Avanquest weaves a new web presence

Transcription

1 Avanquest Software 2008/09 Strategyt Avanquest weaves a new web presence

2 From Start-up to World Leader From 1984 to 2007: 21 years of profitable growth in 24 years GROUP START-UP 1984 Creation of BVRP Software 1995 Launch of WinPhone in France 1995 Launch of Phone Tools internationally The foundations of an international group ACCELERATED GROWTH 1996 Introduced on the stock exchange 2002 Launch of Mobile Phone Tools Geographic expansion and enhancement of the catalog through external growth Present on 3 continents ts + a line of 300 products in 27 languages CHANGE IN SIZE January 2007 Acquisition of Nova Development in the U.S. April 2007 Acquisition of the Emme group in Europe May 2007 Acquisition of Software Paradise in the U.K. A position as worldwide leader (top 10) in consumer software publishing

3 2007: A Year of Change Unfavorable evolution of the economic environment Decline in world economic growth European retail software market down sharply Sharp drop in the US dollar and British pound A rapidly evolving software industry Increasing power of the Internet Emergence of new software distribution modes (free software, subscription, portals) Development of one-line user communities A change in size for Avanquest A year devoted to consolidating teams and optimizing facilities Streamlining of product catalogs and business An economic environment and reorganization costs having a major impact on total sales and earnings for 2007/2008 An opportunity for Avanquest to reinvent itself!

4 Avanquest s response to the challenges of software publishing Because there is no growth without innovation RESEARCH AND DEVELOPMENT FOCUSING on designing innovative software in rapidly growing categories Because the Internet is revolutionizing habits and behaviors SALES SPEEDING UP Growth in all distribution channels by leveraging emerging Internet distribution modes «Because technology is a way of life that should be shared» MARKETING INNOVATING Among consumers and professionals by creating Web-based based opportunities for contact: viral marketing, e-pr, free distribution, community

5 /2009: Reinventing itself: the Internet at the heart of the Group s strategy The Group has demonstrated its ability to reinvent itself» 1996: opening of the American subsidiary (today 45% of total sales)» 2002: refocusing on software with sale of nonstrategic assets (33% of total sales) t t att th strategy t t 2008 IInternet the h heartt off th the G Group s A strategy made d credible dibl by the current performance of our e-commerce business, in terms of g growth/results

6 08 Avanquest weaves its Web on the Internet The Internet: driving synergy among all businesses Examples :» Viral Marketing and e e-pr PR promote sales in all channels» The Avanquest community will influence software design» Internet portals for sales to companies will support the international spread of the Corporate Software business» The Avanquest community project will raise our Internet profile fil and d encourage sales l of our software in all channels

7 08 Avanquest Product Design: Preparing for the future of the software industry Objectives ` Strengthen sales of internally developed software in each channel ` Shorten development cycles: reduction in cost and time to market by y modulating g applications, pp, offshore,, subcontracting ` Complete the pool of existing bestsellers (Mobile PhoneTools, Fix-It, WebEasy, Print Artist) Strategy ` Concentrate on the most dynamic categories» Security, Security mobile convergence convergence, multimedia, multimedia diagnostics/optimization ` Focus development efforts on a more limited line» With strong potential in each of the identified categories» Adapted to all channels: Web, Web Corporate Corporate, OEM and Retail ` Invest in new products that will drive future growth» Software combining off- and on-line (zero install, SAS), mobility applications, multimedia and DLNA utilities (interoperability of all peripherals in the PC ecosystem)» Rely on next-gen technologies, like WPF (Windows Presentation Foundation) for classic applications, Flex and Silver Light for online

8 Priority for innovation Internet-PC-Mobility Convergence Illustration with the SendPhotos Mobile software SendPhotos Mobile proprietary technology offers a solution for managing and sharing 3G cellphone photos by Internet; Complete convergence solution with the addition of mobility to the Internet and to the customer s PC Social networking software enabling automatic sending of photos to Flickr, FaceBook or MySpace, or securely sharing photos with friends/family The Social Networking Photo Software This software will be launched in September boosted by Viral Marketing, e-pr, and promotion via free software

9 OEM, Internet-PC-Mobility convergence New software solutions Digital Frame Manager won over Telefunken Fix-It and System Suite Essentials in their OEM versions are winning over Internet operators and Internet access providers New applications and sales methods By optimizing customer PC performance, software is becoming a key factor in reducing the costs of technical support and winning customer loyalty Viral distribution with live update A new Software as a Service business model Tested successfully for 12 months in the USA U.S.A.» Our software is offered by Internet operators and Internet access providers as a service with a monthly subscription The objective is to make OEM Avanquest s showcase

10 08 Corporate Sales Globalization with the Internet Strategy ` Develop a global offer by relying on the dual expertise of Avanquest Solutions and Software Paradise, online site for Corporate software sales Means ` Implementation of a global Corporate direct-sale catalog based on Software Paradise ` Deployment of a Corporate portal intended for retailers to support their indirect sales locally.

