Preliminary Results

27 May 2014

AVEVA GROUP PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2014

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 2014.

Financial Highlights

* Adjusted profit before tax, adjusted profit margin and adjusted basic earnings per share are calculated before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and exceptional items. In addition, adjusted basic earnings per share also include the tax effects of these adjustments.

 **After adjusting for the effect of the share consolidation and the related reduction in interest income following the associated special dividend of £100 million, the underlying adjusted basic earnings per share rose by 16% to 86.59 pence.

Highlights

• Constant currency organic revenue growth of 10%

• Adjusted PBT margin 33% (2013 - 32%)

• Adjusted basic EPS growth of 19%**

• Significant progress with AVEVA E3D™, with a number of global customers licensing the new platform

• Engineering & Design Systems revenue - £211.5m (2013 - £189.5m); Enterprise Solutions revenue - £25.9m (2013 - £30.7m)

• Strong growth in Asia Pacific up 19% (2013 - 14%)

• Recurring revenue steady at 70% with 11% growth in rental licences

• Cash conversion of 102% (2013 - 97%), reflecting focus on cash collection

Commenting on the outlook, Chief Executive Richard Longdon said:

"The broad international spread of our business, combined with robust underlying market drivers, has once again proved effective in enabling us to deliver strong underlying growth and an improvement in profit margin, despite varied economic conditions across some of the regions in which we operate, and different rates of expansion across our chosen markets. This reflects AVEVA's strong competitive position, and the value that our Engineering and Design and Information Management solutions deliver to our customers. We are confident we can achieve our targets for further growth."

Enquiries:

AVEVA Group plc

Richard Longdon, Chief Executive

James Kidd, Chief Financial Officer

Derek Brown, Head of Investor Relations

On 27 May 2014 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 27 May 2014.

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 of performance

I am pleased to report that this has been another year of good growth and strategic development. We delivered record revenue of £237.3 million (2013 - £220.2 million) and adjusted profit before tax up 11% to £78.3 million (2013 - £70.6 million), generating an improvement in the profit margin for the year to 33% (2013 - 32%). Reported profit before tax increased 9% to £69.0 million (2013 - £63.5 million). Adjusted basic EPS rose 19% to 89.05 pence (2013 - 74.70 pence). Basic earnings per share increased 17% to 78.12 pence (2013 - 66.80 pence). We closed the year with net cash of £117.5 million, after the 147 pence special dividend, amounting to £100 million, paid to shareholders in August 2013.

AVEVA is recognised as the leading innovator in its industry. During the year we made excellent progress with our major new 3D design platform, AVEVA Everything 3D™ (AVEVA E3D™). It has been encouraging to see that a number of our major customers - including KBR, Jacobs Engineering, Foster Wheeler, Worley Parsons, Siemens Energy and Shell - now include AVEVA E3D™ in their licence agreements, providing them with the opportunity to take advantage of the many new capabilities and efficiencies that the platform can deliver. AVEVA is also at the forefront in delivering the benefits of Cloud and Mobile technologies to our customers and we expect further progress in this area during the current financial year.

It has been a year in which we have seen mixed economic situations in many of the regions in which we operate around the world. However, the broad spread of our business has enabled us to deliver good growth. I am particularly pleased to report an outstanding performance from Engineering and Design Systems (EDS), which continued to outpace the competition, and delivered 14% organic growth in constant currency as we further enhanced the portfolio of products we offer.

As previously reported, Enterprise Solutions (ES) was impacted by lengthening sales cycles and the loss of two key customer contracts in the first half of the financial year. This resulted in the division reporting a loss for the year. However, there was a significant roll-out of AVEVA NET at Chevron (Gorgon) as well as milestone projects in China and the Middle East.

Our sales teams are focused towards selling a combination of all AVEVA products to Engineering Procurement & Construction (EPC), Shipyard and Owner Operator customers. This 'One AVEVA' philosophy allows us to adapt our approach to reflect the commercial reality of the industries in which we operate, and will be beneficial to all of our customers including fully exploiting the 'pull-through' between our products and solutions, which is significant.

The Board

I spoke last year about how the Board was giving more focus to key areas including technology, strategy and people. This is starting to show clear benefits as the Board's role, from the perspective of supporting and reviewing the Group's growth strategy, has deepened and broadened in both scope and effectiveness. As a Board we closely monitor the achievements of business objectives as well as the oversight of risks and maintain strong governance processes.

During the year Herve Couturier notified us of his intention to retire from the Board at the 2013 AGM to pursue other challenges, and he leaves with our good wishes for the future. We were delighted to welcome Jennifer Allerton who joined the Board as an independent non-Executive Director at the AGM in July 2013.

