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Thank you very much, and welcome to this call. This will be the first quarter call for SimCorp in 2020. If we go through the slides, starting on Slide 2, that is where the usual disclaimer is. And if you haven't read that in the past, then we can highly encourage that.On Slide #3 is where we have kind of the agenda for today. It is the Q1 results that I'll kind of give you the key highlights of, then I will transfer to Michael Rosenvold, our CFO, that will take you through a little more detail and also give you the outlook. And after that, we'll move on to the Q&A session.Moving to the next slide, #4, is where we have the first quarter at a glance. We had a healthy quarter in the sense of we have 3.2% growth for the quarter on top of what was a very strong first quarter in 2019. The order intake was almost EUR 20 million, that comprised of 2 new SimCorp Dimension contracts and 1 SimCorp Coric contract, 1 contract in Italy and 2 contracts in North America.EBIT for the quarter was EUR 17.5 million, a decrease over last year, given that we had lower revenue growth and had the cost level coming in from 2019. Professional services continued to grow 7.9%, almost 8%. And free cash flow was up 26% over last year to EUR 32.4 million.The rolling software updates and support growth was 10.9%. But as you can see for the first quarter, it kind of came off the level of last year and came down to 6.5% as we had also predicted as we left the last year. That's kind of at a glance of the first quarter for SimCorp.Moving on to Slide #5, has the list of the 3 new clients that we signed in the first quarter. So in Italy, we signed ANIMA, an asset manager. We signed that for front office and IBOR. And then in Canada, we signed an investment manager that we, unfortunately, cannot disclose yet. And as you can see, that was a full front-to-back installation that we're also running in the cloud for the customer. And then in the U.S., we signed a -- what we think is a significant investment manager on Coric.And then moving on to Slide #6. The next 3 slides will give you a little bit of an update on what we have seen the impact of COVID-19 be and then also giving you a little outlook to what it could be as we go forward.On the license revenue, that's clear that there is a risk of cancellations of new ALF and ILF deals. But still, we do see progress in the pipeline. Maybe as a reflection, then many -- most of our deals are yielding when the sales cycle is 9, 12, 15 months and so on, which means that for most of the deals that we are thinking about closing this year, we are in dialogue with the clients, and it's based on their feedback that they are continuing the sales processes that we are giving you a outlook for the year. But still, the risk is there. We don't know what's going to happen in Q3 and Q4.On software updates and support, that is very much recurring revenue, no fundamental change. So overall, we are probably going to be very close to what we predicted. Yes, new deals need to be signed, ILF, ALF to also give some additions to this towards the end of the year.In professional services, we have around 30% of our revenues that are of a recurring nature, mostly the operational services. They are executed remotely and continues to run. 70% of our revenue in professional services is in implementations of either new clients or new functionality to existing clients.Right now, we are currently executing all this remotely, and there's little impact on the productivity at this point. Longer term, it will be impacted if we see a decline in ALF and ILF, given that we won't have as much implementation work to do then.On the hosting fees, that is mostly recurring. And then we also have other fees in there, which is training and third-party and so on and that could be impacted negatively if, again, ILF and ALF gets negatively impacted.So overall, software updates and support running almost as planned, professional services and hosting and other fees is impacted by the license revenue if that slows down. So that's kind of a way to think about it. If we move on to Slide #7, then as you will see, we have closed down all of our recruitment activities or almost. There's always a couple of exceptions in this, so a hiring freeze across the company. All of our salary increases has been postponed for the management team that is until 2021, and for all other employees, it is until July 1 of this year.In essence, there's also some flexibility in our costs, specifically in the professional services area where a part of our cost is with external contractors and consultants. And of course, if we have to scale down the consulting services, that is where we would look to scale first. Also, travel and so on has been reduced. That's clear given that we're doing every part of work remotely. In the long term, we will continue to invest in our strategies. That also means that the investment we are making in the cloud lift and other product