results for the year ended 31 march 2018

© 2018 AVEVA Group plc and its subsidiaries. All rights reserved.

14 June 2018

AVEVA GROUP PLCRESULTS FOR THE YEAR

ENDED 31 MARCH 2018

© 2018 AVEVA Group plc and its subsidiaries. All rights reserved. 2

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 AVEVA’s 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.

AGENDA

4

▲ Highlights

▲ Finance review

▲ CEO review and update on integration and synergies

▲ Appendices


CRAIG HAYMAN, CEO

HIGHLIGHTS

5 © 2018 AVEVA Group plc and its subsidiaries. All rights reserved.

AVEVA FY 2018 HIGHLIGHTS AND OUTLOOK


Strong results. Return to growth. Improved

execution. Several new customer wins

Combination with Schneider Electric software

business completed on 1 March 2018

Integration on track

FY 2019 outlook solid

Growth expected to continue. Proposed final

dividend flat at 27.0 pence per share, following

£10.15 return of value in March

Annualised cost synergies of at least £25m by

the end of the 2020 financial year

Expect to generate material revenue synergies

Industrial

Digitalisation

Heritage AVEVA

£248.2

£67.6

Heritage SES

£456.4

£98.0

+15.0%

+23.8%

+5.4%

+0.7%

Revenue

Pro forma (£m)

Adjusted EBIT

£704.6

£165.6

+8.6%

+8.9%

PBT £162.8 +6.8%

Statutory revenue £499.1m and adjusted PBT £117.2m

AVEVA combined

JAMES KIDD,

DEPUTY CEO & CFO

FINANCIAL REVIEW


COMBINED GROUP

PRO FORMA1 12 MONTH INCOME STATEMENT

8

FY 2018

£m

FY 2017

£mChange

Revenue 704.6 648.7 8.6%

Total costs (539.0) (496.7) 8.5%

Adjusted2 EBIT 165.6 152.0 8.9%

Net interest (2.8) 0.4 -

Adjusted2 profit before tax 162.8 152.4 6.8%

Adjusted effective tax rate 25.0% 28.4% -

Adjusted2 profit before tax margin 23.1% 23.5% (40bps)

Adjusted2 diluted EPS2 75.6p 67.6p 11.8%

1 2018 combined Group pro forma results include results for both heritage SES and heritage AVEVA for the 12 months to 31 March 2018, as well as for the full 2017

comparative period.

2 Adjusted EBIT, profit before tax and adjusted 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. Adjusted earnings per share also include the tax effects of these

adjustments

▲ Strong performance from Heritage AVEVA

▲ Robust performance from Heritage Schneider Electric Software (‘SES’)

▲ Final dividend of 27p following return of value of £10.15


HERITAGE AVEVA

SUMMARY INCOME STATEMENT

9

*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.

FY 2018

£m

FY 2017

£mChange

Constant

currency

Revenue 248.2 215.8 15.0% 13.5%

Cost of sales (30.5) (29.1) 4.8% 4.1%

Gross profit 217.7 186.7 16.6% 15.0%

Operating expenses (150.1) (132.1) 13.6% 10.3%

Adjusted EBIT* 67.6 54.6 23.8% 26.3%

Net interest 0.2 0.4 - -

Adjusted profit before tax* 67.8 55.0 23.3% 25.8%

Adjusted profit before tax margin 27.3% 25.5% 180bps 28.3%

▲ Underlying growth rate c.10% after FX and large contract renewal

▲ Performance driven by strong sales execution and focus on drivers of growth

▲ More stable conditions in Oil & Gas and Marine


HERITAGE AVEVA

▲ AVEVA E3D revenue growth of 55%, MT3D up 27%

▲ Recurring revenue up 11% representing 74.2% of total (FY17 – 76.9%)

▲ Rental fees benefited from a substantial three year contract renewal with a global EPC

▲ Initial fees were driven by Marine wins in Asia and new customers in North America

