74software · EURONEXT:74SW
74software — Axway Software — Investor Presentation (May 2019)
50 slides from 74software's investor presentation, May 2019
Slide 1: Axway Software Investor Presentation May 2019
Axway Software Investor Presentation May 2019
Slide 2: Forward-looking statements
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 Group highlights that signatures of license contracts, which often represent investments for clients, are historicall
Slide 3: Content
Investor Presentation – May 2019 Content 1 - Company Overview 2 - Market & Strategy 3 - 2018 + Q1 2019 Highlights & Performance 4 - Targets & Ambitions 5 - Appendices 3
Slide 4: Company Overview
Company Overview
Slide 5: Axway at a glance
Axway at a glance A long-standing specialist in Middleware markets and the 5th largest software publisher in France*, Euronext Paris – Compartment B Main Indexes Axway develops, distributes, integrates and Bloomberg : AXW:FR → CAC Mid Small Reuters : AXW.PA → CAC TECHNOLOGY maintains its own infrast
Slide 6: A balanced history of organic and external growth
A balanced history of organic and external growth 300 2016 2019 2017 Acquistion’s Strategic Rationale 250 2012 2014 → Customer Position → Technology / Know-how Business 200 model 2008 transition €m 150 2006 2007 100 2002 50 Network of professional Governing Becoming a leader in 0 Incubation Collabor
Slide 7: Axway enables business to leverage change
Axway enables business to leverage change Data Integration Engagement Enterprise Integration Automating Securing file Protecting SOA and Increasing Unifying app Securing transitions broker supply chains transfer services through APIs business visibility development collaboration 2001 2002 2006 2007
Slide 8: Axway Partners
Axway Partners Cloud Providers Global System Integrators Digital Solution Providers Resellers 8
Slide 9: Axway's historical performance
Axway’s historical performance 300 Profit on Operating Activities 301.1 299.8 Revenue 284.6 283.8 250 261.6 237.5 200 217.2 224.3 €m 150 100 50 39.7 44.5 50.8 40.5 35.3 35.0 37.5 31.9 0 2011 2012 2013 2014 2015 2016 2017 2018 Total Growth +4.2% +3.3% +5.9% +10.1% +8.8% +5.8% -0.4% -5.3% Organic Grow
Slide 10: Axway's historical net profit & dividend
Axway’s historical net profit & dividend 40 0,70 Net Profit 35.6 Dividend 35 0,60 31.5 30 27.9 26.5 0,50 24.7 25 0.40 0.40 0.40 0.40 0,40 21.5 0,40 0.35 €m 20 € 0.25 0,30 15 0.20 11.0 0,20 10 4.4 0,10 5 0 0,00 2011 2012 2013 2014 2015 2016 2017 2018 Payout Ratio (Div./EPS) 21% 29% 23% 31% 30% 27% 95
Slide 11: A shareholding structure backing the corporate project
A shareholding structure backing the corporate project Pasquier Odin Sopra Treasury Sopra Steria Managers Caravelle Public Family Family GMT Shares Shares outstanding 32.57% 0.13% 1.39% 1.62% 21.22% 12.12% 30.75% 0.20% Voting rights 36.09% 0.13% 1.51% 1.63% 25.95% 14.82% 19.87% Shareholders’ agreeme
Slide 12: Axway's Corporate Social Responsibility
Axway’s Corporate Social Responsibility 2018 Initiatives & Labels Governance Human Resources Board of Directors: Axway University: → Member of the - 57% independent - 36K+ Hours of training for UN Global Compact - 43% of women more than 1,250 Axwagians - 95% attendance rate → Awarded Silver Ecovadis
Slide 13: Market & Strategy
Market & Strategy
Slide 14: Axway's market in the Software industry
Axway’s market in the Software industry [ Enterprise Software Market ] estimated at $417 billion in 2019* Application Development Application Infrastructure and Middleware Data Integration Tools and Data Quality Tools Infrastructure Software Database Management Systems Application Software Market IT
Slide 15: 2019 Market Forecast and 2019-2022 CAGR
2019 Market Forecast and 2019-2022 CAGR Total market estimated at $18.9 billion in 2019 / Average CAGR 2019-2022 estimated at +11.2% 15
Slide 16: Competitive landscape
Competitive landscape Integration Engagement the same the same IaaS 16
Slide 17: Our historical Middleware market…
Our historical Middleware market… A A A BPM / BAM Data Application MFT Integration Integration Integration Integration B2B Brokerage (ETL, MDM, …) (ESB, MOM, …) EFSS (VAN ), iPaaS Middleware SOA Governance / API Management A A A 17
Slide 18: … and its digital evolution!
