Transcription

Investors OverviewAXWAYDecember 2016

Forward Looking Statements This presentation contains forecasts in respect of which there are risks and uncertainties concerning thecompany’s future growth and profitability. The group highlights the fact that the signature of licensecontracts, which often represent investments for clients, are more significant in the second half of the yearand may therefore induce to a more or less favorable full-year performance. Furthermore the current outcome of the events or actual results may differ from those described in thisdocument as a result of a number of risks and uncertainties set out in the Registration Document 2015submitted to the Autorité des Marchés Financiers (AMF) on 25 April 2016 n D16-0393. The distribution of this document in certain countries may be subject to the laws and regulations in force.Natural persons present in these countries and in which this document is disseminated, published ordistributed, should obtain information about such restrictions and comply with them.1

Welcome To Investor PresentationAgendaTOP 50 Software EditorsSoftware Editor Business ModelTrack Record of Profitable GrowthStatus on the Company TransformationWhy Invest in AxwayAnnexes 2016 Axway CONFIDENTIAL2

TOP 50* Software Editor,From Middleware MarketTo Digital Market*source: Axway3

Axway, 50th Global software editorAxway: Catalyst fordigital transformationAxway a Leader in Gartner MQ for AppServices Governance for the SecondTime (April 2015).TOP 10 Syntec NumeriqueAPI leader by Ovum July 2016Rev. 284.6millionOPM15.6%FCF/Rev15.6%Euronext Paris listing 2011Market cap M 518Float29%Dual nationalityFR/US19 locations worldwide1,844 employeesincluding 584 in R&Dand 130 in the sales force2015 figures4

Axway Market Origin: Infrastructure Software Software market estimated at 300 billion*Infrastructure softwareestimated at 169 billion*Applications softwareestimated at 130 billion* AccountingERPSales managementHuman resources DatabasesOperating systemsNetwork managementStorage managementApplication integrationsolutions (Middleware)estimated at 21 billion*. Digital EngagementEstimated at 2.0 billion. FoundationEstimated at 3.9 billion* Source Axway5

Digital TransformationLARGE ENTERPRISES EXPECTAT LEAST 28%OF REVENUESWILL COME FROMDIGITAL BUSINESSTHE NEXT THREE YEARSSource: Accenture – “Harnessing the Power of Entrepreneurs toOpen Innovation,” 2015; n 2,0006

Digital Business DriversCLOUDDIGITAL DISTRUPTION 2020Cloud Creates 240 BillionMarketOpportunityINTERNET OFTHINGSMobile Spans80% ofDeveloped WorldInternet of ThingsDrivers 25 BillionConnectedMachinesMOBILE74% of today’s business executives say they have a digital strategy “ only 19% of executives believe their firms have the right technology to properly executeon the digital strategy.”11”The State of Digital Business 2014, Forrester Research, Inc., May 7, 2014”7

Portfolio SegmentationDigital Business EnablementINTEGRATION FOUNDATIONManaged File TransferB2B/EDI IntegrationCloud Service IntegrationXML & SOA ServicesECOSYSTEM ENGAGEMENTAnalyticsAPI ManagementCommunity ManagementIdentity Federation & ValidationMobile App Development8

Axway a Leader in Gartner Magic Quadrantfor Full Life Cycle API ManagementPositioned as a Leader for 3rd consecutive time“Full life cycle API management isthe functionality organizationsneed in order to provide thetechnology platform for digitalbusiness, run successful APIprograms and thrive in the APIeconomy.”¹¹Gartner Magic Quadrant for Full Life Cycle API Management, Paolo Malinverno and MarkO’Neill, 27 October 2016.This graphic was published by Gartner, Inc. as part of a larger research document and shouldbe evaluated in the context of the entire document. The Gartner document is available uponrequest from Axway.Gartner does not endorse any vendor, product or service depicted in its research publications,and does not advise technology users to select only those vendors with the highest ratings orother designation. Gartner research publications consist of the opinions of Gartner's researchorganization and should not be construed as statements of fact. Gartner disclaims allwarranties, expressed or implied, with respect to this research, including any warranties ofmerchantability or fitness for a particular purpose. 2016 Axway CONFIDENTIAL9

Competitive & Market LandscapeTraditional Middleware andIntegration ProvidersGeneralistsAPI ManagementCloud Integration andIntegration BrokeragesDigital FoundationEcosystem/DigitalEngagement10

