74software · EURONEXT:74SW
74software — Axway Software — Investor Presentation (September 2018)
51 slides from 74software's investor presentation, September 2018
Slide 1: Axway Software Investor Presentation September 2018
Axway Software Investor Presentation September 2018
Slide 2: Forward-looking statements
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 Group highlights that signatures of license contracts, which often represent investments for clients, are historicall
Slide 3: Content
Investor Presentation – September 2018 Content 1 - Company Overview 2 - Market & Strategy 3 - 2018 Half-Year Highlights & Performance 4 - 2018 Targets & 2020 Ambitions 5 - Appendices 3
Slide 4: Company Overview
axway > Company Overview
Slide 5: Axway at a glance
Axway at a glance Axway is a software company, founded in 2001, Euronext Paris – Compartment B Main Indexes unlocking digital experiences and opportunities Bloomberg : AXW:FR CAC All Shares by linking individuals, systems, businesses and Reuters : AXW.PA CAC Mid Small ecosystems to help enterpri
Slide 6: A recognized leader
A recognized leader Leader Leader Leader AMPLIFY Content Collaboration API Management Solutions B2B Integration API Management Platforms Gateway Software Leader AMPLIFY B2B Integration Notable Vendor Middleware-as-a-Service Mid-Market Context: Suite for Hybrid Integration AMPLIFY ‘Content Collaborat
Slide 7: A balanced history of organic and external growth
A balanced history of organic and external growth 300 Acquisition’s Strategic Rationale 2017 2016 Customer position 2014 250 Technology / Know-How 2012 200 2008 €m 150 2007 2006 100 2002 50 Network of professional Governing Becoming a leader in 0 Incubation B2B Collaborative Business interaction
Slide 8: Axway enables business to leverage change
Axway enables business to leverage change Data Integration Engagement Enterprise Integration Automating Securing file Protecting SOA and Increasing Unifying app Securing transitions broker supply chains transfer services through APIs business visibility development collaboration 2001 2002 2006 2007
Slide 9: Axway Partners
Axway Partners Cloud Providers Global System Integrators Digital Solution Providers Resellers 9
Slide 10: Axway’s historical performance
Axway’s historical performance 300 Profit on Operating Activities 301.1 299.8 Revenue 284.6 250 261.6 237.5 200 217.2 224.3 €m 150 100 50 39.7 44.5 50.8 40.5 35.3 35.0 37.5 0 2011 2012 2013 2014 2015 2016 2017 Total Growth +4.2% +3.3% +5.9% +10.1% +8.8% +5.8% -0.4% Organic Growth +5.7% -1.6% +3.7% +
Slide 11: Axway’s historical net profit & dividend
Axway’s historical net profit & dividend 40 0,70 Net Profit 36.6 Dividend 35 0,60 31.5 30 27.9 26.5 0,50 24.7 25 0.40 0.40 0.40 0.40 21.5 0,40 0.35 Impact of the €m 20 € new tax rules in the US 0,30 0.25 15 0.20 0,20 10 4.4 0,10 5 0 0,00 2011 2012 2013 2014 2015 2016 2017 Payout Ratio (Div./EPS) 21%
Slide 12: A shareholding structure backing the corporate project
A shareholding structure backing the corporate project Pasquier Odin Sopra Treasury Sopra Steria Managers Caravelle Public Family Family GMT Shares Shares outstanding 32.57% 0.13% 1.37% 1.64% 21.22% 12.12% 30.77% 0.18% Voting rights 35.98% 0.13% 1.50% 1.60% 25.87% 14.78% 20.14% Shareholders’ agreeme
Slide 13: Axway’s Corporate Social Responsibility
Axway’s Corporate Social Responsibility 2017 Initiatives & Labels Governance Human Resources Board of Directors: Axway University: Member of the - 63% independent - 34K+ Hours of training for UN Global Compact - 42% of women more than 1,250 Axwagians - 95% attendance rate Awarded Silver Ecovadis
Slide 14: Market & Strategy
Market & Strategy
Slide 15: Axway’s market in the Software industry
Axway’s market in the Software industry [ Enterprise Software Market ] estimated at $352 billion in 2017* Application Development Application Infrastructure and Middleware Data Integration Tools and Data Quality Tools Infrastructure Software Database Management Systems Application Software Market IT
Slide 16: Competitive landscape
Competitive landscape Integration Engagement the same the same IaaS 16
Slide 17: Our historical Middleware market…
Our historical Middleware market… A A A BPM / BAM Data Application MFT Integration Integration Integration Integration B2B Brokerage (ETL, MDM, …) (ESB, MOM, …) EFSS (VAN ), iPaaS Middleware SOA Governance / API Management A A A 17
Slide 18: … and its digital evolution!