priorities is continuing to move forward. So the prediction of us spending about 20% of our revenue in R&D will still hold in this new world.Moving on to Slide #8. Then just on cash flow and liquidity. Just as a reminder, more than 60% of the cash flow is actually recurring. We did pay our dividends in March, and we continue the current first half of the share buyback program that will ultimately yield us buying back EUR 10 million worth of shares. And then we will not initiate the second round of this until we see a stabilization in this situation.So overall, a solid balance sheet and no net cash -- or a good net positive cash position and no debt -- basically reduced debt in the balance sheet. So that's kind of the 3 updates we can give you on the impact of what we're seeing in the current situation.We then move on to Slide #9. I just want to highlight that even in a quarter like this, we were able to launch a new service, which is a data management service. This is -- one of these where not only do we do the software, we host it, we run it, and then we deliver curated data to all of -- to the customers that are in this. This is a service that is based on the acquisition of AIM that we made last year. And it is a service that we have codeveloped or developed in collaboration with Zurich Insurance Group that has always been or has been a long-term client on the SimCorp Gain side.So this is a fully serviced. It's one where we do the upgrades and where we continue to get new access to data from different data vendors and curating that data. That gives firms the flexibility and it gives them the option to not run this in-house and get a shared service with other clients that is more cost beneficial to them. So overall, a good step towards this, everything as a service that we've talked about as one of the strategic imperatives we have as a company. So that was Slide #9.Moving on to Slide #10. Then even in this situation, we've decided to open up a new office, a small office in South Africa. We have the opportunity to hire a very seasoned individual in this business, Brian Anderson joins us as the Managing Director. He has a long experience, a good network in this area. The focus is, of course, the rest of the world to deliver the front-to-back solutions that we do. And we think there's a good opportunity in South Africa to do so because a lot of the systems that are there right now are very much legacy systems from vendors that no longer invest in the product, and is not doing much there.So it feels like there's a new generation that needs to get implemented, and we want to be that version that comes in there. So we have good hopes with it. It's not a huge market in some senses. We think there's somewhere between 15 and 30 customers that are in scope for us in this market and if we can get a deal a year, then we should be in good shape for that market.And with that, we will move on to the next section on Slide 11. You can see the next section is the Q1 financial review. And I'll give the word to Michael Rosenvold, who will take you through that part.
Thank you, Klaus, and I will jump into Slide #12. It's a little bit repetitive here for us. As you can see, we have reported growth of 17% and at reported margin of 3%. And if you look at organic growth, it's 19% -- sorry, not growth, the margin, 19% organic EBIT margin and the growth is flat organically.And as we state on Page 12 and then illustrate on Slide #13 is that it was a quite a tough comparison as Q1 '18 and Q1 '19 were particularly strong. And if you look at it over a 5-year horizon, you can see that the Q1 '20 is actually better than the Q1 in '16 and '17. So you can say, Q1, which is probably a little more normal than the very strong years in '18 and '19 and higher than '16 and '17.Then moving on to Slide #14. With the order intake and order intake, which is a little less than the Q1 2019, where, as Klaus said, we had 2 new Dimension deals and 1 Coric contract signed in the quarter. And then we had no conversions and client-driven development was contributing with less than 1 year ago, so with a little less than EUR 1 million compared to EUR 1.5 million last year.Datacare and SFTR Subscription Services did impact the order book. So these are, you could say, 2 new services we have implemented in 2020. And as you can see here, that contributed to an order intake of almost EUR 4 million. So that's quite nice, introducing new stock and being able to sell it immediately.Order book on Slide 15. It is -- it was slightly increasing from EUR 38 million to EUR 41 million, and that was primarily due to the 2 Dimension deals we made in Q1. They will not be revenue recognized before, most likely Q2 due to some conditions in the contracts. So that meant that order book increased, and we will -- we expect to get the revenue in Q2.Then going to Slide 16. You can see how the different revenue streams developed. It was nice to see that professional services did increase by 8% reported and 4% organically. Also