SD Worx records double-digit growth rates in 2024
Net profit more than a third higher
February 27, 2025
Antwerp, 27 February – SD Worx, the leading European provider of HR and payroll software and services, has announced its financial results for 2024. The consolidated revenues increased by 11.6%, from EUR 1.058 billion in 2023 to EUR 1.180 billion in 2024. The consolidated adjusted EBITDA grew by 28.2% from EUR 181.6 million to EUR 232.7 million. The consolidated net profit climbed from EUR 70.1 million in 2023 to EUR 94.9 million in 2024, an increase of 35.4%.
SD Worx People Solutions, the segment for Payroll & Reward, Human Capital Management and Workforce Management, had started 2024 well. However, difficult economic conditions led to a slowdown in growth in the second half of the year. Nonetheless, SD Worx People Solutions can present good growth results for the full year: it clocked up revenues of EUR 962.4 million, which is 15.4% more than in 2023.
Adjusted EBITDA rose by 30.6% to EUR 231.1 million. This can be explained by higher interest rates on customer funds, which brought in an additional EUR 19.5 million compared to 2023, leading to a total amount of EUR 33.7 million. There was also additional income (EUR 5.9 million) from software and services SD Worx offers to its customers to organise social elections in Belgium, which take place every four years.
SD Worx Staffing & Career Solutions, the segment that focuses on flexible work, continues to struggle in a sector that is generally facing challenges. Revenues fell 3.5% to EUR 220.4 million, with the adjusted EBITDA landing on EUR 1.6 million. In the second half of the year, the entity performed noticeably better, with an EBITDA of EUR 1.9 million.
Pan-European HR and payroll solutions provider
"SD Worx continues to grow well in these more difficult economic times. There is the margin improvement on the one hand, and on the other hand revenue growth remains strong, even without taking into account the impact of higher interest rates and revenue thanks to the social elections in Belgium. This shows that the strategic choices SD Worx has made to evolve into a pan-European HR and payroll solutions provider are still the right ones," says Filip Dierckx, chairman of the board of directors at SD Worx.
Kobe Verdonck, CEO of SD Worx: "We thank our 95 000 customers and almost 10 000 employees for their trust in SD Worx and look back at a successful transformational year. Although the market circumstances were not easy, we have delivered strong organic growth and, more importantly, we realised further innovation in our HR & payroll solutions with a focus on customer experience and compliancy. Furthermore, SD Worx realised five acquisitions in 2024, of which the Italian market leader F2A, the largest acquisition in our history. In 2025, we will continue to execute on our innovation strategy based on strong HR solutions with local expertise and services across Europe."
The full year reported Adjusted EBITDA increased by 28.2% to EUR 232.7 million on a year-over-year basis. The double-digit growth in the current year confirms the SD Worx’ European expansion strategy.
A strong performance of the People Solutions segment, where revenues have gone up by EUR 128.3 million, or 15.4% compared to prior year, is a key driver of the current growth. Improved performance is visible in both the Payroll & Reward / HCM and the workforce management solutions that SD Worx provides to its customers.
The main drivers to mention behind these strong results of SD Worx People Solutions are the solid organic growth which amounts to EUR 74.3 million, an increase of 9.1% (excluding growth in commission income obtained under the customer fund cooperation agreement). Inorganic growth through new acquisitions in the current year contributed an additional EUR 23.2 million in revenue in 2024. Large new acquisitions during 2024 significantly contributing to the inorganic growth included F2A (Italy) and Romanian Software (Romania).
The organic growth is noted across all markets where the group is present, both in recurring and non-recurring business. Within the Belgian market, the group realised additional one-off revenues relating to the support it provides to its customers on the organisation of the social elections. The revenue was also supported by higher commission income obtained under the customer fund cooperation agreement (EUR 19.5 million increase compared to prior year).
The growth in consolidated revenue is noted in spite of the challenging environment in which the Staffing & Career Solutions segment continues to operate. As a result of this difficult market, revenues within this segment decreased by EUR 8.0 million. Nevertheless, the results of the segment showed initial signs of improvement during the second half of the year with a moderate increase in revenue of 1.5% compared to the second half of 2023. SD Worx Staffing & Career has limited the impact on adjusted EBITDA by actively monitoring its costs to compensate for the lower revenue. As a result, adjusted EBITDA during the second half of 2024 was again positive, compared to a negative adjusted EBITDA during the first half of the year.
Further details about the consolidated net result
Restructuring cost and integration costs amount to EUR 7.9 million, relating mainly to the integration and rebranding tracks for both prior acquisitions, such as Intelligo, Integhro and SD Worx Croatia, and more recent acquisitions, such as F2A, SoftMachine and Romanian Software. These costs are at a lower level compared to last year as tracks for older large acquisitions are slowly coming to an end whereas new major acquisition deals such as F2A were closed later in 2024.
Acquisition and transaction costs relate to due diligence costs which are incurred in search of new acquisitions to strengthen our portfolio. The level of these costs is highly correlated to the number of M&A tracks of the year, which was lower during 2023.
The cost of share-based payments relates to the non-committed stock-based compensation with regards to SD Worx’ existing share plans for its management. These plans qualify as equity settled and the cost is spread evenly over a vesting period of three years. The increase in cost recognised for these plans follows from the strong performance of SD Worx, as well as an incentive plan following an external party entering in the capital of SD Worx.
Depreciation, amortisation, and impairment
A total depreciation, amortisation and impairment charge of EUR 79.5 million has been recorded per 31 December 2024 on SD Worx’ tangible and intangible assets and are mainly related to SD Worx’ important and continuing investments in digital solutions and the refurbishment of office spaces (EUR 44.4 million), the depreciation of leased right-of-use assets such as rented buildings and company cars (EUR 24.3 million) and the amortisation of intangible assets acquired in business combinations (EUR 10.9 million). The rise in depreciation and amortisation charges largely follows our continued investment in digital solutions, as well as the amortisation of acquired intangible assets from business combinations, such as brand names and customer relationships.
Financial result
The net financial result per 31 December 2024 amounts to EUR -7.2 million. The improvement in financial result compared to last year is mainly driven by the non-operational foreign currency translation differences which had a net positive impact during 2024 of EUR 3.2 million compared to a loss of EUR -1.6 million over 2023.
The financial result is largely determined by interest charges which are incurred on borrowings, consisting of a subordinated EUR 80.0 million bond issued in June 2019 and a committed EUR 400.0 million revolving credit facility. Other financial charges relate primarily to interest expenses on lease liabilities.
The total leverage of the group remains conservative at a level of 1.4x adjusted EBITDA to net debt as per 31 December 2024.
Taxes
The tax expense increased to EUR 30.0 million as of 31 December 2024, representing an effective tax rate of approximatively 24% compared to 20% in the previous year. The 2023 tax rate was notably influenced by the recognition of deferred tax assets on the planned restructuring of the group’s French operations.
Net result
The net result stands at EUR 94.9 million, which is EUR 24.7 million higher than the previous year. Key factors contributing to this robust result include sustained and solid growth in operational performance, as well as an increase on commission income influenced by the level of interest rates on the group’s operating profit and the strategic buy-and-build policy employed by the group.
More details can be found in this report.
External Audit
The statutory auditor, Deloitte Bedrijfsrevisoren BV, represented by Ben Vandeweyer, confirmed that the audit of the company’s consolidated financial statements, prepared in according with International Financial Reporting Standards (IFRS) as adopted for use in the European Union, and with the legal and regulatory requirements applicable in Belgium, is substantially completed. The statutory auditor confirmed the Financial Results are derived from the consolidated financial statements on 31 December 2024, which have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted for use in the European Union.