Slide 1: Investors Overview
Investors Overview AXWAY December 2016
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. €284.6million Euronext Paris listing 2011 OPM 15.6% Market cap €M 518 FCF
Slide 6: 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 7: 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 6
Slide 8: 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 9: 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 8
Slide 10: 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 11: Competitive & Market Landscape
Competitive & Market Landscape Generalists Traditional Middleware and API Management Integration Providers Cloud Integration and Integration Brokerages Digital Foundation Ecosystem/Digital Engagement 10
Slide 12: Software Editor Business Model
Software Editor Business Model 11
Slide 13: Three sources of revenue in 2015
Three sources of revenue in 2015 Services Licences Classic Editor • Perpetual usage rights Associated with the initial installation 6% Cloud HY • Tiered pricing 2016 Independent of licence • Standard licensing Service agreement agreement Cloud 30% 23% 28% Software as a Service 46% Rental mode Specif
Slide 14: Axway Cash generation profile
Axway Cash generation profile Cash life cycle (cumulative) Software Business Cycle 100,00% 2015 Rev. (€M) 35 80,00% 30 60,00% 25 20 40,00% 15 20,00% 10 5 0,00% 0 Jan Feb Jun Jul Sep Oct Nov Mar Apr May Aug Dec Q1 Q2 Q3 Q4 Cash flow cycle – Influenced by grouped maintenance at the beginning of the ye
Slide 15: A composite growth model: organic + acquisition
A composite growth model: organic + acquisition 300 Revenue in €M Appcelerator 2012 2016 250 2008 200 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 16: A presence spanning the continents
A presence spanning the continents France Rest of Europe €95.2million €65.8million 680 people 672 people 2,077 customers 2,908 customers Americas North America Asia Pacific €110million €13.9million 440people 59 people 4,014 customers 1,530 customers South America Africa 1,387 customers 73 customers
Slide 17: Balanced Business Model
Balanced Business Model FY 2015 BY REGION BY ACTIVITY Services Licences France Rest of Europe Of which Cloud 23% 28% 33% 23% 5% 39% 49% Asia/Pacific Americas Maintenance 16
Slide 18: License Metrics 2015
License Metrics 2015 ASP – Share of Indirect – New/Repeat • Nb Deals ~ 2050 • Share of Tiers 1 business(>250k€) – Share of nb. of deals: 2.9% – Share of total amount: 44.5% 2015 • Share of indirect business partner: 19% versus 2014 • Share of New business (€): 7% • Average Sale Price – ASP Tiers 1 ~
Slide 19: License Metrics 2015: Share of verticals in License revenues
License Metrics 2015 Share of verticals in License revenues SECTORS HEALTHCARE Others vs 2014 Supply Chain 19% 19% SUPPLY CHAIN Public Sector vs 2014 12% PUBLIC SECTOR 42% 9% Healthcare 27%vs 2014 45% FSI FSI vs 2014 18
Slide 20: Maintenance Metrics 2015
Maintenance Metrics 2015 • Total Value/ Contribution ~ 138M€/49% • Attachment rate=20% 2015 (average weighted by volume) versus 2014 • Renewal rate (*) = 92.5% (average weighted by volume) * This percentage represents full year revenue impact 19
Slide 21: Cloud Metrics 2015
Cloud Metrics 2015 • Subscription recognized: 9.9 M€ (+44%) 2015 versus • ASR on 12/31/15 : 13.5M€ 2014 ASR= committed subscription revenue in next 12 months 20
Slide 22: Headcount at End of 2015
Headcount at End of 2015 1884 FRANCE 680 USA 440 21
Slide 23: Axway Shareholders Structure
Axway Shareholders Structure 31/06/2016 20,804,681 SHARES OUTSTANDING 33,793,093 VOTING RIGHTS Pasquier & Treasury Sopra Steria Odin Families Sopra GMT Caravelle Public Shares & Managers Shares 33.3% 3.27% 21.6% 12.3% 29.2% 0.1% Voting Rights 35.7% 3.40% 26.3% 15.2% 19.2% Concerted action - 58.29% o
Slide 24: 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 25: Track Record of Profitable Growth
Track Record of Profitable Growth 24
Slide 26: Growth and profitability over the last eight years
Growth and profitability over the last eight years Rev. (€M) OPM (%) 300 285 25% 262 250 237 217 224 20% 208 15.8 15.6 16.3 15.6 15.2 200 182 14.9 171 15% 150 11.8 10.2 10% 100 5% 50 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 25
