Results for the year ended 31 March 2019
AVEVA Group plc
29 May 2019
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
This presentation may include predictions, estimates, intentions, beliefs and other statements
that are or may be construed as being forward-looking. While these forward-looking statements
represent our current judgment on what the future holds, they are subject to risks and
uncertainties that could result in actual outcomes differing materially from those projected in
these statements. No statement contained herein constitutes a commitment by AVEVA to
perform any particular action or to deliver any particular product or product features. Readers
are cautioned not to place undue reliance on these forward-looking statements, which reflect our
opinions only as of the date of this presentation.
The Company shall not be obliged to disclose any revision to these forward-looking statements to
reflect events or circumstances occurring after the date on which they are made or to reflect the
occurrence of future events.
2 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Highlights
3
Craig Hayman, CEO
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Summary for FY19
4
✓ Strong financial performance
Constant currency revenue growth +12.4%
Adjusted EBIT margin up 160bps to 23.8%
Recurring revenue up 270bps to 54.3%
✓ Integration on track
Management structures integrated across all functions
Systems and cultural integration well progressed
Initiatives in place to drive value in FY20, e.g. pricing, further recurring revenue growth
✓ Outlook remains positive
Digitalisation is driving strong demand
On track to meet medium-term targets of delivering revenue growth at least in-line with the industrial software market, increasing recurring revenue as a percentage of overall revenue to 60% and improving AVEVA’s Adjusted EBIT margin to 30%
2018
692.5
154.0
Growth
11.9%
19.8%
Revenue (£m)
Year ended 31 March
Adjusted EBIT (£m)
775.2
184.5
Adjusted diluted EPS (pence) 90.9
2019
27.0%71.6
Pro forma results
Leading the digitalisation of the industrial
world
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Broad growth in FY19
5 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Engineering
43% of revenue
High-teens growth
Monitor & Control
32% of revenue
Mid-single digit growth
APM
20% growth
Planning & Operations
High-single digit growth
14% of revenue 11% of revenue
Financial Review
6
James Kidd, Deputy CEO and CFO
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Strong financial performance
• Constant currency revenue +12.4%
• Recurring revenue up 270bps to 54.3%
• Strong balance sheet with net cash and deposits of £127.8m
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.7
Pro forma results for the year ended 31 March 2019
Total revenue
£775.2m
11.9%
Adjusted EBIT
£184.5m
19.8%
Adjusted EBIT margin
23.8%
160bps
Adjusted diluted EPS
90.9p
27.0%
Final dividend
29.0p
7.4%
Pro forma income statement
• Growth driven by strong sales
execution
• Gross margin up 90bps to 75.3% and
adjusted EBIT margin up 160bps to
23.8%
• Operational leverage partly offset by
incremental investments in sales,
marketing and R&D
• Effective tax rate reduced to 20.2%
(FY18: 23.5%), benefiting from ongoing
R&D tax incentives in the UK and the
USA
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.8
The pro forma income statement excludes acquisition accounting adjustments, exceptional items and normalised items. These are excluded to provide a reliable and consistent presentation of the underlying performance of the Group. FY18 is restated under IFRS 15.
Adjusted EBIT, profit before tax, adjusted profit margin and adjusted diluted earnings per share are calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on the fair value of forward foreign exchange contracts and exceptional items.
