74software · EURONEXT:74SW
74software — Axway — Investor Presentation (December 2022)
60 slides from 74software's investor presentation, December 2022
Slide 1: Investor Presentation December 2022
Investor Presentation December 2022
Slide 2: 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 3: Who we are
axway © Who we are
Slide 4: Axway at a glance
Axway at a glance 3rd LARGEST HORIZONTAL SOFTWARE PUBLISHER IN FRANCE Top 250 NUMEUM – EY 2022 A RECOGNISED LEADER: Gartner Forrester 2022 Magic Quadrant™ API Management Solutions for Full Life Cycle API Q3 2022 Management The Forrester Wave™, August 2022 Shameen Pillai, Kimihiko Iijima, Mark O'Neil
Slide 5: Axway around the world
Axway around the world Market capitalisation at 01/12/2022: €343M A French-American software company, headquartered in Phoenix, AZ, listed in Paris, France €285.5m REVENUE 5
Slide 6: 20+ years supporting our customer's goals
20+ years supporting our customer’s goals 350 2016 2019 300 2022 2017 2022 250 2012 Customer Position 2014 Technology / Know-how Revenue evolution (€m) 200 2008 2011 2006 150 2007 100 2002 50 Collaborative Business Interaction Digital Business Integration 1st Integration Suite Business Solutions Net
Slide 7: Delivering value to our three constituents
API integration Delivering value to our three constituents platform THE CUSTOMER THE EMPLOYEE THE SHAREHOLDER Delivering brilliant Axway — The place to be Building a predictable, customer experience profitable company for the long term axway.com 7
Slide 8: Shareholding structure at 30/10/2022
Shareholding structure at 30/10/2022 Pasquier Odin Treasury Public Family Family Shares Managers Shares outstanding 31.96% 20.82% 0.11% 1.35% 1.46% 41.33% 2.97% Voting rights 38.39% 25.14% 0.12% 1.33% 1.47% 33.36% Shareholders’ agreement 21,633,597 Shares outstanding 55.69% of shares outstanding / 6
Slide 9: Axway's historical performance
Axway’s historical performance Revenue Business model transition Margin (€m) (€m) 310 301 300 300 60 297 Revenue (€m) 285 286 290 284 55 o/w Profit on Operating Activities (€m) 270 262 50 51 250 45 238 45 230 224 40 217 41 40 210 38 35 35 35 190 33 30 32 31 170 25 26 150 20 2011 2012 2013 2014 2015
Slide 10: Axway's historical net profit & dividend
Axway’s historical net profit & dividend Net Profit (€m) Dividend (€) 40 0,60 35.6 35 Business model transition Net Profit (€m) 31.5 0,50 30 Dividend (€) 27.9 0.40 0.40 26.5 0.40 24.7 0,40 25 0.40 0.40 0.40 0.40 21.5 0.35 20 0,30 Decision to preserve Axway’s resources under 0.20 COVID19 prolonged 15
Slide 11: What we do
axway >= What we do
Slide 12: Vision & Mission
Vision & Mission AXWAY ENABLES ENTERPRISES TO SECURELY INTEGRATING AND MOVING DATA ACROSS A COMPLEX WORLD OF OLD AND NEW. 20-years of delivering value with our Solutions such as MFT, B2Bi, Digital Finance, as well as other specialized products. Who we are APIM based platform helping meet our custome
Slide 13: Product lines
Tl Product lines Trusted for decades. Built for tomorrow. amplify 4 API Management Platform Amplify makes it simple to collect, manage, distribute, secure, and control all APIs to connect applications and data across organizations. Amplify automates the discovery, reuse, and governance of all APIs a
Slide 14: 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* * Alternative performance measures are defined in the glossary at the end of this document. axway.com 14
Slide 15: Focusing on our strengths
Focusing on our strengths General Management Model: Matrix-based in each country & for each product line MARKET LEADERSHIP IN: MARKET LEADERSHIP IN: ➢ MFT ➢ APIM ➢ B2Bi ➢ Digital Finance ➢ Specialized Products GENERAL MANAGER’S ROLE GENERAL MANAGER’S ROLE ▪ Customer focused ▪ Customer focused ▪ Alig
Slide 16: 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 16
Slide 17: Axway MFT. Manage the future of managed file transfer.