Dividend

AVEVA has a progressive dividend policy which reflects our confidence in the underlying strength of the business including cash generation as well as the outlook for future growth and profitability. The Board is recommending a final dividend of 22 pence (2013 - 19.5 pence), an increase of 13% over the prior year, payable on 25 July 2014 to shareholders on the register on 27 June 2014. This gives a full year dividend of 27 pence (2013 - 24 pence), when combined with the interim dividend of 5 pence, an increase of 12.5% over last year. In addition to the ordinary dividend, we paid a Special Dividend of 147 pence per share, returning £100 million to shareholders in August 2013, in light of the Group's strong performance and strong cash generation over many years.

Outlook

It has been a year of significant progress on a number of fronts - operationally, through innovation as well as strategically and financially. This is principally due to the quality and commitment of our people and on behalf of the Board I would like to thank everyone throughout the organisation for their efforts and dedication. This is an exciting time to be part of AVEVA and tremendous opportunities lie ahead. With strong long term market drivers and a broadening product footprint we are confident in our ability to deliver further progress against our growth plans in the future.

Philip AikenChairman27 May 2014

CEO review

Summary of performance

Overview

It has been another period of strong growth in both revenue and profitability for AVEVA in 2013/14. Our customer base can be broadly categorised as the complete supply chain involved in building and operating large capital-intensive facilities in the Process, Power and Marine industries. Our primary customers fall into three broad categories: Engineering, Procurement and Construction companies (EPCs), Shipyards and Owner Operator customers. AVEVA's industry-leading technology solutions are tied to our vision of an evolving Digital Asset, undergoing continual change to support the creation and operation of our customers' capital intensive assets.

In the face of this challenge, increasingly our customers require a combination of products from Engineering & Design Systems (EDS) and Enterprise Solutions (ES). Going forward we will be selling more of the 'One AVEVA ' solution comprising common products sold to each type of customer by a single sales force. This approach is being particularly successful in driving wider use of the entire AVEVA product portfolio where customers are adopters of AVEVA NET™.

Engineering and Design Systems performed strongly during the year with revenue increasing 12% to £211.5 million (2013 - £189.5 million). This was driven by strong sales in Asia Pacific and further expansion within our global EPC customers.

A key priority for us has been to develop the opportunity for our new, market-leading 3D design platform, AVEVA Everything 3D™ (AVEVA E3D™). I am pleased to report that significant progress has been made. Some of our biggest customers are now beginning to licence the platform and benefit from the competitive advantage it offers. AVEVA intends to continue to lead the industry through innovation, and we see particular opportunities in Cloud and Mobile technologies.

Our Enterprise Solutions (ES) division - which provides solutions for information management throughout the operational life of an asset - experienced more difficult market conditions and longer sales cycles in the second half of the year. This, combined with the loss of two key customer contracts in the first half, resulted in the division recording a loss for the year. Since the year end we have implemented some further refinements to our delivery model for all of AVEVA's solutions, in order to maximise their impact across our customer base.

Overall, our broad balance across geographies, market verticals, EPCs and Owner Operators enabled us to make excellent progress despite mixed economic situations. Regionally, we saw continued strength in North East Asia, particularly South Korea where many of the major shipyards are increasingly involved in large offshore Oil & Gas related projects, and in North America where we achieved acceleration in growth mainly because of the buoyant Oil & Gas market, including the shale gas revolution driving more downstream facilities investment. This contrasted with a more challenging year in China and softer markets in EMEA and Latin America, with generally weak economic conditions in Brazil, Russia and the Middle East.

In Oil & Gas we continued to see strong rental renewals as well as initial licence sales, notably in Asia Pacific. Our EPC customers are seeing the effects of lower capital expenditure growth amongst the Super Majors, although in offshore, where we are traditionally strong, investment has continued to grow. In Power we have been encouraged to see some early indications of increasing activity in new Nuclear builds in Europe and Asia, and we are starting to see very early signs of a potential pick up in conventional shipbuilding in Marine, although it is still too early to predict when a cyclical recovery might occur and how quickly this might feed through to an increase in licence usage for AVEVA.

What we are focused on

Innovation

We are proud of the fact that over the course of the past five years AVEVA has invested over £150 million on Research and Development to broaden the number of products we offer and deepen our involvement with our customers to help them to compete more effectively. The benefit of this investment is clear: we have delivered ground-breaking new products like AVEVA E3D™ and our product pipeline is now stronger than ever. At the heart of our technology strategy is a principle that the Digital Asset must evolve in tandem with the physical asset, enabling our customers to adapt to continual change.

