Annual Report 2021 1 Redefining Engineering Efficiencies with AVEVA’S Unified Engineering Solution Optimising EDF’S Power Generation Value Chain
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AVEVA Group plc Annual Report and Accounts 2021 AVEVA Group plc — Annual Report and Accounts 2021 Redefining Digital Transformation Enabling industries to drive sustainable growth In FY21, AVEVA shifted to operate from home, extended Strategic report our Cloud capabilities and accelerated subscription sales. 1 Redefining digital transformation Our transformative integration with OSIsoft deepened 2 Case studies our industrial information management capabilities. 8 At a glance In 12 months of unprecedented disruption, we delivered a 10 Chairman’s statement solid performance. 12 Chief Executive’s review 18 Market review 20 Our business model Integrating our industrial software with OSIsoft’s PI System 22 Our stakeholders enables us to connect our customers’ information with 24 Our strategy artificial intelligence and human insight, empowering their 26 Key performance indicators teams to make precise decisions and drive sustainable 28 Sustainability 36 Principal risks and uncertainties growth. We call this Performance Intelligence and we 47 Viability statement and going concern believe it’s set to redefine how industries can engineer, 48 Finance review operate and innovate. 54 Our people 58 Non-financial information statement In this report, learn how we are helping industries use Cloud, big data, artificial intelligence and the IIoT to drive Governance report engineering efficiency, operational excellence, resiliency, 59 Chairman’s letter and agility, shaping a sustainable future. 62 Board of Directors 66 Governance at a glance FY21 financial highlights 67 Division of responsibilities 68 Keeping the Board informed Revenue Profit before tax 70 Considering stakeholders in principal decisions 74 Board activities £820.4m £34.2m 78 Nomination Committee report Down 1.6% (FY20: £833.8m) Down 62.8% (FY20: £92.0m) 83 Audit Committee report 90 Remuneration Committee report Adjusted1 EBIT Recurring revenue2 100 Directors’ Remuneration Policy 109 The Implementation Report £226.4m 67.9% 123 Other statutory information Up 4.4% (FY20: £216.8m) Up 570 bps (FY20: 62.2%) Net cash Adjusted1 EBIT margin Financial statements 128 Auditor’s report 137 Consolidated financial statements £286.9m 27.6% 179 Company financial statements Up 150.3% (FY20: £114.6m) Up 160 bps (FY20: 26.0%) 185 Statement of Group accounting policies 191 Full list of addresses and subsidiaries 1 Diluted EPS Adjusted diluted EPS 195 Non-GAAP measures 202 Company information and advisers 11.27p 81.31p 203 Glossary Down 67.4% (FY203: 34.60p) Down 6.3% (FY203: 86.75p) 1. Adjusted figures 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. Where relevant this also includes the tax effect of these adjustments. 2. Recurring revenue is defined as subscription plus maintenance revenue. 3. FY20 EPS has been restated to reflect a bonus factor of 0.8 arising on the November 2020 rights issue. View our interactive Online Annual Report at: Front cover image: Worker interacts with a digital infrastructure display. https://investors.aveva.com/annualreport/annualreport.html Redefining digital transformation through Performance Intelligence At AVEVA, we relentlessly pursue innovation. Combining broader, deeper industrial data and AI-infused analytics with Cloud and Digital Twin, we empower teams with insight, freeing our customers to elevate what they can achieve. We call this Performance Intelligence. From water and energy to food and infrastructure, we enable industries to leverage the capabilities of our hardware-agnostic software to drive engineering efficiency and operational agility. Using digital insight, teams can transform opportunity into sustainable business value. We’ll take you there™ Our strategy is centred around five key areas SCG Chemicals drives operational We evolved our strategy Our Action for Good programme agility using AVEVA APM software to focus on engineering efficiency puts our people at the heart of and OSIsoft’s PI System and operational agility sustainable innovation Read more on pages 6 to 7 Read more on pages 24 to 25 Read more on page 56 aveva.com | Annual Report 2021 1 Redefining engineering efficiencies with AVEVA’s Unified Engineering solution Optimising EDF’s power generation value chain Enabling engineering efficiency with AVEVA Unified Engineering EDF, the world’s largest power elevating nuclear engineering to company, is committed to tackling the cutting edge of innovation and climate change. The company’s performance using AVEVA’s vision is to produce low-carbon Unified Engineering solution. electricity and achieve carbon neutrality across its portfolio by Leveraging AVEVA