AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES Risk factors

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

1.13.4 Credit risk At present, the Group’s customers are the main source of any credit risk to which it might be exposed. The Group’s software packages are designed to handleǾmillions of transactions and are particularly useful for major organizations engaged in high-volume business activities. This also implies that a single licensing agreement may represent severalǾmillion euros. Given its broad revenue base, the Group is not dependent on any particular customer (see ChapterǾ1 “Uncertainties related to

the global economic environment”). However, even though the Group’s customers are of first rank, it cannot be assumed that the Group will not be exposed to a possible customer insolvency, for a significant amount. In addition, the geographic scope of its operations exposes the Group to longer payment cycles. Consequently, default by a customer might have a material adverse impact on the Group’s business results and its cash flow generation.

1.13.5 Legal risks Disputes – Legal proceedings andbarbitration

The Group has put measures in place to minimize risks related to its intellectual property rights. The Group holds patents and implements a patent registration policy for its portfolio of software packages. Moreover, the Group has set up technical measures in some of its software packages to prevent the violation of the user rights granted, unauthorized reproduction, or the sale of licenses for the software packages in breach of the contractual terms and conditions of the licenses granted. Despite the measures adopted by the Group, the effectiveness of such measures may vary from one country to another. In addition, the efficiency of the measures implemented may be limited, or even nil in certain countries where intellectual property rights are not protected like they are in the United States or Europe. There is a risk, particularly in certain countries where legal security is insufficient, that a third party may claim ownership of intellectual property rights over all or part of certain software packages, thereby allowing this party to develop and exploit the Group’s intellectual property rights. This could have unfavorable impacts on the Group’s business and generate additional costs for the recognition of such intellectual property rights. The Group’s capacity to use or develop software packages could thus be hampered. If the above-described risk was to materialize, the Group could be prevented from maintaining its competitive market position. This could have a material adverse impact on the Group’s business, results and revenue.

As far as the Company is aware, there are no known governmental, legal or arbitration proceedings, in progress or to which it might be exposed, likely to have, or having had, a material impact on the financial position or profitability of the Company and/or the Group, during the past 12Ǿmonths.

Intellectual property rights held bybthebGroup

The Group’s business rests on the software packages it develops and integrates, and the companies acquired over the years. It is primordial for the Group to be able to continue to use and develop its software packages for its future success. The protection of intellectual property rights is fundamental and crucial to the Group’s business. To this effect, the Group uses the various means at its disposal, i.e. copyright, patent rights, trademark rights, and professional secrecy, as well as confidentiality measures and technical processes to protect its intellectual property rights.

1.13.6 Dependence on the Sopra Group Ongoing influence on major Group decisions Sopra Steria GroupǾSA and Sopra GMT, the lead holding company of Sopra and Axway, along with the founders, retain an influence on the Company, and have the ability tomake important decisions concerning the Company, since they control Axway through their combined ownership of approximately 56.97% of the shares and 64.62% of the voting rights (see ChapterǾ6, SectionǾ2).

Furthermore, Sopra Steria GroupǾSA will appoint the members of the Company’s Board of Directors and will thus have an influence on certain strategic decisions, such as investment and divestment plans that may be carried out by the Company. In addition, Sopra GMT provides a certain number of services to Sopra Steria GroupǾSA and Axway Software (see ChapterǾ2, SectionǾ3).

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AXWAY - 2017 REGISTRATION DOCUMENT

www.axway.com