74software · EURONEXT:74SW
74software — Axway — Investor Presentation (March 2017)
57 slides from 74software's investor presentation, March 2017
Slide 1: Investors Overview
Investors Overview AXWAY March 2017
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: Welcome To Investor Presentation
Welcome To Investor Presentation Agenda TOP 50 Software Editors Software Editor Business Model Track Record of Profitable Growth Status on the Company Transformation Why Invest in Axway Annexes © 2016 Axway | CONFIDENTIAL 2
Slide 4: TOP 50 Software Editor, From Middleware Market To Digital Market
TOP 50* Software Editor, From Middleware Market To Digital Market *source: Axway 3
Slide 5: Axway, 50th Global software editor
Axway, 50th Global software editor Axway a Leader in Gartner MQ for App Axway: Catalyst for Services Governance for the Second Time (April 2015). digital transformation TOP 10 Syntec Numerique API leader by Ovum July 2016 Rev. €301.1million Euronext Paris listing 2011 OPM 16.9% Market cap €M 662 FCF
Slide 6: Key figures 2016
Key figures 2016 Total growth +5.8% 2015 2016 Published Revenue 301.1 284.6 Profit from business activity 50.8 44.5 (%revenue) 16.9% 15.6% Net Profit 31.5 27.9 (%revenue) 10.5% 9.8% (1) At constant exchange rates and on a like-for-like basis © 2017 Axway | CONFIDENTIAL 5
Slide 7: Revenue by activity 2016
Revenue by activity 2016 2015 2015 Organic [€M] 2016 Published Restated Growth1 Licenses 81.3 80.5 79.9 1.8% Maintenance 143.0 137.7 136.6 4.7% Services 76.8 66.4 72.0 6.7% Axway 301.1 284.6 288.5 4.4% (1) At constant exchange rates and on a like-for-like basis © 2017 Axway | CONFIDENTIAL 6
Slide 8: Revenue by region 2016
Revenue by region 2016 2015 2015 Organic [€M] 2016 Published Restated Growth1 France 94.2 95.2 94.8 -0.6% Rest of Europe 68.8 65.7 64.0 7.4% Americas 122.9 109.7 115.9 6.0% Asia Pacific 15.3 13.9 13.8 10.7 Axway 301.1 284.6 288.5 4.4% (1) At constant exchange rates and on a like-for-like basis © 201
Slide 9: Axway Market Origin: Infrastructure Software
Axway Market Origin: Infrastructure Software • Software market estimated at $300 billion* Infrastructure software estimated at $ 169 billion* • Databases Applications software • Operating systems estimated at $130 billion* • Network management • Storage management • Accounting • Application integrat
Slide 10: Digital Transformation: at least 28% of revenues
Digital Transformation LARGE ENTERPRISES EXPECT AT LEAST 28% OF REVENUES WILL COME FROM DIGITAL BUSINESS THE NEXT THREE YEARS Source: Accenture – “Harnessing the Power of Entrepreneurs to Open Innovation,” 2015; n=2,000 9
Slide 11: Digital disruption continues to test the ingenuity and agility of most enterprises
Digital disruption continues to test the ingenuity and agility of most enterprises 900B 80% 200B $1T HOURS SPENT MOBILE COVERAGE CONNECTED IN IoT SPENDING INSIDE MOBILE IN THE DEVELOPED DEVICES DRIVEN BY 2020 APPS IN 2016 WORLD BY THE IOT 90% $79B CARS CONNECTED SMART HOME BY 2020 INDUSTRY © 2017 Ax
Slide 12: Digital Business Drivers
Digital Business Drivers 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 74% of today’s business executives say they have a digital strategy… “…only 19%
Slide 13: Portfolio Segmentation
Portfolio Segmentation Digital Business Enablement INTEGRATION FOUNDATION ECOSYSTEM ENGAGEMENT Managed File Transfer Analytics B2B/EDI Integration API Management Cloud Service Integration Community Management XML & SOA Services Identity Federation & Validation Mobile App Development 12
Slide 14: EFSS Opportunity
EFSS Opportunity • Over the past 3 years market of EFSS has grown at over 20%+ year over year • IDC forecasts EFSS DIGITAL DIGITAL MTF enterprise market to grow MTF to $1.8 billion +17% in 2017 Aggregate Market1 $7.7billion $5,908M +19% +20% © 2017 Axway | CONFIDENTIAL 13
Slide 15: Axway announces the acquisition of Syncplicity
