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74software — Axway — Investor Presentation (October 2017)

59 slides from 74software's investor presentation, October 2017

  1. Slide 1: Investors Overview

    Investors InvestorsOverview Overview AXWAY AXWAY March 2017 October 2017

  2. 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

  3. Slide 3: Axway: Catalyst for digital transformation

    Axway: Catalyst for digital transformation INDEX • Software Digital Transformation • Business Model • Offer • Financial Results 2016 and Latest Publications • Corporate Profile • Perspective © 2017 Axway | CONFIDENTIAL 2

  4. Slide 4: Axway, Catalyst for digital transformation

    Axway, Catalyst for digital transformation Rev. €301.1million Named a leader in the Gartner MQ for OPM 16.9% Content Collaboration Platforms. Formerly referred to as Enterprise File FCF/Rev 9.3% Synchronization and Sharing. (July2017) Equity €374 million Axway solutions are deployed by Cash €51 mill

  5. Slide 5: Software Digital Transformation

    Software Digital Transformation MARKET DRIVERS © 2017 Axway | CONFIDENTIAL 4

  6. Slide 6: Axway Market Origin: Infrastructure Software

    Axway Market Origin: Infrastructure Software • Software market estimated at $300 billion* Applications software Infrastructure software estimated at $130 billion* estimated at $ 169 billion* • Databases • Accounting • Operating systems • ERP • Network management • Sales management • Storage manageme

  7. Slide 7: Market origin: technology viewpoint

    Market origin: technology viewpoint Axway addressable Market ($6 billion) 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 A

  8. Slide 8: Digital technology impact

    Digital technology impact 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

  9. Slide 9: Digital technology impact: B2B and B2C are converging

    Digital technology impact : B2B and B2C are converging • Digital transformation is everywhere • Billion of datas • Security • Regulation • Cost optimization • IT rationalization • Business Innovation 8

  10. Slide 10: Competitive & Market Landscape

    Competitive & Market Landscape From traditional middleware scope to Platform providers Integration Engagement IaaS © 2017 Axway | CONFIDENTIAL 9

  11. Slide 11: Software Digital Transformation: Axway Offer

    Software Digital Transformation AXWAY OFFER © 2017 Axway | CONFIDENTIAL 10

  12. Slide 12: DNA of Axway: Exchange Platform

    DNA of Axway: Exchange Platform 2006 2008 2013 2016 11

  13. Slide 13: Digital transformation increases complexity

    Digital transformation increases complexity © 2017 Axway | CONFIDENTIAL 12

  14. Slide 14: Customer Experience Network (CXN)

    Customer Experience Network (CXN) PROACTIVE CUSTOMER EDI MQTT CARE API MQTT PREDICTIVE MAINTENANCE API Analytics API MFT Dashboards, Mining, Algorithms, etc. API API Integration & EFSS EDI DYNAMIC API API ORDER Messages, Files, Streaming Data, …API SMART SERVICE FULFILLMENT API OPTIMIZATION APIs API

  15. Slide 15: Axway AMPLIFY

    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 connections

  16. Slide 16: Leveraging industry-leading products

    Leveraging industry-leading products Open up data and engage API Management Plus developers to innovate new experiences Decision Insight Analyze service levels and adoption with real-time, predictive insights Axway Appcelerator Build beautiful apps that delight users with a seamless digital journey

  17. Slide 17: Industry analyst recognition

    Industry analyst recognition Leader Leader Leader Strong Performer Pharmaceutical Track Full Life Cycle API API Management API Management and Trace Software Management Solutions Solutions, Q4 2016 Leader B2B Integration Gateway Leader Software Applications Services Strong Performer Governance Mobile

  18. Slide 18: Axway Business Model

    Axway Business Model A Catalyst for transformation © 2017 Axway | CONFIDENTIAL 17

  19. Slide 19: Axway Business Model: sources of revenue in 2017

    Axway Business Model: 4 sources of revenue in 2017 Services Licenses (Classic Editor) • Perpetual usage rights Associated with the initial installation • Tiered pricing Independent of licence • Standard licensing Service agreement agreement 30% Cloud 46% . Subscription usage ACV or TCV 24% Maintenan

  20. Slide 20: Business Model transformation

    Business Model transformation Traditional Model – Upfront Sales New Model – Long Tail Sales © 2017 Axway | CONFIDENTIAL 19

