Axway’s journey began in January 2001 when the infrastructure software business of IT services group Sopra (now Sopra Steria) was spun off as a subsidiary. Sopra’s different infrastructure solutions, including notably the Règles du Jeu accounting interpretation software and the CFT and InterPel file transfer tools, were then grouped together within a single entity: Axway.

In the following four years, Axway accelerated its international development and began its external growth with the acquisition of Viewlocity (2002). Between 2001 and 2005, these developments enabled Axway to take up a position in most major European markets and doubled its customer numbers to 6,000.

Axway launched its expansion into North America in 2005, with the ambition of becoming a world leader in several sub-segments of the infrastructure software market and particularly the Managed File Transfer (MFT) and Business-to-Business integration (B2B) fields.

At the time, the US represented over 50% of the addressable market, but Axway generated only 4% of its revenue in the country. The Company then undertook strategic acquisitions, such as Cyclone Commerce in 2006, and rapidly aligned its geographic presence with the reality of its markets while establishing its executive management in the US.

The successive acquisitions of Atos group’s B2B activities and Tumbleweed in 2007 and 2008, further consolidated Axway’s offer and position with both US and European major customers.

In 2009, Axway reached its development goals by positioning itself as a leader among the main market analysts in the MFT and B2B integration segments. At the same time, the share of revenue earned in the US increased from 4% in 2005 to nearly 30% in 2009.

With revenue of €314.0 million in 2022, Axway is France’s 3rd largest horizontal software publisher.(1)

According to Gartner, “Enterprise infrastructure software spending is expected to grow at a compound annual growth rate (CAGR) of 12.3% (in constant US dollars) between 2021 and 2026 and reach $623 billion in current US dollars by 2026.”(2)

As a software publisher, Axway operates in several infrastructure software sub-segments and specifically application infrastructure and middleware (AIM). In total, Gartner estimates the application infrastructure and middleware sub-segment market at US$56.6 billion in 2023.(2)

Within the application infrastructure and middleware sub-segment, Axway participates in four specific markets:

• ●API Management;
• ●Managed File Transfer (MFT);
• ●B2B Gateway Software (B2B Integration);
• ●Integration Platform as a Service (iPaaS).

For 2023, Gartner estimates growth in the different technology markets in which Axway operates as follows: Full Life Cycle API Management +19.0%, Integration Platform as a Service (iPaaS) +24.7%, Managed File Transfer Suites +2.1%, B2B Gateway Software (Stand-Alone) -2.1%(2).

As an international player, Axway is exposed to the dynamics of different geographic markets. The Company has locations in 18 countries across five continents. Gartner estimates 2023 application infrastructure and middleware growth in Axway regions as follows: North America +12.3%, Latin America +13.1%, Western Europe +9.8% and Asia/Pacific +12.1%.(2)

Supported by a large network of technology partners and dealers, this multi-local presence means that Axway solutions are used in over 100 countries. The Company can support the largest organisations with all their transnational projects.

Infrastructure software is used in cloud, hybrid and on-premise environments. Historically, Axway distributes its solutions in the form of on-premise perpetual licenses. Since 2015, the Company has also offered most of its solutions through “as a service” Subscription contracts. To be able to provide these Subscription offerings, Axway makes use of cloud and/or hybrid technology models.

As a result of these trends, the infrastructure and integration markets continue to evolve:

• ●requirements are constantly increasing, both with regard to the availability of information on all devices and the security of connections and data. IT ecosystems continue to develop as more and more companies work together through collaborative solutions;
• ●while more and more workloads are moving to the cloud, companies have decades of heritage infrastructure and systems that must continue to be leveraged to meet short-term needs and cost constraints.

Companies are therefore naturally turning to integration platforms to facilitate their digital transformation.

According to Gartner, “full life cycle API management remains a dynamic and thriving market with substantial potential for both investors and vendors looking to create and manage APIs as add-ons to their offerings. Gartner expects this market to continue its strong double-digit growth for at least the next five years."(3)

Axway’s hybrid integration offering, based on its Amplify API Management Platform solution, is recognised globally as a leader in the industry. In the third quarter of 2022, Axway was positioned as a Leader in The Forrester WaveTM: API Management Solutions, Q3 2022.(4) It was also recognised as a Leader in the November 2022 Gartner® Magic Quadrant™ for Full Life Cycle API Management for the seventh time.(1)(3) Axway aims to maintain its position as a leader in this market and continues to invest in this direction.

As a software publisher and a leader in digital transformation and B2B integration, Axway supports the modernisation of its customers’ IT infrastructures by securely moving, integrating or exposing their strategic data.

Axway’s different technological areas of expertise converge to connect people, devices, companies and stakeholder ecosystems, thanks to software solutions which are turning customers’ heritage infrastructure into brilliant digital experiences which create value for each use case.

The Amplify platform, powered by APIs, brings together all the players in a major organisation’s IT ecosystem around a common set of tools. The teams in charge of applications and their integration, developers, operators, architects or members of the Board of Directors, within the company or with one of its partners, use Amplify to make the use of data a competitive advantage.

Through a range of ready-to-use solutions and services, Axway’s expertise is demonstrated in the following areas:

• ●API Management: Amplify combines API management functionalities and microservices governance to streamline the management, analysis and expansion of digital services;
• ●Application Integration: Amplify provides access to a collection of pre-built integration scenarios via IPaaS capacities;
• ●Managed File Transfer (MFT): flexible and secure management of the largest critical data flows;
• ●B2B integration: orchestration of business interactions across all value chains within the company.