E3D Design, 2050. Digital transformation is EDF will elevate its engineering critical to delivering EDF’s vision, design tools to a new level of and to preserving the company’s conceptional methodology using competitiveness. In addition, the AVEVA’s unique industrial French nuclear industry identified software capabilities to support software solutions as a key step the SWITCH vision. By empowering towards realising a new, safe and EDF’s teams with a trusted, competitive nuclear sector. data-centric solution, AVEVA provides complete digital continuity SWITCH to the next level and boosts engineering efficiency, In 2018, EDF launched the SWITCH all founded on the Digital Twin. transformation programme. SWITCH was designed to overhaul Analytics-led operational its nuclear engineering operations efficiency to embed efficient processes and In parallel, EDF also uses AVEVA innovative operating models. Predictive Analytics and AVEVA’s Engineering and building a plant operational data management, to EDF’s Extended Producer PI System, to operate its power Responsibility blueprint is a plants. Together, these solutions long-term project. EDF wished to provide EDF’s team with real-time select a trusted partner who is operations information, enabling fully aligned with its innovative them to make precise decisions to priorities. Having signed a optimise assets across the strategic agreement with AVEVA, company’s portfolio. SWITCH will be able to accelerate its digital transformation agenda, Image: A nuclear facility in the French countryside. 2 Annual Report 2021 | aveva.com aveva.com | Annual Report 2021 3 Redefining operational agility through intelligent information management Enabling BASF to optimise chemicals manufacturing Image: BASF employees at the Ludwigshafen plant, Germany. 4 Annual Report 2021 | aveva.com AVEVA Asset Information Management deployment supports BASF’s global digital strategy BASF operates one of the world’s 3D models, and more. The web-based largest AVEVA Asset Information browser of the AIP displays the data Management installations at directly and logically, consolidating the Verbundsite Ludwigshafen, data and facilitating information with over 120 plants connected. transfer between teams. Now, BASF’s The first investment, made over teams can take an enhanced eight years ago, was designed approach to asset documentation, to enable BASF’s teams to unify using a process-oriented system with disparate data stacks into a intuitive navigation which provides unified dashboard that spanned the team with consistent information their engineering and operations and drives operational agility. information, providing a holistic perspective on business operations. In the past year, the AIP has become ever more important to BASF’s Called the myPlant Asset operations, providing accurate, Information Portal (AIP), the real-time information on chemical system provides object- and manufacturing processes and asset-related information at the enabling teams to share best click of a button. BASF teams can practices intuitively. access the technical sheet, inspection documents, drawings, Image: Accessing BASF’s MyPlant AIP using an internet browser. “AVEVA’s flexible approach has been the foundation of our business collaboration for many years. With the introduction of the AIP for myPlant Lifecycle Management, we further boosted efficiency for operational and technical processes because we can find and display information and asset documents faster than conventional searches, and object- and topic-related, associative, networked, dynamic information provides a more intuitive and useful interface for collaboration and knowledge sharing. This year, during lockdown, we have used the system to identify further opportunities to optimise our operations and streamline our production.” Frank Tillwick, BASF Senior Manager Process-Ownership “Having worked with BASF for many years, I have been delighted in the past year to see how our deployment of AVEVA Asset Information Management has enabled the team to optimise key business operations and improve operational agility, keeping core essential processes up and running during times of disruption.” Utrecht Wolf, AVEVA project lead aveva.com | Annual Report 2021 5 Fleet-wide performance monitoring using AVEVA Predictive Analytics enables optimal performance Elevating operations and collaboration at SCG Chemicals Image: SCG Chemicals team at work in Bangkok, Thailand. 6 Annual Report 2021 | aveva.com Innovative model integrates data, analytics and artificial intelligence When the leadership of SCG AVEVA’s expert team worked Chemicals (SCG), one of closely with SCG, building a highly Thailand’s largest integrated innovative model that draws petrochemical complexes, wished on Digital Twin and connected to improve