74software · EURONEXT:74SW
74software — Axway — FY2014 Earnings Presentation
36 slides from 74software's earnings presentation, Feb 26, 2015
Slide 1: 2014 Results
2014 Results Christophe Fabre Chief Executive Officer 26 February 2015 © 2015 Axway | Investor Relations 1
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: Content
Content • Full Year 2014 Analysis • Accounting & Financial Results • Positioning & Strategy • Q&A © 2015 Axway | Investor Relations 3
Slide 4: Full Year 2014 Analysis
Full Year 2014 Analysis © 2015 Axway | Investor Relations 4
Slide 5: 2014 in a nutshell
2014 in a nutshell Bad Q3, Excellent Q4: Axway delivers a solid year • Performance demonstrates the quality of our positioning & products • Systar acquisition – Good FSI customer base and Expertise of the staff – New generation of Operational Intelligence product has real potential • Good first year
Slide 6: FY 2014: Revenue by Region
FY 2014: Revenue by Region 2013 2013 Total Organic [€M] 2014 Published Pro forma Growth Growth1 France 103.4 82.5 95.1 25.3% 8.8% Rest of Europe 59.5 57.6 57.9 3.3% 2.7% Americas 89.1 90.7 93.0 -1.8% -4.2% Asia/Pacific 9.6 6.7 6.5 42.3% 46.5% Axway 261.6 237.5 252.6 10.1% 3.6% (1) At constant exchan
Slide 7: FY2014: Revenue by Type
FY2014: Revenue by Type 2013 2013 Total Organic [€M] 2014 Published Pro forma Growth Growth1 Licenses 79.6 75.6 81.0 5.3% -1.8% Maintenance 120.5 106.3 112.8 13.3% 6.8% Services 61.5 55.6 58.8 10.5% 4.6% Axway 261.6 237.5 252.6 10.1% 3.6% (1) At constant exchange rates and on a like-for-like basis ©
Slide 8: Q4 2014: Revenue by Region
Q4 2014: Revenue by Region Q4 2014 2013 2013 Total Organic [€M] 2014 Published Pro forma Growth Growth1 France 40.3 27.3 32.5 47.6% 23.9% Rest of Europe 17.1 17.7 17.8 -3.4% -4.0% Americas 26.7 24.2 27.4 10.3% -2.5% Asia/Pacific 3.1 1.9 2.0 60.6% 56.2% Axway 87.2 71.2 79.8 22.6% 9.4% (1) At constant
Slide 9: Q4 2014: Revenue by Type
Q4 2014: Revenue by Type Q4 2014 2013 2013 Total Organic [€M] 2014 Published Pro forma Growth Growth1 Licenses 38.5 28.5 32.5 35.2% 18.3% Maintenance 32.2 27.4 30.5 17.7% 5.5% Services 16.6 15.4 16.7 8.0% -0.7% Axway 87.2 71.2 79.8 22.6% 9.4% (1) At constant exchange rates and on a like-for-like bas
Slide 10: Axway: a Balanced Business Model
Axway: a Balanced Business Model FY 2014 BY REGION BY ACTIVITY Rest of Europe Services Licences France 4% 23% 24% 30% 39% 4% 34% 46% Americas Asia/Pacific Total Products Maintenance 76% © 2015 Axway | Investor Relations 10
Slide 11: License Metrics 2014
License Metrics 2014 ASP – Share of Indirect – New/Repeat • No Deals ~ 2154 • Share of Tiers 1 business(>250k€) – Share of nb. of deals: 2.4% – Share of total amount: 42% 2014 • Share of indirect business (€): 9% versus 2013 • Share of new business (€): 9% • Average Sale Price – ASP Tiers 1 ~615k€ –
Slide 12: License Metrics 2014: Share of verticals
License Metrics 2014 Share of verticals in License revenues SECTORS HEALTHCARE Others vs 2013 Supply Chain 16% SUPPLY CHAIN 22% Public 12% Sector vs 2013 PUBLIC SECTOR 9% 41% Healthcare 27%vs 2013 45% FSI FSI vs 2013 © 2015 Axway | Investor Relations 12
Slide 13: Maintenance Metrics 2014
Maintenance Metrics 2014 • Total Value/Contribution ~ €120M/46% • Attachment rate = 20% 2014 (average weighted by volume) versus 2013 • Renewal rate (*) = 93.5% (average weighted by volume) * This percentage represents full year revenue impact © 2015 Axway | Investor Relations 13
