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74software — Axway — Investor Presentation (December 2015)
51 slides from 74software's investor presentation, December 2015
Slide 1: Axway, 54th Global software editor
Axway 54th Global software editor* December 2015 *source: Axway 1
Slide 2: Disclaimer
Disclaimer 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 more significant i
Slide 3: Axway, 54th Global software editor
Axway, 54th Global software editor One of the world N°5 Global Software AFDEL & leaders TRUFFLE100 TOP 10 Syntec Numerique in governing the flow Leadership Compass for API Security of data Management Rev. €261.6 million Euronext Paris listing: 2011 OPM 15.2% Market cap €500 million FCF/Rev. 16.3% Fl
Slide 4: Summary
Summary • TOP 50 Software Editors • Software Editor Business Model • Track record of profitable growth • Status on the Company Transformation 4
Slide 5: TOP 50 Software Editor, From Middleware Market to Digital Market
TOP 50* Software Editor, From Middleware Market to Digital Market August 2015 *source: Axway 5
Slide 6: Axway Market Origin: Infrastructure software
Axway Market Origin: Infrastructure software Company software market estimated at $300 billion* Application software Infrastructure software estimated at $ 169 billion* (Applications) estimated at $130 billion* • Databases • Operating systems • Network management • Accounting • Storage management •
Slide 7: Market origin: technology viewpoint, Axway addressable market
Market origin: technology viewpoint Axway addressable Market ($4 billion) A A A BPM / BAM Data Application Integration Integration MFT Integration Integration Brokerage (ETL, MDM, …) (ESB, MOM, …) B2B (VAN ), iPaaS Middleware SOA Governance / API Management A A A A 7
Slide 8: Leading position confirmed by IT analysts
Leading position confirmed by IT analysts 2014 2013 On-premises MFT App Integration - Info-Tech Suite - Gartner 2013 2014 Application B2B Gateway Services - IDC Governance - Gartner • IDC: “Axway is a Disruptive Innovator, only vendor able to demonstrate its API capabilities in context of trading pa
Slide 9: Axway, Digital Journey
Axway, Digital Journey Develop Business Digital Customer Experience Design the service Business Innovation Software as a service Service = Billing 9
Slide 10: Digital Business
Digital Business Digital business blurs the digital and physical worlds to increase agility, innovation and customer responsiveness. It requires integration to connect intelligent things, people, and businesses. 10
Slide 11: Digital Business Drivers
Digital Business Drivers CLOUD INTERNET OF MOBILE THINGS 74% of today’s business executives say they have a digital strategy… “…only 19% of executives believe their firms have the right technology to properly execute on the digital strategy.”1 1”The State of Digital Business 2014, Forrester Research
Slide 12: Disruptive Market Drivers
Disruptive Market Drivers… “The challenge we and many others are facing is that it’s very hard to know when exactly the disruption will become so big that you actually don’t even survive without being part of that disruption.” - CEO, Konecranes Plc, Finland More Regulation More Competition New Partn
Slide 13: Digital business platform
Digital Business B2B B2C & B2E Web Mobile Cloud Services Digital “Things” Enablement Govern Design Deploy Adopt Monetize Data Apps Application Identity Integration Federation API Marketplace Management Business Application Process Management Services Delivery B2B Cybersecurity Operational Integratio
Slide 14: Digital enablement and integration platform
Big Data & Operational API Community Social Media & Billing & Marketplace & Analytics Intelligence Management Management Collaboration Payments eCommerce Design, adopt & monetize digital services Digital cloud apps things Enablement DIGITAL BUSINESS ECOSYSTEM businesses web developers Deploy multi-e
Slide 15: 2015 Axway's Vocation
2015 Axway’s Vocation Enabling your digital business by connecting people, processes and things while governing data flows throughout your ecosystem 15
Slide 16: 1st Software Suite using APIs to connect B2B, MFT & Mobile
1st Software Suite using APIs to connect B2B, MFT & Mobile in Digital Environment The Axway 5 software suite governs data flow in companies Five Expertise Areas 50 components Interactions Customised Business rules business solution Visualisation tailored to the Integration customer's Sec
Slide 17: HY 2015: Customer Demand Evolution
HY 2015: Customer Demand Evolution Traditional Convergence Pure Business Traditional Business New Business MFT & B2B MFT/B2B Digitalization New Business 17
Slide 18: Competitive & Market Landscape
