Results for the year ended 31 March 2012 - Avevafutureofplantdesign.aveva.com/~/media/Aveva/English/Investors... · Results for the year ended 31 March 2012 James Kidd, Chief Financial

Results for the year ended 31 March 2012

James Kidd, Chief Financial Officer

Richard Longdon, Chief Executive

Copyright 2012 AVEVA Solutions Limited. All rights reserved.

Safe Harbor Statement

During (and in this) presentation we make forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Each forward-looking statement speaks only as of today and save to the extent required by the applicable law or regulation, we do not undertake any obligation to update or renew any forward-looking statement.

Richard Longdon, Chief Executive


Strategic highlights

Strong performance in Engineering & Design Systems

Significant growth in Americas (+24%) and EMEA (+21%)

Enterprise Solutions strong momentum

China successfully re-organised, growth back on track

Strong financials - cash conversion 115%, recurring revenue 70%

Increased investment in new technology & products

Focused M&A strategy


Fundamental drivers

CAPEX plans for deep-water dominate future spend

Complexity is increasing

EPC backlogs surpass 2008 levels

Safety & compliance key drivers

Trend to modular construction

Mining & Metal – very strong growth from a small base

New Centre of Excellence for mining established in Chile

Pulp & Paper, Chemical, petrochemical, pharmaceutical are also areas of growth

Investment delivery & momentum

A true differentiator for AVEVA

Backlog reflects business momentum

Expect break even in FY’13

Domain expertise a barrier to entry

Oil & Gas

Other Enterprise Solutions Brazil expansion continues, more large deals signed

China reorganised and back on growth path

New focus on India in FY’13

Russia gaining momentum

Emerging Markets

Closed large ILF deals with major ship builders for offshore projects

Still see backlog in very large shipbuilders

Naval shipbuilding increasing

Offshore

Focus on India and China (nuclear)

$2 trillion investment in power generation (2007-2015)

Dash for gas

Energy mix not seen changing short term

Marine Power


Positioned for growth

Regional expansion – (Latin America, India, China)

New product launches – extending competitive lead

Focused M&A strategy

Strong track record of execution

Customer driven solutions

Market leading products

Local customer support

Global presence

Exposed to multiple growth markets

Oil & Gas

Metal & Mining

Marine

Power

AVEVA

Petro Chem

Pulp & Paper

Representative only, not to scale

£

Time


46 AVEVA Offices

Global footprint


Strong growth

Engineering hours in design phase for large projects are increasing and driving demand

Investment in new Centres of Excellence in Chile (Mining), Belgium & Germany (Structural Design), UK (3D Data Capture)

High level of cross-sales with existing customers

Extending technology lead through on-going R&D

Engineering & Design Systems

8


ES grew strongly

• Expect break even in FY’13

• Over 20 new customers

Momentum building rapidly

• Backlog +59% in the year (including licenses, services & maintenance)

More focused development as separate line of business

New dedicated owner-operator sales force

Enhanced service delivery model

Expanding partner network

Enterprise Solutions

Project

management

FEED

Decommissioning

Revamp Maintenance Operations

Construction

Materials

management

Procurement

Engineering

9


Innovation remains the lifeblood of AVEVA

R&D investment +14% in the year to £32 million

• Engineering, Electrical and Laser Scanning successfully launched in FY’12

Very exciting product pipeline in EDS over next 12 months

LFM revolutionising 3D creation

• c.50% reduction in man-hours

Further development of AVEVA NET and ERM

CADCentre

World’s first 3D plant design system – PDMS

World’s first intelligent P&ID launched

World’s first plant walk-through visualisation

World’s first automatic clash detection

World’s most powerful solution for multi-site projects

World’s first Deployment of AVEVA NET

World’s first integrated 3D Laser scanning solution

World’s first integrated marine & plant design

World’s first open, standards-based integration of P&ID and 3D

design

World’s most comprehensive 3D laser scanning solution


Strong recurring revenue base (70%)

Plant Exec Council to partner with key customers

Co-developed products with strategic customers

Enduring customer relationships


Strategic acquisition of Bocad adding world class structural detailing capability

LFM fully integrated, further extending AVEVA’s substantial technology lead

Pipeline of acquisition opportunities remains healthy

Focused and disciplined approach

M&A strategy update


James Kidd, Chief Financial Officer


* Adjusted profit before tax and adjusted basic earnings per share are calculated before amortisation of intangible assets, share-based payments, gain/loss on

fair value of forward foreign exchange contracts and exceptional items in the relevant year. In addition, adjusted basic earnings per share also includes the tax

effects of these adjustments.