Slide 14: Cloud metrics 2014
Cloud metrics 2014 • Subscription recognized: 6.2 €M (+53%) 2014 versus • ASR on 12/31/14 : 7.5 €M 2013 ASR= committed subscription revenue in next 12 months © 2015 Axway | Investor Relations 14
Slide 15: Headcount at end of 2014: 1,961
Headcount at end of 2014: 1,961 1961 1661 1755 1774 1783 1131 1145 1173 1263 1064 597 624 629 610 698 2010 2011 2012 2013 2014 France International Total © 2015 Axway | Investor Relations 15
Slide 16: FY 2014: Key Figures
FY 2014: Key Figures 224.3 (+3.3%) 237.5 (+5.9%) 261.6 (+10.1%) Revenue (€M) 2012 2013 2014 35.0 (15.6%) 37.4 (15.8%) 39.7(15.2%) Profit from business 2012 2013 2014 activity (€M) 24.6 (11.0%) 35.5 (15.0%) 26.7 (10.2%) Net Profit (€M) 2012 2013 2014 © 2015 Axway | Investor Relations 16
Slide 17: Accounting & Financial Results
Accounting & Financial Results Patrick Donovan, Chief Financial Officer © 2015 Axway | Investor Relations 17
Slide 18: Income Statement (1/2)
Income Statement (1/2) • Slight improvement in Gross Profit each period • Approximately 13 M€ of the 22 M€ cost increase coming from Systar • Increase in R&D Capabilities to advance A5 suites including API and Decision Insight • Investment in key management within our Distribution network In million
Slide 19: Income Statement (2/2)
Income Statement (2/2) • Profit on Operating Activities as a %, stable for all periods presented • Amortization increased with addition of Systar Intangibles • Other Income/Expense in 2012/2013 mostly GSA, 2014 Systar and Other misc costs • EPS in 2013 - 1.33 €/share without exceptional items In mil
Slide 20: Simplified Balance Sheet (1/2)
Simplified Balance Sheet (1/2) • Goodwill increased by 33 M€ for Systar Acquisition, the rest from foreign currency impact • Due to strong Q4 sales, Trade A/R increased significantly and DSO’s increased to 105 days from 90 days in 2013 In millions of euros 31/12/2014 31/12/2013 31/12/2012 ASSETS Goo
Slide 21: Simplified Balance Sheet (2/2)
Simplified Balance Sheet (2/2) • Bank debt 44,5 M€ at the end of 2014 • Deferred Maintenance Revenues increased to 61 M€ from 40 M€ In millions of euros 31/12/2014 31/12/2013 31/12/2012 SHAREHOLDERS' EQUITY AND LIABILITIES Share capital 41.1 40.9 40.6 Capital reserves and results 257.4 217.4 193.3 T
Slide 22: Change in Equity
Change in Equity • Due to the USD/Euro conversion rate movement a significant translation adjustment was recorded in 2014 on the conversion of the foreign balance sheets to Euro’s In millions of euros 31/12/2014 31/12/2013 31/12/2012 Equity at Opening of Period 258.4 233.9 213.4 Profit for the perio
Slide 23: Cash Flow Statement
Cash Flow Statement • Working Capital Requirements change positive in 2014 due to monetization of CIR receivables • Investing activities includes the purchase of Systar In millions of euros 31/12/2014 31/12/2013 31/12/2012 Net profit for the period 26.7 35.6 24.7 Net charges to amortizations, deprec
Slide 24: Financial Structure – Covenants 2014
Financial Structure – Covenants 2014 Financial covenants met in all periods, net debt near zero 0,2 800 0,1 700 600 0 500 -0,1 400 -0,2 300 -0,3 200 -0,4 100 -0,5 0 31/12/2014 31/12/2013 31/12/2012 31/12/2014 31/12/2013 31/12/2012 Net Debt /EBE R1 <3 Net Debt / Equity R3 <1 EBE / Cost of net financi
Slide 25: Update on Axway Shareholder Structure