… and its digital evolution ! Partners A A A A Customers Digital Middleware Companies A A A End-Users Customer Experience Economy 18
Slide 19: Axway’s purpose remains the same
Axway’s purpose remains the same We moved and integrated data securely for businesses… We will still move, integrate and expose data securely It is the foundation of what we do for businesses NEW WAY Axway's mission remains the same, we are merely implementing our market strategy: Become a leader in
Slide 20: Axway’s solutions evolution
Axway’s solutions evolution Specialised products AMPLIFY™ Products App Dev Track & Trace B2B / EDI Accounting Integration MFT M&A Validation or Authority R&D Analytics IT Operation Management API Management MailGate Content Collaboration 75% of our signatures in the first half of 2018 20
Slide 21: Axway AMPLIFY: our Hybrid Integration Platform
Axway AMPLIFY™: our Hybrid Integration Platform Engagement – Mobile, IoT, Web, Apps Partner Management/Onboard AMPLIFY AMPLIFY AMPLIFY AMPLIFY Central Titanium SDK API Portal B2Bi Governance Marketplace to discover AMPLIFY Content Collaboration and Content Services Collaboration/ EFSS partners, busi
Slide 22: Evolution of practices in a Subscription world
Evolution of practices in a Subscription world Sequences of a perpetual License offering PURCHASE IT Focus Business Focus SALE IMPLEMENT SUPPORT RENEW Customer Acquisition Customer Growth Upfront Revenue Lifetime Revenue Cycle of a Subscription offering Episodic engagement Continuous engagement SUBS
Slide 23: Axway’s Customer Success Organisation
Axway’s Customer Success Organisation Objectives Customer Centric Organisation ▪ Help customers accelerate their ▪ Bring together and align all players ▪ Creation of the Customer Success transformation through rapid interacting with customers Manager function to support results customers throughout
Slide 24: Accelerating execution of the strategy
Accelerating execution of the strategy Renew and Extend Customer Experience Access to new Monitor Customer insights & journey AMPLIFY Services Business & Optimize the customer experience health Engage Customers Accelerate & support time to Customer Support value Services offering Axway community, Su
Slide 25: 2018 Half-Year Highlights & Performance
2018 Half-Year Highlights & Performance
Slide 26: A strengthened governance
A strengthened governance Axway’s Board of Directors is composed of 14 members, Patrick Donovan has been appointed 7 of whom are independent Chief Executive Officer by the Board of Directors on April 6th, 2018 Pierre Pasquier, founder of Axway, officiates as Chairman of the Board 26
Slide 27: Strategy execution since April 2018
Strategy execution since April 2018 STRATEGY GOVERNANCE EXECUTION ▪ Become a Market Leader in ▪ Appointment of new leaders: ▪ Product portfolio audit Hybrid Integration Platforms (HIP) → Deputy CFO ▪ Launch of planned additional investments, → Update of the AMPLIFY™ 2020 → Chief Customer Officer mai