With this in mind AVEVA intends to continue to lead the industry through innovation, and we see additional opportunities in Cloud and Mobile technologies. We recently delivered a new tablet-based application, AVEVA E3D Insight™, and we are now working with a Super Major oil company to develop novel collaboration applications built with AVEVA E3D™ and AVEVA NET™ technology, using large form-factor touch screens. We are also continuing our successful collaboration with Microsoft to Cloud-enable additional solutions on the Microsoft Azure™ platform.

As we deepen our relationship with Owner Operators we have aligned much of our acquired technology to meet the demand for software tools which enhance the safety and operation of complex Brownfield facilities, as well as improving safety in the construction and fabrication of new build assets. We recently introduced the AVEVA Advanced Visualisation Platform™ (AVEVA AVP™), which utilises our Global Majic virtual avatar technology to enable customers to provide training within the 3D model of their plant facility, increasing safety and reducing cost. Further innovative visualisation techniques are in the pipeline and will be showcased later this year.

A new version of AVEVA NET™ is also close to beta testing and will be available in the second half of the year. One focus of this product has been to make installation and start-up much easier re-enforcing this competitive advantage. Another focus area is to improve the graphical interaction.

We have also continued to invest heavily in our Research and Development facilities in India, where we expanded significantly our operations in Hyderabad and Mumbai during the year.

Global growth opportunities

A fundamental strength of our business lies in our global presence and the truly international market reach we enjoy. We take pride in the fact that we can, as a result of past investment, support our customers locally wherever they are in the world, and we see this as a key point of differentiation for AVEVA.

We aim to target expansion in high growth economies, and during the past year saw good growth in a number of regions, particularly North East Asia, where the Korean shipyards have seen a resurgence in business as they become prime contractors for large, complex offshore Oil & Gas projects, and North America, where we benefitted from major investment directed towards the energy sector infrastructure as the shale gas opportunity drives new business for our customers. Elsewhere, we expect to see a number of long term growth opportunities unfold in Latin America, through infrastructure investment driven by the liberalisation of the energy industry particularly in Brazil, Indonesia, India and China, and potentially in Mexico, where we are well positioned to capitalise on these opportunities.

Optimising our organisation

The dynamics of the markets we serve are changing. The evolution towards token-licensing and the convergence between product sets means that our solutions are increasingly including products from both EDS and ES. In response to this we have a more clearly defined sales approach, focused on Owner Operators and EPCs, where we sell the entire AVEVA product range to all of our customers.

Evolution of Enterprise Solutions

The industries we serve are undergoing constant change, often facilitated by technology which creates new ways of doing business and managing risk. There is a major opportunity for AVEVA to exploit its unquestioned strength in design by helping our Owner Operator customers to manage the ever-changing information about their assets. During the year Chevron went live with AVEVA NET™ on the Gorgon project, one of the world's largest ever LNG projects with an estimated life of forty years. We also signed a follow-on deal with another Super Major Oil & Gas company to provide AVEVA NET™.

ES has been affected by cuts in discretionary spend amongst Operators over the past year, which has tempered the outlook for growth pending an improvement in the market backdrop. However, ES products are strategically essential including having a 'pull-through' effect on sales of our other solutions. In Korea we have made a number of sales of AVEVA NET™ which have driven the use and mandating of our EDS products across entire projects.

What we have achieved

Competitive and strategic wins

Our focus on EPC global accounts continues to pay off. Over the course of the last year AVEVA has seen successful wins with a number of the large global players, signing strategic multi-year licence agreements with AMEC (UK), Fluor (USA ) and Jacobs (USA).These new contractual agreements provide a platform for our largest customers to realise the value delivered from the AVEVA Integrated Engineering and Design™ solution-set as well as AVEVA Everything 3D™. In addition to these deals we have continued to see increased adoption of AVEVA technology amongst other customers, for example Technip and Worley Parsons, across all areas of the portfolio. We also closed a large deal in South Korea with a major shipyard for our design tools which reflects their increased workload from Oil & Gas projects.

On track with AVEVA E3D

A number of AVEVA's major existing global EPC customers have now licensed AVEVA E3D™. We expect these customers to begin to use AVEVA E3D™ on new projects beginning in 2014/15. One of our Swiss customers in the chemical industry migrated fully from AVEVA PDMS™ to AVEVA E3D™ mid-project, citing the benefits of generating design drawings directly from the 3D model. In China, a major chemical EPC is scheduled to migrate the bulk of its design licences to AVEVA E3D™ over the next twelve months.