• Axway announces the acquisition of Syncplicity • Leader in secure collaboration and file sharing (EFSS) © 2017 Axway | CONFIDENTIAL 14
Slide 16: Strengthening Axway leadership in secure file exchange
Strengthening Axway leadership in secure file exchange MFT EFSS DIGITAL MFT System Centric Human Centric Digital Shared Services • Managed file transfer for • Access anywhere, anytime • Enhances AMPLIFY™ applications and/or from any device platform integration partners foundation • Secure and easy s
Slide 17: Forrester Wave: Enterprise File Sync And Share, Hybrid Solutions, Q2'16
Forrester Wave: Enterprise File Sync And Share, Hybrid Solutions, Q2'16 The Forrester Wave ™: Enterprise File Sync And Share Platforms, Hybrid Solutions, Q2 2016, Forrester Research, Inc., April 26, 2016 © 2017 Axway | CONFIDENTIAL 16
Slide 18: Axway a Leader in Gartner Magic Quadrant for Full Life Cycle API Management
Axway a Leader in Gartner Magic Quadrant for Full Life Cycle API Management Positioned as a Leader for 3rd consecutive time “Full life cycle API management is the functionality organizations need in order to provide the technology platform for digital business, run successful API programs and thrive
Slide 19: Competitive & Market Landscape
Competitive & Market Landscape Generalists Traditional Middleware and API Management Integration Providers Cloud Integration and Integration Brokerages Digital Foundation Ecosystem/Digital Engagement 18
Slide 20: Introducing Axway AMPLIFY
Introducing Axway AMPLIFY™ Turn Data into Real-time, DevOps-ready Services Cross-Platform App Development DATA INTEGRATION & Unified Engagement with Measure Business User Communities Value of Services ENGAGEMENT PLATFORM Achieve higher levels of efficiency and growth by transforming rigid and manual
Slide 21: Platform Architecture Evolution
Platform Architecture Evolution Axway 5 Suite Axway AMPLIFY Point products, disjointed user experience Integrated solutions, coherent user experience Solutions Product “C” Platform UX Product “A” Platform “C” Platform “A” Platform Pre-built Services Cloud Marketplace Product “B” Cloud Portal Platfor
Slide 22: Software Editor Business Model
Software Editor Business Model 21
Slide 23: Three sources of revenue in 2016
Three sources of revenue in 2016 Services Classic Editor Maintenance Associated with the initial installation • Associated Independent of licence with licence sales Service agreement • Three levels of support Software as a Service (Cloud) • For five years, 26% Rental mode 30% but termination 3-years
Slide 24: Balanced and resilient business model
Balanced and resilient business model By Region By Activity Product Software 80.84%/R +6.8%growth 31% 23% 26% 27% France Rest of Europe Services Licenses Of which Cloud +26.6% Growth 5% 41% 47% Asia Pacific Americas Maintenance Recurring 53.8%/R +9.9%growth Software 33.34%/R +11.2% growth © 2017 Axw
Slide 25: Axway Cash generation profile
Axway Cash generation profile Software Business Cycle Cash life cycle (cumulative) 100,00% 2016 Rev. (€M) 30 80,00% 25 60,00% 20 40,00% 15 10 20,00% 5 0,00% 0 Jan Jun Apr May Jul Aug Feb Oct Mar Dec Sep Nov Q1 Q2 Q3 Q4 Cash flow cycle – Influenced by grouped maintenance at the beginning of the year
Slide 26: A composite growth model: organic + acquisition
A composite growth model: organic + acquisition 300 Revenue in €M 250 Appcelerator 2012 2016 200 2008 2014 2007 150 2006 100 2002 50 0 1985 - 2000 2001 - 2005 2006 - 2009 2010 - 2012 2015 2016 Incubation B2B Collaborative Network of Governing within and Business professional the flow of data Digital
Slide 27: Our Heritage
Our Heritage Born out of innovative solution to help solve tough data challenges 301 262 224 Revenue m€ 208 171 117 70 74 2002 2004 2006 2008 2010 2012 2014 2016
Slide 28: A presence spanning the continents
A presence spanning the continents France Rest of Europe €94.2million €68.8million 604 people 672 people 2,077 customers 2,908 customers Americas North America Asia Pacific €122.9million €15.3million 504 people 59 people 4,014 customers 1,530 customers South America Africa 1,387 customers 73 custome
