Axway Reports Strong 2013 Results

  • Organic growth of 3.7%;
  • Total growth of 5.9%;
  • Operating margin of 15.8% (15.6% in 2012);
  • Net margin of 15.0% up 44% compared with 2012.

PARIS--()--Regulatory News:

Axway (Paris:AXW):

Axway Software's Board of Directors examined the consolidated financial statements for fiscal year 2013 at its meeting of February 14, chaired by Pierre Pasquier. This year’s results are in line with the guidance published by the Group, despite poorer performance in the fourth quarter.

    FY 2013       FY 2012       FY 2011
  (in M€)   (% Rev)       (in M€)   (% Rev)       (in M€)   (% Rev)
Key income statement items                  
Revenue 237.5     224.3     217.2    
Organic growth 3.7%     -1.6%     5.7%    
Profit on operating activities 37.5   15.8% 35.0   15.6% 35.3   16.3%
Profit from recurring operations 32.4   13.7% 31.7   14.1% 33.3   15.3%
Other income and expense -5.3     -2.9     -4.0    
Net financial costs and currency impact -1.3     -0.1     -2.7    
Income Taxes 9.8     -4.0     -5.2    
Net profit   35.6   15.0%       24.7   11.0%       21.5   9.9%
(in €)   (in €)   (in €)  
Basic net earnings per share   1.75     1.22     1.20    
  • Earnings per share are calculated on the basis of 20,379,481 shares for 2013, compared with 20,255,401 for 2012.

Comments on 2013 activity

2013 was characterized by:

  • The well-received launch of the Axway 5 Suite, significant license agreements signed in the USA and France, and confirmation of intense demand in the Application Programming Interface (API) area whose offering (resulting from the acquisition of Vordel) was integrated into the Axway 5 Suite. Its successful integration has led to growth in this activity in line with our expectations. The API area has confirmed its growth potential for the years ahead;
  • The launch in the fourth quarter of new versions of components for the company’s strategic technologies (MFT, B2B) reinforcing Axway’s leadership in these areas;
  • Recognition of Axway by Gartner as being among the leaders in the Application Integration Suite and Application Services Governance segments (MQ Gartner, August 2013);
  • Axway’s executive management, strengthened by the arrival of new members from leading global software publishers.

After the first three quarters posted significant growth, 2013 ended with a declining fourth quarter compared with earlier years, the result of license agreements being deferred mainly in the United States. These deferrals reflect difficulties in executing commercial agreements, which have led to operational changes. Accordingly, it was impossible to fully maintain the ‘progress’ recorded in 2013 through the end of the year.

Revenue by region (in M€)

Exercise 2013   2013   2012 Published   2012 Pro forma   Total Growth   Organic Growth1
         
France 82.5 75.4 76.2 9.4% 8.4%
Rest of Europe 57.6 55.6 58.4 3.6% -1.4%
Americas 90.7 86.5 87.8 4.8% 3.3%
Asia/Pacific   6.7   6.8   6.6   -0.6%   2.0%
Axway 237.5 224.3 229.0 5.9% 3.7%

(1) at constant exchange rates and scope of consolidation

The solid performance in France with 8.4% growth confirmed the recovery witnessed since the fourth quarter of 2012 and enabled this area to enter 2014 with a strong commercial portfolio. The Americas failed to continue its progress recorded during the first three quarters of the year on account of license agreements being deferred in the fourth quarter. The other countries of Europe saw mixed fortunes with growth declining by 1.4% and Asia remained positive with growth of 2.0%. Business as a whole saw organic growth of 3.7% (total growth of 5.9%).

Revenue by activity (in M€)

Exercise 2013   2013   2012 Published   2012 Pro forma  

Total Growth

  Organic Growth1
         
Licenses 75.6 71.4 75.4 5.8% 0.3%
Maintenance 106.3 98.2 98.2 8.3% 8.2%
Services   55.6   54.7   55.4   1.7%   0.4%
Axway 237.5 224.3 229.0 5.9% 3.7%

(1) at constant exchange rates and scope of consolidation

License business stabilized in 2013 after a mixed previous year; the positive reception of the new Axway 5 Suite and the dynamism of the API (Application Programming Interface) area made a partial contribution in 2013 and should play a major role in 2014.
The 8.2% growth in maintenance was excellent, raising this highly recurring activity to more than 45% of Group revenue. Services remained globally stable in 2013 but with varying dynamism (Cloud, Managed Services).

