revenue lines saw an increase, starting with the licenses, we had, you can say, in percentages, had pretty large increase in new licenses as we were revenue recognizing some of the orders we have won in 2020, but I will also say the comparison was relatively low.

So in nominal numbers, it was modest, both in Q1 2021 and in Q1 202. I will come back to additional licenses and also the contribution of where we saw the growth in additional license sales.

Then moving to professional services and hosting, there we see we harvest the benefit of what we did, especially in Q4 where we were gaining a lot of orders on professional services and also as we have more and more SCDaaS clients, we get more and more revenue, both on hosting but also in the adjacent services in relation to the growth. And so you can see both professional services and hosting fees increasing by more than 10%.

Finally our software updates and support increased slightly by 1% organically. And as Klaus also said, we expect that to be flat when we get to year-end for the reasons already.

Then moving to slide number 23 where we have a split of additional license sales And as you might recall, additional license sales can be threefold. It's more selling to existing clients, it's the renewals and it's conversions.

We didn't have any conversions in Q1 2020 nor in Q1 2021. So there is no impact from conversions.

On the other hand, we had an increase in renewals which is, of course, also part of our business model that, as Klaus also said, we started with subscription in 2016 and now we start seeing some renewals coming in. And in Q1, we had the revenue impact of two renewals in North America on Dimension.

We had some Coric clients which renewed. And then traditionally, SimCorp, they have many one-year contracts, which are auto renewed in Q1.

And that's also what we saw in this Q1. So renewals actually increased by EUR4 million and accounted for EUR10 million of the additional license sales.

On the other hand, you can say, the most of traditional clients was relatively modest in Q1 and there we had a decrease of the EUR3 million compared to the comparison quarter last year. Then going to the cost base.

In our opinion, it's the right cost lines which are increasing and it's the right cost lines which are decreasing. So if we look at admin cost, that is increasing by a little new more than 10% organically while R&D cost we are still investing into the future and our R&D cost increased by 5% organically.

Then you have cost of sales increasing 6% and that's, of course, related to the underlying business activity in professional services and hosting were also increasing and they were increasing by more than 6%. We saw early on that that was 10%-plus.

So still some scale in that business as well. And then finally, sales and marketing cost, that's actually not something we like to see a decrease in because that's very much related to our sales activity, our meetings with clients and also commission.

But as there were less travel due to COVID restrictions compared to one year ago, where you don't have the full impact of COVID-19 in Q1 2020, so we have less traveling cost. And we, due to not gaining new clients in this quarter have less commission.

Then going to slide 25, the cash flow development. We believe it was a relatively strong cash generation which also underpinned the resilient business model.

We increased the free cash flow with 22% and bear in mind that Q1 2020 was actually also a quite strong cash flow quarter where we increased the free cash flow by 26% compared to Q1 2019. So it's consecutive years where we had a good start of the year in terms of free cash flow.

And the 12-months rolling cash conversion is a little more than 100%, which is quite pleasing. Then my last slide before we go to Q&A on slide 27.

It's quite simple. As Q1 was as expected and as we see a good pipeline for the rest of the year, we would most likely come back to that in the Q&A, then we maintain our expectations for the full year.

So we maintain expected revenue growth in local currency between 6% and 11% and an EBIT margin in local currency between 24.5% and 27.5%. And by that, I would like to hand over to the Q&A session.

Thank you much, operator. And thank you so much.

Yes, a couple of questions, if I may. First, starting off, it's always interesting to listen to your comments on the prospect database or your funnel in terms of geographical outlook and so on.

To start off there, perhaps, if you can compare year-over-year?

Yes. So you are asking the pipeline, basically how do we see that.

I think when we see, so what we see is that there is an increasing activity level in both our existing customers, but predominantly in prospects as new customers. We are seeing more getting into selection processes, announcing wither that they will be doing an RFP or they are in an RFP process.

So we think that there is more activity. Our services that people see kind of the end of the pandemic or at least some end of the pandemic, getting back to the offices, getting back to something that's' a little more normal and that drives more to want to do something.

So we think the activity level is high and if people do what they say they will do, if they actually we go through with it, then we think second quarter is going to be a quarter with a good activity level.

