74software · EURONEXT:74SW
74software — Axway — Investor Presentation (May 2018)
43 slides from 74software's investor presentation, May 2018
Slide 1: Investor Presentation
Investor Presentation May 2018
Slide 2: Forward Looking Statements
Forward Looking Statements • 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
Slide 3: Index
INDEX • Software Digital Transformation • Offer • Business Model • Accounting and Financial Results • Corporate Profile • Perspectives © 2018 Axway 3
Slide 4: Axway, at a glance
Axway, at a glance Rev. €299.8million Named a leader in the Gartner MQ for OPM 13.5% Content Collaboration Platforms. Formerly referred to as Enterprise File FCF/Rev 8.3% Synchronization and Sharing. (July2017) Equity €344.1 million Axway solutions are deployed by Cash €28.1 million over 11,000 comp
Slide 5: Software Digital Transformation
Software Digital Transformation MARKET DRIVERS © 2018 Axway 5
Slide 6: Axway Market Origin: Infrastructure Software
Axway Market Origin: Infrastructure Software • Software market estimated at $300 billion* Applications software Infrastructure software estimated at $130 billion* estimated at $ 169 billion* • Databases • Accounting • Operating systems • ERP • Network management • Sales management • Storage manageme
Slide 7: Market origin: technology viewpoint
Market origin: technology viewpoint Axway addressable Market ($4 billion ) A A A BPM / BAM Data Application MFT Integration Integration Integration Integration B2B Brokerage (ETL, MDM, …) (ESB, MOM, …) EFSS (VAN ), iPaaS Middleware SOA Governance / API Management A A A © 2018 Axway 7
Slide 8: Market evolution: technology viewpoint
Market evolution: technology viewpoint Axway addressable Market ($2 billion ) A A A A Digital Middleware A A A © 2018 Axway 8
Slide 9: Digital technology impact: new domains
Digital technology impact: new domains CLOUD DIGITAL DISTRUPTION 2020 Cloud Creates Internet of Things Mobile Spans $240 Billion Drivers 25 Billion 80% of Market Connected Developed World Opportunity Machines INTERNET OF MOBILE THINGS © 2018 Axway 9
Slide 10: Digital technology impact: B2B and B2C are converging
Digital technology impact : B2B and B2C are converging • Digital transformation is everywhere • Billion of datas • Security • Regulation • Cost optimization • IT rationalization • Business Innovation © 2018 Axway 10
Slide 11: Competitive & Market Landscape
Competitive & Market Landscape From traditional middleware scope to Platform providers Integration Engagement IaaS © 2018 Axway 11
Slide 12: Axway Offer
Software Digital Transformation AXWAY OFFER © 2018 Axway 12
Slide 13: What's changed?
What’s changed? 2006 2008 2013 2017+ Mainframe monolith Client and Server SOA and Webservices Cloud and microservices Contenairization © 2018 Axway 13
Slide 14: Axway AMPLIFY
Axway AMPLIFY™ DATA INTEGRATION & ENGAGEMENT PLATFORM Achieve higher levels of efficiency and growth by transforming rigid and manual connections between people, businesses and machines into customer experience networks. © 2018 Axway 14
Slide 15: Leveraging industry-leading products
Leveraging industry-leading products API Management Plus Open up data and engage developers to innovate new experiences Decision Insight Analyze service levels and adoption with real-time, predictive insights Axway Appcelerator Build beautiful apps that delight users with a seamless digital journey
Slide 16: Industry analyst recognition
Industry analyst recognition Leader Leader Leader Strong Performer Pharmaceutical Track Full Life Cycle API API Management API Management and Trace Software Management Solutions Solutions, Q4 2016 Leader B2B Integration Gateway Leader Software Applications Services Strong Performer Governance Mobile
Slide 17: Axway portfolio segmentation
