74software · EURONEXT:74SW
74software — Axway — Investor Day (June 2021)
73 slides from 74software's investor day presentation, Jun 2, 2021
Slide 1: The world is opening. Open Everything
The world is opening. Cross-pollenating new ideas, creating new possibilities across geographies, industries, and customers and partners. With every investment, old and new, opportunities for growth are blossoming. So what are you waiting for? & Axway will help turn what you already have into brilli
Slide 2: Capital Markets Meeting: Agenda and opening remarks
Capital Markets Meeting Agenda and opening remarks Arthur Carli axway.com 2
Slide 3: Agenda
Agenda Wednesday June 2, 2021 – 3:30 PM CET Speakers Opening Remarks Arthur CARLI, Investor Relations Strategy & Finance : • 2021 – 2023 Vision and Strategy Patrick DONOVAN, CEO & Roland ROYER, CCO • Financial Model & Transformation Cécile ALLMACHER, CFO & Patrick DONOVAN, CEO Q&A Strategy & Finance
Slide 4: 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 Group highlights that signatures of its contracts, which often represent investments for customers, are hist
Slide 5: About Axway
About Axway Listed on Euronext Paris (AXW.PA) Registered in France Phoenix, AZ & Paris, France Global headquarters €297.2M in revenue in 2020 1st French horizontal software publisher Main Indexes Euronext Paris – Compartment B Bloomberg : AXW:FR → CAC MID&SMALL → CAC TECHNOLOGY 1800+ Employees Reute
Slide 6: Vision & Strategy
Vision & Strategy Patrick Donovan and Roland Royer axway.com 6
Slide 7: Objectives for our first Capital Markets Meeting
Objectives for our first Capital Markets Meeting 01 02 03 VISION STRATEGY EXECUTION Open everything Leverage our portfolio Delivering stakeholder value axway.com 7
Slide 8: 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 8
Slide 9: 20+ years supporting our customer's goals
20+ years supporting our customer’s goals 350 2016 2019 300 2017 250 Customer Position 2012 2014 Technology / Know-how Revenue evolution (€m) 200 2008 2011 150 2006 2007 100 2002 50 Collaborative Business Interaction Digital Business Integration 1st Integration Suite Business Solutions Networks Enab
Slide 10: Success of the 3-year transformation plan
Success of the 3-year transformation plan • Upgraded product portfolio • Strengthened management team and employee's engagement • Adapted structure, based on customer centricity • Increased awareness for sustainable growth 2020 2019 2018 axway.com 10
Slide 11: Strategy transformation
Strategy transformation FROM HYBRID FROM IMAGINATION FROM CUSTOMER INTEGRATION TAKES SHAPE TO COMMITMENT TO PLATFORM TO API integration Delivering brilliant platform Open Everything customer experience axway.com 11
Slide 12: Leveraging our strength
Leveraging our strength 20-years of delivering value with our Core Solutions such as MFT, APIM based platform helping B2Bi, AISuite, Validation meet our customers needs and Authority and other specialized outcomes products axway.com 12
Slide 13: State of California protects citizens' data with central managed-file transfer
State of California protects citizens’ data and cuts costs with a central managed-file transfer platform SUPPORTS 50 AGENCIES and 250 departments data-sharing use cases across the state “ CENTRALIZED THE SERVICE and consolidated needs by reducing disparate applications With AMPLIFY Managed File Tran
Slide 14: Our core offerings are more important than ever
Our core offerings are more important than ever TOP 3 REASONS CUSTOMERS INVEST B2B/EDI AND MFT WILL CONTINUE IN INTEGRATION TO DRIVE BUSINESS Innovate faster to stay ahead of the competition Reduce operational costs Of senior leaders who are Ensure security and compliance implementing enterprise 50%
Slide 15: BNP Paribas Personal Finance uses APIs for data-driven decision-making
BNP Paribas Personal Finance uses APIs to create a firm foundation for data-driven decision-making RAPID deployment of Unified Catalog cuts time- to-insight “ SUPPORTS effective decision-making around API modernization By augmenting our AMPLIFY API Management gateways with FACILITATES Unified Catalo
Slide 16: Growing trend of multiple API management solutions
Growing trend of multiple API management solutions Number of API Management vendors 60% 54% 48% 95% 50% 40% 40% 30% 30% Of enterprises use 17% 20% multiple API management 10% 5% 5% 1% solutions 0% One Two Three Four+ 2020 2022 Source: IDC EMEA (2020): API Management & Integration Survey (right) axwa
Slide 17: Well positioned for the next 3 years
Well positioned for the next 3 years BUILDING ON THE TRUST OF OUR OUR AMPLIFY OFFERING IS HIGHLY CUSTOMERS DIFFERENTIATED axway.com 17
Slide 18: Financial Model and Transformation
Financial Model and Transformation Cécile Allmacher axway.com 18
Slide 19: In 2020, a new chapter begins
In 2020, a new chapter begins Revenue Business model transition Margin (€m) (€m) 310 301 300 300 60 297 Revenue (€m) 285 290 284 55 o/w Profit on Operating Activities (€m) 270 262 50 51 250 45 238 45 230 224 40 217 41 40 210 38 35 35 35 190 32 30 31 170 25 26 150 20 2011 2012 2013 2014 2015 2016 201
Slide 20: … and it's a 3-year journey!