Slide 29: License Metrics 2016 (versus 2015)
License Metrics 2016 (versus 2015) Digital Licenses 45% Nb Deals ~1967 Share of Tiers 1 business Share of nb. of deals: 3.2% Share of total amount: 46.6% Share of indirect business partner: 24% Share of New business (€): 10.3% Average Sale Price ASP Tiers 1 ~571K€ ASP Tiers 2 (< 250 k€) ~104€ ASP Ti
Slide 30: License Metrics 2016 Share of verticals in License revenues
License Metrics 2016 Share of verticals in License revenues Sectors 2016 2015 17% vs Healthcare Others 21% Supply Chain vs Supply Chain 13% Public Sector vs 42% Public Sector 7% FSI Healthcare vs FSI © 2016 Axway | CONFIDENTIAL 29
Slide 31: Maintenance Metrics 2016 (versus 2015)
Maintenance Metrics 2016 (versus 2015) 2016 2015 vs Total Value/ Contribution ~1 38M€/49% Attachment rate =21% vs (average weighted by volume) vs Renewal rate1 =92.5% (1) This percentage represents full year revenue impact 30
Slide 32: Cloud Metrics 2016 (versus 2015)
Cloud Metrics 2016 (versus 2015) 2016 2015 vs Subscription recognized +26.6% vs ASR on 12/31/16 18.9M€ ASR= committed subscription revenue in next 12 months (1) This percentage represents full year revenue impact 31
Slide 33: Axway shareholder structure
Axway shareholder structure 31/12/2016 21 021 354 SHARES OUTSTANDING 33 977 278 VOTING RIGHTS Odin Sopra Steria Pasquier Sopra Auto Family Managers Caravelle Public Group Family GMT Détention Shares Outstanding 32.9% 0.1% 1.4% 1.7% 21.4% 12.2% 30.2% 0.04% Voting rights 35.4% 0.1% 1.5% 1.7% 26.2% 15.
Slide 34: Headcount at end of december 2016
Headcount at end of december 2016 1930 607 (1884 Dec. 2015) 504 33
Slide 35: Governance
Governance • Strengthened Governance • Board of Directors comprising 12 members, of which 7 are independent members • Pierre Pasquier Chairman • Kathleen Clark-Bracco Vice Chairman • Compliance with the Middlenext Code of Corporate Governance Jean-Marc Lazzari Chief Executive Officer French-American
Slide 36: Track Record of Profitable Growth
Track Record of Profitable Growth 35
Slide 37: Growth and profitability over the last eight years
Growth and profitability over the last eight years Rev. (€M) POA (%) 350 25% 301 300 285 262 16,9% 20% 237 15.6 250 16.3 224 15.6 15.8 15.2 14.9 208 217 15% 200 182 171 11.8 10.2 150 10% 100 5% 50 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 36
Slide 38: Income statement (1/2)
Income statement (1/2) • Total Revenue grew 5.8 % with total growth seen in all lines of business • Gross Profit as a % of Revenue improved in all periods with improved Service and Cloud profitability • R&D continued to grow in support of our growing portfolio and new Platform launch In millions of
Slide 39: Income statement (2/2)
Income statement (2/2) • Profit on Operating Activities finished at 16.9%, a strong 1.3 point improvement over FY2015 • Income tax benefit in 2015 due to the release of certain tax asset valuation reserves as well as favorable profit levels across our different tax jurisdictions. • Basic EPS improve
Slide 40: Simplified balance sheet (1/2)
Simplified balance sheet (1/2) • Goodwill and intangibles increased from the acquisition of Appcelerator • Strong cash balance to end 2016 at 51.7 • DSO finished at 85 days, equal to 2015 end of year DSO In millions of euros 31/12/16 31/12/15 31/12/14 ASSETS Goodwill 288.8 251.8 236.5 Intangible ass
Slide 41: Simplified balance sheet (2/2)
Simplified balance sheet (2/2) • 20 M€ of borrowings under 125 M€ RCF at 31 Dec 2016, additional debt outside RCF • Current liabilities includes 74.5 M€ of deferred income in 2016 versus 66.6 M€ in 2015 In millions of euros 31/12/16 31/12/15 31/12/14 SHAREHOLDERS' EQUITY AND LIABILITIES Share capita
Slide 42: Change in equity