Axway MFT. Manage the future of managed file transfer. Empower IT and business users to easily manage data transfers across teams, partners, and applications while ensuring compliance with HIPAA, PCI DSS, GDPR, and other regulations Faster Self- Scalable Tightest Transfers service Deployment Securit
Slide 18: B2B integration platform. Secure, API-enabled EDI in the cloud.
B2B integration platform. Secure, API-enabled EDI in the cloud. Engage your entire digital ecosystem on-premises or in any cloud and respond faster to evolving business demands with Axway's B2B integration platform: a secure, API-enabled approach to EDI Better Faster B2B Responsiveness Onboarding Co
Slide 19: Axway Financial Accounting Hub. Digital finance transformation.
Axway Financial Accounting Hub. Digital finance transformation. Accelerate the closing of accounts at the group level, ensure data accuracy, and comply with all regulations. Digital transformation, operational excellence, and accurate data for the entire company. Event Storage of Audit Data Storage
Slide 20: IT complexity has met its match. Its name is Amplify.
IT complexity has met its match. Its name is Amplify. An open, independent platform for API management, Amplify helps companies conquer the complexity of today's API- fueled digital ecosystems by making API consumption fast and easy Open Developer Full Zero Platform Independence Lifecycle Duplicatio
Slide 21: An API example
An API example FEMILET La Redoute Darjeeling ® zalando livera stripe Distributors Community Member Integrated Providers Partners APIs APIs APIs APIs APIs Chantelle Open Platform axway.com For confidentiality reasons, the ecosystem partners have been changed.
Slide 22: Strengthened Market Position
Strengthened Market Position The Forrester Wave™: API Management Solutions, Q3 2022 Gartner 2022 Magic Quadrant for Full Life Cycle API Management Gartner 2022 Magic Quadrant for Full Life Cycle API Management, Paolo Malinverno, Kimihiko Iijima, Mark O’Neill, John Santoro, Shameen Pillai, Akash The
Slide 23: FY 2021 Highlights
axway >= FY 2021 Highlights
Slide 24: Delivering value to our Customers
API integration Delivering value to our Customers platform +16% THE CUSTOMER Delivering brilliant customer experience Net Promoter Score vs. 2020, 4 years’ continuous improvement 94% Revenue Renewal Rate renewed or moved to Subscription +7% New or Cross-sell Bookings representing 265 new customers a
Slide 25: Completion of the transition to a Subscription model
Completion of the transition to a Subscription model CONTRACT MIX CUSTOMER SUCCESS MODEL License 16% Land 2021 Adopt Signature €118.2m Expand 84% Subscription Renew (3xACV) axway.com 25
Slide 26: Delivering value to our Employees
API integration Delivering value to our Employees platform 66% THE EMPLOYEE Axway — The place to be Employee Engagement Score above 60% for survey threshold 204 Recruited in 2021 during continued uncertain period 30% Feminization of the workplace improvement year over year axway.com 26
Slide 27: Delivering long-term value to our Shareholders
API integration Delivering long-term value to our Shareholders platform 93% THE THE CUSTOMER SHAREHOLDER Building a predictable, profitable company for Product Revenue Recurring the long term vs. 67% in 2016, only 5 years ago +4% Organic Revenue Growth vs. 2020, for the 4 main product lines: MFT, B2
Slide 28: 2021 Key Figures
