74software · EURONEXT:74SW
74software — Investor Presentation (November 2024)
55 slides from 74software's investor presentation, Nov 21, 2024
Slide 1: Investor Deck November 2024
Investor Deck November 2024 1
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS This presentation contains forecasts that may be subject to various risks and uncertainties concerning the Company’s future growth and profitability. The Company highlights that contract signatures, which represent investments for customers, are historically mor
Slide 3: Summary
Summary 1 Who We Are 2 What We Do 3 2024 Q3 & 9M Highlights 4 Looking to Q4 2024 and Beyond 5 Appendices 3
Slide 4: Who We Are
Who We Are
Slide 5: Axway is a Well-recognized Integration Specialist
Axway is a Well-recognized Integration Specialist A CLEAR PURPOSE An independent technology provider that sustainably grows enduring value, based upon trust, for our Customers, Employees, and Shareholders. €319m 19.7% Euronext Paris - Compartment B Bloomberg : AXW-FR Reuters : AXW.PA Market Capitali
Slide 6: Axway is a Portfolio Company
Axway is a Portfolio Company with an established track record of in-house innovation and M&A MFT APIM B2B AFAH Specialized Products and powerful innovation Selected Acquisitions Selected Acquisitions Selected Acquisitions Selected Acquisitions Selected Acquisitions enabled by >€ 60m / year R&D inves
Slide 7: Axway is Diversified by Design
Axway is Diversified by Design STRONG INTERNATIONAL PRESENCE BROAD PRODUCT PORTFOLIO MULTI-SECTORAL EXPERTISE Specialized Products Others Americas France 10% 12% 40% 31% Financial Accounting Hub Healthcare & 9% Life Sciences Managed 10% Financial File Transfer Services 41% 35% 2023 Revenue 2023 Reve
Slide 8: Axway Runs a Profitable Subscription-based Model
Axway Runs a Profitable Subscription-based Model Successful shift towards subscription and recurring revenue Mid-single digit organic growth with a mature product portfolio 8% Subscription Subscription 340 Revenue 20% 59% Maintenance 6% 27% 320 Organic growth 4% 300 Maintenance Services 13% 2019 49%
Slide 9: SBS is a Unique Opportunity to Grow Axway's Portfolio
SBS is a Unique Opportunity to Grow Axway’s Portfolio Helping banks and lenders from around the world make financial services accessible to everyone, everywhere, at any time. 650+ €359m 80+ 3,600 16 Customers 2023 Carve-out Revenue Operating Countries Employees Locations SOPRA BANKING PLATFORM SOPRA
Slide 10: SBS has a Strong Potential for Higher Recurring Revenues
SBS has a Strong Potential for Higher Recurring Revenues ACCELERATE TRANSITION TO A SUBSCRIPTION MODEL LEVERAGING POWERFUL BUSINESS UNITS Support & Others Specialized Market Solutions 6% 14% Tieto FS License UK Core Banking Systems 13% Maintenance & Components 33% 67% Asset Finance 11% Delta APAK Lu
Slide 11: Axway x SBS
47 Aw axway X @ SBS “NO Sg
Slide 12: Birth of 5th Largest French Enterprise Software Company
Birth of 5th Largest French Enterprise Software Company A new major player in enterprise software, achieving critical scale with 1 a bold 2025 ambition of c.€700m revenue and c.€100m profit on operating activities Secured leadership position in a combined $90B total addressable market, 2 with unique
Slide 13: Entering the Big League with Some Serious Arguments
Entering the Big League with Some Serious Arguments 5000 26 €676m 5th Employees Countries 2023 Proforma Revenue Enterprise software vendor in France European Major Player Top 10 French Enterprise Software Vendors by Revenue (in €m) France Leader 1. Dassault Système 5114 2. Criteo 1919 3. Cegid 791 4
Slide 14: Combined Entity to Benefit from Complementary Profiles
Combined Entity to Benefit from Complementary Profiles STRATEGICALLY DISTRIBUTED FROM INFRASTRUCTURE A UNIQUE POSITIONING IN GLOBAL PRESENCE TO BANKING APP THE FINANCIAL SERVICES INDUSTRY Asia/Pacific Middle East Africa Specialized Products Healthcare & Others 3% 1% Financial Accounting Hub 5% 6% 4%
Slide 15: Shared Roots and Common Culture for a Seamless Integration