Year ended 31 March2019£m
2018£m
Change
Revenue 775.2 692.5 11.9%
Cost of sales (191.3) (177.6) 7.7%
Gross profit 583.9 514.9 13.4%
Gross margin 75.3% 74.4% 90bps
Operating expenses (399.4) (360.9) 10.7%
Adjusted EBIT* 184.5 154.0 19.8%
Adjusted EBIT margin 23.8% 22.2% 160bps
Net interest (0.5) (2.8) -
Adjusted profit before tax* 184.0 151.2 21.7%
Tax charge (37.1) (35.5) 4.5%
Adjusted profit after tax 146.9 115.7 27.0%
Adjusted diluted EPS* (pence) 90.90 71.59 27.0%
Pro forma revenue breakdown
9
• 17.8% growth in recurring revenues, driven by 40.2% increase in rental & subscription revenues
• Recurring revenue as a percentage of overall revenue increased by 270bps to 54.3%
• Training & services 18.4% of total revenue, a reduction of 120bps due to the faster growth in software
Year ended 31 March2019£m
% of total2018£m
% of total Change
Rentals & subscriptions 219.4 28.3% 156.5 22.6% 40.2%
Support & maintenance 201.8 26.0% 201.1 29.0% 0.3%
Recurring revenue 421.2 54.3% 357.6 51.6% 17.8%
Initial fees & perpetual 211.6 27.3% 199.5 28.8% 6.1%
Training & services 142.4 18.4% 135.4 19.6% 5.2%
Total 775.2 100% 692.5 100% 11.9%
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Pro forma cost base
10
• Cost of sales: Increase driven by sales outperformance
• Research & Development: Expenditure no longer capitalised, investment in innovation partly offset by efficiency savings
• Selling & distribution: higher sales commissions due to the strong performance, investment in sales function and customer events
• Administrative costs: Higher bonuses in relation to strong financial performance, national insurance costs relating to share options, new senior hires and additional support functions
Year ended 31 March2019£m
2018£m
Change
Cost of sales 191.3 177.6 7.7%
Research & development 114.5 99.0 15.7%
Selling & distribution 196.7 179.1 9.8%
Administrative 81.9 80.3 2.0%
Net impairment loss on financial assets 6.3 2.5 -
Total opex 399.4 360.9 10.7%
Total 590.7 538.5 9.7%
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Pro forma cost bridge
11
• All R&D expensed (FY18: £9.9m capitalised)
• Cost of sale: Increased year-on-year cost of sale
• Commissions and bonuses: Net increase in sales commissions and bonuses due to revenue outperformance
• Investment: Incremental investments to drive future growth including customer events, sales events, accelerated R&D and new sales / marketing hires
• Underlying inflation: Ongoing wage inflation
• Cost savings: Cost synergies achieved in the year
F Y 2 0 1 8 T O T A L E X P E N S I N G R & D
C O S T O F S A L E S C O M M I S S I O N S & B O N U S E S
I N V E S T M E N T U N D E R L Y I N G I N F L A T I O N
B A D D E B T C O S T S A V I N G S F Y 2 0 1 9 T O T A L
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Year ended 31 March 2019 versus prior year
£590.7m
£538.5m
Exceptional and normalised items
12
• Acquisition and integration costs:Consultancy fees paid to advisors; deal related executive retention costs; Finance, HR, IT and Legal integration costs; provision for an onerous lease
• Restructuring costs: Severance payments relating to duplicated roles
• Amortisation of intangibles:Primarily amortisation of heritage AVEVA intangible assets under reverse acquisition accounting following the Combination
• Share based payments: Increased due to senior hires
Year ended 31 March2019£m
2018£m
Acquisition and integration activities 23.0 29.5
Restructuring costs 5.9 2.9
Movement in provision for sales tax - (3.0)
Impairment of R&D - 15.0
Total exceptional items 28.9 44.4
Amortisation (exc. other software) 88.1 50.5
Share based payments 11.2 4.0
Loss / (gain) on FX contracts 0.5 (0.6)
Total normalised items 99.8 53.9
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Balance sheet
13
• Strong balance sheet with no debt, £127.2m of cash and £0.6m of treasury deposits
• Contract assets increased due to revenue recognition on longer-term contracts
• Completion accounts adjustment payment made to Schneider Electric of £19.4m
31 March 2019£m
31 March 2018£m
Non-current assets 1,923.0 1,992.9
Trade and other receivables 237.9 230.4
Contract assets 100.5 67.6
Cash and deposits 127.8 105.8
Other current assets 11.6 12.5
Total assets 2,400.8 2,409.2
Trade and other payables 156.8 147.2
Contract liabilities 174.6 141.7
Loans and borrowings - 10.0
Shareholders’ equity 1,924.5 1,954.7
Other liabilities 144.9 155.6
Total shareholders’ equity and liabilities 2,400.8 2,409.2
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
FY18 is restated under IFRS 15
Pro forma cash flow
14 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
• Conversion of adjusted EBIT to operating cash flow before tax was 91.7%
2019£m
2018£m
Net cash from operating activities before tax 169.1 118.7
Tax paid (32.4) (33.6)
Consideration paid on completion of business combination (19.4) -
