74software · EURONEXT:74SW
74software — Axway — FY2018 Earnings Presentation
37 slides from 74software's earnings presentation, Feb 21, 2019
Slide 1: 2018 Full-Year Results
2018 Full-Year Results Analyst Conference – February 21, 2019 Cloud Business Center - Paris
Slide 2: Forward-looking statements
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 license contracts, which often represent investments for customers, are historica
Slide 3: Agenda
2018 Full-Year Results Agenda 1 - 2018 Financial results and Operating position Patrick Donovan Chief Executive Officer 2 - Progress report on the execution of the strategy and the AMPLIFY™ platform 3 - First commercial successes of the new business model Roland Royer Chief Customer Officer 4 - Targ
Slide 4: 2018 Financial results and Operating position
2018 Financial results and Operating position Patrick Donovan Chief Executive Officer
Slide 5: Full-Year 2018 - Execution of the strategy
Full-Year 2018 - Execution of the strategy Signature Metric New ACV* (License + 3X New ACV) +7.8% +56.1% H2 vs. H1 Investment Operating margin (R&D + Sales & Marketing) on business activity +14.7% 11.2% 2020 Ambitions confirmed: Revenue of around €300 million / HIP** market leader * Alternative perf
Slide 6: Full-Year 2018 - Income Statement
Full-Year 2018 - Income Statement In millions of euros 2018 2017 Revenue 283.8 299.8 of which License 56.5 65.3 → Revenue down 3.6% of which Subscription 40.3 37.5 organically*, 2.7% at of which Maintenance 142.8 145.4 constant exchange rates, Subtotal License, Subscription & Maintenance 239.7 248.3
Slide 7: Full-Year 2018 - Advancing on our new business model
Full-Year 2018 - Advancing on our new business model New Weighting Weighted New → Accelerate the transition [€m] Signatures to Subscription models Factor Signatures Business Value Model → Improve the Customer life cycle License 56.5 1x 56.5 → Increase the number of access points to Axway New solutio
Slide 8: Full-Year 2018 - Revenue by Activity
Full-Year 2018 - Revenue by Activity 2017 2017 Total Organic 19.9% 15.6% [€m] 2018 Restated* Reported Growth Growth* License Services License 56.5 63.7 65.3 -13.4% -11.3% Subscription 40.3 38.6 37.5 7.5% 4.4% 14.2% Subscription Maintenance 142.8 141.6 145.4 -1.8% 0.9% 50.3% Services 44.2 50.5 51.6 -
Slide 9: Focus on Subscription activity in 2018
Focus on Subscription activity in 2018 2017 2017 Total Organic [€m] 2018 Restated* Reported Growth Growth* Subscription 40.3 38.6 37.5 7.5% 4.4% Revenue New ACV 13.1 8.4 7.3 79.6% 56.1% * Alternative performance measures are defined in the glossary at the end of this document 2018 Review → Successfu
Slide 10: Focus on License & Maintenance activities in 2018
Focus on License & Maintenance activities in 2018 2017 2017 Total Organic [€m] 2018 Restated* Reported Growth Growth* License 56.5 63.7 65.3 -13.4% -11.3% Maintenance 142.8 141.6 145.4 -1.8% 0.9% * Alternative performance measures are defined in the glossary at the end of this document 2018 Review →
Slide 11: Main Balance Sheet items at 31/12/2018
Main Balance Sheet items at 31/12/2018 Cash and equivalents DSO Total Assets €35.8m 77 days €553.8m vs. €28.1m at 31/12/2017 stable vs. 31/12/2017 vs. €551.1m at 31/12/2017 Net debt Current deferred revenues Total Equity €10.2m €75.2m €362.7m vs. €24.1m at 31/12/2017 vs. €67.3m at 31/12/2017 (+11.8%
Slide 12: Cash flows & Covenants at 31/12/2018