Financial position

Axway has a very solid financial situation at December 31, 2013 with a cash balance of €49.2 million, a net debt of €35.1 million and shareholder’s equity of €258.4 million.
No acquisitions were made in 2013 (excluding the takeover of a distribution partner in Brazil in September 2013). For this reason, and given the partial use of the credit line, the company’s debt at December 31, 2013 allows to comfortably respect its banking covenants.
The level of operating margin (15.8%) was up 20 basis points compared with 2012, despite a lower than expected fourth quarter. This solid result reflects the robustness of the Axway business model, making it possible to maintain all the investments required to sustain its competitive edge, which remains intact and is a key growth driver. Net profit at December 31, 2013 was €35.6 million (15.0% of net margin), sharply up from €24.7 million in 2012 (11.0% of net margin). The 2013 net result integrates the half year exceptional items of the settlement of the GSA matter with the American Department of Justice and the activation of the tax losses in the United States, made possible from the growth in profitability (historic and forecasted) of the US subsidiary of the group. Without the impact of these two exceptional items, our net result would have been €27.1 million or €1.33 per share.
Consolidated financial statement audit procedures are under way.

Workforce

Axway employed 1,783 people at December 31, 2013 (610 in France and 1,173 in other countries), an increase of 9 employees compared with December 31, 2012.

Cash dividend

Axway’s Board of Directors will propose, at the next Shareholders' Meeting, the distribution of a dividend of €0.40 per share for 2013.

Strategy

Axway is continuing its growth plan by rolling out infrastructure to govern the flow of data aimed at large organizations and their ecosystems. This positioning is based on a market whose dynamism is driven by the major technological drivers (mobility, Cloud, Big Data, Internet of Things) which are leading to the sizable development of data flows both inside and outside the company. Axway has robust historical assets (MFT, B2B technology) enabling it to take advantage of these trends and has made key choices (API) to maintain a significant competitive edge. Within this context, Axway is maintaining its investments to retain this positioning and develop its commercial presence; these investments are reflected in internal growth projects and external acquisitions.

Outlook

Confident of the quality of its positioning and its competitive advantages and strengthened by the positive reception of its new offerings by its customers, Axway expects significant growth in 2014, both organically and through external acquisitions and targets to maintain its operating margin at the current level.
With this in mind, the start of the year appears to be in line with these objectives.

Revenue by region and by quarter (in M€)

1st Quarter   2013   2012 Published   2012 Pro forma   Total Growth   Organic Growth1
         
France 16.9 15.7 15.8 7.8% 6.8%
Rest of Europe 12.3 12.7 13.6 -3.5% -9.2%
Americas 19.1 16.3 16.5 17.3% 15.7%
Asia/Pacific   1.6   1.2   1.2   27.1%   27.1%
Axway 49.9 46.0 47.2 8.6% 5.9%
                     
2nd Quarter 2013 2012 Published 2012 Pro forma Total Growth Organic Growth1
         
France 17.9 16.9 16.9 5.8% 5.7%
Rest of Europe 14.4 12.4 12.9 16.3% 12.2%
Americas 22.5 21.7 23.1 3.6% -2.5%
Asia/Pacific   1.7   1.4   1.5   18.6%   10.0%
Axway 56.5 52.4 54.4 7.7% 3.9%
                     
3rd Quarter 2013 2012 Published   2012 Pro forma

Total Growth

Organic Growth 1

         
France 20.4 16.6 16.9 22.9% 21.0%
Rest of Europe 13.2 11.6 13.2 13.2% -0.5%
America's 24.8 20.8 21.1 19.1% 17.5%
Asia/Pacific   1.6   1.6   1.5   -4.0%   7.1%
Axway 60.0 50.7 52.7 18.4% 13.8%
                     