Delivering on our investment in innovation

Utilising the technology we acquired with Global Majic at the end of 2012, we unveiled our new AVEVA Advanced Visualisation Platform™ during 2013 which transforms operator training by enabling users to create immersive, multi-person environments from an AVEVA Everything3D™ or AVEVA PDMS™ model, as well as models created using third-party software. In November 2013, AVEVA won the coveted UK Tech award for 'Tech Innovation of the Year', for the release of its new AVEVA E3D Insight™ tablet-application, selected from an impressive field of technology companies in the software, manufacturing and engineering sectors. During the year we also released significant enhancements across many of our other products, including major new capabilities within AVEVA PDMS™, AVEVA NET™ and AVEVA Bocad™.

The future

Embracing change

Our markets are changing. New technologies, such as Cloud and Mobile, are beginning to enable our customers to achieve more than ever before with their Digital Assets. More connected devices, more data, more intuitive interfaces, all combine to mean that there are more opportunities for us to add value within the industries we serve. For example, by enabling new forms of collaboration within the design department via gesture-based navigation on large touchscreens and tablet devices; improving workflows and expanding our user base; integrating key aspects of operational data back into the design phase of a major project, improving efficiency; immersing the designer in the as-built, real world environment using 3D laser modelling technologies, thus reducing the need for reworking the design due to errors in fabrication and construction, or even using the latest gaming technologies to extend the use of the 3D model into areas such as avatar-based operational training, to improve safety and reduce risk and cost. AVEVA is doing all of these things today, and it is shaping our future direction, and giving a glimpse at the exciting range of new capabilities our customers can benefit from by using our industry-leading Engineering and Design Systems and Information Management tools.

The challenge for us is to deliver new technologies to our customers in a well-judged and measured way, ensuring that we preserve our reputation for reliability as well as the essence of what they appreciate most about the solutions we offer today. We call this 'continual progression' and protecting the investment our customers have already made in technology is fundamental to our vision of the future.

Taking a disciplined approach to acquisitions

We take a highly disciplined approach to the acquisitions that we make, and over the years have built up a strong track record of identifying the right assets to add value to the AVEVA product and solution suite. This has produced tangible results as we have successfully introduced a number of acquired technologies into the AVEVA product portfolio in recent years. The evidence of this can be seen in the 'Bubble View™' laser modelling capabilities in the AVEVA E3D™ platform, which were made possible through our acquisition of LFM in 2011, as well as in the recent release of AVEVA AVP™, utilises the avatar technology we acquired with Global Majic in 2012. Acquisitions remain a high priority for us as we execute our strategy to build our presence in operations, and scale our business around the world, particularly in North America and we expect them to continue to complement our own Research & Development efforts.

Efficient development

As our business scales, we need to continue to invest in making AVEVA as efficient as it possibly can be. Over the past year we have started a project to upgrade many of our internal systems, to ensure they are able to scale as we continue to grow and handle the increased complexity of the business. We expect this process to continue as we grow still further.

Summary and outlook

The broad international spread of our business combined with robust underlying market drivers, has once again proved effective in enabling us to deliver stong underlying growth and an improvement in profit margin, despite varied economic conditions across some of the regions in which we operate, and different rates of expansion across our chosen markets. This reflects the strong competitive position of the Group, and the value that our Engineering and Design and Information Management solutions deliver to our customers. We are confident we can achieve our targets for further growth given our resources, technology leadership and the many exciting opportunities across the markets we address.

Richard LongdonChief Executive

27 May 2014

Finance review

AVEVA has reported a strong financial performance in 2013/14 during which we continued to deliver against our key financial metrics. Total revenue increased 8% to £237.3 million (10% growth on a constant currency basis), adjusted profit before tax increased 11% to £78.3 million and operating cash inflows were £52.0 million resulting in a year-end cash balance of £117.5 million which was after a special dividend payment of £100 million.

Revenue

AVEVA's revenue increased 8% in the year to £237.3 million (2013 - £220.2 million). During the second half of the year we faced a foreign currency headwind which negatively impacted reported revenue by £7.1 million following a £2.3 million benefit in the first half. This resulted in an overall negative impact for the year of £4.8 million. This was mainly due to the strengthening of sterling against a number of currencies including Brazilian Real, Australian Dollar, Japanese Yen and Russian Rouble. Constant currency revenue growth for the year was 10%.

The Group has continued to maintain high levels of recurring revenue, which increased 9% to £167.0 million (2013 - £153.2 million) and continues to represent 70% of total revenue.

