Capital Markets Day

AVEVA GROUP PLC

Capital Markets Day

AVEVA Group plc ('AVEVA' or 'the Group'), a global leader in engineering and industrial software, will host a capital markets day this afternoon starting at 1pm BST. The event will be webcast live on www.aveva.com/investors.

In relation to this, the Group provides an update on current trading and sets out medium-term targets for revenue growth rates, Adjusted EBIT(1) margin and Recurring Revenue(2).

Current trading

AVEVA has continued to deliver constant currency revenue growth in the financial year to date and the full year outlook remains in line with the Board's expectations.

Medium-term revenue growth

The Group aims to grow medium term revenue on a constant currency basis at least in line with the blended growth rate of the industrial software market, which we currently estimate to be growing at a mid-single digit rate.

This revenue growth target reflects AVEVA expecting to grow its underlying software business in excess of market growth rates, driven by a combination of the strength of the Group's market positions, sales execution, revenue synergies and additional value levers, including pricing.

This above-market growth will be partly offset in terms of reported revenue by the impact of a phased transition towards greater Rental & Subscription revenue, together with potentially lower growth rates in Services revenue.

Medium-term Adjusted EBIT margin

The Group aims to increase Adjusted EBIT margins to 30%. This margin improvement is expected to be driven by a combination of revenue growth, previously announced cost savings, cost control and a focus on high margin revenue growth through pricing and revenue mix optimisation.

Growing Recurring and Rental & Subscription revenue

The Group aims to increase its Recurring Revenue as a percentage of total revenue over the medium-term. This will be driven by growing software as part of the revenue mix and by increasing the mix of Rental & Subscription revenue as a proportion of new software revenue in a financial year.

AVEVA aims to grow the proportion of Recurring Revenue to total revenue from 52% (FY18 on a pro forma basis) to over 60% in the medium term.

The transition to greater levels of Recurring Revenue is expected to increase long-term free cash flow generation. Rental & Subscription offers customers benefits including greater flexibility, lower up-front costs and simplicity in pricing. These benefits are reflected in higher customer life-time value of a Rental & Subscription model versus a Perpetual licence model.

1 Adjusted EBIT: Calculated as profit from operations before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and exceptional items.

2 Recurring Revenue as a proportion of total revenue = (Rental & Subscription software licence revenue + Support and Maintenance revenue) / total revenue.

Enquiries:

AVEVA Group plc

Matt Springett, Head of Investor Relations

Tel: 01223 556 676

FTI Consulting LLP

Edward Bridges / Dwight Burden

Tel: 020 3727 1000