4th Quarter 2013 2012 Published 2012 Pro forma

Total Growth

Organic Growth1
         
France 27.3 26.2 26.5 4.2% 2.9%
Rest of Europe 17.7 18.8 18.8 -6.0% -5.8%
America's 24.2 27.7 27.0 -12.4% -10.3%
Asia/Pacific   1.9   2.5   2.4   -22.9%   -19.2%
Axway 71.2 75.2 74.7 -5.4% -4.8%

(1) at constant exchange rates and scope of consolidation

Revenue by activity and by quarter (in M€)

1st Quarter   2013   2012 Published   2012 Pro forma   Total Growth   Organic Growth1
         
Licenses 10.6 9.4 10.0 13.1% 5.5%
Maintenance 25.7 23.2 23.7 10.7% 8.8%
Services   13.6   13.4   13.5   1.8%   0.9%
49.9 46.0 47.2 8.6% 5.9%
                     
2nd Quarter 2013 2012 Published 2012 Pro forma Total

Growth

Organic Growth1
         
Licenses 16.4 15.2 16.5 7.7% -0.9%
Maintenance 26.7 23.9 24.2 11.8% 10.2%
Services   13.4   13.3   13.6   0.5%   -1.8%
Axway 56.5 52.4 54.4 7.7% 3.9%
                     
3rd Quarter 2013 2012 Published 2012 Pro forma Total

Growth

Organic Growth 1
         
Licenses 20.2 12.6 14.7 60.0% 37.6%
Maintenance 26.6 24.9 24.8 6.7% 7.1%
Services   13.3   13.2   13.3   0.6%   0.1%
60.0 50.7 52.7 18.4% 13.8%
                     
4th Quarter 2013 2012 Published 2012 Pro forma Total

Growth

Organic Growth 1
         
Licenses 28.5 34.3 34.1 -17.0% -16.7%
Maintenance 27.4 26.2 25.5 4.5% 7.3%
Services   15.4   14.8   15.0   3.7%   2.3%
Axway 71.2 75.2 74.7 -5.4% -4.8%

(1) at constant exchange rates and scope of consolidation

Income Statement              
(in thousands of euros) FY 2013 FY 2012 FY 2011
Revenue :
License 75 583 71 435 77 762
Maintenance 106 348 98 205 85 037
Total Product Revenue 181 931 169 640 162 799
Services 55 613 54 680 54 445
Total Revenue : 237 544 224 320 217 244
 
Costs of sales:
Product Revenue 20 721 20 653 19 929
Services 51 407 51 070 49 285
Total Costs of sales : 72 128 71 723 69 214
 
Gross profit: 165 416 152 597 148 030
as a % of Revenue 69.6% 68.0% 68.1%
Operating expenses :
Sales and marketing 70 763 64 077 61 528
Research and development 33 636 32 508 32 079
General and administrative 23 549 21 046 19 120
Total operating expenses : 127 948 117 631 112 727
Profit on operating activities 37 468 34 966 35 303
as a % of Revenue 15.8% 15.6% 16.3%
 
Stock option releated expenses (1 352) (1 147) (146)
Amortization of intangible assets (3 679) (2 130) (1 858)
Profit from recurring operations 32 437 31 689 33 299
as a % of Revenue 13.7% 14.1% 15.3%
 
Other income and expenses (5 271) (2 940) (3 967)
Operating profit 27 166 28 750 29 332
 
Cost of net financial debt (674) (51) (1 633)
Other financial revenues and expenses (656) (63) (1 034)
Income taxes 9 759 (3 976) (5 208)
Net Profit 35 595

 

24 660

 

21 457
    15.0%       11.0%       9.9%
Simplified Balance Sheet              
                     
31/12/2013 31/12/2012 31/12/2011
    (in M€)       (in M€)       (in M€)
ASSETS
Goodwill 189.3 196.6 169.6
Intangible assets 28.8 31.0 19.4
Property, plant and equipment 6.3 6.2 4.9
Other non-current assets 31.5 18.5 15.3
Non-current assets 255.9 252.3 209.2
 