Software EditorBusiness Model11

Three sources of revenue in 2015LicencesServicesClassic EditorAssociated with the initial installationIndependent of licenceService agreementCloudSoftware as a ServiceRental modeSpecific agreement300 6% Cloud HY201630% 23%Perpetual usage rightsTiered pricingStandard licensingagreement28%46%24%49%Maintenance 250200 15010050Associatedwith licence salesThree levels of supportFor five years,but terminationpossible every year02010 2011 2012 2013 2014 2015LicencesMaintenanceServices12

Axway Cash generation profileCash life cycle (cumulative)Software Business Cycle2015 Rev. ( ovOctSepAugJulJunMayAprMarFebJan0,00%0Q1Q2Q3Q4Cash flow cycle– Influenced by grouped maintenance at the beginning of the year (Feb.March)– Increased at the start of the year by licences– Regulated by services during the year13

A composite growth model: organic acquisition300Revenue in 0025001985 - 2000IncubationwithinSopra2001 - 2005B2BandIntegration2006 - 20092010 - 2012CollaborativeBusinessSolutionsNetwork ofprofessionalinteractions MFTmarket leader2015Governingthe flow of dataAxway 5 Suite2016Digital BusinessEngablementAcquisition target: Customer positionAcquisition target: Technology/competency14

A presence spanning the continentsFranceRest of Europe 95.2million 65.8million680 people672 people2,077 customers2,908 customersAmericasNorth AmericaAsia Pacific 110million 13.9million440people59 people4,014 customers1,530 customersSouth AmericaAfrica1,387 customers73 customers22 peopleR&D: Fr, US, IrelandRomania, BulgariaMore than 11,000 customers served through 19 locationsGeneral management in the United States and registered officein France15

Balanced Business ModelFY 2015BY REGIONFranceBY ACTIVITYRest of Europe23%33%ServicesLicencesOf which 16

License Metrics 2015ASP – 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% Share of indirect business partner: 19%2015versus2014 Share of New business ( ): 7% Average Sale Price–––ASP Tiers 1ASP Tiers 2 ( 250 k )ASP Tiers 3 ( 50 k ) 110 k 9 k 566k 17

License Metrics 2015Share of verticals in License revenuesSECTORSHEALTHCAREOthersSupply Chain19%19%PublicSector12%42%FSI9%vs 2014SUPPLY CHAINvs 2014PUBLIC SECTORHealthcare 27%vs201445%FSIvs 201418

Maintenance Metrics 2015 Total Value/ Contribution 138M /49% Attachment rate 20%(average weighted by volume)2015versus2014 Renewal rate (*) 92.5%(average weighted by volume)* This percentage represents full year revenue impact19

Cloud Metrics 2015 Subscription recognized: 9.9 M ( 44%) ASR on 12/31/15 : 13.5M 2015versus2014ASR committed subscription revenue in next 12 months20

Headcount at End of 20151884FRANCE680USA44021

Axway Shareholders Structure31/06/201620,804,681 SHARES OUTSTANDING33,793,093 VOTING RIGHTSSopra SteriaPasquier &Odin Families& ManagersSopra 2%0.1%3.40%26.3%15.2%19.2%Shares33.3%Voting Rights35.7%Concerted action- 58.29% of the shares- 65.49% of the voting rights19

Governance Strengthened Governance Board of Directorscomprising 12 members, of which 7are independent membersJean-Marc Lazzari Pierre Pasquier Chairman Kathleen Clark-Bracco Vice Chairman Compliance with the Middlenext Codeof Corporate GovernanceChief Executive OfficerFrench-American management:10 top managers coming from the software industry and historical corporate management23

Track Record ofProfitable Growth24

Growth and profitability over the last eight yearsOPM (%)Rev. ( 523715.815.215.625%20%15%10.210%1005%5000%2008 2009 2010 2011 2012 2013 2014 201525

Income Statement (1/2) Total Revenue grew 8.8 % with one additional quarter of Systar and a stronger DollarGross Profit as a% of Revenue stable in all periods, with an underlying shift towards the CloudSales, Marketing and R&D continued to grow to support a larger product and target customerbaseIn millions of eurosRevenue :LicenseMaintenanceTotal Product RevenueServicesTotal Revenue :Costs of sales:Product RevenueServicesTotal Costs of sales :Gross profit:as a % of RevenueOperating expenses :Sales and marketingResearch and developmentGeneral and administrativeTotal operating expenses :Profit on operating activitiesFY 2015FY 2014FY .526