… and it’s a 3-year journey! 2023 Ambitions Revenue ≥ €500 million 2021 Guidance (including M&A) Organic Revenue growth Profit on Operating Activites ≥ 15% between +2% and +4% Profit on Operating Activities Earnings per share ≥ €1 between 11 to 13% of total revenue axway.com 20
Slide 21: Subscription brings visibility
Subscription brings visibility Recurrent vs. Non-Recurrent Revenue 2011 2020 100% % Recurrent Rev. % of Rev. Rev. % of Rev. 90% % Non-Recurrent 80% License 78 36% 26 9% 70% Maintenance 85 39% 138 46% 60% 50% Subscription - 0% 97 33% 40% Services 54 25% 36 12% 30% 20% Axway 217 100% 297 100% 10% 0% R
Slide 22: But disrupts revenue recognition
But disrupts revenue recognition Revenue Recognition under IFRS 15 Contracting Model Non-Recurrent Recurrent License (100% upfront) 2011 PERPETUAL Maintenance (pro-rata) Services (upon delivery) 2020 SUBSCRIPTION 50% TCV 50% Customer Managed upfront pro-rata SUBSCRIPTION TCV (pro-rata) Axway Managed
Slide 23: Subscription revenue recognition model
Subscription revenue recognition model vs. Traditional Iniatilly committed contract period Signature Contract Metric Year 1 Year 2 Year 3 Year 4 Value Value* Upfront Recurrent Recurrent Recurrent Upfront Recurrent PERPETUAL 180 147 147 33 33 33 - 33 SUBSCRIPTION 180 180 90 30 30 30 90 30 Customer Ma
Slide 24: Subscription impact on invoicing
Subscription impact on invoicing Iniatilly committed contract period Contract Value Year 1 Year 2 Year 3 Year 4 Revenue 180 33 33 33 PERPETUAL 180 Invoice 180 33 33 33 Δ - - - - Revenue 120 30 30 120 SUBSCRIPTION 180 Invoice 60 60 60 60 Customer Managed Δ -60 -30 0 -60 Revenue 60 60 60 60 SUBSCRIPTI
Slide 25: Transformation impact on FCF
Transformation impact on FCF Profit on Operating Activities 60 (€m) 18% of Rev. FCF Margin 16% First Customer Managed 50 Subscription Offer 14% 12% 40 10% 8% 30 6% 4% 20 2% 10 0% -2% 0 -4% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 axway.com 25
Slide 26: Expected Revenue Growth - 2021 to 2023
Expected Revenue Growth - 2021 to 2023 Revenue 350 (€m) Core Amplify 300 250 + M&A to reach €500m of revenue 200 2020 2021 2022 2023 axway.com 26
Slide 27: Customer Managed Subscription Renewals
Customer Managed Subscription Renewals 2021 to 2025 30 (€m) Upfront 25 Recurring 20 15 10 5 0 2021 2022 2023 2024 2025 axway.com 27
Slide 28: Evolution of the P&L profile
Evolution of the P&L profile 2011 2020 2023e Subscription - 71% License & Maintenance 88% 85% Gross Margins Sub-total Software 88% 80% (% of Revenue) Services 10% 4% Axway 68% 71% 71% Sales & Marketing 28% 31% Operating Expenses Research & Development 15% 20% (% of Revenue) General & Administrative
Slide 29: For the future
For the future 01 02 03 FINANCE 2021 2022 & 2023 Solid financial performance Confidence in our strategy Profit & FCF return and guidance axway.com 29
Slide 30: Questions?
Questions? axway.com 30
Slide 31: Break
Break axway.com 31
Slide 32: Product Portfolio Approach
Product Portfolio Approach Rahim Bhatia – EVP Product Management axway.com 32
Slide 33: Customer challenges
Customer challenges Keep a lid on costs, increase ROI, decrease time to value Unrelenting pressure to increase security posture New types of users, endpoints, devices, protocols Incorporate new technologies, while deriving value from prior investments Manage a highly heterogeneous environment axway.
Slide 34: Customer challenges → mega trends → customer value
Customer challenges → mega trends → customer value 01 02 03 04 05 HYBRID CLOUD NO-CODE DEVOPS EDGE ECOSYSTEM Choice and Time-to-value Productivity Customer Channels flexibility and innovation experience and reach axway.com 34
Slide 35: Portfolio strategy
Portfolio strategy PRODUCT VISION BREADTH OF USE CASE axway.com BUSINESS PROCESS DEPENDENCIES 35
Slide 36: One game – two plays
One game – two plays 01 02 Staying even closer to our A dedicated team of specialists historical customers with key to accelerate winning market account managers and customer share for Amplify Platform success managers axway.com 36
Slide 37: Investments aligned to market trends
Investments aligned to market trends Market Size Relative Size Market Size Relative Size CAGR 2020 2020 2024 2024 2B 54% 3.6B 64% 16% MFT 0.943B 25% 1.3B 23% 9% B2B 0.76B 20% 0.73B 13% 0% Total Addressable 3.7B 100% 5.63B 100% 12% Market Source: Gartner Q1 2021 update axway.com 37
Slide 38: Amplify API Management: where we are going
WHERE WE ARE GOING Amplify API Management Platform grows with your business needs WHERE WE ARE Hundreds of customers rely on Axway and early adopters are blazing trails WHERE WE HAVE BEEN Mature API Gateway complemented by a SaaS Platform axway.com 38
Slide 39: Growing IT complexity
Growing IT complexity 2 Dev teams 5 Dev teams 10 Dev teams (internal and external) 3 Geographies 10 APIs 100 APIs 500 APIs 3 Impacted applications 25 Impacted applications (Internal and Cloud) 100 Impacted applications (Internal and Cloud) Complexity axway.com 39
Slide 40: Manage your ecosystem with Amplify
Manage your ecosystem with Amplify Centralized control for your environments Amplify Management Plane Ecosystems Unified Catalog Environments Policies Analytics Organizations Infrastructure CLI Subscriptions Identity & Access Dev Portal & Users Discovery / Traceability / Policy Federated Data Planes
Slide 41: Roadmap to a future proof platform
Roadmap to a future proof platform 01 02 03 MANAGEMENT PLANE MODERN GATEWAY ADVANCED CAPABILITIES axway.com 41
Slide 42: Strengthened Market Position
Strengthened Market Position The Forrester Wave™: API Management Solutions, Q3 2020 Gartner 2020 Magic Quadrant for Full Life Cycle API Management Gartner 2020 Magic Quadrant for Full Life Cycle API Management, Paolo Malinverno, Kimihiko Iijima, Mark O’Neill, John Santoro, Shameen Pillai, Akash The
Slide 43: MFT
WHERE WE ARE GOING MFT As MFT continues to be mission critical, our customers’ requirements are squarely centered on resiliency, scale and increased operational intelligence WHERE and efficiency. WE ARE Run on-premises, on multi- cloud platforms, and in a hybrid deployment setup. Axway also offers a
Slide 44: Axway is modernizing MFT
Axway is modernizing MFT App Biz Owners Head of Data Relationship LOB ITSM Manager Application MFT CoE Transmissions Manager Stakeholder Developer Collaboration layer Custom UI / Workflow ITSM Out of the box self-service UI / Workflow (Service enabled) Integration with Line of Business Applications
Slide 45: Axway MFT: Built for cloud, driven by business
Axway MFT: Built for cloud, driven by business 01 02 03 BEST OF BREED MFT DEPLOY ANYWHERE CENTRAL CONTROL AND EFFICIENCY axway.com 45
Slide 46: Axway B2B
Axway B2B WHERE WE ARE GOING Axway B2Bi offers the tools and capabilities to keep up with this changing landscape, including native JSON transformation and WHERE innovative APIs. WE ARE Axway has become integral to the largest and most sophisticated supply chains around the globe. WHERE WE HAVE BEEN
Slide 47: Axway B2B customer requirements
Axway B2B customer requirements 01 02 03 SCALE MODERNIZE OPERATIONAL EXCELLENCE axway.com 47
Slide 48: Axway B2B roadmap: Evolving to customer needs
Axway B2B roadmap: Evolving to customer needs 01 02 03 CLOUD AND DIGITALIZATION / MODERNIZATION MANAGED SERVICE INNOVATION axway.com 48
Slide 49: Portfolio strategy
Portfolio strategy PRODUCT VISION BREADTH OF USE CASE axway.com BUSINESS PROCESS DEPENDENCIES 49
Slide 50: Strategic Vision
Strategic Vision Vince Padua, CTIO axway.com 50
Slide 51: 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 51
Slide 52: Vision point of view
Vision point of view NEXT DECADE Automation Interoperable Composable THIS DECADE Speed Flexibility Integration LAST DECADE Security axway.com Resiliency 52
Slide 53: Big problems and big opportunities
Big problems and big opportunities 01 02 03 EXISTING AND SECURE AND INTEROPERABLE COMPOSABLE ECOSYSTEM EMERGING ECOSYSTEMS INFRASTRUCTURE axway.com 53