Thank you. That sounds good.

And then a question on the SG&A. Perhaps the year-over-year drop of 10% and obviously, of course, some measures but also COVID and new ways of working, I guess.

Once when the market starts to open up more and more, how should we think in modeling this going ahead? Do you think should we be a little bit more aggressive on SG&A, but perhaps not going back to the historical levels compared to, say, what you see a year ago, it would be good.

I think Michael will answer that. What I said a bit ago to the answer to you, I said we will see more activity in the Q2.

We are seeing more activity in the Q2. But what I meant was, it's going to be the second half of the year, we actually think that more is going to come to a conclusion, some coming to a conclusion in Q2 as well.

But it is really all the activity in half two, just so I correct on what I said. With the cost, I will leave it to you to.

Michael.

Yes. And I think for the modeling, like for revenue, we are comparing, you can say, three months where we had the COVID-19 impact by Q1 2020, where it was only half of Q1 2020, which was COVID impacted.

It's the same with the cost. So you can say, we haven't traveled at all in Q1 2021 while we did travel in the part of Q1 2020.

So I will say, in general, this will be the best cost quarter you will have. So you should expect to see some increase in cost level as we go into the next quarters because we are very, very eager to come out and visit our prospects and client.

And that also means, we will like any other company, not travel as much as before. But we would certainly like to increase the activity level, both internally, for motivational reasons, but especially externally with our clients.

So I will say, you should expect cost to go up in the coming quarters. It was, of course, into our guidance for the full year.

But it's a bit abnormal that we were able to decrease the admin cost by 11% this quarter.

Perfect. Thank you.

And then just a question on seasonality. In recent years, we have seen a more even seasonality compared to the history of the company with the worst on Q1 and so forth.

But then, of course, a new revenue model and so on has been changing a little bit. But underlying demand and the willingness to sign orders, would you say that we will go back to a more historical pattern this year?

Or is it more ad hoc and based on other stuff, not on normal seasonality? Just your view on seasonality for this year would be great.

I will say, we expect for this year would be a more normal year. And I will say, it was primarily 2019, which was an abnormal year and then we saw something more normal in 2020.

And we expect 2021 to be more like a normal year. And that means that we have highest expectations for Q4 as we have also seen in the past.

It seems like that that's where most people take the final decision. And thereby, that is impacting our revenue quite dramatically that most decisions are taken in Q4 which is even further amplified by the fact that COVID has decided to also leave us in Q4 this year, right.

So we expect to really be fully back in a normal place only in Q4.

Perfect. I have a lot of more questions but I will get back to the queue and let someone else.

Thank you and good luck in Q2.

Thank you.

Thanks so much for taking my question. I just have two questions.

First, on your professional services revenue was quite good this quarter and you say that is because of sort of the tailwind from Q4 where you got a lot of orders. Will that tailwind continue into to Q2?

Or is that sort of over now?

There's still a very good activity level on professional services in Q2. So there's just a lot of work to be done as well.

We expect the professional services to stay at a healthy level also in Q2 and Q3. And if we keep signing deals in both as we done so far in Q2 and we do in Q3 and Q4 as well, then professional services is going to follow there.

Okay. Very clear.

Thank you. And the other question goes to the order intake.

I don't know if you will answer that, but if you exclude renewals from the order intake of EUR12.6 million, how much was order intake then?

That's a relatively clear. I think we state how much is -- on order intake, sorry, order intake.

That's different from revenue. It's because some of the revenue was actually order intake in 2020.

I don't have the -- you can get the number from Anders. I don't have exact number.

Then it's less than the impact on revenue because the two Dimension deals which is renewal in revenue, those were actually order intake early on. So the impact on order intake is less than what you see in revenue, if that gives you some kind of clarification.

Yes. Okay.

That's good. I will ask Anders for the detail.

Thank you very much. That's my questions.

Thank you.

Thank you. A few questions from my side.

The first question goes to the number of employees. As I see, it seems like the number of employees is flattish year-over-year and also versus Q4.

Can you try to explain what are you seeing? Are you still adding people but people are also leaving SimCorp?

And what are your plans for rest of the year? that will be the first question.