Change in equity • Due to the USD/Euro conversion rate movement a significant translation adjustment was recorded in 2014 and 2015 on the conversion of the foreign balance sheets to Euros In millions of euros 31/12/16 31/12/15 31/12/14 Equity at Opening of Period 340.6 298.5 258.4 Profit for the per
Slide 43: Cash Flow statement
Cash Flow statement • Working Capital Requirements — positive improvement in 2014 and 2015 with monetization of certain assets and improvement in DSO. 2016 Change finished at -5,9 M€ • Free cash for 2016 is 27.9 M€ versus 44.5 M€ for 2015 In millions of euros FY 2016 FY 2015 FY 2014 Net profit for t
Slide 44: Financial structure — Covenants 2016
Financial structure — Covenants 2016 • Financial covenants met in all periods. Net treasury for 2016 is 16,3 M€ • Our main covenant is the leverage ratio: Net debt/EBE ≤ 3 (-0,33 at Dec 31, 2016) • The 125 M€ credit line is extended to mid-2021 and is fully available 140 0 120 -0,2 100 -0,4 80 -0,6
Slide 45: Finance at a glance
Finance at a glance Strong increase in Profit on Operating Activities 16.9% of Revenue Solid ending cash 51,7 €M Solid Annual Results for 2016 with organic growth up by 4.4% © 2017 Axway | CONFIDENTIAL 44
Slide 46: Status of the Company Transformation
Status of the Company Transformation 45
Slide 47: Axway business plan ambition & strategy
Axway business plan ambition & strategy • Preserve margins before acquisition while investing in innovation 16,9%, 17.7% R&D, AMPLIFY, Golden Gate, API © 2017 Axway | CONFIDENTIAL 46
Slide 48: Axway business plan ambition & strategy
Axway business plan ambition & strategy • Preserve margins before acquisition while investing in innovation • Keep our historic leadership in France, while focusing on Digital Stable Revenue, 80% growth in Digital, +16% in Q4 © 2017 Axway | CONFIDENTIAL 47
Slide 49: Axway business plan ambition & strategy
Axway business plan ambition & strategy • Preserve margins before acquisition while investing in innovation • Keep our historic leadership in France, while focusing on Digital • Target 20% growth in software revenue in the USA +23.4% software revenue growth in the USA © 2017 Axway | CONFIDENTIAL 48
Slide 50: Axway business plan ambition & strategy
Axway business plan ambition & strategy • Preserve margins before acquisition while investing in innovation • Keep our historic leadership in France, while focusing on Digital • Target 20% growth in software revenue in the USA • Achieve average annual growth of 30% Digital revenue +53% Digital (API,
Slide 51: Axway business plan ambition & strategy
Axway business plan ambition & strategy • Preserve margins before acquisition while investing in innovation • Keep our historic leadership in France, while focusing on Digital • Target 20% growth in software revenue in the USA • Achieve average annual growth of 30% Digital revenue • Active M&A plan
Slide 52: Axway, 50th Global software editor
Axway, 50th Global software editor Axway a Leader in Gartner MQ for App Axway: Catalyst for Services Governance for the Second Time (April 2015). digital transformation TOP 10 Syntec Numerique API leader by Ovum July 2016 Rev. €301.1million Euronext Paris listing 2011 OPM 16.9% Market cap €M 662 FCF
Slide 53: Thank you
Thank you Presentation available on: www.investors.axway.com/en Mobile App: Axway IR available on Apple store & Android Patrick Gouffran Investor Relations pgouffran@axway.com 52
Slide 54: Annexes
axway SS Annexes
Slide 55: Appcelerator Platform
Appcelerator Platform OPEN, EXTENSIBLE, CLOUD-BASED OPEN, EXTENSIBLE, CLOUD-BASED 54
Slide 56: The Forrester Wave: Mobile Infrastructure Services, Q3 2015
THE FORRESTER WAVETM: MOBILE INFRASTRUCTURE SERVICES, Q3 2015 Appcelerator is one of six vendors who is “…strong across the major mobile infrastructure disciplines … [and] …well suited to act as the centerpiece of nearly all enterprise mobility solutions.”1 ¹The Forrester . Wave™: Mobile Infrastruct
Slide 57: IAP Glossary
IAP Glossary • 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. • Prof