74software · EURONEXT:74SW
74software — Axway — Investor Presentation (June 2023)
54 slides from 74software's investor presentation, Jun 2, 2023
Slide 1: Investor Presentation June 2023
Investor Presentation June 2023
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: Who we are
axway © Who we are
Slide 4: Axway at a glance
Axway at a glance REVENUE BY GEOGRAPHY 3rd LARGEST HORIZONTAL SOFTWARE PUBLISHER IN FRANCE Top 250 NUMEUM – EY 2022 A RECOGNISED LEADER: Gartner Forrester 2022 Magic Quadrant™ API Management Solutions for Full Life Cycle API Q3 2022 Management The Forrester Wave™, 23 August 2022 REVENUE BY ACTIVITY
Slide 5: Axway around the world
Axway around the world A French-American software company, dual headquartered in Phoenix, AZ, and Paris, France €285.5m REVENUE 5
Slide 6: 20+ years supporting our customer's goals
20+ years supporting our customer’s goals 350 2023 2017 300 2022 Customer Position 2016 Technology / Know-how 2019 250 2014 2012 Revenue evolution (€m) 200 2011 2008 150 2007 2006 100 2002 50 1st Integration Suite Collaborative Business Interaction Digital Business Integration Platform Business Solu
Slide 7: Our stakeholders are at the heart of our strategy
Our stakeholders are at the heart of our strategy… OUR CUSTOMERS OUR EMPLOYEES OUR SHAREHOLDERS Delivering brilliant Axway — The place to be Building a predictable, customer experience profitable company for the long term axway.com 7
Slide 8: In 2022 we continued to deliver value to each of them
… in 2022 we continued to deliver value to each of them! OUR CUSTOMERS OUR EMPLOYEES OUR SHAREHOLDERS Delivering brilliant Axway — The place to be Building a predictable, customer experience profitable company for the long term ▪ Customer satisfaction ▪ Employee Engagement Score ▪ Growth AND Profita
Slide 9: Axway's historical performance
Axway’s historical performance Revenue POA (€m) (€m) Business model transition 320 314 60 Revenue (€m) 301 300 300 297 300 55 o/w Profit on Operating Activities (€m) 285 284 286 280 50 262 51 260 46 45 238 240 45 224 40 217 41 220 40 38 35 200 35 35 33 180 32 30 31 26 160 25 2011 2012 2013 2014 2015
Slide 10: Axway's historical net profit & dividend
Axway’s historical net profit & dividend Restated from disposals impact EPS would have represented €1.47 2,00 1,75 1,51 Business model transition 1.47 1,50 1,35 1,29 1,20 1,22 1,00 0,52 0,40 0,45 0,50 0,21 0,25 0.35 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.25 0.20 0,00 Payout Ratio 2011 2012 2013 2
Slide 11: Shareholding structure at 28/04/2023
Shareholding structure at 28/04/2023 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.12% 1.35% 1.47% 41.43% 2.86% Voting rights 38.44% 25.04% 0.13% 1.44% 1.44% 33.47% Shareholders’ agreement 21,633,597 shares outstanding 55.7% of shares outstanding / 66
Slide 12: What we do
axway >= What we do
Slide 13: Vision & Mission
Vision & Mission AXWAY ENABLES ENTERPRISES TO OPEN EVERYTHING BY SECURELY INTEGRATING AND MOVING DATA ACROSS A COMPLEX WORLD OF OLD AND NEW 20-years of delivering value with our Solutions such as MFT, B2Bi, Digital Finance, as well as other specialized products. Who we are APIM based platform helpin
Slide 14: Focus on strategic core product lines
Focus on strategic core product lines 4 Main product lines representing 90% of Axway’s revenue Axway Amplify API Managed File Transfer Management Platform Secure, reliable, and The only open, independent easy-to-manage solution for platform for governing APIs transferring data between across teams,
Slide 15: Axway MFT. Manage the future of managed file transfer.
Axway MFT. Manage the future of managed file transfer. Faster Transfers Self-service Scalable Deployment Tightest Security Decrease the time it takes to Give business users easy-to- Deploy as a subscription Meet SLAs and avoid security create and initiate a file transfer use self-service capabilitie
Slide 16: B2B integration platform. Secure, API-enabled EDI in the cloud.