11 08 From Retail to e-retail Consoliding our market share Objective ` In a very competitive and declining market segment, consolidate our positions in each territory and develop the level of sales in a competitive environment Strategy 1st focus ` A policy of selective line development based on the Avanquest North America model» Create a limited line according to potential for growth» Concentrate the marketing investment on a limited number of major products ` Agreements with refocused third-party publishers» To promote acquisition of potential bestsellers ` Promote a selection of internally developed software» Scheduling major launches

12 From Retail to e-retail Expanding distribution channels Strategy 2 nd focus Develop a proactive approach to e-retailers in all territories» Today e-retailers represent 7% of the software market» This market segment is growing fast and is compensating for the decline in the retail market Establish a direct-to-consumer sales business on every continent that complements our Web store» Paper mail (cards, coupons ) coupled with ings (electronic DTC)» Making it possible to reach the consumers buying direct off the Web Strategy- 3rd focus Develop a «casual games» strategy in Europe» A strategy already successfully applied to the British market» A low-risk activity» Priority targeting of PC and Nintendo DS console games, to benefit from this fast-growing g market segment, without changing the group s main objectives

13 Speed up e-commerce with a Next-Gen e-marketing strategy Invest in three main directions to speed up the growth of the Internet channe From 3M to 15M in sales in 4 years CYBER MARKETING Already 15 m. customers and possibly 1 m. more each month Potential access to 75 million customers 80% of sales by download! VIRAL Target Attract Trial versions Win loyalty y MARKETING Free downloads and e-pr Establishing a dedicated Viral Mkg team BUSINESS DEVELOPMENT Designing specific products Developing affiliation programs Implementing specialized Make Avanquest the online store of reference

14 08 Extend Avanquest s reach with the birth of a Community The Software Café e So t a e Ca é Objectives ` Create a place for exchanges that will reinforce Avanquest s relationship with its customers ` Establish a community sharing enthusiasm, ideas and product support: A Breakthrough in Living with Technology A Web 2.0 community where software users can interact, share their knowledge and offer assistance through their expertise An image vector: the FaceBook of the software world ` Each user will have his own profile and be able to collect friends, tell what kinds of software they use, give advice on our products and subscribe to many interactive services A growth engine with loyal, participating users Launch the Software Café by inviting our existing Avanquest customer base of more than 10 million registered users

15 The assets of a Global Group Worldwide market access A network covering 3 continents 11 subsidiaries in Europe, the U.S.A. and Asia An unrivaled catalog A strategy of complementary brands:» Avanquest internally developed software as intellectual asset» Well known brands published by Avanquest (Berlitz, Hachette Multimedia, Hallmark ) A balanced geographical presence A diversification of revenue source Mastery of all sales channels 4 sales circuits: it Amulti-channel sales strategy e-commerce, Corporate, OEM and Retail Strong development of e-commerce An ongoing approach of technological innovation Worldwide bestsellers: WinPhone, Mobile PhoneTools, Connection Manager, Fix-It Utilities, WebEasy, Digital Frame Manager, Print Artist, SendPhotos 662 employees including 196 engineers Nearly 10M in R&D investments in 2007/08 A balanced sales distribution

16 : Profitable growth as our top Priority A Group with solid fundamentals and a confident outlook After 2 years of investments that enabled Avanquest Software to join the world s top 10 software publishers, the group will concentrate t on organic growth and profitability A diversified business model supporting an ambitious strategy Being both software developer and publisher of third-party software has been an asset in Avanquest s development, Introducing innovative i new bestsellers developed d in-house will be the key to ensuring the group s long-term profitable growth. A winning strategy Profiting from the newest trends in Internet use, the new strategy will allow profitable sales growth in each channel and territory

17 A year of consolidation impacted by an unfavorable economic environmen Revenue distribution OEM : 6% Retail :55% Corporate : 22% Special deals : 4% Web : 13% Revenues of M are below expectations because of: The drop in the US dollar and British pound ( 2M impact on the last quarter) A declining European market on most software categories addressed by Avanquest. The French and German business units have been particularly impacted. The sales fall of our main OEM customer This counter-performance should not eclipse the excellent dynamic of the US Retail This counter performance should not eclipse the excellent dynamic of the US Retail revenue, along with Web and Corporate sales, all posting two-digit growth.

18 A year of consolidation impacted by an unfavorable economic environmen Strongly impacted by the $ and fall, currencies of the most profitable business units of the group, as well as by the bad performances of the French and German subsidiaries during the last quarter, the operating result (before non recurring items) is estimated at a loss of 1,2M for the last 12 months (unaudited d figures). As a result of the structure optimization and product line rationalization, deeper than initially anticipated to ensure a profitable growth for the years to come, an exceptional expenditure of 5M is now projected.

19 Avanquest three year objective For the 2008/09 FY, 115M to 120M in sales and 4 to 6% EBIT are projected These figures incorporate the negative dollar and British pound impact on sales of about 9M (the average budgeted rate is 1 = $1.6) At a constant exchange rate, organic growth is between 7 and 12% Positive operating income that t will reflect the reduction in costs and the evolution of the business model 2009/10 projections: 125M to 135M in sales and 6 to 8% EBIT 2010/11 projections: 135M to 150M in sales and 8 to 10% EBIT A willingness to give visibility while staying cautious given the economic context

20 Thank you for your attention All questions are welcome