Axway portfolio segmentation INTEGRATION FOUNDATION ECOSYSTEM ENGAGEMENT Managed File Transfer Analytics B2B/EDI Integration API Management Cloud Service Integration Identity Federation & Validation XML & SOA Services EFSS API Gateway Mobile App Development © 2018 Axway 17
Slide 18: Axway Business Model
Axway Business Model © 2018 Axway 18
Slide 19: Axway Business Model: sources of revenue in 2017
Axway Business Model: 4 sources of revenue in 2017 Services Licenses (Classic Editor) • Perpetual usage rights Associated with the initial installation • Tiered pricing Independent of licence • Standard licensing Service agreement agreement 30% 46% 24% Maintenance Cloud • Associated Subscription usa
Slide 20: 2017 Balanced and resilient business model
2017 Balanced and resilient business model 61% Vs 54% By Region By Activity Recurring/R 28% (2016 31%) 24% 22% 18% France Rest of Europe Licenses Services 13% Cloud 5% 43% (2016 41%) 49% Asia Pacific Americas Maintenance © 2018 Axway 20
Slide 21: Revenue by activity FY 2017
Revenue by activity FY 2017 2016 2016 Total Organic [€M] 2017 Published Restated 1 Growth Growth1 Licenses 65.3 81.3 80.3 -19.6% -18.7% Cloud 37.5 - 32.8 - 14.4% Maintenance 145.4 143.0 141.4 1.7% 2.8% Services 51.6 76.8 57.1 -32.9% -9.6% Axway 299.8 301.1 311.6 -0.4% -3.8% (1) At constant exchange
Slide 22: Revenue by region FY 2017
Revenue by region FY 2017 2016 2016 Total Organic [€M] 2017 Published Restated 1 Growth Growth1 France 83.8 94.2 94.2 -11.0% -11.0% Rest of Europe 71.7 68.8 67.4 4.3% 6.5% Americas 128.8 122.9 134.9 4.8% -4.5% Asia Pacific 15.6 15.3 15.2 1.8% 2.7% 301 Axway 299.8 301.1 311.6 -0.4% -3.8% (1) At const
Slide 23: Business Model transformation
Business Model transformation Traditional Model – Upfront Sales New Model – Long Tail Sales © 2018 Axway 23
Slide 24: Cloud Subscription Model
Cloud Subscription Model Revenue + ACV + TCV over the years Renewal Churn 93% 7% 37.5M€ New ACV 7.3M€ +14.4% Cloud New TCV 16.3M€ 2017 2018 2019 2020 © 2018 Axway 24
Slide 25: A composite growth model: organic + acquisition
A composite growth model: organic + acquisition 300 Revenue in €M Appcelerator 2017 2016 250 2012 2008 2014 200 2007 150 2006 2002 100 50 2016 Catalyst for 0 Transformation 1985 - 2000 2001 - 2005 2006 - 2009 2010 - 2012 2015 2016 2017 Incubation within B2B Collaborative Network of Governing Sopra a
Slide 26: Accounting & Financial Results
Accounting & Financial Results 26
Slide 27: Simplified income statement 1/2
Simplified income statement 1/2 In millions of euros FY 2017 FY 2016 FY 2015 Revenue : License 65.3 81.3 80.5 Cloud 37.5 19.1 10.3 Maintenance 145.4 143.0 137.7 Total Product Revenue 248.3 243.4 228.4 Services 51.6 57.7 56.2 Total Revenue : 299.8 301.1 284.6 Costs of sales: Product Revenue 23.8 23.7
Slide 28: Simplified income statement 2/2
Simplified income statement 2/2 In millions of euros FY 2017 FY 2016 FY 2015 • We continue to see impact of shifting business model with Profit on operating activities 40.5 50.8 44.5 license revenue decreasing as a % of Revenue 13.5% 16.9% 15.6% and cloud increasing Stock option releated expenses (1
Slide 29: Simplified balance sheet
Simplified balance sheet In millions of euros 31/12/17 31/12/16 31/12/15 • Goodwill and intangibles ASSETS increased from the Goodwill 333.6 288.8 251.8 acquisition of Syncplicity Non-current assets 420.7 402.7 347.5 Trade receivables 71.1 78.2 73.9 • Cash balance of 28.1M€ and Other current assets
Slide 30: Change in Equity
Change in Equity In millions of euros 31/12/17 31/12/16 31/12/15 • Due to the USD/Euro conver- Equity at Opening of Period 374.8 340.6 298.5 sion rate movement at Profit for the period 4.4 31.5 27.9 balance sheet ending date a significant translation adj- Dividends -8.5 -8.3 -8.2 ustment was recorde
