74software · EURONEXT:74SW
74software — Axway — H1 2017 Earnings Presentation
30 slides from 74software's earnings presentation, Jul 27, 2017
Slide 1: 1st Half-Year 2017 Analyst Conference
1st Half-Year 2017 Analyst Conference 27 July 2017 © 2017 Axway | CONFIDENTIAL 1
Slide 2: Forward Looking Statements
Forward Looking Statements • This presentation contains forecasts in respect of which there are risks and uncertainties concerning the company’s future growth and profitability. The group highlights the fact that the signature of license contracts, which often represent investments for clients, are
Slide 3: Agenda
Agenda Speakers Patrick Gouffran, Corporate Secretary Jean-Marc Lazzari, Patrick Donovan, CEO CFO © 2017 Axway | CONFIDENTIAL 3
Slide 4: Highlights 1st Semester 2017
Highlights 1st Semester 2017 #axway • Key figures HY 2017 • Accounting Results HY 2017 • Mid term Status and Perspective • FY 2017 Outlook © 2017 Axway | CONFIDENTIAL 4
Slide 5: Key figures HY 2017
Key figures HY 2017 [€M] 2016 2017 Published Revenue 142.8 144.7 Profit from business activity 6.0 16.3 (%revenue) 4.2% 11.3% Net Profit 2.6 11.0 (%revenue) 1.8% 7.6% (1) At constant exchange rates and on a like-for-like basis © 2017 Axway | CONFIDENTIAL 5
Slide 6: Revenue by activity HY 2017
Revenue by activity HY 2017 2016 2016 Organic [€M] 2017 Published Restated Growth1 Licenses 25.0 37.4 37.9 -34.0% Cloud 17.2 - 15.0 14.8% Maintenance 73.5 70.2 70.8 3.7% Services 27.1 37.1 28.2 -3.9% Axway 142.8 144.7 151.9 -6.0% (1) At constant exchange rates and on a like-for-like basis © 2017 Axw
Slide 7: Revenue by region HY 2017
Revenue by region HY 2017 2016 2016 Organic [€M] 2017 Published Restated Growth1 France 38.7 43.9 43.9 -11.9% Rest of Europe 33.7 31.8 31.0 8.7% Americas 62.7 61.5 69.4 -9.6% Asia Pacific 7.8 7.4 7.7 0.9% Axway 142.8 144.7 151.9 -6.0% (1) At constant exchange rates and on a like-for-like basis © 201
Slide 8: HY 2017 Balanced and resilient business model
HY 2017 Balanced and resilient business model By Region By Activity 19% 18% 27% 24% Services Licenses France Rest of Europe 12% Cloud 5% 44% 51% Asia Pacific Americas Maintenance Recurring Revenue up 5.6% representing 63% of Total Revenue © 2017 Axway | CONFIDENTIAL 8
Slide 9: Headcount at end of June 2017
Headcount at end of June 2017 1,941 576 (1,930 Dec. 2016) 529 © 2017 Axway | CONFIDENTIAL 9
Slide 10: 2017 Axway Licenses Pipe
2017 Axway Licenses Pipe By Technology By Region 7% 10% 4% Div 13% APAC AI ADI 39% 24% 57% USA FRANCE 32% 32% Digital +BNL MFT API solutions 6% 21% 12% LATAM GEMEA EDI © 2017 Axway | CONFIDENTIAL 10
Slide 11: Accounting & Financial Results
Headcount at End of 2016 Accounting & Financial Results 1884 Patrick Donovan FRANCE 680 CFO USA 440 © 2017 Axway | CONFIDENTIAL 11
Slide 12: Income statement (1/2)
Income statement (1/2) • Continue to see impact of shifting business model with license revenue decrease and cloud increase • Gross Profit as a 66.9% of revenue dropped with falling license revenue, Cloud margin up to 38% and service margin increased to 13% as well • R&D continued to grow in support
Slide 13: Income statement (2/2)
Income statement (2/2) • Profit on Operating Activities finished at 4.2%, a drop from 11.3% in HY 2016 • Increase in intangible amortization relates to assets from Syncplicity • Net Profit finish at 2.6 M€ or 0,12€ per share, similar to S1 2015 and 2014 In millions of euros HY 2017 HY 2016 FY 2016 P
Slide 14: Simplified balance sheet (1/2)
Simplified balance sheet (1/2) • Goodwill and intangibles increased from the acquisition of Syncplicity • Cash balance ended at 27,1 M€ for 30 June 2017 • With our drop in Trade Receivables, our DSO finished at 51 days, down from 78 days at 30 June 2016 In millions of euros 30/06/17 30/06/2016 31/12
Slide 15: Simplified balance sheet (2/2)
Simplified balance sheet (2/2) • 45 M$ of borrowings under 125 M€ RCF at 30 June 2017, additional debt outside RCF • Current liabilities includes 84.5 M€ of deferred income in June 2017 versus 86.9 M€ in June 2016 In millions of euros 30/06/2017 30/06/2016 31/12/16 SHAREHOLDERS' EQUITY AND LIABILITI
