Copyright 2009 by Common Sense Advisory, Inc.

15 May 2009
Unauthorized Reproduction & Distribution Prohibited

Ranking of Top 30 Language Services Companies

byRenatoS.BeninattoandNatalyKelly

CommonSenseAdvisoryhaspublishedanannuallistofthelargestlanguage
serviceproviders(LSPs)since2005.Increasedmarketvisibilityandtransparency
haveledustoincreasethenumberofvendorswecoverinthisyearsreport.

Industry Experiences Continued Growth, Slight Slowdown in 2008

Therevenuedatarevealsthat2008wasastrongyearformanysuppliersinthe
languageservicesindustry.AmongtheTop25playersthatappearedinour2007
ranking,theaverageyearoveryeargrowthratewas19.7percent,aslightdecrease
fromthepreviousyear,inwhichtheaveragewas26.68percent.Thechangerelates
inparttorevenuefromalargescalemilitarylinguistcontractthatshiftedfromL3
CommunicationstoGlobalLinguistSolutions,thenewnumberonecompanyin
ourranking.ExcludingL3s42percentdecreaseinrevenue,theaverageis22.3
percent,closertothepreviousyearsnumbers.

TakingintoaccountthesomewhatlessaggressivegrowthreportedbyLSPsin2008
comparedwith2007,weadjustedourmarketsizeprojections(seeTable1).We
predictthatthemarketwillreachUS$22.5billionby2012,slightlylessthanour
priorestimateofUS$24billion.Thatgrowthequatestoacompoundannual
growthrate(CAGR)of10.76percentoverthenextfiveyears.

Region
Market
Share
2009
US$ M
2010
US$ M
2011
US$ M
2012
US$ M
2013
US$ M
Europe 43% 6,468 7,331 8,409 9,703 10,781
U.S. 40% 6,074 6,884 7,896 9,111 10,123
Asia 12% 1,735 1,965 2,255 2,601 2,891
ROW 5% 722 818 939 1,083 1,203
Growth Totals 100% 15,000 17,000 19,500 22,500 25,000

Table1:ProjectedLanguageServicesRevenuesfor20092013inU.S.MillionsofDollars
Source:CommonSenseAdvisory,Inc.

How We Ranked the Companies

Asalways,CommonSenseAdvisorysrankingincludescompaniesordivisionsof
companiesthatmakemostoftheirrevenuebyprovidinglanguageservices,beitin
2 Ranking of Top 30 Language Services Companies



Copyright 2009 by Common Sense Advisory, Inc. 15 May 2009
Unauthorized Reproduction & Distribution Prohibited www.commonsenseadvisory.com
writtenorverbalform,onpaper,overtheweb,inperson,viavideo,inside
softwareapplicationsanywherearoundtheglobe.Thelistincludesbothpublic
andprivatecompanies.However,notmanypubliclytradedcompaniesworkin
thelanguagearena,sothisrankingalwaysinvolvesalotmorelegworkthan
producingasimilarregisterfortheautomotiveortelecommunicationsindustries.

Publiccompanies.Aboutathirdofthecompaniesinourrankingarepublic.
Formostofthesefirms,wehavetheluxuryofreviewingannualreportsand
officialfilings.However,someofthesearelargecorporationswithspecialized
businessunitsforwhichtheydonotbreakoutnumbers.Inthosecases,we
consideredonlytherevenuefromtheunitprovidinglanguageservices.
Gettingthesenumberscanbeachallenge.

Privatelyheldcompanies.Thesefirmsconsumemostofourtime,becausewe
approach100pluscandidatecompaniestocomeupwithourlistof30.Wecall
theirexecutivestofindoutwhattheyearnedintheprecedingyear,probefor
themagicnumber,andthenaskthemforfinancialstatementstoconfirmtheir
data.Privatefirmsinsomecountriesarenotobligatedtoreleaseanydata,so
wecanonlychecktheirfinancialstotheextentthattheyallowus.