… and its digital evolution ! Partners A A A A Customers Digital Middleware Companies A A A End-Users Customer Experience Economy 18
Slide 19: Axway's purpose remains the same
Axway’s purpose remains the same We moved and integrated data securely for businesses… We will still move, integrate and expose data securely It is the foundation of what we do for businesses NEW WAY Axway's mission remains the same, we are merely implementing our market strategy: Become a leader in
Slide 20: Axway's solutions evolution
Axway’s solutions evolution Specialised products AMPLIFY™ Products App Dev Track & Trace B2B / EDI Accounting Integration MFT M&A Validation or Authority R&D Analytics IT Operation Management API Management MailGate Content Collaboration 20
Slide 21: AMPLIFY: 15 years of strategic evolution
AMPLIFY™: 15 years of strategic evolution 2006 SECURELY MOVING AND INTEGRATING DATA 2008 BUSINESS CONTEXT 2013 DATA OPENESS 2017 CUSTOMER CENTRICITY AMPLIFY™ 2020 21
Slide 22: AMPLIFY: Axway's Hybrid Integration Platform
AMPLIFY™: Axway’s Hybrid Integration Platform Engagement – Mobile, IoT, Web, Apps Partner Management/Onboard AMPLIFY AMPLIFY AMPLIFY AMPLIFY Central Titanium SDK API Portal B2Bi Governance Marketplace to discover AMPLIFY Content Collaboration and Content Services Collaboration/ EFSS partners, busine
Slide 23: AMPLIFY: One Platform, One Experience, Multiple Integration
AMPLIFY™: One Platform, One Experience, Mutiple Integration Application API Managed Content B2B/EDI Integration Management File Transfer Collaboration (IPaaS) Unified Flow Event-driven Partner and consumer Portals and Developer catalog orchestration Choreography onboard/management marketplace tools
Slide 24: AMPLIFY: Setting the standard for HIP
AMPLIFY™: Setting the standard for HIP Endpoints AMPLIFY™ Products CRMs App Development B2B / EDI Cloud Services MFT General Ledgers Analytics Legacy Systems API Management etc. Content Collaboration 24
Slide 25: AMPLIFY: Catalog available from end of Q1 2019
AMPLIFY™: Catalog available from end of Q1 2019 Availability Offered as Application Integration (IPaaS) Available Subscription API – Build & Orchestrate Available Subscription MFT – Service enrollment Available Subscription B2Bi – Partner enrollment Available Subscription Microservice Mesh Managemen
Slide 26: Evolution of practices in a Subscription world
Evolution of practices in a Subscription world Sequences of a perpetual License offering PURCHASE IT Focus Business Focus SALE IMPLEMENT SUPPORT RENEW Customer Acquisition Customer Growth Upfront Revenue Lifetime Revenue Cycle of a Subscription offering Episodic engagement Continuous engagement SUBS
Slide 27: Axway's Customer Success Organisation
Axway’s Customer Success Organisation Objectives Customer Centric Organisation ▪ Help customers accelerate their ▪ Bring together and align all players ▪ Creation of the Customer Success transformation through rapid interacting with customers Manager function to support results customers throughout
Slide 28: Axway's Customer Success Organisation
Axway’s Customer Success Organisation Renew and Extend Customer Experience Access to new Monitor Customer insights & journey AMPLIFY Services Business & Optimize the customer experience health Engage Customers Accelerate & support time to Customer Support value Services offering Axway community, Sup
Slide 29: 2018 + Q1 2019 Highlights & Performance
2018 + Q1 2019 Highlights & Performance
Slide 30: 2018, Acceleration of the execution of the strategy (R&D)
2018, Acceleration of the execution of the strategy Technologies Products Customer Success Marketing → Portfolio audit and first → Creation of the Customer → Digital campaign to → Validation of the 2020 strategic rationalization Success Organisation support new offers strategic orientations with dec