REVENUE BREAKDOWN

10

FY 2018

£m% of total

FY 2017

£mChange

Constant

currency

Support & maintenance 74.5 30.0% 71.8 3.8% 2.1%

Rentals & subscriptions 109.7 44.2% 94.2 16.5% 14.9%

Recurring revenue 184.2 74.2% 166.0 11.0% 9.4%

Initial fees & perpetual 42.1 17.0% 32.2 30.7% 29.9%

Training & services 21.9 8.8% 17.6 24.4% 22.5%

Total 248.2 100.0% 215.8 15.0% 13.5%


HERITAGE AVEVA

▲ Costs increased due to performance related bonuses, FX, sales commissions and salary inflation

▲ R&D investment in MT3D products and increased expansion in India

▲ Higher admin costs driven by FX, Investment in IT and HR plus NI on share options

COST BASE

11

FY 2018

£m% of total

FY 2017

£mChange

Constant

currency

Cost of sales 30.5 16.9% 29.1 4.8% 4.1%

Research & Development 32.3 17.9% 27.2 18.7% 17.2%

Selling & distribution 79.1 43.8% 74.4 6.3% 5.2%

Administrative 38.7 21.4% 30.5 26.9% 16.5%

Total opex 150.1 83.1% 132.1 13.7% 10.3%

Total costs* 180.6 100.0% 161.2 12.0% 9.2%

* 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.


HERITAGE SES

SUMMARY INCOME STATEMENT

12

*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.

FY 2018

£m

FY 2017

£mChange

Revenue 456.4 432.8 5.4%

Cost of sales (147.1) (136.8) 7.5%

Gross profit 309.3 296.0 4.5%

Operating expenses (211.3) (198.7) 6.3%

Adjusted* EBIT 98.0 97.3 0.7%

Net interest (3.0) 0.1 -

Adjusted* profit before tax 95.0 97.4 (2.5)%

Adjusted* profit before tax margin 20.8% 22.5% (170bps)

▲ Positive impact of new inter-co agreements with SE – underlying growth c.2.5%

▲ Margin improvement continues to be a focus going forward


HERITAGE SES

▲ Minimal FX impact in FY18 – 0.2% headwind

▲ Strong growth in support & maintenance through customer first initiative

▲ Wonderware indirect channel driver behind licence growth

▲ Lower service revenues due to lower project volumes in mid stream Oil & Gas

REVENUE BREAKDOWN

13

FY 2018

£m% of total

FY 2017

£mChange

Support & maintenance 132.5 29.0% 115.0 15.2%

Rentals & subscriptions 47.9 10.5% 47.0 1.9%

Recurring revenue 180.4 39.5% 162.0 11.3%

Initial fees & perpetual 163.2 35.8% 142.1 14.8%

Training & services 112.8 24.7% 128.7 (12.4)%

Total 456.4 100.0% 432.8 5.4%


HERITAGE SES

▲ Cost of sales increase due to inflation, FX and impact from new inter-co agreements with SE

▲ R&D reduced 5% due to savings from restructuring and lower outsourcing offset by inflation

▲ Selling & distribution up due to inflation, additional resources in EMEA and Asia and FX

▲ Admin costs up 12.7% due to additional accounting and legal costs

COST BASE

14

FY 2018

£m% of total

FY 2017

£mChange

Cost of sales 147.1 41.0% 136.8 7.5%

Research & Development 66.8 18.7% 70.3 (5.0)%

Selling & distribution 101.0 28.2% 89.8 12.5%

Administrative 43.5 12.1% 38.6 12.7%

Total opex 211.3 59.0% 198.7 6.3%

Total costs* 358.4 100.0% 335.5 6.8%

* Calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on the fair value of forward foreign



COMBINED GROUP

▲ Recurring revenue is 51.7% v 74.2% for heritage AVEVA in FY18

▲ Ongoing focus will be on growing high margin recurring software revenues

PRO FORMA 12 MONTH REVENUE BREAKDOWN

15

FY 2018

£m% of total

FY 2017

£mChange

Support & maintenance 206.8 29.3% 186.9 10.6%

Rentals & subscriptions 157.8 22.4% 141.2 11.8%

Recurring revenue 364.6 51.7% 328.1 11.1%

Initial fees & perpetual 205.3 29.1% 174.3 17.8%

Training & services 134.7 19.2% 146.3 (7.9)%

Total 704.6 100.0% 648.7 8.6%


COMBINED GROUP

▲ Underlying growth: Revenue growth from normal trading

▲ Commercial agreements: Revenue growth from a one-off benefit in commercial terms between the

software business and Schneider Electric

▲ Large contract: The impact of a substantial three-year contract renewal with a key EPC customer

