74software · EURONEXT:74SW
74software — Axway — FY2022 Earnings Presentation
39 slides from 74software's earnings presentation, Feb 22, 2023
Slide 1: 2022 Full-Year Results Analysts Conference
2022 Full-Year Results Analysts Conference February 22, 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: Agenda
Agenda 1. Operational Commentary on 2022 2. 2022 Financial Results 3. Customers & Market Trends 4. Targets & Ambition 5. Q&A Session Patrick Donovan Chief Executive Officer Cécile Allmacher Chief Financial Officer Roland Royer Chief Customer Officer 3
Slide 4: Operational Commentary on 2022
Operational Commentary on 2022 Patrick Donovan Chief Executive Officer
Slide 5: 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 5
Slide 6: 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 6
Slide 7: … and we continue to deliver value to each of them!
… and we continue to deliver value to each of them! 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 Profitabilit
Slide 8: 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 9: 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 10: 2022 Key Figures
2022 Key Figures Revenue compared to €285.5m in 2021, an organic growth of 5.5% Profit on Operating Activities or 14.7% of revenue, up 320bps vs. 11.5% in 2021 Subscription Growth or €154.0m vs. €117.6m in 2021 ARR Growth or €196.5m vs. €174.8m in Q4 2021 10
Slide 11: Financial Results
2022 Financial Results Cécile Allmacher Chief Financial Officer
Slide 12: 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 Gross Profit 222.6 70.9% 202.3 70.8% + % + % Operating expenses of which Sales and marketing of which Research and dev
Slide 13: 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 14: License & Maintenance activities
2022 Full-Year Results LICENSE & MAINTENANCE ACTIVITIES 2021 2021 Total Organic [€m] 2022 Restated* Reported Growth Growth* License 11.6 19.6 18.6 -37.6% -40.8% of which Q4 22 3.0 4.5 4.6 -34.9% -33.8% Maintenance 111.2 125.0 119.0 -6.6% -11.1% of which Q4 22 26.9 30.3 29.4 -8.8% -11.4% * Alternativ
Slide 15: 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 16: Services activity
2022 Full-Year Results SERVICES ACTIVITY 2021 2021 Total Organic [€m] 2022 Restated* Reported Growth Growth* Services 37.3 35.4 33.8 +10.3% +5.4% of which Q1 22 9.0 9.3 9.0 -1.0% -4.0% of which Q2 22 9.3 8.7 8.3 +11.8% +6.3% of which Q3 22 9.6 8.3 7.7 +23.9% +15.8% of which Q4 22 9.5 9.1 8.8 +8.5% +
Slide 17: 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 18: Cash flows and covenants
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 19: Change in Net Debt
2022 Full-Year Results - Change in Net Debt €8.5m €69.5m 70.0 €-0.7m 65.0 €13.7m 60.0 55.0 50.0 €13.6m 45.0 40.0 €36.5m 35.0 €-2.2m 30.0 25.0 20.0 Net Financial Debt Free Cash Flow Changes in scope & Share Buyback Dividends Others Net Financial Debt at 31/12/2021 Financial investments at 31/12/2022
Slide 20: Progressive normalization of Free Cash Flow
Progressive normalization of Free Cash Flow 80 22.00% Profit on Operating Activities (€m) BUSINESS MODEL FCF as a % of revenue 70 TRANSFORMATION 18.00% 60 14.00% 50 First Customer Managed Subscription Offer FCF / Rev. (%) POA (€m) 40 10.00% 30 6.00% 20 2.00% 10 0 -2.00% 2011 2012 2013 2014 2015 2016
Slide 21: Customers & Market trends
Customers & Market trends Roland Royer Chief Customer Officer
Slide 22: Customer experience as a company value
Customer experience as a company value OVERALL RENEWAL AVERAGE MIGRATION NET PROMOTER SCORE SUCCESS RATE MULTIPLIER COMPARED TO 29 RENEWED OR MOVED MAINTENANCE MOVING TO AT THE END OF 2021 TO SUBSCRIPTION SUBSCRIPTION 22
Slide 23: 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 23
Slide 24: Subscription – Customer and Axway Managed
Subscription – Customer and Axway Managed 2022 BOOKING MIX AXWAY MANAGED Axway 23% YoY Booking Growth Managed Largest new customer > 5m€ over 5 years 19% B2B representing 60% of booking €183.6m CUSTOMER MANAGED 2022 Booking 38% of Customer Managed contracts signed for a 5 years duration MF
Slide 25: Looking ahead
Looking ahead STILL GREAT POTENTIAL AND OPPORTUNITIES TO SEIZE… NEW SOLUTION WITH GREAT INITIAL TRACTION ON OUR CUSTOMER BASE AMPLIFY INTEGRATION AND AMPLIFY OF INITIAL CUSTOMER BASE INCREASE IN PIPELINE MARKETPLACE STILL AVAILABLE TO ENTERING 23 VS. 22 MIGRATE DESPITE DECEMBER BOOKING LEVEL 25
Slide 26: Targets & Ambition
Targets & Ambition Patrick Donovan Chief Executive Officer 26
Slide 27: 2023 Priorities
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 properly
Slide 28: Building our strength year after year…
Building our strength year after year… 5 Years 2013-17 2023 2022 2021 2020 2019 2018 Average Average Guidance Organic Revenue Growth (%) +5.5% -2.7% +0.5% +3.3% -3.6% 0 to +3% excluding disposed products +7.4% +0.3% +1.6% +4.9% -2.2% +2.4% +1.6% Profit on Operating Activities (€m) 46.3 32.9 30.8 25.
Slide 29: Adjusting our mid-term ambitions
Adjusting our mid-term ambitions FROM NOW ON PREVIOUSLY Profit on Operating Activities ≈ 20% Profit on Operating Activities ≥ 15% Earnings per share ≥ €1 Opportunistic Strategy to €500m Revenue Revenue ≥ €500 million (including M&A) 29
Slide 30: Q&A Session
Q&A Session Call +44 (0) 33 0551 0200 or use the chat to ask a question Financial Calendar Friday, March 24, 2023: Filing of the 2022 Universal Registration Document Thursday, April 27, 2023, before market opening: Publication of Q1 2023 Revenue Thursday, May 11, 2023, 2:30 p.m. (UTC+1): Annual Shar
Slide 31: Thank you
Thank <* you =o
Slide 32: Appendices
axway * Appendices
Slide 33: 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 34: 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 34
Slide 35: 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 36: Changes in equity & earnings per share
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 37: Headcount
2022 Full-Year Results HEADCOUNT 31/12/2022 31/12/2021 France 437 466 Rest of Europe 636 748 Americas 378 436 Asia/Pacific 74 62 Axway 1 525 1 712 37
Slide 38: Shareholding structure at 31/12/2022
Shareholding structure at 31/12/2022 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.11% 1.35% 1.47% 41.30% 3.01% Voting rights 38.61% 25.15% 0.12% 1.33% 1.45% 33.34% Shareholders’ agreement 21,633,597 Shares outstanding 55.7% of shares outstanding / 66
Slide 39: 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