TIDMAVV
RNS Number : 0874O
AVEVA Group PLC
08 June 2022
AVEVA GROUP PLC
RESULTS FOR THE 12 MONTHSED 31 MARCH 2022
AVEVA delivers solid results with ARR up 10% and revenue up 7%
on an organic pro forma constant currency basis
AVEVA Group plc ('AVEVA' or 'the Group') announces its results
for the year ended 31 March 2022.
Highlights
Pro forma results (1)
-- Annualised Recurring Revenue (ARR)(2) increased 10.2% to GBP768.7m (FY21: GBP697.8m).
-- On an organic constant currency basis(3) pro forma revenue
for the combined Group grew 7.1% and adjusted EBIT(4) grew
7.7%.
Statutory results (5)
-- Revenue was GBP1,185.3 million (FY21: GBP820.4 million) after
the impact of the deferred revenue haircut of GBP50.3 million
(FY21: GBP3.3 million), representing an increase of 44.5%. This
change was primarily due to the acquisition of OSIsoft.
-- Loss from operations before tax was GBP6.5m (FY21: profit of
GBP36.6m) with the loss being primarily due to the amortisation of
intangible assets of GBP226.1m (FY21: GBP95.7m).
-- Diluted loss per share was 20.8 pence (FY21: EPS 11.3 pence).
-- Final dividend of 24.5 pence proposed representing an increase of 4.3% (FY21: 23.5 pence).
Integration
-- Integration of the AVEVA and OSIsoft businesses has
progressed well. During the year both revenue and cost synergies
were in line with the plan while strong progress was made on
product integration, which will drive substantial longer-term
synergies.
Summary results
Combined AVEVA Group on a pro forma basis (unaudited)
Organic constant
Year ended 31 March 2022 2021 Change currency
Revenue GBP1,235.6m GBP1,196.1m 3.3% 7.1%
Annualised recurring revenue GBP768.7m GBP697.8m - 10.2%
Adjusted EBIT GBP365.1m GBP354.7m 2.9% 7.7%
Adjusted diluted earnings
per share 99.6p 105.3p (5.4)% -
------------------------------ ------------ ------------ ------- -----------------
AVEVA Group plc statutory results
Year ended 31 March 2022 2021 Change
Revenue GBP1,185.3m GBP820.4m 44.5%
(Loss)/profit from operations GBP(6.5)m GBP36.6m -
Basic (loss)/earnings per
share (20.8)p 11.4p -
Diluted (loss)/earnings
per share (20.8)p 11.3p -
Chief Executive Officer, Peter Herweck said:
"AVEVA delivered a solid set of results in FY22 as the business
recovered following disruption caused by the Covid pandemic. During
the year we made good progress with the integration of OSIsoft and
have recently launched integrated products that will drive further
revenue synergies. I am excited about the opportunities ahead of us
as AVEVA enables the connection and digitalisation of the
industrial world. We are focused on accelerating growth in
Annualised Recurring Revenue and expect AVEVA's growth rate on this
metric to significantly improve."
Notes
(1) On 19 March 2021, the Group announced the completion of the
acquisition of OSIsoft, LLC (OSIsoft) enhancing AVEVA's ability to
accelerate the digital transformation of the industrial world . To
provide a better understanding of the combined comparative trading
performance and to improve transparency, non-statutory results are
also shown for the combined Group on a pro forma basis. The
Directors believe that the pro forma results give helpful insight
into the performance of the Group and form a basis from which to
consider the outlook.
Pro forma results include results for both AVEVA and OSIsoft for
the 12 months to 31 March 2022 and the 12 months to 31 March 2021.
In addition to this, the results have been adjusted to exclude the
effect of the deferred revenue haircut under IFRS 3 (Business
Combinations), which reduces statutory revenue.
(2) ARR makes it easier to track recurring revenue progression
by annualising revenue associated with subscription, cloud and
Maintenance contracts. It removes timing differences caused by
revenue recognition standards by annualising the revenue associated
with contracts at a point in time. It is calculated on a constant
currency basis.
(3) Organic constant currency revenue and adjusted EBIT excludes
a currency translation reduction of GBP 42.5 million to revenue;
and adjusts for the disposals of the Acquis Software, Termis
Software and Water Loss Management Software businesses in June 2021
by removing the results of the disposals from each reporting
period.
(4) Adjusted metrics are calculated before amortisation of
intangible assets, share-based payments and exceptional items.
Adjusted Earnings Per Share also includes the tax effects of these
adjustments. See note 1 Basis of Preparation.
(5) Statutory results include the results for the combined AVEVA
Group for the 12 months to 31 March 2022 compared to the results
for AVEVA Group and 12 days of OSIsoft ownership for FY21.
Enquiries:
AVEVA Group plc
Matt Springett, Head of Investor Relations Tel: 07789 818
684
FTI Consulting LLP
Edward Bridges / Dwight Burden Tel: 0203 727 1017
Conference call details
AVEVA will host a call for analysts and investors at 9.30am BST
today.
Conference call dial-in details:
UK: 020 3936 2999 / 0800 640 6441
USA : 1 855 9796 654 / 1 646 664 1960
All other locations: +44 20 3936 2999
Conference call access code: 427649
Slides and a webcast are available via investors.aveva.com and a
replay of the call will be made available later in the day.
Chief Executive's review
Summary
AVEVA delivered a solid financial performance and made good
progress in integrating OSIsoft, which was acquired just before the
start of the financial year.
Pro forma organic constant currency ARR increased 10.2%, revenue
grew by 7.1% and adjusted EBIT increased 7.7% on the same basis.
The revenue growth was led by growth in sales of PI System
products, which increased at a double-digit rate and growth from
the heritage AVEVA business at a low single-digit rate.
Integration
The integration of OSIsoft progressed well, in accordance with
AVEVA's plans. During the first half of the financial year, the
organisational model was established and leadership roles
determined.
R&D work on the product portfolio roadmap to achieve
interoperability between products has been progressed to add
greater value to customers. Key integrated products that have been
launched included AVEVA Unified Operations Center with AVEVA PI
System and AVEVA Predictive Analytics with PI System.
AVEVA is on track to achieve both cost and revenue synergies in
line with its acquisition model. Pre-tax cash cost synergies are
expected of not less than $30 million per annum on a run rate basis
by the year ending 31 March 2023. Revenue synergies of at least
$100 million per annum are expected by the year ending 31 March
2026.
During FY22 AVEVA achieved initial revenue synergies of GBP7. 4
million ($10.1 million) and GBP 10.8 million ($14.7 million) of
cost synergies were realised in the year .
ARR and business model transition
ARR at 31 March 2022 for the combined AVEVA Group on a pro forma
constant currency basis was GBP768.7 million (FY21: GBP697.8
million), representing a 12 month increase of 10.2%. This growth
was driven by the heritage AVEVA business, which increased ARR by a
double-digit rate, while OSIsoft increased ARR by a low single
digit rate, ahead of its transition to a subscription-based revenue
model.
During the year AVEVA also made progress with its subscription
transition, with 11.5% growth in on-premises pro forma constant
currency subscription revenue and very strong growth in SaaS
contract wins, leading to 23.9% growth in SaaS revenue on a pro
forma constant currency basis.
The PI System product is expected to increase ARR growth as it
moves to the AVEVA Flex subscription model. AVEVA also expects to
drive an acceleration in sales of SaaS revenue as more products
become available on the cloud and salesforce incentives have been
evolved to further encourage sales of these products.
Pro forma regional performance
EMEA revenue was GBP473.9 million representing an increase of
5.9% (FY21: GBP447.6 million) and was up 9.7% on an organic
constant currency basis. AVEVA achieved good growth in Eastern
Europe and the Middle East in particular. The war in Ukraine did
not have a material impact on revenue in the financial year.
Notable order wins were achieved with companies including
International Maritime Industries, Saudi Aramco and Saudi
Electricity Company.
Americas revenue was GBP496.5 million representing an increase
of 4.8% to (FY21: GBP473.7 million) and was up 8.4% on an organic
constant currency basis. Growth was broad based with all regions
delivering a good performance across the USA, Canada and Latin
America. Notable order wins were achieved with companies including
TC Energy, Pembina, Southern California Gas and General Mills.
Asia Pacific revenue was GBP265.2 million, representing a
decrease of 3.5% (FY21: GBP274.8 million) and was up 0.7% on an
organic constant currency basis. AVEVA saw good growth in China and
India, which was largely offset by declines in Korea and Japan due
to tough comparative periods. Notable order wins were achieved with
companies including Sinopec Engineering and Indian Oil
Corporation.
Business highlights
Engineering consists of Engineering and Simulation software. In
turn, Engineering software includes Engineering & Design,
Project Execution and Engineering Information Management.
Simulation includes Simulation & Learning and Value Chain
Optimisation.
Engineering contributed 30.9% of pro forma revenue in the period
(FY21: 35.1%). On an organic constant currency basis, revenue
decreased by 5.7%. This decrease was due to a tough comparator in
the prior year that included a significant amount of point-in-time
revenue recognition due to several significant multi-year
contracts. Underlying business performance was good, contributing
to the Group's double-digit ARR growth, with a broad range of new
order wins being achieved, particularly in the energy market, which
is undergoing a recovery following the Covid crisis. Significant
orders were won from companies including Aibel, Saipem SBM Offshore
and Worley.
Operations consists of Asset Performance, Monitoring &
Control and Information Management (PI System). In turn, Asset
Performance consists of Asset Performance Management and
Manufacturing Executions Systems software. Monitoring & Control
includes HMI SCADA, Enterprise Visualisation and Pipeline
Management software. Information Management consists of the
recently acquired OSIsoft business.
Operations contributed 69.1% of pro forma revenue in the period
(FY21: 64.9%). On an organic constant currency basis, revenue
increased by 14.2%. This revenue growth was due to good
performances across the business unit from Asset Performance,
Monitoring & Control and in particular, Information Management.
The PI System business delivered solid double-digit growth in the
year, with performance significantly strengthening in Q4 as the
benefits of integration began to take effect. The growth in
Monitoring & Control revenue was supported by a significant
contract extension and renewal with Schneider Electric, with a
substantial element of point-in-time revenue recognition. Other
significant orders came from companies including General Mills,
PepsiCo, Nestle and Rio Tinto.
Cloud
AVEVA made progress during FY22 growing SaaS revenue to GBP27.8
million representing 23.9% growth on a pro forma organic constant
currency basis (FY21: GBP23.4 million) and orders in annual
contract value terms by 89%. Key products were launched on the
Group's SaaS platform, AVEVA Connect, during the year including
Unified Engineering, Unified Operations Control and Unified Supply
Chain. AVEVA is accelerating investment in cloud R&D during
FY23 moving products to an industrial hybrid cloud architecture to
maximise the opportunities for leveraging data and collaborative
working.
Outlook
The ongoing digitalisation of the industrial world continues to
drive demand for industrial software and AVEVA is very well
positioned with its broad integrated software portfolio to drive
sustainable growth. AVEVA's end markets have recovered from the
Covid crisis and several key markets are showing positive trends,
such as energy, power, shipbuilding and infrastructure.
As communicated in the trading update on 27 April 2022, AVEVA
intends to drive an acceleration in ARR growth in FY23 to a level
of 15% to 20% per annum. This growth will be underpinned by the
business model transition to subscription, improving end market
conditions, synergies relating to the PI System integration, and
price increases. For example, contracts are beginning to be renewed
early as energy markets recover; PI System will accelerate its move
to subscription; the Group's cloud transition is being accelerated;
and AVEVA implemented a substantial list price increase on 1 April
2022.
As the transition to subscription and SaaS accelerates in FY23,
reported revenue will be reduced by the timing of revenue
recognition but ARR will increase. The Group expects contract
assets to remain broadly stable, impacting point-in-time revenue
recognition as AVEVA increasingly moves towards higher ARR value
contracts that have rateable revenue recognition.
In addition to this, revenue will be impacted by the war in
Ukraine and consequential sanctions on Russia as AVEVA has ceased
new business in Russia. The Group continues to support existing
non-sanctioned companies where there is no legal basis to terminate
contracts. Russia is a relatively small market in the context of
the Group, representing around 2% of revenue in FY22. Due to the
fixed nature of AVEVA's costs, the loss of revenue will largely
drop through to adjusted EBIT.
Adjusted EBIT for FY23 will also be impacted by some additional
costs. These include wage inflation due to very competitive
software labour market conditions; increased travel and event costs
post-Covid; together with investment in cloud R&D, cloud sales
and cloud operations. Wage inflation will be more than offset by
pricing over time; however, most salary increases feed through at
the beginning of the financial year, while list price increases
only take effect when contracts are renewed, or new business is
signed. While the additional investment in cloud was planned, the
Board has decided to pull this investment forward to accelerate
AVEVA's transition and the impact of this acceleration in cloud
will result in around GBP20m of additional costs in the current
financial year.
As previously communicated in a trading update on 27 April 2022,
taking all of these factors into account, revenue growth is
expected to be lower in FY23 than in FY22 on an organic constant
currency basis and adjusted EBIT margin is expected to reduce,
before resuming growth in FY24. If current rates of FX persist,
AVEVA will benefit from a significant currency translation gain on
a statutory basis, due to the strength of the US dollar versus
Sterling. Cash conversion is expected to significantly improve in
FY23 and beyond.