So, from an attrition point of view, our traditional attrition in SimCorp sits around 10%. So our voluntary attrition sits below 7% typically and the ones we actually leave sits in the 3%, 4% range typically.

The attrition rate we have seen throughout last year 2020 was a little lower, given that people were a little less risk taking in leaving good jobs and going somewhere else. We are seeing that return to more normal levels in 2021.

So yes, we are still hiring new people into the company. But we have also stated a year ago that we would try to keep headcount flattish and that's what we have been able to do.

We have staffed up in a number of areas on contingent workers. So more subcontractors and so on for some of our consulting work and also for some of our R&D work.

So in that sense, there's more people working for SimCorp, but not as employees.

And Klaus, why is that? Normally, these people are more expensive than having on your own books.

Yes. But they are also more flexible in terms of in and out.

So that's why we got it.

And then it also depends on where in the world you hire those people. So especially in PD where you are having our, you can say our subcontractors are more flexible people.

They are hired primarily new employees. And that is not more expensive than hiring in high class country.

Okay.

So you ask for the rest of the year, you will most probably, if everything goes as it should, you should see headcount going up for the rest of the year.

Yes. So the reason why I am asking, you have this high growth guidance and normally that means more people.

So I am just trying to figure out whether you are more uncertain about the outlook, especially about timing? Or are you going more depending going forward, based on independent contractors or more has anything changed to your business model?

No. So we still have a good mix.

We have said for consulting, we previously said we want up to 20% of the consulting work for us to be flexible in terms of subcontractors. And we are not at that level at this point.

And maybe one thing to highlight is, that COVID has kind of given us more flexibility to where in the world we hire people because you can now deliver more remotely. And that has put some fuel to, for example, what we are doing out of home.

Sure. Okay.

That makes sense. Then a question regarding the pipeline or projects that has actually been awarded.

Have you lost any project that you thought you would win year-to-date?

I think we had one prospect in the U.S. where we were quite close where they ended up making another decision.

And then we had one project in the Middle East that was postponed. But other than that, no.

Okay. And then just also about your order intake.

Order intake from existing clients within Dimension is at a low level from a historical point of view. Can you give some more color to why is it that the existing installed base are not buying more Dimension functionality?

That's more a quarter-to-quarter comparison. We still expect that to be at a healthy level for the year.

So in Q2, it will be bounced back to more normal levels. Is that what you are saying, Klaus?

I don't know if it will be Q2 or Q3. But our expectation and the engagement with our existing customer indicate that we would be able to have a healthy level of both software and services sales to our existing customers.

Okay. Thanks.

Yes. It's Hannes.

Thanks for letting me on. Congrats on the results.

As Michael mentioned though, you want to talk about the guidance. Clearly, with 9% organic growth in Q1, maybe you can talk us a little bit what keeps you from moving that upwards, especially as you believe that second half will be -- it will be second half loaded?

So what keeps you back? And then maybe you can talk a little bit of the expected savings in terms of comps in Q3, especially in Q3 are easy?

And then the second one is, Italiana, a lower recurring revenue payment in Q1, does this infer that you are almost done with Generali. So maybe you can talk a little bit about your insurance vertical and then also in terms of the State Street signed deal, how did you progress there?

And then maybe I have a follow-up afterwards.

So on the first one, on kind of the saving and so on. So if we were confident that people were going to do exactly what they say they are going to do, then life would be a lot easier.

But we would like to see them actually execute on some of the promises before we do anything. So I think that's the easy answer to that one.

And I will also say, Q1 is a relatively small quarter. So you have to be careful not extrapolating too much on Q1 and then also, in all fairness, Q1 2021 was not like a great quarter.

So growing 9% in Q1, as I said, the beginning that was as expected. But it's not something extraordinary.

And that calls for that we need to change our guidance. So what we do is that we look into what did we do in Q1 compared to what we expected.

And then how does our pipeline look for the rest of the year and that support our guidance. And that's why we stick to our guidance.

And the second one, maybe on the APL, that does reflect that Generali is coming to an end. So that's the case.

And maybe Chris can just give update on insurance in general and then how is the State Street thing going.

Yes. I can certainly do that.

So the insurance segment as a whole is progressing quite aggressively. I would say, that's got a lot of trends that also feeds into that.