nice to see software updates and support increasing by organically 6.5%. Add-on licenses increased by 14% organically. And then quite small contribution from new licenses as the deals we made, they were not revenue recognized in Q1, but will be revenue recognized later in the year.Moving on to Slide 17, where we do the normal split on add-on licenses, where you can see, as I also mentioned before, there were no conversion -- client conversions from perpetual licenses to subscription licenses in Q1 compared with one conversion of EUR 1.6 million in Q1 2019. And that actually means that you could say the additional regular license sales was higher in Q1 2020 compared to Q1 2019 with EUR 8 million in 2020 and EUR 6 million in 2019.Then moving on to Slide #18, where we have the cost development. I will say a few highlights here is that the cost -- you could say, the cost increase is, of course, impacted by the run rate. So what we entered into 2020 with -- from 2019, that also means that the cost measures we did take in early March has a very little impact on what you see here, but will have more impact in the coming quarters. So the impact of the hiring freeze and some of the savings on travel and so on, that will be more visible in the coming quarters. And we do expect cost growth to decrease quarter-by-quarter in the next 3 quarters.If we look at the -- at each of the lines, starting with sales and distribution costs, the increase you see here is very much in line with what we've announced earlier on that we, as part of our strategic priority, has strengthened our sales organization and especially our client engagement organization in relation to servicing existing clients. So that is a consequence of the strategic move we made about investing and strengthening our client engagement organization.Admin costs, there are some one-offs here. We finished our head office rebuilding and taken some costs here. And we are also in the process of implementing IT systems, and that has had an impact on admin costs.Then on R&D, and I think that's quite important. As Klaus also said, we are continuing investing into our products, people and strategic priorities, including our cloud lift, and that is, of course, to realize our long-term growth ambitions. And that means that the R&D costs relative to revenue increased by more than 2 percentage point in this quarter. And that was also what we indicated in our announcement and guidance last year that we did expect the R&D cost to increase by 2 percentage point in relation to revenue.Then moving on to Slide 19. Of course, in these days, liquidity, cash flow, balance sheet are important. And I would say we are in a strong position. We have a strong balance sheet. We have a net cash position and the liquidity was also looking good. So a 26% increase in free cash flow. And when we look at the 12-month rolling cash conversion, it was quite solid with -- of 85%, despite the fact of changes in contract assets, which is, when you look at it on a 12 months basis, having a negative impact on the cash conversion. But still a solid performance in liquidity and a strong balance sheet.Then before we take the Q&A, the full year guidance on Page 21. As you all know, on March 18, we suspended our guidance due to the escalation of the situation and the uncertainty caused by the COVID-19 outbreak. And it was very difficult for us to predict what -- how would that impact our business. We believe now we have more certainty. We have seen that it is possible to work remotely. The clients accepted, and our people are doing a great job in working remotely. And we do also see that discussions with clients are ongoing, and that's why we are now able to make, you can say, a revised new guidance. You have noticed that the range is bigger than you have seen in the past. And that is, of course, indicating that the uncertainty is also bigger than what we have seen in the past. And that's the reason for, you can say, the wider range of our new guidance.So the new guidance is that we expect revenue in local currency to be between minus 5% and plus 5% and an EBIT margin of between 22% and 27%. And as we still believe that the impact from the Gain or the AIM Software acquisition will be the same as we had before, we withdrew our 2020 guidance. Then that means organically -- an organic revenue growth of between minus 7% and plus 7% (sic) [ plus 3% ] and an EBIT margin between 23% and 28%.So this actually conclude our presentation. Maybe just one more slide, and that is that we did plan to host a Capital Markets Day in Nice in France on September 18 and due to uncertainty about travel restrictions and all that, we have decided to postpone that Capital Markets Day, and we will inform you when we know more about a new date for the Capital Markets Day. But we feel it's a more prudent thing to do with the knowledge we have today to postpone to -- until further notice.So with this, I will conclude my part of the presentation, and we go to the Q&A session.