Peter Herweck
Chief Executive Officer
7 June 2022
Finance review
Overview
On 25 August 2020, AVEVA announced that it had reached agreement
to acquire OSIsoft at an enterprise value of $5.0 billion . The
transaction subsequently completed on 19 March 2021 and therefore
the statutory results compare the performance of the combined AVEVA
and OSIsoft business in FY22 with the standalone AVEVA business
plus 12 days of OSIsoft ownership in FY21.
The finance review begins with a commentary of those statutory
results and then covers pro forma results to show the underlying
performance of the combined business.
Statutory results
On a statutory basis, revenue for the year was GBP1,185.3
million whic h was 44.5% higher compared with the previous year
(FY21: GBP820.4 million). This change was due to the inclusion of
OSIsoft in the current year and growth in the business, partly
offset by negative FX translation due to the relative strengthening
of Sterling, particularly in relation to the US Dollar on average
during the year, given that the majority of AVEVA's sales are made
in US Dollars.
Subscription revenue, which includes rental contracts and SaaS
contracts, grew 17.9% to GBP424.2 million (FY21: GBP359.7 million),
primarily due to the growth in the heritage AVEVA business
Operations business unit.
Maintenance revenue grew by 74.6% to GBP345.2 million (FY21:
GBP197.7 million), primarily due to the inclusion of OSIsoft in
FY22.
Perpetual licences grew 107.0% to GBP293.1 million (FY21:
GBP141.6 million), primarily due to the inclusion of OSIsoft in
FY22 and growth in the OSIsoft business.
Services revenue grew 1.2% to GBP122.8 million (FY21: GBP121.4
million) relating to a focus on growing higher margin software
revenue.
Total statutory costs increased to GBP1,203.9 million (FY21:
GBP786.2 million). This increase was mainly due to the acquisition
of OSIsoft and the cost of sale, operating cost and amortisation of
intangible assets associated with this.
As a result of the acquisition the amortisation charge increased
to GBP226.1 million (FY21: GBP95.7 million). While the cost of sale
increased 28.2% to GBP232.5 million (FY21: GBP181.3 million),
operating costs including amortisation increased 59.2% to GBP959.3
million (FY21: GBP602.5 million) and net interest increased from
GBP2.4 million to GBP12.1 million.
Cost of sales was GBP232.5 million (FY21: GBP181.3 million)
representing an increase of 28.2%. This was below the statutory
increase in revenue of 44.5%, due to a lower cost of sale for the
OSIsoft business, which has a lower services revenue mix.
Research & Development costs were GBP343.3 million (FY21:
GBP184.5 million) representing an increase of 86.1%. This was due
the amortisation of acquired intangible assets, an increase in the
scale of the business, growth due to investment in cloud and higher
employment costs.
Selling and distribution expenses were GBP345.4 million (FY21:
GBP226.8 million) representing an increase of 52.3%. This was
mainly due to the greater scale of the business and additional
amortisation.
Administrative expenses were GBP246.3 million (FY21: GBP193.0
million) representing an increase of 27.6%. This reflected a
decrease in exceptional items, which was more than offset by the
increased scale of the business and underlying higher costs in IT
and legal functions.
The Group made a loss before tax of GBP18.6 million (FY21:
profit of GBP34.2 million). This was largely due to the
amortisation of intangible assets relating to AVEVA's combinations
with the Schneider Electric industrial software business and
OSIsoft, the deferred revenue haircut and exceptional costs.
Basic loss per share was 20.8 pence (FY21: EPS 11.4 pence) and
diluted loss per share was 20.8 pence (FY21: EPS 11.3 pence).
The statutory tax charge was GBP44.0m (FY21: GBP9.4 million).
This was due to factors including additional taxable profits
following the OSIsoft acquisition, US alternative minimum tax and
an increase in the UK tax rate from 19% to 25%.
Operating cash flow
Cash generated from operating activities before tax was GBP197.2
million, compared to GBP91.2 million generated in the previous
year.
This included cash paid in the period in relation to the
acquisition of OSIsoft of GBP67.4 million and other exceptional
items of GBP40.6 million (FY21: GBP63.2 million).
Cash conversion, defined as free cash flow before tax excluding
acquisition costs as a proportion of adjusted profit before tax was
62.5% (FY21: 36.8%).
Dividends
The Directors propose to pay a final dividend of 24.5 pence per
share (FY21: 23.5 pence). The final dividend will be payable on 5
August 2022 to shareholders on the register on 8 July 2022.
Balance sheet
On 31 March 2022, AVEVA had net debt of GBP405.2 million (31
March 2021: GBP367.4 million). Net debt is defined as loans and
borrowings minus cash and cash equivalents. This reflects the $900
million term loan taken out to partly finance the acquisition of
OSIsoft, together with cash of GBP279.3 million (31 March 2021:
GBP286.6 million).
Non-current assets were GBP 5.7 billion (31 March 2021: GBP5.8
billion), reflecting goodwill and intangible assets that arose from
the combination with the Schneider Electric industrial software
business and the OSIsoft acquisition. Goodwill and intangible
assets were GBP 5.5 billion (31 March 2021: GBP5.6 billion).
Trade and other receivables were GBP381.2 million (31 March
2021: GBP318.0 million). Contract assets increased to GBP302.1
million from GBP215.6 million at 31 March 2021. This increase
included the impact of new subscription contract wins with point in
time revenue recognition.
Contract liabilities were GBP328.2 million (31 March 2021:
GBP239.7 million). This increase reflected an increase in
Maintenance contract wins and the unwinding of the deferred revenue
haircut, which arose from the acquisition of OSIsoft.
Pro forma results
The pro forma results are summarised below:
FY21 Organic constant
GBPm FY22 Unaudited Unaudited Change currency
Revenue 1,235.6 1,196.1 3.3% 7.1%
Cost of sales (232.3) (229.1) 1.4% 4.9%
------------------------ --------------- ----------- -------- -----------------
Gross profit 1,003.3 967.0 3.8% 7.7%
Operating expenses (638.2) (612.3) 4.2% 7.6%
------------------------ --------------- ----------- -------- -----------------
Adjusted EBIT 365.1 354.7 2.9% 7.7%
Net interest (12.1) (16.0) (24.4)%
------------------------ --------------- ----------- -------- -----------------
Adjusted profit before
tax 353.0 338.7 4.2%
Tax charge (50.6) (20.1) 151.7%
------------------------ --------------- ----------- -------- -----------------
Adjusted profit after
tax 302.4 318.6 (5.1)%
Adjusted diluted EPS
(pence) 99.6 105.3 (5.4)% -
Gross margin 81.2% 80.8% +40bps +40bps
Adjusted EBIT margin 29.5% 29.7% (20)bps +30bps
Tax charge 14.3% 5.9% +840bps -
Pro forma results include results for both AVEVA and OSIsoft for
the 12 months to 31 March 2022 and the 12 months to 31 March 2021.
In addition to this, the results have been adjusted to exclude the
effect of the deferred revenue haircut under IFRS 3 (Business
Combinations).
Adjusted metrics are calculated before amortisation of
intangible assets, share-based payments and exceptional items.
Adjusted Earnings Per Share also includes the tax effects of these
adjustments.
Pro forma revenue
Revenue was GBP1,235.6 million, representing an increase of 3.3%
(FY21: GBP1,196.1 million). Organic constant currency revenue grew
7.1%, adjusted for a currency translation headwind of GBP42.5
million and minor disposals in the current year.
The revenue mix for the combined Group is shown below:
Organic
constant
Reported currency % of FY22
GBPm FY22 FY21 change change total
On-premises rental 396.4 364.0 8.9% 11.5% 32.1%
SaaS 27.8 23.4 18.8% 23.9% 2.2%
-------- -------- --------- ---------- ----------
Total subscription
revenue 424.2 387.4 9.5% 12.3% 34.3%
Maintenance 395.5 412.8 (4.2)% 0.4% 32.0%
-------- -------- --------- ---------- ----------
Total recurring revenue 819.7 800.2 2.4% 6.2% 66.3%
Perpetual licences 293.1 271.2 8.1% 12.2% 23.7%
Services 122.8 124.7 (1.5)% 2.5% 10.0%
-------- -------- --------- ---------- ----------
Total 1,235.6 1,196.1 3.3% 7.1% 100.0%
-------- -------- --------- ---------- ----------
Subscription revenue growth was driven by sales of on-premises
rental contracts within the heritage AVEVA business as the
transition to a recuring revenue model continued and also
subscription growth from OSIsoft, as it began its business model
transition. Within subscription, SaaS revenue grew 18.8% to GBP27.8
million (FY21: GBP23.4 million) which was due to sales of cloud
solutions such as Value Chain Optimisation, Asset Information
Management and Unified Engineering. On an organic constant currency
basis the increase was 23.9%.
Maintenance revenue was driven by growth associated with the
OSIsoft business, which more than offset a decline at the heritage
AVEVA business due to the planned subscription transition.
Perpetual licence increase was driven by strong growth from the
heritage OSIsoft business, ahead of its move to a subscription
business model.
Services revenue was driven by growth in the overall business,
partly offset by a focus on higher margin software revenue.
The revenue mix for the combined Group showing point in time
versus overtime revenue recognition is shown below:
FY22 FY21
Revenue Revenue
point in Revenue point in Revenue
GBPm time over time Total time over time Total
On-premises rental 280.7 115.7 396.4 259.6 104.4 364.0
SaaS - 27.8 27.8 - 23.4 23.4
Total subscription 280.7 143.5 424.2 259.6 127.8 387.4
Maintenance - 395.5 395.5 - 412.8 412.8
---------- ----------- -------- ---------- ----------- --------
Total recurring
revenue 280.7 539.0 819.7 259.6 540.6 800.2
Perpetual licences 293.1 - 293.1 271.2 - 271.2
Services - 122.8 122.8 - 124.7 124.7
---------- ----------- -------- ---------- ----------- --------
Total 573.8 661.8 1,235.6 530.8 665.3 1,196.1
---------- ----------- -------- ---------- ----------- --------
Of the total revenue recognised in FY22, GBP661.8 million (FY21:
GBP665.3 million) was recognised over time representing 53.6% of
the total (FY21: 55.6%), demonstrating that AVEVA already has a
significant amount of revenue which is recognised rateably.
Revenue recognised at a point in time was GBP573.8 million
(FY21: GBP530.8 million) representing 46.4% of total revenue (FY21:
44.4%). Of this GBP280.7 million (FY21: GBP259.6 million) related
to on-premises rental subscription contracts and represented 22.7%
of total revenue in the year (FY21: 21.7%), showing that this
element is relatively stable year on year.
At 31 Marc h 2022, the Group had a revenue backlog of GBP781.4
million (FY21: GBP657.9 million) representing remaining performance
obligations which have not been met or are partially met. Of this
GBP487.8 million (FY21: GBP425.8 million) will be recognisable
within one year.
Pro forma costs
An analysis of total expenses is summarised below.
Net impairment
gain / loss
Cost of Selling from financial
GBPm sales R&D and distribution Admin. assets Total
Adjusted costs 232.3 178.2 280.7 179.9 (0.6) 870.5
FY21 229.1 168.5 278.1 162.1 3.6 841.4
Change 1.4% 5.8% 0.9% 11.0% (116.7)% 3.5%
Organic constant
currency 4.9% 9.2% 4.2% 14.7% (113.9)% 6.9%
Cost of sales increased largely due to the growth in the
business and included higher cloud hosting and infrastructure
costs.
Research & Development costs increased due to investment in
the development of cloud products and also reflects higher
employment costs, reflecting a very competitive labour market.
Selling and distribution expenses increased mainly due to
increased sales commissions and sales employment costs.
Administrative expenses increased largely due to higher costs in
IT and legal functions with increases in capacity being needed as
the business scales.
Net impairment loss from financial assets represents the
impairment of accounts receivable and contract assets. The reversal
of provisions made during the Covid crisis in FY21, offset by the
impairment of assets in Russia, led to a net positive impact in
FY22.
Pro forma adjusted EBIT
Adjusted EBIT increased by 2.9% to GBP365.1 million (FY21:
GBP354.7 million). This resulted in an adjusted EBIT margin of
29.5% (FY21: 29.7%), which was up +30bps on an organic constant
currency basis.
Pro forma net interest charge
The combined pro forma interest charge assumes that the GBP685.1
million term loan was drawn down on 1 April 2020 and therefore a
full year's interest is charged in each period. Total net interest
was GBP12.1 million (FY21: GBP16.0 million). The year-on-year
reduction was largely due to lower LIBOR rates.
Pro forma taxation
The pro forma tax charge on adjusted profit before tax was GBP
50.6 million (FY21: GBP20.1 million), which equates to an effective
tax rate of 14.3 % (FY21: 5.9%). This tax charge factors in the
benefit of UK tax incentives on intellectual property and US tax
deductions for the amortisation of goodwill relating to the
acquisition of OSIsoft . The year-on-year increase was due to
increased US Alternative Minimum Tax and irrecoverable withholding
tax. The tax rate on adjusted profit before tax is expected to
remain at or below the level seen in FY22 going forward.
