Interim Results

10 November 2010

AVEVA GROUP PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

AVEVA Group plc ('AVEVA'; stock code : AVV), one of the world's leading providers of engineering data and design IT systems, today announces its interim results for the six months ended 30 September 2010.

Highlights

* Adjusted profit before tax and adjusted basic earnings per share are calculated before amortisation of intangible assets, share-based payments, gain/loss on fair value of forward foreign exchange contracts, restructuring costs and acquisition and amortisation in the relevant year. In addition, adjusted basic earnings per share also include the tax effects of these adjustments.

Commenting on the outlook, Chairman Nick Prest said:

"AVEVA remains a highly focused business delivering long term value to our customers. Our longstanding customer relationships have been formed over many years and remain key to both traditional market growth and also the introduction of new products to a larger addressable market.

The timing of a general return to higher growth rates globally is difficult for us to predict, but specific markets and geographies are providing near-term opportunities for AVEVA to maintain its progress in these challenging times."

Enquiries:

AVEVA Group plc

Richard Longdon, Chief Executive On 10 November 2010 Tel: 020 7796 4133

Paul Taylor, Finance Director Thereafter Tel: 01223 556 611

James Kidd

Hudson Sandler

Andrew Hayes / Wendy Baker / Alex Brennan Tel: 020 7796 4133

An analysts' briefing will be held at 29 Cloth Fair, London, EC1A 7NN at 9.30 am on 10 November 2010. For further information please contact Anna Domin on 020 7796 4133 or on [email protected].

Chairman's statement

Overview

AVEVA has delivered a good set of results, with strong recurring revenue and growth from developing economies mitigating areas where the global turmoil has been more pronounced and recovery slower. Sustained investment in key geographies, new products and increased service delivery capacity continue to position the Group well to benefit from cyclical up-trends and new opportunities.

Financials

Revenue grew 12% to £78.5 million (2009 £69.9 million) with recurring revenue accounting for 68% of the total. Annual fees continued to increase in line with expectations with renewal rates remaining robust. Rental revenue grew to £31.0 million (2009 £27.6 million) as we saw some customers preferring this model to support near-term project requirements with less cash outlay. Initial fees grew by 19% to £19.2 million (2009 £16.2 million), helped by growth in emerging markets which still remains at a relatively early stage.

Sustained investment in core products remains important to the continued long-term success of the business and we continue to add new functionality, greater ease of use for our customers and more flexible development environments. Additionally we continue to increase investment levels for our Enterprise Solutions business (AVEVA NET) where we continue to enhance our technical offering and increase sales, project delivery and pre-sales resources in key geographies. As a result of this planned investment, our expenses grew by 19.5% to £55.7 million (2009 £46.6 million), resulting in a margin of 29% (2009 33%).

Adjusted profit before tax amounted to £24.6 million (2009 £21.9 million), which is before amortisation of intangibles, share-based payments, fair value of forward exchange contracts, restructuring costs and acquisition and integration costs. Adjusted basic earnings per share amounted to 25.14 pence (2009 21.55 pence). Profit before tax was £23.1 million (2009 £23.3 million) resulting in basic earnings per share of 23.17 pence (2009 22.99 pence).

Tax

The effective tax rate for the half year of 31.8 % (2009 33%) is higher than the underlying UK rate and is predominantly due to irrecoverable withholding tax incurred in Asia. The Group continues to look at how its businesses are structured to improve this position.

Cash

AVEVA continues to be cash generative with net cash (including treasury deposits of £106.5 million) at 30 September 2010 of £140.1 million, a decrease of £9.6 million from 31 March 2010, but after paying the increased 2009/2010 final dividend of £9.4 million and acquisitions of Logimatic and ADB of £13.4 million (net of cash acquired).

Dividend

The Board is declaring an increased interim dividend of 3.36p per share (2009 3.00p). The dividend will be payable on 4 February 2011 to shareholders on the register on 7 January 2011.

Operating review

Trading in the last six months has continued to improve and has been supported by new opportunities, but markets remain subdued by the effects of the recent economic turmoil and some customers may still be carrying enough seat capacity to see them through the early recovery stages without the need to increase usage under their existing licence. Ongoing and recent investments in new geographies continues to provide near-term opportunities and with growing certainty of more stable economic conditions and therefore robust recurring revenue, AVEVA remains well placed to benefit from future growth.

Asia Pacific

Revenue in the Asian region grew by 34% to £31.6 million (2009 £23.5 million). Declines in revenue last year in the Marine markets have stabilised and growth in Power and the Oil and Gas markets has delivered both new and enhanced customer relationships. The Asia Pacific market has traditionally been driven by initial fees, but, whilst current market conditions may not be typical and it remains early, we have seen an increase in rental fees in these markets. Our Marine business in the region still remains subdued for new build, but the desire to improve efficiency and throughput remains and continues to offer some opportunities. Power and Oil and Gas are still key drivers in the region where the need of developing economies for new and more efficient/environmentally friendly power is ongoing.

Europe, Middle East and Africa (EMEA)

Our EMEA region is still suffering from the recent economic turmoil. In particular the performance in Germany and France has been affected by lack of real growth in any of our major markets and the adoption of new technologies is inhibited by spending constraints.

Revenue in the region declined 7% to £32.1 million (2009 £34.4 million). Recurring revenue remained relatively stable whilst investment in the region continues to concentrate on key pockets of opportunity and in particular the Middle East where revamp and new build work will help drive growth in traditional design tools as well as AVEVA NET. For many of the assets in the North Sea, AVEVA NET is also proving to be the system of choice for managing data for these large complex assets.

Americas

Revenue increased by 23% to £14.7 million (2009 £12.0 million). South America delivered strong underlying growth and North America saw modest growth generated from our existing customer base. The Oil and Gas market remains the fundamental driver for both our traditional design tools and AVEVA NET.

In Brazil we have continued to expand our sales and support capacity to reflect the high growth market in Oil and Gas led by Petrobras. In addition we continue to assess the wider South America geographies where Oil and Gas and Mining are providing additional opportunities.

North America is still a highly competitive market where most of our recent successes have come from developing our traditional customer base. Competition remains strong although recent consolidation in the market may give rise to more medium-term opportunity in our design tools market. AVEVA NET sales to both existing and competitor accounts, whilst still in its infancy, remains a high area of focus.

Research and Development

In the six months ended 30 September 2010, we invested £12.9 million (2009 £10.3 million) in Research and Development where we continue to invest in all our major products serving all our main markets. We remain confident that many of our main markets will return to good levels of growth and investment in key technologies will keep us ahead of our competitors. We will therefore benefit from delivering real value to our customers in ever increasingly complex and regulation-driven markets.

Acquisitions

AVEVA completed two acquisitions in the period to further strengthen our product portfolio and our solutions delivery capacity. Integration is going to plan and the acquisitions have been well received by existing customers as well as generating new opportunities.

The MARS suite of products acquired from Logimatic strengthens our AVEVA NET offering by adding material control and production planning. It is designed specifically to reduce cost and build time for major projects and has more than 50 reference accounts across the global shipbuilding industry. In the future, MARS will also be integrated with AVEVA's VPRM products to create a complete material management, construction management and planning solution for the Plant industries.

The acquisition of ADB's Oil and Gas business delivers a team of experienced industry professionals who have been providing plant operators with comprehensive integrity management solutions for more than 20 years. The acquisition includes the WorkMate suite of products which further extends the management capabilities of AVEVA NET by offering owner-operators an integrity management solution.

The acquisitions contributed revenue of £1.8 million in the period and incurred a loss before tax of £0.5 million.

Directorate change

We are pleased to announce the appointment of James Kidd to the Board of AVEVA Group plc as Chief Financial Officer with effect from 1st January 2011.

James has been with AVEVA since 2004 where he has held several senior roles and has been Head of Finance since 2006. His experience and knowledge of the Group makes him well placed to help direct and develop the business through its next stages.

After twenty one years with AVEVA, and the last ten years serving as Group Finance Director, Paul Taylor has decided for personal reasons to step down from the Board on the 1st January 2011 to pursue opportunities outside of the Group.

The Board wishes to thank Paul for many years of valuable contribution where the Group has transitioned into a highly respected global software and service provider. We wish Paul every success for the future. We are delighted to announce the appointment of James whose operational and financial knowledge of the Group will allow him to immediately contribute to the Board and the development of the Group's operations.

Outlook

AVEVA remains a highly focused business delivering long term value to our customers. Our longstanding customer relationships have been formed over many years and remain key to both traditional market growth and also the introduction of new products to a larger addressable market.

The timing of a general return to higher growth rates globally is difficult for us to predict, but specific markets and geographies are providing near-term opportunities for AVEVA to maintain its progress in these challenging times

Nick Prest

Chairman

10 November 2010

Independent review report to AVEVA Group plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2010 which comprise the Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Consolidated statement of changes in shareholders' equity, the Consolidated cash flow statement and the related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

Cambridge

10 November 2010

Consolidated income statement

for the six months ended 30 September 2010

Consolidated statement of comprehensive income

for the six months ended 30 September 2010

Consolidated balance sheet

30 September 2010

Consolidated statement of changes in shareholders' equity

30 September 2010

Consolidated cash flow statement

for the six months ended 30 September 2010

1 The interim report

The interim report was approved by the Board on 10 November 2010. The financial information set out in the interim report is unaudited but has been reviewed by the auditor, Ernst & Young LLP, and their report to the Company is included.

The interim report will be posted to shareholders in due course and copies will be available from the registered office of AVEVA Group plc, High Cross, Madingley Road, Cambridge CB3 0HB and on the Company's website at www.aveva.com.

2 Basis of preparation and accounting policies

The interim report for the six months ended 30 September 2010 has been prepared in accordance with IAS 34 Interim Financial Reporting and the disclosure requirements of the Listing Rules.

The interim report has been prepared on the basis of the accounting policies set out in the most recently published annual report of the Group for the year ended 31 March 2010.

The interim report does not include all the information and disclosures required in the annual report and should be read in conjunction with the annual report for the year ended 31 March 2010.

The financial information set out within this report does not constitute AVEVA's Consolidated statutory financial statements as defined in Section 435 of the Companies Act 2006. The results for the year ended 31 March 2010 have been extracted from the Consolidated statutory financial statements for AVEVA Group plc for the year ended 31 March 2010 which are prepared in accordance with IFRS as adopted by the European Union, on which the auditor gave an unqualified report (which made no statement under Section 498 (2) or (3) respectively of the Companies Act 2006 and did not draw attention to any matters by way of emphasis) and have been filed with the Registrar of Companies.

The Group presents adjusted profit before tax on the face of the Consolidated income statement disclosing those material items of operating income and expense which materially impact on the underlying performance of the business. The items that are added back in deriving adjusted profit before tax are share-based payments, amortisation of intangible assets, gain/loss on fair value of forward foreign exchange contracts, acquisition and integration costs and restructuring costs. As discussed in the most recent published annual report for the year ended 31 March 2010, the Group has chosen to adjust for the gain/loss on the fair value of forward foreign currency contracts because this is a non-cash item and has become material due to the volatility of underlying exchange rates. Accordingly, adjusted profit before tax presented on the face of the Consolidated income statement for the six months to 30 September 2009 has been restated to include this adjustment. The Directors believe that adjusted profit before tax allows shareholders to understand better the elements of financial performance in the period in assessing trends in underlying performance.

3 Going concern

As disclosed in the most recent annual report, the Group continues to have significant financial resources and continues to be profitable. At 30 September 2010, the Group had bank and cash and treasury deposits of £140.1 million (31 March 2010 £149.7 million) and no debt. The Directors continue to believe that the Group is well placed to manage business risks successfully despite the uncertain economic outlook.

Therefore, after making enquiries and considering the cash flow forecasts for the Group, the Directors have a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the interim financial statements.

4 Risks and uncertainties

As with all businesses, the Group is affected by certain risks, not wholly within our control, which could have a material impact on the Group's long-term performance and could cause actual results to differ materially from forecast and historical results.

The primary risk and uncertainty related to the Group's performance for the remainder of the year is the challenging macro economic environment, which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results.

The other principal risks and uncertainties facing the Group have not changed from those set out in the annual report for the year ended 31 March 2010. These include:

>> protection of the Group's intellectual property rights;

>> dependency on key markets;

>> competition;

>> foreign exchange risk;

>> recruitment and retention of employees;

>> identification and successful integration of acquisitions;

>> Research and Development; and

>> international operations.

These risks are described in more detail on pages 20 and 21 of the 2010 Annual report. The Directors routinely monitor all of these risks and uncertainties and appropriate actions are taken where possible to mitigate these risks. Included in the Chairman's statement is a commentary on the outlook of the Group for the remaining six months of the year.

5 Revenue

An analysis of the Group's revenue is as follows:

The operations of the Group are not subject to significant seasonality.

Services consist of consultancy and training fees.

6 Segment information

For management purposes the Group is organised into three geographical segments known as Sales divisions: Asia Pacific, Americas, and Europe, Middle East and Africa (EMEA). Each segment is determined by the location of the Group's operations and is organised and managed separately due to the differing local requirements in each market. Sales divisions are granted distribution rights to license the Group's software to customers in their respective territories.