Capital expenditure (net) (7.6) (2.2)
Net interest (0.5) (2.6)
Dividends paid (66.0) (17.3)
Purchase of own shares (9.3) (0.3)
Change in funding with related parties - (18.1)
Return of value to shareholders net of issue costs - (101.7)
Other - 0.2
Increase in net cash and deposits 33.9 (56.9)
Foreign exchange movement (1.9) (0.5)
Opening net cash and deposits 95.8 153.2
Closing net cash and deposits 127.8 95.8
Integration updateCost savings and Transitional Service Agreements (TSAs)
• Exited 70% of the TSAs with Schneider Electric
• Cost saving programme on track – more than half of the £25m annual savings implemented
• Over 2,200 employees (83%) of SES transferred on to AVEVA payroll and benefits
Sales and marketing
• Re-branding of the enlarged Group completed
• Single CRM implemented delivering significant benefits
• Implemented new processes for pricing and launched subscription offering for Monitoring & Control
Major location consolidation
• Real estate consolidation programme on track – 10 sites consolidated
• Expansion of Hyderabad office to over 1,000 professionals. One of three major R&D hubs
Areas of focus
• IT integration and TSA exit (system integration, security, infrastructure)
• Value creation programme focusing on pricing, renewals, subscription transition
• ERP harmonised implementation
15 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Operational review
16
Craig Hayman, CEO
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Driving the digitalisation of the industrial world
17
Digitalisation is driving growing demand for industrial software
AVEVA is optimally placed to capture this demand due to its unique product portfolio, which runs end-to-end from Simulation through to Operations
Leading thedigitalisation ofthe industrial
world
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Digital transformation at ADNOC
Business challenge
ADNOC is transforming into an Industry 4.0
organisation to maximise returns from every
barrel of oil. To begin this journey, data was
centralised and integrated into a single
operating platform.
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.18
ADNOC is one of the world’s energy producers, operating across the hydrocarbon value chain
Solutions provided
Monitoring & Control to provide a real-time overview
of operations
Asset Performance Management to reduce
maintenance costs and downtime
Planning & Scheduling to optimise production planning
For video see: https://sw.aveva.com/success-stories/adnoc
Medium-term targets
19
Revenue
Recurring Revenue
Adjusted EBIT margin
Constant currency growth at least in line with industrial software market
• Grow underlying software business in excess of market growth rates
• Partly offset by focus on recurring revenue
Aim to increase Recurring Revenue as a percentage of total revenue, driven by:• Increasing the mix of Rentals & Subscriptions as a proportion of new software revenue• Growing software as part of the revenue mix• Increase recurring revenue to over 60%
An improvement in adjusted EBIT margin to 30%, achieved through:• Operational leverage
• Focus on high margin revenue growth through pricing and revenue mix optimisation
• Cost control with underlying growth limited to inflation
• Cost saving programme – £25m run rate by the end of FY20
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Set at September 2018 capital markets day
Medium-term targets
20 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Progress in FY19
+11.9%£775.2m
+17.8%£421.2m
+160bps23.8%
Revenue
Recurring Revenue
Adjusted EBIT margin
Rental & subscription revenue: Up over 40%
Recurring software revenue growth: 3x versus training & services
Recurring revenue: up to 54.3% (FY18: 51.6%)
AVEVA Cloud: 37 new enterprise scale customers
AVEVA Flex: 1st subscription offering introduced for Monitoring & Control
Improvement in gross margin: Higher proportion of software revenue
Improvement in operating margin: Operational leverage starting to show through
Substantial reinvestment: Increased investment in R&D, sales force and marketing
Direct sales force integration: Management from Q1 FY19, systems from Q3 FY19
Channel sales force: Double digit growth, new channel leadership
Schneider Electric relationship: 10% growth in sales to £80m
Product integration: Combined portfolio launched at AVEVA World Summit
Marketing investment: Customer events and new marketing leadership
Focus on Asset Performance ManagementBuilding the knowledge graph for the industrial sector
Digital Twin / Information ManagementProven scalability
Integration to hundreds of devices and business systems
Data model is integrated with 3D physical plant model
Risk-based MaintenanceConnects APM strategy to business strategy
Simplified user interface and attractive TCO
Preventive Maintenance (EAM)Integrated condition and predictive maintenance capability