Pro forma earnings per share
Pro forma diluted adjusted EPS decreased by 5.4 % to 99.6 pence
(FY21: 105.3 pence) as a result of the higher adjusted EBIT and
lower interest, being more than offset by a higher tax charge.
Normalised and exceptional items
The normalised and exceptional items below have been excluded in
presenting the adjusted results.
GBPm FY22 FY21
Acquisition costs relating to OSIsoft 0.8 44.4
Integration of OSIsoft 28.0 6.1
Integration of Schneider Electric industrial
software business 13.5 27.6
Disposals 2.8 -
Retirement of steel fabrication business 15.4 -
Impairment of balances with Russian-based
counterparties 7.3 -
Gain on disposal of pension scheme - (0.3)
Total exceptional items 67.8 77.8
---------------------------------------------- ------ ------
Amortisation 226.1 95.7
Share-based payments 27.4 16.3
Total normalised items 253.5 112.0
---------------------------------------------- ------ ------
Exceptional costs incurred in the integration of OSIsoft,
primarily consisting of consultancy and adviser fees and additional
temporary resources paid relating to the merging of IT systems and
real estate, and rebranding. Costs are anticipated to continue
until mid-calendar 2023.
In the year-ended 31 March 2022, Schneider Electric industrial
software business integration costs primarily related to the
continued build and implementation of a global ERP system and legal
entity rationalisation. These costs are expected to continue until
mid-calendar 2024.
A GBP14.9 million impairment of intangible assets associated
with the Group's steel fabrication business (GBP10.9 million and
GBP4.0 million of developed technology and customer relationships
respectively) was recognised following the announcement in July
2021 of these products' retirement. Restructuring costs of GBP0.5
million have also been incurred.
As a result of the invasion of Ukraine by Russia, and the
subsequent sanctions enforced by the UK and US governments, the
Group fully provided against an additional GBP4.9 million of trade
receivables, GBP1.0 million of amounts owed by related parties, and
GBP1.4 million of contract assets held with entities within Russia
at 31 March 2022.
Amortisation relates to the amortisation of the fair valued
heritage AVEVA intangible assets under acquisition accounting,
following the combination with the Schneider Electric industrial
software business and the amortisation of intangibles relating to
the OSIsoft acquisition. Of the GBP226.1 million amortisation
charge, GBP147.6 million relates to the intangibles acquired
through the OSIsoft acquisition.
The increase in share-based payments reflects the increase in
the size of AVEVA's business post the acquisition of OSIsoft.
Brian DiBenedetto
Chief Financial Officer
7 June 2022
Review of principal risks and uncertainties
Approach to risk management
We further strengthened our risk management approach and the
supporting Group risk function throughout the fiscal year. The
Board of Directors retains overall responsibility for the Group's
risk management approach, supported by the Executive Risk
Committee, which includes all Executive Directors and relevant
stakeholders across the business. The Executive Risk Committee
meets quarterly to oversee our principal and emerging risks,
challenge the acceptability of risk exposure and monitor the
adequacy of risk management and mitigation. Through this process,
we avoid exceeding our risk tolerance as defined by our Group-wide
risk appetite.
Key changes in the year
Industrial digitalisation strategy - Movement towards industrial
digitalisation has accelerated within the last 24 months, and our
customers understand and accept the need to evolve. With less need
to convince customers to digitalise, it is less likely our strategy
to capitalise on the opportunities of industrial digital
transformation could fail or not provide the expected levels of
return. This risk has been removed from our principal risks as the
market has evolved and we do not deem this to be a material threat
over the next 18 months.
SaaS subscription - We previously reported on separate principal
risks for Cloud and Subscription. These are now combined into one
risk, ultimately linked to growth of SaaS subscriptions.
Strategic risks
Risk Mitigation
------------------------------------------------------------ ----------------------------------------------------------
Talent In the past 12 months, we improved
As a technology company, we are the tracking and visibility of attrition
heavily reliant on the people we rates. We are also introducing new
employ and we compete for the best approaches to succession planning.
talent globally. If we are unable
to attract or retain the niche skills Additional mitigations we undertook
and experience we need to drive in the last fiscal year include:
the business forward, creating innovation * Building talent pipelines in niche/hard-to-hire
and growth, this could materially areas;
impact our success.
The AVEVA brand must remain attractive * Using AVEVA's connections to Schneider Electric to
for us to successfully attract and source talent, including talent rotation programme
retain developers, technical sales s;
staff, consultants and leadership.
Talent recruitment and retention * Review of compensation packages in various
challenges have increased globally territories;
in the last 12 months, caused by
the pandemic and subsequent impacts
including changing work-life balance * Improving talent review processes;
requirements and employer responses
(compensation packages, remote working
opportunities and wellbeing). The * Increasing in-house talent acquisition expertise;
need to retain talent during the
key integration of our recent acquisition
has also contributed to a continued * Partnering with universities;
high risk in the last 12 months.
* Leveraging employee referral programmes; and
* Strengthening employee engagement activities.
We seek to ensure that employees
are motivated in their work and
receive regular appraisals and encouragement
to develop their skills. Annually,
there is a Group-wide salary review
that rewards strong performance
and ensures salaries remain competitive.
Commission and bonus schemes help
to ensure that both AVEVA's success
and individual achievement are appropriately
rewarded.
Risk Mitigation
----- -----------
SaaS subscription
This risk encompasses all the risk The shift to cloud is a core theme
elements related to our shift towards of our five-year business planning
a SaaS subscription model, including process, with functional strategies
product and portfolio readiness, and investments aligned with our
cloud strategy and capabilities, strategic plans.
the current structure of the organisation
and ability to scale, and competition We also have a multi-year business
from other large platform providers transformation programme to drive
and system integrators. Failure operational readiness for the shift
to move towards a SaaS subscription to SaaS and grow AVEVA's user base
model could negatively impact recurring through access to new markets and
revenue and cash flow generation. additional cloud products. Targeted
investments have also been made
in sales and marketing.
Risk Mitigation
----- -----------
Sustainability
Increased focus on sustainability During FY22, we established a dedicated
and greater stakeholder expectations sustainability function and ESG
for management of ESG issues creates governance structure. To inform
reputational, regulatory and product the company's prioritisation of
related risk for AVEVA. If not well-managed, ESG management, target-setting,
this risk could lead to: and disclosures, we conducted a
* loss of existing customers or failure to acquire new robust materiality assessment.
customers;
A key pillar of our ESG framework
is to reduce reliance on fossil
* failure to maintain our ratings in sustainable fuel industries by seizing opportunities
investment indices and broader reputational impact, to help customers use digitalisation
leading to loss of investment; to thrive in a low-carbon future.
To increase what we call our technology
handprint, or impact, we are developing
* failure to attract or retain the talent and niche sustainability-related offerings
skills our business requires; and and product features and further
leveraging AVEVA's partner ecosystems.
Sustainability-focused marketing
* failure to meet new ESG-related reporting and sales enablement strategies
regulations. are also in place to support diversification.
We disclose climate-related risks
and opportunities in accordance
with the recommendations of the
Taskforce on Climate-related Financial
Disclosures (TCFD). In addition,
our climate goals include a near
term science-based target and a
net-zero commitment.
Risk Mitigation
----- -----------
Integration
In 2021, we acquired OSIsoft, now We set up and are running a comprehensive
operated as the PI Business within integration programme, led by our
AVEVA. We spent much of the last SVP of Integration. This process
12 months ensuring the successful is overseen by an Integration Management
integration of this acquisition. Office Steering Committee, headed
by the CEO. As part of this programme,
The primary risks we have been addressing we established cross-organisational
as we integrate the PI Business workstreams for all major and enabling
are: functions impacted by the integration.
* employee turnover;
The organisation design workstream,
for example, is nearly complete,
* achievement of cost and revenue synergies; with ongoing checks on employee
engagement. To drive our revenue
synergies while addressing employee
* integrating business processes and systems; and attrition risks, we accelerated
recruitment for key revenue-driving
skills in the midst of a challenging
* the risk of disruptive change to core operations. recruitment market. We also created
the right sales operating model
with incentives aligned to market
dynamics.
Some projects to integrate business
processes and address systems risk
are ongoing, including development
of campaign-to-cash processes, office
consolidation, and extensive product,
portfolio and R&D planning.
New corporate values and behaviours
were communicated throughout the
business, and there have been numerous
employee engagement and change initiatives
delivered throughout the year to
counter the impact of disruptive
change.
------------------------------------------------------------ ----------------------------------------------------------
External risks
Risk Mitigation
------------------------------------------------------------ ----------------------------------------------------------
Competitors We carefully monitor customer requirements,
We operate in highly competitive trends and other suppliers operating
markets. Other technology companies within our chosen markets. We invest
could acquire, merge or move into in innovation and strive to offer
AVEVA's market space to compete superior products to meet market
with our offerings, creating a material needs.
threat. Existing competitors could
also respond more quickly to market The integration of our PI Business
demands and trends, resulting in further mitigates this risk, providing
reduced market share and missed us with a distinct competitive advantage
growth opportunities. Our industry and market position.
is characterised by rapid technological
change, evolving industry standards, Other mitigations include leveraging
evolving business models and consolidations. our relationship with Schneider
Electric, attractive proposals for
In an environment of continuing additional complementary products
uncertainty, it is likely that competitor for existing customers, and flexibility
strategies may change or consolidations to meet changing market demands
in our industry could negatively and competitive forces.
impact our business. Potential negative
impacts include increased pricing
pressure, cost increases, the loss
of market share due to competitor
cooperation and, consequently, a
reduced ability to integrate solutions.
Risk Mitigation
----- -----------
Dependency on energy sector
Approximately a third of our revenue Our products deliver Capex certainty
is derived from customers in the and Opex reduction, providing meaningful
energy sector, particularly oil efficiency.
and gas companies.
Our extensive global presence provides
In the event of a downturn in energy diversification and allows us to
markets, customers may have less avoid over-reliance on specific
funding for capital projects or geographic markets.
additional operational commitments,
including the purchase of AVEVA's In FY22, about 33% of our revenue
software products. Significant end-market was attributable to customers operating
downturns could materially impact in the energy sector. This represents
our revenues and profits. a decrease from FY21, when 50% was
attributable. This change is primarily
a result of the OSIsoft acquisition.
AVEVA's move towards a subscription-based
licensing model further mitigates
this risk, as it offers customers
greater flexibility over their expenditure.
We also continue to leverage our
relationship with Schneider Electric
to expand into other sectors.
In the event of a downturn in the
energy market, AVEVA's products
act as a natural hedge for one another,
with decrease in revenue from Capex
likely to be offset by an increase
in revenue from Opex as customers
look to further optimise their operations.
Risk Mitigation
----- -----------
Product security
AVEVA's products are complex and Our products are extensively tested
new products or enhancements may prior to commercial launch. In addition,
contain undetected errors, failures, AVEVA has a robust security development
performance problems or defects life cycle as a key component of
which may impact our strong reputation our overall software development
with our customers or create negative process, and we have created formal
financial implications. and collaborative relationships
with third-party security researchers,
This risk reflects AVEVA's portfolio security organisations and regulatory
of products, their functionality entities to proactively ensure our
and increasing threats in the external software is as safe and secure as
cyber environment. is reasonable.
The risk level increased during As part of the integration of our
FY22, in part due to the acquisition PI Business, we have combined security
of the PI business and related growth best practices from both entities,
in our product portfolio. The risk further strengthening our approach.
of cyber conflict also increased
as the Ukraine crisis developed. Our threat intelligence capabilities
were enhanced throughout the year
in response to the cyber security
risk to the corporate environment,
and product security teams have
been able to leverage this information
to improve their defences.
AVEVA also implemented a sabotage
resistance programme across the
company during FY22, increasing
resistance to insider threat.
Risk Mitigation
----- -----------
Cyber security
Cyber and physical threats continue
to grow. We depend on our IT systems To reduce our risk, we conduct continual
not only to run our business but security assessments of our digital
also to deliver services and capabilities assets. This is combined with regular
to customers, compounding our exposure external penetration testing to
to this risk. ensure a suitable security posture
is maintained.
The risk remains elevated due to
higher cyber threats associated Our global security team focuses
with remote working, recent developments on: reducing the likelihood of regulatory
in Ukraine, and other global or sanctions and fines being levied;
market events impacting supply chain protecting our brand and our digital
and cloud providers. and physical assets; protecting
customer and employee data; and
building stakeholders' confidence
in our overall security posture.
We measure ourself against the NIST
Cyber Security Framework and the
maturity of our cyber and security
controls is audited by independent
third-party accessors. These steps
constitute a continual verification
and improvement programme.
We are ISO27001 certified for our
R&D function and continue to maintain
SOC2 compliance.
We constantly assess and adapt our
security capabilities in response
to the emerging threat landscape
and remain fully committed to protecting
the confidentiality, integrity and
availability of our infrastructure.