The Amplify platform, powered by APIs, is able to evolve the existing infrastructure solutions of major organisations, and accommodates cloud, hybrid and on-premise architectures. It is distributed as a Subscription or as a License to respond to the challenges of all types of customers.

In addition to the technological functionalities described previously, the Amplify platform offers various high added-value outcomes:

• ●agility: single control plane to manage all vendor gateways in the ecosystem providing automated visibility and traceability of transaction flows;
• ●flexibility: hands-free visibility and governance, integration with Axway and non-Axway infrastructure and gateways;
• ●efficiency: automation that allows the management and maintenance of the integrity of the catalogue and elimination of long manual interventions;
• ●risk reduction: secure open event-based platform enabling processes to be automated and integrated with existing processes, creating productive governance that accelerates business.

Its ramp-up will enable Axway to continue to develop its activities towards Subscription-based offerings through a growing, profitable business model that offers good medium-term visibility.

At 31 December 2022, Axway had 28 patents (Issued and/or Published) relating to its technologies and solutions. These patents are filed mainly in the United States, in the security and exchange integrity market segment. The Company’s business as a whole is not specifically dependent on a particular patent or technology.

2022 revenue increased 8.0 % on 2021 (License -57.9%, Maintenance -8.7%, Services +17.2%, Subscription +38.7%). Revenue from non-Group customers declined 1.6% while inter-company revenue increased 17.0%.

The operating loss was -€9.1 million in 2022, compared to -€12.3 million in 2021. Despite a €7.6 million increase in purchases consumed, mainly due to inter-company billing, and a €1.8 million increase in employee costs, revenue growth (+€14.6 million) offset the increase in some expenses, improving the operating loss.

Net financial income increased from €4.1 million in 2021 to €10.9 million in 2022. The main movements in this heading comprised an increase in dividends received from subsidiaries of €8.8 million and an increase in financial expenses relating to loan interest and other costs of €1.3 million. A provision of €1.1 million was recognised on the equity investment in the new entity, DXchange Technologies Private Limited.

A pre-tax current profit of €1.7 million was recorded in 2022 compared to a pre-tax current loss of -€8.2 million in 2021.

The net exceptional expense was -€14.3 million in 2022, compared to -€4.7 million in 2021. Exceptional expenses were impacted this year by commercial debt waivers granted to six subsidiaries given their difficult net position for a total of €12.4 million, +€8.2 million higher than in 2021.

Employee profit-sharing totalled €1.0 million in 2022, compared to €0.8 million in 2021.

The 2022 net loss was -€8.0 million, compared to -€7.8 million in 2021.

Axway’s governance structure is detailed below in accordance with Article L. 225-37-4 of the French Commercial Code. Axway’s governance structure consists of a Chairman, a Chief Executive Officer and a Board of Directors.

This organisational structure is supported by a permanent operational and functional structure as well as temporary structures for the management of particular businesses and projects.

Axway’s permanent structure comprises a management body, an organisation based on the main operating functions and functional structures.

Executive Management comprises the Chief Executive Officer and the Executive Committee.

The Executive Committee comprises the Chief Executive Officer, the Heads of the major operating and functional entities and the General Managers.

Executive Committee members are responsible for strategy development and supervise the organisation and management system, as well as major cross-functional initiatives.

The Company’s Board of Directors is composed of 14 directors (nine of whom are independent directors). The directors elected Pierre Pasquier as Chairman at the Board meeting of 28 July 2015. Information on the Board’s organisation and working procedures is presented in Chapter 4, Section 1.2 of this Universal Registration Document.

The General Managers are the heads of the operating departments that make up Axway's value chain. They are involved in defining, producing and selling Axway's products and services. They comprise:

• ●Regional General Managers, responsible for all interactions with current and prospective customers in their region, including sales, pre-sales, services, customer success and field marketing. They are located in the four main regions where Axway operates: Europe, North America, Latin America and Asia Pacific;
• ●Product General Managers, responsible for all aspects of Axway’s offerings, including product management, development, innovation, maintenance and related marketing.

This structure ensures that strategies and processes are consistent and harmonised, while providing the necessary proximity to Axway customers and markets.

As part of the budget process, each of these Departments is allocated resources and assigned targets, which they are responsible for managing. Progress towards the achievement of targets is assessed on a monthly basis, with weekly control points for sales and services and monitoring of major customer accounts.

The Functional Departments (Corporate Secretary, Marketing, Support, Finance, Logistics, People & Culture, Communication, IT Resources, Internal Information Systems, Legal Affairs) are centralised. They contribute to overall Axway cohesiveness, ensuring commitment to Axway’s core values and serve the operational entities. They report directly to Executive Management.

The functional structures standardise the management rules (IT resources, IT systems, financial reporting, etc.) and monitor the application of policies and rules.

In this manner, they contribute to overall supervision and enable the operating entities to focus on business.

In support of its stakeholder responsibility policy and in accordance with the recommendations of the Middlenext Code of Corporate Governance updated in 2021, Axway strengthened its corporate, social and environmental responsibility (CSR) framework within its governance bodies and internal teams.

Within the Board of Directors and its committees:

• ●CSR is included on the agenda of the Appointments, Ethics and Governance Committee, renamed the Appointments, Governance and Corporate Responsibility Committee.

