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TWST: Shall we set the foundation with a quick introduction to SDL (London:SDL.L)?

Mr. Rees-Evans: SDL is in the business of providing translation solutions to international companies for the purposes of their software documentation or online content. We have been in business for about eleven years. We are quoted on the London Stock Market and have a staff head count of about eleven hundred people in 35 offices around the world. We tend to focus on the more technical aspect of the translation. So we provide project management, translations, publishing, and consulting expertise, as well as software products, which provide productivity and support in that process. This includes things like multi-lingual content management and real-time translations where we can improve the speed and quality of the output.

TWST: This is text-based translation, not voice recognition?

Mr. Rees-Evans: That’s right – translation of any content, documentation, brochure, help file, Webpage, Intranet document and that kind of thing. You could also have an incoming e-mail in a foreign language; our software will help you get a ‘gist’ of it through a ‘real-time translation’ and then offer a perfect translation through the workflow if you have requested it. You can integrate this technology into portals, so that staff can select the balance of speed and cost. We have started segmenting the marketplace through the use of this technology, which will allow us to drive our margins up. I think that’s one of the areas that we have succeeded very well on - maintaining our gross margin. The addition of an expanding revenue stream, from an effective product portfolio, will have an even more substantial impact on that margin.

TWST: Can you summarize the agenda and the milestones you will be targeting over the next couple of years?

Mr. Rees-Evans: First stick to your knitting; do what you do and do it well. We want to make sure our operations are efficient as possible; the service utilization and output is at optimum level. Secondly avoid becoming a “cobblers son,” in a sense that you should use your own applications to improve your own productivity in the same way as you are asking your customer to do it. So that has been a thrust in the organization. Finally, we will continue to move the technology forward. It is an exciting time for language deployments, both in terms of the automation possible and the use of procedural elements such as ‘workflow’. We expect to leverage this investment even further, through integration with our partners’ software - such as with the content management providers, like Microsoft, moving this technology into the commercial mainstream.

TWST: How would you recommend investors gauge your progress? What specific metrics should one use to make a fair assessment over the next couple of years?

Mr. Rees-Evans: Are they doing what they said they would do? We have been reporting good results in growth and revenues and tracking our predicted movement back to profitability. We predicted the losses due to the reorganization and investment in the new technology I outlined above, but are now moving back towards profitability. The investor should also ask ‘Are they demonstrating that the investment technology is improving both the productivity of their customers and their internal systems?’ ‘Have they demonstrable leadership position in a market, which should return to substantial levels of growth?’ It’s about what our industry opportunity is and SDL’s position within it - I think we have got a good track record in both.

TWST: As a summary, what are the three or four key points you would give for potential investors to consider taking a position in SDL?

Mr. Rees-Evans: It is fairly obvious what it is. SDL has a strong position in a clear market potential. We have a demonstrable and consistent track record. SDL has sustained a clear strategic mission for over two years now. That strategic vision seems to be paying dividends because the actual results are moving in line with expectations, if not better. It is a reliable business in a good growth market.