Risk Mitigation
----- -----------
Regulatory compliance
AVEVA operates through direct and Compliance policies and guidance
indirect sales channels and must materials for our employees and
comply with both international and external partners are combined with
local laws in each country of operation. regular, targeted communications
If one or more employees acting and training platforms.
on our behalf commit, or are alleged
to have committed, a violation of Local management teams are supported
law, we could face substantial costs by local professional advisors.
and severe financial penalties and Corporate legal and finance functions
reputational damage. Applicable provide further oversight and regularly
regulatory risks include geopolitical receive support from external advisors.
risk, trade compliance, data protection
and privacy, anti-trust, anti-bribery Dedicated compliance resources,
and corruption. including software and people, enhance
management and monitoring of this
Schneider Electric is a major re-seller principal risk.
for AVEVA and major shareholder.
We are subject to related-party As part of our integration of our
transaction obligations with respect recent acquisition of OSIsoft, work
to our relationship with Schneider is ongoing to harmonise compliance
Electric. programmes.
Risk Mitigation
----- -----------
Pandemic-related economic disruption
Because of the global Covid-19 pandemic, Our business remains in a strong
AVEVA, like many global companies, cash and financial position. Our
operates in an environment with leadership continues to review our
continued economic disruption and financial position and is prepared
declining GDPs. This could have to take mitigating steps as necessary.
many impacts including significantly
decreased demand for our products As mentioned above, our products
and services, unexpected disruptions deliver Capex certainty and Opex
in the industries that we serve reduction for meaningful efficiency
or the potential for restricted in periods of economic and trading
access to funding. disruption. We are also committed
to supporting our valued customers
Our customers may seek to minimise and meeting their needs.
expenditures by terminating subscriptions
or licence arrangements, or attempting
to renegotiate or delay previously-agreed
payment dates. Customers may also
be more cautious and take more time
to make purchase decisions.
------------------------------------------------------------ ----------------------------------------------------------
Operational risks
Description Mitigation
------------------------------------------------------------ ----------------------------------------------------------
Internal IT systems (suitability
and continuity) During the fiscal year, we made
We seek to deliver uninterrupted significant improvements to address
customer and employee services and the legacy risk in our application
experiences, supported by our functional and infrastructure services.
IT strategy.
A key strategic programme to support
We outsource certain IT-related mitigations is in place. It features
functions to third parties that committed investment, executive
are responsible for maintaining support and a global multi-phase
their own network security, disaster plan.
recovery and systems management
procedures. If such third-party For our third-party providers, we
IT vendors fail to manage their are now undertaking a more formal
IT systems and related software approach with questionnaires and
applications effectively, this could assessments of capabilities before
severely impact AVEVA. commercial commitment is finalised.
To ensure successful business outcomes,
we engage external third-party advisors
and use best practice metrics and
governance.
------------------------------------------------------------ ----------------------------------------------------------
Disruptive risks
Description Mitigation
------------------------------------------------------------ ----------------------------------------------------------
Disruptive technologies
New and unforeseen technology, software This risk is primarily mitigated
or business models threatening our through our own innovation initiatives,
value offering could be developed and remaining at the forefront of
and become commercially viable. technological advances. This is
This would impact our profits and a core strategic strength of our
prospects. company. In addition, we continually
scan the disruptive technology environment
The potential threats seeking to to ensure we stay informed and well
capitalise on digitalisation trends positioned to respond to any material
continue but have not increased. threats.
------------------------------------------------------------ ----------------------------------------------------------
Consolidated Income Statement
for the year ended 31 March 2022
2022 2021
Notes GBPm GBPm
------------------------------------------ ------ -------- --------
Revenue 3,4 1,185.3 820.4
Cost of sales (232.5) (181.3)
------------------------------------------ ------ -------- --------
Gross profit 952.8 639.1
Operating expenses
Research & Development costs (343.3) (184.5)
Selling and distribution expenses (345.4) (226.8)
Administrative expenses (246.3) (193.0)
Net impairment loss on financial assets (6.7) (3.7)
Other (expense)/income 5 (17.6) 5.5
------------------------------------------ ------ -------- --------
Total operating expenses (959.3) (602.5)
------------------------------------------ ------ -------- --------
(Loss)/profit from operations (6.5) 36.6
Finance revenue 1.9 0.6
Finance expense (14.0) (3.0)
------------------------------------------ ------ -------- --------
(Loss)/profit before tax from continuing
operations (18.6) 34.2
Income tax expense 6 (44.0) (9.4)
------------------------------------------ ------ -------- --------
(Loss)/profit for the year attributable
to equity holders of the parent (62.6) 24.8
------------------------------------------ ------ -------- --------
(Loss)/profit from operations (6.5) 36.6
Amortisation of intangible assets 226.1 95.7
Share-based payments 27.4 16.3
Exceptional items 5 67.8 77.8
------------------------------------------ ------ -------- --------
Adjusted EBIT 1 314.8 226.4
------------------------------------------ ------ -------- --------
(Loss)/earnings per share (pence)
-- basic 8 (20.78) 11.35
-- diluted 8 (20.78) 11.27
----------------------------------- -------- ------
All activities relate to continuing activities.
The accompanying notes are an integral part of this Consolidated
Income Statement.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2022
2022 2021
Notes GBPm GBPm
---------------------------------------------- ------ ------- ------
(Loss)/profit for the year (62.6) 24.8
Items that may be reclassified to profit
or loss in subsequent periods:
Exchange gain arising on translation of
foreign operations 159.1 20.7
---------------------------------------------- ------ ------- ------
Total of items that may be reclassified
to profit or loss in subsequent periods 159.1 20.7
---------------------------------------------- ------ ------- ------
Items that will not be reclassified to
profit or loss in subsequent periods:
Actuarial remeasurements on retirement
benefits 3.4 (2.5)
Deferred tax on actuarial remeasurements
on retirement benefits 6 (2.2) 0.5
Deferred tax on losses and other timing
differences 6 2.9 -
---------------------------------------------- ------ ------- ------
Total of items that will not be reclassified
to profit or loss in subsequent periods 4.1 (2.0)
---------------------------------------------- ------ ------- ------
Total comprehensive income for the year,
net of tax 100.6 43.5
---------------------------------------------- ------ ------- ------
The accompanying notes are an integral part of this Consolidated
Statement of Comprehensive Income.
Consolidated Balance Sheet
31 March 2022
2022 2021
Notes GBPm GBPm
-------------------------------- ------ -------- --------
Non-current assets
Goodwill 4,004.6 3,904.1
Other intangible assets 1,472.5 1,662.3
Property, plant and equipment 44.7 48.5
Right-of-use assets 95.1 111.9
Deferred tax assets 47.2 21.4
Trade and other receivables 10 8.4 19.4
Customer acquisition costs 6.3 0.3
Investments 0.4 0.4
Retirement benefit surplus 16.6 13.1
-------------------------------- ------ -------- --------
5,695.8 5,781.4
-------------------------------- ------ -------- --------
Current assets
Trade and other receivables 10 381.2 318.0
Contract assets 302.1 215.6
Cash and cash equivalents 11 279.3 286.6
Restricted cash 11 - 7.3
Current tax assets 12.1 18.9
-------------------------------- ------ -------- --------
974.7 846.4
-------------------------------- ------ -------- --------
Total assets 6,670.5 6,627.8
-------------------------------- ------ -------- --------
Equity
Issued share capital 10.7 10.7
Share premium 2,842.1 3,842.1
Other reserves 1,370.4 1,209.6
Retained earnings 986.0 130.3
-------------------------------- ------ -------- --------
Total equity 5,209.2 5,192.7
-------------------------------- ------ -------- --------
Current liabilities
Trade and other payables 12 224.0 271.3
Contract liabilities 3 328.2 239.7
Lease liabilities 22.1 22.9
Current tax liabilities 33.8 45.6
-------------------------------- ------ -------- --------
608.1 579.5
-------------------------------- ------ -------- --------
Non-current liabilities
Loans and borrowings 684.5 654.0
Lease liabilities 73.3 88.9
Deferred tax liabilities 71.2 82.0
Other liabilities 12 10.7 18.2
Retirement benefit obligations 13.5 12.5
-------------------------------- ------ -------- --------
853.2 855.6
-------------------------------- ------ -------- --------
Total equity and liabilities 6,670.5 6,627.8
-------------------------------- ------ -------- --------
The accompanying notes are an integral part of this Consolidated
Balance Sheet.
Consolidated Statement of Changes in Shareholders' Equity
31 March 2022
Other reserves
--------------- -------- ---------- -------- --------------------------------------- --------- --------- --------- --------
Cumulative Capital Reverse Total
Share Share Merger translation redemption acquisition Treasury other Retained Total
capital premium reserve adjustments reserve reserve shares reserves earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- -------- ---------- -------- ------------ ----------- ------------ --------- --------- --------- --------
At 1 April
2020 5.7 574.5 615.6 22.6 101.7 452.5 (12.1) 1,180.3 181.2 1,941.7
Profit for
the year - - - - - - - - 24.8 24.8
Other
comprehensive
income/(loss) - - - 20.7 - - - 20.7 (2.0) 18.7
Total
comprehensive
income - - - 20.7 - - - 20.7 22.8 43.5
Issue of new
shares 0.5 465.2 - - - - - - - 465.7
Rights issue 4.5 2,831.0 - - - - - - - 2,835.5
Transaction
costs
relating
to issue of
share capital - (28.6) - - - - - - - (28.6)
Share-based
payments - - - - - - - - 16.3 16.3
Tax arising
on
share-based
payments - - - - - - - - 2.1 2.1
Investment
in own shares - - - - - - (1.1) (1.1) - (1.1)
Cost of
employee
benefit trust
shares issued
to employees - - - - - - 9.7 9.7 (9.7) -
Equity
dividends - - - - - - - - (82.4) (82.4)
--------------- -------- ---------- -------- ------------ ----------- ------------ --------- --------- --------- --------
At 31 March
2021 10.7 3,842.1 615.6 43.3 101.7 452.5 (3.5) 1,209.6 130.3 5,192.7
Loss for the
year - - - - - - - - (62.6) (62.6)
Other
comprehensive
income - - - 159.1 - - - 159.1 4.1 163.2
--------------- -------- ---------- -------- ------------ ----------- ------------ --------- --------- --------- --------
Total
comprehensive
income/(loss) - - - 159.1 - - - 159.1 (58.5) 100.6
Share-based
payments - - - - - - - - 27.4 27.4
Tax arising
on
share-based
payments - - - - - - - - (0.2) (0.2)
Investment
in own shares - - - - - - (1.3) (1.3) - (1.3)
Cost of
employee
benefit trust
shares issued
to employees - - - - - - 3.0 3.0 (3.0) -
Equity
dividends - - - - - - - - (110.0) (110.0)
Capital
reduction - (1,000.0) - - - - - - 1,000.0 -
--------------- -------- ---------- -------- ------------ ----------- ------------ --------- --------- --------- --------
At 31 March
2022 10.7 2,842.1 615.6 202.4 101.7 452.5 (1.8) 1,370.4 986.0 5,209.2
--------------- -------- ---------- -------- ------------ ----------- ------------ --------- --------- --------- --------
The accompanying notes are an integral part of this Consolidated
Statement of Changes in Shareholders' Equity.
Consolidated Cash Flow Statement
For the year ended 31 March 2022
2022 2021
Notes GBPm GBPm
------------------------------------------------------ ------ -------- ----------
Cash flows from operating activities
(Loss)/profit for the year (62.6) 24.8
Income tax expense 6 44.0 9.4
Net finance expense 12.1 2.4
Amortisation of intangible assets 226.1 96.3
Depreciation of property, plant and equipment
and right-of-use assets 36.6 28.2
Loss on disposal of property, plant and equipment 0.4 1.0
Impairment of intangible assets 5 14.9 -
Gain on disposal of pension scheme - (0.3)
Loss on disposal of subsidiaries 5,9 2.8 -
Share-based payments 27.4 16.3
Difference between pension contributions paid
and amounts charged to operating profit (0.5) 0.3
Research & Development expenditure tax credit (2.2) (3.1)
Changes in working capital:
Trade and other receivables (53.6) (5.5)
Contract assets (78.3) (70.8)
Customer acquisition costs (5.4) (0.3)
Trade and other payables (45.5) 5.5
Contract liabilities 81.0 (13.0)
------------------------------------------------------ ------ -------- ----------
Cash generated from operating activities before
tax 197.2 91.2
Income taxes paid (59.8) (32.8)
------------------------------------------------------ ------ -------- ----------
Net cash generated from operating activities 137.4 58.4
------------------------------------------------------ ------ -------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (8.6) (10.9)
Purchase of intangible assets - (0.5)
Payment on disposal of pension scheme - (0.3)
Acquisition of subsidiaries, net of cash acquired 9 - (3,029.5)
Adjustment to consideration on completion of
business combination 6.2 -
Restricted cash from acquisition of business
- held in escrow - (7.3)
Net payment for forward contracts under hedge
accounting - (74.2)
Proceeds from sale of business, net of cash 9 1.6 -
Interest received 1.9 0.3
------------------------------------------------------ ------ -------- ----------
Net cash generated/(used) in investing activities 1.1 (3,122.4)
------------------------------------------------------ ------ -------- ----------
Cash flows from financing activities
Interest paid (12.7) (2.8)
Purchase of own shares (1.3) (1.1)
Proceeds from borrowings, net of fees incurred - 645.6
Payment of principal element of lease liability (23.3) (18.5)
Proceeds from rights issue - 2,835.5
Transaction costs on issue of shares - (28.6)
Payment of facility arrangement fees - (2.0)
Dividends paid to shareholders of the parent 7 (110.0) (82.4)
------------------------------------------------------ ------ -------- ----------
Net cash generated/(used) in financing activities (147.3) 3,345.7
------------------------------------------------------ ------ -------- ----------
Net (decrease)/increase in cash and cash equivalents (8.8) 281.7
Net foreign exchange difference 1.5 (109.6)
Opening cash and cash equivalents 11 286.6 114.5
------------------------------------------------------ ------ -------- ----------
Closing cash and cash equivalents 11 279.3 286.6
------------------------------------------------------ ------ -------- ----------
The accompanying notes are an integral part of this Consolidated
Cash Flow Statement.
