Slide 1: Axway
Axway 54th Global software editor* April 2016 * source Axway 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 mo
Slide 3: Axway Positioning
Axway Positioning S axway PEOPLE, PROCESSES & THINGS 3 | ~wwwaaxway.com
Slide 4: Axway, 54th Global software editor
Axway, 54th Global software editor Axway a Leader in Gartner MQ for App Digital Business Services Governance for the Second Enablement Time (April 2015). TOP 10 Syntec Numerique Rev. €284.6million Euronext Paris listing: 2011 OPM 15.6% Market cap €407million FCF/Rev 15.6% Float 28.9% Dual nationalit
Slide 5: Summary
Summary • TOP 50 Software Editors • Software Editor Business Model • Track record of profitable growth • Status on the Company Transformation 5
Slide 6: TOP 50 Software Editor, From Middleware Market to Digital Market
TOP 50* Software Editor, From Middleware Market to Digital Market March 2016 *source: Axway 6
Slide 7: Axway Market Origin: Infrastructure software
Axway Market Origin: Infrastructure software Company software market estimated at $300 billion* Application software Infrastructure software estimated at $ 169 billion* (Applications) estimated at $130 billion* • Databases • Operating systems • Network management • Accounting • Storage management •
Slide 8: Market origin: technology viewpoint, Axway addressable market
Market origin: technology viewpoint Axway addressable Market ($4 billion) A A A BPM / BAM Data Application Integration Integration MFT Integration Integration Brokerage (ETL, MDM, …) (ESB, MOM, …) B2B (VAN ), iPaaS Middleware SOA Governance / API Management A A A A 8
Slide 9: Leading position confirmed by IT analysts
Leading position confirmed by IT analysts 2014 2013 On-premises MFT App Integration - Info-Tech Suite - Gartner 2013 2014 Application B2B Gateway Services - IDC Governance - Gartner • IDC: “Axway is a Disruptive Innovator, only vendor able to demonstrate its API capabilities in context of trading pa
Slide 10: Axway, Digital Journey
Axway, Digital Journey Develop Business Digital Customer Experience Design the service Business Innovation Software as a service Service = Billing 10
Slide 11: Digital is everywhere
Digital is everywhere 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 11 Open Innovation,” 2015; n=2,000
Slide 12: Enterprise Threatened with Disruption
Enterprise Threatened with Distruption PWC – 18th Annual Global CEO Survey, 2015; n=1,322 12
Slide 13: Digital Business Drivers
Digital Business Drivers CLOUD INTERNET OF MOBILE THINGS 74% of today’s business executives say they have a digital strategy… “…only 19% of executives believe their firms have the right technology to properly execute on the digital strategy.”1 1”The State of Digital Business 2014, Forrester Research
Slide 14: Portfolio Segmentation and a Bi-modal Approach
Portfolio Segmentation…and a Bi-modal Approach DIGITAL BUSINESS ENABLEMENT INTEGRATION FOUNDATION ECOSYSTEM ENGAGEMENT Managed File Transfer Analytics B2B/EDI Integration API Management Cloud Service Community Management Integration Identity Federation XML & SOA Services Identity Validation API Inte
Slide 15: Digital Enablement
Digital Cloud Services Mobile Enablement Cloud “Things” Adapters IoT Traditional B2B Middleware & B2B via APIs Enterprise App Store API Composition B2B B2C & B2E Community Analytics Management Integration Mobile App Platform Integration ON-PREMISE DIGITAL ENABLEMENT Identity API B2B Integration Data
Slide 16: 2015: Customer Demand Evolution
2015: Customer Demand Evolution Traditional Convergence Pure Business Traditional Business New Business MFT & B2B MFT/B2B Digitalization New Business 16
Slide 17: Competitive & Market Landscape
Competitive & Market Landscape Generalists Digital Foundation Traditional Middleware API Management and Integration Providers Specialists Specialists Cloud Integration and Integration Brokerages Digital Engagement 17
Slide 18: Additional potential Digital Enablement Markets
Additional potential Digital Enablement Markets Aggregate INTEGRATION FOUNDATION Market1 $5,908M Aggregate Market1 +20% $3,938M +12% (1) Axway estimates based on a combination of Market Analyst Projections and assumptions 18
Slide 19: Software Editor Business Model
Software Editor Business Model 19
Slide 20: Three sources of revenue in 2015
Three sources of revenue in 2015 Services Licences Classic Editor • Perpetual usage rights Associated with • Tiered pricing the initial installation • Standard licensing Independent of licence 23% 28% agreement Service agreement 30% Cloud 46% Software as a Service Rental mode 49% 24% Maintenance Spe
Slide 21: Axway Cash generation profile
Axway Cash generation profile Cash life cycle (cumulative) Software Business Cycle 100,00% 2015 Rev. (€M) 90,00% 35 80,00% 30 70,00% 60,00% 25 50,00% 20 40,00% 15 30,00% 10 20,00% 10,00% 5 0,00% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 • Cash flow cycle – Influenced by grouped m
Slide 22: Financial Structure — Covenants 2015