Slide 27: Income Statement (1/2)
Income Statement (1/2) • Total Revenue grew 8.8 % with one additional quarter of Systar and a stronger Dollar • Gross Profit as a% of Revenue stable in all periods, with an underlying shift towards the Cloud • Sales, Marketing and R&D continued to grow to support a larger product and target customer
Slide 28: Income Statement (2/2)
Income Statement (2/2) • Profit on Operating Activities finished at 15.6%, stable and comparable to prior years • Restructuring charge to rationalize our activities after years of acquisitions, primarily in our R&D and Sales areas • Income tax benefit in 2015 due to the release of certain tax asset
Slide 29: Simplified Balance Sheet (1/2)
Simplified Balance Sheet (1/2) • Goodwill increased from the currency impact on conversion of US Dollar balance sheet • Strong cash balance to end 2015 at 44,7 M€ • DSO finished at 85, versus 105 at the end of 2014 In millions of euros 31/12/2015 31/12/2014 31/12/2013 ASSETS Goodwill 251.8 236.5 189
Slide 30: Simplified Balance Sheet (2/2)
Simplified Balance Sheet (2/2) • No borrowings under 125 M€ RCF at 31 Dec 2015, Financial debt from other one off sources • Other current liabilities includes 66.6 M€ of deferred income in 2015 versus 61.6 M€ in 2014 In millions of euros 31/12/2015 31/12/2014 31/12/2013 SHAREHOLDERS' EQUITY AND LIAB
Slide 31: Cash Flow Statement
Cash Flow Statement • Working Capital Requirements — positive improvement 2015 with the conversion of receivables from customers and due from tax agencies • Free cash for 2015 is 44.5 M€ • Systar borrowing against RCF was paid off in 2015 In millions of euros FY 2015 FY 2014 FY 2013 Net profit for t
Slide 32: Financial Summary FY 2015
Financial Summary FY 2015 Total revenue 2015 growth of 8.8% to 284 M€ Growth in results from operating activities to 15.6% of total revenues in 2015 Solid ending cash of 45 M€, well above guidance due to conversion of customer and tax receivables with some small opportunistic bank borrowings 31
Slide 33: Latest news November 2016
Latest news November 2016 32
Slide 34: 3rd Quarter & Year to Date 9 Months 2016
27 Oct. 2016: 3d Quarter & Year to Date 9 Months In €million 2015 2015 Total Organic 2015 2015 Total Organic 3rd Quarter 2016 Reported Restated Growth Growth 1 3rd Quarter 2016 Reported Restated Growth Growth 1 France 19.3 20.5 20.5 -6.1% -6.1% Licenses 16.8 14.8 14.6 13.5% 15.2% Rest of Europe 17.6
Slide 35: 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 36: 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 37: Status of the Company Transformation
Status of the Company Transformation 36
Slide 38: Axway Business plan ambition by 2018
Axway Business plan ambition by 2018 • Double Axway size • Preserve margins before acquisition • Target 20% growth annually in license/cloud revenue in the United States market • Achieve average annual growth of 30% in Ecosystem Engagement revenue • Keep our historic leadership in France • Active M&
Slide 39: A Key Actor Strategy
A Key Actor Strategy • To strengthen Axway in governing the flow of data in DIGITAL Rev. 2014 Rev. 2015 €261.6 M €284.6 M Rev. 2001 Active role €50 M in the Market’ Strengthen consoli- Axway in Rev. 1985 Independant & dation Digital €45 M Axway 5 creation Incubation within Sopra 1985 - 2000 2001 - 2
Slide 40: Why invest in Axway?
Why invest in Axway? • A technology actor, Innovative model • A significant customer base, no risky dependence to one customer. • A high renewal rate on maintenance contracts. The recurring revenue is high and rising. • A leader position and good consolidation opportunities in Digital software marke
Slide 41: 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. €284.6million Euronext Paris listing 2011 OPM 15.6% Market cap €M 518 FCF
Slide 42: 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 41
Slide 43: Annexes
axway SS Annexes
Slide 44: Appcelerator Platform
Appcelerator Platform OPEN, EXTENSIBLE, CLOUD-BASED OPEN, EXTENSIBLE, CLOUD-BASED 43
Slide 45: Appcelerator in the Forrester Wave: Mobile Infrastructure Services
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 46: 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