Eachyear,newcompaniesqualifyforaspotinourranking.Videointerpreting
providerPurpleCommunicationscatapultedontothisyearslistduetothemerger
ofseveralcompanies.NewcomersCrestec,(Japan),CBGKonsult(Sweden),
SEPROTEC(Spain),andTelelingua(Belgium)alsodebutonthisyearstable.

Varioussuppliersinthegovernmentandmilitarycontractingspacesuchas
AllworldLanguageConsultants,CACI,CALNET,McNeilTechnologies,Mission
EssentialPersonnel,MPRI,SMConsulting,TCSTranslations,andTRWhavealso
receivedlanguageservicescontractslargeenoughforthemtobecontendersfor
theranking.However,notallcompaniesareforthcomingabouttherevenue
derivedfromlanguageservices,makingitdifficulttouncoverexactnumbers.

The Top 30 List Remains Global in Nature

Ourlistfor2008includessuppliersfrom15countriesacrosstheglobe:theU.S.(9),
U.K.(4),Belgium(2),Japan(2),Sweden(2),Switzerland(2)andChina,Czech
Republic,Finland,France,Ireland,Italy,Luxembourg,Netherlands,andSpain
(oneeach).WhileAmericanandBritishcompaniesstilldominatetherankings,
AsiacontinuestoexpanditsshareofdominantplayerswithatotalofthreeLSPs
fromChinaandJapan.
Ranking of Top 30 Language Services Companies 3



Copyright 2009 by Common Sense Advisory, Inc. 15 May 2009
Unauthorized Reproduction & Distribution Prohibited www.commonsenseadvisory.com

Figure1:GeographicDistributionTop30LanguageServicesProvidersinTotalRevenuesEarned
inU.S.Dollars
Source:CommonSenseAdvisory,Inc.

GiventhatthecompaniesonourTop30listreportrevenueinanarrayof
currencies,weconvertthemintoabaselineunittheU.S.dollartoallowfora
directcomparison.FornonU.S.companiesoutsidetheUnitedStates,wedivide
revenueinlocalcurrencybytheaverageexchangerateforthe365daysofthe
firmsfiscalyear.Thus,theaverageexchangeratefortwelfthrankedRWS
HoldingswasUS$1.9731perpoundsterling(GBP)forthefiscalyearendedon30
September2008.FourthrankedSDL,reportingitsresultsonacalendaryear,is
affectedbythedevaluationofthepoundagainstthedollarforthebalanceof2008,
withthepoundquotedatUS$1.8551.

Three Tiers of Language Services Suppliers Comprise the Top 30

Themarketfortranslation,localization,andinterpretingservicesisorganizedinto
threemajortiers(seeTable2).Thesixhighestrankedcompaniesonthelistreport
annualrevenueinexcessofUS$200million.Thesecondtierincludesseven
companiesintheUS$106166millionrange.Thebottomhalfofthelistincludes
companiesthatreportUS$2060millioninrevenue.