B2B integration platform. Secure, API-enabled EDI in the cloud. Better Responsiveness Faster Onboarding B2B Communications Real-time Visibility Cut manual involvement API-enabled onboarding and Connect to all your Track all data and apps and shorten response support for innovative partners quickly a
Slide 17: Axway Financial Accounting Hub. Digital finance transformation.
Axway Financial Accounting Hub. Digital finance transformation. Accelerate the closing of accounts at the group level, ensure data accuracy, and comply with all regulations. Digital transformation, operational excellence, and accurate data for the entire company. Event Storage of Audit Data Storage
Slide 18: IT complexity has met its match. Its name is Amplify.
IT complexity has met its match. Its name is Amplify. Open Platform Developer Independence Full Lifecycle Zero Duplication Discover, reuse, and govern Speed API and app development Manage the entire API lifecycle: Automatically detect new APIs across multiple gateways, by giving DevOps the freedom d
Slide 19: Recognized APIM Market Position
Recognized APIM Market Position The Forrester Wave™: API Management Solutions, Q3 2022 Gartner 2022 Magic Quadrant for Full Life Cycle API Management Gartner 2022 Magic Quadrant for Full Life Cycle API Management, Paolo Malinverno, Kimihiko Iijima, Mark O’Neill, John Santoro, Shameen Pillai, Akash T
Slide 20: Product lines drivers
Product lines drivers 01 02 03 04 MFT B2B APIM AFAH EXPANSION OF ACCELERATION DRIVING API HIGH VALUE FILE TOWARD CONSUMPTION ENABLING ERPs MOVEMENT CLOUD MANAGED THROUGH MOVE TO CLOUD IN THE CLOUD SERVICES MARKETPLACE axway.com 20
Slide 21: FY 2022 Highlights
axway >= FY 2022 Highlights
Slide 22: Historic Q4 performance, FY targets exceeded
Historic Q4 performance, FY targets exceeded Organic growth @ +5.5% vs. +1 to +3% target Profit on operating activities @ 14.7% vs. 12 to 14% target Portfolio rationalization executed as planned axway.com 22
Slide 23: 2022 Key Figures
2022 Key Figures €314.0m Revenue compared to €285.5m in 2021, an organic growth of 5.5% €46.3m Profit on Operating Activities or 14.7% of revenue, up 320bps vs. 11.5% in 2021 +31.0% Subscription Growth or €154.0m vs. €117.6m in 2021 +12.5% ARR Growth or €196.5m vs. €174.8m in Q4 2021 axway.com 23
Slide 24: Optimization of the product portfolio
Optimization of the product portfolio REFOCUSED STRENGHENED Rationalization executed as planned: Acquisition of 3 non-growing and/or non-profitable specialized products disposed of or discontinued in 2022 €9.3m revenue which represent 3% of 2022 revenue Cloud Native Integration Platform (5% of 2021
Slide 25: Customer experience as a company value
Customer experience as a company value OVERALL RENEWAL AVERAGE MIGRATION NET PROMOTER SCORE SUCCESS RATE MULTIPLIER 35 94% 2.1X COMPARED TO 29 RENEWED OR MOVED MAINTENANCE MOVING TO AT THE END OF 2021 TO SUBSCRIPTION SUBSCRIPTION axway.com 25
Slide 26: Looking ahead
Looking ahead STILL GREAT POTENTIAL AND OPPORTUNITIES TO SEIZE… 55% 3 → NEW SOLUTION WITH GREAT INITIAL + % TRACTION ON OUR CUSTOMER BASE → AMPLIFY INTEGRATION AND AMPLIFY OF INITIAL CUSTOMER BASE INCREASE IN PIPELINE MARKETPLACE STILL AVAILABLE TO ENTERING 23 VS. 22 MIGRATE DESPITE DECEMBER BOOKING
Slide 27: 2022 Full-Year Results
2022 Full-Year Results KEY FIGURES INCOME STATEMENT 2022 2021 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 314.0 285.5 +5.5% +10.0% Cost of sales 91.4 83.3 Gross Profit 222.6 70.9% 202.3 70.8% Operating expenses 176.4 169.4 of which Sales and marketing 93.2 89.
Slide 28: 2022 Full-Year Results: Revenue by Activity
2022 Full-Year Results REVENUE BY ACTIVITY 4% 2021 2021 Total Organic 12% License [€m] 2022 Services Restated* Reported Growth Growth* License 11.6 19.6 18.6 -37.6% -40.8% 49% Subscription Subscription 154.0 117.6 114.2 +34.8% +31.0% Maintenance 111.2 125.0 119.0 -6.6% -11.1% 35% Maintenance Service
Slide 29: License & Maintenance Activities
2022 Full-Year Results LICENSE & MAINTENANCE ACTIVITIES 2021 2021 Total Organic [€m] 2022 Restated* Reported Growth Growth* License 11.6 19.6 18.6 -37.6% -40.8% of which Q4 22 3.0 4.5 4.6 -34.9% -33.8% Maintenance 111.2 125.0 119.0 -6.6% -11.1% of which Q4 22 26.9 30.3 29.4 -8.8% -11.4% * Alternativ
Slide 30: Subscription Activity
2022 Full-Year Results SUBSCRIPTION ACTIVITY 2021 2021 Total Organic [€m] 2022 Restated* Reported Growth Growth* Subscription 154.0 117.6 114.2 +35% +31.0% of which Q1 22 26.4 24.4 23.7 +11% +8.2% of which Q2 22 29.5 29.7 28.1 +5% -0.8% of which Q3 22 27.4 30.2 27.8 -1.7% -9.5% of which Q4 22 70.7 3
Slide 31: Subscription bookings
Subscription bookings 2022 BOOKING MIX AXWAY MANAGED Axway ▪ 23% YoY Booking Growth Managed ▪ Largest new customer > 5m€ over 5 years 19% ▪ B2B representing 60% of booking €183.6m CUSTOMER MANAGED 2022 Booking ▪ 38% of Customer Managed contracts signed for a 5 years duration 81% ▪ MFT representing 5
Slide 32: Services Activity
2022 Full-Year Results SERVICES ACTIVITY 2021 2021 Total Organic [€m] 2022 Restated* Reported Growth Growth* Services 37.3 35.4 33.8 +10.3% +5.4% of which Q1 22 9.0 9.3 9.0 -1.0% -4.0% of which Q2 22 9.3 8.7 8.3 +11.8% +6.3% of which Q3 22 9.6 8.3 7.7 +23.9% +15.8% of which Q4 22 9.5 9.1 8.8 +8.5% +
Slide 33: Main Balance Sheet items at 31/12/2022
2022 Full-Year Results Main Balance Sheet items at 31/12/2022 Cash and cash equivalents DSO Total assets €18.3m 155 days €571.1m vs. €25.4m at 31/12/2021 vs. 121 days at 31/12/2021 vs. €582.9m at 31/12/2021 Net debt Current deferred revenues Total equity €69.5m €55.6m €327.8m vs. €36.5m at 31/12/202
Slide 34: Cash Flows
2022 Full-Year Results CASH FLOWS In millions of euros 2022 2021 Net profit for the period -40.0 9.6 Change in operating working capital requirements -41.0 -26.2 Net cash from operating activities 13.0 12.9 Free cash flow 2.2 2.9 Net cash used in investing activities -11.1 -2.8 Net cash used in fina
Slide 35: Progressive normalization of Free Cash Flow
Progressive normalization of Free Cash Flow 80 22% Profit on Operating Activities (€m) BUSINESS MODEL FCF as a % of revenue 70 TRANSITION 18% 60 14% 50 First Customer Managed Subscription Offer FCF / Rev. (%) POA (€m) 40 10% 30 6% 20 2% 10 0 -2% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 36: Q1 2023 Performance
axway >= Q1 2023 Performance
Slide 37: Very strong start to the year in Q1 2023
Very strong start to the year in Q1 2023 Q1 2022 Q1 2022 Total Organic [€m] Q1 2023 → Annual Recurrent Revenue Restated* Reported Growth Growth* (ARR) of €196.8m, up 12.3% on end-March 2022 License 2.1 3.5 3.7 -42.6% -39.5% → Quarterly revenue up 10.3% organically and 7.3% overall Subscription 37.8
Slide 38: Targets & ambition
axway >= Targets & ambition
Slide 39: 2023 Priorities
2023 Priorities 01 02 03 Employee Engagement Continued Focus on Delivering Portfolio Management Ensure all Axway employees Operational Efficiency Execution understand and are engaged in Confidence in our strategy Add assets aligned to strategy and delivering delightful customer and guidance properly
Slide 40: Building our strength year after year
Building our strength year after year… 5 Years 2013-17 2023 2022 2021 2020 2019 2018 Average Average Guidance Organic Revenue Growth (%) +5.5% -2.7% +0.5% +3.3% -3.6% 0 to +3% excluding disposed products +7.4% +0.3% +1.6% +4.9% -2.2% +2.4% +1.6% Profit on Operating Activities (€m) 46.3 32.9 30.8 25.