Predictive MaintenanceAdvanced model templates, alert workflow, case library, fault
diagnostics, with Industrial asset SME
MobilityMobile device and OS agnostic
Intuitive user interface for creating, testing and deploying inspections and procedures
Connect
Collect
Analyse
Act
21 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
AVEVA Flex: A new subscription offer for Monitoring & Control
22 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
FLEXIBILITY to monitor, operate, control, analyse and optimise industrial operations
Commercial flexibility
Technical flexibility
Architectural flexibility
Early customer wins:
Two major North American Food & Beverage companies
Steel manufacturer
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.23
AVEVA operates an independent board with two non-independent, non executive directors from Schneider Electric
AVEVA’s results financially fully consolidated into the Schneider Electric Industrial Automation business
Schneider Electric 60% shareholding in AVEVA reflected within Schneider's valuation
Schneider Electric as sales partners
• Joint sales and marketing of AVEVA and
Schneider Electric EcoStruxure solutions
• Schneider Electric distributes AVEVA’s
solutions through its global partner
network
Schneider Electric as a customer
• AVEVA Lean digitisation solution for
discrete manufacturing
Deployed across 60 factories
• AVEVA Factory Insight solution for
IT/OT condition based maintenance
Deployed across 30 factories
+
Schneider Electric relationship with AVEVA drives 10% of total revenue
Focus for FY20
24
Revenue
Recurring Revenue
Adjusted EBIT margin
Constant currency growth at least in line with industrial software market
• Continued focus: Channel sales, Schneider Electric relationship, product development
• Pricing: Standardised contractual terms introduced, improved management of discounting
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Driving towards medium term targets
Aim to increase Recurring Revenue as a percentage of total revenue towards medium target• Sales incentive optimisation: Incentives in place to drive recurring revenue
An improvement in adjusted EBIT margin towards medium term target• Cost control
• Implementation of remaining cost savings: £25m run-rate by the end of the year
Summary and Outlook
Summary
• Strong sales performance delivering growth across all regions and product categories
• Excellent progress made on integration
• Progress on achieving medium term targets
Outlook
• Outlook remains positive
• On track to meet medium-term targets
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.25
Appendices
26© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
End-to-end product portfolio
27
Engineering
43% of revenue
Process Engineering & Simulation: DYNSIM Dynamic Simulation, Pro/11 Process Engineering, SimCental Simulation Platform
Engineering & Design: AVEVA Engineering, AVEVA E3D
Operator Training: AR/VR Immersive Training, Operator Training Simulators
Procure, Construct, Handover: AVEVA ERM
Monitor & Control
32% of revenue
HMI / Visualisation: InTouch HMI
SCADA: System Platform, CitecSCADA (for process plants), OaSyS SCADA (for pipelines)
APM Planning & Operations
Plan & ScheduleUnified Supply Chain Management: Enterprise Crude Knowledge Management
Operate & OptimiseManufacturing Operations:Manufacturing Execution System, Recipe Management, Batch Management, Energy Performance, Smart Water Solutions, AmplaOperations Management (Mining), Refinery Operations Management
Optimisation: Advanced Process Control, ROMeo Process Optimisation
14% of revenue 11% of revenue
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Asset Strategy: APM Assessment, Risk-Based Maintenance
Asset Information: AVEVA Engage, AVEVA Net, AVEVA Information Standards Manager, AVEVA Change Manager
Asset Analysis: Predictive Asset Analytics, Condition Management Intelligence, Augmented Reality for Maintenance
Asset Maintenance: Control of Work, Mobile Operator Rounds
Business units drivers
28
Engineering
Customer BenefitIntegrated process engineering and engineering design with constant feedback on design changes to reduce design, build and operating costs
Monitor & Control
Customer BenefitEdge to enterprise visualisation and monitoring
Multi-site supervision and control
Asset Performance Management Planning & Operations
Reduced operating costs
Increased productivity
Customer Benefit Customer Benefit
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Engineering information, real-time data and transactional history in context enables the most effective use of analytics and artificial intelligence
Drivers in FY19 Drivers in FY19 Drivers in FY19 Drivers in FY19
Mid-single digit growth driven by customers upgrading software and favourable end market conditions across Discrete, Hybrid, Process and Infrastructure