Shared Roots and Common Culture for a Seamless Integration An experienced management team… and all the ingredients for a successful tie-up! Patrick Donovan Group CEO ▪ Both companies born within Sopra Steria Group Roland Royer Eric Bierry ▪ Shared DNA and common culture, built on a strong Axway CEO
Slide 16: Leveraging our Strong Brands, Shaping our Future
Leveraging our Strong Brands, Shaping our Future COMING SOON A NEW PARENT ENTITY TO CENTRALIZE CORPORATE FUNCTIONS FOR OUR BRANDS A LISTED CENTRAL HOLDING ACROSS OUR SOFTWARE HOUSE’S BRANDS 16
Slide 17: Capital Structure at 01/09/2024
Capital Structure at 01/09/2024 PASQUIER ODIN Treasury FAMILY FAMILY Public MANAGERS Shares SHARES OUTSTANDING 41.70% 11.07% 0.29% 1.27% 1.18% 42.33% 2.16% VOTING RIGHTS 41.59% 16.21% 0.26% 1.48% 1.36% 39.09% SHAREHOLDERS’ AGREEMENT 29,746,194 Shares outstanding 55.5% of shares outstanding / 60.9% o
Slide 18: What We Do
What We Do
Slide 19: Building a Robust Enterprise Software House
Building a Robust Enterprise Software House INTEGRATION BANKING APP BANKING MFT APIM PLATFORM FINANCING B2B AFAH PLATFORM 19
Slide 20: A Day-to-day Software House Mindset
A Day-to-day Software House Mindset AXWAY’S RECENT SUCCESS PILLARS Customer Centric, Agile Portfolio Of Focused R&D, Engaged People, NPS Driven Leading Products Sales And Marketing Efficient Organization … AND THE DISCIPLINE IT REQUIRES Standardizing Optimizing R&D, Sales Offers & Products & Marketi
Slide 21: Wherever Critical Data Is
Wherever Critical Data Is Leader in Banking and Financial Services Top 10 Customers representing 28% of Revenue* * 2023 Proforma Revenue 21
Slide 22: Diversified Sticky Niches in Large Markets
Diversified Sticky Niches in Large Markets TAM = $68bn (1) TAM = $22bn (2) End-user spending by market (in $bn) End-user spending by market (in $bn) IPAAS APIM Banking CAGR: +20.4% CAGR: +15.0% CAGR: +13.7% 17,4 6,8 14,7 6,1 158,7 5,3 139,8 12,3 4,6 123,1 10,1 3,9 95,0 107,9 8,3 2023E 2024E 2025E 20
Slide 23: With Awarded Leading Products
With Awarded Leading Products Gartner Magic Quadrant The Forrester Wave G2 Reports Leader in Leader in Leader in Full Life Cycle API Management API, API Management Software B2B & MFT 16 October 2024 1 July 2024 Summer 2024 Deal Survey Omdia Universe Sales League Table Ranked 3rd World Leader for 1st
Slide 24: Portfolio Business & Technical Synergies
Portfolio Business & Technical Synergies Bringing Axway’s integration value to SBS - From 2025 FUTURE USE INCREMENTAL PORTFOLIO MARKET NEEDS CASES + OPPORTUNITIES SYNERGIES ▪ Compose any banking services ➢ Reduce costs DIGITAL BANKING ▪ From physical branch to mobile/web ➢ Integrate, Compose & Secu
Slide 25: 2024 Q3 & 9M Highlights
2024 Q3 & 9M Highlights
Slide 26: Q3 & 9M 2024 - Group Revenue
Q3 & 9M 2024 - Group Revenue AXWAY + SBS Consolidated revenue Q3 2023 Q3 2023 Total Organic 3rd Quarter 2024 (€m) Q3 2024 Restated* Reported Growth Growth Axway Scope 78.3 69.0 69.4 12.8% 13.4% SBS Scope (1 month) 34.3 28.9 - - 18.8% Intra-Group Operations -0.1 0.0 - - 173.8% Group's Revenue 112.4 9
Slide 27: Q3 2024 - Brands Revenue
Q3 2024 - Brands Revenue AXWAY SCOPE Revenue by business line Q3 2023 Q3 2023 Total Organic 3rd Quarter 2024 (€m) Q3 2024 Restated* Reported Growth Growth Subscription 48.4 36.9 37.0 30.8% 31.2% of which Axway Managed 12.8 11.8 11.9 7.7% 8.3% of which Customer Managed 35.5 25.0 25.1 41.7% 42.1% Main
Slide 28: Q3 2024 Highlights
Strong revenue performance year-to-date Organic Growth of 5.6% for first nine months MFT momentum continues Q3 2024 Growth in new customers, especially in North American market Core products continue market leadership HIGHLIGHTS Most recently announced leadership in Gartner 2024 APIM Magic Quadrant
Slide 29: Successful launch of SBS integration
Successful launch of SBS integration NEW CORPORATE PROJECT INITIATED FIRST SYNERGIES AND SHARED OPPORTUNITIES ENTHUSIASTIC CUSTOMER’ FEEDBACKS FOCUSED BUSINESS TEAMS 29
Slide 30: Looking to Q4 2024 and Beyond
Looking to Q4 2024 and Beyond
Slide 31: Always The Same Ambitions
