results for the six months ended 30 september 2013/media/aveva... · net and aveva pdms on a large...
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Results for the six months ended 30 September 2013
Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. 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.
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Richard Longdon Chief Executive
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Strategic highlights
Strong growth within Engineering & Design Systems, with revenue +12%
‘AVEVA Everything 3D’ (AVEVA E3D™) on track, with one major EPC announcing plans to migrate in 2014
Continued growth in pipeline in Enterprise Solutions (revenue +5%), although slower growth than anticipated due to customer-specific factors
Cash generated from operations before tax +32%
High recurring revenues maintained at 70% of sales
Innovation and technology leadership – October launch of ‘AVEVA E3D™ Insight’ at AVEVA World Summit in Boston
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Engineering & Design Systems
EPCs – a number of significant licence deals in the period
AVEVA E3D™ momentum building
Customers widening use of AVEVA design tools – This is an important strategic growth driver for AVEVA
EPC backlogs continue to grow
New product pipeline strong – Mobile & Cloud
– AVEVA E3D™ Insight released in October, and more to come…
88%
EDS
74%
Recurring
95%
Software
Services
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
EDS – Recent customer examples
MAN Diesel & Turbo (Germany) – AVEVA IE&D, including AVEVA PDMS, AVEVA Engineering, AVEVA Diagrams and AVEVA Global
Daewoo Shipbuilding & Marine Engineering (Korea) –Building around 70 ships per year with AVEVA tools. First shipbuilder to have achieved revenue >$10 billion from offshore
AVEVA Marine model of an FPSO, and an FPSO now in construction Images Courtesy of DSME. © Copyright DSME
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Enterprise Solutions
Substantial pipeline and the business continues to grow – Much of the opportunity lies in territories where predicting the timing of revenues
is by nature more difficult; the sales cycle is much longer for ES
Significant milestones reached in H1 on multiple projects – BP NOTIME project, Chevron Gorgon, Shell Carmon Creek, Conoco Phillips CNSO
and ADMA-OPCO
Partner strategy gaining pace, e.g. Capgemini in nuclear
H1 was affected by two customer-specific external factors – A major shipyard in Brazil ran into severe financial difficulties
– Global roll out plans for AVEVA NET abandoned at one Owner Operator
– These factors affected revenue and backlog
48%
52%
Software
Services
12%
ES
34%
Recurring
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
ES – Recent customer examples
Promon Engenharia (Brazil) – leading EPC selected and implemented AVEVA NET and AVEVA PDMS on a large mining project for Largo Resources, Brazil’s first vanadium pentoxide production facility
CSC Jinling (China) – shipyard selected AVEVA NET for an integrated design information management system. Distributed, complex operations, AVEVA NET will integrate engineering, design and ERP systems across all geographic locations
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
ES Customer focus - ADMA-OPCO
Previously spent >75% of time spent looking for information
AVEVA Laser Scanning plus AVEVA NET to facilitate a vast ‘as built’ operation, creating a full digital replica of all existing assets
Assets include >300 well head towers
Around 129,000 pieces of equipment
Ambitious project with AVEVA NET pulling in information from multiple sources: – 260,000 scanned documents
– >400 3D models
– >20,000 datasheets
Great reference for AVEVA
Complex accommodations asset, ADMA-OPCO © Copyright ADMA-OPCO
This project is expected to drive ‘engineering excellence’ through better management and control of information
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
AVEVA E3D™
More than 30 customers now using the AVEVA E3D™ platform – minimal revenue YTD, though growing rapidly
Superb feedback at AVEVA World Summit – H2’14 offers a number of key strategic marketing opportunities (user groups, etc.)
Siemens Energy
– Four engineering hubs
– Around 2 years ago decided to adopt AVEVA
– Full evaluation of AVEVA E3D™ Draw application was the first major step
– Expect full migration in Q4 2014, with ‘go live’ on all projects
Other discussions with major EPC customers are progressing well
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
James Kidd CFO
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Financial highlights
Sept 2013
Sept 2012
Total revenue £108.5m £97.6m 11%
Constant currency revenue £106.2m £97.6m 9%
Adjusted* profit before tax £32.3m £28.6m 13%
Adjusted* basic EPS (pence) 35.23p 30.19p 17%
Adjusted profit before tax margin 29.8% 29.3% 46bps
Interim dividend per share (pence) 5.0p 4.5p 11%
Operating cash flow before tax £30.2m £22.9m 32%
* Adjusted profit before tax, adjusted profit margin and adjusted basic earnings per share are calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and exceptional items. In addition, adjusted basic earnings per share also include the tax effects of these adjustments.