Trade receivables 64.4 72.2 57.1
Other current assets 22.5 17.1 13.8
Cash and cash equivalents 49.2 35.4 23.8
Current assets 136.1 124.7 95.3
     
TOTAL ASSETS 392.0 377.0 304.5
 
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital 40.9 40.6 40.3
Capital reserves and results 217.4 193.3 173.1
Total shareholders' equity 258.4 233.9 213.4
 
Financial debt - long-term portion 28.5 36.9 2.0
Other non-current liabilities 15.5 16.2 14.6
Non-current liabilities 44.0 53.1 16.6
 
Financial debt - short-term portion 9.5 5.3 0.5
Other current liabilities 80.1 84.7 74.0
Current liabilities 89.6 90.0 74.5
TOTAL LIABILITIES 133.6 143.1 91.1
     
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 392.0 377.0 304.5
                     
Cash Flow Statement              
                     
  FY 2013 FY 2012 FY 2011
  (in M€)       (in M€)       (in M€)
 
Net profit for the period 35.6 24.7 21.5
Net charges to amortizations, depreciations and provisions 8.0 5.8 4.4
Other income and expense items 1.7 0.6 0.3
Cash from operations after cost of net debt and tax 45.3 31.1 26.2
Changes to operating working capital requirements (3.6) (10.8) 8.1
Costs of net financial debt 0.7 0.1 1.6
Income tax paid net of accrual (14.1) (0.2) (0.6)
Net cash from operating activities 28.3 20.2 35.3
Net cash used in investing activities (3.6) (45.6) (3.6)
Proceeds on shares issued 2.2 2.1 61.2
Dividends paid (7.1) (5.0) (21.8)
Change in current account - Sopra Group - - (68.4)
Change in loan (4.4) 40.0 -
Net interest paid (0.7) - (1.6)
Other changes 0.3 0.1 (0.2)
Net cash from (used in) financing activites (9.7) 37.2 (30.8)
Effect of foreign exchange rate changes (1.2) (0.1) 0.5
NET CHANGE IN CASH AND CASH EQUIVALENTS 13.8 11.7 1.4
 
Opening cash position 35.4 23.7 22.3
CLOSING CASH POSITION 49.2 35.4 23.7
                     

Financial Calendar

  • Wednesday, February 19, 2014 at 2.30pm: meeting of financial analysts at the Hôtel Le Meurice, Paris
  • Monday, April 28, 2014 (after close of trading): Publication of Q1 2014 revenue.
  • Wednesday, June 4, 2014 at 2.30pm: General Meeting at the Hôtel Le Meurice, Paris.

Disclaimer

This document is a free translation into English of the original French press release. It is not a binding document. In the event of a conflict in interpretation, reference should be made to the French version, which is the authentic text.

About Axway

Axway (NYSE Euronext: AXW.PA), a market leader in governing the flow of data, is a global software company with more than 11,000 public- and private-sector customers in 100 countries. For more than a decade, Axway has empowered leading organizations around the world with proven solutions that help manage business-critical interactions through the exchange of data flowing across the enterprise, among B2B communities, cloud and mobile devices. Our award-winning solutions span business-to-business integration, managed file transfer, API and identity management, and email security– offered on premise and in the Cloud with professional and managed services. Axway is registered in France with headquarters in the United States and offices in 19 countries.

More information is available at www.axway.com.

Contacts

Axway
Investor Relations:
Patrick Gouffran, +33 (0)1 40 67 29 26
pgouffran@axway.com
or
Press Relations:
Sylvie Podetti, +33 (0)1 47 17 22 40
spodetti@axway.com

Release Summary

PR FY 2013.

Sharing

Contacts

Axway
Investor Relations:
Patrick Gouffran, +33 (0)1 40 67 29 26
pgouffran@axway.com
or
Press Relations:
Sylvie Podetti, +33 (0)1 47 17 22 40
spodetti@axway.com