And if you follow through the walkthrough that Klaus had on the slides, at some point we talk about business process as a service, which is to a certain extent also driven out of that segment where we have a very strong foothold already. So what we see there is this still a very large interest in engaging directly with SimCorp with a traditional front to back discussion.

So that drives a considerable part of our existing pipeline. But we can also see that there is quite a great interest in working with SimCorp and our partnerships on the asset services side in combination.

And State Street is one them. And that project is kind of progressing well and generates a lot of interest in the market in Europe.

But there is also other partnerships in that space whether that's CACEIS, KBC or whether it's SocGen, we have quite a nice portfolio of these now starting to generate additional pipe. Some of that pipe is our traditional addressable market, but more importantly some of that pipe is also outside of our addressable market, which is obviously nice for us that people go out and sell their services based on our platform.

So we are going to have a kind of a multifaceted approach to that segment of the market and it's something I expect we can kind of continue to build strength in that space. And it's clear, State Street has taken that to another level but it's not all depended on State Street only.

We will see if we can be a little more specific in future quarters. But our expectation is, we will sign, our partners in this space will sign multiple deals in 2021, based on SimCorp Dimension and in the market segment that's here just below where we would normally sign.

And then it looks great. That's very helpful.

And then the last piece is just on the latest trends around the cryptocurrency. So do you expect there to develop a module which you can then sell to your installed base?

Or is this part of the current just of the normal development and progress to add that potentially going forward?

It is, unfortunately, just another currency.

Okay. Thank you and good luck.

Thank you.

Thank you.

Can you hear me?

Yes.

Great. Thanks again for taking my question.

I just wanted to come back on the pipeline point which you made. And it looks like obviously, the activity has been weak but it is in line with your plans.

But my question is more around the dynamics of how the pipeline is built. Has anything structurally changed through COVID, especially from a competitive landscape standpoint?

No. I would say, one of the reasons why we have good confidence is that a lot of the deals we see coming through the pipeline or what I would say SimCorp traffic, so they really play well to our key capabilities.

What is coming on top is that increased interest that we see based on the service offerings that are now starting to get more and more validation in the market. So that combination is quite strong and that also plays into the existing customer base.

From a regional point of view, I would say, balanced. So North America and you can also see they signed the first two deals of the year, are still generating good activity.

Europe is kind of catching up. And Asia is also there.

So I think that the positive side is that we see a lot of good deals that fit what we do quite well. The risk is predominantly a timing risk.

But that's serious because we might start to feel here in Denmark that things are a bit more open but there is still, to a very large extent, we are into Q4 before we can start to plan face-to-face meetings on a global scale. And we can see deals take longer time if you can't get together face-to-face.

So that's really what still drives a lot of uncertainty, I would say.

Got it.

We want to see people start to execute on what they say they will execute on. That would be nice in time.

There's a lot of progress out there.

Sure. Thank you.

Makes sense. And secondly, I had a question to Michael on the ARR definition.

Extremely helpful. But just to kind of understand what you are putting in there, is it maintenance, some of maintenance, subscriptions and recurring services?

Any kind of thoughts on how the mix shift is happening between maintenance and subscriptions? And also, is there any IFRS 15 impact in the ARR metric?

I would assume not, but just wanted to be sure.

No. There should not be any IFRS impact on the ARR.

And I think that's the beauty of ARR that it's probably a better metric or KPI for explaining you can say the underlying development of our business. So that is not the case.

And I think the stuff you mentioned there with the on the maintenance and the recurring services, that is exactly what we have included in the ARR. So it's all the recurring revenue and not the one-off.

And on the mix of maintenance with the subscriptions in the ARR right now versus perhaps two or three years back? Any explanation or color on that?

Well, it is clearly that the maintenance part is becoming less in the growth. So you see the other lines, that's the driver of the increase.

So if you see what we are saying on the first page where we are saying we think that on a last 12-months basis, then maintenance is going to be flat over the year and yet we are growing ARR by 10%. So that kind of tells you that 10% growth is something different than maintenance.

Sure. Makes sense.

And lastly, a question on the cloud part of the business. And as you explained, Klaus, your platform is built on Azure.