Slide 31: Free Cash Flow statement
Free Cash Flow statement In millions of euros 31/12/17 31/12/16 31/12/15 • Change in Working Capital Net profit for the period 4.4 31.5 27.9 Requirements (BFR) for 2017 of -11.7 M€ versus -5.9 M€ in Net cash from operating activities 29.6 38.4 49.6 2016 Net cash used in investing activities (57.5) (
Slide 32: Financial structure — Covenants FY 2017
Financial structure — Covenants FY 2017 31/12/17 31/12/16 31/12/15 EBE/ • Financial covenants met in Costs of Debt (covenant >5) 40.19 130 111 all periods. Net debt for 2017 is 20.6 M€ • Our main covenant is the leverage ratio: Net debt/EBE Net Debt/ ≤ 3 (0,47 at Dec 31, 2017) EBE (covenant <3) 0.47
Slide 33: Corporate Profile
Corporate Profile © 2018 Axway 33
Slide 34: Governance
Governance • Strengthened Governance • Board of Directors Patrick Donovan has been comprising 13 members, of which 7 are appointed by the Board of Directors independent members the 6th of April 2018. • Pierre Pasquier Chairman • Kathleen Clark-Bracco Vice Chairman • Compliance with the Middlenext Co
Slide 35: Axway shareholder structure
Axway shareholder structure 31/12/2017 21,210,546 SHARES OUTSTANDING 34,301,758 VOTING RIGHTS Sopra Steria Pasquier Odin Sopra Treasury Managers Caravelle Public Group Family Family GMT Shares Shares Outstanding 32.59% 0.13% 1.37% 1.64% 21.23% 12.13% 30.77% 0.13% Voting Rights 35.08% 0.14% 1.52% 1.6
Slide 36: A presence spanning the continents
A presence spanning the continents France Rest of Europe €94.2million €68.8million 576 people 745people 2,077 customers 2,908 customers Americas North America Asia Pacific €122.9million €15.3million 529 people 74 people 4,014 customers 1,530 customers South America Africa 1,387 customers 73 customer
Slide 37: Corporate Social Responsibility
Corporate Social Responsibility Organizations & Labels Governance • Global Compact • Board members: CSR Report • 63% independant Download • 36% women 42% http://www.investors.ax way.com/sites/default/ • EcoVadis label for the • 95% attendance rate files/csr_report_extract_ registration_document_ a
Slide 38: Perspective
31/12/2015 20,773,916 SHARES OUTSTANDING 35,538,163 VOTING RIGHTS Axway Sopra Pasquier Odin Geninfo Treasury Shareholder Managers Sopra GMT Caravelle Public Steria Family Family (SG Group) Shares Structure Shares outstanding 24.9% 0.1% 1.4% 1.7% 21.6% 8.6% 12.3% 28.9% 0.2% Voting Rights Perspective
Slide 39: Become a leader in Hybrid Integration Platform
Become a leader in Hybrid Integration Platform © 2018 Axway | CONFIDENTIAL 39
Slide 40: Hybrid Integration Platform As A Service
Hybrid Integration Platform As A Service 25 000,0 DIGITAL IMPACT 20 000,0 By 2020, more than 75% ~$14.5B Global Market (2018) of large organizations 15 000,0 will establish a hybrid integration platform 10 000,0 using an integration infrastructure that 5 000,0 they assemble from multiple vendors. 0,
Slide 41: Become a leader in Hybrid Integration Platform
Become a leader in Hybrid Integration Platform 2020 TRENDS 2018 INVESTMENTS • Stable Top Line Organic Revenue Additional 15 M€ • Grow Subscription Revenue • R&D to deliver Cloud Offers to 65-75 M€ • Sales & Digital Marketing • 65% of Recurring Revenue • Customer Satisfaction • Strategic M&A © 2018 A
Slide 42: Thank You
THANK YOU www.investors.axway.com/en Mobile App: Axway IR available on Apple store & Android 42
Slide 43: APM Definition
APM Definition • Restated: Revenue for the prior year, expressed on the basis of the scope and exchange rates for the current year. • Organic growth of revenue: Growth of operations between revenue for the period and the reprocessed revenue data for the same period of the preceding fiscal year. • Pr