74software · EURONEXT:74SW
74software — Axway — FY2017 Earnings Presentation
32 slides from 74software's earnings presentation, Feb 15, 2018
Slide 1: Axway Full-Year 2017
Axway Full-Year 2017 Conference & Webcast live 15 February 2018
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 / Speakers
Agenda Speakers Patrick Gouffran, Corporate Secretary Jean-Marc Lazzari, Patrick Donovan, CEO CFO © 2018 Axway | CONFIDENTIAL 3
Slide 4: Index
INDEX • Highlights 2017 • Key figures • Accounting & Finance • Business Model • Perspectives © 2018 Axway | CONFIDENTIAL 4
Slide 5: Highlights 2017 Transformation #axway
Highlights 2017 Transformation #axway • Acquisition of Syncplicity • Digital Transformation as market animator • Cloud & Saas (subscription) revolution • AMPLIFY Hybrid Integration Platform • Strong Q4 • Cost management • Corporate Fiscal Taxes © 2018 Axway | CONFIDENTIAL 5
Slide 6: Key figures FY 2017
Key figures FY 2017 Initial 2016 [€M] 2017 Guidance Published 301.1 301.1 Revenue 299.8 stable Profit from business activity 40.5 50.8 (%revenue) 13% 13.5% 16.9% Net Profit 4.4 31.5 (%revenue) 1.5% 10.5% (1) At constant exchange rates and on a like-for-like basis © 2018 Axway | CONFIDENTIAL 6
Slide 7: Revenue by activity FY 2017
Revenue by activity FY 2017 2016 2016 Total Organic [€M] 2017 Published Restated Growth1 Growth1 Licenses 65.3 81.3 80.3 -19.6% -18.7% Cloud 37.5 - 32.8 - 14.4% Maintenance 145.4 143.0 141.4 1.7% 2.8% Services 51.6 76.8 57.1 -32.9% -9.6% Axway 299.8 301.1 311.6 -0.4% -3.8% (1) At constant exchange r
Slide 8: Revenue by region FY 2017
Revenue by region FY 2017 2016 2016 Total Organic [€M] 2017 Published Restated Growth1 Growth1 France 83.8 94.2 94.2 -11.0% -11.0% Rest of Europe 71.7 68.8 67.4 4.3% 6.5% Americas 128.8 122.9 134.9 4.8% -4.5% Asia Pacific 15.6 15.3 15.2 1.8% 2.7% 301 Axway 299.8 301.1 311.6 -0.4% -3.8% (1) At consta
Slide 9: 2017 Balanced and resilient business model
2017 Balanced and resilient business model 61% Vs 54% By Region By Activity Recurring/R 28% (2016 31%) 24% 22% 18% France Rest of Europe Licenses Services 13% Cloud 5% 43% (2016 41%) 49% Asia Pacific Americas Maintenance © 2018 Axway | CONFIDENTIAL 9
Slide 10: Cloud Subscription Model
Cloud Subscription Model Revenue + ACV + TCV over the years Renewal Churn 93% 7% 37.5M€ New ACV 7.3M€ +14.4% Cloud New TCV 16.3M€ 2017 2018 2019 2020 © 2018 Axway | CONFIDENTIAL 10
Slide 11: 2017 Headcount at 31 December
2017 Headcount at 31 December 1,839 72% (1,930 Dec. 2016) International 498 518 © 2018 Axway | CONFIDENTIAL 11
Slide 12: Accounting & Financial Results
Accounting & Financial Results Patrick Donovan CFO
Slide 13: Financial News/Context 2017
Financial News/Context 2017 NEW US SYNCPLICITY CORPORATE IFRS 15 ACQUISITION TAX LAWS © 2018 Axway | CONFIDENTIAL
Slide 14: Simplified income statement
Simplified income statement In millions of euros FY 2017 FY 2016 FY 2015 Revenue : • We continue to see impact of License 65.3 81.3 80.5 shifting business model with Cloud 37.5 19.1 10.3 license revenue decreasing Maintenance 145.4 143.0 137.7 and cloud increasing Total Product Revenue 248.3 243.4 2
Slide 15: Simplified balance sheet
Simplified balance sheet In millions of euros 31/12/17 31/12/16 31/12/15 • Goodwill and intangibles ASSETS increased from the Goodwill 333.6 288.8 251.8 acquisition of Syncplicity Non-current assets 420.7 402.7 347.5 Trade receivables 71.1 78.2 73.9 • Cash balance of 28.1M€ and Other current assets
Slide 16: Change in Equity
Change in Equity In millions of euros 31/12/17 31/12/16 31/12/15 • Due to the USD/Euro conver- Equity at Opening of Period 374.8 340.6 298.5 sion rate movement at Profit for the period 4.4 31.5 27.9 balance sheet ending date a significant translation adj- Dividends -8.5 -8.3 -8.2 ustment was recorde