Competitive & Market Landscape Generalists Digital Foundation Traditional Middleware API Management and Integration Providers Specialists Specialists Cloud Integration and Integration Brokerages Digital Engagement 18
Slide 19: Potential Digital Enablement Markets
Potential Digital Enablement Markets B2B B2C & B2E Mobile Cloud Services “Things” Digital Engagement API Developer Operational Portal Intelligence Aggregate API Gateway Partner Mgmt & On-boarding Market1 $5,908M +20% Technical Middleware Digital Foundation B2B Aggregate Visibility & Analytics Market
Slide 20: Software Editor Business Model
Software Editor Business Model 20
Slide 21: Three sources of revenue in 2014
Three sources of revenue in 2014 Licences Maintenance Perpetual usage rights • Associated Tiered pricing • with licence sales Standard licensing • Three levels agreement 30% • of support 46% • For five years, • but termination Services possible every year 24% 300 Classic Editor 250 Associated with 2
Slide 22: Axway Cash generation profile
Axway Cash generation profile Cash life cycle (cumulative) Software Business Cycle 2014 Rev. (€M) 30 100% 90% 25 80% 70% 20 60% 50% 15 40% 10 30% 20% 5 10% 0% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 • Cash flow cycle – Influenced by grouped maintenance at the beginning of the y
Slide 23: Debt & Financing
Debt & Financing • Despite our agressive acquisition strategy, we managed to keep our debt at a very low level, helped by our robust and stable cash flow generation. In millions of euros 31/12/2014 31/12/2013 31/12/2012 Net Debt 1.8 -20.7 1.5 Banking debt 46.4 28.5 36.9 Cash 44.6 49.2 35.4 Our Main
Slide 24: A composite growth model: organic + acquisition
A composite growth model: organic + acquisition Revenue in €M 250 2012 2008 200 2014 2007 150 2006 100 2002 50 1985 - 2000 0 2001 - 2005 2006 - 2009 2010 - 2012 By 2015 Incubation B2B Collaborative Network of Governing within and Business professional the flow of data Sopra Integration Solutions int
Slide 25: A presence spanning the continents
A presence spanning the continents France Rest of Europe R&D centre €102 million €60 million 698 people 745 people 2,077 customers 2,908 customers Americas North America Asia Pacific €90.7 million €10 million 440 people 58 people 4,014 customers 1,530 customers South America Africa 1,387 customers 7
Slide 26: Axway: a Balanced Business Model
Axway: a Balanced Business Model FY2014 BY REGION BY ACTIVITY Rest of Europe Licences Services France 4% 23% 24% 30% 39% 4% 34% Total 46% Americas Products 76% Maintenance Asia Pacific 26
Slide 27: License Metrics 2014: ASP, Indirect, New/Repeat
License Metrics 2014 ASP – Share of Indirect – New/Repeat • Nb Deals ~ 2154 Share of Tiers 1 business(>250k€) – Share of nb. of deals: 2,4% – Share of total amount: 42% 2014 • Share of indirect business (€): 9% versus 2013 • Share of New business (€): 9% • Average Sale Price – ASP Tiers 1 ~615k€ – A
Slide 28: License Metrics 2014: Share of verticals
License Metrics 2014 Share of verticals in License revenues SECTORS HEALTHCARE Others vs 2013 Supply Chain 16% SUPPLY CHAIN 22% Public 12% Sector vs 2013 PUBLIC SECTOR 9% 41% Healthcare 27%vs 2013 45% FSI FSI vs 2013 28
Slide 29: Maintenance Metrics 2014
Maintenance Metrics 2014 • Total Value/ Contribution ~ 120M€/46% Attachement rate = 20% 2014 (average weighted by volume) versus 2013 • Renewal rate (*) = 93.5% (average weighted by volume) * This percentage represents full year revenue impact 29
Slide 30: Cloud Metrics 2014
Cloud Metrics 2014 • Subscription recognized: 6.2 M€ (+53%) 2014 versus • ASR on 12/31/14 : 7.5M€ 2013 ASR= committed subscription revenue in next 12 months 30
Slide 31: Headcount at End of June 2015
Headcount at End of June 2015 1926 FRANCE 692 USA 411 31
Slide 32: Update on Axway Shareholder Structure
Update on Axway Shareholder Structure 30/06/2015 20,602,494 SHARES OUTSTANDING 35,408,908 VOTING RIGHTS Sopra Pasquier Odin Geninfo Treasury Managers Sopra GMT Caravelle Public Steria Family Family (SG Group) Shares Shares outstanding 25.33% 0.11% 1.12% 1.13% 21.86% 8.71% 12.49% 29.15% 0.11% Voting
Slide 33: Governance
Governance Strengthened Governance • Board of Directors comprising ten members, of which five are independent members o Pierre Pasquier Chairman o Kathleen Clark-Bracco Vice Chairman • Compliance with the Middlenext Code of Corporate Governance Jean-Marc Lazzari Chief Executive Officer • French-Amer
Slide 34: Track Record of Profitable Growth
Track Record of Profitable Growth 34
Slide 35: Growth and profitability over the last six years
Growth and profitability over the last six years Rev. (€M) OPM (%) 300 25% 262 250 237 217 224 20% 208 16.3 15.6 15.8 200 182 14.9 171 15,2% 15% 150 11.8 10.2 10% 100 5% 50 0 0% 2008 2009 2010 2011 2012 2013 2014 35