▲ FX: The impact of foreign exchange translation

PRO FORMA 12 REVENUE BRIDGE

16

400

450

500

550

600

650

700

F Y 1 7 P R O F O R M A

U N D ER L Y I N G G R O W T H

C O M M ER C I A L A G R EEM EN T S

L A R G E C O N T R A C T

F X F Y 1 8 P R O F O R M A

REV

ENU

E £

M

Heritage AVEVA

Heritage SES

2.0% 1.2%5.0% 0.4%

AVEVA:

£215.8m

SES:

£432.8m


AVEVA:

£248.2m

SES:

£456.4m

COMBINED GROUP

▲ COS: Inflation and one off impact of new inter-co agreements with SE

▲ R&D: Benefited from restructuring related savings and lower outsourcing at SES

▲ Selling & distribution: Higher commissions due to strong performance in AVV plus some investment

▲ Administrative: Growth impacted by bonus payments relating to heritage AVEVA’s strong performance

and additional accounting costs for heritage SES

PRO FORMA 12 MONTH COST BASE

17

FY 2018

£m% of total

FY 2017

£mChange

Cost of sales 177.6 32.9% 165.9 7.1%

Research & Development 99.1 18.4% 97.5 1.6%

Selling & distribution 180.1 33.4% 164.2 9.7%

Administrative 82.2 15.3% 69.1 19.0%

Total opex 361.4 67.1% 330.8 9.2%

Total costs* 539.0 100.0% 496.7 8.5%

*Calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on the fair value of forward foreign



COMBINED GROUP

PRO FORMA 12 MONTH EXCEPTIONAL ITEMS

18

AVEVA

£m

SES

£m

FY 2018

£m

Acquisition costs and integration activities 24.9 4.6 29.5

Restructuring costs - 2.9 2.9

Movement in provision for sales taxes (3.0) (3.0)

Impairment of capitalised R&D - 15.0 15.0

Net charge 21.9 22.5 44.4

▲ Acquisition/integration: Due diligence and advisor fees, integration costs

▲ Restructuring: Costs related to severance payments in a number of global locations net of divestment

made by SES in China

▲ Provision for sales taxes: Partial release of the provision following a reassessment of the liability

▲ Impairment: Development project ceased prior to completion plus write off of project no longer

considered viable


EFFECTIVE TAX RATE

FY 2018 AND OUTLOOK

▲ Pro forma FY 2018 Group tax rate on adjusted profit was 25% (heritage AVEVA 11%,

SES 35%)

▲ The SES effective tax rate benefitted from 3 months from the new US corporate tax

rate

▲ The heritage AVEVA tax rate during the year benefited from:

▲ Patent Box related catch-up

▲ A release of provision for withholding tax

▲ Looking ahead, the blended Group tax rate to remain broadly flat due to:

▲ The above factors not recurring, being offset by an annualised benefit of a reduction

in the US corporate rate from 1 January 2018


COMBINED GROUP

BALANCE SHEET AT 31 MARCH 2018

20

2018

£m

Non-current assets 1,982.4

Trade and other receivables 271.1

Other current assets 12.4

Cash and deposits 105.8

Total assets 2,371.7

Trade and other payables 128.8

Deferred revenue 166.3

Other liabilities 140.4

Loans and borrowings 10.0

Shareholders’ equity 1,926.2

Total shareholders’ equity and liabilities 2,371.7

▲ Non-current assets include £1.26bn of goodwill associated with the Combination

▲ Net cash may be adjusted as part of the completion mechanics of the Combination


CRAIG HAYMAN, CEO

CEO REVIEW AND UPDATE

ON INTEGRATION AND

SYNERGIES


THE COMBINED AVEVA GROUP

22

The leading global provider of

engineering, design and

information management software

The leading global provider of

industrial software and services

for operational efficiency and

asset reliability

A new global leader driving digital

transformation across the entire

asset and operational life cycle

+

=


DRIVING INDUSTRIAL DIGITAL TRANSFORMATION

23

Cloud

Industrial IoT

Data

▲ Strong relationships with many of the world’s

leading companies in over 10 industry verticals

▲ Connect disparate industrial assets from different

vendors at different stages of their lifecycle

▲ Use data and analytics to accelerate a company’s

digital agenda

▲ Technology trends make the Digital Twin possible

▲ Pace of digitalisation of the industrial world is

increasing

Analytics

Unmatched end-to-end product portfolio that

helps customers increase return on capital by

reducing build and operating costs.



