New businesses boost Bentley results

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Bentley Systems says Seequent has boosted its exposure to mineral exploration and mining at an opportune time
‘We see a lot of activities with the large mining companies who are full of cash’

US-based software group Bentley Systems has seen strong contributions from recently acquired companies offset the loss of Russia and weakness in China in its 2022 financial results, with further growth forecast for 2023.

Bentley nearly doubled net income year-on-year to US$174.8 million on 13.9% higher FY22 revenues totalling $1099 million.

The company is guiding for 2023 revenue of $1205-1235 million, and constant-currency annual recurring revenue (ARR) growth of 11.5-to-13.5%.

CFO Werner Andre said constant-currency ARR growth was 15% in 2022 and “we ended 2022 with ARR of $1.037 billion at year-end spot rates, now for the first time above $1 billion”.

“The strong and sustained momentum of our business performance is driven by our E365 and SMB growth initiatives and the continued growth velocity of our platform acquisitions of Seequent and Power Line Systems, making up for lost ARR in Russia and headwinds in China,” Andre said.

“Subscription revenues grew 18% [in 2022], or 24% in constant currency, which included 12 percentage points from our Seequent and Power Line Systems acquisitions, and 12 percentage points from our business performance.”

Bentley bought New Zealand-based Seequent and its Leapfrog 3D geoscience modelling software for more than $1 billion in 2021. It wrapped up its $700m acquisition of Power Line Systems early last year.

Seequent expanded Bentley’s exposure to the mining and metals vertical.

“Mining is still in a super cycle,” Bentley chief operating officer Nicholas Cumins said this week.

“The early-stage drilling, which we look as an early indicator, is up, and it’s at its highest level since 2014. So there’s a lot of activity going on. I think there’s a clear realisation that a lot of mining is needed in order to support the world electrification.

“We see also a lot of activities with the large mining companies who are full of cash because they benefited from sustained price increases.

“We see them acquiring a lot of smaller mining companies. In the first half of 2022 we saw 50% more M&A activity than in the previous year.

“So there’s a lot of investment going on into mining.

“And of course, Seequent is extremely well positioned to benefit from that.”

CEO Greg Bentley said the company started 2022 with China contributing about 5% of its ARR.

“This year, [as] we start the year, it’s under 4%.

“If China was growing at the relatively favourable growth rate, compared to the company as a whole, that we experienced prior to the pandemic, our outlook for 2023 would be at least a percent higher in ARR growth than it is.

“For the year 2022 … as reflected in our anticipation last quarter, we would have exceeded our range of ARR growth outlook if not for the regression caused by Russia and then knock-on counter-globalism in China.

“We are cautiously bearing in mind those risks in China in our outlook for 2023.”


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