Within Executive Management:

• ●the Chief Executive Officer leads the CSR policy and defines the roadmap in quarterly Committee meetings with the Human Resources Director, Head of Investor Relations, the CSR Coordinator and, if necessary, the heads of the Functional Departments concerned;
• ●the main social, societal and environmental indicators are included and measured as part of the Company's performance monitoring.

With dedicated internal teams:

• ●the CSR team is led by the Head of Investor Relations, who coordinates the work with the Functional Departments involved (Human Resources, Purchasing, IT, Legal, etc.);
• ●the network of correspondents present locally in Axway’s subsidiaries and responsible for gathering social, societal and environmental data in line with the CSR roadmap.

On 26 January 2023, Axway issued a press release announcing the upward revision of 2022 annual targets:

“Paris, 26 January 2023 – Axway today announces an upward revision of its organic growth and profitability guidance for the fiscal year ended 31 December 2022. While the Company will present its detailed annual results on 22 February 2023, as planned, current unaudited estimates indicate that the previously communicated targets for 2022 should be exceeded.

This performance is explained by the historically high level of activity recorded by the Company at the end of year. In fact, thanks to an organic increase in the Subscription activity of more than 100% in Q4 2022 over Q4 2021, on a full-year basis Axway now expects:

Organic revenue growth of between 4.5% and 5.5%, compared to 1% to 3% previously;

Operating profit from business activity representing between 14% to 15% of revenue, compared with 12% to 14% previously.”

Axway Software – Tour W, 102 Terrasse Boieldieu 92085 Paris La Défense Cedex, France

Arthur Carli, Head of Investor Relations & CSR

Tel.: +33(0)1 47 17 24 65 / email: acarli@axway.com

Sylvie Podetti, Financial Communication & CSR

Tel.: +33(0)1 47 17 22 40 / email: spodetti@axway.com

Rina Andriamiadantsoa, Financial Communication

Tel.: +33(0)1 47 17 24 04 / email: randriamiadantsoa@axway.com

Axway is exposed to risks, financial and non-financial, internal and external, which if they materialise could have a negative impact on its activities, financial results, reputation or jeopardise the achievement of its objectives. Indeed, the Company operates in a constantly changing business environment. The economic and geopolitical situation has increased uncertainty and impacted Axway’s business, by exacerbating some of the already existing risks Axway faces.

However, processes implemented by the Company allow it to identify and assess risks and take the necessary actions to minimise the adverse repercussions of this global crisis on its activity and organisation.

Risk mapping is the approach allowing the identification and assessment of risks. All the activity domains in the organisation were discussed with the members of the Executive Committee and the Company’s main managers, to identify the main threats and draw up a detailed description of each corresponding risk. These were assessed based on their probability of occurrence and their potential impact on business, taking account of all mitigation measures already implemented and effective (“net risk”).

Based on this work, the most material net risks for the Company were extracted and are presented hereafter. This Section presents the main risk factors to which Axway considers it is exposed at the date of filing of this document. Explanations are provided on how each risk may affect Axway, as well as information on how this risk is managed.

Other risks, which Axway is not aware of or currently considers to be of lesser importance, may also have a negative impact. In particular, additional information is provided on sensitivity to foreign exchange rate and interest rate risks in Chapter 5 “Consolidated financial statements”.

While Axway cannot ensure that all risks will be eliminated, risk management and the internal control system seek to identify, qualify and mitigate risks. They are described in Section 2 of this Chapter “Internal control and risk management”.

Risk mapping as well as risk factors were validated by Executive Management and examined by the Board of Directors’ Audit Committee.

Axway’s internal control and risk management system complies with prevailing laws and regulations. It is supported by the reference framework, implementation guide and recommendations published and updated by the Autorité des marchés financiers (AMF).

According to the definition of the AMF’s reference framework, internal control is “a system set up by the Company, defined and implemented under its responsibility, which aims to ensure:

• ●compliance with laws and regulations;
• ●the application of instructions and guidelines determined by Executive Management;
• ●the proper functioning of the Company’s internal processes, particularly those intended to safeguard its assets;
• ●the reliability of financial disclosures”.

With regard to risk management, its aim is to:

• ●create and preserve the Company’s value, assets and reputation;
• ●safeguard decision-making and other Company processes in order to promote the achievement of objectives;
• ●promote the consistency of the actions taken with the Company’s values;
• ●unify Company employees around a common vision of the main risks and increase their awareness of risks inherent to their activity.

The main risks that Axway faces are described in Chapter 2, Section 2.1 (“Risk factors”).

All of the internal control system and risk management processes described hereunder are implemented in all entities in the scope of consolidation with the aim of reducing the risk factors to an acceptable level, helping Axway achieve its objectives and providing reasonable assurance on their implementation. In the event of a new acquisition, this company will be fully consolidated into the global internal control and risk management system.

As with any control system, it cannot provide an absolute guarantee that such risks have been totally avoided, eliminated or controlled, or that Axway’s objectives will be achieved.

The responsibilities of the Finance Department mainly involve producing the separate financial statements of the Company’s subsidiaries and preparing the consolidated financial statements, management control, tax issues, sales administration, financing and cash accounting. The accounting and financial function is predominantly centralised within the Company. As previously indicated, there are a limited number of legal entities, and consequently, accounting entities, which generates operational savings and limits operating risks.