1. Basis of preparation
The Consolidated Financial Statements of the Group have been
prepared in accordance with International Accounting Standards
(IASs) in conformity with the requirements of the Companies Act
2006 and in accordance with UK-adopted IASs. The financial
information has been prepared on the basis of all applicable IFRSs,
including all IASs, Standing Interpretations Committee (SIC)
interpretations and International Financial Reporting
Interpretations Committee (IFRIC) interpretations issued by the
International Accounting Standards Board (IASB) that are applicable
to the financial period.
Except for the application of UK-adopted IASs, for which there
are no material differences from IFRSs as issued by the IASB and
adopted by the EU when applied to the Group, accounting policies
have been applied consistently to all years presented unless
otherwise stated.
The preliminary announcement covers the period from 1 April 2021
to 31 March 2022 and was approved by the Board on 7 June 2022. It
is presented in Pounds Sterling (GBP) and all values are rounded to
the nearest GBP0.1m except when otherwise indicated.
The financial information contained in this preliminary
announcement of audited results does not constitute the Group's
statutory accounts for the years ended 31 March 2022 or 31 March
2021. The accounts for the year ended 31 March 2021 have been
delivered to the Registrar of Companies. The statutory accounts for
the year ended 31 March 2022 have been reported on by the Company's
auditors; the report on these accounts was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain any statement under section 498(2) or (3) of the Companies
Act 2006 or equivalent preceding legislation.
The statutory accounts for the year ended 31 March 2022 are
expected to be posted to shareholders in due course and will be
delivered to the Registrar of Companies after they have been laid
before the shareholders in a general meeting on 15 July 2022.
Copies will be available from the registered office of the Company,
High Cross, Madingley Road, Cambridge CB3 0HB and can be accessed
on the AVEVA website, www.aveva.com. The registered number of AVEVA
Group plc is 2937296.
The Group presents multiple non-GAAP measures. They are not
defined by IFRSs and therefore may not be directly comparable with
similarly titled measures of other companies. They are not intended
to be a substitute for, or superior to, GAAP measures. Additional
information for all non-GAAP measures, including definitions,
rationale for their presentation, and reconciliations from the
closest IFRS measure is provided in the Non-GAAP Measures section
below.
The main non-GAAP presentations are adjusted and pro forma
results.
Adjusted results
The business is managed and measured on a day-to-day basis using
adjusted results. To arrive at adjusted results, certain
adjustments are made for normalised and exceptional items that are
individually significant and which could affect the understanding
of the performance for the year and the comparability between
periods.
Adjusted earnings before interest and tax (EBIT) is presented on
the face of the Consolidated Income Statement and is reconciled to
profit from operations as required to be presented under the
applicable accounting standards. The Directors believe that this
alternative measure of profit provides a reliable and consistent
measure of the Group's underlying performance.
Adjusted earnings per share is calculated having adjusted profit
after tax for the normalised and exceptional items, their tax
effect, the deferred revenue haircut arising due to the fair
valuing of OSIsoft's contract liabilities on acquisition, and the
tax effect of the deferred revenue haircut.
Normalised items
These are recurring items which management considers could
affect the underlying results of the Group.
These items relate to:
-- amortisation of intangible assets;
-- share-based payment charges; and
-- tax step up due to intangible assets recognised on acquisition of OSIsoft, LLC.
Other types of recurring items may arise; however, no others
were identified in either the current or prior year. Recurring
items are adjusted each year irrespective of materiality to ensure
consistent treatment.
Management considers these items to not reflect the underlying
performance of the Group.
In the year ended 31 March 2022, the following changes have been
made to the definition of normalised items:
-- inclusion of the impact of the tax step up arising on the acquisition of OSIsoft;
-- removal of the impact of fair value adjustments on financial derivatives; and
-- inclusion of the impact of amortisation of other software.
Further commentary and explanation of these changes is provided
in the Non-GAAP Measures section below.
Exceptional items
These are items which are non-recurring and are identified by
virtue of either their size or their nature. These items can
include, but are not restricted to, the costs of significant
restructuring exercises, fees associated with business combinations
and costs incurred in integrating acquired companies. Exceptional
items are discussed further in note 6.
Management considers these significant, non-recurring-items to
be inherently not reflective of the future or underlying
performance of the Group.
Pro forma results
For the year ended 31 March 2022, pro forma results are the
Group's adjusted results with an additional adjustment to add back
the deferred revenue haircut arising due to the fair valuing of
OSIsoft's contract liabilities on acquisition. Pro forma results do
not form part of the financial statements and are unaudited.
For the year ended 31 March 2021, pro forma results are the
Group's adjusted results adjusted for the deferred revenue haircut,
with the addition of pre-acquisition OSIsoft results for the
period. It is assumed no synergies or trading between the groups
occurred, and that the term loan used to finance the acquisition
was entered into on 1 April 2020.
These are presented to increase year-on-year comparability,
given the significant impact of the OSIsoft acquisition upon the
Group's results.
Going concern
In adopting the going concern basis for preparing the financial
statements, the Directors have considered the business activities
and the Group's principal risks and uncertainties in the context of
the current operating environment. This includes possible ongoing
impacts upon the Group of the global Covid-19 pandemic and economic
sanctions following the Russian invasion of Ukraine, and reviews of
liquidity and covenant forecasts.
At 31 March 2022, the Group held external debt in the form of a
GBP685.1 million (US$ 900.0 million) term loan, due for repayment
in March 2024. The Group has access to a GBP250.0 million Revolving
Credit Facility (RCF), of which nil was drawn down at 31 March
2022. This facility is due for renewal in February 2025, with a
one-year extension option subject to lender approval.
To support the going concern conclusion, the Group has developed
several working capital financial models covering the period from
the signing of the financial statements to 30 September 2023. The
specific scenarios modelled are:
Scenario Outcome
----------------------------------------------- ---------------------------------------------
Base case
Based upon the Group's most recent The Group is not in breach of any
Board approved forecasts to 31 March financial covenants and is not required
2027. These are the same forecasts to draw down on the RCF. The Group
used in the viability statement and is able to meet all forecasted obligations
VIU model used for impairment testing. as they fall due.
Sensitised
A severe downside scenario, including The Group is not in breach of any
reducing revenue financial covenants and is not required
(10% from the base case), and introducing to draw down on the RCF. The Group
delays in cash collection (10% increase is able to meet all forecasted obligations
from the base case). as they fall due.
Reverse stress case
A scenario created to model the circumstances This resulted in a covenant breach
required to breach the Group's credit at the end of the going concern period.
facilities within the going concern Management believes the possibility
period. This includes reducing revenue of this combination of severe downsides
(18% decrease from the base case) arising to be remote, and that there
and delays in cash collection (10 are numerous mitigating actions which
day increase in debtor days from could be taken to avoid a covenant
the base case). breach. The impact of these mitigating
actions were not considered in the
scenario modelling.
----------------------------------------------- ---------------------------------------------
Should extreme downside scenarios occur, there are several
mitigating actions the Group could take to avoid covenant breaches
to maintain liquidity headroom under existing debt facilities.
These include cancellation or deferral of dividend payments and
reductions in other discretionary spending costs.
The financial statements for the year ended 31 March 2022 have
therefore been prepared under the going concern basis of
accounting.
2. Accounting policies
The preliminary statement has been prepared on a consistent
basis with the accounting policies set out in the last published
financial statements for the year ended 31 March 2021. New
standards and interpretations which came into force during the year
did not have a significant impact on the Group's financial
statements.
3. Revenue
An analysis of the Group's revenue is as follows:
Services transferred at a point in time Services transferred over time Total
Year ended 31 March 2022 GBPm GBPm GBPm
---------------------------- ---------------------------------------- ------------------------------- --------
On-premises rental 280.7 115.7 396.4
SaaS - 27.8 27.8
---------------------------- ---------------------------------------- ------------------------------- --------
Total subscription revenue 280.7 143.5 424.2
Maintenance - 345.2 345.2
Perpetual licences 293.1 - 293.1
Services - 122.8 122.8
---------------------------- ---------------------------------------- ------------------------------- --------
573.8 611.5 1,185.3
---------------------------- ---------------------------------------- ------------------------------- --------
Services transferred
Services transferred at a point in time over time Total
Year ended 31 March 2021 GBPm GBPm GBPm
---------------------------- ---------------------------------------- --------------------- ------
On-premises rental 236.1 100.2 336.3
SaaS - 23.4 23.4
---------------------------- ---------------------------------------- --------------------- ------
Total subscription revenue 236.1 123.6 359.7
Maintenance - 197.7 197.7
Perpetual licences 141.6 - 141.6
Services - 121.4 121.4
---------------------------- ---------------------------------------- --------------------- ------
377.7 442.7 820.4
---------------------------- ---------------------------------------- --------------------- ------
Contract balances are as follows:
2022 2021 2020
GBPm GBPm GBPm
--------------------------------- ------ ------ ------
Trade receivables (non-current) 0.2 0.7 2.0
Trade receivables (current) 287.3 245.3 181.2
Contract assets 302.1 215.6 142.4
Contract liabilities 328.2 239.7 177.0
--------------------------------- ------ ------ ------
Contract assets have increased year-on-year predominantly due to
an increase in the number and value of multi-year subscription
licenses (rentals). The structure of these contracts results in the
cumulative revenue recognised in the initial years being higher
than the invoiced total. Contract assets are stated net of a
provision of GBP2.0 million (2021: GBP7.7 million). The provision
has decreased year-on-year due to the reversal of an historical
forward-looking provision made due to the uncertainty caused by the
onset of the Covid-19 pandemic. As there is limited evidence that
Covid-19 has harmed cash collection, management believes this is no
longer required. This has been offset by a provision of GBP1.4
million relating to contract assets with counterparties based in
Russia. See note 6 for further information.
Trade receivables increased year-on-year as a result of revenue
growth in the last quarter of the year. Contract liabilities have
increased primarily due to the impact of the reduction in prior
year contract liabilities caused by the revenue haircut taken on
acquisition of OSIsoft, LLC.
Revenue for the year ended 31 March 2022 includes GBP215.8
million (2021: GBP159.3 million) which was included in contract
liabilities at the beginning of the year. Revenue of GBP3.1 million
(2021: GBP3.1 million) recognised in the year ended 31 March 2022
related to performance obligations satisfied in previous years.
The transaction price allocated to the remaining performance
obligations (unsatisfied or partially unsatisfied) as at 31 March
is as follows:
2022 2021
GBPm GBPm
-------------------- ------ ------
Within one year 487.8 425.8
More than one year 293.6 232.1
-------------------- ------ ------
4. Segment information
The Executive Leadership Team (ELT) monitors and appraises the
business based on the performance of three geographic regions:
Americas; Asia Pacific; and Europe, Middle East and Africa (EMEA).
These three regions are the basis of the Group's primary operating
segments reported in the financial statements. Performance is
evaluated based on regional contribution using the same accounting
policies as adopted for the Group's financial statements. There is
no inter-segment revenue. Corporate costs include centralised
functions such as Executive Management, Information Technology,
Finance and Legal. Balance sheet information is not included in the
information provided to the ELT.
Year ended 31 March 2022
-----------------------------------------------------
Asia
Americas Pacific EMEA Corporate Total
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ------- ---------- --------
Revenue
On-premises rental 134.2 81.5 180.7 - 396.4
SaaS 9.3 4.9 13.6 - 27.8
---------------------------------------- --------- --------- ------- ---------- --------
Total subscription revenue 143.5 86.4 194.3 - 424.2
Maintenance 170.7 58.8 115.7 - 345.2
Perpetual licences 105.6 84.6 102.9 - 293.1
Services 47.2 30.3 45.3 - 122.8
---------------------------------------- --------- --------- ------- ---------- --------
Regional revenue total 467.0 260.1 458.2 - 1,185.3
Adjusted cost of sales(1) (53.6) (22.1) (39.9) (116.7) (232.3)
Adjusted selling and distribution
expenses(1) (98.2) (51.0) (97.3) (34.2) (280.7)
Adjusted administrative expenses(1) - - - (179.9) (179.9)
Net impairment loss on financial
assets - 2.0 (1.4) - 0.6
---------------------------------------- --------- --------- ------- ---------- --------
Regional contribution 315.2 189.0 319.6 (330.8) 493.0
Adjusted Research & Development
costs(1) (178.2)
---------------------------------------- --------- --------- ------- ---------- --------
Adjusted EBIT 314.8
---------------------------------------- --------- --------- ------- ---------- --------
Exceptional items, normalised items(1)
and net interest (333.4)
---------------------------------------- --------- --------- ------- ---------- --------
Loss before tax (18.6)
---------------------------------------- --------- --------- ------- ---------- --------
1. Adjusted cost of sales, adjusted selling and distribution
expenses, adjusted administrative expenses and adjusted Research
& Development costs exclude the impact of exceptional and
normalised items. Normalised items include amortisation of
intangible assets and share-based payments.