Is it some sort of an indication when more customers are employing a multi-cloud strategy and application software vendors try to be infrastructure agnostic?

So the unified platform we are building is infrastructure agnostic, if you will. So that will run on a Windows server.

It will run on the IBM infrastructure. We are providing to a number of our cloud clients today.

And it will run on Microsoft Azure. In native cloud, we decided to go Microsoft Azure first.

We have a very good partnership with Microsoft. They are helping quite a bit both on the technology side.

They are also engaged in bringing the product to market to their clients. And so we have a very good relationship with those.

If we end up with a number of customers that are saying, we really, really want to do something different. We want it to be a Google or Amazon or something different, that is an opportunity we have, then we can take the unified platform and make the connection to whatever that cloud solution is.

Our wish is to not do that because the fewer platforms we are going to operate on, the better. If a customer says, I want to take your product and deploy it on Amazon and I will run it, I, as a customer, run it because I am cloud agnostic, you can do that.

We have got several customers who are on Microsoft Dimension on Amazon today, but they are self hosting it, if you will. They are not asking us to run it as SimCorp Dimension as a service.

I think the trend we are kind of reacting to is, if you go five years back, one of our customers would typically go out and choose a company-wide cloud relationship. And then the would gradually move their applications on to that.

That's not really the way it works these days because if you look at what some of our biggest customers they do, they basically rank their top 10 technologies and if those top 10 technologies have a service offering, they go over that first and then they would choose a cloud vendor for the rest. And that's because they ultimately want the SLA to be owned by the software provider in the end.

And then obviously, in that context whoever fuels the service offering is of a less importance but in that case, we still believe that Microsoft give us even further power in that space.

As an example, I will tell you that we have moved all of our infrastructure at SimCorp, all of development servers and everything else we can find, we moved to Microsoft Azure. We have also implemented Workday as our new ERP system.

And I don't think we have mandated Workday to be on Microsoft Azure.

Got it. All right.

Thank you so much for taking my question. All the best for the remainder of the year.

Thank you.

Thank you.

Operator? Hello.

Anything on?

Yes. Good morning Klaus.

Good morning Michael. Thanks very much for taking the question.

I just have two actually, following up on the previous question. So first of all, on services, it was quite impressive to see the 12.5% organic growth at CC.

And I think it wasn't supposed to include contributions from services delivered to the State Street deal that you signed in Q4. So as of Q2, there will be State Street contributing to professional services and also lower comps.

So is it reasonable to expect an acceleration in the growth year-on-year for professional services for the rest of the year from the one that was recorded in Q1?

I will say, for the professional services, that consists of many things. It consists of some implementation projects and that is, of course, related to what we have signed for, both in the past and recently and then we have also some services related to our hosting and then some ongoing recurring services.

And what we saw in Q4 was that we were building up the pipeline for going into 2021 and of course we are benefiting from that in Q1. And as Klaus also said, we see that going into the coming quarters as well.

And then, of course, we need to win some new implementation projects which we also expect to do to keep up the high momentum. I am not sure that I answered your question but it is a combination of all these which means that we believe that we will be quite busy in professional services in 2021.

All right. Okay.

That's helpful. Thank you very much.

And maybe a very last one on the pipeline, again. I was just wondering because last year, in 2020, maybe what was a bit disappointing was the average sale deal size that you signed on Dimension?

How do you see the pipeline evolving from a size of the deals point of view? Do you see it is largely coming back to the pipeline?

So the pipeline is a good and healthy mix of small and large deals. And you can say, if you add up all the pipeline, then it sits at a value that is higher than what we saw at the same time a year ago.

But the mix is big and small amongst each other. So whether it becomes a bunch of small deals that ends up signing or a few large deals that ends up signing, that depends on who is willing to put the pen on paper.

But we are negotiating both small and large deals. And I think it is fair to say, we see more of larger deals in our pipeline now than we saw one year ago.

All right. That was very clear.

Thank you very much and have a good day.

Thank you.

Thank you.

Very good. And we don't have any questions on the web either.

So we will conclude the call here and say a big one thank you to all of you for participating and we hope to see you all back in the call we have after the first half of the year. So thank you and have a wonderful day.