Financial Structure — Covenants 2015 • Financial covenants met in all periods. Net treasury for 2015 is 35,7 M€ • Our main covenant is the leverage ratio: Net debt/EBE ≤ 3 (-0,98 at Dec 31, 2015) • The 125 M€ credit line is extended to mid-2020 and is fully available 120 0,2 100 0 -0,2 80 -0,4 60 -0
Slide 23: 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 24: A presence spanning the continents
A presence spanning the continents France Rest of Europe R&D centre €95.2million €65.8million 680 people 672 people 2,077 customers 2,908 customers Americas North America Asia Pacific €XXmillion €13.9million 440people 59 people 4,014 customers 1,530 customers South America Africa 1,387 customers 73
Slide 25: Balanced Business Model
Balanced Business Model FY2015 BY REGION BY ACTIVITY France Rest of Europe Services Licences Of which Cloud 23% 28% 33% 23% 5% 39% 49% Asia/Pacific Americas Maintenance 25
Slide 26: 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 (€): 19% versus 2014 • Share of New business (€): 7% • Average Sale Price – ASP Tiers 1 ~566k€
Slide 27: 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 27
Slide 28: Maintenance Metrics 2015
Maintenance Metrics 2015 • Total Value/ Contribution ~ 138M€/49% Attachement rate = 20% 2015 (average weighted by volume) versus 2014 • Renewal rate (*) = 92.5% (average weighted by volume) * This percentage represents full year revenue impact 28
Slide 29: 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 29
Slide 30: Headcount at End of 2015
Headcount at End of 2015 1884 FRANCE 680 USA 440 30
Slide 31: Axway Shareholder Structure
Axway Shareholder Structure 31/12/2015 20,773,916 SHARES OUTSTANDING 35,538,163 VOTING RIGHTS Sopra Pasquier Odin Geninfo Treasury Managers Sopra GMT Caravelle Public Steria Family Family (SG Group) Shares Shares outstanding 24.9% 0.1% 1.4% 1.7% 21.6% 8.6% 12.3% 28.9% 0.2% Voting Rights 29.0% 0.1% 1
Slide 32: Governance
Governance Strengthened Governance • Board of Directors comprising ten members, of which five are independent members o Pierre Pasquier Chairman o Kathleen Clark-Bracco Vice Chairman • Compliance with the Middlenext Code of Corporate Governance Jean-Marc Lazzari Chief Executive Officer • French-Amer
Slide 33: Track Record of Profitable Growth
Track Record of Profitable Growth 33
Slide 34: Growth and profitability over the last six years
Growth and profitability over the last six 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 34
Slide 35: 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 36: 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 37: 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 38: 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 39: Change in Equity
Change in Equity • Due to the USD/Euro conversion rate movement a significant translation adjustment was recorded in 2014 and 2015 on the conversion of the foreign balance sheets to Euros In millions of euros 31/12/2015 31/12/2014 31/12/2013 Equity at Opening of Period 298.5 258.4 233.9 Profit for t
Slide 40: 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 41: Financial Summary
Financial Summary 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 41
Slide 42: Status of the company transformation
Status of the company transformation 42
Slide 43: Axway 2015 in Key Facts
Axway 2015 in Key Facts • New CEO and Organization adaptation • (Re)positioning and strategy review • Major transformation program started • Ecosystem engagement initialisation • Appcelerator acquisition early 2016 43
Slide 44: The Forrester Wave: Mobile Infrastructure Services, Q3 2015
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 45: Appcelerator Platform
Appcelerator Platform OPEN, EXTENSIBLE, CLOUD-BASED OPEN, EXTENSIBLE, CLOUD-BASED 45
Slide 46: Axway on the road
Axway on the road R&D key investments Pipeline driven by the strategic plan Other 14% GEMEA 20% USA 41% 45% FR-BN Digital 28% Engagement MFT 27% APAC LATAM 13% 10% 2% B2B Marketing campains Internal digital transformation 46
Slide 47: 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 €50 M role in the Market’ Strengthen consoli- Axway in Rev. 1985 Independant dation Digital €45 M & Axway 5 creation Incubation within Sopra 1985 - 2000 2001 - 201
Slide 48: Axway Business plan ambition by 2018
Axway Business plan ambition by 2018 • Double Axway size • Preserve margins before next acquisitions • 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 • Act
Slide 49: 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 50: Axway, 54th Global software editor
Axway, 54th Global software editor Axway a Leader in Gartner MQ for App Digital Business Services Governance for the Second Enablement Time (April 2015). TOP 10 Syntec Numerique Rev. €284.6million Euronext Paris listing: 2011 OPM 15.6% Market cap €407million FCF/Rev 15.6% Float 28.9% Dual nationalit
Slide 51: Thank You
Thank You Investor Relations Patrick Gouffran pgouffran@axway.com Tel+33(6)85.92.49.91 51 www.investors.axway.com