Slide 17: Cash Flow statement
Cash Flow statement In millions of euros 31/12/17 31/12/16 31/12/15 • Change in Working Capital Net profit for the period 4.4 31.5 27.9 Requirements (BFR) for 2017 of -11.7 M€ versus -5.9 M€ in Net cash from operating activities 29.6 38.4 49.6 2016 Net cash used in investing activities (57.5) (57.3)
Slide 18: Financial structure — Covenants FY 2017
Financial structure — Covenants FY 2017 31/12/17 31/12/16 31/12/15 EBE/ • Financial covenants met in Costs of Debt (covenant >5) 40.19 130 111 all periods. Net debt for 2017 is 20.6 M€ • Our main covenant is the leverage ratio: Net debt/EBE Net Debt/ ≤ 3 (0,47 at Dec 31, 2017) EBE (covenant <3) 0.47
Slide 19: Axway shareholder structure
Axway shareholder structure 31/12/2017 21,210,546 SHARES OUTSTANDING 34,301,758 VOTING RIGHTS Sopra Steria Pasquier Odin Sopra Treasury Managers Caravelle Public Group Family Family GMT Shares Shares Outstanding 32.59% 0.13% 1.37% 1.64% 21.23% 12.13% 30.77% 0.13% Voting Rights 35.08% 0.14% 1.52% 1.6
Slide 20: Finance at a glance 2017
Finance at a glance 2017 FINANCE Cost & Investments • Impact of the new US • Cost management corporate tax laws throughout year to maintain margin • Changing business model with 14.4% growth in our • R&D spend of 59 M€ as we Cloud business continue to invest in our product strategy • Continued solid
Slide 21: Market
Market Technology & Services Industries
Slide 22: What’s changed?
What’s changed? 2006 2008 2013 2017+ Mainframe monolith Client and Server SOA and Webservices Cloud and microservices Contenairization © 2018 Axway | CONFIDENTIAL 22
Slide 23: Today’s reality: Enterprise Sprawl
Today’s reality: Enterprise Sprawl © 2018 Axway | CONFIDENTIAL 23
Slide 24: Today’s reality: Enterprise Sprawl
Today’s reality: Enterprise Sprawl © 2018 Axway | CONFIDENTIAL 24
Slide 25: Hybrid Integration Platform As A Service
Hybrid Integration Platform As A Service 25 000,0 DIGITAL IMPACT 20 000,0 By 2020, more than 75% ~$14.5B Global Market (2018) of large organizations 15 000,0 will establish a hybrid integration platform 10 000,0 using an integration infrastructure that 5 000,0 they assemble from multiple vendors. 0,
Slide 26: Technology Business Model Disruption
Technology Business Model Disruption If left “as is,” most technology suppliers will shrink. $180 000 Total Service & Product Revenues* -$4.3 B Loss of product revenues for $160 000 T&S 50 companies from Q1 2016 to Q1 2017.* $140 000 USD Millions Services (PS, Maint, MS) + Subscriptions $120 000 $10
Slide 27: The Fish Model
The Fish Model LEVEL1 OR 2 LEVEL 3 Impact of STATUS QUO Investments in the END STATE New Capabilities Faster Revenue Revenue Growth Costs Lower Investments Impact of needed in Transitioning to Consumption cloud Pricing Model Transformation Time © 2018 Axway | CONFIDENTIAL 27
Slide 28: Become a leader in Hybrid Integration Platform
Become a leader in Hybrid Integration Platform © 2018 Axway | CONFIDENTIAL
Slide 29: Become a leader in Hybrid Integration Platform
Become a leader in Hybrid Integration Platform 2020 TRENDS 2018 INVESTMENTS • Stable Top Line Organic Revenue Additional 15 M€ • Grow Subscription Revenue • R&D to deliver Cloud Offers to 65-75 M€ • Sales & Digital Marketing • 65% of Recurring Revenue • Customer Satisfaction • Strategic M&A © 2018 A
Slide 30: Q&A
Q&A © 2018 Axway | CONFIDENTIAL 30
Slide 31: Thank you
THANK YOU www.investors.axway.com/en Mobile App: Axway IR available on Apple store & Android
Slide 32: 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