[Operator Instructions] And your first question comes from the line of Claus Almer from Nordea.
Yes. I have a few questions from my side. Maybe you could also give some details on how April and maybe even May has performed? That will be the first question.
So no, we can't. We will publish that as we get into Q2. Every part of how we performed is in the report that was issued last night.
Okay. So no color on how professional service has -- is that a continuation from what we saw in Q1 or we have to wait?
So overall, you have to wait, but I will say that the business continues to run as predicted. We have not seen any degradation in what we do for the projects we are on. As such, we continue to be able to operate those from remote. So that's kind of where we are. But details on this one will be a little later.
Sure. Okay. Then another question regarding the choice of putting maybe a foot on the cost break and the R&D. So as I understand, you are postponing some introduction of some new functionalities in the cloud, maybe only by a few quarters, but still a delay. Giving your very profitable business and very strong balance sheet, maybe, Klaus, you could give some color to why you are not going full ahead on the R&D part?
I'm not sure where that conclusion comes from. What we've said or at least what we've tried to say is that we have put in a hiring freeze. We did that back in March when we kind of took the guidance away at the same time, where the world was a very uncertain place to be. Then a few weeks later, we have -- we basically decided that hiring freeze stays in place. But all of the investments we're making in R&D will continue. So we are investing at the cloud lift at the same pace as we were planning to before we went into this, and we're investing in new functionality.So I think you should expect, as we said, that we'll get back to the 20% of revenue in R&D for '21, which is kind of what we said at the beginning of the year, and that's still the expectation that we have at this point.
Okay. And then congratulations on additional datacare potential that are starting to unfold for you. Maybe you could give some color on the potential -- yes, what should we expect going forward for this part?
I think that datacare is a part of the Gain acquisition. It's a service we're building on top of this. It's a quite new offering for us, as you can imagine. But we are seeing good interest from customers in this one both from a number of our existing customers, but also a number of new customers. Detailed guidance on that one product, we won't give you as such. But I would say you should expect us to do a couple more deals like this a year, that would kind of be what I would think to begin with and then accelerating from there.
So in Q2, how many clients did you add?
Well, in Q2?
In Q1. So this, I don't know, EUR 2 million, EUR 2.5 million in order intake. Just trying to figure out how many clients are you actually converting to or winning per quarter?
But we've not disclosed that at this point.
Sure. So you can't say if this is 5, 10, 20 through 50...
It's a lot less.
It's a few, Claus. It's a few.
Just a few.
And your next question comes from the line of Daniel Djurberg from Handelsbanken.
Congratulations to a solid report in turbulent times. A few questions, if I may. Starting with the comment on the OpEx growth that you expect will decrease quarter-on-quarter coming 3 quarters, I believe you said. Can you comment, is this the year-over-year growth you referred to? And also, will the postponed salary increase until July not make this very tough for Q3 to happen? And also for my modeling, can you comment a bit on the percentage average increase one should pencil in for the planned salary increase from July 1?
Yes. So when we are saying that the growth will decrease quarter-by-quarter, so then that's the comparison, if you take Q2 compared to Q2 the year before, so there you will see -- so you can see we had a 10% organic increase, and that will -- we expect that to be a lower number in Q2, Q3 and Q4 for several reasons. First of all, of course, the hiring freeze has a huge impact. But also, there are also other costs which, for financial reasons, will be less, less travel, less meeting activities, all that, and that is taking full effect from April and onwards. So that will have an impact.You could say, our normal salary increase is about 3 percentage points. So I think that is what you should expect. Then, of course, management will not get any increase this year. So...
That has very little impact.
But that has little impact as we are very few people. And it really doesn't have such a big impact on the total. It's more -- it's a good signal to say nothing.
Okay. I have one more question, if I may? You mentioned in the beginning a risk for cancellation and delays of new license contracts. I -- when we spoke some months ago, there were no such discussions at the table. Can you comment a little bit what happened since also in the market turbulence that has happened perhaps also from a geographical point of view, what you do see in the market?