The geographic performance across the Group was mixed where some territories performed very strongly whilst others faced tougher economic conditions. In EMEA revenue increased by 4% during the year to £112.0 million (2013 - £107.7 million) and we saw good performances in Central and Western Europe driven by further expansion within the global EPCs and our other customers involved in Oil & Gas, petrochemicals, chemicals and conventional power projects. On a constant currency basis, revenue growth in EMEA was 4%.

Asia Pacific revenue was £86.9 million, an increase of 19% (2013 - £73.3 million). South Korea had an outstanding year benefitting from many of the major shipyards working on Oil & Gas offshore projects. Although the overall long term growth opportunity in China remains strong, we had a tougher year in the face of generally weaker economic conditions and with shipbuilding remaining subdued. We saw good growth in India where our customers are busy on naval, downstream Oil & Gas and conventional and nuclear power projects. On a constant currency basis, revenue growth in Asia Pacific was 23%.

Americas' revenue decreased by 2% from £39.3 million in 2012/13 to £38.4 million. North America had a good year which reflects the increased focus and investment that we have put into the region. We have benefitted from increased activities in shale gas projects and in Oil & Gas more generally. In Latin America, we continued to face a tougher economic environment in Brazil where the delays in Oil & Gas projects continue to make trading challenging. On a constant currency basis, revenue growth in the Americas was 2%.

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

Engineering & Design Systems (EDS)

EDS had a successful year despite facing a currency headwind with revenue increasing 12% to £211.5 million (2013 - £189.5 million). On a constant currency basis, revenue growth was 14%.

A key component of this growth was the strong sales of initial licences in the year, up 25% on 2012/13. This was primarily driven by the performance in South Korea where a number of the large shipyards purchased additional licences for Oil & Gas projects.

Rental licences increased by 13% to £105.5 million (2013 - £93.3 million). Our focus on the key global EPC customers continues to prove successful in driving both revenue growth and token usage as well as expansion within some of those accounts. Pleasingly, we have also secured some of the global accounts on longer term contracts which gives us improved visibility of future revenue.

EDS costs increased by 7% to £48.5 million (2013 - £45.4 million). During the year we completed the establishment of our dedicated Research and Development centre in Hyderabad, India where we have added additional headcount. This was later than anticipated as a result of delays in obtaining beneficial tax status for this operation. We are now in the process of transitioning projects away from third party providers to the new operation and there have been additional costs incurred in the handover. We expect to benefit from cost savings in future years as the centre becomes fully operational.

We continue to invest in innovation to create new software as well as develop our existing portfolio to take advantage of new technologies and new approaches. We launched AVEVA E3D Insight™, our first tablet-based mobile application, as well as releasing a significant upgrade to AVEVA PDMS™ and fully integrating AVEVA Bocad software with AVEVA's range of 3D design tools including AVEVA Everything3D™.

We also made further investment in technical sales resources to support selling our wider portfolio of schematic products and Bocad. In addition, we focused on improving our internal training and sales collateral to help our sales teams promote the wider product portfolio and this activity will continue into FY15 when we expect to see the benefits come through.

EDS had a segment contribution of £163.0 million (2013 - £144.1 million), up 13% and representing a contribution margin of 77% (2013 - 76%).

Enterprise Solutions (ES)

Enterprise Solutions had a disappointing year with revenue falling by 16% to £25.9 million (2013 - £30.7 million). As highlighted in our interim results, the performance was impacted by two customer-specific factors which together partially explain the disappointing result. A major Latin American shipyard customer ran into serious financial difficulties and a major Oil & Gas operator abandoned its plan to roll-out an enterprise-wide information management solution. There are indications that some International Oil Companies are more focused on limiting discretionary spend.

The ES business is inherently more difficult to forecast with the purchase often more discretionary in nature (compared to EDS) and with this comes longer sales cycles. Individual customer sales can be significant (£1 million+) and are often on initial licences. For a division still growing in scale, this is causing "lumpier" revenue growth trends. Nevertheless, developing our Enterprise Solutions offerings for Owner Operators remains an important component of medium term growth for AVEVA and is strategically fundamental to our offering across the entire portfolio in playing an important role in generating a 'pull-through' effect on the sales of our other products.

The performance of ES also had an impact on the revenue backlog, which we define to include all contracted ES revenue (including software licences, annual fees and services) that has not yet been recognised. The backlog in ES at 31 March 2014 was £10.7 million, compared to £11.4 million at 30 September 2013 and £14.7 million at 31 March 2013.

ES costs were £29.2 million compared to £28.7 million in the prior year, an increase of 2%. We have continued to apply tight cost control in ES and have continued to improve the efficiency and effectiveness of service delivery as well as our business development and sales processes. We have made some additional cost savings through expanding our Research and Development and service and support teams in Hyderabad, India.