Year ended 31 March 2021
---------------------------------------------------
Asia
Americas Pacific EMEA Corporate Total
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- --------- --------- ------- ---------- --------
Revenue
On-premises rental 84.5 90.1 161.7 - 336.3
SaaS 10.1 5.4 7.9 - 23.4
---------------------------------------- --------- --------- ------- ---------- --------
Total subscription revenue 94.6 95.5 169.6 - 359.7
Maintenance 84.3 46.7 66.7 - 197.7
Perpetual licences 42.1 47.4 52.1 - 141.6
Services 44.4 31.7 45.3 - 121.4
---------------------------------------- --------- --------- ------- ---------- --------
Regional revenue total 265.4 221.3 333.7 - 820.4
Adjusted cost of sales(1) (50.0) (19.8) (39.9) (70.8) (180.5)
Adjusted selling and distribution
expenses(1) (64.4) (40.7) (68.0) (21.2) (194.3)
Adjusted administrative expenses(1) - - - (97.8) (97.8)
Net impairment loss on financial
assets (1.0) (1.8) (0.9) - (3.7)
---------------------------------------- --------- --------- ------- ---------- --------
Regional contribution 150.0 159.0 224.9 (189.8) 344.1
Adjusted Research & Development
costs(1) (116.4)
---------------------------------------- --------- --------- ------- ---------- --------
Adjusted EBIT 227.7
---------------------------------------- --------- --------- ------- ---------- --------
Exceptional items, normalised items(1)
and net interest (193.5)
---------------------------------------- --------- --------- ------- ---------- --------
Profit before tax 34.2
---------------------------------------- --------- --------- ------- ---------- --------
1. Adjusted cost of sales, adjusted selling and distribution
expenses, adjusted administrative expenses and adjusted Research
& Development costs exclude the impact of exceptional and
normalised items. Normalised items include amortisation of
intangible assets and share-based payments.
5. Exceptional items
2022 2021
GBPm GBPm
--------------------------------------------------------- ----- ------
Acquisition of OSIsoft 0.8 44.4
Integration of OSIsoft and associated activities 28.0 6.1
Integration of SES and associated activities 13.5 27.6
Disposal of Acquis Software, Termis Software and Water
Loss Management Software business (note 9) 2.8 -
Retirement of steel fabrication business 15.4 -
Impairment of balances with Russia-based counterparties 7.3 -
Gain on disposal of pension scheme - (0.3)
--------------------------------------------------------- ----- ------
67.8 77.8
--------------------------------------------------------- ----- ------
The total net cash outflow during the year as a result of
exceptional items was GBP59.8 million (2021: GBP63.2 million).
a) Acquisition of OSIsoft
Adviser fees incurred due to the acquisition of OSIsoft, which
completed on 19 March 2021. No further cost relating to this
acquisition are anticipated. This has resulted in a cash outflow of
GBP19.2 million (2021: GBP26.0 million).
b) Integration of OSIsoft and associated activities
Costs incurred in the integration of OSIsoft, primarily
consisting of consultancy fees advisers and additional temporary
resources paid relating to the merging of IT systems and real
estate, and rebranding. Costs are anticipated to continue until at
least the end of the year ended 31 March 2023. This has resulted in
a cash outflow of GBP29.5 million (2021: GBP3.5 million).
c) Integration of SES and associated activities
In the year ended 31 March 2022, costs primarily related to the
continued build and implementation of a global ERP system and legal
entity rationalisation. These costs are expected to continue until
2024. Costs in the years ended 31 March 2022 and 31 March 2021
included work undertaken to exit the Transitional Service
Agreements (TSAs) provided by Schneider Electric which ended in
August 2021. In the year ended 31 March 2021, GBP5.2 million was
reimbursement by Schneider Electric for capital expenditure
incurred as part of the Group's migration activities covered by
TSAs. The associated cash outflow was GBP12.6 million (2021:
GBP33.7 million).
d) Retirement of steel fabrication business
A GBP14.9 million impairment of intangible assets associated
with the Group's steel fabrication business (GBP10.9 million and
GBP4.0 million of developed technology and customer relationships
respectively) was recognised following the announcement in July
2021 of these products' retirement. A discounted cash flow model
was used to determine the value in use over the assets' remaining
life. Restructuring costs of GBP0.5 million have also been
incurred. This has resulted in a cash outflow of GBP0.1 million
(2021: GBPnil).
e) Impairment of balances with Russia-based counterparties
As a result of the invasion of Ukraine by Russia, and the
enforcement of subsequent international sanctions, the Group fully
provided against GBP4.9 million of trade receivables, GBP1.0
million of amounts owed by related parties, and GBP1.4 million of
contract assets held with entities within Russia at 31 March 2022.
This has resulted in a cash outflow of GBPnil (2021: GBPnil).
f) Income statement impact
Exceptional items were included in the Consolidated Income
Statement as follows:
2022 2021
GBPm GBPm
----------------------------------- ----- ------
Cost of sales 0.2 0.8
Research & Development costs 0.5 0.3
Selling and distribution expenses 3.4 3.9
Administrative expenses 38.8 78.3
Net impairment loss on financial
assets 7.3 -
Other expense/(income) 17.6 (5.5)
----------------------------------- ----- ------
67.8 77.8
----------------------------------- ----- ------
6. Income tax expense
a) Tax on loss
The major components of income tax expense are as follows:
2022 2021
GBPm GBPm
------------------------------------------------------ ------- -------
Tax charged in Consolidated Income Statement
Current tax
-- UK corporation tax - -
-- Foreign tax 65.1 41.9
-- Adjustments in respect of prior periods (0.4) (1.9)
------------------------------------------------------ ------- -------
64.7 40.0
------------------------------------------------------ ------- -------
Deferred tax
-- Origination and reversal of temporary differences (18.3) (29.3)
-- Adjustments in respect of prior periods (2.4) (1.3)
------------------------------------------------------ ------- -------
(20.7) (30.6)
------------------------------------------------------ ------- -------
Total income tax expense reported in Consolidated
Income Statement 44.0 9.4
------------------------------------------------------ ------- -------
2022 2021
GBPm GBPm
---------------------------------------------------------------- ------ ------
Tax relating to items charged/(credited) directly
to Consolidated Statement of Comprehensive Income
Deferred tax on actuarial remeasurements on retirement
benefits 2.2 (0.5)
Deferred tax on losses and other timing differences (2.9) -
---------------------------------------------------------------- ------ ------
Tax credit reported in Consolidated Statement of Comprehensive
Income (0.7) (0.5)
---------------------------------------------------------------- ------ ------
b) Reconciliation of the total tax charge
The differences between the total tax expense shown above and
the amount calculated by applying the standard rate of US (2021:
US) corporation tax to the profit before tax are as follows:
2022 2021
GBPm GBPm
------------------------------------------------------ ------- ------
Tax on Group profit before tax at standard US (2021:
US) corporation tax rate of 24% (2021: 24%)(1) (4.5) 8.2
Effects of:
-- expenses not deductible for tax purposes 9 .2 1.8
-- US alternative minimum tax 19.8 7.0
-- non-deductible acquisition costs - 3.0
-- Research & Development incentives (10.2) (5.3)
-- UK rate change impact on deferred tax 13.5 -
-- irrecoverable withholding tax 13.9 -
-- movement on unprovided deferred tax balances 1.0 (1.9)
-- differing tax rates 4.1 (0.2)
-- adjustments in respect of prior years (2.8) (3.2)
------------------------------------------------------ ------- ------
Income tax expense reported in Consolidated Income
Statement 44.0 9.4
------------------------------------------------------ ------- ------
1. Reconciliation is performed starting from the standard US
corporation tax rate as US taxable profits are greater than any
other individual country.
The Group's effective tax rate for the year was (236.6)% (2021:
27.5%). The Group's effective tax rate before exceptional and other
normalised adjustments was 12.4% (2021: 21.2%).
7. Dividends paid and proposed on equity shares
The following dividends were declared, paid and proposed in
relation to the legal entity AVEVA Group plc:
2022 2021
GBPm GBPm
--------------------------------------------------------- ------ -----
Declared and paid during the year
Interim 2021/22 dividend paid of 13.0 pence (2020/21:
12.4 pence) per ordinary share 39.2 35.6
Final 2020/21 dividend paid of 23.5 pence (2019/20:
23.3 pence) per ordinary share 70.8 46.8
--------------------------------------------------------- ------ -----
110.0 82.4
--------------------------------------------------------- ------ -----
Proposed for approval by shareholders at the Annual
General Meeting
--------------------------------------------------------- ------ -----
Final proposed dividend 2021/22 of 24.5 pence (2020/21:
23.5 pence) per ordinary share 73.9 70.8
--------------------------------------------------------- ------ -----
The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting on 15 July 2022 and has
not been included as a liability in these financial statements. If
approved at the Annual General Meeting, the final dividend will be
paid on 5 August 2022 to shareholders on the register at the close
of business on 8 July 2022.
8. (Loss)/earnings per share
2022 2021
Pence Pence
------------------------------------------- -------- ------
(Loss)/earnings per share for the year:
-- Basic (20.78) 11.35
-- Diluted (20.78) 11.27
Adjusted earnings per share for the year:
-- Basic 100.37 81.86
-- Diluted 99.58 81.31
------------------------------------------- -------- ------
2022 2021
Millions Millions
------------------------------------------------------ --------- ---------
(Loss)/earnings per share
Weighted average number of ordinary shares for basic
earnings per share 301.30 218.50
Effect of dilution: employee share options(1) - 1.50
------------------------------------------------------ --------- ---------
Weighted average number of ordinary shares adjusted
for the effect of dilution 301.30 220.00
------------------------------------------------------ --------- ---------
Adjusted earnings per share
Weighted average number of ordinary shares for basic
earnings per share 301.3 218.5
Effect of dilution: employee share options 2.4 1.5
------------------------------------------------------ --------- ---------
Weighted average number of ordinary shares adjusted
for the effect of dilution 303.7 220.0
------------------------------------------------------ --------- ---------
1. The effect of share options are anti-dilutive in the year
ended 31 March 2022 due to the Group recognising a net loss for the
period. They are therefore excluded from the diluted earnings per
share calculation.
The calculations of basic and diluted earnings per share (EPS)
are based on the net loss attributable to equity holders of the
parent for the year of GBP62.6 million (2021: profit GBP24.8
million). Basic EPS amounts are calculated by dividing the net
profit attributable to equity holders of the parent by the weighted
average number of AVEVA Group plc ordinary shares outstanding
during the year.
Diluted EPS amounts are calculated by dividing the net profit
attributable to equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year as
described above, plus the weighted average number of ordinary
shares that would be issued on the conversion of all the
potentially dilutive share options into ordinary shares.
Details of the calculation of adjusted EPS are set out
below:
2022 2021
GBPm GBPm
----------------------------------------------------- ------- -------
(Loss)/profit after tax for the year (62.6) 24.8
Amortisation of intangible assets 226.1 95.7
Share-based payments 27.4 16.3
Exceptional items 67.8 77.8
Effect of acquisition accounting adjustments(1) 50.3 3.3
Tax effect on exceptional items (9.5) (15.1)
Tax effect on normalised adjustments (excluding net
finance expense) 16.0 (23.0)
Tax effect on acquisition accounting adjustments(1) (13.1) (0.9)
----------------------------------------------------- ------- -------
Adjusted profit after tax 302.4 178.9
----------------------------------------------------- ------- -------
1. Acquisition accounting adjustments relate to the revenue
haircut made upon the combination with OSIsoft, LLC.
The denominators used are the same as those detailed above for
both basic and diluted EPS.
The adjustment made to profit after tax in calculating adjusted
basic and diluted EPS has been adjusted for the tax effects of the
items adjusted. The Directors believe that adjusted EPS is more
representative of the underlying performance of the business.
9. Business combinations
a) Acquisition of OSIsoft, LLC
On 19 March 2021 the Group acquired 100% of the voting shares of
OSIsoft, LLC, a global leader in real-time industrial operational
data software and services. The OSIsoft Group's main product is the
PI System, a proprietary, vendor-agnostic data management software
which enables customers to capture, store, analyse and share
real-time industrial sensor-based data with business systems across
all operations. This acquisition will significantly enhance the
Group's product offering, provide customer diversification and
greater geographical market penetration, create opportunities for
material revenue and cost synergies, and accelerate and improve the
Group's development of new software and technology. A consideration
of GBP3,825.2 million (US$5,095.1 million) was paid.