So could you just say the first one...
Yes, yes, I'm sorry. The question was -- the key question was on the cancellation and delays, you mentioned that it is a risk that would happen in new license sales and add-on licenses.
Okay. So what we're seeing right now is we've not -- we've seen a couple of customers canceling their buying processes basically, but we are seeing most of the things that we have in the pipeline as we started the year, they continue to be in the pipeline. So customers keep saying, "Yes, we will make a decision to buy something before the end of the year." Then, of course, we hope that it will be from us that they buy it or at least we'll have our normal win rate on those deals.We also see new request for proposals, new RFPs coming to the market in this period. So new sales kind of or new buying processes starting up in this. So we're seeing all of this happen, but at the same time, some of these processes has been slower. There's been some things that we expected would happen in early Q2, but where everybody was sent home and where that customer didn't have enough infrastructure to actually be able to make decisions while people were working at home and where they've needed people to start to come back in the offices to that process to really start-up again. So in that sense, you get a couple of months delay. And that doesn't mean we don't talk to them, that we continue with the progress and all of this. But for contracts to get written and the legal teams to get in and the management teams to meet and all of this still is pushed out by a couple months in such a case. So we've seen that. But as I said, some delays and some slowness and so on, but things are moving forward. Our -- if there's any concern, then the concern is that what will happen in Q3 and Q4? Will they actually find the pen, put it on paper? That's the big question mark in some senses. So what we are forecasting, we're expecting a good group of the customers to actually follow through on what they say they're going to do, but I -- we've also built in a little more risk in this. So we're not expecting everybody to do exactly what they say, but we expect a good portion of them to do what they say.
Perfect. And good luck in Q2 and Q3.
Thank you.
Q4 as well.
And your next question comes from the line of Gautam Pillai from Goldman Sachs.
I have a few questions, I'll ask them one by one. Firstly, I wanted to follow-up on some of the comments made on the pipeline. And specifically, can you provide some color on the conversations you are having with customers since the COVID-19 outbreak? You have withdrawn your guidance, and now you have reinstated it. So what has changed in the last 2 months from a customer standpoint, which is providing you some added visibility? And also when you have set the new guidance, have you assumed your normal win rates or a slightly lower rate given the uncertain environment? That's the first question.
Okay. Yes. So I would say that on the pipeline, what we've seen in this period, so let's go back to when we withdrew guidance. At that point, we had very little idea on whether customers would actually just stop everything or follow through on something. And then in the period from then till now, we've had the opportunity to engage 1 or more times with every 1 of the customers that is in the pipeline and kind of confirm their intent to buy and the intent to buy within the time line that kind of brings the deal into 2020.So that's kind of -- that's the increased visibility we have is the conversations we've had with each one of these customers that they still think they'll make a decision in the right time frame. Our assumption is that we'll have the same win rate as we had in the past. We don't think that we'll be worse off in this situation. And maybe we'll be better off, but maybe we won't. So we've assumed the same win rate as we've done in the past. But I would also say we've assumed that not every customer does exactly what they said they were going to do.
Got it. And secondly, can I follow-up on the new services, datacare and SFTR? And as you have alluded to earlier, this has contributed to almost 20% of your order intake in the first quarter, which is quite good traction. And you mentioned that you expect a few of these deals to happen in the year. But my question is on the -- from a technical integration standpoint, especially related to your on premise customers, given these are only available on the cloud, is that integration a complex process? And how are your on-prem customers taking it?