Slide 31: 2018, Acceleration of the execution of the strategy (Sales & Marketing)
2018, Acceleration of the execution of the strategy Technologies Products Customer Success Marketing → Portfolio audit and first → Creation of the Customer → Digital campaign to → Validation of the 2020 strategic rationalization Success Organisation support new offers strategic orientations with dec
Slide 32: Full-Year 2018 - Execution of the strategy
Full-Year 2018 - Execution of the strategy Signature Metric New ACV* (License + 3X New ACV) +7.8% +56.1% H2 vs. H1 Investment Operating margin (R&D + Sales & Marketing) on business activity +14.7% 11.2% 2020 Ambitions confirmed: Revenue of around €300 million / HIP** Market Leader * Alternative perf
Slide 33: Full-Year 2018 - Income Statement
Full-Year 2018 - Income Statement In millions of euros 2018 2017 Revenue 283.8 299.8 of which License 56.5 65.3 → Revenue down 3.6% of which Subscription 40.3 37.5 organically*, 2.7% at of which Maintenance 142.8 145.4 constant exchange rates, Subtotal License, Subscription & Maintenance 239.7 248.3
Slide 34: Full-Year 2018 - Advancing on our new business model
Full-Year 2018 - Advancing on our new business model New Weighting Weighted New → Accelerate the transition [€m] Signatures to Subscription models Factor Signatures Business Value Model → Improve the Customer life cycle License 56.5 1x 56.5 → Increase the number of access points to Axway New solutio
Slide 35: Full-Year 2018 - Revenue by Activity
Full-Year 2018 - Revenue by Activity 2017 2017 Total Organic 19.9% 15.6% [€m] 2018 Restated* Reported Growth Growth* License Services License 56.5 63.7 65.3 -13.4% -11.3% Subscription 40.3 38.6 37.5 7.5% 4.4% 14.2% Subscription Maintenance 142.8 141.6 145.4 -1.8% 0.9% 50.3% Services 44.2 50.5 51.6 -
Slide 36: Focus on Subscription activity in 2018
Focus on Subscription activity in 2018 2017 2017 Total Organic [€m] 2018 Restated* Reported Growth Growth* Subscription 40.3 38.6 37.5 7.5% 4.4% Revenue New ACV 13.1 8.4 7.3 79.6% 56.1% * Alternative performance measures are defined in the glossary at the end of this document 2018 Review → Successfu
Slide 37: Focus on License & Maintenance activities in 2018
Focus on License & Maintenance activities in 2018 2017 2017 Total Organic [€m] 2018 Restated* Reported Growth Growth* License 56.5 63.7 65.3 -13.4% -11.3% Maintenance 142.8 141.6 145.4 -1.8% 0.9% * Alternative performance measures are defined in the glossary at the end of this document 2018 Review →
Slide 38: Main Balance Sheet items at 31/12/2018
Main Balance Sheet items at 31/12/2018 Cash and equivalents DSO Total Assets €35.8m 77 days €553.8m vs. €28.1m at 31/12/2017 stable vs. 31/12/2017 vs. €551.1m at 31/12/2017 Net debt Current deferred revenues Total Equity €10.2m €75.2m €362.7m vs. €24.1m at 31/12/2017 vs. €67.3m at 31/12/2017 (+11.8%
Slide 39: Cash flows & Covenants at 31/12/2018
Cash flows & Covenants at 31/12/2018 In millions of euros 31/12/2018 31/12/2017 31/12/2018 31/12/2017 Net profit for the period 11.0 4.4 Change in operating working capital requirements -3.6 -11.7 EBITDA Cost of debt 45.2 40.2 Net cash from operating activities 22.6 29.6 (covenant > 5) Free cash flo
Slide 40: Q1 2019 Highlights
Q1 2019 Highlights Q1 2018 Q1 2018 Total Organic Highlights of the 1st quarter 2019 [€m] Q1 2019 Restated* Reported Growth Growth* → Acceleration in Subscription revenue License 9.1 8.5 8.2 11.0% 6.7% (+11.2%), in line with the roadmap → License growth (+6.7%) and Subscription 10.9 9.8 9.1 19.1% 11.