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Sept 2013 £m
Sept 2012 £m
Reported
Normalised
Total revenue 108.5 97.6 11%
Cost of sales (8.5) (7.4) 15%
Research and Development costs (18.7) (16.2) 15% 8%
Selling and distribution expenses (44.2) (40.5) 9% 6%
Administrative expenses (10.2) (8.3) 23% 31%
Net interest receivable 0.4 0.6
Normalised items 4.9 2.8
Adjusted profit before tax 32.3 28.6 13%
Reported profit before tax 27.3 25.8 6%
Income tax (effective rate 27.6%, 2012 - 29.0%) (7.5) (7.5)
Profit after tax 19.8 18.3 8%
Adjusted profit margin 29.8% 29.3%
Adjusted basic EPS 35.23p 30.19p 17%
Summary income statement (statutory)
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Summary balance sheet
Sept 2013 £m
Sept 2012 £m
Non-current assets 77.1 77.7
Accounts receivable (net of provision £4.7m, 2012 - £4.8m) 54.0 49.6
Prepayments and other receivables 8.0 9.5
Net cash and deposits 95.8 166.4
Total assets 234.9 303.2
Trade and other liabilities 34.4 34.6
Deferred revenue 30.4 31.2
Pension liabilities 13.3 12.1
Shareholders’ equity 156.8 225.3
Total shareholders’ equity and liabilities 234.9 303.2
Payment of £100 million special dividend during first half
Deferred revenue impacted by FX
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Revenue by category Recurring revenue
maintained at 70% of total sales
Tokens now a major part of rental licence income
Rental licences +14%
ILF growth 11%
Flat services revenue, software revenue now 90% of total sales
Constant currency growth 9%
28.4
47.2
21.6
11.3 108.5
0
20
40
60
80
100
120
Annual fees Rental fees Initial license fees Services Total revenue
25.8
41.3
19.5
11.0 97.6
H1 ’13
H1 ’14
+10%
+14%
+11%
+3% +11%
£m
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
AVEVA – revenue by geography
Americas +9% Revenue = £17.8m
(2012 - £16.3m)
EMEA +4% Revenue = £48.4m
(2012 - £46.6m)
Asia Pacific +22% Revenue = £42.3m
(2012 - £34.7m)
Korea was the principal driver of the strong growth seen in Asia Pacific
EMEA negatively affected by the weakness in Enterprise Solutions
Americas saw good growth outside LatAm, encouraging signs in North America
Brazil sizeable long-term opportunity
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Sept 2013 £m
Sept 2012 £m
Revenue 95.7 85.4 12%
Annual fees 25.5 23.4 9%
Rental licence fees 45.7 39.7 15%
Recurring revenue 71.2 63.1 13%
Initial licence fees 19.9 17.0 17%
Services 4.6 5.3 (13%)
Total revenue 95.7 85.4 12%
Operating costs (23.8) (20.8) 14%
Contribution 71.9 64.6 11%
Engineering & Design Systems
Strong growth in initial licence fees driven by Asia Pacific
Continued strength in rental licence fees
Investment in sales technical and R&D
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Sept 2013 £m
Sept 2012 £m
Revenue 12.8 12.2 5%
Annual fees 2.8 2.5 12%
Rental licence fees 1.5 1.6 (6%)
Recurring revenue 4.3 4.1 5%
Initial licence fees 1.7 2.4 (29%)
Services 6.8 5.7 19%
Total revenue 12.8 12.2 5%
Operating costs (14.4) (14.0) 3%
Contribution (1.6) (1.8) 11%
Enterprise Solutions
Division saw negative impact due to two customers-specific events
Backlog £11.4 million (31 March 2013 £14.7 million), reflecting H1 customer issues
Continue to make good progress with Owner Operators
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Movements in net cash position
Cash from operations pre tax
up 32% to £30.2 million
Strong cash conversion,
112% in H1 (versus 91% H1
2012)
Cash outflow of £100 million
Special Dividend in H1
Negative impact of £2.2
million from ForEx
190.4
30.2 (6.7) (2.5)
(100.0)
(13.3)
(2.3) 95.8
80
100
120
140
160
180
200
220
31-Mar-13 Cash from
Operations Tax Cap Ex Special
Dividend
Final Dividend
FX/Other 30-Sep-13
£m
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Outlook
Momentum within EDS remains strong underpinned by global breadth, long customer relationships, new products and high recurring revenues
ES opportunity undiminished, the significant pipeline continues to grow
We remain the leading innovator in our industry, beginning to deliver Cloud and Mobile apps using E3D™ as the enabling platform