Income Statement (2/2) Profit on Operating Activities finished at 15.6%, stable and comparable to prior yearsRestructuring charge to rationalize our activities after years of acquisitions, primarily inour R&D and Sales areasIncome tax benefit in 2015 due to the release of certain tax asset valuation reserves as wellas a favorable profit levels across our different tax jurisdictionsIn millions of eurosProfit on operating activitiesas a % of RevenueStock option releated expensesAmortization of intangible assetsProfit from recurring operationsas a % of RevenueOther income and expensesOperating profitCost of net financial debtOther financial revenues and expensesIncome taxesNet Profitas a % of RevenueBasic net earnings per share (in Euro)FY 2015FY 2014FY .413.7%(5.3)27.2(0.3)(1.0)9.835.615.0%1.7527

Simplified Balance Sheet (1/2) Goodwill increased from the currency impact on conversion of US Dollar balance sheetStrong cash balance to end 2015 at 44,7 M DSO finished at 85, versus 105 at the end of 2014In millions of 6.5189.3Intangible assets40.945.628.8Property, plant and equipment7.86.96.3Other non-current assets47.042.145.7Non-current assets347.5331.1270.1Trade receivables73.984.964.4Other current assets22.518.28.3Cash and cash equivalents44.744.649.2Current assets141.0147.6121.9TOTAL ASSETS488.6478.7392.0ASSETS28

Simplified Balance Sheet (2/2) No borrowings under 125 M RCF at 31 Dec 2015, Financial debt from other one offsourcesOther current liabilities includes 66.6 M of deferred income in 2015 versus 61.6 M in2014In millions of euros31/12/201531/12/201431/12/2013SHAREHOLDERS' EQUITY AND LIABILITIESShare capital41.541.140.9Capital reserves and results299.1257.4217.4Total shareholders' equity340.6298.5258.4Financial debt - long-term portion7.546.328.5Other non-current liabilities15.718.915.5Non-current liabilities23.265.244.0Financial debt - short-term portion1.51.39.5Other current liabilities123.3113.780.1Current liabilities124.8115.089.6TOTAL LIABILITIES148.0180.2133.6TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES488.6478.7392.029

Cash Flow Statement Working Capital Requirements — positive improvement 2015 with the conversion ofreceivables from customers and due from tax agenciesFree cash for 2015 is 44.5 M Systar borrowing against RCF was paid off in 2015In millions of eurosNet profit for the periodNet charges to amortizations, depreciations and provisionsOther income and expense itemsCash from operations after cost of net debt and taxChanges to operating working capital requirementsCosts of net financial debtIncome tax paid net of accrualNet cash from operating activitiesNet cash used in investing activitiesProceeds on shares issuedDividends paidChange in loanNet interest paidOther changesNet cash from (used in) financing activitesEffect of foreign exchange rate changesNET CHANGE IN CASH AND CASH EQUIVALENTSOpening cash positionCLOSING CASH POSITIONFY (41.0)(0.4)0.3(46.1)1.1(0.7)44.643.9FY 2014FY 35.449.230

Financial Summary FY 2015Total revenue 2015 growth of 8.8% to 284 M Growth in results from operating activities to15.6% of total revenues in 2015Solid ending cash of 45 M , well aboveguidance due to conversion of customer andtaxreceivableswithsomesmallopportunistic bank borrowings31

Latest newsNovember 201632

27 Oct. 2016: 3d Quarter & Year to Date 9 MonthsIn million3rd Quarter201620152015Reported RestatedTotalGrowthOrganicGrowth 13rd Quarter201620152015Reported RestatedTotalGrowthOrganicGrowth 3.5%15.2%Rest of owth 1TotalGrowthOrganicGrowth 1Asia/PacificAxwayYear to Date 9 Months201620152015Reported RestatedFrance63.268.068.0-7.1%-7.1%Rest of 03.77.8%6.3%AxwayYear to Date 9 MonthsLicenses201620152015Reported .77.8%6.3%Maintenance33

Introducing Axway AMPLIFY DATA INTEGRATION &ENGAGEMENT PLATFORMAchieve higher levels of efficiencyand growth by transforming rigidand manual connections betweenpeople, businesses and machinesinto customer experience networks.Turn Data into Real-time,DevOps-ready ServicesCross-PlatformApp DevelopmentUnified Engagement withUser CommunitiesMeasure BusinessValue of ServicesLeverage ExistingIntegration Foundation 2016 Axway CONFIDENTIAL34