Slide 41: Adjusting our mid-term ambitions
Adjusting our mid-term ambitions FROM NOW ON PREVIOUSLY Profit on Operating Activities ≥ 15% Profit on Operating Activities ≈ 20% Earnings per share ≥ €1 Revenue ≥ €500 million (including M&A) Opportunistic Strategy to €500m Revenue axway.com 41
Slide 42: Appendices
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Slide 43: 2022 Full-Year Results: Revenue by Geography
2022 Full-Year Results REVENUE BY GEOGRAPHY 7% 2021 2021 Total Organic Asia/Pacific [€m] 2022 Restated* Reported Growth Growth* 29% France France 91.6 81.2 81.4 +12.5% +12.8% Rest of Europe 68.4 66.6 67.4 +1.5% +2.7% 42% Americas 133.3 131.1 119.4 +11.6% +1.6% Americas 22% Asia/Pacific 20.8 18.6 17.
Slide 44: Change in Revenue
2022 Full-Year Results - Change in Revenue €+16.5m 320 +5.5% €314.0m 310 €+16.1m 300 USD vs. € 290 €285.5m 280 €-4.1m Portfolio 270 Refocus 260 2021 Scope Exchange Rate Organic 2021 Revenue Effect Effect Growth Revenue 44
Slide 45: Change in Net Debt
2022 Full-Year Results - Change in Net Debt €8.5m €69.5m 70,0 €-0.7m 65,0 €13.7m 60,0 55,0 50,0 €13.6m 45,0 40,0 €36.5m 35,0 €-2.2m 30,0 25,0 20,0 Net Financial Debt Free Cash Flow Changes in scope & Share Buyback Dividends Others Net Financial Debt at 31/12/2021 Financial investments at 31/12/2022
Slide 46: Simplified Balance Sheet
2022 Full-Year Results In millions of euros 31/12/2022 31/12/2021 SIMPLIFIED Assets BALANCE SHEET Goodwill 297.8 348.3 Non-current assets 374.0 424.6 Trade receivables 148.1 105.1 Other current assets 30.6 27.8 Cash and cash equivalents 18.3 25.4 Current assets 197.1 158.3 Total Assets 571.1 582.9 →
Slide 47: Changes in Equity & Earnings per Share
2022 Full-Year Results CHANGES IN EQUITY & EARNINGS PER SHARE AT 31/12/2022 In millions of euros 31/12/2022 31/12/2021 31/12/2020 Equity at Beginning of Period 372.2 355.5 362.6 Profit for the period -40.0 9.6 8.5 Dividends -8.5 -8.6 0.0 Capital increase 0.0 2.1 0.6 Other -10.3 -5.0 4.2 Foreign exch
Slide 48: Headcount
2022 Full-Year Results HEADCOUNT 31/12/2022 31/12/2021 France 437 466 Rest of Europe 636 748 Americas 378 436 Asia/Pacific 74 62 Axway 1 525 1 712 48
Slide 49: Corporate Social Responsibility
Corporate Social Responsibility
Slide 50: Axway, a responsible and committed player
Axway, a responsible and committed player Business ethics Whistle-blowing system axway.com 50
Slide 51: Governance
Governance
Slide 52: Board of Directors
9 Members 44% Independent directors Board of Directors 4 Nationalities 44% Women Nomination, Governance and Name Status Audit Committee Compensation Committee Corporate Responsibility Committee Pierre PASQUIER Chaiman ✓ Kathleen Director Chairman CLARK Deputy Chairman Pierre-Yves COMMANAY Director ✓
Slide 53: Executive Committee
Executive Committee 7 Members 4 Nationalities 29% Women axway.com 53
Slide 54: Alternative performance measures
Alternative performance measures ACV: Annual Contract Value – Annual contract value of a subscription agreement. ARR: Annual Recurrent Revenue – Expected annual billing amounts from all active maintenance and subscription agreements. Employee Engagement Score: Measurement of employee engagement thro