ES incurred a segment loss of £3.4 million compared to a segment contribution of £2.0 million in the previous year.

Shared operating costs

Shared selling and distribution expenses increased by 5% to £58.0 million (2013 - £55.0 million). We have continued to invest in our sales organisation, principally in North America where we can see strong growth opportunities principally in Oil & Gas, the Middle East where we are focusing on Owner Operators, and India to capture the growing investment in Oil & Gas and Power infrastructure. These investments have been offset by lower bonuses and commissions in certain sales areas, such as Latin America and China, where results have been below plan.

Other shared operating expenses increased by 10% to £23.8 million (2013 - £21.7 million).

Exceptional items totalled £3.4 million in the year (2013 - £1.1 million). This included: a charge of £0.1 million incurred in respect of the final phase of the Bocad acquisition and integration; a charge of £1.8 million in respect of redundancy costs relating to the reorganisation of Bocad and transfer of roles and responsibilities to a lower cost product development centre in India; and a charge of £1.5 million as the Group provided against a potential underpaid sales tax liability, together with interest for late payment, in respect of sales at one of the Group's subsidiary companies.

Headcount

Total headcount at 31 March 2014 was 1,491 (2013 - 1,317), a net increase of 174 from the previous year. The average headcount during the year was 1,432 (2013 -1,238) with 505 (2013 - 407) in Research and Development and product support, 665 (2013 - 597) in sales, marketing and customer support and 262 (2013 - 234) in administration.

Staff costs for the year were £100.2 million (2013 - £92.8 million), an increase of 8%. This was due to the increased headcount and annual salary increases where the average pay rise across the Group was 4%. The average total cost per head (including salary, bonus, social security and pension) was £70,000 compared to £75,000 in 2012/13 reflecting lower sales commissions paid in certain sales areas, the foreign currency translation impact of our overseas staff costs and our strategy to use resources in India for Research and Development and service delivery.

Profit before tax and margins

The adjusted profit before tax (as disclosed and defined within the income statement) for the year was £78.3 million (2013 - £70.6 million), an increase of 11%. Reported profit before tax was £69.0 million (2013 - £63.5 million).

The adjusted profit margin was 33.0% compared to 32.1% for last year demonstrating that the business continues to deliver operational leverage. Reported profit margin was 29.1% (2013 - 28.9%).

Taxation

The Group's effective tax rate for the year was 26% (2013 - 28.5%) which is higher than the underlying UK tax rate of 23% (2013 - 24%) due to profits earned in higher tax jurisdictions as well as non-deductible expenses.

The UK Government has substantively enacted a 2% reduction in the main rate of corporation tax from 23% to 21% effective from 1 April 2014. It has further proposed reducing the UK rate by a further 1% to 20% from 1 April 2015. These changes have no material impact on the tax charge in 2013/14 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 78.12 pence (2013 - 66.80 pence), an increase of 17%, and diluted earnings per share were 77.99 pence (2013 - 66.65 pence). Adjusted basic earnings per share rose 19% to 89.05 pence (2013 - 74.70 pence) and by 16%, after excluding the impact of the share consolidation and the related reduction in interest income following the associated special dividend of £100 million paid during the year. Adjusted diluted earnings per share was 88.80 pence (2013 - 74.53 pence).

During the year the Company paid a special dividend of 147 pence per share totalling £100 million, which was also accompanied by a share consolidation of 15 new ordinary shares for every 16 ordinary shares held. This reduced the number of shares in issue at the time of the share consolidation from 68,115,648 shares to 63,858,420 ordinary shares and also amended the nominal value of the shares to 3 5/9p pence each.

The Board is declaring a final dividend of 22.0 pence per share (2013 - 19.5 pence per share), an increase of 13%. The dividend will be payable on 25 July 2014 to shareholders on the register on 27 June 2014.

Balance sheet and cash flows

AVEVA continues to maintain a strong Balance sheet supported by net assets at 31 March 2014 of £185.0 million (2013 - £251.6 million), having paid out a special dividend during the year of £100 million as noted above.

Gross trade receivables at 31 March 2014 were £82.9 million (2013 - £78.8 million). We have increased the bad debt provision to £5.1 million (2013 - £4.8 million) to cover the risk of non-payment of certain debts.

Deferred revenue was £36.5 million at 31 March 2014 compared to £36.6 million in the prior year mainly due to movements in foreign exchange rates. If the foreign currency spot rates at 31 March 2013 were applied to the balances at 31 March 2014, the deferred revenue balance would have been £39.3 million.