The Finance Department reports to the Company’s Executive Management. Like all entities, it contributes to the aforementioned steering system. Executive Management is closely involved in the planning and supervision process as well as in preparing the financial statements.

The Board of Directors is responsible for the regular oversight of accounting and financial information. 

It reviews and approves the half-year and annual financial statements, taking account of the Statutory Auditors’ opinion.

All Axway companies prepare full quarterly accounts on which the Company bases its published quarterly sales figures and interim financial statements. All of these companies are fully consolidated.

Monthly cash flow forecasts and financial statements that include operating profit are prepared for all companies. The application of rules is monitored continuously by the Finance Department, particularly regarding the application of revenue recognition and project valuation rules. The accounting methods and principles used are those presented in the notes to the consolidated financial statements, as disclosed in Chapter 5, Section 5.6 of this document, (“Notes to the consolidated financial statement”). Any changes are presented to the Audit Committee.

Insurance management is centralised by the Legal Department. The purpose of the insurance programme is to ensure a uniform and adapted coverage of risks for the Company and its employees, for all entities and under reasonable and optimised conditions. The scope and coverage of these various insurance programmes are reviewed annually with regard to changes in the Company’s size, its activities, the insurance market and risk assessment.

All Axway companies are insured with leading insurance firms for all risks that could impact its activity, results or assets. However, it is not inconceivable that Axway may be required to pay compensation for losses not covered by the insurance programmes put in place.

Nonetheless, it is noteworthy that, in the last three years, no major claim has been reported by any of Axway’s entities under the policies described below (or others covering the Group in the past).

The main insurance programmes are as follows:

The software solutions developed by Axway help companies make the most of their IT infrastructures by securely moving, integrating or exposing their strategic data.

In 2022, Axway attained its objective of optimising its product portfolio, while generating growth and improving profitability. The Company adjusted its organisation to include General Managers for each of the four main product lines. These new leaders are responsible for defining, producing and selling the various products and services proposed by Axway. Supported by the Research & Development, Product Management and Marketing teams, they comprise the value chain in the Company’s business model.

In a competitive sector with highly innovative businesses, Axway maintains its innovation and human capital assets and its responsible values through:

• ●an organisation focused on satisfying customers, measured by the Net Promoter Score (NPS);
• ●a comprehensive portfolio of products recognised by market analysts;
• ●significant investment in Research & Development, sales and marketing;
• ●balanced governance and a shareholder structure guaranteeing an independent corporate project; 
• ●constant dialogue between Executive Management and employees, supported by direct surveys;
• ●agile working methods and a harmonious and safe work environment;
• ●talent development, coordinated by a dedicated structure, Axway University;
• ●a solid financial structure;
• ●values shared with all the Company’s stakeholders;
• ●CSR indicators and programmes integrated in the Company’s policy and employee objectives.

These assets support Axway’s ambition to become an independent, committed and responsible leader in its markets.

Axway’s CSR materiality matrix, updated every year based on surveys conducted with stakeholders, makes it possible to build programmes and deploy responsible and sustainable practices to meet the expectations of the various parties in the Company’s ecosystem. Societal programmes conducted in 2022 focused in priority on customer satisfaction and the deployment of Axway’s CSR commitments to its stakeholders and particularly its suppliers. Axway also developed its programmes promoting access to digital training and careers, through educational and social projects in line with the Employer targets described above.

For the past five years, Axway has been committed to contributing to climate change mitigation. Work conducted to produce the carbon assessment published each year has enabled the approach to be structured into three stages: the measurement, reduction and ultimately the treatment of residual emissions from Axway’s activities through offset measures.

Encouraged by regulatory developments, the Company has learned much from the annual carbon assessments, which gradually strengthen the involvement of management and employees in the approach. Accordingly, at the end of 2021, under the impetus of the Chief Executive Officer, Axway embarked on a trajectory aimed at reducing its CO2 emissions as much as possible by 2028.

2022 was a new step in the implementation of this environmental commitment. Work made it possible to clarify the carbon assessment data and scopes, improve the measurement of CO2 emissions, particularly with suppliers, solicit new internal correspondents and communicate with employees to gradually initiate reduction measures.

Axway is therefore implementing a carbon system consistent with the climate targets set by the Paris Agreements, without resorting at this stage to financing third-party carbon offset, reduction or sequestration projects.

Axway has identified the key stages of its low carbon trajectory for the next three years, i.e. an initial horizon of 2025 which will be a major milestone. To this end, the Company has determined the necessary operational system, the tools to be developed and the skills to be acquired to achieve its objectives.

Axway also strengthened its methodology and reporting by drawing on the most reputed rating guidelines and labels. Axway therefore applies the ADEME reference guide and coefficients to calculate its carbon emissions. In 2022, the Company contributed for the first time to the Carbon Disclosure Project (CDP) and will analyse the interest of integrating SBTi guidance in 2023.

Carbon trajectory

The following table summarises the work undertaken in 2022 and identified for 2025 : 

The Company is a public limited company (société anonyme) with a Board of Directors. It is governed by applicable French laws and regulations and its Articles of Association. The Board of Directors determines the overall business strategy of the Company, supervises its implementation and meets as often as the Company’s interests require it to do so, at the request of its Chairman.

Furthermore, on 22 June 2015, the Board of Directors decided to separate the functions of Board Chairman and Chief Executive Officer.