24

Cloud

Industrial IoT

Data

Cloud. First major win

Connect oil major’s global upstream and

downstream operating assets

Visualise data in context

▲ Improved productivity with standard work processes

and data

▲ Proactive analysis and insight to identify potential

problems

▲ Increased efficiency and improved plan maintenance

▲ Enablement of field workforce for improved decision

making

Panoramic command centre

Enables customer to monitor and optimise

asset performance from Abu Dhabi

headquarters

▲ Reducing operational losses due to

asset downtime

▲ Reducing operational costs

▲ Reducing maintenance costs

Analytics






Our new portfolio


26

Cloud

Industrial IoT

Data

Analytics




Digital model of the Temelin Nuclear Power Plant visualised

in AVEVA Engage (courtesy of ČEZ a.s., NPP Temelin)


VISUALISING OPERATIONAL DATA IN CONTEXT

27

AVEVA ENGAGE WITH WONDERWARE


END MARKET DEVELOPMENTS

▲ Oil & Gas: >45% of total revenue

▲ Upstream Oil & Gas: Capex began to recover, following a fall of over 40% between 2014 and 2016

▲ Downstream Oil & Gas: Recently started to resume capex growth, primarily around upgrading existing assets

and improving operational efficiency

▲ Midstream Oil & Gas: Lower project volumes, but significant installed base opportunity

▲ Power and Utilities (c.15% of total revenue): Trends are positive as the world’s emerging economies invest in

their utilities and the ageing infrastructure of the developed world is maintained or replaced

▲ Packaged goods (c.10% of total revenue): In Food & Beverage and Pharma saw an increase in demand for

solutions related to operational performance visibility and asset performance management

▲ Engineering & Infrastructure (c.10% of total revenue): With a broad-based recovery in the global industrial

manufacturing market, AVEVA’s business to this market showed corresponding recovery

▲ Marine (c.10% of total revenue): Signs of improvement with new ship orders increasing, albeit

from a very low base versus historical standards

▲ Mining (c.5% of total revenue): Conditions in the sector were broadly positive, supported by

stable to improving commodity prices


UPDATE ON INTEGRATION AND SYNERGIES

INTEGRATION PROCESS

29

▲ Overall responsibility for integration led by CFO and run

through Integration Management Office

▲ From 1 March 2018 the combined AVEVA Group began to

operate as one organisation with a new operating model

being codified and an Executive Leadership Team

appointed from key people in both merged businesses:

AVEVA IGNITE: Combined sales meeting

▲ April 2018 saw the combined AVEVA sales kick-off

▲ 500 sales people met in Dubai to learn about the new

business

▲ Immediate focus on cross selling

▲ Detailed value capture workstreams ongoing across all

main functions


UPDATE ON INTEGRATION AND SYNERGIES

AVEVA aims to achieve value creation through sustainable revenue and margin growth

▲ Cost savings: Removal duplicated spend. £25m of annualised synergies expected by end FY2020, with a

moderate benefit in year 1. The exceptional cash costs associated with achieving these synergies are

expected to be approximately the same as the annualised saving

▲ Revenue initiatives: Cross selling and greater exploitation of the Schneider Electric sales channel, pricing

initiatives, contract optimisation, sales productivity

▲ Full product integration: Unified engineering around the asset lifecycle and integration of operational data