Always The Same Ambitions OUR CUSTOMERS OUR EMPLOYEES OUR SHAREHOLDERS Delivering brilliant Building a predictable, The place to be Customer experience profitable model An Independent Technology Provider That Sustainably Grows Enduring Value 31
Slide 32: Clear Roadmap to Strong Ambitions
Clear Roadmap to Strong Ambitions 2023 2024 2025 2027 RESTATED* GUIDANCE AMBITION AMBITION AXW + 12 Mo. SBS AXW + 4 Months SBS AXW + SBS 3 YEARS PLAN Revenue €651m ≈€ 460m ≈ €700m >€ 750m 18 months 2 to 4% to materialize organic growth full synergies run rate Targeting Profit on Operating Activities
Slide 33: Capital Allocation Priorities
Capital Allocation Priorities FOCUS ON RETURN SHARE DELEVERAGING TO DIVIDEND BUYBACK < 2.0x As soon as Regular activation possible and of share buyback by end-2025 appropriate authorizations 33
Slide 34: Appendices
axway Appendices »
Slide 35: Proforma 2023 Key Figures
Proforma 2023 Key Figures Proforma Adjustments + Revenue €319m €359m €2m Interco €676m Profit on Op. Activities €63m €26m €5m Accounting principles alignment €84m or 12.4% of revenue 35
Slide 36: 2023 Proforma Income Statement
2023 Proforma Income Statement 2023 2023 2023 Proforma In millions of euros €m % of Rev. €m % of Rev. €m % of Rev. Revenue 319,0 359,2 676,2 Employee costs -179,6 -237,8 -417,4 External expenses -63,8 -80,1 -141,9 Taxes and duties -2,9 -3,2 -6,1 Depreciation and amortisation, provisions and impairme
Slide 37: Shareholding Structure to Further Support Development
Shareholding Structure to Further Support Development POST SOPRA GMT ACQUISITION OF SOPRA STERIA STAKE POST C. €131M SUCCESSFUL RIGHTS ISSUE Treasury Shares Treasury Shares 3.0% Of Shares Sopra Steria 2.2% Of Shares Sopra Steria s s are 15.2% Of Shares are 11.1% Of Shares Sh 16.2% Of Voting Rights S
Slide 38: Shareholding Structure to Further Support Development
Shareholding Structure to Further Support Development PRE-SOPRA GMT ACQUISITION OF SOPRA STERIA STAKE POST SOPRA GMT ACQUISITION OF SOPRA STERIA STAKE Treasury Shares Treasury Shares 3.0% Of Shares Sopra Steria 3.0% Of Shares Sopra Steria s s are 32.0% Of Shares are 15.2% Of Shares Sh 20.3% Of Votin
Slide 39: Axway Standalone
axway >» Axway Standalone
Slide 40: Axway's Historical Performance
Axway’s Historical Performance 5 Year 2013-17 2024 2023 2022 2021 2020 2019 Average Average Guidance Organic Revenue Growth (%) +5.8% +5.5% -2.7% +0.5% +3.3% +2.5% +1.6% +1 to 3% Profit on Operating Activities (€m) 62.8 46.3 32.9 30.8 25.9 ≈ 20% as a % of revenue 19.7% 14.7% 11.5% 10.4% 8.6% 13.0% 1
Slide 41: Axway's Historical Performance
Axway’s Historical Performance Revenue Profit on (€m) BUSINESS MODEL TRANSITION Ope. Activities (€m) 330 65 Revenue 310 60 Profit on Operating Activities 290 55 270 50 250 45 230 40 210 35 190 30 170 25 150 20 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Organic Growth +5.7% -1.6
Slide 42: Axway's External Growth History
Axway's External Growth History 350 2023 Customer Position 2017 300 Technology / Know-how 2016 2019 2022 250 Revenue evolution (€m) 2012 2014 200 2011 2008 150 2007 2006 100 2002 50 1st Collaborative Business Interaction Digital Business Integration Integration Suite Business Solutions Networks Enab
Slide 43: Axway, a Responsible and Committed Company
Axway, a Responsible and Committed Company Rolling out its corporate responsibility policy through 3 commitments: Employer, Societal and Environmental PRINCIPLES GOVERNANCE DISCLOSURE CERTIFICATIONS 43
Slide 44: H1 2024
axway > H1 2024
Slide 45: 2024 Half-Year Results
2024 Half-Year Results KEY FIGURES INCOME STATEMENT H1 2024 H1 2023 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 148.7 145.5 19 22 Cost of sales 43.9 42.9 Gross Profit 104.7 70.5% 102.6 70.5% + . % + . % Operating expenses of which Sales and marketing 87.6 41.8
Slide 46: 2024 Half-Year Results
2024 Half-Year Results REVENUE BY ACTIVITY H1 2023 H1 2023 Total Organic [€m] H1 2024 Services 12% Subscription Restated* Reported Growth Growth* 63% License 2% Subscription 93.2 79.0 78.7 +18.5% +18.0% of which Axway Managed 25.9 22.6 22.3 +16.5% +14.8% of which Customer Managed 67.3 56.4 56.4 +19.