So it's probably different for the 2 services that we talk about. So for datacare, there some customers have their own teams internal that kind of does the data cleansing and all of this. And for the ones who want to outsource that to somebody else to do or have somebody else do that, so acquire that as a service rather than do it internal, then that's a good option. There's not much data migration to do in the sense of this is data that comes in from Bloomberg or from any other data vendor, gets cleansed and then delivered to the customer.What needs to be done is that the piping between the system that the customer has today internal needs to be reallocated to the piping that kind of goes into the datacare system that we have. These are projects, but it's not big projects as such. So it's not super complicated in that sense, given that every customer has an interface some data feed, that they just needs to get rerouted for this. So yes, it's there. I think the biggest deal is what about the people that used to do this? Will I still have them and blah, blah, blah. So it's more that type of decision in a sense. Technically, not super complicated. But SFTR, this is new, but this is also new regulation, right? So this is where customers don't have a current solution for this, given that it's new regulation. That means that this is going to be the first configuration they do for this, and this is going to be the first connection they do to their systems where you get data from, you get data out of the system, you get data back and so on. So -- and you do this in a cloud or you do this on-premise, really doesn't matter in that sense. It's actually easier for customers to get this done in the cloud and have it done along with other customers. So in that sense, again, new service, new features that hasn't been done before, the customer doesn't have something they replace.
Got it. Next, I had a question on the implementations, especially for ongoing projects. How are you managing these if there is a restriction to access client sites?
Yes. So what we -- so if you look at the past, and we would say to a customer, we want to do the implementation remotely, then there would be a lot of compliance and security and all kinds of things that would be in the way of getting that done. Fortunately, for many of our customers, we've had a relationship where, at least for support, we have an open dialogue and where we would be able to get access to the system for our support engineers to do searching if there was issues in the system. When this happened, many of our clients chose to take that line or that access and open up for something broader. So over the first couple of weeks of this, we were able to get access to pretty much all of our -- to all of our customers and work remotely on those customers. And I -- there's some -- a little bit of degradation in terms of productivity in some because it's not every customer that has the perfect infrastructure to make this happen. So you needed new VPN lines, you needed better routers but I would say that's now up to scale with most of our customers that we can actually do this.We've even come to the conclusion where we -- there are some customers that have gone live, where all of our people have been in our homes or their homes and all their people have been in their homes. So we've had fully remote teams on the customer side and fully remote teams on our side bringing installations live in this period. So there's nothing that says it can't be done. Had you asked somebody 3 months ago, they would have said "Never going to happen." Now it's actually possible.
Got it. And lastly, I had a question for Michael on cash flow. And especially, if you note, in 1Q, free cash flow has been quite strong. Is it normal seasonality? You talk about conversion of some contract assets. But can you provide some color on how that should develop for the remainder of the year?
Yes. But I -- there is some seasonality in our cash flow as some of the annual payments are being made in the beginning of the year, but that was also the case last year. So when we are comparing one quarter with the quarter one year ago, it should be more or less the same seasonality. So -- and if you look at the overall cash flow structure, then it's quite clear we get more incoming cash flow in the first part of the year. On the other hand, we also pay dividends, make share buyback and pay bonuses in the beginning of the year. So we both have more incoming and outgoing payments in the first -- especially from January to April.
We will now be taking our next question that comes from the line of Poul Jessen from Danske Bank.
I have questions coming back to these subscription services. And the first question is about the SFTR. You say it's new regulation. It's being implemented from 1st of July. Does that mean that business opportunity is this quarter and Q2, and then everybody shall have systems installed from July and onwards and that means that the revenue opportunity comes down from then?And then general, on the subscription services, can you indicate what kind of gross margins you're having there compared to the licenses and the professional services, where are we? Are we just in between? Or are we closer to one of them? That was the first question.
Yes. So SFTR, there's -- of course, some needs to get it done now, some needs to get it done by October. That also means that there was quite a run-off now. There will also be some here in the second quarter and in the third quarter that need to get this up and running as such. The revenue opportunity, I think, is going to continue because as we -- you get new customers and so on that want to have it as a service rather than do it on their own. I think you'll see somebody who kind of figured this out in other ways in the short-term and then ends up with a service as well.So I don't think the revenue opportunity has gone as such, but it's clear that getting to the regulation and so on, there is a little more push in this couple of quarters than there will be in other quarters. So that's kind of where it is. The revenue opportunity is not going to be gone. And if you look at the margin, then given that this has hosting costs and all of this included, then the margins are lower than it is on just a normal software subscription, but still good margins.
