74software · EURONEXT:74SW
74software — Axway — H1 2022 Earnings Presentation
40 slides from 74software's earnings presentation, Jul 26, 2022
Slide 1: Axway - Open Everything
axway Open Everything
Slide 2: 2022 Half-Year Results Analysts Conference
2022 Half-Year Results Analysts Conference July 26, 2022
Slide 3: 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 4: Agenda
2022 Half-Year Results Agenda 1. Operational commentary on H1 2022 Patrick Donovan Chief Executive Officer 2. H1 2022 Financial Results Cécile Allmacher 3. Customers and Market trends Chief Financial Officer 4. Looking to H2 2022 and Beyond Roland Royer 5. Q&A Session Chief Customer Officer 4
Slide 5: Operational commentary on H1 2022
Operational commentary on H1 2022 Patrick Donovan Chief Executive Officer
Slide 6: Vision & Mission unchanged
Vision & Mission unchanged AXWAY ENABLES ENTERPRISES TO SECURELY OPEN EVERYTHING We believe that in order to create the most value for your customers, partners, and employees, you need to Open Everything by securely integrating and moving data across a complex world of old and new. 20-years of deliv
Slide 7: Continuing to execute our strategy
Continuing to execute our strategy MAINTAIN EXPAND Market leadership Market leadership CUSTOMER EXPANSION NEW LOGOS Net retention rate Growth rate CUSTOMER DELIGHT NPS* axway.com * Alternative performance measures are defined in the glossary at the end of this document. 7
Slide 8: Focusing on our strengths
Focusing on our strengths General Manager Model Roll-out MARKET LEADERSHIP IN: MFT MARKET LEADERSHIP IN: B2Bi APIM Digital Finance Specialized Products GENERAL MANAGER’S ROLE GENERAL MANAGER’S ROLE Customer focused Customer focused Align team to support customers Align team to supp
Slide 9: Key Figures in H1 2022
Key Figures in H1 2022 ARR* Growth or €189.8m vs. €174.7m H1 2021, with almost 400% growth in Axway Managed subscriptions Revenue compared to €138.4m in H1 2021, an organic decline of 5.8% due to the changing mix of subscription bookings Margin on Operating Activities ahead of budget at €6.7m, compa
Slide 10: H1 2022 Financial Results
H1 2022 Financial Results Cécile Allmacher Chief Financial Officer
Slide 11: Key figures income statement
2022 Half-Year Results KEY FIGURES INCOME STATEMENT H1 2022 H1 2021 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 136.4 138.4 Cost of sales 45.8 42.7 Gross Profit 90.6 66.4% 95.7 69.1% Operating expenses 83.9 85.1 of which Sales and marketing 42.8 43.3 of which
Slide 12: Revenue by activity
2022 Half-Year Results REVENUE BY ACTIVITY 5% H1 2021 H1 2021 Total Organic License 13% [€m] H1 2022 Services Restated* Reported Growth Growth* License 6.3 9.8 9.3 -31.8% -35.5% 41% Subscription Subscription 55.9 54.1 51.8 +7.9% +3.2% Maintenance 56.0 62.9 60.0 -6.6% -10.9% 41% Maintenance Services
Slide 13: License & Maintenance activities
2022 Half-Year Results LICENSE & MAINTENANCE ACTIVITIES H1 2021 H1 2021 Organic [€m] H1 2022 Restated* Reported Growth* License 6.3 9.8 9.3 -35.5% Decline in License and Maintenance activities due to the accelerated of which Q1 22 3.7 4.0 3.8 -7.4% transition to Subscription and cloud of which Q2
Slide 14: Subscription activity
2022 Half-Year Results SUBSCRIPTION ACTIVITY H1 2021 H1 2021 Organic [€m] H1 2022 Restated* Reported Growth* Subscription 55.9 54.1 51.8 +3.2% of which Q1 22 26.4 24.4 23.7 +8.2% of which Q2 22 29.5 29.7 28.1 -0.8% * Alternative performance measures are defined in the glossary at the end of this doc
Slide 15: ARR (Annual Recurrent Revenue)
2022 Half-Year Results ARR (Annual Recurrent Revenue) 195 Half-Year ARR (€m) 190 185 180 175 170 165 160 155 150 up 8.6% compared to H1 2021 145 H1 2019 H1 2020 H1 2021 H1 2022 15
Slide 16: Services activity
2022 Half-Year Results SERVICES ACTIVITY H1 2021 H1 2021 Organic [€m] H1 2022 Restated* Reported Growth* Services 18.2 18.1 17.3 +1.0% of which Q1 22 9.0 9.3 9.0 -4.0% of which Q2 22 9.3 8.7 8.3 +6.3% * Alternative performance measures are defined in the glossary at the end of this document Activi
Slide 17: Main Balance Sheet items at 30/06/2022
2022 Half-Year Results Main Balance Sheet items at 30/06/2022 Cash and cash equivalents DSO Total assets vs. €25.4m at 31/12/2021 vs. 94 days at 30/06/2021 vs. €582.9m at 31/12/2021 Net debt Current deferred revenues Total equity vs. €36.5m at 31/12/2021 vs. €55.8m at 31/12/2021 vs. €372.2m at 31/12
Slide 18: H1 2022 Cash flows & Covenants
2022 Half-Year Results H1 2022 Cash flows & Covenants at 30/06/2022 CASH FLOWS COVENANTS 30/06/2022 31/12/2021 30/06/2021 In millions of euros H1 2022 H1 2021 Net profit for the period 2.4 1.8 EBITDA Change in operating working capital requirements 2.3 7.5 Cost of debt - 73.0 66.6 (covenant > 5) Net
Slide 19: Free Cash Flow Impact
Free Cash Flow Impact 20% Profit on Operating Activities (€m) 60 FCF as a % of Revenue BUSINESS MODEL 15% 50 TRANSFORMATION 40 First Customer Managed Subscription Offer 10% 30 5% 20 0% 10 POA FCF / Rev. (€m) 0 -5% (%) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 19
Slide 20: Customers and Market trends
Customers and Market trends Roland Royer Chief Customer Officer
Slide 21: 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 21
Slide 22: It's Cloud time!