Platform Architecture EvolutionAxway 5 SuitePoint products, disjointed user experienceAxway AMPLIFYIntegrated solutions, coherent user experienceSolutionsProduct “C”Product “A”Platform UXPlatform “C”Platform Pre-built ServicesServices “D”Platform “D”Services “E”Platform “E”Cloud-ConnectedProducts(evolved subset ofA5 Suite)On-PremiseManaged ServicesCloudNativeProducts(new)Platform APIPlatform “B”Cloud PortalProduct “B”Cloud MarketplacePlatform “A”MultitenantSoftware-as-a-Service 2016 Axway CONFIDENTIAL35

Status of theCompanyTransformation36

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&A plan on both engagement and foundation domainsAll the hypothesis mentioned above are not objective and final results to group has decided to achieve by 2018.Furthermore they depend on a lot of criteria that may change drastically in the future and conduct to deem thesehypothesis as inaccurate and inadequate with the group situation37

A Key Actor Strategy To strengthen Axway in governing the flow of data in DIGITALRev. 2015 284.6 MRev. 2014 261.6 MRev. 2001 50 MIndependant &Axway 5creationRev. 1985 45 MActive rolein theMarket’consolidationStrengthenAxway inDigitalIncubationwithin Sopra1985 - 200033%2001 - 2010FranceSince 20112015 67%FranceInternationalInternational201538

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 market A increased business in North America where the Digital business is growing Ongoing plan to move to the Digital space while preserving the operational margin Sopra Steria and Sopra GMT as stable shareholders of Axway.39

Axway, 50th Global software editorAxway: Catalyst fordigital transformationAxway a Leader in Gartner MQ for AppServices Governance for the SecondTime (April 2015).TOP 10 Syntec NumeriqueAPI leader by Ovum July 2016Rev. 284.6millionOPM15.6%FCF/Rev15.6%Euronext Paris listing 2011Market cap M 518Float29%Dual nationality FRUS19 locationsworldwide1,844 employeesincluding 584 in R&Dand 130 in the sales force2015 figures40

Thank youPresentation available on:www.investors.axway.com/enMobile App: Axway IR availableon Apple store & AndroidPatrick GouffranInvestor [email protected]

Annexes

Appcelerator PlatformOPEN, EXTENSIBLE, CLOUD-BASEDOPEN, EXTENSIBLE, CLOUD-BASED43

THE FORRESTER WAVETM: MOBILEINFRASTRUCTURE SERVICES, Q32015Appcelerator is one of sixvendors who is “ strongacross the major mobileinfrastructure disciplines [and] well suited to act asthe centerpiece of nearly allenterprise mobilitysolutions.”1¹The Forrester.Wave : Mobile Infrastructure Services, Q3 2015,Forrester Research, Inc., September 15, 2015The Forrester Wave is copyrighted by Forrester Research, Inc.Forrester and Forrester Wave are trademarks of ForresterResearch, Inc. The Forrester Wave is a graphical representation ofForrester's call on a market and is plotted using a detailedspreadsheet with exposed scores, weightings, and comments.Forrester does not endorse any vendor, product, or service depictedin the Forrester Wave. Information is based on best availableresources. Opinions reflect judgment at the time and are subject tochange.44

IAP Glossary Restated: Revenue for the prior year, expressed on the basis of the scope and exchange ratesfor the current year. Organic growth of revenue: Growth of operations between revenue for the period and thereprocessed revenue data for the same period of the preceding fiscal year. Profit (loss) from operations This indicator, such as defined in the Registration Document,corresponds to profit from the reprocessed counting operations data of the charge pertainingto the cost of services rendered by the beneficiaries of stock options and of restricted sharesand of the provisions to amortisation of the affected intangible assets. Profit from counting operations: This indicator corresponds to the operating profit prior totaking into account other operating income and expenses which correspond to unusual,abnormal, infrequent, non-predictive operating income and expenses, and of a particularlysignificant amount, presented in a distinct manner in order to facilitate understanding of theperformance connected to current operations.45

¹Gartner Magic Quadrant for Full Life Cycle API Management, Paolo Malinverno and Mark O’Neill, 27 October 2016. This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartne