74software · EURONEXT:74SW
74software — Axway — Investor Presentation (September 2023)
57 slides from 74software's investor presentation, September 2023
Slide 1: Investor Presentation September 2023
Investor Presentation September 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: Axway's historical performance
Axway’s historical performance Revenue (€m) BUSINESS MODEL TRANSITION POA (€m) 330 Revenue (€m) 60 314 Profit on Operating Activities (€m) 310 301 300 300 55 297 290 285 284 286 50 51 270 262 45 46 250 45 238 40 230 224 40 41 217 38 35 210 35 35 33 30 190 32 31 170 25 26 150 20 2011 2012 2013 2014 2
Slide 9: 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 10: Shareholding structure at 31/07/2023
Shareholding structure at 31/07/2023 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.12% 1.34% 1.47% 41.25% 3.04% Voting rights 38.49% 25.07% 0.13% 1.43% 1.45% 33.43% Shareholders’ agreement 21,633,597 shares outstanding 55.7% of shares outstanding / 66
Slide 11: What we do
axway >= What we do
Slide 12: 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 13: 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 14: 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 14
Slide 15: Axway MFT. Secure managed file transfer operations.
Axway MFT. Secure managed file transfer operations. Tightest Security Automate and meet SLAs Managed Cloud Services for MFT Scalable Hybrid Deployment Protect organizations from Use automated workflows to Spend less time managing a technical Deploy as a flexible subscription operations disruption an
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 partners Track all data and apps and shorten response times support for innovative int
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 Storage accounting
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: FY 2022 Highlights
axway >= FY 2022 Highlights
Slide 21: 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 21
Slide 22: 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 22
Slide 23: In 2022 we continued to deliver value!
In 2022 we continued to deliver value! 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 Profitability at its high
Slide 24: 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 Cost of sales 91.4 83.3 +5.5% +10.0% 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 25: 2022 Full-Year Results: Revenue by Activity
2022 Full-Year Results REVENUE BY ACTIVITY 4% 2021 2021 Total Organic License 12% [€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 26: 2022 Full-Year Results: 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 27: 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 28: 2022 Full-Year Results: 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 29: H1 2023 Highlights
axway >= H1 2023 Highlights
Slide 30: Momentum continues!
Momentum continues! 3RD QUARTER OF PORTFOLIO RATIONALIZATION READY FOR STRONG ORGANIC GROWTH AND FOCUS PLAN NEXT STRATEGIC PHASE IMPROVED CONTINUED CUSTOMER REINVESTMENT FREE CASH FLOW IN MAIN PRODUCT LINES 30
Slide 31: Product portfolio investments
Product portfolio investments EXTENSION OF CAPABILITY GROWING CUSTOMER NEEDS Amplify Enterprise Marketplace Acquisition of Unifying distributed APIs to enable more robust governance and security, ensuring compliance and consistent API lifecycle management and monetization Amplify Integration Integra
Slide 32: Customer success as a company value
Customer success as a company value H1 2023 growth factors AVERAGE MIGRATION NET RETENTION RATE NEW CUSTOMERS MULTIPLIER CONTRACT VALUE MAINTENANCE MOVING OF WINS WITH RENEWED OR MOVED TO SUBSCRIPTION NEW CUSTOMERS TO SUBSCRIPTION 32
Slide 33: 2023 Half-Year Results: ARR
2023 Half-Year Results ARR (Annual Recurrent Revenue) 210 Half-Year ARR (€m) 200 190 180 203 170 190 175 160 163 164 150 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 33
Slide 34: 2023 Half-Year Results: Revenue by Activity
2023 Half-Year Results REVENUE BY ACTIVITY 2% H1 2022 H1 2022 Total Organic License 13% [€m] H1 2023 Restated* Reported Growth Growth* Services License 3.0 5.5 6.3 -52.5% -44.9% 54% Subscription Subscription 78.7 52.3 55.9 +40.8% +50.5% Maintenance 44.6 55.1 56.0 -20.4% -19.1% 31% Maintenance Servic
Slide 35: 2023 Half-Year Results: Subscription Activity
2023 Half-Year Results SUBSCRIPTION ACTIVITY H1 2022 H1 2022 Total Organic [€m] H1 2023 Restated* Reported Growth Growth* Subscription 78.7 52.3 55.9 +40.8% +50.5% of which Q1 23 37.8 24.7 26.4 +43.1% +53.1% of which Q2 23 40.9 27.6 29.5 +38.7% +48.2% * Alternative performance measures are defined i
Slide 36: 2023 Half-Year Results: Key Figures Income Statement
2023 Half-Year Results KEY FIGURES INCOME STATEMENT H1 2023 H1 2022 In millions of euros €m % of Rev. €m % of Rev. Revenue 145.5 136.4 Cost of sales 42.9 45.8 Gross Profit 102.6 70.5% 90.6 66.4% Operating expenses 84.8 83.9 of which Sales and marketing 42.1 42.8 of which Research and development 29.
