74software · EURONEXT:74SW
74software — Axway — FY2021 Earnings Presentation
43 slides from 74software's earnings presentation, Feb 22, 2022
Slide 1: 2021 Full-Year Results Analysts Conference
2021 Full-Year Results Analysts Conference February 22, 2022
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: Agenda
2021 Full-Year Results Agenda 1. Operational commentary on 2021 Patrick Donovan Chief Executive Officer 2. 2021 Financial Results Cécile Allmacher 3. Focus on Customers Chief Financial Officer 4. Targets and Ambition Roland Royer 5. Q&A Session Chief Customer Officer 3
Slide 4: Operational commentary on 2021
Operational commentary on 2021 Patrick Donovan Chief Executive Officer
Slide 5: Vision & Mission unchanged
Vision & Mission unchanged 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. 20-years of deliv
Slide 6: Delivering value to our three constituents
API integration platform Delivering value to our three constituents THE CUSTOMER THE EMPLOYEE THE SHAREHOLDER Delivering brilliant Axway — The place to be Building a predictable, customer experience profitable company for the long term axway.com 6
Slide 7: Delivering value to our Customers
API integration platform Delivering value to our Customers THE CUSTOMER Delivering brilliant customer experience Net Promoter Score vs. 2020, 4 years’ continuous improvement Revenue Renewal Rate renewed or moved to Subscription New or Cross-sell Bookings representing 265 new customers axway.com 7
Slide 8: Delivering value to our Employees
API integration platform Delivering value to our Employees THE EMPLOYEE Axway — The place to be Employee Engagement Score above 60% for survey threshold Recruited in 2021 during continued uncertain period Feminization of the workplace improvement year over year axway.com 8
Slide 9: Delivering long-term value to our Shareholders
API integration platform Delivering long-term value to our Shareholders THE THE CUSTOMER SHAREHOLDER Building a predictable, profitable company for Product Revenue Recurring the long term vs. 67% in 2016, only 5 years ago Organic Revenue Growth vs. 2020, for the 4 main product lines: MFT, B2Bi, Ampl
Slide 10: Effective Marketing Investments
Effective Marketing Investments 900+ Customer and Partner attendees 29% increase in non-paid web visits €10.6m pipeline created 150+ Customer Peer Reviews Event NPS = 49 2nd highest share of voice in category 600% increase in social reach axway.com 10
Slide 11: Strengthened Brand & Awareness
Strengthened Brand & Awareness Website Brand & PR Imagine Summit Customer Digital Advocacy Marketing ABM Campaigns Content & Events Marketing Partner MIT Marketing One Game. Two plays. axway.com 11
Slide 12: 2021 Key Figures
2021 Key Figures Revenue € m compared to €297.2m in 2020, an organic* decline of 2.7% Margin on Operating Activities % or €32.9m, compared to €30.8m (10.4%) in 2020 Subscription Growth + % or €114.2m vs. €97.3m in 2020 ACV Growth + % or €33.2m vs. €31.9m in 2020 * Alternative performance measures ar
Slide 13: 2021 Financial Results
2021 Financial Results Cécile Allmacher Chief Financial Officer
Slide 14: Full-Year 2021 Key Figures and Income Statement
Full-Year 2021 KEY FIGURES INCOME STATEMENT 2021 2020 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 285.5 297.2 Cost of sales 83.3 87.6 Gross Profit 202.3 70.8% 209.7 70.5% Operating expenses 169.4 178.8 of which Sales and marketing 89.0 92.9 of which Research a
Slide 15: Full-Year 2021 Revenue by Activity