4 Ranking of Top 30 Language Services Companies

Copyright 2009 by Common Sense Advisory, Inc. 15 May 2009
Unauthorized Reproduction & Distribution Prohibited www.commonsenseadvisory.com
Rank Company HQ
Country
Revenue
in US$M
Employees Offices Status
1 Global Linguist Solutions, LLC* US 691.00 6500 6 Private
2 Lionbridge Technologies US 461.00 4500 40 Public
3 L-3 Communications (LOTS) US 434.59 1049 1 Public
4 SDL International UK 294.54 1981 55 Public
5 Language Line Holdings US 212.64 4719 7 Private
6 TransPerfect / Translations.com US 204.77 1115 56 Private
7 STAR Group* CH 164.83 910 42 Private
8 SDI Media Group US 140.00 800 1 Private
9 Purple Communications, Inc. US 130.08 577 5 Public
10 euroscript international S.A. LU 129.03 1267 32 Private
11 Xerox Global Services* UK 113.74 506 9 Public
12 RWS Holdings PLC UK 106.76 451 12 Public
13 CLS Communication CH 57.62 360 14 Private
14 Manpower Business Solutions NL 55.91 150 7 Private
15 Semantix A/B SE 53.26 160 10 Private
16 Logos Group IT 50.22 135 17 Private
17 thebigword Group UK 49.90 270 9 Private
18 Welocalize, Inc. US 49.86 402 12 Private
19 AAC Global Corporation FI 48.99 304 14 Public
20 Moravia Worldwide CZ 42.80 446 12 Private
21 Honyaku Center Inc. JP 42.68 193 7 Public
22 Jonckers Translation & Engineering s.a. BE 37.21 280 13 Private
23 hiSoft Technology International Ltd. ZH 35.10 926 16 Private
24 HP ACG FR 30.06 150 9 Public
25 Merrill-Brink International US 30.02 100 4 Private
26 Crestec, Inc. JP 28.56 511 22 Private
27 CBG Konsult AB SE 28.54 180 9 Private
28 VistaTEC Ltd. IE 27.23 102 5 Private
29 Telelingua Group BE 21.98 135 5 Private
30 SEPROTEC Translations ES 20.12 358 15 Private

Table2:Top30LanguageServiceProvidersWorldwidefor2008(*estimated)
Source:CitedCompaniesandCommonSenseAdvisory,Inc.

The Market for Language Services Remains Fragmented

Inpreviousresearch,wevenotedhowlittleoftheoveralllanguagerevenueis
earnedbythelargestlanguageserviceproviders.Thistrendremainedconsistentin
2008,withthetop30bookingjust26.6percentofthemarkettotal(seeFigure2).

Ranking of Top 30 Language Services Companies 5

Copyright 2009 by Common Sense Advisory, Inc. 15 May 2009
Unauthorized Reproduction & Distribution Prohibited www.commonsenseadvisory.com

Figure2:Top30AggregateRevenuefor2008asaPercentageofTotalLanguageServicesMarketSize
inU.S.Dollars
Source:CommonSenseAdvisory,Inc.

Finally,todeterminewhetherthisfragmentationisgettingworseorconsolidation
increasingtoomuch,weapplytheHerfindahlHirschmanIndex(HHI)togauge
industryconcentrationandcompetitioninthemarketplace.TheHHIcalculatesa
weightedaveragemarketshare(whichisrepresentedbythesumofthesquaresof
themarketsharesofeachindividualfirm).Thescoresrangefrom0to10,000.Low
numbersindicateaverylargeamountofverysmallfirms,whilealargenumber
correlatestoasingle,monopolisticproducer.

ThelanguageservicesindustryhasanextremelylowHHIconcentration.Although
theconsolidationhasincreasedslightlysincelastyear,itremainsonthelowerend
oftheHHIscale.Infact,evenifthe10biggestcompaniesintheindustrymergedto
formaUS$3billioncompany,itisunlikelythatitwouldbechallengedbyanti
trustauthoritiesintheUnitedStates.

Most Large Providers Exceed Ten Percent Revenue Growth

AcquisitionscontinuedtofuelthegrowthofcompanieslikeAACGlobal,SDL,and
Welocalize.However,mostcompaniesreportsignificantorganicgrowthfromthe
increaseddemandfortheirlanguageservices.L3slanguageservicesdivision
reportednegativegrowthduetothelossofacontracttoprovidelinguistsupport
incombatzonesfortheUnitedStatesmilitary.ThenumberforLCJEEIG(now
6 Ranking of Top 30 Language Services Companies



Copyright 2009 by Common Sense Advisory, Inc. 15 May 2009
Unauthorized Reproduction & Distribution Prohibited www.commonsenseadvisory.com
Jonckers)shrankafterthemergerofthreemembercompaniesduetothefactthatit
nolongerreportsrevenueforLogoscript.

