Cloud adoption drives momentum for Forterro in 2023

CLOUD ADOPTION DRIVES MOMENTUM 
FOR FORTERRO IN 2023

Written by Dean Forbes, Chief Executive Officer

We closed the Forterro Financial Year 2023 at the end of December, showing another 12 months of strong performance momentum as we unify our company - while continuing to drive cloud adoption across our growing product portfolio.
 

Cloud transformation

Recurring revenue mix was just ahead of plan at the close, resulting in 16% year-on-year organic growth. That on the back of Cloud and Subscription revenues increasing 35% against 2022, fuelled by both strong new-logo sales and customers moving from on-premise to Cloud across several Forterro product lines. This momentum entering 2024 is extremely positive, and we expect the growth trend to accelerate further - especially as our Forterro Cloud Suite proposition (our unified Cloud Platform) takes shape in the second half of the year. And while accelerated shifts to recurring revenue can sometimes compress 'in-year' performance, we still grew our overall top-line revenue at just over 9%.
 

Go-to-market momentum

The overall sales picture was solid during the period, showing strong double-digit growth vs 2022. There were good results and some excellent wins for new system sales, with deals in our existing base significantly exceeding plan - excellent signals that our customers continue to expand their use of Forterro's software and extend the services they leverage to maximise ROI. In line with this trend, customer retention remained high at 95%, with insolvency among our smallest cohort of customers being the underlying cause of churn. We look forward to 2024, when we expect to recognise the full benefit of our newly acquired businesses, Proffix of Switzerland and abas BS of France, two high-performing teams that will make Forterro even stronger.
 

Operational efficiency

The company performed well against EBITDA and profitability goals, delivering 99% of our EBITDA plan and growing profits 11% year-over-year. We're especially proud of these achievements given the challenging economic climate, as well as our accelerated transition to Cloud which can sometimes have adverse effects on profitability as the model shifts. So far, we have successfully managed our cloud transition while still growing EBITDA on both a net and percentage basis.
 

People-first values

Concluding with our most important metric of all, employee retention was ahead of plan and ahead of market trends for the IT sector in Europe. But while we're pleased with the progress, we also continue to invest heavily in unifying Forterro from its original federated group structure into one company. Doing so with a relentless focus on employee development and retention - recognising employees as the number-one stakeholder for whom we strive to deliver value. It was a good 12 months, but we want 2024 to be even better again. Our Forterro team is one to be proud of, and our employees are and always will be our top priority.