Update on Axway Shareholder Structure 31/12/2014 20,568,138 SHARES OUTSTANDING 35,421,420 VOTING RIGHTS Sopra Pasquier Odin Sopra Geninfo Treasury Managers Caravelle Public Steria Family Family GMT (SG Group) Shares Shares outstanding 25.5% 0.1% 1.1% 1.1% 21.3% 8.7% 12.5% 29.5% 0.2% Voting Rights 29
Slide 26: Positioning and Strategy
Positioning and Strategy Christophe Fabre, Chief Executive Officer © 2015 Axway | Investor Relations 26
Slide 27: Axway confirms its Market Drivers
Axway confirms its Market Drivers • Digital Business Enablement • Risk & Compliance, Security • Operational efficiency – Partner on boarding/Community Management – Visibility/Operational Intelligence – Self provisioning/Shared services/Cloud consumption • “Uncontrollable” volume increase • Hybrid In
Slide 28: Govern the Flow of Data: Signatures 2014 EMEA / APAC
Signatures 2014: EMEA / APAC The largest banking network (10,000 agencies) addresses Govern the Flow of Data Exchange Platform 10 million customers. Back Office Exchange Platform (A2A) involving MFT and API, opening digital banking. Joint success with Sopra Banking Software. Digital Banking One of t
Slide 29: Govern the Flow of Data: Signatures 2014 Americas / EMEA
Signatures 2014: Americas / EMEA Operational Excellence Govern the Flow of Data 9 billion transactions, 2,02 billion card authorizations annually for 56,000 accounts and close to 2,400 clients on a daily basis: Crédit Agricole Cards & Payments secure the whole payments and cards value chain with Axw
Slide 30: Our Market has deeply changed since 2011
Our Market has deeply changed since 2011 Digital Business Transformation Specialists (Mobile, IoT, Social, Big Data) Generalists Cyclone Tumbleweed Governing Cloud Consumption Vordel the Flow of Data Systar IDS Scheer Ilog Metismo Lombardi Terracota Sterling Commerce My-channels Process Castlron Apa
Slide 31: The Key factors which changed the Middleware Market since 2011
The 5 Key factors which changed the Middleware Market since 2011 Digital Business as a corporate mandate Increasing usage of Cloud in Large Entreprises Demand for Cloud Services & Hybrid Integration > 2011 2012 2013 2014 2015 Emergence of API (3 Phases) 1. digital business middleware (New edge) 2. a
Slide 32: Digital Business is a new world
Digital Business is a new world LOB Manager Chief Digital Officer API Admin Digital App API & Policy Enterprise Developer API Manager Developer Architect Business Transformation Faster, better, cheaper IT vs Business New Data Flows New Governance Security officer DevOps Manager © 2015 Axway | In
Slide 33: Axway has adapted with success since 2011
Axway has adapted with success since 2011 • Market positioning with Axway 5 Suite – Anticipation of B2B convergence (API/B2B/MFT) – Move to hybrid API-centric architecture (vs ESB) – Innovation around Data Flow Governance (UFM, OI) • Transformation plan from Sales to R&D – One business culture – One
Slide 34: Axway is Updating its 3Y Strategy Plan
Axway is Updating its 3Y Strategy Plan • More changes to focus Axway on the main priorities • Good sales pipe to begin the year • Q1/2015 seems well oriented Delivery of a complete guidance 2015 After Q1 June After review of the strategic plan © 2015 Axway | Investor Relations 35
Slide 35: It’s time for Q & A
It’s time for Q & A 11,000+ 1,961+ 261.6 M€ Governing Flow customers employees of data 15.2% margin 19 locations in the World Headquarters in US, listed (AXW. PA) and registered in France © 2015 Axway | Investor Relations 36
Slide 36: Thank You
Thank You www.finance.axway.com © 2015 Axway | Investor Relations 37