AXWAY_REGISTRATION_DOCUMENT_2017
CORPORATE GOVERNANCE AXWAY GROUP AND ITS BUSINESS ACTIVITIES Comments on the Group’s 2017 consolidated financial statements CORPORATE RESPONSIBILITY
CONSOLIDATED FINANCIAL STATEMENTS
2017 ANNUAL FINANCIAL STATEMENTS
CAPITAL AND AXWAY SOFTWARE STOCK
INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES
COMBINED GENERAL MEETING OFb6bJUNEb2018
Comparison of fiscal years ended 31bDecember 2017, 2016 and 2015
2017
2016
2015
(in millions of euros)
Revenue
Licenses
65.3 37.5
81.3 19.1
80.5 10.3
Cloud
Maintenance
145.4 248.3
143.0 243.4
137.7 228.4
Total Product Revenue
Services
51.6
57.7
56.2
Total revenue
299.8
301.1
284.6
Total Costs of sales Licenses and maintenance
23.8 21.1 43.3 88.2 211.6 70.6%
23.7 12.7 50.3 86.6 214.4 71.2%
23.2 12.6 50.7 86.4 198.3 69.7%
Cloud
Services
Total costs of sales
Gross profit
As % of revenue
Operating expenses
Sales and marketing
83.8 59.4 27.9
81.9 53.3 28.4
81.9 46.0 25.9
Research & Development
General and administrative costs
Total operating expenses Profit on operating activities
171.1
163.7
153.8
40.5
50.8
44.5
As % of revenue
13.5%
16.9%
15.6%
Cost of sales and gross margin InǾ2017, our gross margin was stable at 70.6%. Our overall costs related to license and maintenance income remained stable in absolute value terms. However, our margin on granting licenses and maintenance fell as a percentage of revenue from 89.5% inǾ2016 to 88.7% inǾ2017 because of the fall in license revenue. Our Cloud costs increased throughout 2017, with the inclusion of the costs from the Syncplicity cloud offer and the additional costs related to the Axway cloud environment. However, our gross margin reached 43.9% for the cloud, compared with 33.7% inǾ2016. This is a clear increase and well on the way to the baseline of over 65.0%. For 2017, the total cost of services fell significantly thanks to the considerable efforts deployed over the years to improve the Service margins to the same level as inǾ2016.
Sales and marketing, Research & Development, and administrative expenses InǾ2017, our sales and marketing costs were 28.0% of revenue, compared with 27.2% inǾ2016. In absolute value terms, our sales costs increased by €1.9Ǿmillion. However, we added €6.1Ǿmillion in costs arising from the Syncplicity acquisition, offset by our sales and marketing teams’ savings plan of €6.9Ǿmillion. InǾ2017, our Research & Development expenditure increased by €6.0Ǿmillion compared with 2016, rising from 17.7% of our revenue inǾ2016 to 19.8%% inǾ2017. This €6.0Ǿmillion increase in our research and development costs includes €8.0Ǿmillion of costs from Syncplicity, offset by our teams’ savings plans inǾ2015 and 2016, together with a €2.7Ǿmillion negative impact from currency translation differences. General and administrative expenses decreased in absolute value terms by €0.6Ǿmillion inǾ2017 compared toǾ2016, accounting for 9.3% of our revenue inǾ2017, versus 9.4% inǾ2016. The €0.6Ǿmillion decrease in our general and administrative expenses fromǾ2016 toǾ2017 includes a €1.0Ǿmillion increase from Syncplicity and a (-)€1.7Ǿmillion impact from currency translation differences.
1.9.2 Balance sheet and financial structure As of 31ǾDecember 2017, Axway’s financial position was extremely solid with cash and cash equivalents of €28.1Ǿmillion, bank debt of €48.7Ǿmillion and shareholders’ equity of €344.1Ǿmillion.
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AXWAY - 2017 REGISTRATION DOCUMENT
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