2021 Key Figures € 285.5m Revenue compared to €297.2m in 2020, an organic * decline of 2.7% +18.9% Subscription Growth or €114.2m vs. €97.3m in 2020 11.5% Margin on Operating Activities or €32.9m, compared to €30.8m (10.4%) in 2020 +4.2% ACV Growth or €33.2m vs. €31.9m in 2020 * Alternative performa
Slide 29: 2021 Full-Year Results
2021 Full-Year Results INCOME STATEMENT 2021 2020 In millions of euros €m % of Rev. €m % of Rev. Organic Growth* Total Growth Revenue 285.5 297.2 -2.7% -3.9% Cost of sales 83.3 87.6 Gross Profit 202.3 70.8% 209.7 70.5% Operating expenses 169.4 178.8 of which Sales and marketing 89.0 92.9 of which Re
Slide 30: 2021 Full-Year Results: Revenue by Activity
2021 Full-Year Results REVENUE BY ACTIVITY 6% 2020 2020 Total Organic License 12% [€m] 2021 Services Restated* Reported Growth Growth* License 18.6 25.3 25.8 -28.0% -26.6% Subscription 114.2 96.1 97.3 +17.4% +18.9% Maintenance 119.0 136.6 138.2 -13.9% -12.9% 40% Subscription 42% Maintenance Services
Slide 31: Customer Managed Subscription Renewals
Customer Managed Subscription Renewals 2022 to 2026 Revenue (€m) 70 Upfront Recurring 60 50 40 30 20 10 0 2022 2023 2024 2025 2026 axway.com 31
Slide 32: Main Balance Sheet items at 31/12/2021
Main Balance Sheet items at 31/12/2021 Cash and equivalents DSO Total assets €25.4m 121 days €582.9m vs. €16.2m at 31/12/2020 vs. 95 days at 31/12/2020 vs. €559.3m at 31/12/2020 Net debt Current deferred revenues Total equity €36.5m €55.8m €372.2m vs. €24.0m at 31/12/2020 vs. €54.7m at 31/12/2020 vs
Slide 33: 2021 Cash flows & Covenants at 31/12/2021
2021 Cash flows & Covenants at 31/12/2021 CASH FLOWS COVENANTS In millions of euros 31/12/2021 2021 31/12/2020 2020 31/12/2021 31/12/2020 31/12/2019 Net profit for the period 9.6 8.5 EBITDA Change in operating working capital requirements -26.2 -23.7 Cost of debt 73.0 60.6 43.9 Net cash from operati
Slide 34: Free Cash Flow Impact
Free Cash Flow Impact 60 20% Profit on Operating Activities (€m) FCF as a % of Revenue 50 Business Model 15% 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 34
Slide 35: 2022 YTD Performance
axway >= 2022 YTD Performance
Slide 36: Key Figures in H1 2022
Key Figures in H1 2022 + 8.6 % ARR* Growth or €189.8m vs. €174.7m H1 2021, with almost 400% growth in Axway Managed subscriptions €136.4m Revenue compared to €138.4m in H1 2021, an organic decline of 5.8% due to the changing mix of subscription bookings 4 .9 % Margin on Operating Activities ahead of
Slide 37: 2022 Half-Year Results
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 -5.8% -1.4% 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
Slide 38: 2022 Half-Year Results: 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 39: Q3 2022: Revenue of €67.5m, ARR up 6.6%
Q3 2022: Revenue of €67.5m, ARR up 6.6% ▪ Annual Recurrent Q3 2021 Q3 2021 Total Organic [€m] Q3 2022 Revenue (ARR) of Restated* Reported Growth Growth* €191.1m, up 6.6% on end- September 2021 License 2.3 5.3 4.7 -51.7% -56.7% ▪ Quarterly revenue down Subscription 27.4 30.2 27.8 -1.7% -9.5% 3.3% ove
Slide 40: 9M 2022 revenue
9M 2022 9M 2021 9M 2021 Total Organic [€m] 9M 2022 Restated* Reported Growth Growth* License 8.6 15.1 14.0 -38.5% -42.9% Subscription 83.2 84.4 79.6 +4.5% -1.3% Maintenance 84.3 94.7 89.5 -5.8% -11.0% Services 27.8 26.3 25.1 +10.9% +5.6% Axway 203.9 220.5 208.2 -2.1% -7.5% * Alternative performance
Slide 41: Targets & ambition
axway >= Targets & ambition
Slide 42: 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 43: 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 axway.com 43