Okay. And then as I understand it, then these services are going to be reported as part of the hosting and other. And in general, I would have assumed that, that line should be continuously or sequentially increasing as more and more hosting and cloud services are added. What's the reasoning then for a decline both sequentially and especially -- or annually and especially sequentially?
I think at some stage, when we get some volume in this, we'll have a separate line for this, and that might be at year-end, we will afford it separately. I think from the Q1, it's a very little revenue impact from this. As you know, that we will readily recognize it over the term of the contract. And thereby, it has had very little impact on revenue in Q1. And so as we grow the subscription services, we will most likely have a separate line for that.
What's been the reason for the decline in the hosting?
Hosting is -- hosting and other. So it's also third-party products and stuff like that. So primarily, we sold this third-party products in Q1 compared to 1 year ago.
Okay. Then a question on South Africa and then a general question on adding new markets. Entering South Africa, is that more a consequence of a strategic planning? Or was it opportunity-driven? That's 1 part of it. And then you mentioned the potential of number of clients. So what pace should we expect here? I just think about when you entered Spain and Japan, shortly after or shortly before you had a contract, but then we haven't heard much from any of those markets since.
Yes. So if you look at South Africa, we've done -- so what we've done is, we've kind of looked at all of the world, and we've kind of drawn our plan for what would it mean to be in South America? What would it mean to be in South Africa? What would it mean to be in any meaningful market around the world? So we kind of know what the regulation is. We know what the revenue opportunity is. We know who the potential customers are, and so on. We have all of that.And then, as we've said in the past, we try to pursue opportunistically to get into these countries either by finding some way in, in terms of what we've done in South Africa where there's an opportunity to hire a very seasoned person that can help us get in there or as we did in Spain and Italy, where we signed 1 of the top 3 asset owners in the country. So that's kind of where -- that's how we've gone about it. Japan, we have a few customers there. We have an opportunity to kind of get somebody who knew the market quite well. It's been very slow in Japan. We'll admit that. Italy has been okay, I would say. Spain has been quite slow for us since then. And as I said, South Africa, if we can get a dealer here, we'll be happy with that. It's a quite small investment that we're making in this. And most of the people will be coming out of our U.K. team to help out on this.
I know that you, over the years, are working very, very patiently, but on these new markets, when should we see some traction? Or could that go 1, 2, 3 years and then suddenly it comes?
That's the hope. We'll see. Japan, I think we said it takes a long time. It's really a country where you need to build relationships and so on. We're building those, we found a local partner. We are in discussions with a number, especially of the asset owners in Japan, but it just takes time and then we'll see where it takes us. I think it's -- I think that Japan is the biggest market outside of the U.S., single market outside of the U.S. I think it's worth making the investment and having the patience to actually get to talk to the potential customers that are in Japan, ensuring their commitment of actually having an office there. We'll then see if that yields something, but it's a slow burn, Japan.
Final question from me is about Q1. The order intake there. You signed 2 Dimension and 1 Coric. Were there any missed business because of COVID in that quarter? In other words, if there had been no pandemic, would you have assumed to sign more than you did?
I don't think so.
No.
I think, actually, it was a quite normal quarter, very much as expected. And that's also what we stated in our interim report on the first-line that Q1 was actually -- despite all this disturbance, it was actually as expected.
And your next question comes from the line of Hannes Leitner from UBS.
I also got a couple of questions. The first question is maybe you can give us a little bit of a sense check from the conversations of your existing clients? Is there any risk that there is some bankruptcy coming up? And what all you can see? That's maybe the first one.
So far, not, I would say, any of the insurance companies and pension funds that would be very hard-pressed to go bankrupt in this situation. But for the asset managers, there are some that have seen significant outflow of capital, but still, we have not seen any that are -- at least that we know of that are getting close to bankruptcy.