Full-Year 2021 REVENUE BY ACTIVITY 6% 2020 2020 Total Organic 12% [€m] 2021 License Restated* Reported Growth Growth* Services License 18.6 25.3 25.8 -28.0% -26.6% Subscription 114.2 96.1 97.3 +17.4% +18.9% Maintenance 119.0 136.6 138.2 -13.9% -12.9% 40% Subscription 42% Maintenance Services 33.8 35
Slide 16: License & Maintenance Activities
Full-Year 2021 LICENSE & MAINTENANCE ACTIVITIES 2020 2020 Organic [€m] 2021 Restated* Reported Growth* License 18.6 25.3 25.8 -26.6% License activity under pressure in H2 2021 of which Q1 21 3.8 3.7 3.9 +2.8% As forecasted, Maintenance of which Q2 21 5.4 6.3 6.6 -13.7% activity is dropping due t
Slide 17: Subscription Activity
Full-Year 2021 SUBSCRIPTION ACTIVITY 2020 2020 Organic [€m] 2021 Restated* Reported Growth* Continuous Subscription Subscription 114.2 96.1 97.3 +18.9% growth over 2021 in spite of the Q4 miss of which Q1 21 23.7 14.8 15.7 +59.6% Upfront Subscription of which Q2 21 28.1 20.9 21.5 +34.6% revenue
Slide 18: Customer Managed Subscription Renewals
Customer Managed Subscription Renewals 2022 to 2026 Revenue (€m) 70 Upfront Recurring 60 50 40 30 20 10 0 2022 2023 2024 2025 2026 axway.com 18
Slide 19: Signature Metric
Full-Year 2021 SIGNATURE METRIC 2021 Weighting Weighted [€m] Signatures Factor New Signatures Value 2.2% organic decrease License 18.6 1x 18.6 consistent with Q4 miss in closings New Subscription (ACV*) 33.2 3x 99.6 ACV 4% growth not sufficient to offset drop in 2021 Weighted Signatures 118.2 Li
Slide 20: Main Balance Sheet items at 31/12/2021
Full-Year 2021 Main Balance Sheet items at 31/12/2021 Cash and equivalents DSO Total assets vs. €16.2m at 31/12/2020 vs. 95 days at 31/12/2020 vs. €559.3m at 31/12/2020 Net debt Current deferred revenues Total equity vs. €24.0m at 31/12/2020 vs. €54.7m at 31/12/2020 vs. €355.5m at 31/12/2020 20
Slide 21: 2021 Cash Flows & Covenants
Full-Year 2021 2021 Cash flows & Covenants at 31/12/2021 CASH FLOWS COVENANTS In millions of euros 31/12/2021 31/12/2020 31/12/2021 31/12/2020 31/12/2019 Net profit for the period 9.6 8.5 EBITDA Change in operating working capital requirements -26.2 -23.7 Cost of debt 73.0 60.6 43.9 Net cash from op
Slide 22: Free Cash Flow Impact
Free Cash Flow Impact 60 20% Profit on Operating Activities (€m) FCF as a % of Revenue 50 BUSINESS MODEL 15% TRANSFORMATION 40 First Customer Managed Subscription Offer 10% 30 5% 20 0% 10 POA FCF / Rev. (€m) 0 -5% (%) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 22
Slide 23: Focus on Customers
Focus on Customers Roland Royer Chief Customer Officer
Slide 24: Customer experience as a company value
Customer experience as a company value Net Promoter Score* compared to 25 at the end of 2020 Customer Base Signature Value stable vs. 2020 Overall Renewal Success Rate renewed or moved to subscription * Alternative performance measures are defined in the glossary at the end of this document. axway.c
Slide 25: Completion of the transition to a Subscription model
Completion of the transition to a Subscription model CONTRACT MIX CUSTOMER SUCCESS MODEL License 16% Land 2021 Adopt Signature €118.2m Expand 84% Subscription Renew (3xACV) axway.com 25
Slide 26: Land Adopt Expand Renew
Land Adopt Expand Renew NEW CUSTOMER CUSTOMERS EXAMPLE of transactions occurred with New Amplify Logo new customers US axway.com 26
Slide 27: Open Banking Initiative in Brazil
Land Adopt Expand Renew Open Banking Initiative in Brazil Business Problem Route to Market Customers Success axway.com 27