Slide 44: 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 44
Slide 45: Appendices
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Slide 46: Full-Year 2021: Revenue by Geography
Full-Year 2021 REVENUE BY GEOGRAPHY 6% 2020 2020 Total Organic Asia/Pacific [€m] 2021 Restated* Reported Growth Growth* 28% France France 81.4 93.5 93.5 -12.9% -12.9% Rest of Europe 67.4 62.9 62.3 +8.1% +7.2% Americas 119.4 120.8 125.3 -4.7% -1.2% 42% Americas Asia/Pacific 17.3 16.4 16.1 +7.4% +5.8%
Slide 47: Full-Year 2021 - Change in Revenue
Full-Year 2021 - Change in Revenue 300 €297.2m No changes 295 Neutral 290 €-3.7m USD vs. € €285.5m 285 BRL vs. € €-8.0m 280 -2.7% 275 270 265 260 2020 Scope Exchange Rate Organic 2021 Revenue Effect Effect Growth Revenue 47
Slide 48: Full-Year 2021 Simplified Balance Sheet
Full-Year 2021 SIMPLIFIED BALANCE SHEET In millions of euros 31/12/2021 31/12/2020 Assets Goodwill 348.3 330.3 Non-current assets 424.6 422.9 Trade receivables 105.1 88.1 Other current assets 27.8 32.2 Cash and cash equivalents 25.4 16.2 Current assets 158.3 136.4 → Cash and cash equivalents of €25.
Slide 49: Changes in equity & Earnings per share at 31/12/2021
Changes in equity & Earnings per share at 31/12/2021 In millions of euros 31/12/2021 31/12/2020 31/12/2019 Equity at Beginning of Period 355.5 362.6 362.8 Profit for the period 9.6 8.5 5.4 Dividends -8.6 0.0 -8.5 Capital increase 2.1 0.6 0.0 First-time application of IFRS16 0.0 0.0 -0.7 Other -5.0 4
Slide 50: 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 50
Slide 51: Products
Products
Slide 52: Axway MFT. Manage the future of managed file transfer.
Axway MFT. Manage the future of managed file transfer. Faster Transfers Self-service Scalable Deployment Tightest Security Decrease the time it takes to Give business users easy-to- Deploy as a subscription Meet SLAs and avoid security create and initiate a file transfer use self-service capabilitie
Slide 53: B2B integration platform. Secure, API-enabled EDI in the cloud.
B2B integration platform. Secure, API-enabled EDI in the cloud. Better Responsiveness Faster Onboarding B2B Communications Real-time Visibility Cut manual involvement API-enabled onboarding and Connect to all your Track all data and apps and shorten response support for innovative partners quickly a
Slide 54: IT complexity has met its match. Its name is Amplify.
IT complexity has met its match. Its name is Amplify. Open Platform Developer Independence Full Lifecycle Zero Duplication Discover, reuse, and govern Speed API and app development Manage the entire API lifecycle: Automatically detect new APIs across multiple gateways, by giving DevOps the freedom d
Slide 55: CSR
CSR
Slide 56: CSR: Stakes and Commitments
CSR: Stakes and Commitments EMPLOYER COMMITMENT: Continue to shape the company we want to work for SOCIETAL COMMITMENT: Have a positive impact in our communities as a leading software company ENVIRONMENTAL COMMITMENT: Contribute to climate change mitigation Find out more in our Corporate Social Resp
Slide 57: Governance
Governance
Slide 58: Board of Directors
Board of Directors Audit Commitee Compensation Commitee Appointments, Governance and Corporate Responsibility Commitee 14 Members 4 Nationalities 64% Independent directors 43% Women axway.com 58
Slide 59: Executive Committee
Executive Committee 7 Members 4 Nationalities 29% Women axway.com 59
Slide 60: 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