74software · EURONEXT:74SW
74software — H1 2021 Earnings Presentation
33 slides from 74software's earnings presentation, Jul 27, 2021
Slide 1: 2021 Half-Year Results Analysts Conference
2021 Half-Year Results Analysts Conference July 27, 2021
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 signatures of its contracts, which represent investments for customers, are historic
Slide 3: Agenda
2021 Half-Year Results Agenda 1. Operational commentary on H1 2021 Patrick Donovan Chief Executive Officer 2. H1 2021 Financial Results 3. 2021 Targets and Ambition Cécile Allmacher 4. Q&A Session Chief Financial Officer axway.com 3
Slide 4: Operational commentary on H1 2021
Operational commentary Patrick Donovan on H1 2021 Chief Executive Officer axway.com 4
Slide 5: Vision & Mission
Vision & Mission AXWAY ENABLES ENTERPRISES TO SECURELY OPEN EVERYTHING We believe that in order to create the most value for your customers, partners, and employees, you need to Open Everything by securely integrating and moving data across a complex world of old and new. axway.com 5
Slide 6: Leveraging our strength
Leveraging our strength 20-years of delivering value with APIM based platform helping our Core Solutions such as MFT, meet our customers needs and B2Bi, AISuite, Validation Authority outcomes and other specialized products axway.com 6
Slide 7: Deployment of the new strategy
Deployment of the new strategy MAINTAIN EXPAND Market leadership Market leadership CUSTOMER EXPANSION NEW LOGOS Net retention rate Growth rate CUSTOMER DELIGHT NPS axway.com 7
Slide 8: Driving operating excellence
Driving operating excellence Net Promoter Score* compared to 25 at the end of 2020 % Renewal Rate in line with our historic Maintenance Renewal Rates % Converted to Subscription supports strong increase in Subscription Revenue % Signature Growth showing continued strong performance over 2020 axway.c
Slide 9: Early results of focused approach
Early results of focused approach 20% Signature Growth 50% growth in new customers 7% New and Cross-Sell Signatures 51% Signature Growth axway.com 9
Slide 10: Customer examples
Customer examples 15 year North American bank Large German bank expands agreed to modernize MFT solution significantly its capabilities and usage with their API first approach axway.com 10
Slide 11: Effective marketing investments
Effective marketing investments 900+ customer and partner attendees 13% increase in non-paid web visits €1.5m pipeline created (to date), 100+ customer peer reviews posted 32% of marketing funnel engaged 20% increase in market awareness Event NPS = 49 axway.com 11
Slide 12: Dynamic start to the year
Dynamic start to the year € m Revenue compared to €136.6 million in H1 2020, an organic* growth of 5.2% % Profit on Operating activities or €10.5m, compared to €2.5m (1.9%) in H1 2020 + % Subscription Growth or €51.8m vs. €35.7m in H1 2020 + % ACV Growth or €14.3m vs. €10.2m in H1 2020 axway.com * A
Slide 13: H1 2021 Financial Results
H1 2021 Cécile Allmacher Financial Results Chief Financial Officer axway.com 13
Slide 14: Half-Year 2021 – Income Statement
Half-Year 2021 – Income Statement In millions of euros H1 2021 H1 2020 Revenue 138.4 136.6 Cost of sales 42.7 47.3 Organic Growth* Total Growth Gross Profit (% of Revenue) 95.7 69.1% 89.3 65.4% Operating expenses 85.1 86.8 of which Sales and marketing of which Research and development 43.3 29.0 43.5
Slide 15: Half-Year 2021 - Revenue by activity
Half-Year 2021 - Revenue by activity H1 2020 H1 2020 Total Organic 7% [€m] H1 2021 License 13% Restated* Reported Growth Growth* Services License 9.3 10.0 10.5 -11.6% -7.5% 37% Subscription Subscription 51.8 35.7 37.2 +39.1% +45.0% Maintenance 60.0 68.2 70.7 -15.1% -12.0% Services 17.3 17.6 18.2 -4.