The main provisions of the Articles of Association(1) relating to members of the Board of Directors and management bodies can be consulted on our Investors web page at https://investors. axway.com/en/bylaws-regulations-agreements.

The Board of Directors comprises a minimum of three and a maximum of eighteen members. During the life of the Company, the directors are appointed, reappointed or dismissed by the Ordinary General Meeting; they are all eligible for re-election. Directors are appointed for a term of four (4) years.

The Board of Directors elects a Chairman from among its members, who must be a natural person for the appointment to be valid. The Board of Directors can dismiss him at any time.

Diversity is a point of specific concern in the composition of the Board of Directors:

With regards to independence, the Board seeks, each year, during the review of its composition, to ensure a good balance between independent and non-independent members.

With regards to parity, the aim is to move towards an equal number of men and women. Parity is also sought in the specialist committees.

The desire for Board members of different nationalities reflects the search for multicultural diversity. Finally, a diversity of skills is also a major factor in the composition of the Board of Directors. The essential skills to guarantee the good functioning of the Board of Directors include experience in the software publishing sector, financial expertise, expertise in international environments, as well as corporate governance expertise in listed family companies, to favour the leverage of assets for profitable and sustainable growth.

The Board wishes to extend this diversity policy to Axway’s top-level Management.

The Board of Directors comprises the following members:

To the best of the Company’s knowledge, at the date of this Universal Registration Document, the only existing family relationships were those between:

• ●Yann Metz-Pasquier and Pierre Pasquier;
• ●Pierre-Yves Commanay and Pierre Pasquier;
• ●Yann Metz-Pasquier and Pierre-Yves Commanay.

At the date of this Universal Registration Document and to the best of the Company’s knowledge, none of the members of the Board of Directors or management have been:

• ●convicted of fraud in the past five years;
• ●declared bankrupt or placed into receivership or liquidation in the past five years;
• ●incriminated and/or issued an official public sanction by statutory or regulatory authorities in the past five years.

To the best of the Company’s knowledge, none of the company officers have been prevented by the courts from acting as a member of an issuer’s administrative, management or supervisory body or from being involved in an issuer’s management or the conduct of its business in the past five years.

The Company maintains significant relationships for its business, control, strategy and development with Sopra GMT, the lead holding company. Pierre Pasquier is the Chairman and Chief Executive Officer of Sopra GMT and the Pasquier family holds a 68.27% interest in the share capital.

Sopra GMT controls the Company as a result of its direct and indirect holding of more than half of the Company’s share capital (55.69%) and 65.53% of its voting rights (see Chapter 7, Section 7.2). Sopra GMT therefore exercises considerable influence over the Company’s business, strategy and development.

Furthermore, a framework assistance agreement was entered into with Sopra GMT, under which Sopra GMT provides a considerable number of services involving the Axway Software strategy and the potential synergies with Sopra Steria Group (see Chapter 4, Section 4.2). Pursuant to the procedure applicable to regulated agreements, this agreement, and its extension, were submitted to the Board of Directors and the General Shareholders’ Meeting for approval prior to being signed.

To the best of the Company’s knowledge, these relationships are not liable to constitute conflicts of interest.

It should also be noted that:

• ●Axway’s Board of Directors includes nine (9) independent directors, selected at its meeting held on 26 January 2023, in accordance with Recommendation No. 3 of the Middlenext Code of Corporate Governance;
• ●The directors are bound by the obligation to protect the interests of the Company and comply with the rules set out in the internal regulations of the Board of Directors and any other rules contributing to good governance as defined in the Middlenext Code of Corporate Governance (Code of Ethics for Board members). Moreover, the Board of Directors’ internal regulations stipulate in Title 7 “Ethics” that: “Any member of the Board of Directors finding himself in a situation of conflict of interest or potential conflict of Interest, due notably to the offices they hold with another company, must report this situation to the Appointments, Ethics and Governance Committee as rapidly as possible, explaining the issue encountered and detailing the reasons for the existence of the actual or potential conflict of interest. […]. The Chairman of the Board, having regard to the opinion of the Appointments, Ethics and Governance Committee, asks the relevant member of the Board of Directors not to take part In the deliberations and/or not to attend the Board of Directors’ meeting”;
• ●the members of the Board of Directors undertake to report, prior to each Board meeting and depending on the agenda, any potential conflicts of interest and to not take part in deliberations or votes on any subjects where they have a conflict of interest.

Pursuant to Article 223-26 of the AMF General Regulations, the following transactions involving Axway shares fell within the scope of Article L. 621-18-2 of the French Monetary and Financial Code during the fiscal year ended 31 December 2022:

The sole agreement approved in previous years with continuing effect during the year ended 31 December 2022 is described below:

The support agreement between Sopra GMT on the one hand, and the Company and Sopra Steria Group SA on the other, defines Sopra GMT’s role as the financial holding company for these two companies. This agreement, which was initially entered into on 1 July 2011, for a period of two (2) years and then renewed in July 2013, has been amended to make it an open-ended agreement, which may be cancelled by giving twelve (12) months prior notice, in writing. This agreement aims to improve strategic planning and general policy coordination between the Sopra Steria Group and the Company, in particular, by developing synergies subsequent to the spin-off of Axway Software, as well as providing the Company with support and consultancy services.