Slide 28: 2018 Half-Year - Income statement
2018 Half-Year - Income statement In millions of euros H1 2018 H1 2017 Revenue 134.9 142.8 of which License 23.8 25.0 ▪ Stable revenue at of which Subscription 18.8 17.2 constant exchange rates* of which Maintenance 69.9 73.5 Subtotal License, Subscription & Maintenance 112.5 115.7 ▪ Significant inc
Slide 29: 2018 Half-Year - Change in revenue
2018 Half-Year - Change in revenue 150 +€2.8m -€7.9m €142.8m 140 -€2.8m €134.9m Consolidated USD vs. EUR = -10.6% since 03/01/2017 2.0% 130 organic decrease €m 120 110 100 H1 2017 Scope Exchange rates Organic H1 2018 Revenue effect effect growth Revenue 29
Slide 30: 2018 Half-Year - Revenue by Activity
2018 Half-Year - Revenue by Activity H1 2017 H1 2017 Total Organic [€m] H1 2018 Restated* Reported Growth Growth* 18% 16% License Services License 23.8 23.8 25.0 -4.8% 0.0% Subscription 18.8 18.2 17.2 9.3% 3.3% 14% Subscription Maintenance 69.9 69.7 73.5 -4.9% 0.3% Services 22.5 26.0 27.1 -17.0% -13
Slide 31: Focus on License activities in the first half of 2018
Focus on License activities in the first half of 2018 Organic growth % of Revenue H1 2017 H1 2017 Total Organic in H1 2018 in H1 2018 [€m] H1 2018 Restated* Reported Growth Growth* 0.0% 18% License 23.8 23.8 25.0 -4.8% 0.0% of which Q1 18 8.2 9.0 9.6 -14.3% -8.7% Main products: of which Q2 18 15.5 1
Slide 32: Focus on Subscription activities in the first half of 2018
Focus on Subscription activities in the first half of 2018 Organic growth % of Revenue H1 2017 H1 2017 Total Organic in H1 2018 in H1 2018 [€m] H1 2018 Restated* Reported Growth Growth* + 3.3% 14% Subscription 18.8 18.2 17.2 9.3% 3.3% * Alternative performance measures are defined in the glossary at
Slide 33: Sales transformation in progress
Sales transformation in progress New New ACV in H1 18 Weighting Weighted New Organic [€m] Signatures Factor Signatures Growth* Value License New 23.8 1x 23.8 €4.7m Subscription 4.7 3x 14.0 vs. €4.1m in H1 2017 (ACV*) Signatures monitoring vs. H1 17 First Half 2018 37.8 +4.6% +4.6 % * Alternative per
Slide 34: Main Balance Sheet items at 06/30/2018
Main Balance Sheet items at 06/30/2018 Cash and equivalents DSO Total Assets €47.6m 63 days €557.5m vs. €28.1m at 12/31/2017 vs. 51 days at 06/30/2017 vs. €551.1m at 12/31/2017 Net debt Deferred revenues Total Equity €0.9m €94.4m €353.9m vs. €24.1m at 12/31/2017 vs. €84.5m at 06/30/2017 vs. €344.1m
Slide 35: Cash flows & covenants at 06/30/2018
Cash flows & covenants at 06/30/2018 06/30/2018 12/31/2017 06/30/2017 In millions of euros 06/30/2018 06/30/2017 Net profit for the period 3.9 2.6 Change in operating working capital requirements 16.0 16.5 EBITDA Cost of debt 101.4 40.2 1908 (covenant > 5) Net cash from operating activities 25.5 22.