Company Revenue Growth

(Reduction) from
2007 to 2008
hiSoft Technology International Ltd.
59.5%
AAC Global Group
54.7%
thebigword Group
51.1%
Welocalize, Inc.
48.0%
Manpower Business Solutions
44.0%
TransPerfect / Translations.com
31.3%
Hewlett-Packard ACG
30.7%
SDL International
25.3%
VistaTEC
24.9%
Semantix
21.8%
Honyaku Centre
17.6%
RWS Group
17.4%
CLS Communication
17.1%
SDI Media Group
16.9%
Language Line Holdings
16.1%
Xerox Global Services
15.0%
Moravia Worldwide
12.0%
Logos Group
8.0%
euroscript International S.A.
6.7%
Amesto Translation Holding A/S
3.8%
Lionbridge Technologies
2.0%
STAR Group
1.9%
Jonckers Translation & Engineering s.a.
(2.2%)
L-3 Communications Linguist Operations & Technical Support Division
(42.3%)

Table3:RevenueGrowth(Reduction)byCompanyfrom2007to2008
Source:CommonSenseAdvisory,Inc.

The Biggest LSPs Trail in Revenue per Employee

Revenueperemployeeisameasureofhowefficientlyaparticularcompanyis
usingitsworkers.Ingeneral,risingrevenueperemployeeshowsthatthecompany
isusingitsworkersmoreefficiently.Someofthecompanieswiththemost
employeessuchasGlobalLinguistSolutions,LanguageLine,andLionbridge
areamongtheleastefficient(seeTable4).L3Communications,ontheotherhand,
Ranking of Top 30 Language Services Companies 7



Copyright 2009 by Common Sense Advisory, Inc. 15 May 2009
Unauthorized Reproduction & Distribution Prohibited www.commonsenseadvisory.com
madereductionstoitsworkforce,boostingitsefficiencytoclaimthetopspot.The
topprovidersshowedamarkedimprovementinaverageefficiencythisyear
(US$184,731.45)comparedtothepreviousyear(US$162,914.48).

Ranking by
Revenue per
Employee
Ranking by
Number of
Employees
Company Number of
Employees
Revenue by
Employee in
USD
1 7 L-3 Communications (LOTS) 1049 414,289.80
2 25 Manpower Business Solutions 150 372,729.33
3 27 Logos Group 135 371,966.44
4 24 Semantix A/B 160 332,903.13
5 30 Merril-Brink 100 300,200.00
6 29 VistaTEC Ltd. 102 266,911.76
7 14 RWS Holdings PLC 451 236,728.25
8 11 Purple Communications, Inc. 577 225,443.67
9 13 Xerox Global Services* 506 224,772.73
10 22 Honyaku Center Inc. 193 221,139.90
11 26 HP ACG 150 200,400.00
12 21 thebigword Group 270 184,822.93
13 6 Transperfect / Translations.com 1115 183,650.22
14 9 STAR Group* 910 181,131.56
15 10 SDI Media Group 800 175,000.00
16 28 Telelingua Group 135 162,845.66
17 19 AAC Global Corporation 304 161,165.43
18 17 CLS Communication 360 160,061.33
19 23 CBG Konsult AB 180 158,553.33
20 4 SDL International 1981 148,684.25
21 20 Jonckers Translation & Engineering s.a. 280 132,889.92
22 16 Welocalize, Inc. 402 124,029.85
23 1 Global Linguist Solutions, LLC* 6500 106,307.69
24 3 Lionbridge Technologies 4500 102,444.44
25 5 euroscript international S.A. 1267 101,841.37
26 15 Moravia Worldwide 446 95,964.13
27 18 SEPROTEC Translations 358 56,209.41
28 12 Crestec, Inc. 511 55,890.60
29 2 LanguageLine Holdings 4719 45,061.24
30 8 hiSoft Technology International Ltd. 926 37,904.97
Average of Top 30 Companies 984.5 184,731.45

Table4:Top30LanguageServicesCompaniesRankedbyRevenueperEmployee
Source:CommonSenseAdvisory,Inc.