and visualisation technologies to serve the operational lifecycle

VALUE LEVERS


FY 2019 FY 2020 FY 2021

Cost Synergies

Cost synergies

OUTLOOK

▲ In the current year, we are focused on integrating the businesses

whilst driving performance through improved execution

▲ In the medium-term we expect to drive stronger growth driven by the

positive trend of the ongoing digitalisation of industry, an optimisation

of our products and go-to-market strategies, and capitalising on the

synergies outlined above

▲ The trading outlook for the enlarged AVEVA Group is positive and the

Board is confident that it can deliver the FY19 plan in line with its

expectations



Our new portfolio

Q&A


APPENDICES


MAJOR CURRENCIES

35

Percentage of

combined pro

forma FY2018

revenue

GBP vs. local currency

FY18 average vs. FY

2017 average

GBP vs. local currency

FY 2018 average vs. 31

March 2018 spot

USD >40% 3.9% 5.6%

Euro <15% (4.7)% 0.3%

GBP >10% 0.0% 0.0%

AUD >5% (0.8)% 6.2%

CAD >5% (1.4)% 6.4%

KRW <5% 0.2% 1.0%

JPY <5% 3.9% 1.3%

▲ AVEVA is facing an FX translation headwind in FY 2019


IMPACT OF IFRS 15 ACCOUNTING STANDARD

About IFRS 15

▲ The adoption of IFRS15 ‘Revenue from Contracts with Customers’ will have implications for the revenue recognition

of software sales. Most notably, where software sales are on a ‘right to use’ basis, the license portion of the sales

contract is be required to be recognised at the time of delivery

About AVEVA contracts

▲ The AVEVA business sells software products on a number of license models that include Initial & Perpetual licenses,

Rental or term licenses and some Subscription licenses

▲ For Initial & Perpetual licenses, Support & Maintenance fees are charged separately. For Rental & subscription

licenses, Support & Maintenance fees are incorporated into the license fees charged

Impact on AVEVA numbers

▲ Generally, AVEVA’s Rental licenses are already recognised in line with IFRS 15. There will be some impact for the

way in which a few, large, multi-year customer Rental licenses are recognised

▲ Very little impact on the way in which Initial & Perpetual licenses are recognised

▲ Very little impact on recognition of Support & Maintenance fees

▲ No impact expected on AVEVA’s limited Subscription revenue

What to expect next

▲ AVEVA will report results for 6 months to 30 September 2018 under IFRS 15


STATUTORY INCOME STATEMENT

37

*Adjusted 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. In addition, adjusted diluted earnings per share also includes the tax effects of these adjustments.

▲ Based on reverse acquisition accounting, showing 12 months for the heritage SES

business and 1 month for the heritage AVEVA business

FY 2018

£m

FY 2017

£mChange

Revenue 499.1 432.8 15.3%

Cost of sales (150.8) (137.1) 10.0%

Operating costs (228.9) (199.7) 14.6%

Net interest & other income (2.2) 1.4 -

Adjusted profit before tax* 117.2 97.4 20.3%


PRO FORMA CASH FLOW

38

2018

£m

2017

£m

Net cash from operating activities 118.8 163.4

Tax paid (33.6) (15.0)

Capital expenditure (net) (2.2) (11.5)

Net interest (2.7) 1.8

Acquisitions - (3.7)

Purchase/(maturity) of treasury deposits (net) 45.3 (2.1)

Drawdown of RCF 10.0 -

Change in funding with related parties (18.1) (77.3)

Return of value to shareholders net of issue costs (102.0) -

Dividends paid (17.3) (27.5)

Net (decrease)/increase in cash (1.8) 28.1

Foreign exchange movement (0.5) 3.8

Opening cash and cash equivalents 107.9 76.0

Closing cash and cash equivalents 105.6 107.9


DEFINITIONS & TERMSStatutory results: Results stated under reverse acquisition accounting principles and therefore include the results for

heritage SES for the 12 months to 31 March 2018 and results for heritage AVEVA for 1 month to 31 March 2018. 2017

statutory results include results for heritage SES only for the 12 months to 31 March 2017.

Combined Group pro forma results: Include results for both heritage SES and heritage AVEVA for the 12 months to 31

March 2018, as well as for the full 2017 comparative period.

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.

AVEVA EngageTM: A 3D Decision Support solution for digital assets.

Digital Twin: A virtual replica of a physical asset, an evolving, digital model that updates and

changes as its physical counterpart changes.

EPC: Engineering, Procurement, and Construction companies.

WonderwareTM: A software brand that incorporates functions such as Human to Machine Interfaces

and Supervisors, Control and Data Acquisition capabilities.


40

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


results for the year ended 31 march 2018

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