The Board of Directors’ meeting of 26 January 2023 unanimously approved (with abstention of relevant directors) (i) the continuation of the authorisation previously granted and (ii) the payment of €1,167,536.64 to Sopra GMT for services rendered in the year ended 31 December 2022.

The Company decided to adopt the recommendations of the Middlenext Code of Corporate Governance for small and midcaps updated in September 2021 (available on the Middlenext website: www.middlenext.com), due to its compatibility with the size of the Company and its capital structure.

The Board of Directors has reviewed the principles of this Code.

A summary table of directors qualified as independent under the criteria used by the Middlenext Code is presented in Chapter 4, Section 4.1.

The Company applies the majority of recommendations included in the Middlenext Code and intends to adapt its internal process on a gradual basis with each passing fiscal year. However, for the fiscal year ended 31 December 2022, the application status of the Code’s recommendations is as follows:

Following the update of the Code in 2021, directors were made aware of the need to prepare a three-year training plan and committed to doing so over the year.

The Company’s Legal Department currently monitors developments and keeps Board members and Management informed of all regulatory changes relating to corporate governance and/or impacting the Company’s activities. An annual summary of legal developments is also prepared, highlighting major legislative changes during the year and their implementation and enabling expected upcoming developments to be anticipated.

From a review of the subjects covered by Middlenext in its directors training catalogue since 2021, it would appear that Axway directors and senior executives had the opportunity to raise and discuss all these subjects during Board and Committee meetings in 2021 and 2022.

With regard to specific matters relating to the Company’s activities, each new product is explained to directors by Executive Management during Board and Committee meetings.

Given the measures already implemented for directors and their experience and seniority in Axway, we indicated in 2021 that we partially complied with this recommendation.

In 2022, additional measures were implemented for Board members and management, with the provision of:

• a shared space containing, by topic, the applicable regulatory texts, presentations made or documents communicated to Board and/or Committee meetings on issues relating to corporate governance and/or impacting the Company’s activities. This space is kept up-to-date by the Legal Department and the Company Secretary;
• training modules on Axway products via the Axway University;
• a catalogue of additional training courses provided by third-party bodies.

Given the above, Axway complies fully with recommendation no. 5 of the Middlenext Code.

The following developments, which form an integral part of the Board of Directors’ report on corporate governance, are presented in accordance with Article L. 22-10-9 of the French Commercial Code.

Pursuant to the provisions of Article L. 22-10-34 II and III of the French Commercial Code, shareholders will be asked to approve the compensation of company officers presented below and the compensation components paid or awarded to executive officers.

This Section presents, for each company officer, the compensation components paid or awarded in respect of the previous fiscal year, in accordance with the compensation policy approved by the Company’s Combined General Meeting of 24 May 2022.

The Company’s Combined General Meeting of 24 May 2022, in the 7th resolution, decided to grant directors compensation referred to in Article L. 22-10-14 of the French Commercial Code of €330,000 for the year ended 31 December 2022.

The following table presents the compensation paid to directors for their duties in respect of the past three fiscal years.

There are currently no service agreements or employment contracts between the Company and the directors.

With the exception of Pierre Pasquier, Chairman of the Board of Directors, whose compensation components for his duties as Chairman of the Board of Directors are presented below, the directors do not receive any compensation from the Company for their duties, other than the compensation referred to in Article L. 22-10-14 of the French Commercial Code.

The fixed, variable and exceptional components of total compensation and benefits in kind paid or granted in the past year to Pierre Pasquier, Chairman of the Board of Directors, for his term of office, determined in accordance with the compensation principles and criteria approved by the General Meeting of 24 May 2022 are as follows:

The fixed, variable and exceptional components of total compensation and benefits in kind paid during the past year or awarded in respect of this same year to Patrick Donovan, Chief Executive Officer, for his term of office, determined in accordance with the compensation principles and criteria approved by the General Meeting of 24 May 2022 are as follows:

In accordance with position-recommendation 2014-14 amended on 25 July 2019 and the recommendations of the new Middlenext Code of Corporate Governance, the table below shows the compensation received by the Chairman of the Board of Directors, Pierre Pasquier, and the Axway Group Chief Executive Officer for the past three fiscal years:

Pierre Pasquier, Chairman and Chief Executive Officer of Sopra GMT, Axway Software’s holding company, received from this company fixed compensation of €130,000 in respect of his duties, in addition to compensation referred to in Article L. 22-10-14 of the French Commercial Code in respect of his office of €14,400 for 2022. This compensation is not reinvoiced to the Company. Furthermore, as stated in the Sopra Steria Group Universal Registration Document, he also received fixed compensation of €500,000 as Chairman of the Board of Directors of this company and compensation referred to in Article L. 22-10-14 of the French Commercial Code in respect of his office of €26,891 for 2022.

The company officers did not receive stock options when the different plans were set up.

During the fiscal year ended 31 December 2022, no stock options were granted to executive officers.

No stock options granted to executive officers were exercised during the fiscal year ended 31 December 2022. Prior to his appointment, the Company’s current Chief Executive Officer, Patrick Donovan, was the Group’s Chief Financial Officer and, as such, was granted subscription options as part of the stock option plans allocated to key executives.

This is a translation into English of the Statutory Auditors’ report on the consolidated financial statements of the Company issued in French and it is provided solely for the convenience of English speaking users.

