Resilience in a time of uncertainty
In times of uncertainty we are often advised to not dwell in the past or dream of the future, but to concentrate the mind on the present. While I largely subscribe to that thinking, we recently announced our financial results for the year – an event which gives everyone a chance to look at the journey we’ve taken, where we are now and the direction we’re heading. The theme that fuels our journey today, and that of our customer, is resilience through digitalization.
Let’s start with the past 12 months. I am very pleased with AVEVA’s performance over the last year. The Group has grown as we play a leading role in the digitalization of the industrial world, which is being driven by a need for sustainability, the industrial internet of things (IIoT), Cloud, data visualization and artificial intelligence (AI). At the same time, we continued to drive operational improvement throughout the business, which is increasing recurring revenue and margins. But any success is we enjoy today - and tomorrow - will ultimately be down to our loyal customers and shareholders, strong alliances and investments, as well as our unwavering commitment to our employees and the communities we operate in. People often forget the human aspect of digitalization, and so I want to ensure that no matter how amazing technology can be, people remain vital to making it matter.
Resilience is something we help create for our customers, but it is also part of AVEVA’s character too. From our people to our products, our business model to our strategy – resilience is a virtue of AVEVA.
Good Financial Performance and A Solid Steady Medium-Term Plan
From a financial standpoint, it’s pleasing to report that over the last 12 months we’ve grown revenues, profit and maintained our dividend – reflecting our confidence in AVEVA’s resilience, strong balance sheet position and ongoing cash generation, balanced with prudence regarding the global economic crisis. This has been achieved while investing in innovation and our people – the cornerstones of any great software companies.
Operationally, we saw growth across all geographic regions, with Asia Pacific particularly strong. Each of our Business Units grew, with strong growth in Asset Performance Management and Planning & Operations. We also launched new products including Unified Engineering and Unified Operations Control Centre, including Unified Operations Centre for Datacenters – an exciting new area for AVEVA.
Our Solutions Are Driving Customer Efficiency
Across the board, we see a high level of interest from organizations who want to quickly move their digital agenda forward and we are doing great things with our customers. For example, Olam, a global agriculture and food producer, selected AVEVA to drive operational excellence and sustainability. We have also built a strategic partnership with Nestlé, an AVEVA customer for more than two decades, help create efficiencies and resilience in its manufacturing process.
On the topic of AI, our customers are increasingly looking how higher degrees of automation and better cognitive solutions through emerging technology can transform their digital experience, and AVEVA will be there to be the AI-infused solution partner they need. Though it’s now commonplace for CEOs to talk about the big opportunity within AI, for AVEVA and its customers, that opportunity is very real. We have an incredibly broad portfolio, meaning we can infuse AI into products and portfolios to make them smarter. We can also integrate and connect the different AI modules together into a broader intelligence, using the cloud. The combined analysis helps generate more complex insights and recommendations for the human workforce, allowing teams to do more complex things, quicker. Because it is all delivered through the cloud, we can leverage the breadth of AVEVA’s whole portfolio – cloud is the glue and AI the intelligence that underpins better decisions.
Two customers examples that help illustrate the change that is occurring. Duke Energy have harnessed AVEVA’s AI capability to avoid costly operational failures. Energy company, ENEL, is now using AVEVA for next-gen predictive maintenance to leverage AI-driven simulation and forecasting - lowering risk and improving decision-making throughout its operations.
To highlight another strand of our resilience, we seek to grow our recurring revenues and drive cloud adoption. From the inside out - we are focused on being digital in everything that we do, accelerating Cloud and uptake and driving the roll out of our subscription offering, AVEVA Flex. This gives us greater visibility and shows that we’re stickier with our customers who are each undertaking digital journeys. The output we ended the year with recurring revenue already exceeding our medium-term target.
The Well-Being of Our Employees Is Paramount
When we think about the here and now, there’s clearly one topic that is front and center of every conversation, and that is the COVID-19 pandemic. AVEVA’s team has adapted impressively to the current market and operating environment. The safety of our employees is paramount, and I was very pleased that we managed to deliver a successful close to our financial year with 95% of employees working remotely.
Supporting Environmental Sustainability and Creating Better Living Standards
Looking to future, AVEVA is well placed to navigate its way through the current environment. AVEVA is in a strong position and our strategy and medium-term objectives remain unchanged. AVEVA is committed to be a leader in industrial software for a sustainable future, working with our employees, our customers, our partners and the wider communities where we do business.
At AVEVA, we aspire to a world where economic growth supports environmental sustainability. It’s resilience through sustainability. At a micro level and inspired by the UN’s Sustainable Development Goals, AVEVA Action for Good we seek to be a positive force for change in the communities where we operate - there’s a commitment is to return 1% of AVEVA’s net profit into the communities where employees live and work. Added to that, myself, members of the Board and Executive Leadership Team members will donate 10% of base salary for a six-month period. This positive change is amplified by AVEVA Life, an initiative which ensures sustainability in our own operations. At a macro level, our solutions are making customers more efficient – decarbonization through digitalization – and we believe AVEVA will play an ever-greater role in helping customers achieve their green ambitions.
So, AVEVA’s outlook remains one of resilience with digitalization key to driving customers’ efficiency and our own growth.
Craig Hayman is Chief Executive Officer of AVEVA, a position he’s held since February 2018. Previously, Mr. Hayman was Chief Operating Officer at PTC Inc., where he had responsibility for engineering, marketing, and sales. He also served as President of the Solutions Group. At PTC, he returned the digital engineering business to growth, revitalized the Partner Network, and successfully introduced a new generation of Industry 4.0-connected manufacturing applications. Prior to joining PTC, he was President of eBay’s enterprise business and served more than 15 years in senior leadership positions at IBM. Mr. Hayman holds a BSc in computer science and electronics from the University of London.