Okay. Then in regards of the EUR 322 million you announced of having basically contracted for 2019 already. If you take the Q1 and then we just add that number, we come basically to the lower end of your guidance range. So that seems quite prudent. Can you maybe give us how many deals do you think because this kind of implies that you almost don't sign any new deal.
No, no.
So how many deals you have in your mind on the top end of the range -- at least the top end?
But I think contrary to that -- and the EUR 322 million is including Q1. It's not to add that number to Q1, it's including Q1. It's more to give you for the full year, then, of course, the Q1 is secured. And then it's the EUR 322 million minus what you have made in Q1.
And then in regards to the implementation, I mean, you said that Q1 was pretty normal. It is clearly a little bit more difficult to run the time and material, and I think that sort of also this uncertainty has led to the fall of the guidance. Can you give us a little bit more color in, for example, of how many existing projects you still have or current projects you have ongoing? Are we seeing that those 70% of professional services being nonrecurring? Are they going also towards -- into next year? And we get quite comfortable about, let's say, having a baseline even if we don't sign now many more deals for the rest of the year?
I would say that of the projects that are running, none of them have been canceled, right? And I can hardly think of anywhere we've seen a significant slowdown in anything. In fact they're continuing even though they're remote at this point. The risk in this is, if we don't sign more license deals, both with existing and new customers, then the implementation part of the professional services business will slow down towards the second half of the year. And if you look at the guidance we've given, then we're also implying that the license growth over 2019 is not going to be fantastic, down to even negative in this. That's kind of the implied. And then that will have an impact on professional services, which is also implied in the guidance. So that's just how it is. Those 2 are linked. Some projects that we have, will continue into '21, but not every project will continue into '21.
Okay. And then the last one is maybe on SOFIA. How is the project going on with Generali? Do we see another potential renewal next year? Or are we close to finalization here?
So we continue to work on the Generali project, and it's making good progress. And so we'll see. It's not decided yet.
And your next question comes from the line of Magnus Jensen from SEB.
Just a couple of questions from my side as well. First, you've taken -- you talked about that you've taken out cost due to COVID-19. Are you able in any way to sort of quantify for us how much it will impact 2020 or help you in 2020? And the other question is regards to renewal of your subscription contracts, which will start next year, I guess. Could you just tell us how much tailwind you will get in 2021 from the subscription order that you will renew? And as a follow-up to that, most of the contracts you signed in 2017 were 7-year contracts. So I'm right to assume that there will be limited renewals in 2022? That's my questions.
Yes. I think I can answer all these questions. So if I start with your last question, you're right in your assumption regarding when we did the agreement, and so you're absolutely right that we will not -- we don't expect a lot of renewals in 2022.In terms of the impact on 2021, that's something we cannot tell you for several reasons. One reason is also that we don't know for how long they will renew. They could renew for a certain number of years, but it could also be a longer period of time. So it really depends on for how many years they will renew. So there, you need to be a little more patient in terms of an answer to that question.In terms of costs, I think actually, you will be able to do your own calculations. So if you look at our guidance, you will see that the guidance, you could say, declined compared to our original guidance on revenue is bigger than on EBIT margin. So that's a kind of indication of the magnitude of our resilience and how much cost we have been able to adjust to a potential lower revenue. So I think you can actually do the math yourself by looking into the guidance.
Also, if you think about it, then 75% of our cost is head count. We exited 2020 with a given run rate on head count. We didn't hire a ton of people in the first quarter. And given that we're not planning on hiring people in the next few quarters, you have a decent assumption.
Thank you. And there are no further questions at this time. Sir, you may continue.
So if there are no further questions, then we will -- and there's no further questions on the web either, then we will say a big thank you for all of you who called in to this call, and thank you for the many good questions. We really appreciate the engagement. We hope you have a great day for the rest of the day. Thank you very much.
Thank you. And that does conclude your conference for today. Thank you all for participating. You may all disconnect.