Broadening our relationship with Global Accounts with broader portfolio of integrated software solutions
Growth indicators across our markets remain positive
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Appendices
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Sept 2013 £m
Sept 2012 £m
Net cash from operating activities 30.2 22.9
Tax paid (6.7) (9.4)
Capital expenditure (net) (2.5) (2.4)
Acquisitions - (11.5)
Interest received (net) 0.6 0.7
Purchase of own shares (0.7) (0.6)
Dividends paid (113.3) (11.5)
Net decrease in cash (92.4) (11.8)
Foreign exchange movement (2.2) (0.8)
Opening cash and deposits 190.4 179.0
Closing cash and deposits 95.8 166.4
Summary cash flow
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Sept 2013 reported
£m
Intangible amortisation
Share based
payments
FX gains/ (losses)
Exceptional items
Sept 2013 - normalised
Sept 2012 normalised
Total revenue 108.5 108.5 97.6
Cost of sales (8.5) (8.5) (7.4)
Research and Development (18.7) 1.9 0.9 (15.9) (14.7)
Selling and distribution (44.2) 0.4 1.2 (42.5) (40.0)
Administrative expenses (10.2) 1.5 (1.1) 0.1 (9.7) (7.4)
Normalised items 4.9 (2.3) (1.5) 1.1 (2.2) 0.0 -
Net interest receivable 0.4 0.4 0.6
Adjusted profit before tax 32.3 - - - - 32.3 28.6
Operating expenditure (normalised)
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
AVEVA products and competitive landscape
ASPEN
HEXAGON
BENTLEY
DASSAULT
SIEMENS
ASPEN
SIEMENS
Conceptual Design FEED
Detailed Design
Construction & Commissioning Operations Decommissioning
BENTLEY
HEXAGON
Engineering Design Systems
DASSAULT
SAP
IN-HOUSE SOLUTIONS
IN HOUSE SOLUTIONS POINT SOLUTIONS
Project phase 2-6 years (c.$1.6 billion) Operations phase up to 50 years (>$2 billion)
AUTODESK
Enterprise Solutions
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Copyright © 2013 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Definition of terms
Item Definition
Initial Licence Fee Initial Licence Fee (ILF) - users are charged an initial licence fee per seat together with an obligatory annual fee.
Annual Fee Charged in association with an ILF providing customer support and maintenance, which includes core updates. Users must pay the annual fee in order to maintain the right to use the software.
Rental licence model An alternative to the ILF plus annual fee model, there are three different types of rental licence: Monthly invoicing, contractual period (typically one year, invoiced up front) or token licensing.
Token-based licensing The user pays for a 'basket of tokens' representing licences to use different software products over a defined period of time. The customer can draw down on these licences as required.
Revenue recognition
ILFs – recognised upfront after usual delivery and acceptance conditions are met. Annual fees – recognised ratably over the period (typically 12 months). Rental licences - an estimated licence element is recognised up front, and the remaining maintenance element is recognised ratably over the contracted period. Services are recognised on a percentage complete basis.
Revenue by geography The sales force is organised into three geographic regions. Revenue is allocated based on where the contracting entity of the customer is based. AVEVA's global accounts often choose to purchase software in one geography for use in another.
Recurring revenue Annual fees plus rental fees.
Adjusted PBT Profit Before Tax adjusted to exclude the effects of amortisation of intangibles (excluding software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and exceptional items.
Adjusted EPS Adjusted PBT is used to calculate the adjusted earnings per share, after an adjustment for the tax effect of the items adjusted.
Cash conversion Cash flow from operations divided by the operating profit for the period, measured as a percentage.
Enterprise Solutions backlog Contracted Enterprise Solutions revenue that has not yet been recognised but which is expected to be recognised in the next 12 months. Revenue backlog also includes 12 months of annual fees.
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