Slide 16: Half-Year 2021 - License & Maintenance
Half-Year 2021 - License & Maintenance H1 2020 H1 2020 Organic [€m] H1 2021 Restated* Reported Growth* License 9.3 10.0 10.5 -7.5% of which Q1 21 3.8 3.7 3.9 +2.8% of which Q2 21 5.4 6.3 6.6 -13.7% Maintenance 60.0 68.2 70.7 -12.0% * Alternative performance measures are defined in the glossary at th
Slide 17: Half-Year 2021 - Subscription
Half-Year 2021 - Subscription H1 2020 H1 2020 Organic [€m] H1 2021 Restated* Reported Growth* Subscription 51.8 35.7 37.2 +45.0% of which Q1 21 23.7 14.8 15.7 +59.6% of which Q2 21 28.1 20.9 21.5 +34.6% * Alternative performance measures are defined in the glossary at the end of this document Very
Slide 18: Half-Year 2021 - Signature Metric
Half-Year 2021 - Signature Metric H1 2021 Weighting Weighted [€m] Signatures Factor New Signatures Value Strong Signature Metric organic License 9.3 1x 9.3 growth over H1 2021 Strong ACV confirming the move New Subscription (ACV*) 14.3 3x 42.9 to the subscription business model H1 2021 Weighted
Slide 19: Main Balance Sheet items at 30/06/2021
Main Balance Sheet items at 30/06/2021 Cash and equivalents DSO Total assets vs. €16.2m at 31/12/2020 vs. 70 days at 30/06/2020 vs. €559.3m at 31/12/2020 Net debt Current deferred revenues Total equity vs. €24.0m at 31/12/2020 vs. €60.6m at 31/12/2020 vs. €355.5m at 31/12/2020 axway.com 19
Slide 20: Cash flows & Covenants at 30/06/2021
Cash flows & Covenants at 30/06/2021 In millions of euros 30/06/2021 30/06/2020 30/06/2021 31/12/2020 30/06/2020 Net profit for the period 1.8 -6.0 Change in operating working capital requirements 7.5 5.0 EBITDA Net cash from operating activities 22.3 10.6 Cost of debt (covenant > 5) 66.6 60.6 106.8
Slide 21: 2021 Targets and Ambition
2021 Targets and Ambition Patrick Donovan Chief Executive Officer axway.com 21
Slide 22: Limited visibility, heterogeneous situation across geographies
v v LIMITED VISIBILITY HETEROGENEOUS SITUATION ACROSS GEOGRAPHIES v v axway.com 22
Slide 23: Axway confirms its targets for 2021
“ Axway confirms its targets for 2021 : Organic revenue growth of between 2% and 4% Profit on operating activities representing 11% to 13% of revenue axway.com 23
Slide 24: Medium-term ambition
Medium-term ambition 2023 Ambition Revenue ≥ €500 million 2021 Guidance (including M&A) Organic Revenue Growth Profit on Operating Activities ≥ 15% between +2% and +4% Profit on Operating Activities Earnings per share ≥ €1 between 11% to 13% of total revenue axway.com 24
Slide 25: Thank you!
Thank you! Let’s answer your questions ©2021 Axway axway.com 25
Slide 26: Appendices
y AND (AY /S \\ cs) Appendices <= NY 3 SEPHORA axway B rawness ||
Slide 27: Half-Year 2021 - Revenue by geography
Half-Year 2021 - Revenue by geography H1 2020 H1 2020 Total Organic 6% [€m] H1 2021 Asia/Pacific Restated* Reported Growth Growth* 28% France 39.4 40.9 40.9 -3.7% -3.7% France 41% Rest of Europe 33.9 29.7 29.6 +14.8% +14.2% Americas Americas 57.1 54.1 59.3 -3.7% +5.6% 25% Asia/Pacific 8.0 6.9 6.9 +1
Slide 28: Half-Year 2021 - Change in Revenue
Half-Year 2021 - Change in Revenue 140.0 €+6.8m €138.4m €136.6m Neutral No changes 135.0 €-5.0m +0.5% 130.0 USD vs. € BRL vs. € 125.0 H1 2020 Scope Exchange rate Organic H1 2021 Revenue effect effect growth Revenue axway.com 28
Slide 29: Simplified Balance Sheet at 30/06/2021
Simplified Balance Sheet at 30/06/2021 In millions of euros 30/06/2021 30/06/2020 Assets Goodwill 337.3 350.6 Non-current assets 424.6 437.2 Trade receivables 86.0 64.7 Cash and cash equivalents Other current assets 27.0 38.5 at €23.7 million Cash and cash equivalents 23.7 24.3 DSO at 94 days, C
Slide 30: Changes in equity & Earnings per share at 30/06/2021
Changes in equity & Earnings per share at 30/06/2021 In millions of euros 30/06/2021 30/06/2020 31/12/2020 Equity at Beginning of Period 355.5 362.6 362.6 Profit for the period 1.8 -6.0 8.5 Dividends -8.6 - 0.0 Capital increase 1.2 0.2 0.6 Other 2.7 1.5 4.2 Foreign exchange translation adjustments 7
Slide 31: Half-Year 2021 - Headcount
Half-Year 2021 - Headcount 30/06/2021 31/12/2020 France 473 483 Rest of Europe 771 835 Americas 485 501 Asia/Pacific 67 69 Axway 1 796 1 888 axway.com 31
Slide 32: Shareholding structure at 30/06/2021
Shareholding structure at 30/06/2021 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 32.05% 20.88% 0.11% 1.38% 1.47% 44.09% 0.03% Voting rights 38.00% 24.76% 0.12% 1.34% 1.44% 34.34% Shareholders’ agreement 21,569,260 Shares outstanding 55.88% of shares outstanding / 6
Slide 33: 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