Net cash (including treasury deposits) at 31 March 2014 was £117.5 million compared to £190.4 million at 31 March 2013 with the reduction reflecting the special dividend payment in the year offset by strong operating cash inflows. During the year we have paid £116.5 million out in dividends (2013 - £14.6 million), corporate tax payments of £18.2 million (2013 - £19.6 million), capital expenditure of £5.2 million (2013 - £5.2 million) and a one-off pension payment of £2.5 million (2013 - £0.6 million). Total cash and treasury deposits held in the UK represented 66% of the total balance held (2013 - 80%). The Group continues to have no debt.

Non-current liabilities include retirement benefit obligations of £8.8 million (2013 - £17.0 million) which relate to defined benefit pension obligations in the UK and Germany and the South Korean severance pay provision. The significant reduction in pension liabilities reflects principally a reduction in the liability associated with the UK defined benefit scheme where, during the year, the liability reduced as a result of an additional cash contribution from the Company of £2.5 million along with some improvement in actuarial assumptions used to value the liabilities. In addition, during the year we fully insured a defined benefit liability in Germany relating to Bocad which we had inherited through the acquisition.

The Group continues to remain highly cash generative and generated £52.0 million (2013 - £40.8 million) from operating activities after tax, an increase of 27%. This was as a result of our continued focus on cash collection from customers during the year. Cash conversion, measured by cash generated from operating activities before tax as a percentage of profit from operations, was 102% compared to 97% in the previous year which is in line with our internal targets.

Capital structure

At 31 March 2014, the Group had 63,873,360 shares of 3.56p each in issue (2013 - 68,079,078 shares of 3.33p each). As noted above, the special dividend paid during the year was accompanied by a share consolidation of 15 new ordinary shares for every 16 ordinary shares held which reduced the number of shares in issue by approximately 4.3 million shares. During the year the AVEVA Group Employee Benefit Trust 2008 purchased 31,937 ordinary shares in the Company in the open market at an average price of £22.46 per share for total consideration of £717,000 in order to satisfy awards made under the AVEVA Group Management Bonus Deferred Share Scheme 2008. At 31 March 2014, the Trust owned 72,626 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.

James Kidd

Chief Financial Officer

27 May 2014

Review of principal risks & 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 & 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 Owner Operators 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 ever-expanding global presence provides some mitigation from over-reliance on key geographic markets.

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 Systems business. This brings different challenges and opportunities for the Group which 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 returns as quickly as expected.

We continue to manage 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 2013/14, Enterprise Solutions' financial results were disappointing but the pipeline of opportunities remains strong. For 2014/15, we have put more focus within our sales force into selling our solutions into Owner Operators. We are optimistic that Enterprise Solutions will return to a positive contribution in 2014/15.

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. Recently we launched AVEVA Everything3D™ 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.

Identification and successful integration of acquisitions

In recent years, the Group has successfully completed a number of 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. Were the Group to undertake a much larger acquisition, we would ensure that appropriate resources and experience were applied to manage the risks and that we had access to the best possible professional advice.

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 achieved 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 vigorously assert its proprietary rights wherever possible.

Research & 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 operates in over 30 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 is 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 the success of the Group and individual achievement is appropriately rewarded.

Foreign exchange risk

Exposure to foreign currency gains and losses can be material to the Group, with more than 80% of the Group's revenue denominated in a currency other than s terling, of which our two largest are US Dollar and Euro. The Group also trades in a number of other currencies that over the past year have shown greater volatility in exchange rates with GBP - notably Japanese Yen, Indian Rupee, Brazilian Real and Australian Dollar.

The overseas subsidiaries predominantly trade in their own local currencies, which acts as a partial natural hedge against currency movements. In addition, the Group enters into forward foreign currency contracts to manage the risk where material and practical. The Group limits its hedging of revenue to US Dollar, Euro, Japanese Yen and its hedging of costs to Swedish Krona. As the Group expands its product development team in India we plan to hedge forecast outflows of Indian Rupee where appropriate.

Consolidated income statement

for the year ended 31 March 2014

*Restated for the impact of IAS 19 Employee benefits (revised 2011). This is in respect of retirement benefit obligations, see note 2 for further details.

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 2014

*Restated for the impact of IAS 19 (revised 2011). See note 2

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

Consolidated balance sheet

31 March 2014

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

Consolidated statement of changes in shareholders' equity

31 March 2014

*Restated for the impact of IAS 19 (revised 2011). See note 2

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

Consolidated cash flow statement

31 March 2014

*Restated for the impact of IAS 19 (revised 2011). See note 2

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 2013 to 31 March 2014 and was approved by the Board on 27 May 2014.

