AVEVA says full steam ahead

AVEVA issued one of its periodic trading updates — they don’t really say much but seem to be required to coincide with parent company Schneider Electric’s earnings releases. Schneider Electric is on a December year-end, quarterly pattern while AVEVA reports bi-annually with a March year-end. In all, a mishmash. I still need to listen to Schneider’s results, but AVEVA’s performance was positive:

AVEVA says it “delivered low double-digit revenue growth on a full year, pro forma IFRS 15 basis” in the March quarter and that “this growth included some benefit from upfront revenue recognition on multiyear rental contracts”. We’ll have to find out exactly what that means for this and future periods when we have real numbers.

The company also hinted to investors that, while operating margins improved over the prior year, it might not be as much of an improvement as some wanted. More sales means higher costs of sales, in commissions and other expenses, and the integration of Schneider Electric Software and AVEVA products plus filling the gaps all cost money, lowering margins.

So for a non-statement, pretty much “all systems go, nothing to see here”.

For its part, Schneider’s press release said that “AVEVA conclude[d] a remarkable first year and confirms the strategic rationale of the transaction” — but they’d say that in any event, right? — and that “AVEVA benefitted from sales in conjunction with Schneider Electric’s automation offers through a coordinated go-to-market approach. This performance highlights the good traction for its end-to-end digital solution from design and build to operation and maintenance for operators in hybrid and process end-markets.”

We’ll learn more when AVEVA itself announces results on May 29.