This Statutory Auditors’ report includes information required by French law, such as information about the appointment of the Statutory Auditors or verification of the management report and other documents provided to shareholders.

This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France

Year ended 31 December 2022

To the General Meeting of Axway Software,

In compliance with the engagement entrusted to us by your General Meeting, we have audited the accompanying consolidated financial statements of Axway Software for the year ended 31 December 2022.

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at 31 December 2022 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

The audit opinion expressed above is consistent with our report to the Audit Committee.

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Section of our report.

We conducted our audit engagement in compliance with independence requirements of the French Commercial Code (code de commerce) and the French Code of Ethics (code de deontologie) for Statutory Auditors, for the period from 1 January 2022 to the date of our report, and specifically we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014.

In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code (code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period, as well as how we addressed those risks.

These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the financial statements.

(Note 4.1.1 to the consolidated financial statements)

The Group’s activity comprises several business lines including license sales and sales of Customer Managed Subscription contracts. At 31 December 2022, the Group’s licensing revenue amounted to €11.6 million, representing 3.7% of consolidated revenue. Customer Managed Subscription revenue amounted to €154 million, representing 49% of consolidated revenue.

As a rule, licensing revenue is recognised immediately upon delivery, which is considered completed when all contractual obligations have been fulfilled, i.e. when any remaining services to be provided are non-material and not liable to call into question the customer’s acceptance of goods supplied.

Sometimes, contracts comprising multiple components (license, maintenance, ancillary services, etc.) may be negotiated on a fixed-price basis. In this situation, the amount of revenue attributable to the license is equal to the difference between the total contract amount and the fair value of the other performance obligations.

Customer Managed Subscription contracts are a hybrid offer comprising three separate performance obligations: License, Maintenance and Subscription. The contract price must be allocated to each performance obligation and revenue is recognised in accordance with the method applicable to each obligation.

In this context, the audit risks concern in particular the correct separation of fiscal years and the rules and procedures for apportioning revenue to the different performance obligations.

Revenue recognition for these business lines is considered a key audit matter in view of their material significance in the Group’s financial statements, and, in particular, their impact on operating profit.

Our audit approach is based on the assessment of the internal control procedures put in place by the Group in order to verify the measurement, comprehensiveness and proper separation of fiscal years for licensing revenue and Customer Managed Subscription, as well as substantive audit procedures.

Our work included the following, in particular:

• ●reviewing the design of internal control and testing the effectiveness of key controls in the revenue recognition procedure;
• ●conducting substantive tests, by sampling or other selection methods, on the revenue from licensing contracts and Customer Management Subscription contracts signed during the fiscal year in order to verify the reality and measurement of revenue, and the correct separation of fiscal years.

In particular, we reconciled the recognised amount with the contract data, and verified the application of the procedure for apportioning the price of multiple-component contracts among the different performance obligations.

We examined the proof of delivery and the terms and procedures for payment.

We also assessed the appropriateness of the disclosures in Note 4.1.1 to the consolidated financial statements.

(Notes 8.1 and 8.2 to the consolidated financial statements)

For the purposes of its development, the Group has conducted targeted external growth operations entailing recognition of several goodwill items.

These goodwill items, corresponding to the difference between the price paid and the fair value of the assets acquired and liabilities assumed, are described in Note 8.1 to the consolidated financial statements. This goodwill is allocated to the sole cash generating unit (CGU) identified in the Axway Group, namely the Group itself.

Management ensures at each year-end, and whenever indication of an impairment loss is identified, that the net carrying amount of such goodwill, recognised in the balance sheet at €348.3 million at 31 December 2021, and at €297.8 million at 31 December 2022, is not greater than its recoverable amount.

A cash generating unit’s recoverable amount is the higher of its fair value (generally market value) less costs to sell, and its value-in-use. The value-in-use is determined by discounting future cash flows. The Impairment test procedure applied and details of the assumptions adopted are presented in Note 8.2. At 31 December 2022, the Impairment test performed did not identify any impairment loss on the goodwill recognised.

The determination of the recoverable amount of goodwill, which is particularly material with regard to the balance sheet total, relies very largely on management judgement; this concerns in particular the definition of the cash generating units, the perpetual growth rate adopted for the cash flow forecasts and the discount rate applied. We therefore considered the measurement of goodwill and the implementation of Impairment tests as a key audit matter.

Our work included the following, in particular:

• ●examining the compliance of the methodology applied by the Group with current accounting standards and, in particular, ascertaining whether the allocation of the assets to the sole CGU identified is comprehensive;
• ●verifying that fair value less costs to sell is based on the closing share price;
• ●assessing the reasonableness of the assumptions used to determine future cash flows with regard to operating data and in light of the economic and financial context in which the Group operates;
• ●assessing, with the support of our valuation experts, the consistency of all components of the perpetual growth rate and discount rate;
• ●analysing the sensitivity of the value-in-use determined by management to changes in the main assumptions adopted.

Lastly, we verified the appropriateness of disclosures in Notes 8.1 and 8.2.

(Note 6.4 to the consolidated financial statements)

At 31 December 2022, eligible tax losses carried forward amounted to €307.3 million. The Group recognised deferred tax assets in the balance sheet amounting to €35.4 million in respect of these tax loss carryforwards.

The Group recognises deferred tax using the balance sheet liability method based on temporary differences between the carrying amount of assets and liabilities in the consolidated financial statements and their tax base. Deferred tax assets relating to tax losses carried forward are recognised if the subsidiaries or the tax consolidation group are likely to have sufficient taxable profits to offset against them.