Slide 36: FY2014: Cost Analysis
FY2014: Cost Analysis • Slight improvement in Gross Profit each period • Approximately 13 M€ of the 22 M€ cost increase coming from Systar • Increase in R&D Capabilities to advance A5 suites including API and Decision Insight • Investment in key management within our Distribution network In millions
Slide 37: Income Statement (2/2)
Income Statement (2/2) • Profit on Operating Activities margin stable for all periods presented • Amortization increased with the addition of Systar Intangibles. • Other Income/Expense in 2012/2013: mostly GSA, 2014 mostly Acquisition costs • EPS in 2013 - 1.33 €/share without Exceptional items In m
Slide 38: Simplified Balance Sheet (1/2)
Simplified Balance Sheet (1/2) • Goodwill increased by 33 M€ for Systar Acquisition, the rest from foreign currency impact • Due to strong Q4 sales, Trade A/R increased significantly and DSO’s increased to 105 days from 90 days in 2013 In millions of euros 31/12/2014 31/12/2013 31/12/2012 ASSETS Goo
Slide 39: Simplified Balance Sheet (2/2)
Simplified Balance Sheet (2/2) • Bank debt 45 M€ at the end of 2014 • Deferred Maintenance Revenues increased to 61 M€ from 40 M€ In millions of euros 31/12/2014 31/12/2013 31/12/2012 SHAREHOLDERS' EQUITY AND LIABILITIES Share capital 41.1 40.9 40.6 Capital reserves and results 257.4 217.4 193.3 Tot
Slide 40: Change in Equity
Change in Equity • Due to the USD/Eur conversion rate movement a significant translation adjustment was recorded in 2014 on the conversion of the foreign balances sheets to Euro’s In millions of euros 31/12/2014 31/12/2013 31/12/2012 Equity at Opening of Period 258.4 233.9 213.4 Profit for the perio
Slide 41: Cash Flow Statement
Cash Flow Statement • Working Capital Requirements change positive in 2014 due to monetization of CIR receivables • Investing activities includes the purchase of Systar In millions of euros 31/12/2014 31/12/2013 31/12/2012 Net profit for the period 26.7 35.6 24.7 Net charges to amortizations, deprec
Slide 42: Last trend October 2015
Last trend 27 October 2015 42
Slide 43: 9 Month Cumulative by Activity
9 Month Cumulative by Activity – PR 27.10.2015 Nine-Month cumulative 2014 2014 Total Organic 2015 [€M] Published Pro forma Growth Growth1 Licenses 49.0 41.1 46.6 19.2% 5.3% Maintenance 102.4 88.3 87.7 16.0% 4.8% Services 49.5 44.9 48.9 10.2% 1.2% Axway 200.9 174.3 193.2 15.3% 4.0% (1) At constant ex
Slide 44: 9 Month Cumulative by Region
9 Month Cumulative by Region – PR 27.10.2015 Nine-Month cumulative 2014 2014 Total Organic 2015 [€M] Published Pro forma Growth Growth1 France 68.0 63.1 62.7 7.8% 8.4% Rest of Europe 47.6 42.4 46.5 12.3% 2.4% Americas 75.7 62.3 76.4 21.5% (0.8)% Asia/Pacific 9.6 6.5 7.5 47.6% 27.3% Axway 200.9 174.3
Slide 45: Status of the company transformation
Status of the company transformation 45
Slide 46: Status of the Axway Transformation
Status of the Axway Transformation Strengthened Product Management • Hired new head of Product Management • Created a Chief Digital Officer position • Focused on Digital Enablement • Implement a bi-model approach Sales Transformation • Continued strengthening of Sales Organization (NA mainly) • Solu
Slide 47: A Key Actor Strategy
A Key Actor Strategy To strengthen Axway in governing the flow of data in DIGITAL Rev. 2014 €261,6 M Rev. 2001 Active €50 M role in the Market’ Strengthen consoli- Axway in Rev. 1985 Independant dation Digital €45 M & Axway 5 creation Incubation within Sopra 1985 - 2000 2001 - 2010 Since 2011 2015…
Slide 48: A strategy with strong growth potential
A strategy with strong growth potential • Capitalising on competitive assets • Strengthening the full-service approach to customers • Developing the technological platform • Actively pursuing organic growth and targeted acquisitions To strengthen our position as a benchmark player in Governing the
Slide 49: Why invest in Axway?
Why invest in Axway? • A technology actor, Innovative model • A significant customer base, no risky dependence to one customer. • A high renewal rate on maintenance contracts. The recurring revenue is high and rising. • A leader position and good consolidation opportunities in Digital software marke
Slide 50: Axway, 54th Global software editor
Axway, 54th Global software editor Rev. €261.6 million Euronext Paris listing: 2011 OPM 15.2% Market cap €500 million FCF/Rev. 16.3% Float 29.7% Dual nationality 1,960+ employees FR-US including 650 in R&D 19 locations and 130 in the sales force worldwide 50 2014 figures
Slide 51: Thank You
Thank You Investor Relations Patrick Gouffran [email protected] Tel+33(6)85.92.49.91 51 www.investors.axway.com