The deal was funded by GBP3,365.7 million (US$4,438.1 million)
of cash; GBP2,806.9 million (US$3,734.3 million) raised via a
rights issue (net of expenses), and GBP558.8 million (US$703.8
million) from existing cash and new debt facilities. The remainder
was funded by a GBP465.7 million (US$648.4 million) issue of
13,655,570 ordinary shares on 22 March 2021 to Estudillo Holdings
Corp, a company majority owned by Dr J. Patrick Kennedy and his
family, which held a 50.3% interest in OSIsoft, LLC. At 31 March
2021, GBP7.3 million (US$10.0 million) remained in restricted cash
in relation to consideration to be paid. This was released in the
year ended 31 March 2022 upon finalisation of the completion
accounts.
At the end of the previous reporting period, the acquisition
accounting had been provisionally determined. This has been
finalised in the current year, as part of the measurement period
permitted under IFRS 3. Changes to the provisionally reported fair
values as set out in note 14 of the 2021 Annual Report are due to
finalisation and review of the acquired balance sheet. The overall
movement is not deemed material.
The fair values of identifiable assets acquired and liabilities
assumed at the acquisition date are:
Carrying value at acquisition Fair value adjustment Fair value
GBPm GBPm GBPm
----------------------------------------- ------------------------------ ---------------------- -----------
Non-current assets
Intangible assets 0.4 1,231.6 1,232.0
Property, plant and equipment 21.0 - 21.0
Right-of-use assets 36.2 - 36.2
Deferred tax assets 22.0 (3.0) 19.0
Trade and other receivables 2.9 - 2.9
Customer acquisition costs 10.3 (10.3) -
Investments 0.4 - 0.4
----------------------------------------- ------------------------------ ---------------------- -----------
Total non-current assets 93.2 1,218.3 1,311.5
----------------------------------------- ------------------------------ ---------------------- -----------
Current assets
Trade and other receivables 75.6 (5.5) 70.1
Contract assets 2.4 - 2.4
Customer acquisition costs 4.0 (4.0) -
Cash and cash equivalents 150.6 - 150.6
Financial assets 0.4 - 0.4
----------------------------------------- ------------------------------ ---------------------- -----------
Total current assets 233.0 (9.5) 223.5
----------------------------------------- ------------------------------ ---------------------- -----------
Current liabilities
Trade and other payables (115.1) (5.0) (120.1)
Contract liabilities (136.2) 60.5 (75.7)
Lease liabilities (6.8) - (6.8)
Current tax liabilities (29.9) (0.5) (30.4)
----------------------------------------- ------------------------------ ---------------------- -----------
Total current liabilities (288.0) 55.0 (233.0)
----------------------------------------- ------------------------------ ---------------------- -----------
Non-current liabilities
Lease liabilities (37.9) - (37.9)
Retirement benefit obligations (0.9) (0.4) (1.3)
----------------------------------------- ------------------------------ ---------------------- -----------
Total non-current liabilities (38.8) (0.4) (39.2)
----------------------------------------- ------------------------------ ---------------------- -----------
Net identifiable assets and liabilities (0.6) 1,263.4 1,262.8
Goodwill 2,562.4
----------------------------------------- ------------------------------ ---------------------- -----------
Total consideration 3,825.2
----------------------------------------- ------------------------------ ---------------------- -----------
Goodwill of GBP1,358.0 million is expected to be deductible for
tax purposes.
The main factors leading to the recognition of goodwill are the
value of the assembled OSIsoft, LLC workforce and the future
synergy benefits expected to arise from integrating the two
combined businesses.
Costs incurred in the year ended 31 March 2021 that were
directly attributable to raising debt (GBP2.9 million) and equity
(GBP28.6 million) were offset against the corresponding financial
liability and share premium respectively. All remaining transaction
costs were expensed and included within administrative expenses.
Additional details are included within note 5.
From acquisition date to 31 March 2021, OSIsoft, LLC contributed
revenue and profit after tax of GBP20.7 million and GBP10.8 million
respectively in the Consolidated Income Statement, before a revenue
haircut of GBP3.3 million. If the acquisition had occurred on 1
April 2020, the Consolidated Income Statement would have presented
revenue of GBP1,196.1 million and profit after tax of GBP48.1
million (at an effective tax rate of 5.5%) in the 12 months to 31
March 2021, before a revenue haircut of approximately GBP53.0
million.
b) Disposal of Acquis Software, Termis Software and Water Loss Management Software business
On 11 May 2021 the Group entered into an agreement to sell the
business and assets of Acquis Software, Termis Software and Water
Loss Management Software to Schneider Electric for an aggregate
consideration of GBP1.6 million. This transaction was made at arm's
length, with the consideration set based upon independent advice
and resulted in a net cash inflow of GBP1.6 million.
This completed on 30 June 2021. A loss on disposal of GBP2.8
million was recognised, calculated as follows:
Total
GBPm
--------------------- ------
Cash consideration 1.6
--------------------- ------
Gross consideration 1.6
Net assets disposed (4.4)
--------------------- ------
Loss on disposal (2.8)
--------------------- ------
Net assets disposed comprised:
Total
GBPm
--------------------------- ------
Non-current assets
Goodwill 5.2
Other intangible assets 0.1
--------------------------- ------
Total non-current assets 5.3
--------------------------- ------
Current liabilities
Contract liabilities (0.9)
--------------------------- ------
Total current liabilities (0.9)
--------------------------- ------
Net assets 4.4
--------------------------- ------
The net loss on disposal is included within other
(expense)/income. Disposed goodwill of GBP5.2 million has been
allocated to the following CGUs, based on the value of cash flows
for the disposed business relative to the cash flows for the CGU
overall:
-- Americas: GBPnil
-- Asia Pacific: GBP1.9 million
-- EMEA: GBP3.3 million
10. Trade and other receivables
2022 2021
GBPm GBPm
--------------------------------------------- ------ ------
Current
Trade receivables 287.3 245.3
Amounts owed from related parties (note 13) 37.6 21.6
Prepayments and other receivables 56.3 51.1
--------------------------------------------- ------ ------
381.2 318.0
--------------------------------------------- ------ ------
Non-current
Trade and other receivables 8.4 19.4
--------------------------------------------- ------ ------
8.4 19.4
--------------------------------------------- ------ ------
11. Cash and cash equivalents
2022 2021
GBPm GBPm
--------------------------------------------- ------ ------
Cash at bank and in hand 105.7 279.7
Short-term deposits 173.6 6.9
--------------------------------------------- ------ ------
Net cash and cash equivalents per cash flow 279.3 286.6
Restricted cash - 7.3
--------------------------------------------- ------ ------
279.3 293.9
--------------------------------------------- ------ ------
GBP11.6 million of cash at bank and in hand was held in Russia
at 31 March 2022. Due to the introduction of international
sanctions upon Russian entities, cash is likely to remain deployed
within Russian operations whilst sanctions remain in force.
Restricted cash represented funds held in escrow in relation to
the acquisition of OSIsoft, LLC. This was released during the year
ended 31 March 2022 as a result of the finalisation of the
completion accounts process.
Short-term deposits are made for varying periods of between one
day and three months, depending on the immediate cash requirements
of the Group, and earn interest at the respective fixed short-term
deposit rates.
12. Trade and other payables
2022 2021
GBPm GBPm
--------------------------------------- ------ ------
Current
Trade payables 30.0 39.6
Amounts owed to related parties (note
13) 6.2 1.5
Social security, employee taxes and
sales taxes 21.1 28.5
Accruals 148.7 176.8
Other liabilities 18.0 24.9
--------------------------------------- ------ ------
224.0 271.3
--------------------------------------- ------ ------
Non-current
Other liabilities 10.7 18.2
--------------------------------------- ------ ------
10.7 18.2
--------------------------------------- ------ ------
Trade payables are non-interest bearing and are normally settled
on terms of between 30 and 60 days. Social security, employee taxes
and sales taxes are non-interest bearing and are normally settled
on terms of between 19 and 30 days. The Directors consider that the
carrying amount of trade and other payables approximates their fair
value.
Accruals have reduced year-on-year following the payment of
transaction related costs associated with the acquisition of
OSIsoft, LLC.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
a) Schneider Electric Group companies
Schneider Electric SE is the Group's majority shareholder.
During the year, Group companies entered into the following
transactions with Schneider Electric Group companies:
2022 2021
GBPm GBPm
--------------------------------- ------ ------
Sales of goods and services 104.6 62.2
Purchases of goods and services (6.8) (3.4)
Interest expense on term loan (8.6) (0.2)
Other non-trading transactions 1.6 13.7
--------------------------------- ------ ------
On 19 March 2021, the AVEVA Group received a US $900.0 million
term loan from Schneider Electric Holdings Inc to assist in the
funding of the acquisition of OSIsoft, LLC. The term loan bears
interest of LIBOR plus a margin and is repayable three years from
the inception date on 19 March 2024.
Other non-trading transactions of GBP1.6 million (2021: GBPnil)
comprised the sale of Acquis Software, Termis Software and Water
Management Software. See note 9(b) for further details.
In the year ended 31 March 2021, other non-trading transactions
of GBP13.7 million related to amounts received in reimbursement for
expenditure incurred as part of the Group's migration from
activities covered by Transitional Service Agreements following the
combination with the Schneider Electric industrial software
business. Of these transactions, GBP8.5 million related to
operating expenses incurred, and GBP5.2 million to capital
expenditure.
The Transitional Service Agreement with Schneider Electric ended
on 31 August 2021. A new Service Agreement was entered into on 1
September 2021 under which Schneider Electric (through SE Digital)
will continue to provide ERP-related support services until 31
December 2023 whilst the AVEVA Group completes its global roll out
of the new ERP system.
As disclosed on page 91 of the Group's 2021 Annual Report, Peter
Herweck has retained his Schneider Electric LTIP share options and
continued to participate in his Schneider Electric pension
arrangement, with the cost being met by Schneider Electric.
.
The Group did not make any payments to Schneider Electric SE,
the parent company of the Schneider Electric Group (2021: GBPnil).
All transactions were with subsidiary companies within the
Schneider Electric Group.
As at 31 March, Group companies held the following balances with
Schneider Electric Group companies:
2022 2021
GBPm GBPm
------------------------- -------- --------
Trade receivables 37.6 18.9
Trade payables (5.8) (1.3)
Non-trading receivables - 2.7
Non-trading payables (0.4) (0.2)
Term loan(1) (685.1) (654.8)
------------------------- -------- --------
1. This balance represents the contractual obligation owed to
Schneider Electric Group companies. The carrying value per the
Consolidated Balance Sheet is stated after offsetting directly
attributable costs for obtaining this financing.
All balances held were with subsidiary companies within the
Schneider Electric Group.
Terms and conditions of transactions with related parties
Outstanding balances at 31 March 2022 are unsecured, and
settlement occurs in cash. There have been no guarantees provided
or received for any related party receivables or payables. For the
year ended 31 March 2022, the Group has recorded impairment against
GBP1.0 million of receivables relating to amounts owed by related
parties situated in Russia (2021: GBPnil). This assessment is
undertaken each financial year through examining the financial
position of the related party and the market in which the related
party operates. The amounts set out in the table above are stated
before impairment.
b) Transactions with other related parties
Dr J Patrick Kennedy controls 4.4% (2021: 4.5%) of the issued
ordinary share capital of AVEVA Group plc through his controlling
ownership of Estudillo Holdings Corp and is Chairman Emeritus of
the Group, a board advisory position.
During the period, Group companies entered into the following
transactions with Dr J Patrick Kennedy, and with companies in which
Dr J Patrick Kennedy has a shareholding:
2022 2021
GBPm GBPm
-------------------------------- ----- -----
Purchase of goods and services 4.1 0.1
Chairman Emeritus salary 0.2 -
-------------------------------- ----- -----
Non-GAAP measures
The Group presents various non-GAAP measures, which management
believes provide useful information for understanding the Group's
financial performance. These non-GAAP measures should be considered
in addition to IFRS measures and are not intended to be either a
substitute for them or superior to them.
As non-GAAP measures are not defined by IFRS, they may not be
directly comparable with other companies who use similar
measures.
The Group's non-GAAP measures are consistent with those
presented in the 2021 Annual Report, except for:
-- Standalone AVEVA and standalone OSIsoft results are not
reported. Management believes presentation of separate results is
not required due to the ongoing integration of OSIsoft into the
Group.
-- Normalised items have been redefined to:
o include the impact of the tax step up arising on the
acquisition of OSIsoft;
o remove the impact of fair value adjustments on financial
derivatives; and
o include the impact of amortisation of other software.
-- Net cash has been redefined to:
o include the US $900 million term loan drawn down on 19 March
2021; and
o exclude treasury deposits.
It has consequently been renamed net debt.
-- Cash conversion has been redefined also resulting in the
inclusion of free cash flow before tax as a non-GAAP measure.
Further information, definitions, the intent in presenting, and
a reconciliation from the nearest IFRS measure are provided
below.
