Schnitger Corporation

Quickie: Historic AVEVA surged in FY18

Quickie: Historic AVEVA surged in FY18

Jun 14, 2018 | Hot Topics

AVEVA had an awesome fiscal 2018 (ended March 31). You’ll recall that the AVEVA merged with Schneider Electric Software earlier this year to create a much bigger company with software that reaches from plant design to operations. That combined group reported revenue £705 million, up a respectable 9% if compared to the theoretical merged businesses in fiscal 2017 as well. The historic AVEVA reported revenue of £248 million, up a strong 15% as reported and up 13.5% in constant currencies. Historic AVEVA benefitted from one mega deal that added 3% of that growth, to me an endorsement of both AVEVA’s technology and the forward-looking potential of the larger group. The historic Schneider Electric Software saw revenue growth of 5% to £456 million — but half of that growth was from a commercial agreement with Schneider Electric, so external customers contributed maybe 2.5% of growth.

In prepared remarks, CEO Craig Hayman said that his “initial focus has been ensuring we remain on track with the integration of the two businesses while spending time with customers, investors and employees around the world. I’ve established new leadership teams to drive the business including an Executive Leadership Team and Strategy Leadership Team, which work hand-in-hand with the regional sales teams and the business units … In the current year, we are focused on integrating the businesses whilst driving performance through improved execution. In the medium-term we expect to drive stronger growth assisted by the positive trend of the ongoing digitalisation of industry, an optimisation of our products and go-to-market strategies, and capitalising on the synergies outlined above.”

Clearly still a work in progress.

AVEVA doesn’t give guidance but all of the broker reports I’ve seen indicate growth of at least5% for the overall group, led by stronger historic AVEVA and slightly weaker historic Schneider Electric. AVEVA has/is hosting a web briefing on this today and will hold an investor event in September — both of those should start laying out strategies to capitalize on the trends Mr. Hayman laid out above.

Much more after I see the replay of today’s investor call.

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