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The 2018 Nimdzi 100 – Growth (Revised May, 2018)

1 May 2018

Language services industry growth

Revised May, 2018

In the revised version we update figures for many companies with more accurate and more recent numbers. We have also split the reports into three sections:

The original version published in March of 2018 is still available here and you are free to check out the full change log here

If you’d rather download the PDF version of the first edition, you can do that, too! But of course any interactive features will be disabled. Keep in mind that the PDF version is updated on a regular schedule to reflect the most up to date information, but may not always reflect the latest updates that are in the tables below. 

Language services remains a growth market. 

Out of the companies for which we have reliable data for the last 3 years, 80 percent grew in revenue, while only 20 percent stayed the same or shrank. Nimdzi estimates the market as a whole will grow at 7.4 percent CAGR for the next 5 years

In comparison to the average market growth rate, leading companies are growing at a rate of 12 percent. In many individual cases, this faster growth is driven by acquisitions, which greatly influenced the market in 2017, as can be seen in the table below. 

Fastest-growing companies with recent acquisitions

Want to take a closer look? Grab all tables in Google Sheets!

Acquisitions made by RWS Group and Keywords Studios propelled them to the Nimdzi Global Top 10, also increasing their capitalization to previously unseen values. While RWS paid more than twice the turnover for Moravia, its stock price now put the company’s capitalization at 4.5x the combined turnover. Same with Keywords – they are valued at 5x their revenue at the time of this report. The effort invested into acquisitions and funding pays well. In other words, for every dollar invested in acquisitions, companies tend to see an immediate two-dollar return in their market capitalization. Like magic!

In France, the leading LSPs have been completely transformed by acquisitions in 2016-2017. Both Datawords and Technicis, the 2nd and the 3rd players in the market practically doubled revenue over two years. Datawords acquired a digital agency Vanksen, and Technicis has snapped up Arancho Doc in Italy and Translation Probst in Switzerland. HL Trad, another company in France’s Top 10, has also increased revenue significantly with acquisitions.

This data is not intended to imply that these companies are growing exclusively through acquisition. Organic growth also plays a role. 

Organic growth leaders

Want to take a closer look? Grab all tables in Google Sheets!

Companies with organic growth each have an individual unique driver. We can make few generalizations in the current report.

  • Media localization studios have experienced a tremendous surge in business over the last two years. Four out of five fastest-growing companies are Netflix vendors. Netflix has gone from 0 to 600 hours of original scripted content in 2016 and is still ramping up production budgets. All of that content needs subtitling and voice over for the company’s international expansion.
  • Life sciences localization companies are doing really well. The amount of drug trials and clinical research in the US for example, has increased 2.5x times over the last 5 years, and the medical devices industry is witnessing a similar growth level. Localization companies capitalize on this trend.
  • Some LSPs have simply landed a large contract. For example, thebigword has won the Ministry of Justice interpreting framework agreement in the UK in 2016, and is now making the best of the immense volume of interpretation as a result. Other countries are following UK’s example and are rolling up multiple interpreting contracts into huge consolidated tenders to increase bargaining power which will lead to growth in huge interpreting providers with ties in the public sector.
  • Most mid-sized LSPs on the growth list are developing their salesforce and customer service functions.

Continue reading…

The revised Nimdzi 100 report is broken into three sections: Nimdzi 100 LSP Rankings, Market Analysis, and Growth Analysis. Continue reading for more information.

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