  21. Slide 21: Balanced and resilient business model FY 2016

    Balanced and resilient business model FY 2016 By Region By Activity Product Software 80.84%/R +6.8%growth 31% 23% 26% 27% France Rest of Europe Services Licenses Of which Cloud +26.6% Growth 5% 41% 47% Asia Pacific Americas Maintenance Recurring 53.8%/R +9.9%growth Software 33.34%/R +11.2% growth ©

  22. Slide 22: Balanced and resilient business model HY 2017

    Balanced and resilient business model HY 2017 By Region By Activity 19% 18% 27% 24% Services Licenses France Rest of Europe 12% Cloud 5% 44% 51% Asia Pacific Americas Maintenance Recurring Revenue up 5.6% representing 63% of Total Revenue © 2017 Axway | CONFIDENTIAL 21

  23. Slide 23: Axway Cash generation profile (FY 2016)

    Axway Cash generation profile (FY 2016) Cash life cycle (cumulative) Software Business Cycle 2016 Rev. (€M) 100,00% 30 80,00% 25 60,00% 20 40,00% 15 10 20,00% 5 0,00% 0 Mar Apr May Dec Jan Jun Sep Oct Aug Jul Nov Feb Q1 Q2 Q3 Q4 Cash flow cycle – Influenced by grouped maintenance at the beginning of

  24. Slide 24: A composite growth model: organic + acquisition

    A composite growth model: organic + acquisition 300 Revenue in €M Appcelerator 2017 2016 250 2012 2008 2014 200 2007 150 2006 2002 100 50 2016 Catalyst for 0 Transformation 1985 - 2000 2001 - 2005 2006 - 2009 2010 - 2012 2015 2016 2017 Incubation within B2B Collaborative Network of Governing Sopra a

  25. Slide 25: Business Metrics

    Business Model Business Metrics

  26. Slide 26: License Metrics FY 2016 (versus 2015)

    License Metrics FY 2016 (versus 2015) Digital Licenses 45% Nb Deals ~1967 Share of Tiers 1 business Share of nb. of deals: 3.2% Share of total amount: 46.6% Share of indirect business partner: 24% Share of New business (€): 10.3% Average Sale Price ASP Tiers 1 ~571K€ ASP Tiers 2 (< 250 k€) ~104€ ASP

  27. Slide 27: License Metrics HY 2017 (versus HY 2016)

    License Metrics HY 2017 (versus HY 2016) Digital Licenses 43% Nb Deals ~724 Share of Tiers 1 business Share of nb. of deals: 15 2.0% Share of total amount: 27.6% Share of indirect business partner: 17.2% Share of New business (€): 10.5% Average Sale Price ASP Tiers 1 ~451K€ ASP Tiers 2 (< 250 k€) ~1

  28. Slide 28: License Pipe (July 2017)

    License Pipe (July 2017) By Technology By Region 7% 10% 4% Div 13% APAC AI ADI 39% 24% 45% USA FRANCE 32% 32% Digital +BNL MFT API solutions 6% 21% 12% LATAM GEMEA EDI © 2017 Axway | CONFIDENTIAL 27

  29. Slide 29: License Metrics FY 2016: Share of verticals in License revenues

    License Metrics FY 2016 Share of verticals in License revenues Sectors 2016 2015 17% vs Healthcare Others 21% Supply Chain vs Supply Chain 13% Public Sector vs 42% Public Sector 7% FSI Healthcare vs FSI © 2017 Axway | CONFIDENTIAL 28

  30. Slide 30: License Metrics HY 2017: Share of verticals in License revenues

    License Metrics HY 2017 (vs HY 2016) Share of verticals in License revenues Sectors 2017 2016 14% vs Healthcare Others 25% Supply Chain vs Supply Chain 22% Public Sector vs 31% Public Sector 8% FSI Healthcare vs FSI © 2017 Axway | CONFIDENTIAL 29

  31. Slide 31: Maintenance Metrics FY 2016 (vs 2015)

    Maintenance Metrics FY 2016 (vs 2015) 2016 2015 vs Total Value/ Contribution ~1 38M€/49% Attachment rate =21% vs (average weighted by volume) vs Renewal rate1 =92.5% (1) This percentage represents full year revenue impact © 2017 Axway | CONFIDENTIAL 30