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 2014 or 31 March 2013. The accounts for the year ended 31 March 2013 have been delivered to the Registrar of Companies. The statutory accounts for the years ended 31 March 2014 and 2013 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 2014 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 14 July 2014. 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 2013 except for the following.

During the period legislation was enacted to allow UK companies to elect for the Research and Development Expenditure Credit (RDEC) on qualifying expenditure incurred since 1 April 2013, instead of the existing super-deduction rules. At the balance sheet date management has concluded that the election will be made and therefore the RDEC is recorded as income included in profit before tax, netted against research and development expenses as the RDEC is of the nature of a government grant. In previous periods there was a reduction in the income tax expense.

Adoption of new and revised standards

The Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated statement of changes in shareholders' equity and affected notes have been restated for the year ended 31 March 2014 to reflect changes in the way in which returns on scheme assets are recognised in accordance with IAS 19 "Employee Benefits (revised)". The effect of this has been to reduce the element of finance revenue associated with retirement benefit obligations by £152,000 in the year to 31 March 2013. The tax charge for the same year has been adjusted accordingly (£36,000) and each measure of earnings per share has also been restated. The results of the Group for prior periods have been restated for this change in accounting policy. There was no impact on the disclosed defined benefit pension obligation at either period end.

The amendments to IAS 1 introduce a grouping of items presented in Other Comprehensive Income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time are now presented separately from items that will never be reclassified. The amendment affected presentation only and had no impact on the Group's financial position or performance.

In all other respects the accounting policies adopted are consistent with those of the previous financial year. New standards and interpretations which came into force during the year did not have a significant impact on the Group's financial statements.

3. Revenue

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

*Restated for the impact of IAS19 (revised 2011), see note 2

Services consist of consultancy, implementation services and training fees.

4. Segment information

The Group is organised into two lines of business, being Engineering & Design Systems and Enterprise Solutions which are considered to be the two reportable segments for the Group. 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 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.

#Normalised adjustments include amortisation of intangible assets (excluding other software), share-based payments and (losses)/gains on fair value of forward foreign exchange contracts.

4. Segment information continued

*Restated for the impact of IAS19 (revised 2011), see note 2

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 £20,667,000 and £216,669,000 (2013 - £19,190,000 and £201,040,000) respectively. South Korea accounted for 16% of the Group's total revenue. No other 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 £19,978,000 and £49,929,000 (2013 - £21,966,000 and £53,865,000) 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 (2013 - none).

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

5. Exceptional items

During the year the Group incurred exceptional costs of £3,395,000 (2013 - £1,099,000), relating to acquisition and integration costs of £102,000 (2013 - £1,099,000), exceptional restructuring costs of £1,762,000 and a provision for underpaid sales taxes in an overseas location of £1,531,000.

The restructuring costs relate to rationalisation of the Group's resources and principally relate to Bocad and the transfer of some roles and responsibilities to a lower cost product development centre in India.

The Group has provided for a potential underpaid sales tax liability, mostly in respect of prior periods, related to the local sales of one of the Group's subsidiary companies. The provision includes an estimate of the underpaid tax as well as related interest for late payment.

6. Income tax expense

a) Tax on profit

The major components of income tax expense for the years ended 31 March 2014 and 2013 are as follows:

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:

*Restated for the impact of IAS19 (revised 2011), see note 2

At the Balance sheet date the UK government had substantively enacted a 2% reduction in the main rate of UK corporation tax from 23% to 21% effective from 1 April 2014 and a further reduction in the UK corporation tax rate to 20% from 1 April 2015.

7. Dividends paid and proposed on equity shares

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 14 July 2014 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 25 July 2014 to shareholders on the register at the close of business on 27 June 2014.

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 £51,011,000 (2013 - £45,397,000). Basic earnings per share amounts are calculate

d 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:

* Restated for the impact of IAS19 (revised 2011), see note 2

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. 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 2014 the provision for impairment of receivables was £5,161,000 (2013 - £4,771,000) and an analysis of the movements during the year was as follows:

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

10. 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 £117,547,000 (2013 - £190,357,000).

11. 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.

12. Retirement benefit obligations

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

* Restated for the impact of IAS19 (revised 2011), see note 2

13. Directors

Philip Aiken

Chairman

Philip Dayer

Non-Executive Director and Senior Independent Director

Jonathan Brooks

Non-Executive Director

Jennifer Allerton

Non-Executive Director

Richard Longdon

Chief Executive

James Kidd

Chief Financial Officer

14. 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 13) confirms that (solely for the purpose of DTR 4) to the best of his knowledge:

· the financial information 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

27 May 2014