Slide 28: Land Adopt Expand Renew: Upsell and Migration Example
Land Adopt Expand Renew UPSELL CUSTOMER AND MIGRATION EXAMPLE Amplify of 2021 Signature value France axway.com 28
Slide 29: Land Adopt Expand Renew: Migration Customer Example
Land Adopt Expand Renew AVERAGE MIGRATION CUSTOMER MULTIPLIER EXAMPLE MFT US axway.com 29
Slide 30: Looking ahead
Looking ahead STILL GREAT POTENTIAL AND OPPORTUNITIES TO SEIZE… Launching new Cloud Services on MFT & B2B OF INITIAL CUSTOMER AMPLIFY BASE STILL AVAILABLE TO PIPELINE GROWTH MIGRATE axway.com 30
Slide 31: Targets & Ambition
Targets & Ambition Patrick Donovan Chief Executive Officer
Slide 32: Roadmap to an independent, growing, and profitable model
Roadmap to an independent, growing, and profitable model 01 02 03 VISION STRATEGY EXECUTION Open everything Leverage our portfolio Delivering value to the three constituents axway.com 32
Slide 33: Axway sets targets for 2022
“ Axway sets targets for 2022 : Organic revenue growth of between 1% and 3% Profit on operating activities representing 12% to 14% of revenue Strategy – Leverage the Portfolio : 2022 a year of Portfolio FOCUS 5 to 7% of unprofitable, declining revenue to be addressed in 2022 33
Slide 34: Mid-term ambition
Mid-term ambition Mid-term Ambition 2022 Guidance Profit on Operating Activities ≥ 15% Organic Revenue Growth Earnings per share ≥ €1 between +1% and +3% Profit on Operating Activities Revenue ≥ €500 million between 12% to 14% of total revenue (including M&A) axway.com 34
Slide 35: Thank you
Thank <* you =o
Slide 36: Appendices
B rranKis Appendices
Slide 37: Revenue by Geography
Full-Year 2021 REVENUE BY GEOGRAPHY 6% 2020 2020 Total Organic [€m] 2021 Asia/Pacific Restated* Reported Growth Growth* 28% France France 81.4 93.5 93.5 -12.9% -12.9% Rest of Europe 67.4 62.9 62.3 +8.1% +7.2% Americas 119.4 120.8 125.3 -4.7% -1.2% 42% Americas Asia/Pacific 17.3 16.4 16.1 +7.4% +5.8%
Slide 38: Full-Year 2021 - Change in Revenue
Full-Year 2021 - Change in Revenue 300 €297.2m No changes 295 Neutral 290 €-3.7m USD vs. € €285.5m 285 BRL vs. € €-8.0m 280 -2.7% 275 270 265 260 2020 Scope Exchange Rate Organic 2021 Revenue Effect Effect Growth Revenue 38
Slide 39: Simplified Balance Sheet
Full-Year 2021 SIMPLIFIED BALANCE SHEET In millions of euros 31/12/2021 31/12/2020 Assets Goodwill 348.3 330.3 Non-current assets 424.6 422.9 Trade receivables 105.1 88.1 Other current assets 27.8 32.2 Cash and cash equivalents 25.4 16.2 Current assets 158.3 136.4 Cash and cash equivalents of €25.
Slide 40: Changes in equity & Earnings per share
Changes in equity & Earnings per share at 31/12/2021 In millions of euros 31/12/2021 31/12/2020 31/12/2019 Equity at Beginning of Period 355.5 362.6 362.8 Profit for the period 9.6 8.5 5.4 Dividends -8.6 0.0 -8.5 Capital increase 2.1 0.6 0.0 First-time application of IFRS16 0.0 0.0 -0.7 Other -5.0 4
Slide 41: Full-Year 2021 - Headcount
Full-Year 2021 - Headcount 31/12/2021 31/12/2020 France 466 483 Rest of Europe 748 835 Americas 436 501 Asia/Pacific 62 69 Axway 1 712 1 888 axway.com 41
Slide 42: Shareholding structure at 31/12/2021
Shareholding structure at 31/12/2021 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.11% 1.35% 1.46% 30.77% 1.65% Voting rights 38.32% 24.96% 0.12% 1.32% 1.45% 19.56% Shareholders’ agreement 21,633,597 Shares outstanding 55.69% of shares outstanding / 6
Slide 43: 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