  32. Slide 32: Maintenance Metrics HY 2017 (vs HY 2016)

    Maintenance Metrics HY 2017 (vs HY 2016) HY2017 HY2016 vs Total Value/ Contribution ~51% Attachment rate =21.5% vs (average weighted by volume) vs Renewal rate1 =92.5% (1) This percentage represents full year revenue impact © 2017 Axway | CONFIDENTIAL 31

  33. Slide 33: Cloud Metrics HY 2017 (vs HY 2016)

    Cloud Metrics HY 2017(vs HY 2016) 14.8% Organic growth HY 2017 HY 2016 vs Subscription/Total Revenue 12% vs New ACV 4.3M€ ACV= Annual Contract Value is the signed revenue still to come during the year. New TCV 7.3M€ TCV= Annual Contract Value is the signed revenue still to come during the year. (1)

  34. Slide 34: Cloud References, New Clients & Upsell

    Cloud References, New Clients & Upsell API NEW Country Solution Industry USA Government Syncplicity GERMANY NEW Solution Industry Country Manufacturing, Axway Cloud USA Retail, Electronics B2B Service Rene wal Industry Country Solution US Federal Axway Cloud USA Government MFT Service Rnw. © 2017 Ax

  35. Slide 35: Financial Results Full-Year 2016

    Headcount at End of 2016 Financial Results Full-Year 2016 1884 FRANCE 680 USA 440 © 2017 Axway | CONFIDENTIAL 34

  36. Slide 36: Income statement (1/2)

    Income statement (1/2) • Total Revenue grew 5.8 % with total growth seen in all lines of business • Gross Profit as a % of Revenue improved in all periods with improved Service and Cloud profitability • R&D continued to grow in support of our growing portfolio and new Platform launch In millions of

  37. Slide 37: Income statement (2/2)

    Income statement (2/2) • Profit on Operating Activities finished at 16.9%, a strong 1.3 point improvement over FY2015 • Income tax benefit in 2015 due to the release of certain tax asset valuation reserves as well as favorable profit levels across our different tax jurisdictions. • Basic EPS improve

  38. Slide 38: Simplified balance sheet (1/2)

    Simplified balance sheet (1/2) • Goodwill and intangibles increased from the acquisition of Appcelerator • Strong cash balance to end 2016 at 51.7 • DSO finished at 85 days, equal to 2015 end of year DSO In millions of euros 31/12/16 31/12/15 31/12/14 ASSETS Goodwill 288.8 251.8 236.5 Intangible ass

  39. Slide 39: Simplified balance sheet (2/2)

    Simplified balance sheet (2/2) • 20 M€ of borrowings under 125 M€ RCF at 31 Dec 2016, additional debt outside RCF • Current liabilities includes 74.5 M€ of deferred income in 2016 versus 66.6 M€ in 2015 In millions of euros 31/12/16 31/12/15 31/12/14 SHAREHOLDERS' EQUITY AND LIABILITIES Share capita

  40. Slide 40: 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 31/12/16 31/12/15 31/12/14 Equity at Opening of Period 340.6 298.5 258.4 Profit for the per

  41. Slide 41: Cash Flow statement

    Cash Flow statement • Working Capital Requirements — positive improvement in 2014 and 2015 with monetization of certain assets and improvement in DSO. 2016 Change finished at -5,9 M€ • Free cash for 2016 is 27.9 M€ versus 44.5 M€ for 2015 In millions of euros FY 2016 FY 2015 FY 2014 Net profit for t

  42. Slide 42: Latest financial publication

    Latest financial publication

  43. Slide 43: Income statement (1/2)

    Income statement (1/2) • Continue to see impact of shifting business model with license revenue decrease and cloud increase • Gross Profit as a 66.9% of revenue dropped with falling license revenue, Cloud margin up to 38% and service margin increased to 13% as well • R&D continued to grow in support

  44. Slide 44: Income statement (2/2)

    Income statement (2/2) • Profit on Operating Activities finished at 4.2%, a drop from 11.3% in HY 2016 • Increase in intangible amortization relates to assets from Syncplicity • Net Profit finish at 2.6 M€ or 0,12€ per share, similar to S1 2015 and 2014 In millions of euros HY 2017 HY 2016 FY 2016 P

  45. Slide 45: Simplified balance sheet (1/2)

    Simplified balance sheet (1/2) • Goodwill and intangibles increased from the acquisition of Syncplicity • Cash balance ended at 27,1 M€ for 30 June 2017 • With our drop in Trade Receivables, our DSO finished at 51 days, down from 78 days at 30 June 2016 In millions of euros 30/06/17 30/06/2016 31/12

