Preliminary Results

 23 May 2013

AVEVA GROUP PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2013

AVEVA Group plc ('AVEVA'; stock code : AVV), one of the world's leading providers of engineering data and design IT systems, today announces its preliminary results for the year ended 31 March 2013.

Commenting on the outlook, Chief Executive Richard Longdon said:

"AVEVA delivered another excellent year of growth in 2012/13. As a truly international company selling world leading technology into global industries we have been able to benefit from the positive fundamentals in many of our markets. Our goal is to deliver sustainable, strong, long-term earnings growth. Our global platform and technology leadership have been key to delivering this expansion, even during a period of severe economic uncertainty. We expect to see further growth in the Oil & Gas industry in coming years and a solid demand backdrop in Power, underpinned by nuclear new-build in China and India in particular. Against this backdrop we view the outlook for 2013/14 with confidence."

Enquiries:

AVEVA Group plc

Richard Longdon, Chief Executive

James Kidd, Chief Financial Officer

Derek Brown, Head of Investor Relations

On 23 May 2013 Tel: 020 7796 4133

Thereafter Tel: 01223 556611 or 01223 556683

Hudson Sandler

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

An analysts' briefing will be held at Goldman Sachs, Peterborough Court, 133 Fleet Street, London, EC4A 2BB at 9.30 am on 23 May 2013.

The analyst presentation will be audio-webcast live on the morning of the event for registered participants. The audio-webcast will be also accessible via the AVEVA website following the presentation. You can register online in advance of the audio-webcast online at http://www.aveva.com/en/Investors.aspx.

For further information please contact Anna Qazi on 020 7796 4133 or on [email protected].

Chairman's statement

Overview

In my first year as Chairman, I am pleased to report another strong performance for AVEVA during 2012/13, reflecting our market leading position in engineering design and information management solutions for the Oil & Gas, Power and Marine industries worldwide. I joined AVEVA at the beginning of the 2012/13 financial year and I am delighted to be involved with such an exciting, world-class company which continues to benefit from a global platform, exposure to developing markets and world-beating technology and innovation.

These results are a testament to the hard work of all AVEVA employees around the world. In particular, a notable milestone was achieved during the year as our Enterprise Solutions business grew more than 30% and moved into profitability for the first time.

Another major achievement for the Group was the launch of AVEVA Everything3D™ (AVEVA E3D) in October 2012, the most significant new product release that AVEVA, or the engineering design industry as a whole, has seen for many years.

Our Engineering & Design Systems business also delivered good growth, and we were able to expand the breadth of our product offering, both organically and through the strategic acquisitions of Bocad in May 2012 and Global Majic in December 2012, further deepening our relationships with our customers, in line with our long-term strategy.

Key financials

AVEVA delivered record revenue for the year in 2012/13 of £220.2 million (2012 - £195.9 million), up 12% on the same period a year ago. This was driven by strong revenue growth and excellent execution in Enterprise Solutions and further expansion in Engineering & Design Systems.

Adjusted profit before tax grew by 13% to £70.7 million (2012 - £62.3 million) and we achieved an adjusted profit margin of 32% (2012 - 32%), whilst still maintaining our investment in the business as planned. Profit before tax for the year was £63.6 million (2012 - £57.7 million). Adjusted basic earnings per share amounted to 74.9 pence, an increase of 17% over the prior year (2012 - 63.8 pence). Basic earnings per share was 67.0 pence (2012 - 58.9 pence)

AVEVA continues to maintain a strong balance sheet and remains highly cash generative. We closed the year with more than £190 million of cash (2012 - £179.0 million) and no debt. This was after investing £12.5 million on the acquisitions of Bocad and Global Majic and after paying £14.6 million in dividends.

Operations

In our core Engineering & Design Systems division, revenue grew 10% to a record £189.5 million (2012 - £172.5 million) - driven by sustained demand from our Engineering, Procurement and Construction (EPC) customers where we continue to expand our footprint within key accounts.

In Enterprise Solutions we set clear targets for the year to deliver both growth and profitability, and we were very pleased to report success on both fronts. Revenue increased by 31% to £30.7 million (2012 - £23.5 million) which delivered a contribution of £2.0 million (2012 - loss of £4.4 million).

Technology

From a technology perspective it has been a most exciting year and we continue to build on our leadership position. We have delivered the successful commercial launch of AVEVA E3D, a major new platform focused on Plant Design for 'Lean Construction', which we believe will create significant efficiencies for our customers and raise the competitive benchmark for the plant design industry. In addition to this, we have released a number of other exciting new products in the Schematics and Enterprise Solutions portfolios. We also continue to add to our technology capabilities through acquisition, with Bocad and Global Majic both being acquired during the year.

Dividends

The Board is recommending a final dividend of 19.5 pence (2012 - 17.0 pence), an increase of 15% over the prior year. This gives a full year dividend of 24 pence (2012 - 21.0 pence) when combined with the interim dividend of 4.5 pence announced earlier in the year, gives an increase of 14% over last year. Subject to approval at the Annual General Meeting (AGM), the final dividend will be paid on 26 July 2013 to shareholders on the register on 21 June 2013.

Return of capital

AVEVA is committed to generating returns for our shareholders whilst maintaining a strong balance sheet to provide adequate resources for future investment and growth. In light of the Group's strong performance and strong cash generation over many years, the Board is proposing the return of cash to shareholders of approximately £100 million in the form of a special dividend, which is expected to be paid in August 2013. The Board is also recommending the special dividend is accompanied by a share consolidation to maintain, as far as possible, the comparability of the share price before and after the special dividend. The special dividend and share consolidation will be subject to shareholder approval at the AGM on 9 July 2013. The ex-dividend, record and payment dates for the special dividend and the share consolidation factor will be set out in the AGM circular for shareholders.

People

AVEVA continues to have a team of highly skilled and dedicated employees who are the driving force behind the success of the Group and the strong performance in 2012/13. On behalf of the Board I would like to thank everyone at the Company for their excellent contribution and commitment.

Role of the Board

We have revamped our Board agenda to put more emphasis on the Group's key areas of focus such as our technology plan, strategy and people. AVEVA has grown significantly in recent years and has a great future and I see the role of the Board as supporting and reviewing our growth strategy. The balance between delivering short-term performance and investing for future growth is a challenge for any organisation and one where I believe the Board has a significant role to play in working with and supporting the Executive team.

Prospects

AVEVA has world-beating technology and products, strong underlying market drivers, a truly international breadth of operations, long-term customer relationships, as well as a highly dedicated and expert team. The Group has significant opportunities to continue to deliver strong growth in the future.

Philip Aiken

Chairman

23 May 2013

Chief Executive's Review

Overview

AVEVA delivered another excellent year of growth in 2012/13. As a truly international company selling world-leading technology into global industries we have been able to benefit from the positive fundamentals in many of our markets.

This growth has enabled us to continue to make significant investment in both innovation and the development of our global platform. In particular, we successfully launched AVEVA Everything3D™ (AVEVA E3D), one of the industry's most significant new product releases in many years, which strengthens our technology leadership and delivers enhanced efficiencies for our customers.

Our Engineering & Design Systems business, which provides software solutions for the design and construction of assets in the Plant, Power and Marine industries, continued to benefit from global growth trends in Oil & Gas and Power, whilst as expected the Marine segment remained subdued.

Our Enterprise Solutions division, which provides software and support for ongoing information management throughout an asset's lifecycle, achieved a major milestone as the business grew by more than 30% in the year and moved into profitability for the first time. This was achieved as a result of increased management and internal focus, and is now benefitting from the returns on investment we have made to build our service delivery infrastructure and sales organisation.

Global growth markets

One of AVEVA's core strengths is our global presence, enabling us to be close to our customers. During the year we continued to develop our international reach, targeting and investing in high growth markets with new offices in Mumbai and Hyderabad in India and by establishing, through the acquisition of Bocad, a new Centre of Excellence for Structural Design in Germany.

Demand for AVEVA's products remained strong in the Oil & Gas and Power markets during the year whilst activity levels in Marine remained flat. The trends driving demand in Oil & Gas continued with an increase in the number, size and complexity of projects worldwide. Global energy demand is expected to grow at 36% from 2011-2030 (BP Energy Outlook 2030, Jan 2013) with an increasing proportion of the supply to be satisfied by difficult to exploit deep-water fields. This drives up design hours and the use of AVEVA's software tools for ever more complex engineering and design.

Power also has long investment cycles and AVEVA serves a wide variety of customers around the world involved in all types of power generation. We are strongly positioned to benefit from new nuclear projects in China, where the nuclear build programme has recently recommenced, and in India, where nuclear is a key part of the government's long-term power infrastructure build programme. The World Nuclear Association report that over half of the 480 proposed or planned new builds will be located in China and India by 2030. Whilst there remains some hesitancy around new-build nuclear projects in Europe, the building of additional conventional power stations further drives demand for AVEVA's design tools.

In Marine, the industry is in the midst of a cyclical downturn and hence sales of our design software have remained subdued, particularly in China where the shipyards have been more focused on conventional shipbuilding. This is in contrast to Korea where an increasing amount of the shipyard's work is now related to offshore Oil & Gas projects. We anticipate the Marine market conditions will remain for another two years. Meanwhile we are focused on selling our other products, such as Enterprise Resource Management which helps shipyards become more efficient through streamlining and improving their planning and construction.

Innovation

In October we launched AVEVA E3D, a next generation product for 'Lean Construction' in the plant design industry. AVEVA E3D was previewed at the Achema trade fair in Frankfurt during the summer followed by a working demo at the AVEVA World Summit in October and first customer shipments were made in January 2013. AVEVA E3D has been seen by industry watchers as the most significant new product to be launched in the plant design market for many years and is potentially a true game changer. AVEVA E3D is the result of years of development and incorporates much of the functionality of our acquisitions over recent years. AVEVA E3D has been designed to be fully compatible with our existing 3D applications. As a result we believe AVEVA E3D will deliver enhanced efficiencies to customers seeking to maintain competitive advantage.

Customers will be able to transition easily to AVEVA E3D and will find a range of new features, such as fully integrated 2D drafting, laser scanning and enhanced visualisation, allowing them to perform many functions within a fully integrated engineering environment.

Early feedback from customers has been positive and the prospects for AVEVA E3D are encouraging as Engineering, Procurement and Construction companies (EPCs) seek to further improve design efficiency, reduce time to start-up and remove costly rework in fabrication and construction. Nonetheless, our customers are highly conservative and it will take some time to convert them all from PDMS to AVEVA E3D.

We are particularly excited about the new directions that the AVEVA E3D platform promises for future innovation, including in the areas of mobile and cloud computing. During our World Summit in October 2012, we provided customers with a preview of some new mobile applications, which were met with great enthusiasm. We plan to release the first of these new tablet-based applications later in 2013/14. Our customers are rightly cautious in their approach to new technologies and thus our approach is to follow AVEVA tradition and deliver such solutions through working in partnership with our customers. We are fortunate in that the introduction of mobile and cloud technology is far less of a technology disruption than for many of our peers.

Elsewhere, AVEVA further broadened its product portfolio during the year with the release of a powerful new version of AVEVA Instrumentation and a brand new product, AVEVA Electrical. We believe there is a major opportunity to extend our design solution footprint with our existing customers.

AVEVA has always been a leading innovator in using advanced visualisation techniques to bring engineering data to life. The acquisition of Global Majic and the subsequent establishment of a Centre of Excellence for Visualisation in Huntsville, Alabama will see the Global Majic visualisation technology introduced across the AVEVA product range toenhance the value of engineering data to a wider audience.

Regional summary

EMEA once again delivered good growth with revenue up 15% over the prior year with expansion within the larger global EPCs and Owner Operators being the key drivers together with strong regional performance in UK, Russia and Middle East. Revenue growth in the Americas was 3% and was negatively affected by a slowdown in Brazil, where demand was impacted by delays in project awards to our customers. We do expect the situation to improve in 2013/14 and see the long-term market opportunity as undiminished. In Asia Pacific, we were pleased to see our China operations continue to make progress, with strong licence growth over the previous year despite the continued subdued demand in Marine across the region.

As a part of our strategy to expand significantly our presence in the emerging markets, we invested in a new office in Mumbai as well as a new Research and Development centre in Hyderabad. Our headcount in India materially increased during the period and as a result of this planned investment, we will have the capability to carry out the majority of our offshore Research and Development activities within our own facilities in India. This will reduce our dependency on outsourced development partners while improving knowledge retention.

Engineering & Design Systems (EDS)

Our EDS business performed well during the year, delivering constant currency growth of 9% over 2011/12. Again, we saw particularly strong demand from the Oil & Gas market, with customers involved in increasingly complex projects, some of which are the largest ever undertaken, necessitating additional design hours and more licences of our 3D design software tools. We also released a number of new products to broaden our design footprint, for example with AVEVA Electrical and AVEVA Instrumentation. In addition, these solutions have been designed to meet the needs of operations and in-plant engineering and are contributing to revenue growth, particularly with the Owner Operators. We further extended our capabilities through the acquisitions of Bocad and the software assets of Global Majic, which added market-leading structural steel detailing and visualisation software to the AVEVA solution.

The overall revenue performance for the EDS division was affected by the difficult situation in Brazil but despite this, strength elsewhere enabled the EDS business to deliver a record result.

We invested in additional headcount in EDS, particularly in the area of technical sales and product strategy. As AVEVA has expanded its design footprint by selling a broader solution to our customers, the requirement has evolved for a more specialist sales approach with an even greater depth of technical and domain expertise. Due to the fragmented nature of the acquired group of companies, the integration of Bocad into AVEVA took longer than normal and as a result the revenue was slightly behind our expectations for the year. The necessary restructuring to integrate Bocad was completed in April 2013 and this, combined with the upfront investment in sales during the year, has positioned us well to realise new growth opportunities in 2013/14.

Enterprise Solutions (ES)

We set ourselves challenging revenue targets for the ES business at the beginning of the year. We also had the goal to further improve service delivery and manage costs of sale. We grew revenue by more than 30% and moved into profitability for the first time. Accelerating ES is key to our objective in positioning AVEVA as a strategic partner to our customers. The market opportunity continues to develop and we were particularly encouraged to see further inroads into the Oil & Gas Owner Operators including the largest Independent Oil Companies (IOCs). In addition we have seen growing sales of AVEVA NET to our traditional EPC customers as Owner Operators demand our technology for project execution and data handover and throughout the project lifecycle.

Organisation and people

The quality of our people is a major determinant of AVEVA's continued innovation and success. This can be seen through the continual progression of our world-leading products, as well as our ability to deliver new solutions based upon our customers' needs. AVEVA invests in its workforce in multiple ways, with an extensive range of human resources development and training programmes, central induction and leadership development for future senior staff.

We have invested during the year in growing our headcount, particularly within Research and Development and Sales and Marketing. We also welcome the teams joining through Bocad, in Belgium and Germany, and Global Majic, in Huntsville, Alabama.

My thanks go to the AVEVA team for the efforts they have made to help us achieve our financial targets and position the Group for another phase of strong growth.

Outlook

AVEVA's goal is to deliver sustainable, strong, long-term earnings growth. Our proven management team, technology leadership and global platform have been key to growing the business, even during a period of severe global economic uncertainty. During 2012/13 we built upon our market-leading position through delivering one of the most significant new products in the Company's history, AVEVA E3D, and further extending our product portfolio through Research and Development and selective acquisitions. As a result we are well placed to extend our leadership position through providing unrivalled engineering design and information management solutions to our global blue chip customer base.

We expect to see further growth in the Oil & Gas industry in coming years and a solid demand backdrop in Power, underpinned by nuclear new-build in China and India in particular.

The move to profitability within the ES division is an important milestone and we aim to build on this in 2013/14. We anticipate a return to growth in Latin America as project delays subside and the spending freeze unwinds. China and South East Asia are well positioned to deliver further good growth and we will continue to invest in growing our presence in the world's developing economies. Against this backdrop we view the outlook for 2013/14 with confidence.

Richard Longdon

Chief Executive Officer23 May 2013

Finance review

AVEVA continued to deliver a strong financial performance in 2012/13 across the business with total revenue increasing 12% in the year to £220.2 million, adjusted profit before tax up 13% to £70.7 million and operating cash inflows of £40.8 million resulting in the year-end cash balance being just over £190 million.

Revenue

AVEVA's revenue increased 12% in the year to £220.2 million (2012 - £195.9 million). Our business model continued to drive recurring revenue with an increase of 11% to £153.2 million (2012 - £137.9 million) representing 70% (2012 - 70%) of total revenue.

Foreign currency exchange rates had a negative impact on revenue in the year of £3.8 million, mainly due to the weakening of Euro against Sterling. After adjusting for this, the constant currency growth rate was 14% (2012 - 13%).

Revenue from the acquisition of Bocad contributed £5.1 million in the ten-month period since the acquisition, with £2.6 million from annual fees, £1.7 million from initial licence fees, £0.1 million from rental licence fees and £0.7 million in services.

Underlying revenue growth after adjusting for the Bocad acquisition and currency effects was 12% (2012 - 12%).

During the year, EMEA revenue grew by 15% (2012 - 21%), Asia Pacific grew by 14% (2012 - down 3%) and Americas 3% (2012 - 24%).

Total revenue from end user markets remained in line with previous periods with Oil & Gas accounting for approximately 45 - 50%, Marine 20 - 25%, Power 15% and Other, consisting of Mining, Petrochemical, Chemical and Paper and Pulp, 10 - 20%.

Engineering & Design Systems (EDS)

Revenue was £189.5 million, up 10% on the previous year. Excluding the contribution in the period from the acquisition of Bocad, the underlying constant currency growth rate was 9% (2012 - 10%). We continued to see good licence growth with rental licences up 7% and initial licence fees up 9% over the previous year. Growth in rental licences was impacted by the delays in project awards to Engineering, Procurement and Construction customers (EPCs) in Brazil and the timing of rental renewals. This was offset by continued expansion within the large engineering contractors and customers in Europe and North America. In Asia Pacific we did see an increase in rental licences within India and South East Asia. Initial licences growth was driven by growth in Oil & Gas and Power in Asia but offset by weaker conditions generally in Marine and particularly in China.

EDS costs increased by 16% to £45.4 million (2012 - £39.0 million). This included £3.2 million from the acquisition of Bocad, without which the increase would have been 8%. This increase was due to the development and launch of the new products, AVEVA Everything3D™ (AVEVA E3D) and AVEVA Electrical, and further investment in sales technical resources in our sales areas to support selling our specialist products within the Schematics portfolio. In addition, we continued to invest in developing our existing products and in product strategy and marketing to help launch our products with improved marketing campaigns, training and collateral.

EDS had a segment contribution of £144.1 million (2012 - £133.4 million), up 8% on the previous year and representing a contribution margin of 76% (2012 - 77%).

Enterprise Solutions (ES)

We saw a strong performance in the second half of the year resulting in annual growth of 31%, which delivered revenue of £30.7 million for the year (2012 - £23.5 million). At the start of the year we invested in a dedicated team focused on selling both EDS and ES solutions to the Owner Operators and independent oil companies. It is pleasing that this has delivered positive benefits during the year with progress made with many of the oil super majors and Owner Operators such as Lundin Norway AS. We have also continued to make progress with the EPCs, with AVEVA NET being deployed across many projects as the preferred tool to assist with project execution and data handover.

We also monitor revenue backlog, which we define to include all contracted ES revenue (including software licences and services) that has not yet been recognised but which is expected to be recognised in the next twelve months. Revenue backlog also includes twelve months of annual fees. The backlog in ES at 31 March 2013 was £14.7 million, up 16% from £12.7 million at 31 March 2012.ES costs were £28.7 million compared to £27.9 million in the prior year, an increase of 3%. At the start of the financial year there was a lot of focus put on the ES cost base both in terms of business capture and on improving the efficiency of service delivery. This was achieved by careful cost control and expanding our existing Indian Research and Development team and establishing a service and support team in Hyderabad to assist with service delivery globally.

ES delivered a segment contribution of £2.0 million compared to a segment loss of £4.4 million in the previous year, which reflects the strong organic revenue growth and careful cost management during 2012/13.

Shared operating costs

Shared selling and distribution expenses increased by 18% to £55.0 million (2012 - £46.7 million). The increase is due to the investment in India, China and Latin America in sales resources to expand our business in these fast developing geographies, the establishment of a dedicated team focused on the Owner Operators and the sales and support organisation inherited from Bocad. The increase was also partly due to the bad debt provision in China of approximately £2.0 million, which is explained in the balance sheet section.

Other shared operating expenses increased by 2% to £21.7 million (2012 - £21.3 million).

Headcount

Total headcount at 31 March 2013 was 1,317 (2012 - 1,055), a net increase of 262 from the previous year which includes 97 employees acquired through the Bocad and Global Majic acquisitions. The average headcount during the year was 1,238 (2012 -1,053) with 407 (2012 - 347) in Research and Development and product support, 597 (2012 - 515) in sales, marketing and customer support and 234 (2012 - 191) in administration.

The staff costs for the year were £92.8 million (2012 - £81.8 million), an increase of 13% due to the increased headcount, annual salary increases and higher bonus and commission payments.

Profit before tax and margins

The adjusted profit before tax (as disclosed and defined within the income statement) for the year was £70.7 million (2012 - £62.3 million), an increase of 13%, which consisted of £71.1 million from the organic business and an adjusted loss of £0.4 million from Bocad. Reported profit before tax was £63.6 million (2012 - £57.7 million).

The adjusted profit margin was 32.1% compared to 31.8% for last year. Reported profit margin was 28.9% (2012 - 29.5%).

Taxation

The Group's effective tax rate for the year was 28.5% (2012 - 30.8%) which is higher than the underlying UK tax rate of 24% because of profits earned in higher tax jurisdictions as well as non-deductible expenses.

The UK government has substantively enacted a 1% reduction in the main rate of corporation tax from 24% to 23% effective from 1 April 2013. It has further proposed reducing the UK rate by a further 2% to 21% from 1 April 2014 and a further 1% to 20% from 1 April 2015. These changes have no material impact on the tax charge in 2012/13 but the Group expects to benefit from these reductions in future periods as future UK profits are earned and subject to the lower rates of corporation tax.

Earnings per share and final dividend

Basic earnings per share were 67.0 pence (2012 - 58.9 pence), an increase of 14%, and diluted earnings per share were 66.8 pence (2012 - 58.7 pence). Adjusted basic earnings per share were 74.9 pence (diluted adjusted basic earnings per share 74.7 pence), an increase of 17% over the same period in 2011/12 (2012 - adjusted basic earnings per share 63.8 pence, adjusted diluted earnings per share 63.7 pence).

The Board is declaring a final dividend of 19.5 pence per share (2012 - 17.0 pence per share), an increase of 15%. The dividend will be payable on 26 July 2013 to shareholders on the register on 21 June 2013.

Return of capital

The Board is proposing to return £100 million to shareholders in the form of a special dividend. The Board is also recommending that the special dividend is accompanied by a share consolidation in order to maintain, as far as possible, the comparability of the share price before and after the special dividend. The special dividend and share consolidation will be subject to shareholder approval at the Annual General Meeting on 9 July 2013.

Balance sheet and cash flows

AVEVA continues to maintain a strong balance sheet supported by net assets at 31 March 2013 of £251.6 million (2012 - £221.5 million).

In May 2012, we completed the acquisition of Bocad for consideration of £14.0 million on a debt free/cash-free basis. The acquisition resulted in additions of developed technology and customer relationships of £7.0 million and £0.4 million respectively. In addition, goodwill of £8.1 million arose on the acquisition. In December 2012, we acquired the developed technology and staff from Global Majic Software Inc for cash consideration of £1.0 million.

Gross trade receivables at 31 March 2013 were £78.8 million (2012 - £67.1 million). We have increased the bad debt provision to £4.8 million (2012 - £3.4 million) to cover the risk of non-payment of certain debts. We experienced delays in payment of debts from some Chinese customers during the course of the year which, as noted above, has triggered a net bad debt provision charge of approximately £2.0 million, of which £1.0 million was incurred in the first half. We consider that this exposure has been fully provided for.

Deferred revenue increased by 9% to £36.6 million at 31 March 2013 compared to £33.5 million in the prior year, reflecting the continued growth in rental and annual licences.

Net cash (including treasury deposits) at 31 March 2013 was £190.4 million, an increase of £11.4 million from 31 March 2012. During the year we have paid £12.5 million for the acquisition of Bocad and Global Majic, £14.6 million for dividends (2012 - £12.8 million) and corporate tax payments of £19.6 million (2012 - £16.9 million). Total cash and treasury deposits held in the UK represented 80% of the total balance held (2012 - 79%). The Group continues to have no debt.

Non-current liabilities include retirement benefit obligations of £17.0 million (2012 - £9.9 million) which relate to defined benefit pension obligations in the UK and Germany and the South Korean severance pay provision. The UK defined benefit pension liability increased from £7.8 million to £13.2 million is due mostly to a decline in the discount rate applied to the scheme liabilities. In addition, as part of the acquisition of Bocad, we inherited certain defined benefit pension liabilities in Germany.

Cash generated from operating activities before tax was £40.8 million compared to £47.8 million last year which is due to higher tax payments during the course of the year and timing of working capital. Cash conversion, measured by cash generated from operating activities before tax as a percentage of profit from operations, was 97% compared to 115% in the previous period. This mainly reflects timing differences in working capital.

Capital structure

The issued share capital at 31 March 2013 was 68.1 million (2012 - 68.0 million) ordinary shares of 3.33 pence each. During the year the AVEVA Group Employee Benefit Trust 2008 purchased 36,345 ordinary shares in the Company in the open market at an average price of £16.90 per share for total consideration of £615,000 in order to satisfy awards made under the AVEVA Group Management Bonus Deferred Share Scheme 2008. At 31 March 2012, the Trust owned 81,420 ordinary shares in the Company.

Treasury policy

The Group treasury policy aims to ensure that the capital held is not put at risk and the treasury function is managed under policies and procedures approved by the Board. These policies are designed to reduce the financial risk arising from the Group's normal trading activities, which primarily relate to credit, interest, liquidity and currency risk. The Group is, and expects to continue to be, cash positive and currently holds net deposits. The treasury policy includes strict counter-party limits.

Investor communications calendar

In 2013/14, the Group plans to provide updates to investors as follows:

James Kidd

Chief Financial Officer

23 May 2013

Review of principal risks and uncertainties

AVEVA has continued to be successful during the year, but as with any organisation there are a number of potential risks and uncertainties which could have a material impact on the Group's long term performance.

The principal risks and uncertainties faced by the Group are as follows:

Dependency on key markets

AVEVA generates a substantial amount of its income from customers whose main business is derived from capital projects driven predominantly by growth in the Oil and Gas, Power and Marine markets. World economic conditions or funding constraints for new capital projects may adversely affect our financial performance.

AVEVA already has a broad spread across existing and new market segments. It is central to our strategy to diversify our customer offerings into Enterprise Solutions and Plant operations. This will help secure a longer term income stream that extends beyond the design/build phase of these capital projects. In addition, our expanding global presence provides some mitigation over-reliance on key geographic markets.

Competition

AVEVA operates in highly competitive markets that serve the Oil & Gas, Power and Marine markets. We believe that there are a relatively small number of significant competitors serving our markets. However, some of these competitors could, in the future, pose a greater competitive threat, particularly if they consolidate or form strategic or commercial relationships among themselves or with larger, well capitalised companies. A further threat is posed by the entrance, into AVEVA's markets, of a much larger technology competitor.

We carefully monitor customers and other suppliers operating within our chosen markets. We stay close to our customers and ensure we have a strong understanding of their needs and their expectations from the AVEVA product development roadmap.

During FY13 we launched AVEVA Everything 3D™ and our vision for the future of plant design. This together with a number of other new products will help cement our relationships with our customers and reinforce barriers to competition.

Enterprise Solutions

The development of the Group's Enterprise Solutions business represents a significant opportunity for the Group. This is a relatively new market with different characteristics compared to our traditional Engineering and Design business. This brings different challenges and opportunities for the Group which although we believe we are well positioned to manage and exploit. However, there remains a risk that our investment in this area does not produce the financial retrurns as quickly as expected.

We have managed our investment into Enterprise Solutions carefully: employing experienced industry professionals; building commercial partnerships with third party systems integrators; and carefully selecting our target markets and customers. In FY13, Enterprise Solutions financial results improved and this line of business recorded a positive contribution for the first time.

Identification and successful integration of acquisitions

During the year, the Group successfully completed two acquisitions and expects to continue to review acquisition targets as part of its strategy. The integration of acquisitions involves a number of unique risks, including diversion of management's attention, failure to retain key personnel of the acquired business, failure to realise the benefits anticipated to result from the acquisition and successful integration of the acquired intellectual property.

While each acquisition and integration is unique, AVEVA now has an experienced team to appraise and complete acquisitions. The Group's experience of previous 'bolt-on' acquisitions provides a good understanding of potential integration risks and as a result we feel well placed to successfully manage these risks.

Protection of intellectual property

The Group's success has been built upon the development of its substantial intellectual property rights and the future growth of the business requires the continual protection of these tools.

The protection of the Group's proprietary software products is acheived by licensing rights to use the application, rather than selling or licensing the computer source code. The Group uses third party technology to encrypt, protect and restrict access to its products. Access limitations and rights are also defined within the terms of the software licence agreement. The Group seeks to ensure that its intellectual property rights are appropriately protected by law and seeks to assert is proprietary rights wherever possible.

Research and development

The Group makes substantial investments in Research and Development in enhancing existing products and introducing new products and must effectively appraise its investment decisions and ensure that we continue to provide class-leading solutions that meet the needs of our markets.

Our software products are complex and new products or enhancements may contain undetected errors, failures, performance problems or defects which may impact our strong reputation with our customers.

AVEVA continually reviews the alignment of the activities of our Research & Development teams to ensure that they remain focused on areas that will meet the demands of our customers and deliver appropriate financial returns. This process is managed by developing a product roadmap that identifies the schedule for new products and the enhancements that will be made to successive versions of existing products. Products are extensively tested prior to commercial launch.

International operations

The Group now operates in over 40 countries globally and must determine how best to utilise its resources across these diverse markets. Where necessary the business must adapt its market approach to best capitalise on local market opportunities, particularly in the strategically key growth economies. In addition, the Group is required to comply with the local laws, regulations and tax legislation in each of these jurisdictions. Significant changes in these laws and regulations or failure to comply with them could lead to additional liabilities and penalties.

The Group manages its overseas operations by employing locally qualified personnel who are able to provide expertise in the appropriate language and an understanding of local culture, custom and practice. Local management are supported by local professional advisers and further oversight is maintained from the Group's corporate legal and finance functions.

Recruitment and retention of employees

AVEVA's success has been built on the quality and reputation of its products and services, which rely almost entirely on the quality of the people developing and delivering them. Managing this pool of highly skilled and motivated individuals across all disciplines and geographies remains key to our ongoing success.

The Group endeavours to ensure that employees are motivated in their work and there are regular appraisals, with staff encouraged to develop their skills.

Annually there is a Group-wide salary review that rewards strong performance and ensures salaries remain competitive.

Commission and bonus schemes help to ensure individual success is appropriately rewarded.

Foreign exchange risk

Exposure to foreign currency gains and losses can be material to the Group, with approximately 80% of the Group's revenue denominated in a foreign currency, of which our two largest are US Dollar and Euro.

The Group enters into forward foreign currency contracts to manage the currency risk where material. The overseas subsidiaries trade in their own currencies, which also acts as a natural hedge against currency movements. In recent months, world currencies have become more volatile.

Consolidated income statement

for the year ended 31 March 2013

All activities relate to continuing activities.

The accompanying notes are an integral part of this Consolidated income statement.

Consolidated statement of comprehensive income

for the year ended 31 March 2013

The accompanying notes are an integral part of this Consolidated statement of comprehensive income.

Consolidated balance sheet

31 March 2013

The accompanying notes are an integral part of this Consolidated balance sheet.

Consolidated statement of changes in shareholders' equity

31 March 2013

The accompanying notes are an integral part of this Consolidated statement of changes in shareholders' equity.

Consolidated cash flow statement

for the year ended 31 March 2013

The accompanying notes are an integral part of this Consolidated cash flow statement.

1. Basis of preparation

The Group is required to prepare its Consolidated financial statements in accordance with IFRS as adopted by the European Union. For the purposes of this document the term IFRS includes International Accounting Standards.

The preliminary announcement covers the period 1 April 2012 to 31 March 2013 and was approved by the Board on 23 May 2013.

The financial information contained in this preliminary announcement of audited results does not constitute the Group's statutory accounts for the years ended 31 March 2013 or 31 March 2012. The accounts for the year ended 31 March 2012 have been delivered to the Registrar of Companies. The statutory accounts for the years ended 31 March 2013 and 2012 have been reported on by the Company's auditors; the reports on these accounts were unqualified, did not draw attention to any matters by way of emphasis and did not contain any statement under section 498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.

The statutory accounts for the year ended 31 March 2013 are expected to be posted to shareholders in due course and will be delivered to the Registrar of Companies after they have been laid before the shareholders in a general meeting on 9 July 2013. Copies will be available from the registered office of the Company, High Cross, Madingley Road, Cambridge CB3 0HB and can be accessed on the AVEVA website, www.aveva.com. The registered number of AVEVA Group plc is 2937296.

The Group presents a non-GAAP performance measure on the face of the Consolidated income statement. The Directors believe that this alternative measure of profit provides a reliable and consistent measure of the Group's underlying performance. The face of the Consolidated income statement presents adjusted profit before tax and reconciles this to profit before tax as required to be presented under the applicable accounting standards. Adjusted earnings per share is calculated having adjusted profit after tax for the same items and their tax effect. The term adjusted profit is not defined under IFRS and may not be comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, GAAP measures of profit.

2. Accounting policies

The preliminary statement has been prepared on a consistent basis with the accounting policies set out in the last published financial statements for the year ended 31 March 2012.

3. Revenue

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

Services consist of consultancy, implementation services and training fees.

Engineering & Design Systems revenue includes £5,130,000, relating to the acquired business of Bocad of which £2,633,000 related to annual fees, £1,675,000 to initial licence fees, £115,000 to rental licence fees and £707,000 to services.

4. Segment information

The Group is organised into two lines of business being Engineering & Design Systems and Enterprise Solutions. These two lines of business are considered to be the two reportable segments for the Group.Each line of business is managed separately due to the differing requirements of each market. The products of each of the lines of business are taken to market by a shared sales force that is itself organised into three geographical sales divisions: Asia Pacific; Americas; and Europe, Middle East and Africa (EMEA). The Executive Board, comprising the Chief Executive, Chief Financial Officer, Chief Operating Officer, Chief Technology Officer, Executive Vice President Sales, Executive Vice President Business Strategy and Marketing, and Executive Vice President Human Resources and Business Services, monitors the operating results of the lines of business for the purposes of making decisions about performance assessment and resource allocation. Performance is evaluated based on adjusted profit contribution using the same accounting policies as adopted for the Group's financial statements. There is no inter-segment revenue. Balance sheet information is not included in the information provided to the Executive Board. Support functions such as Head Office departments are controlled and monitored centrally.

Engineering & Design Systems revenue includes £5,130,000, relating to the acquired business of Bocad.

4. Segment information continued

Analysis of revenue by geographical location

4. Segment information continued

Other segmental disclosures

The Company's country of domicile is the UK. Revenue attributed to the UK and all foreign countries amounted to £19,190,000 and £201,040,000 (2012 - £16,609,000 and £179,326,000) respectively. No individual country accounted for more than 10% of the Group's total revenue. Revenue is allocated to countries on the basis of the location of the customer.

Non-current assets (excluding deferred tax assets) held in the UK and all foreign countries amounted to £21,966,000 and £53,865,000 (2012 - £11,647,000 and £46,650,000) respectively. There are no material non-current assets located in an individual country outside of the UK.

No single external customer accounted for 10% or more of the Group's total revenue (2012 - none).

Further information concerning revenue by type of product and service is disclosed in note 3.

5. Exceptional items

In 2012/13 exceptional costs totalling £1,099,000 (2012 - £813,000) were incurred on acquisition and integration activities. These costs principally relate to fees paid to professional advisers for legal, due diligence and taxation advice related to the acquisitions of Bocad and Global Majic. In 2011/12, the costs related to the acquisition of LFM Software Limited and the integration of Logimatic Software A/S.

6. Income Tax

a) Tax on profit

The major components of income tax expense for the years ended 31 March 2013 and 2012 are as follows:

6. Income Tax continued

b) Reconciliation of the total tax charge

The differences between the total tax charge shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax are as follows:

At the Balance sheet date the UK government had substantively enacted a 1% reduction in the main rate of UK corporation tax from 24% to 23% effective from 1 April 2013. The government has also proposed reducing the UK corporation tax rate to 21% by 1 April 2014 and 20% by 1 April 2015. 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 balance of the Group.

7. Dividends paid and proposed on equity shares

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 9 July 2013 and has not been included as a liability in these financial statements. If approved at the Annual General Meeting the final dividend will be paid on 26 July 2013 to shareholders on the register at the close of business on 21 June 2013.

In addition, the Board is proposing to return £100 million to shareholders in the form of a special dividend of 146 pence per share. The Board is recommending that the special dividend is accompanied by a share consolidation in order to maintain, as far as possible, the comparability of the share price before and after the special dividend. The special dividend and share consolidation will be subject to shareholder approval at the AGM on 9 July 2013.

8. Earnings per share

The calculations of basic and diluted earnings per share are based on the net profit attributable to equity holders of the parent for the year of £45,513,000 (2012 - £39,968,000). Basic earnings per share amounts are calculated by dividing the net profit attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the potentially dilutive share options into ordinary shares.

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

The denominators used are the same as those detailed above for both basic and diluted earnings per share.

The adjustment made to profit after tax in calculating adjusted basic and diluted earnings per share has been adjusted for the tax effects of the items adjusted.

The Directors believe that adjusted earnings per share is a more representative presentation of the underlying performance of the business.

9. Business combinations

On 22 May 2012, the Group acquired 100% of the issued share capital of the Bocad group of companies based in Belgium and Germany. The acquisition consideration was cash of €17.5 million (£14.0 million) on a debt free/cash free basis.

Acquisition costs (including due diligence and professional fees) and integration costs have been included in the Consolidated income statement.

Details of the fair values of the net assets acquired and goodwill is set out below, which includes purchased intangibles consisting of developed technology and customer relationships. Fair value adjustments of £2.4 million have been made to align with the Group's accounting policies as well as an adjustment to increase the value of an acquired property by £0.2 million to an estimate of market value.

From the date of acquisition to 31 March 2013, the business contributed £5,130,000 to revenue and a loss before tax of £440,000. Goodwill represents the value of the assembled workforce and the future synergy benefits of integrating the business in the AVEVA Group. The assembled workforce brings product development skills and expertise, service delivery skills and domain knowledge of the end user markets to the Group.

Acquisition of trade and assets from Global Majic Software Inc.

On 17 December 2012, the Group acquired the trade and certain assets and liabilities of Global Majic Software Inc. for cash consideration of £989,000.

The fair value of the assets acquired consisted mainly of developed technology of £1,092,000.

9. Business combinations continued

LFM Software Limited

On 7 October 2011, the Group acquired 100% of the issued share capital of Z+F UK Limited, a UK software company which develops and markets laser scanning software for the capture and management of laser scan data. The company's name has since been changed to LFM Software Limited. The acquisition was satisfied for net consideration of £6.3 million on a debt free/cash free basis. As part of this acquisition, Z+F GmbH, the former parent company of Z+F UK Limited, has also been granted a licence to continue to distribute the Z+F UK software together with Z+F GmbH's laser scanning hardware products. This initial licence has been granted free of royalty up to the value of the first £1 million of royalties over the next five years.

The fair value of the assets acquired of £8,937,000 consisted mainly of developed technology of £2,433,000, customer relationships of £855,000, goodwill of £4,340,000 and cash and cash equivalents of £2,188,000.

10. Trade and other receivables

Trade receivables are non-interest bearing and generally on terms of between 30 and 90 days. The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

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

As at 31 March 2013 the provision for impairment of receivables was £4,771,000 (2012 - £3,431,000) and an analysis of the movements during the year was as follows:

10. Trade and other receivables continued

As at 31 March, the ageing analysis of trade receivables (net of provision for impairment) was as follows:

11. Cash and cash equivalents and treasury deposits

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

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

The fair value of cash and cash equivalents and treasury deposits is £190,357,000 (2012 - £178,951,000).

12. Trade and other payables

Trade payables are non-interest bearing and are normally settled on terms of between 30 and 60 days. Social security, employee taxes and sales taxes are non-interest bearing and are normally settled on terms of between 19 and 30 days. The Directors consider that the carrying amount of trade and other payables approximates their fair value.

13. Retirement benefit obligations

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

14. Directors

Philip Aiken

Chairman

Philip Dayer

Non-Executive Director and Senior Independent Director

Jonathan Brooks

Non-Executive Director

Hervé Couturier

Non-Executive Director

Richard Longdon

Chief Executive

James Kidd

Chief Financial Officer

15. Responsibility statement pursuant to FSA's Disclosure and Transparency Rule 4 (DTR 4)

Each Director of the Company (whose names and functions appear in note 14) confirms that (solely for the purpose of DTR 4) to the best of his knowledge:

·; the financial statements in this document, prepared in accordance with the applicable UK law and applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and result of the Company and of the Group taken as a whole; and

·; the Chairman's statement, Chief Executive's review and Finance review include a fair review of the development and performance of the business and the position of the Company and Group taken as a whole, together with a description of the principal risks and uncertainties that they face.

On behalf of the Board

23 May 2013