Cash flows & Covenants at 31/12/2018 In millions of euros 31/12/2018 31/12/2017 31/12/2018 31/12/2017 Net profit for the period 11.0 4.4 Change in operating working capital requirements -3.6 -11.7 EBITDA Cost of debt 45.2 40.2 Net cash from operating activities 22.6 29.6 (covenant > 5) Free cash flo
Slide 13: Progress report on the execution of the strategy and the AMPLIFY platform
Progress report on the execution of the strategy and the AMPLIFY™ platform Patrick Donovan Chief Executive Officer
Slide 14: 2018, Acceleration of the execution of the strategy
2018, Acceleration of the execution of the strategy Technologies Products Customer Success Marketing → Portfolio audit and first → Creation of the Customer → Digital campaign to → Validation of the 2020 strategic rationalization Success Organisation support new offers strategic orientations with dec
Slide 15: AMPLIFY: Axway's Hybrid Integration Platform
AMPLIFY™: Axway’s Hybrid Integration Platform Engagement – Mobile, IoT, Web, Apps Partner Management/Onboard AMPLIFY AMPLIFY AMPLIFY AMPLIFY Central Titanium SDK API Portal B2Bi Governance Marketplace to discover AMPLIFY Content Collaboration and Content Services Collaboration/ EFSS partners, busine
Slide 16: AMPLIFY: 15 years of strategic evolution
AMPLIFY™: 15 years of strategic evolution 2006 SECURELY MOVING AND INTEGRATING DATA 2008 BUSINESS CONTEXT 2013 DATA OPENESS 2017 CUSTOMER CENTRICITY AMPLIFY™ 2020 16
Slide 17: 2019 Market Forecast and 2018-2022 CAGR
2019 Market Forecast and 2018-2022 CAGR Total market estimated at $19.7 billion in 2019 / Average CAGR 2018-2022 estimated at +10.0% 2006 SECURELY MOVING AND INTEGRATING DATA High Control 2008 BUSINESS CONTEXT • Managed File Transfer $1.1B (+6.1%) • B2Bi $1.1B (+4.0%) IT Transformation 2013 DATA OPE
Slide 18: AMPLIFY: Catalog available from end of Q1 2019
AMPLIFY™: Catalog available from end of Q1 2019 Availability Offered as Application Integration (IPaaS) Available Subscription API – Build & Orchestrate Available Subscription MFT – Service enrollment Available Subscription B2Bi – Partner enrollment Available Subscription Microservice Mesh Managemen
Slide 19: AMPLIFY: One Platform, One Experience, Multiple Integration
AMPLIFY™: One Platform, One Experience, Mutiple Integration Application API Managed Content B2B/EDI Integration Management File Transfer Collaboration (IPaaS) Unified Flow Event-driven Partner and consumer Portals and Developer catalog orchestration Choreography onboard/management marketplace tools
Slide 20: AMPLIFY: Setting the standard for HIP
AMPLIFY™: Setting the standard for HIP Endpoints AMPLIFY™ Products CRMs App Development B2B / EDI Cloud Services MFT General Ledgers Analytics Legacy Systems API Management etc. Content Collaboration 20
Slide 21: First commercial successes of the new business model
First commercial successes of the new business model Roland Royer Chief Customer Officer
Slide 22: 2018, Acceleration of the execution of the strategy
2018, Acceleration of the execution of the strategy Technologies Products Customer Success Marketing → Portfolio audit and first → Creation of the Customer → Digital campaign to → Validation of the 2020 strategic rationalization Success Organisation support new offers strategic orientations with dec
Slide 23: First commercial successes of the new business model
First commercial successes of the new business model One of A major player in life insurance in A major automotive equipment Brazil’s largest banks... the United States... manufacturer in Europe.... Axway managed the transition Axway successfully and rapidly Axway extended its presence to from a per