Financial highlights

March 2012 March 2011

Total revenue £195.9m £174.0m 13%

Adjusted* profit before tax £62.3m £54.7m 14%

Adjusted* basic EPS (pence) 63.81p 56.08p 14%

Adjusted profit before tax margin 31.8% 31.4%

Final dividend per share (pence) 17.0p 14.89p 14%

Net cash £178.9m £153.2m 17%


Summary income statement (statutory) March 2012

£m

March 2011

£m

13%

14%

14%

14%

Total revenue 195.9 174.0

Costs of sales (16.1) (18.7)

Research and Development costs (32.1) (28.1)

Selling and distribution expenses (75.0) (62.7)

Administrative expenses (16.2) (15.3)

Net interest receivable 1.3 0.6

Normalised items 4.5 4.9

Adjusted profit before tax 62.3 54.7

Reported profit before tax 57.7 49.8

Income tax (17.7) (15.3)

Profit after tax 40.0 34.5

Adjusted profit margin 31.8% 31.4%

Adjusted basic EPS 63.81p 56.08p

20%

6%

16%

16%


March

2012

£m

March 2011

£m

Summary balance sheet

Non-current assets 62.3 58.4

Accounts receivable 63.7 68.4

Other receivables 5.2 5.8

Net cash and deposits 178.9 153.2

Total assets 310.1 285.8

Other liabilities 45.2 44.0

Deferred revenue 33.5 36.4

Pension liabilities 9.9 3.0

Shareholders’ equity 221.5 202.4

Total shareholders’ equity and liabilities 310.1 285.8

Strong focus on cash collection – cash conversion 115%

Deferred revenue included significant contract in prior year

UK pension scheme impacted by discount rate


Revenue by category

Organic revenue growth rate 11% - strong H2

Recurring revenue up 18% to £138m

Rental licences up 26%, mix changing

Initial licenses recovered in H2, China back on track

Enterprise Solutions driving services (+31%)

No overall FX impact (constant currency basis)

Split at 31 March 2012

Initial 19%

11%

70%

Services

Recurring


Engineering & Design Systems

March 2012

£m March 2011

£m

Revenue

Annual fees 43.1 42.0

Rental licence fees 86.9 66.6

Recurring revenue 130.0 108.6

Initial licence fees 33.2 37.9

Services 9.3 8.6


Operating costs (39.0) (38.6)

Contribution 133.5 116.5

EPCs driving recurring revenue +20%

H2 initial licences £18.5m

Cost base stable


Enterprise Solutions

Strong backlog up 59% to £12.7m (2011

£8m)

March 2012

£m

March 2011

£m

Revenue

Annual fees 4.7 3.7

Rental licence fees 3.3 4.7

Recurring revenue 8.0 8.4

Initial licence fees 4.1 3.1

Services 11.4 7.4


Operating costs (27.9) (24.8)

Contribution (4.4) (5.9)


AVEVA – global performance

Americas

£38.2m

(2011 - £30.8m) Growth 24%

EMEA

£93.3m (2011 - £76.9m)

Growth 21% Asia Pacific

£64.4m (2011 - £66.3m)

Growth -3%


Extending technology leadership • Exciting product pipeline in core EDS

• Focused and disciplined approach to acquisitions

Enterprise Solutions a $2 billion market opportunity • Material positive momentum in backlog entering FY’13

Sustainable growth • Complexity and safety driving investment in design

• Broad exposure across multiple growth markets – Oil & Gas, China, India, Brazil, Mining, Power…

• High recurring revenues, margins and cash conversion

Outlook

Appendices


Net cash from operating activities 64.7 44.7

Tax paid (16.9) (13.8)

Capital expenditure (net) (3.1) (2.6)

Acquisitions (5.7) (13.4)

Interest received (net) 1.4 1.2

Purchase of own shares (0.6) (0.4)

Dividends paid (12.8) (11.7)

Net increase in cash 27.0 4.0

Foreign exchange movement (1.3) (0.5)

Opening cash and deposits 153.2 149.7

Closing cash and deposits 178.9 153.2

Summary cash flow

March 2011

£m

March 2012

£m


ASPEN

HEXAGON / INTERGRAPH

BENTLEY

DASSAULT

IN-HOUSE SYSTEMS

Oracle

SAP

PTC

DASSAULT

SIEMENS (UGS)

ASPEN

SIEMENS

AUTODESK

AVEVA products and competitive landscape

Engineering Design Systems Enterprise Solutions

Project Phase 2-6 years ($1.6bn market)*

Operations up to 50yrs ($2.1bn market)

*Source: Arc

Engineering Design Systems Enterprise Solutions


First rental sale

Example AVEVA NET model (yearly rental fees)

Ongoing services

Additional modules

Software/services split moves from 40/60 to 75/25 by year 5

Stronger annuity stream for maintenance fees in operations

Services impact margin initially

Services may be partly outsourced

Y0 6m 12m 18m 24m 36m 48m 60m

Software

Services

Additional modules


Technology leadership based on well-invested platform and unrivalled capabilities

Virtuous Cycle of AVEVA’s Continual Progression model

Key Technological Edge

Object based 3D from the start

Open standards

No limit to data size

Flexible and extendable

Easy to understand and use

Recurring

Revenue

Continual

Investment

Improved

Product

Leader NOT Follower

Concurrent multi-discipline design

Integrated Hull & Top-side design

3D navigation at the heart of Asset Management

Fast track modelling from laser data

Global work share

Documents

Results for the year ended 31 March 2012 - Avevafutureofplantdesign.aveva.com/~/media/Aveva/English/Investors... · Results for the year ended 31 March 2012 James Kidd, Chief Financial