Slide 37: Main Balance Sheet items at 30/06/2023
2023 Half-Year Results Main Balance Sheet items at 30/06/2023 Cash and cash equivalents DSO Total assets €14.2m 137 days €545.4m vs. €18.3m at 31/12/2022 vs. 124 days at 30/06/2022 vs. €571.1m at 31/12/2022 Net debt Current deferred revenues Total equity €73.4m €66.5m €314.6m vs. €69.5m at 31/12/202
Slide 38: 2023 Half-Year Results: Cash Flows
2023 Half-Year Results CASH FLOWS In millions of euros H1 2023 H1 2022 Net profit for the period 3.7 2.4 Change in operating working capital requirements 4.5 2.3 Net cash from operating activities 23.1 13.1 Free cash flow 16.5 8.2 Net cash used in investing activities -8.6 -9.7 Net cash used in fina
Slide 39: Targets & ambition
Targets & ambition Looking to H2 2023 & beyond
Slide 40: H2 2023 Priorities
H2 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 prope
Slide 41: Looking ahead
Looking ahead Continued momentum SOLID PIPELINE FOR H2 STILL GREAT POTENTIAL COVERAGE OF INITIAL CUSTOMER BASE STABLE VS. LAST YEAR STILL AVAILABLE TO MIGRATE DESPITE H1 SOLID BOOKING GROWTH 41
Slide 42: Confirming our guidance and ambitions
Confirming our guidance and ambitions 2023 FY GUIDANCE MID-TERM AMBITIONS Organic Revenue Growth Profit on Operating Activities ≈ 20% between 0% and +3% Profit on Operating Activities Opportunistic Strategy to €500m Revenue between 15% and 18% of total Revenue 42
Slide 43: 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 TRANSITION 70 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 44: 2024 and beyond – Establish capital allocation program
2024 and beyond – Establish capital allocation program Path to €500 million M&A OPPORTUNITIES ▪ From 2023 onwards, FCF and POA will allow more flexibility to explore M&A options ▪ Over the last 3 years, acquisitions were limited to the addition of product functionality ▪ Built out M&A team to suppor
Slide 45: Appendices
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Slide 46: 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 47: 2022 Full-Year Results - 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 axway.com 47
Slide 48: 2022 Full-Year Results: Revenue by Geography
2022 Full-Year Results REVENUE BY GEOGRAPHY 7% 2021 2021 Total Organic [€m] 2022 Asia/Pacific 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 49: 2022 Full-Year Results: 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 50: Changes in Equity & Earnings per Share at 31/12/2022
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 51: Headcount
Headcount As of 30/06/2023 30/06/2023 31/12/2022 France 425 437 Rest of Europe 606 636 Americas 362 378 Asia/Pacific 64 74 Axway 1 457 1 525 51
Slide 52: Corporate Social Responsibility
Corporate Social Responsibility
Slide 53: Axway, a responsible and committed player
Axway, a responsible and committed player Business ethics Whistle-blowing system axway.com 53
Slide 54: Governance
Governance
Slide 55: 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 56: Executive Committee
Executive Committee 7 Members 4 Nationalities 29% Women axway.com 56
Slide 57: 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