It’s Cloud time! Axway Managed bookings TCV of new customers’ booking value on cloud axway.com 22
Slide 23: Market trends by product lines
Market trends by product lines MFT AMPLIFY EXPANSION OF APIM BUSINESS VALUE HIGH VALUE FILE MOVEMENT THROUGH MARKETPLACE B2B DIGITAL FINANCE ACCELERATION TOWARD AXWAY FINANCIAL CLOUD MANAGED SERVICES ACCOUNTING HUB axway.com 23
Slide 24: Looking ahead
Looking ahead CORE PRODUCTS + % Core Product Pipeline Growth SAAS DEMAND + % Axway Managed Pipeline Growth CUSTOMERS OUR CUSTOMER TO REVENUE axway.com 24
Slide 25: Looking to H2 2022 and beyond
Looking to H2 2022 and beyond Patrick Donovan Chief Executive Officer
Slide 26: H2 2022 Priorities
H2 2022 Priorities 01 02 03 Bookings AND Revenue Continued Focus on Delivering Portfolio Management Carefully monitor booking mix Operational Efficiency Execution and impact on revenue Confidence in our strategy Release non-performing assets and guidance and add assets aligned to strategy axway.com
Slide 27: Bringing technological value
Bringing technological value Cloud Native Integration Platform 20+ people based in Hyderabad, India Connected customer experience integrating and orchestrating systems, applications, data and users Low code/No code hybrid integration platform to build solutions for application, data and API inte
Slide 28: It's back…
It’s back… v v LIMITED VISIBILITY HETEROGENEOUS SITUATION ACROSS GEOGRAPHIES v v axway.com 28
Slide 29: Axway maintains its 2022 targets
“ Axway maintains its 2022 targets: Organic revenue growth of between 1% and 3% Profit on operating activities representing 12% to 14% of revenue 29
Slide 30: Unchanged mid-term ambition
Unchanged mid-term ambition Mid-term Ambition 2022 Guidance Profit on Operating Activities ≥ 15% Organic Revenue Growth Earnings per share ≥ €1 between +1% and +3% Profit on Operating Activities Revenue ≥ €500 million between 12% to 14% of total revenue (including M&A) axway.com 30
Slide 31: Q&A Session
Q&A Session Use the chat or call +44 (0) 33 0551 0200 to ask a question Financial Calendar Friday, August 5, 2022: Filing of the 2022 half-year financial report Thursday, October 20, 2022, before market opening: Publication of Q3 2022 Revenue 31
Slide 32: Thank you
Thank <* you =o
Slide 33: Appendices
B rranKis Appendices
Slide 34: Revenue by geography
2022 Half-Year Results REVENUE BY GEOGRAPHY 8% H1 2021 H1 2021 Total Organic Asia/Pacific [€m] H1 2022 Restated* Reported Growth Growth* 28% France France 37.7 39.4 39.4 -4.1% -4.1% Rest of Europe 27.2 34.0 33.9 -19.9% -19.9% 44% Americas 60.8 63.0 57.1 +6.5% -3.5% Americas 20% Rest of Europe Asia/P
Slide 35: Change in revenue in the first half of 2022
Change in revenue in the first half of 2022 +€6.5m 145 140 €138.4m No change Neutral €136.4m USD vs. € 135 -€8.5m -5.8 % 130 125 120 H1 2021 Scope Exchange Rate Organic H1 2022 Revenue Effect Effect Growth Revenue 35
Slide 36: Simplified balance sheet
2022 Half-Year Results SIMPLIFIED BALANCE SHEET In millions of euros 30/06/2022 30/06/2021 Assets Goodwill 383.7 337.3 Non-current assets 458.2 424.6 Trade receivables 106.8 86.0 Other current assets 36.0 27.0 Cash and cash equivalents 19.5 23.7 Current assets 162.3 136.7 Cash and cash equivalents
Slide 37: Changes in equity & Earnings per share at 30/06/2022
Changes in equity & Earnings per share at 30/06/2022 In millions of euros 30/06/2022 30/06/2021 31/12/2021 Equity at Beginning of Period 372.2 355.5 355.5 Profit for the period 2.4 1.8 9.6 Dividends -8.5 -8.6 -8.6 Capital increase 0.0 1.2 2.1 Other -6.6 2.7 -5.0 Foreign exchange translation adjustme
Slide 38: Half-Year 2022 - Headcount
Half-Year 2022 - Headcount 30/06/2022 31/12/2021 France 453 466 Rest of Europe 702 748 Americas 421 436 Asia/Pacific 72 62 Axway 1 648 1 712 axway.com 38
Slide 39: Shareholding structure at 30/06/2022
Shareholding structure at 30/06/2022 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.11% 1.35% 1.46% 42.18% 2.13% Voting rights 38.39% 25.01% 0.12% 1.33% 1.46% 33.69% Shareholders’ agreement 21,633,597 Shares outstanding 55.69% of shares outstanding / 6
Slide 40: 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