Slide 54: Composable ecosystem
Composable ecosystem Orchestration of automotive ecosystem AUTOMATED INTEROPERABLE MODULAR Business Data Exchange API platform processes axway.com 54
Slide 55: Flexible co-creation and co-innovation
Flexible co-creation and co-innovation NEXT DECADE Automation Interoperable Composable axway.com 55
Slide 56: "We are what we repeatedly do" - Socrates
“We are what we repeatedly do” - Socrates 01 02 03 EXISTING AND SECURE AND INTEROPERABLE COMPOSABLE ECOSYSTEM EMERGING ECOSYSTEMS INFRASTRUCTURE axway.com 56
Slide 57: Go-To-Market Approach
Go-To-Market Approach Paul French – EVP Go-To-Market axway.com 57
Slide 58: Unified model to deliver results
Unified model to deliver results CUSTOMER VIEW 2021 FOCUS & EXECUTION Product Sales management Customer experience Demand generation Engineering Marketing Sales efficiency axway.com 58
Slide 59: One game – two plays
One game – two plays 01 02 MAINTAIN EXPAND Market leadership Market leadership CUSTOMER EXPANSION NEW LOGOS Net retention rate Growth rate CUSTOMER DELIGHT NPS axway.com 59
Slide 60: Accelerating success with partners
Accelerating success with partners Partners leveraged signatures grew from 13% to 22% in 3 years Share of Partners leveraged signatures Partners leveraged signatures by product Signatures of which Partners leveraged 22% • Significant success of the 22% “API Boost” program with Sopra Steria, generati
Slide 61: axway.com
axway.com 61
Slide 62: Growing trend of multiple API management solutions
Growing trend of multiple API management solutions Number of API Management vendors 60% 54% 48% 95% 50% 40% 40% 30% 30% Of enterprises use 17% 20% multiple API management 10% 5% 5% 1% solutions 0% One Two Three Four+ 2020 2022 Source: IDC EMEA (2020): API Management & Integration Survey (right) axwa
Slide 63: Create a marketplace to monetize digital products through APIs
Create a marketplace to monetize digital products through APIs and automate subscription management based on a single catalog across the enterprise INCREASE EFFICIENCY By offering API reusability which reduces manual tasks and errors via automation, auto-discover APIs, and makes consumption data eas
Slide 64: Tame API complexity with Amplify
axway.com ap Tame API complexity is a beast, tame it with Amplify. 64
Slide 65: 2021 GTM — Amplify
2021 GTM — Amplify Innovation Functional, Enterprise Application Integration PERSONAS Board/CEO CDO CIO teams supply chain architects architects teams Microservices and streams SOLUTION THEMES API complexity API marketplace Securing your API ROUTE TO Partners: Direct: MARKET Sell with, sell through
Slide 66: axway.com
axway.com 66
Slide 67: The challenge is achieving the right balance
“ The challenge is achieving the right balance between managing the short-term issues of cost and complexity while at the same time investing in the future. Mike Gilbert, The CEO’s Dilemma axway.com 67
Slide 68: Enables secure eGovernment services in Germany with hybrid integration platform
Enables secure, seamless eGovernment services in Germany with a hybrid integration platform €150 BILLION In social security benefits paid in 2020 FPO 100,000 EMPLOYERS Integrated with a secure, central platform UP TO 5 MILLION “ Cyber threats defeated daily Our success during the COVID-19 crisis cle
Slide 69: 2021 GTM — Axway Core
2021 GTM — Axway Core Innovation Functional, Enterprise Application Integration PERSONAS Board/CEO CDO CIO teams supply chain architects architects teams Move to the cloud SOLUTION THEMES Self-service and real-time insights API-enabled MFT and B2B/EDI ROUTE TO Partners: Direct: Direct: MARKET Sell w
Slide 70: Winning in a competitive environment
Winning in a competitive environment 01 02 03 04 Embracing heritage Starts with strategy and Mission-critical infrastructure to deliver Open and independent process, not technology performance and scale brilliant digital experiences axway.com 70
Slide 71: The world is opening. Open Everything
The world is opening. Cross-pollenating new ideas, creating new possibilities across geographies, industries, and customers and partners. With every investment, old and new, opportunities for growth are blossoming. So what are you waiting for? & Axway will help turn what you already have into brilli
Slide 72: Questions?
Questions? axway.com 72
Slide 73: Objectives for our first Capital Markets Meeting
Objectives for our first Capital Markets Meeting 01 02 03 VISION STRATEGY EXECUTION Open everything Leverage our portfolio Delivering stakeholder value axway.com 73