The Executive Management Board monitors the operating results of the Sales divisions for the purposes of making decisions about performance assessment and resource allocation. Sales division performance is evaluated based on an adjusted profit basis as described in note 2 using the same accounting policies as adopted for the Group's financial statements. There is no inter-segment revenue. Support functions such as product development and head office functions are controlled and monitored centrally.

6 Segment information continued

6 Segment information continued

7 Income tax expense

The current year income tax expense for the six months ended 30 September 2010 is estimated at 31.8% (2009 33.2%) of profit before tax.

The total tax charge of £7.3 million (2009 £7.7 million) is made up of UK tax of £4.0 million (2009 £4.1 million) and overseas tax of £3.3 million (2009 £3.6 million).

At the balance sheet date the UK government had enacted a 1% reduction in the main rate of UK Corporation Tax from 28% to 27% from 1 April 2011. The government has also proposed reducing the UK corporation tax rate by a further 1% per annum to 24% by 1 April 2014. However, these further rate changes had not been substantively enacted at the balance sheet date and their effects are not, therefore, included in these financial statements. We do not expect that the enactment of these changes will have a material impact on the deferred tax balances of the Group.

8 Ordinary dividends

The proposed interim dividend of 3.36 pence per ordinary share will be payable on 4 February 2011 to shareholders on the register on 7 January 2011. In accordance with IFRS, no provision for the interim dividend has been made in these financial statements.

An analysis of dividends paid is set out below:

9 Earnings per share

The calculations of earnings per share from continuing operations are based on the profit after tax for the six months ended 30 September 2010 of £15.7 million and the following weighted average number of shares:

Details of the calculation of adjusted earnings per share are set out below:

As disclosed in the annual report for the year ended 31 March 2010, the adjustments made to profit after tax in calculating adjusted basic and diluted earnings per share include the gain on fair value of forward exchange contracts and take into account the tax effects of such adjustments. The comparatives for the six months ended 30 September 2009 have been restated accordingly.

10 Cash and cash equivalents and treasury deposits

Treasury deposits represent bank deposits with an original maturity of over three months.

11 Trade and other receivables

Current

Non-current other receivables consist of rental deposits for operating leases.

12 Trade and other payables

13 Retirement benefit obligations

The movement on the provision for retirement benefit obligations during the period was as follows:

14 Business Combinations

The Group completed the acquisitions of Logimatic Software A/S and the trade and assets from ADB Systemer AS during the six months ended 30 September 2010. Acquisition costs (including due diligence and professional fees) and integration costs have been included in the Consolidated income statement. Goodwill for both acquisitions represents the value of the assembled workforce and the future synergy benefits of integrating both businesses in the AVEVA group. The assembled workforce brings product development skills and expertise, service delivery skills and domain knowledge of the respective end user markets to the Group.

Logimatic Software A/S

On 30 June 2010, the Group acquired 100% of the share capital of Logimatic Software A/S, a Danish company which provides material control and production planning software to the marine industry. The total cash consideration paid (net of cash and cash equivalents acquired) was £9.3 million.

14 Business Combinations continued

Details of the provisional fair values of the net assets acquired and goodwill is set out below, which includes purchased intangibles consisting of developed technology and customer relationships:

From the date of acquisition to 30 September 2010, the business contributed £1.1 million to revenue and incurred a loss before tax of £0.3 million. If the company had been acquired from the start of the period, it would have contributed £2.1 million in revenue and a loss before tax of £0.4 million.

Acquisition of trade and assets from ADB Systemer AS

On 30 June 2010, the Group acquired the trade and certain assets of ADB's Oil and Gas business, including intellectual property, from a Norwegian company, ADB Systemer AS. The acquisition provides software products and service delivery capability to deliver information integrity solutions to owner-operators in the Oil and Gas industry. The total cash consideration paid was £4.1 million.

The fair value of the assets acquired was developed technology of £2.1 million and goodwill of £2.0 million.

From the date of acquisition to 30 September 2010, the business contributed £0.7 million to revenue and incurred a loss before tax of £0.2 million. It is not practical to determine the effect of the acquisition from the start of the period because the trade and assets were part of a larger business and not separately analysed.

Responsibility statement of the Directors in respect of the interim report

The Directors of the Company confirm that to the best of our knowledge:

>> the interim report has been prepared in accordance with IAS 34;

>> the interim report includes a fair review of the information required by DTR 4.2.7R, being an indication of the important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year; and

>> the interim report includes a fair review of the information required by DTR 4.2.8R, being disclosure of related party transactions and changes therein since the last annual report.

By order of the Board

Richard Longdon Paul Taylor

Chief Executive Finance Director

10 November 2010