Slide 36: 2018 Targets & 2020 Ambitions
2018 Targets & 2020 Ambitions
Slide 37: Outlook for the second half of 2018
Outlook for the second half of 2018 Acceleration in H2 of planned additional investment 3 to €5m of investment in 2018 1 Confirmation of the additional envelope of approximately 15 M€ per year dedicated to AMPLIFY™ Implementation of tools facilitating Subscription growth: 2 - New offerings - Evolu
Slide 38: 2018 Targets
2018 Targets ➢ Organic revenue growth of between -3 and 0% ➢ Profit on Operating Activities of between 8 and 11% of revenue 38
Slide 39: FY 2020 Ambitions
FY 2020 Ambitions ➢ Become a market leader in Hybrid Integration Platforms ➢ Maintain revenue at approximately €300m "organically stable compared to 2017“ while transforming the revenue mix from License to Subscription ➢ Seize strategic acquisition opportunities 39
Slide 40: Appendices
axway Appendices
Slide 41: H1 2018
H1 2018
Slide 42: 2018 Half-Year - Revenue by Geographic Area
2018 Half-Year - Revenue by Geographic Area H1 2017 H1 2017 Total Organic [€m] H1 2018 Restated* Reported Growth Growth* 24% France 37.3 38.7 38.7 -3.6% -3.6% 28% Rest France of Europe Rest of Europe 32.4 33.4 33.7 -3.9% -3.0% Americas 58.4 58.4 62.7 -6.9% 0.0% Asia / Pacific 6.8 7.2 7.8 -12.8% -5.6
Slide 43: Simplified Balance Sheet at 06/30/2018
Simplified Balance Sheet at 06/30/2018 In millions of euros 06/30/2018 06/30/2017 12/31/2017 Assets Goodwill 339.5 339.8 333.6 ▪ High cash position at Non-current assets 424.0 467.8 420.7 €47.6m Trade receivables 55.6 48.7 71.1 Other current assets 30.3 28.3 31.2 ▪ DSO at 63 days, up due to Cash and
Slide 44: Changes in equity and earnings per share at 06/30/2018
Changes in equity and earnings per share at 06/30/2018 In millions of euros 06/30/2018 06/30/2017 12/31/2017 Equity at Beginning of Period 344.1 374.8 374.8 ▪ Dividend payment of Profit for the period 3.9 2.6 4.4 €0.20 per share on Dividends - -8.5 -8.5 July 4, 2018 Capital increase 0.2 2.8 3.2 ▪ Si
Slide 45: 2018 Half-Year – Headcount
2018 Half-Year – Headcount 06/30/2018 12/31/2017 France 467 518 Rest of Europe 727 733 Americas 514 515 Asia - Pacific 72 74 Axway 1,780 1,839 45
Slide 46: FY 2017
FY 2017
Slide 47: 2017 Full-Year - Revenue by Activity
2017 Full-Year - Revenue by Activity 2016 Total Organic [€m] 2017 2016 Restated* Growth Growth* License 65.3 80.3 81.3 -19.6% -18.7% Subscription 37.5 32.8 19.1 96.3% 14.4% Maintenance 145.4 141.4 143.0 1.7% 2.8% Services 51.6 57.1 57.7 -10.6% -9.6% Axway 299.8 311.6 301.1 -0.4% -3.8% * Alternative
Slide 48: 2017 Full-Year - Income statement
2017 Full-Year - Income statement In millions of euros 2017 2016 Revenue 299.8 301.1 of which License 65.3 81.3 of which Subscription 37.5 19.1 of which Maintenance 145.4 143.0 Subtotal License, Subscription & Maintenance 248.3 243.4 Services 51.6 57.7 Cost of sales 88.2 86.6 Gross Profit ( % of Rev
Slide 49: Simplified Balance Sheet at 31/12/2017
Simplified Balance Sheet at 31/12/2017 In millions of euros 31/12/2017 31/12/2016 Assets Goodwill 333.6 288.8 Non-current assets 420.7 402.7 Trade receivables 71.1 78.2 Other current assets 31.2 25.3 Cash and cash equivalents 28.1 51.7 Current assets 130.4 155.2 Total Assets 551.1 557.8 Equity and L
Slide 50: Earnings per share at 31/12/2017
Earnings per share at 31/12/2017 In € 31/12/2017 31/12/2016 Net profit for the period 4.4 31.5 Weighted average number of shares excluding treasury shares 21.16M 20.82M Basic earnings per share 0.21 1.51 Theorical potential weighted average number of shares 21.84M 21.29M Diluted earnings per share (
Slide 51: Alternative Performance Measures
Alternative Performance Measures • Restated revenue: Revenue for the prior year, adjusted for the consolidation scope and exchange rates of the current year. • Organic growth: Growth in revenue between the period under review and the prior period, restated for consolidation scope and exchange rate i
Axway Software — Investor Presentation (September 2018) on 6ix