  46. Slide 46: Simplified balance sheet (2/2)

    Simplified balance sheet (2/2) • 45 M$ of borrowings under 125 M€ RCF at 30 June 2017, additional debt outside RCF • Current liabilities includes 84.5 M€ of deferred income in June 2017 versus 86.9 M€ in June 2016 In millions of euros 30/06/2017 30/06/2016 31/12/16 SHAREHOLDERS' EQUITY AND LIABILITI

  47. Slide 47: Change in Equity

    Change in Equity • Due to the USD/Euro conversion rate movement at balance sheet ending date a significant translation adjustment was recorded in June 2017 on the conversion of the foreign balance sheets to Euros In millions of euros 30/06/2017 30/06/2016 31/12/2016 Equity at Opening of Period 374.8

  48. Slide 48: Cash Flow statement

    Cash Flow statement • Working Capital Requirements (BFR) — positive improvement in HY 2017 of 16.5 M€ which was used to pay off our Appcelerator draw under our RCF • Free cash for HY 2017 is 19.0 M€ versus 17.4 M€ for HY 2016 In millions of euros HY 2017 HY 2016 FY 2016 Net profit for the period 2.6

  49. Slide 49: Financial structure — Covenants HY 2017

    Financial structure — Covenants HY 2017 • Financial covenants met in all periods. Net bank debt for 2017 is 28,8 M€ • Our main covenant is the leverage ratio: Net debt/EBE ≤ 3 (0,72 at June 30, 2017) • The 125 M€ credit line is extended to mid-2021 and approximately 85 M€ is available EBE/Costs of D

  50. Slide 50: Corporate Profile

    Corporate Profile A Catalyst for transformation © 2017 Axway | CONFIDENTIAL 49

  51. Slide 51: Axway shareholder structure

    Axway shareholder structure 30/06/2017 21,168,021 SHARES OUTSTANDING 34,274,819 VOTING RIGHTS Sopra Steria Pasquier Odin Sopra Treasury Managers Caravelle Public Group Family Family GMT Shares Shares Outstanding 32.7% 0.1% 1.4% 1.7% 21.3% 12.1% 30.6% 0.07% Voting Rights 35.1% 0.1% 1.5% 1.7% 26.3% 15

  52. Slide 52: Governance

    Governance • Strengthened Governance • Board of Directors French-American management: comprising 13 members, of which 7 are independent members 8 top managers coming from the software industry and historical • Pierre Pasquier Chairman corporate management • Kathleen Clark-Bracco Vice Chairman • Comp

  53. Slide 53: Human Resources

    Human Resources Axwegians 1 . 1 ; | @ 1,884 Deen | axway >~ a © ae 0 ] ( including 64% Europe, ; 30% North America Breakdown of workforce by location 3.8% Asia-Pacific \ 26% Americas 70% Europe | 94] At 30 June 2017 52

  54. Slide 54: A presence spanning the continents

    A presence spanning the continents France Rest of Europe €94.2million €68.8million 576 people 745people 2,077 customers 2,908 customers Americas North America Asia Pacific €122.9million €15.3million 529 people 74 people 4,014 customers 1,530 customers South America Africa 1,387 customers 73 customer

  55. Slide 55: Corporate Social Responsibility

    Corporate Social Responsibility Organizations & Labels Governance • Global Compact • Board members: CSR Report • 63% independant Download http://www.investors.ax way.com/sites/default/ • 36% women files/csr_report_extract_ • EcoVadis label for • 95% attendance rate registration_document_ axway_2016_

  56. Slide 56: Perspective

    31/12/2015 20,773,916 SHARES OUTSTANDING 35,538,163 VOTING RIGHTS Axway Sopra Pasquier Odin Geninfo Treasury Shareholder Managers Sopra GMT Caravelle Public Steria Family Family (SG Group) Shares Structure Shares outstanding 24.9% 0.1% 1.4% 1.7% 21.6% 8.6% 12.3% 28.9% 0.2% Voting Rights Perspective

  57. Slide 57: FY 2017 Outlook

    FY 2017 Outlook Keep focusing FY ROA Continue Axway Stable on our strategic over Transformation FY Revenue ambition 13% 56

  58. Slide 58: 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 57

  59. Slide 59: APM Definition

    APM Definition • 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. • Pr

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