We considered the recognition and assessment of the recoverability of these deferred tax assets to be a key audit matter, in view of their material amount in the Group financial statements and as the recoverable amount is determined based in particular on future profit forecasts, founded on assumptions, estimates and management assessments.

We obtained details of the deferred tax assets and taxable profit forecasts for Axway Software, Axway Inc. and Axway Ireland. On the basis of this information, we conducted the following procedures:

• ●we reviewed the calculations and assessed the reasonableness of the main estimates, particularly for the forecasts of future taxable profits;
• ●we analysed the consistency of the forecasts with the historic performance, transfer pricing policies and the assumptions used to determine the value-in-use of the sole CGU;
• ●we reviewed the various taxation rates used to determine the deferred tax assets, notably in France and the United States.

Lastly, we verified the appropriateness of disclosures in Note 6.4.

As required by law, we have also verified in accordance with professional standards applicable in France the information pertaining to the Group presented in the Board of Directors’ management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

We attest that the consolidated non-financial performance statement required by Article L. 225-102-1 of the French Commercial Code is included in the information pertaining to the Group presented in the Group management report. It is specified that, in accordance with the provisions of Article L. 823-10 of this Code, we have not verified the fair presentation and the consistency with the consolidated financial statements of the information contained therein, which should be reported on by an independent third party.

We have also verified, in accordance with the professional standard applicable in France relating to the procedures performed by the statutory auditor relating to the annual and consolidated financial statements presented in the European single electronic format, that the presentation of the consolidated financial statements intended to be included in the annual financial report mentioned in Article L. 451-1-2, I of the French Monetary and Financial Code (code monetaire et financier), prepared under the responsibility of Chief Executive Officer, complies with the single electronic format defined in the European Delegated Regulation No 2019/815 of 17 December 2018. As it relates to consolidated financial statements, our work includes verifying that the tagging of these consolidated financial statements complies with the format defined in the above delegated regulation.

Based on the work we have performed, we conclude that the presentation of the consolidated financial statements intended to be included in the annual financial report complies, in all material respects, with the European single electronic format.

Due to the technical limits inherent to the macro-tagging of consolidated financial statements in accordance with the European single electronic format, it is possible that the content of certain tags in the notes to the consolidated financial statements are not presented in an identical manner to the accompanying consolidated financial statements.

Furthermore, we have no responsibility to verify that the consolidated financial statements that will ultimately be included by your Company in the annual financial report filed with the AMF are in agreement with those on which we have performed our work.

Both Aca Nexia and Mazars were appointed Statutory Auditors of Axway Software by the General Meeting of 18 December 2000.

At 31 December 2022, ACA Nexia and Mazars had held office as auditors for 22 continuous years, of which 12 years since the Company’s securities were admitted for trading on a regulated market.

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations.

The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures.

The consolidated financial statements were approved by the Board of Directors.

Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As specified in Article L. 823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of management of the affairs of the Company.

As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional judgement throughout the audit and furthermore:

• ●identifies and assesses the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• ●obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control;
• ●evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management in the consolidated financial statements;
• ●assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the consolidated financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein;
• ●evaluates the overall presentation of the consolidated financial statements and assesses whether these statements represent the underlying transactions and events in a manner that achieves fair presentation;
• ●obtains sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. The statutory auditor is responsible for the direction, supervision and performance of the audit of the consolidated financial statements and for the opinion expressed on these consolidated financial statements.

Each year, Axway Software SA distributes free shares to employees subject either to a condition of presence or a condition of presence and performance conditions.

In March 2022, the LTI AOA, WW free share and Executive Committee plans expired and the shares were delivered. An employee expense of €403 thousand was recognised in respect of these shares.

For the plans expiring in 2023 and beyond, it was decided to continue purchasing shares on the stock market via CM-CIC. The cost of this transaction at 31 December 2022 is €23.3 million. As Axway Software SA cannot bear this cost alone, the subsidiaries will be rebilled based on the number of free shares granted to their employees, as was done in March 2022 for a total of €9 million.

A provision of €8.6 million was recorded for the purchase of treasury shares for distribution under the free share plans. Accrued income of €6.9 million was recognised between Axway Software and its subsidiaries as of 31 December 2022.

In June 2022, Axway Software acquired DXchange Technologies Private Limited and its subsidiary in India. DXchange Technologies Private Limited will be liquidated in June 2023. The subsidiary will be retained to house the employees. The share capital of the company is €9.8 million.

On 16 September, Axway Software sold its Mailgate technology to MailGate LLC. The asset was removed from the accounts for a gross value of €4.5 million and amortisation of €3.8 million. An earn-out clause was agreed with the buyer, linking part of the price paid to the future performance of the company.

The annual financial statements were drawn up pursuant to French legal and regulatory provisions as defined in ANC Regulation no. 2020-05 of 24 July 2020 issued by the Autorite des Normes Comptables (French Accounting Standards Authority), updated for additional regulations issued as of the date of preparation of the annual financial statements.

These principles were applied on a prudent basis and in accordance with the following underlying assumptions:

• ●going concern basis;
• ●consistency of accounting methods year-on-year;
• ●accruals basis; and
• ●in accordance with general guidelines for the preparation and presentation of annual financial statements.