High-teens growth driven by plant 3D design and process simulation
20% growth driven by AVEVA Advanced Analytics and AVEVA NET / Engage
High single-digit growth driven by Operations Execution & Trading and Planning & Scheduling
Avenues for growth
29
Engineering
Asset Performance Management
Planning and Operations
Monitoring and Control
Established positions Focus areaU
pst
ream
Do
wn
stre
am
Ch
em
ical
s
Min
ing
Po
we
r
F&B
, CP
G
Spe
c C
he
m a
nd
P
har
ma
Mid
stre
am
Dis
cre
te a
nd
O
EM
Wat
er
Smar
t In
fra
Mar
ine
DiscreteBatch and
HybridProcess
Utilities and Infrastructure
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
End markets
30
• Other markets: Water & Wastewater, Infrastructure and Discrete Manufacturing
Oil & Gas
>40% of revenue
Moderate growth
Marine
5-10% of revenue
Pockets of growth
Power
Non-cyclical, ongoing growth
Packaged Goods Metals & Mining
Moderate growth
5-10% of revenue 5-10% of revenue 5-10% of revenue
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Smart mines for metals and coal
Food & Beverage, Pharma
Engineering design for nuclear and conventional power plants
Engineering design for complex ships
15% Upstream, 10% Mid-stream, 15% Downstream
Chemicals & Petrochemicals
5-10% of revenue
Moderate growth
Engineering / simulation and operations
Non-cyclical, ongoing growth
Pro forma revenue by region
31 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Asia Pacific EMEA Americas Total Total
£m FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18
Rentals and subscriptions 49.8 32.5 107.8 97.7 61.8 26.3 219.4 156.5 40.2%
Support and maintenance 48.6 47.0 74.6 62.9 78.6 91.2 201.8 201.1 0.3%
Total recurring revenue 98.4 79.5 182.4 160.6 140.4 117.5 421.2 357.6 17.8%
Initial fees and perpetuals 57.3 68.5 86.6 59.7 67.7 71.3 211.6 199.5 6.1%
Training and services 27.8 29.4 48.8 45.5 65.8 60.5 142.4 135.4 5.2%
Total 183.5 177.4 317.8 265.8 273.9 249.3 775.2 692.5 11.9%
Change 3.4% 19.6% 9.9% 11.9%
Major currencies
32
Approximate percentage of revenue
GBP vs. local currencyFY19 average vs. FY18 average
GBP vs. local currencyFY19 average vs. 31 March 2019
USD 45% (1.1)% 0.8%
Euro 15% 0.0% (2.4)%
GBP 9% 0.0% 0.0%
CAD 4% 1.2% (1.0)%
KRW 4% (0.7)% 1.4%
JPY 4% 1.0% 0.7%
CNY 4% 0.3% 0.7%
Emerging markets 15% 6% -
Pro forma adjusted EBIT to cash from operating activities
33 © 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
2019£m
2018£m
EBIT 184.5 154.0
Depreciation 5.4 5.5
Loss on disposal of fixed assets 0.1 1.8
Difference between pension contributions paid and amounts charged to operating profit
0.1 (2.8)
R&D tax credit (2.0) (2.1)
Amortisation not normalised 0.7 1.4
Capitalisation of R&D - (9.9)
Working capital movement (0.8) 3.7
Exceptional items paid (18.9) (33.4)
Other - 0.5
Net cash from operating activities before tax 169.1 118.7
Cash flow
34
Year ended 31 March 2019£m
2018£m
Cash generated from operating activities before tax 169.1 118.7
Income taxes paid (32.4) (33.6)
Net cash generated from operating activities 136.7 85.1
Purchase of property, plant and equipment (7.4) (6.8)
Purchase of intangible assets (0.2) (1.9)
Consideration paid on completion of business combination (19.4) -
Proceeds from disposal of PPE and intangible assets - 6.5
Maturity/(purchase) of treasury deposits (0.4) 45.3
Interest received 0.2 0.5
Net cash flows from investing activities (27.2) 43.6
Interest paid (0.7) (3.1)
Repayment/(proceeds) borrowings (10.0) 10.0
Change in funding with related parties - (18.1)
Purchase of own shares (9.3) (0.3)
Return of value to shareholders - (100.0)
Issue costs - (1.7)
Dividends paid to equity holders of the parent (66.0) (17.3)
Net cash flows used in financing activities (86.0) (130.5)
Net increase in cash and cash equivalents 23.5 (1.8)
Net foreign exchange difference (1.9) (0.5)
Opening net cash and cash equivalents 105.6 107.9
Closing net cash and cash equivalents 127.2 105.6
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
• Net cash and treasury deposits £127.8 million (FY 2018: £95.8 million net of £10 million debt)
Pro forma IFRS 15 reconciliation
35
Year ended 31 March 2018
£mIFRS 15 (i)
£m IFRS 15 (ii) £m IFRS 15 (iii) £mRestated
£m
Revenue 704.6 (10.4) (2.0) 0.3 692.5
Selling and administration expenses (262.3) 0.5 – – (261.8)
Income tax expense (40.7) 4.7 0.6 (0.1) (35.5)
(i) Rendering of services – transfer of controlUnder IAS 18, revenue from sales of initial licences, perpetual licences and the initial software delivery element of rental/term licences was recognised upon delivery. Delivery occurred when the customer had accessto the intellectual property described in the contract. In some limited circumstances, AVEVA recognised revenue from a rental/term licence agreement rateably over the contract period. This assessment was based onwhether AVEVA could reliably estimate the maintenance and support element of the contract.