Slide 24: Reinforcing our Go-To-Market approach
Reinforcing our Go-To-Market approach → Digital presence → HIP evangelists team → Sales Specialists Go-To-Market → Inside Sales / Mid-Market Team +130% +300% 30 Traffic on Traffic on New Mid-Market Axway.com Axway Blogs Logos 24
Slide 25: Customer Success is Axway's Success
Customer Success is Axway’s Success → Proximity and collaboration → Supporting customers in their digital transformation → Co-Innovation with customers & partners Customer Loyalty 40 700 1,500 30 User Events User Online Community Customer Success Worldwide Members Members Managers 25
Slide 26: AMPLIFY 2019 Launch
2019 Launch January 2019 February 2019 AMERICAS March 2019 EUROPE AMPLIFY™ March End 2019 March 2019 Market Launch 26
Slide 27: Targets & Ambitions
Targets & Ambitions Patrick Donovan Chief Executive Officer
Slide 28: Targets & Ambitions
Targets & Ambitions → 2019 Return to organic growth, continuing into 2020, enabling Axway to achieve targeted revenue of around €300 million (« stable vs. 2017 ») → 2019 Operating margin on business activity between 8 and 10%, the low point during the transformation period, before a rebound expected
Slide 29: Q&A Session
Q&A Session Microphones are at your disposal
Slide 30: Appendices
axway Appendices
Slide 31: Full-Year 2018 - Change in revenue
Full-Year 2018 - Change in revenue 310 +€2.8m €299.8m 300 290 - €8.2m €283.8m consolidated since 280 01/03/2017 USD vs. EUR = -5.1 % - €10.6m 270 -3.6% organic decrease 260 €m 250 240 230 220 210 200 2017 Scope Exchange rates Organic 2018 Revenue effect effect growth Revenue 31
Slide 32: Full-Year 2018 - Revenue by Geography
Full-Year 2018 - Revenue by Geography 2017 2017 Total Organic [€m] 2018 23% Restated* Reported Growth Growth* Rest of Europe 29% France France 80.9 83.8 83.8 -3.4% -3.4% Rest of Europe 65.7 71.4 71.7 -8.4% -7.9% Americas 122.3 124.3 128.8 -5.0% -1.6% 5% 43% Asia - Pacific Americas Asia / Pacific 14.
Slide 33: Simplified Balance Sheet at 31/12/2018
Simplified Balance Sheet at 31/12/2018 In millions of euros 31/12/2018 31/12/2017 Assets Goodwill 344.1 333.6 Non-current assets 422.7 420.7 Trade receivables 65.6 71.1 → High cash position at €35.8 million Other current assets 29.7 31.2 Cash and cash equivalents 35.8 28.1 → 77-day DSO, stable compa
Slide 34: Changes in equity and Earnings per share at 31/12/2018
Changes in equity and Earnings per share at 31/12/2018 In millions of euros 31/12/2018 31/12/2017 Equity at Beginning of Period 344.1 374.8 Profit for the period 11.0 4.4 → Distribution of a dividend of Dividends -4.2 -8.5 €0.40 per share submitted to the shareholders' vote at the Capital increase 0
Slide 35: Full-Year 2018 - Headcount
Full-Year 2018 - Headcount 31/12/2018 30/06/2018 31/12/2017 France 468 467 518 Rest of Europe 771 727 733 Americas 537 514 515 Asia - Pacific 72 72 74 Axway 1,848 1,780 1,839 → Recruitment stepped up significantly in the second half of 2018 35
Slide 36: Shareholding structure at 31/12/2018
Shareholding structure at 31/12/2018 Pasquier Odin Sopra Treasury Sopra Steria Managers Caravelle Public Family Family GMT Shares Shares outstanding 32.57% 0.13% 1.39% 1.61% 21.22% 12.12% 30.36% 0.60% Voting rights 36.18% 0.13% 1.52% 1.63% 26.01% 14.86% 19.67% Shareholders’ agreement 21,225,381 Shar
Slide 37: 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