Slide 16: Change in Equity
Change in Equity • Due to the USD/Euro conversion rate movement at balance sheet ending date a significant translation adjustment was recorded in June 2017 on the conversion of the foreign balance sheets to Euros In millions of euros 30/06/2017 30/06/2016 31/12/2016 Equity at Opening of Period 374.8
Slide 17: Cash Flow statement
Cash Flow statement • Working Capital Requirements (BFR) — positive improvement in HY 2017 of 16.5 M€ which was used to pay off our Appcelerator draw under our RCF • Free cash for HY 2017 is 19.0 M€ versus 17.4 M€ for HY 2016 In millions of euros HY 2017 HY 2016 FY 2016 Net profit for the period 2.6
Slide 18: Financial structure — Covenants HY 2017
Financial structure — Covenants HY 2017 • Financial covenants met in all periods. Net bank debt for 2017 is 28,8 M€ • Our main covenant is the leverage ratio: Net debt/EBE ≤ 3 (0,72 at June 30, 2017) • The 125 M€ credit line is extended to mid-2021 and approximately 85 M€ is available EBE/Costs of D
Slide 19: Axway shareholder structure
Axway shareholder structure 30/06/2017 21,168,021 SHARES OUTSTANDING 34,274,819 VOTING RIGHTS Sopra Steria Pasquier Odin Sopra Treasury Managers Caravelle Public Group Family Family GMT Shares Shares Outstanding 32.7% 0.1% 1.4% 1.7% 21.3% 12.1% 30.6% 0.07% Voting Rights 35.1% 0.1% 1.5% 1.7% 26.3% 15
Slide 20: Finance at a glance
Finance at a glance • Revenue 142.8 M€, which is reflecting our shifting business model • Profit on Operating Activities 4.2% of Revenues • Continued solid financial position © 2017 Axway | CONFIDENTIAL 20
Slide 21: Axway Shareholder Structure / Mid term Status and Perspective
31/12/2015 20,773,916 SHARES OUTSTANDING 35,538,163 VOTING RIGHTS Axway Sopra Pasquier Odin Geninfo Treasury Shareholder Managers Sopra GMT Caravelle Public Steria Family Family (SG Group) Shares Structure Shares outstanding 24.9% 0.1% 1.4% 1.7% 21.6% 8.6% 12.3% 28.9% 0.2% Mid term Status and Voting
Slide 22: Axway business plan ambition & strategy
Axway business plan ambition & strategy • Preserve margins before acquisition while investing in innovation • Keep our historic leadership in France, while focusing on Digital • Target 20% growth in software revenue in the USA • Achieve average annual growth of 30% Digital revenue • Active M&A plan
Slide 23: Digital Transformation: Customer Experience network
Digital Transformation: Customer Experience network AMPLIFY +17% 84% API +30% API API deals Extensions upsell Country Solution Industry USA Finance API Management Technology & Solution Country Industry Belgium Technology Digitalization for XXX API Management Governmental Institutions Country Solutio
Slide 24: Acceleration of market demand for Cloud/Subscription
Acceleration of market demand for Cloud/Subscription Need to shift from this … To this … © 2017 Axway | CONFIDENTIAL 24
Slide 25: New Business Model: Positive Cloud performance in revenue & new booking
New Business Model: Positive Cloud performance in revenue & new booking 14.8% 4.3M€ 7.3M€ API Organic New ACV New TCV growth Country Solution Industry USA Government Syncplicity GERMANY Country Solution Industry Manufacturing, Axway Cloud USA Retail, Electronics B2B Service Industry Country Solution
Slide 26: H2 2017 Action Plan
H2 2017 Action Plan Deep dive We will be Accelerate sales & revenue prudent on Strategic check transformation reforcasting managing costs point & enablement for Full Year on H2 © 2017 Axway | CONFIDENTIAL
Slide 27: FY 2017 Outlook
FY 2017 Outlook Keep focusing FY ROA Continue Axway Stable on our strategic over Transformation FY Revenue ambition 13% © 2017 Axway | CONFIDENTIAL
Slide 28: Q&A
Q&A © 2017 Axway | CONFIDENTIAL
Slide 29: Q&A THANK YOU
Q&A THANK YOU www.investors.axway.com/en Mobile App: Axway IR available on Apple store & Android
Slide 30: APM Definition
APM Definition • Restated: Revenue for the prior year, expressed on the basis of the scope and exchange rates for the current year. • Organic growth of revenue: Growth of operations between revenue for the period and the reprocessed revenue data for the same period of the preceding fiscal year. • Pr