SDL plc (“SDL” or “the Group”), a leader in the emerging market for Global Information Management (GIM) solutions, is pleased to announce its unaudited interim results for the six months ended 30 June 2007.

Highlights:

• Results ahead of market expectations
• Gross Margin up 2% points to 52% compared to the first half of 2006
• Tridion contribution of revenue of £3.8m and £1.8m of profit before tax
• Successful integration of Tridion with encouraging early signs of cross-selling opportunities
• Strengthening of product set with acquisition of Passolo for €2m
• Strong market penetration: SDL supplies technology and/or services to the world’s top 10 brands
• Significant new business wins including Intel, Philips and Greater London Authority

Commenting on the interim results Mark Lancaster, Chairman and Chief Executive of SDL, said:

“We are pleased to announce a strong performance for the half year, ahead of market expectations. We continue to see solid organic growth driven by the increased adoption of our technology and a growing awareness of our solutions. In addition, the acquisition of Tridion, a leading web content management software company, has integrated well into SDL, contributing to the growth in the period.

“Looking ahead, we remain confident in our prospects for the full year.  Overall, we are encouraged by the progress achieved to date and anticipate to see continued growing interest in Global Information Management Solutions. We believe that our newly acquired web content management capability combined with SDL’s Translation Management System, make for a compelling proposition to address the complex requirements of an evolving market place. We anticipate that this combined offering will deliver continued growth in the longer term.”

Chairman's Statement

Summary Performance

The first half of 2007 saw SDL achieve record revenue and operating profit, ahead of market expectations.  Revenues were up 20% at £54.5 million (H1 2006: £45.6 million) with 11% of this revenue growth being organic and the balance contributed by the acquisition of Tridion. Profit before tax and amortisation of intangible assets has increased by 72% to £8.7 million (H1 2006: £5.1 million) with £1.8m being contributed from Tridion end of quarter licence revenue, giving a 36% increase in organic profit.

Integration of Tridion

Tridion, a leading web content management software company, has integrated well into the SDL group. We are pleased to have released Tridion’s Web Content Management System with SDL Translation Management system tightly integrated, allowing businesses to truly create and deliver global web content across their enterprise. While a number of the customers are common to both businesses, the majority do not overlap, which will allow us to leverage our solutions into the combined customer base of the businesses. We are starting to see the benefits of the combined entity, with Tridion already starting to expand its footprint into Asia and the west coast of America, utilising SDL’s existing infrastructure to speed up this process and reduce the costs of expansion. We anticipate a number of the second half deals for 2007 to be joint Global Information Management solutions with Tridion and SDL technology.

Our Technology

The combined installations of SDL’s enterprise Global Information Management Solutions, including web content management, translation management systems and terminology management, are now getting close to the 600 mark, most of these being from blue chip customers such as Intel,  FedEx, Canon, ABN Amro, Virgin Atlantic, John Deere and Philips. We are seeing an increasing number of the world’s leading brands across all sectors use SDL Global Information Management technology in some form, confirming not only that awareness of our solutions is growing, but also the value they add to the leading global businesses.

Services Infrastructure

The Services side of the Group has continued to grow. Our Knowledge-based Translation solution (“SDL KbTS”) is transforming the landscape of translation, speeding up time to market and reducing costs. We are continuing to see significant momentum in the KbTS category with a 200% increase in the volume of words being translated over the equivalent period in 2006.  We have also added some significant business process outsourcing clients to the SDL portfolio such as Linde, Burger King and Research in Motion. SDL now has arguably the most integrated and extensive local language office network in the industry, with a global infrastructure of language production offices situated in more than 30 countries. All of these offices are fully integrated with each other via SDL’s Global Information Management Technology, driving internal operational efficiencies and bringing scalability to our services offering.

Vision and strategy for SDL

The vision of SDL is to help the world’s leading brands to deliver a consistent message globally and also to accelerate time to market by providing the software and services to deliver all corporate information into different languages. Our solutions are becoming increasingly recognised for web globalisation and brand management through to technical support (for lowering the overall cost of delivering global support) as well as the traditional functions such as localisation of technical documentation. In order to provide comprehensive Global Information Management, the complete supply chain of those involved in the creation and maintenance of global content must be included in the solution. SDL’s technology provides increased integration across this supply chain enabling new line-of-business functions to leverage the global supply chain more efficiently. The integration of the Tridion content management system into the SDL technology portfolio provides SDL with the technology basis to take advantage of the growing acceptance amongst global corporations of using web-based technologies to drive growth initiatives around sales, marketing and support.

Outlook

Looking ahead, we remain confident in our prospects for the full year. The technology divisions are expected to increase their revenue contribution second half to first half, primarily due to Global Information Management traction combined with the additional full half year from the Tridion acquisition. The localisation services division will slightly decrease their revenue contribution second half to first half, primarily due to seasonal projects, but also due to the dollar  weakness; the predominant services revenue being derived from North America. We anticipate the market conditions to remain similar to those of the first half, however with increasing interest in Global Information Management solutions we expect to see continued revenue traction on the technology side of the business.

Looking forward to 2008, we anticipate further consolidation in both the content management and translation services spaces. We expect to see continued growth in global trading and increased awareness of the need to create and manage content for global markets, a great deal of this being driven from the need to have a global web presence. We consider the acquisition of the Tridion web content management system coupled with SDL’s Translation Management System to be a key solution for the evolving global market that will deliver continued growth in the longer term.

Mark Lancaster
Chairman and CEO
SDL plc
31 August 2007

Full Interim Report