Slide 47: 2024 Half-Year Results
2024 Half-Year Results SIMPLIFIED BALANCE SHEET In millions of euros 30/06/2024 30/06/2023 Assets Goodwill 302.7 299.3 Non-current assets 369.1 362.1 Trade receivables 166.3 135.2 Other current assets 38.8 34.0 Cash and cash equivalents 16.9 14.2 Current assets 222.0 183.4 ▪ Cash and cash equivalent
Slide 48: 2024 Half-Year Results
2024 Half-Year Results CASH FLOWS In millions of euros H1 2024 H1 2023 Net profit for the period 2.8 3.7 Change in operating working capital requirements 2.6 4.5 Net cash from operating activities 15.0 23.1 Free cash flow 6.7 16.5 Net cash used in investing activities -2.7 -8.6 Net cash used in fina
Slide 49: Progressive Normalization of Free Cash Flow
Progressive Normalization of Free Cash Flow 90 26% Profit on Operating Activities (€m) FCF as a % of revenue BUSINESS MODEL 80 TRANSITION 22% 70 18% Profit on Operating Activities (€m) 60 Free Cash Flow / Revenue (%) First Customer Managed Subscription Offer 50 14% 40 10% 30 6% 20 2% 10 0 -2% 2011 2
Slide 50: FY 2023
axway > FY 2023
Slide 51: 2023 Full-Year Results
2023 Full-Year Results KEY FIGURES INCOME STATEMENT 2023 2022 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 319.0 314.0 +5.8% +1.6% Cost of sales 87.2 91.4 Gross Profit 231.7 72.7% 222.6 70.9% Operating expenses 168.9 176.4 of which Sales and marketing 81.6 93.2
Slide 52: 2023 Full-Year Results
2023 Full-Year Results REVENUE BY ACTIVITY 3% 2022 2022 Total Organic [€m] 2023 License 11% Restated* Reported Growth Growth* Services License 8.8 10.2 11.6 -23.8% -13.7% 27% Subscription 186.6 146.5 154.0 +21.2% +27.4% Maintenance 59% Maintenance 87.0 107.9 111.2 -21.7% -19.4% Subscription Sub-tota
Slide 53: 2023 Full-Year Results
2023 Full-Year Results SIMPLIFIED In millions of euros 31/12/2023 31/12/2022 Assets BALANCE SHEET Goodwill 302.1 297.8 Non-current assets 367.6 374.0 Trade receivables 178.0 148.1 Other current assets 32.3 30.6 Cash and cash equivalents 16.7 18.3 Current assets 227.0 197.1 • Cash and cash equivalent
Slide 54: 2023 Full-Year Results
2023 Full-Year Results CASH FLOWS In millions of euros 2023 2022 Net profit for the period 35.8 -40.0 Change in operating working capital requirements -32.9 -41.0 Net cash from operating activities 32.1 13.0 Free cash flow 18.8 2.2 Net cash used in investing activities -12.6 -11.1 Net cash used in f
Slide 55: Alternative Performance Measures
Alternative Performance Measures ACV: Annual Contract Value – Annual contract value of a subscription agreement. ARR: Annual Recurring Revenue – Expected annual billing amounts from all active maintenance and subscription agreements. Growth at constant exchange rates: Growth in revenue between the p
74Software (formerly Axway) — Investor Presentation (November 2024) on 6ix