Under IFRS 15, revenue is recognised when a customer obtains control of the services. All distinct performance obligations relating to licences for software are transferred to the customer at a ‘point in time’.Therefore, under IFRS 15, all revenue from software licences which are distinct performance obligations are recognised at a ‘point in time’ and not ‘over time’. This results in an acceleration of the recognition inrevenue for certain contracts and revenue streams.
(ii) Providing extended payment terms to customersPreviously, where AVEVA provided a customer with extended payment terms the revenue was deferred until the consideration was due in accordance with the contract. Under IFRS 15, all the contractual paymentsare included in the transaction price and allocated to the performance obligations at the start of the contract.
(iii) Stand-alone selling pricesRevenue from contracts with separately-identifiable components (multiple-element arrangements) were previously recognised based on the relative fair value of the components. Under IFRS 15, the totalconsideration of a customer arrangement is allocated based on their relative stand-alone selling prices. Stand-alone selling prices are determined based on list prices (with standard discounts where appropriate), theadjusted market assessment approach and the residual approach.
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Definitions & terms
36
Recurring revenue: Rental & Subscription plus Support & Maintenance revenue.
Statutory results: Results stated under reverse acquisition accounting principles and therefore include the results for heritage SES only for the 6 months to 30 September 2018.
Pro forma results: Results for both heritage SES and heritage AVEVA for the six months to 30 September 2017 and exclude an adjustment to revenue of £6.5m for the six months to 30 September 2018 reflecting a reverse acquisition accounting adjustment to deferred revenue on the opening balance sheet.
Adjusted profit before tax, adjusted EBIT and adjusted earnings per share: 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. Adjusted earnings per share also include the tax effects of these adjustments.
The Combination: The combination between AVEVA Group plc and the Schneider Electric industrial software business that completed on 1 March 2018.
Heritage AVEVA: AVEVA Group excluding the Schneider Electric industrial software business.
Heritage SES: The Schneider Electric industrial software business excluding Heritage AVEVA.
Support & Maintenance: Support and maintenance payments for software acquired through Initial Fees or Perpetual licences.
Rentals & Subscriptions: Software licenses with a fixed term or licenses that are paid for on a subscription basis.
Initial Fees & Perpetual: Software licenses with an upfront payment that can then be used if maintenance fees are paid, or licence with no end date for usage.
Digital Twin: A virtual replica of a physical asset, an evolving, digital model that updates and changes as its physical counterpart changes.
APM: Asset Performance Management. Software to maximise Return on asset investments
EPC: Engineering, Procurement, and Construction companies.
AVEVA E3D: The next generation 3D design platform from AVEVA.
AVEVA Engage: A 3D Decision Support solution for digital assets.
AVEVA Advance Analysics: Predictive asset analytics software.
Wonderware: A software brand that incorporates functions such as Human to Machine Interfaces and Supervisors, Control and Data Acquisition capabilities.
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
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ABOUT AVEVA
AVEVA is a global leader in engineering and industrial software driving digital transformation across the entire asset and operational life cycle of capital-intensive industries.
The company’s engineering, planning and operations, asset performance, and monitoring and control solutions deliver proven results to over 16,000 customers across the globe. Its customers are supported by the largest industrial software ecosystem, including 4,200 partners and 5,700 certified developers. AVEVA is headquartered in Cambridge, UK, with over 4,400 employees at 80 locations in over 40 countries.
aveva.com
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