Non-GAAP Closest Definition and purpose
measure equivalent
IFRS measure
Pro forma Group GAAP Pro forma results are presented to provide a year-on-year
results results performance comparison for the Group, given the
significant impact of the OSIsoft acquisition on
the Group's results for the year ended 31 March
2022. Management have considered pro forma results
in the day-to-day running of the business for the
year ended 31 March 2022, and they have been incorporated
into performance elements of employee bonus and
share schemes.
Pro forma results do not represent the enlarged
Group's actual results and do not purport to represent
what the combined results would have been in comparative
periods. They share the same limitations as adjusted
results and present a more favourable view than
GAAP measures. In addition, due to the acquisition
of OSIsoft completing close to the year-end, comparatives
for the year ended 31 March 2021 do not represent
the legal form of the Group for the full 12 months
and include results that are not attributable to
the Group's shareholders.
Pro forma results for the year ended 31 March 2022
Pro forma results for the year ended 31 March 2022
are prepared on an adjusted basis and additionally
exclude the impact of the deferred revenue haircut
(see definition below).
Pro forma results for the year ended 31 March 2021
* Pro forma results for the year ended 31 March 2021
have been prepared on the basis that:
* The financial information is the combination of the
consolidated financial statements of AVEVA Group plc
and OSIsoft, LLC for the year to 31 March 2021.
* No pro forma adjustments have been made to reflect
synergies or cost savings that may be expected to
occur as a result of the acquisition, nor have any
adjustments been made to reflect the stand-alone
costs expected.
* There has been no trading between the two groups for
either of the years presented.
* The term loan was entered into on 1 April 2020, and
interest accrued from that date.
Pro forma adjusted diluted EPS
The pro forma adjusted diluted EPS calculation
assumes:
* Rights issue shares were issued on 1 April 2020.
* Rights issue adjustments for unexercised share
options at the date of the rights issue were made at
the later of 1 April 2020 and the share option award
date.
* No timing adjustments made for actual or potential
share option awards to OSIsoft employees.
For reconciliations, see:
* Section a below for pro forma results, pro forma
constant currency results, and pro forma organic
constant currency results.
--------------- ------------------------------------------------------------
Normalised No direct The following changes have been made to the definition
items equivalent of normalised items in the year ended 31 March
2022:
* The tax step up has been included within normalised
items for the first time. This benefit accrues evenly
across the financial year and, given the proximity of
the completion of the OSIsoft acquisition to the
year-end (such that the benefit only accrued for 13
days in the year ended 31 March 2021), it did not
have a material impact in previous years. Note that
this is a tax effect, and hence does not impact
pre-tax measures such as adjusted EBIT or pro forma
adjusted EBIT.
* Fair value adjustments on financial derivatives have
been removed from normalised items for the year ended
31 March 2022. This is due to their relative
immateriality compared to the Group's results (2022:
GBP0.3 million, 2021: GBP(0.7) million) and is
intended to simplify the Group's normalised items.
* Amortisation of intangible assets has been expanded
to include amortisation of other software for the
year ended 31 March 2022. Historically, this category
has been presented as amortisation of intangible
assets (excluding other software). This is due to the
relative immateriality of amortisation of other
software compared to the Group's results (2022:
GBP0.2 million, 2021: GBP0.6 million), and is
intended to simplify the Group's normalised items.
* The tax impact of normalised items is included in the
reconciliation to adjusted profit after tax in note 8
above.
For additional information and reconciliations,
see:
* Normalised items are included on the face of the
Consolidated Income Statement in the reconciliation
to adjusted EBIT.
* Normalised items are included in the reconciliation
to adjusted and pro forma results in section a below.
--------------- ------------------------------------------------------------
Net debt No direct Total cash, cash equivalents, overdrafts, and the
equivalent carrying value of the Group's term loan. This metric
was called net cash in previous years.
The definition of net debt has changed to:
* include the carrying value of the Group's term loan.
This term loan was drawn down on 19 March 2021 and
has been included as it is a significant future
obligation affecting the Group's liquidity; and
* exclude treasury deposits, due to their relative
immateriality.
Net debt is a measure of the strength of the Group's
balance sheet.
See section b below for a reconciliation.
--------------- ------------------------------------------------------------
Cash conversion No direct Free cash flow before tax (see definition below)
equivalent as a percentage of the Group's adjusted profit
before tax (the Group's profit before tax excluding
exceptional and normalised items). This is a financial
target for the Group, which targets an average
100% cash conversion for the five-year period from
the financial year ending 31 March 2022 to the
financial year ending 31 March 2026. Additionally,
this is included as a strategic target within the
Executive Directors' bonus scheme for the year
ended 31 March 2023.
This measures how efficiently the Group's profit
are converted into cash for organic investment,
M&A and returns to shareholders.
The definition of cash conversion has changed from
that presented in the 2021 Annual Report. Previously,
cash conversion was defined as cash generated from
operating activities before tax as a percentage
of adjusted EBIT. Management believes that use
of free cash flow before tax, and inclusion of
cash outflows necessary as part of the Group's
day-to-day operations, provides a better indication
of the Group's trading performance.
See section c below for a reconciliation.
--------------- ------------------------------------------------------------
Free cash Cash generated Free cash flow before tax is used in determining
flow before from operating cash conversion (see definition above). It is calculated
tax activities as :
before * cash generated from operating activities before tax;
tax plus
* capital expenditure, lease repayments, interest paid
and received, purchase of own shares; excluding
* cash outflow on M&A related exceptional items.
See section c below for a reconciliation.
--------------- ------------------------------------------------------------
a) Reconciliation to adjusted and pro forma results
31 March 2022
Pro
Impact Pro forma
of forma Disposal organic
Normalised Exceptional Revenue Pro foreign constant of constant
Statutory items items Adjusted haircut forma exchange currency business currency
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ---------- ----------- ------------ --------- -------- -------- --------- --------- --------- ---------
Revenue 1,185.3 - - 1,185.3 50.3 1,235.6 42.5 1,278.1 (0.7) 1,277.4
Cost of sales (232.5) - 0.2 (232.3) - (232.3) (8.0) (240.3) 0.9 (239.4)
---------------- ---------- ----------- ------------ --------- -------- -------- --------- --------- --------- ---------
Gross profit 952.8 - 0.2 953.0 50.3 1,003.3 34.5 1,037.8 0.2 1,038.0
Operating
expenses
Research &
Development
costs (343.3) 164.6 0.5 (178.2) - (178.2) (5.7) (183.9) 0.5 (183.4)
Selling and
distribution
expenses (345.4) 61.3 3.4 (280.7) - (280.7) (9.1) (289.8) - (289.8)
Administrative
expenses (246.3) 27.6 38.8 (179.9) - (179.9) (6.0) (185.9) - (185.9)
Net impairment
(loss)/gain
on financial
assets (6.7) - 7.3 0.6 - 0.6 (0.1) 0.5 - 0.5
Other expense (17.6) - 17.6 - - - - - - -
---------------- ---------- ----------- ------------ --------- -------- -------- --------- --------- --------- ---------
Total operating
expenses (959.3) 253.5 67.6 (638.2) - (638.2) (20.9) (659.1) 0.5 (658.6)
---------------- ---------- ----------- ------------ --------- -------- -------- --------- --------- --------- ---------
(Loss)/profit
from
operations (6.5) 253.5 67.8 314.8 50.3 365.1 13.6 378.7 0.7 379.4
Finance revenue 1.9 - - 1.9 - 1.9 0.1 2.0 - 2.0
Finance expense (14.0) - - (14.0) - (14.0) (0.5) (14.5) - (14.5)
---------------- ---------- ----------- ------------ --------- -------- -------- --------- --------- --------- ---------
(Loss)/profit
before tax (18.6) 253.5 67.8 302.7 50.3 353.0 13.2 366.2 0.7 366.9
---------------- ---------- ----------- ------------ --------- -------- -------- --------- --------- --------- ---------
31 March 2021
Term Disposal Pro
Normalised Exceptional Revenue Pre-acquisition loan Pro of forma
Statutory items items Adjusted haircut OSIsoft interest forma business organic
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ---------- ----------- ------------ --------- -------- ---------------- --------- -------- --------- --------
Revenue 820.4 - - 820.4 3.3 372.4 - 1,196.1 (3.9) 1,192.2
Cost of sales (181.3) - 0.8 (180.5) - (48.6) - (229.1) 0.9 (228.2)
---------------- ---------- ----------- ------------ --------- -------- ---------------- --------- -------- --------- --------
Gross profit 639.1 - 0.8 639.9 3.3 323.8 - 967.0 (3.0) 964.0
Operating
expenses
Research &
Development
costs (184.5) 67.8 0.3 (116.4) - (52.1) - (168.5) 0.5 (168.0)
Selling and
distribution
expenses (226.8) 27.9 3.9 (195.0) - (83.1) - (278.1) - (278.1)
Administrative
expenses (193.0) 16.3 78.3 (98.4) - (63.7) - (162.1) - (162.1)
Net impairment
loss on
financial
assets (3.7) - - (3.7) - 0.1 - (3.6) - (3.6)
Other income 5.5 - (5.5) - - - - - - -
---------------- ---------- ----------- ------------ --------- -------- ---------------- --------- -------- --------- --------
Total operating
expenses (602.5) 112.0 77.0 (413.5) - (198.8) - (612.3) 0.5 (611.8)
---------------- ---------- ----------- ------------ --------- -------- ---------------- --------- -------- --------- --------
Profit from
operations 36.6 112.0 77.8 226.4 3.3 125.0 - 354.7 (2.5) 352.2
Finance revenue 0.6 - - 0.6 - 0.1 - 0.7 - 0.7
Finance expense (3.0) - - (3.0) - (0.9) (12.8) (16.7) - (16.7)
---------------- ---------- ----------- ------------ --------- -------- ---------------- --------- -------- --------- --------
Profit before
tax 34.2 112.0 77.8 224.0 3.3 124.2 (12.8) 338.7 (2.5) 336.2
---------------- ---------- ----------- ------------ --------- -------- ---------------- --------- -------- --------- --------
b) Net debt
2022 2021
GBPm GBPm
--------------------------- -------- --------
Cash and cash equivalents 279.3 286.6
Loans and borrowings (684.5) (654.0)
--------------------------- -------- --------
Net debt (405.2) (367.4)
--------------------------- -------- --------
c) Cash conversion
2022 2021
GBPm GBPm
--------------------------------------------------------- ------- -------
Net cash generated from operating activities before
tax 197.2 91.2
Operating activities cash flow impact from exceptional
items (M&A related)
* Acquisition of OSIsoft 19.2 26.0
* Disposal of Acquis Software, Termis Software and
Water Loss Management Software business - -
* OSIsoft transaction bonus(1) 48.2 -
--------------------------------------------------------- ------- -------
264.6 117.2
Purchase of property, plant and equipment (8.6) (10.9)
Purchase of intangible assets - (0.5)
Interest received 1.9 0.3
Interest paid (12.7) (2.8)
Purchase of own shares (1.3) (1.1)
Payment of principal element of lease liability (23.3) (18.5)
--------------------------------------------------------- ------- -------
Free cash flow before tax 220.6 83.7
--------------------------------------------------------- ------- -------
Adjusted EBIT 314.8 226.4
Deferred revenue haircut 50.3 3.3
Finance revenue 1.9 0.6
Finance expense (14.0) (3.0)
--------------------------------------------------------- ------- -------
Adjusted profit before tax 353.0 227.3
--------------------------------------------------------- ------- -------
Cash conversion 62.5% 36.8%
--------------------------------------------------------- ------- -------
1. A one-off transaction bonus paid to OSIsoft employees. This
was recognised in the acquired OSIsoft balance sheet.
Directors
Philip Aiken
Chairman
Peter Herweck
CEO
James Kidd
Chief Strategy and Transformation Officer
Christopher Humphrey
Senior Independent Non-Executive Director
Jennifer Allerton
Independent Non-Executive Director
Olivier Blum
Non-Executive Director
Paula Dowdy
Independent Non-Executive Director
Dr. Ayesha Khanna
Independent Non-Executive Director
Hilary Maxson
Non-Executive Director
Ron Mobed
Independent Non-Executive Director
Anne Stevens
Independent Non-Executive Director
Responsibility statement pursuant to FSA's Disclosure and
Transparency Rule 4 (DTR 4)
Each Director of the Company (whose names and functions appear
above) confirms that (solely for the purpose of DTR 4) to the best
of his/her knowledge:
-- the financial information in this document, prepared in
accordance with the applicable UK law and applicable accounting
standards, give a true and fair view of the assets, liabilities,
financial position and result of the Company and of the Group taken
as a whole; and
-- the Chairman's statement, Chief Executive's strategic review
and Finance review include a fair review of the development and
performance of the business and the position of the Company and
Group taken as a whole, together with a description of the
principal risks and uncertainties that they face.
On behalf of the Board
Philip Aiken Peter Herweck
Chairman CEO
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR UPUGAQUPPUGR
(END) Dow Jones Newswires
June 08, 2022 02:01 ET (06:01 GMT)
Aveva (LSE:AVV)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Aveva (LSE:AVV)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024
