AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

Notes to the financial statements

11.2 Reconciliation of WCR with the cash flow statement WCR decreased by €11.7Ǿmillion inǾ2017 compared with a 2016 decrease in WCR of €5.9Ǿmillion. The decrease in DSO to 77Ǿdays from 85Ǿdays failed to offset falls in certain liabilities during this fiscal year.

11.3 Other cash flows Net cash generated from operating activities amounted to €29.6Ǿmillion inǾ2017, with cash from operations before cost of net financial debt and tax of €43.3Ǿmillion. Net investment cash flow of (-)€57.5Ǿmillion arose from the acquisition of Syncplicity ((-)€53.1Ǿmillion) and acquisitions of property, plant and equipment and intangible assets ((-)€4.2Ǿmillion), mainly in France and the United States. Net cash used in financing activities amounted to +€6.8Ǿmillion, with a change of €13.2Ǿmillion in borrowings and a dividend of €8.5Ǿmillion paid to Axway Software’s shareholders. In AprilǾ2015, the Board of Directors granted certain employees 35,000Ǿbonus shares, subject to a four-year lock-up period. At 31ǾDecember 2017, all bonus shares were in circulation, and none of them had been cancelled. In JuneǾ2016, the Board of Directors granted 64Ǿsenior executives and Jean-Marc Lazzari 273,500Ǿbonus shares, subject to a lock- up period of three years. At 31ǾDecember 2017, 231,500Ǿbonus shares are still in circulation. In JuneǾ2017, the Board of Directors adopted a bonus share plan for 253,000Ǿshares, subject to the fulfillment of presence and performance conditions, for the Axway Leadership team, the members of the Executive Committee and other persons regarded as key for the Axway Group. At 31ǾDecember 2017, 226,000Ǿbonus shares are still in circulation. In JuneǾ2017, the Board of Directors also adopted a bonus share plan for 72,000Ǿshares, for the Chief Executive Officer, subject to the fulfillment of presence and performance conditions. This plan is implemented for a period of four (4) years. At 31ǾDecember 2017, 72,000Ǿbonus shares are still in circulation.

NoteǾ12 Equity and earnings per share The statement of changes in consolidated shareholders’ equity is presented on pageǾ5. 12.1 Changes in the share capital At 31ǾDecember 2016, the share capital stood at €42,042,078, and comprised 21,021,039Ǿfully paid-up shares with a nominal value of €2.00 each. InǾ2017, 189,192Ǿshare subscription options were exercised, creating 189,192Ǿnew shares at a price of €2.00. At 31ǾDecember 2017, the share capital stood at €42,420,462 comprising 21,210,231Ǿfully-paid up shares with a nominal value of €2.00 each. Following the authorization issued by the General Shareholders’ Meeting of 28ǾApril 2011, the Board of Directors ratified, on 14ǾFebruary 2012, the bonus share allocation plan for employees of the Axway Group. Under IFRSǾ2 Share-based Payment, the value of the bonus shares granted calculated at the award date of the rights is expensed over the vesting period, i.e. two to four years. This plan resulted in the creation of 25,155 shares on 14ǾFebruary 2014 and 23,040 shares on 23ǾFebruary 2016, i.e. 45 shares per eligible employee.

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AXWAY - 2017 REGISTRATION DOCUMENT