Slide 41: Targets & Ambitions
Targets & Ambitions
Slide 42: Targets & Ambitions
Targets & Ambitions → 2019 Return to organic growth, continuing into 2020, enabling Axway to achieve targeted revenue of around €300 million → 2019 Operating margin on business activity between 8 and 10%, the low point during the transformation period, before a rebound expected in 2020 → Become a Le
Slide 43: Appendices
axway Appendices
Slide 44: FY 2018
FY 2018
Slide 45: Full-Year 2018 - Change in revenue
Full-Year 2018 - Change in revenue 310 +€2.8m €299.8m 300 290 - €8.2m €283.8m consolidated since 280 01/03/2017 USD vs. EUR = -5.1 % - €10.6m 270 -3.6% organic decrease 260 €m 250 240 230 220 210 200 2017 Scope Exchange rates Organic 2018 Revenue effect effect growth Revenue 45
Slide 46: Full-Year 2018 - Revenue by Geography
Full-Year 2018 - Revenue by Geography 2017 2017 Total Organic [€m] 2018 23% Restated* Reported Growth Growth* Rest of Europe 29% France France 80.9 83.8 83.8 -3.4% -3.4% Rest of Europe 65.7 71.4 71.7 -8.4% -7.9% Americas 122.3 124.3 128.8 -5.0% -1.6% 5% 43% Asia - Pacific Americas Asia / Pacific 14.
Slide 47: Simplified Balance Sheet at 31/12/2018
Simplified Balance Sheet at 31/12/2018 In millions of euros 31/12/2018 31/12/2017 Assets Goodwill 344.1 333.6 Non-current assets 422.7 420.7 Trade receivables 65.6 71.1 → High cash position at €35.8 million Other current assets 29.7 31.2 Cash and cash equivalents 35.8 28.1 → 77-day DSO, stable compa
Slide 48: Changes in equity and Earnings per share at 31/12/2018
Changes in equity and Earnings per share at 31/12/2018 In millions of euros 31/12/2018 31/12/2017 Equity at Beginning of Period 344.1 374.8 Profit for the period 11.0 4.4 → Distribution of a dividend of Dividends -4.2 -8.5 €0.40 per share submitted to the shareholders' vote at the Capital increase 0
Slide 49: Full-Year 2018 - Headcount
Full-Year 2018 - Headcount 31/12/2018 30/06/2018 31/12/2017 France 468 467 518 Rest of Europe 771 727 733 Americas 537 514 515 Asia - Pacific 72 72 74 Axway 1,848 1,780 1,839 → Recruitment stepped up significantly in the second half of 2018 49
Slide 50: Alternative Performance Measures
Alternative Performance Measures • Restated revenue: Revenue for the prior year, adjusted for the consolidation scope and exchange rates of the current year. • Organic growth: Growth in revenue between the period under review and the prior period, restated for consolidation scope and exchange rate i