INVESTOR RELATIONS FACTBOOK
December 2015
© 2015 Software AG. All rights reserved.
2 |
This presentation includes forward-looking statements based on the beliefs of Software AG management.
Such statements reflect current views of Software AG with respect to future events
and results and are subject to risks and uncertainties. Actual results may vary materially from those
projected here, due to factors including changes in general economic and business conditions, changes in
currency exchange, the introduction of competing products, lack of market acceptance
of new products, services or technologies and changes in business strategy. Software AG does not intend
or assume any obligation to update these forward-looking statements.
This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way
securities of Software AG or any of the companies that are members of the Group at present or in the
future, nor does it form part of such an offer and it should not be understood as such. This presentation
does not constitute an offer of sale of securities in the United States of America. Securities may not be
offered or sold in the United States of America without registration or exemption from registration in
accordance with the U.S. Securities‘ Act of 1933 in its currently valid form.
The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) research opinion or viewpoints published, as part of a syndicated
subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date
(and not as of the date of this Prospectus) and the opinions expressed in the Gartner Report(s) are subject to change without notice.
© 2015 Software AG. All rights reserved.
SAFE-HARBOR-STATEMENT
3 |
SOFTWARE AG AT A GLANCE
Technology leader for more than 40 years
in data management and application development platforms
€850+ MILLION IN REVENUE
4,300+ EMPLOYEES WORLDWIDE*
€2bn+ MARKET CAP
40%+
recurring
50%+ new
products
* P&L as of Sept. 30, 2015
45%
Americas EMEA
47%
REVENUE BY REGION*
34%
Euro
31%
USD
REVENUE BY CURRENCY*
R&D 23%
S&M 21%
~65% Free float
Consulting
& Services
42%
Admin
14%
© 2015 Software AG. All rights reserved.
4 |
BUSINESS DEVELOPMENT
© 2015 Software AG. All rights reserved.
STRATEGY EXECUTION IN 3 STAGES
243 355
395
2003 2010 2006 2014 2020
Revenue in €m: Product Revenue
(Own Products, Group)
DBP
A&N
69
677
351
5 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
6 |
KEY VALUE INVESTMENT INDICATORS
© 2015 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built over 40+ years
• Risk balanced revenue by industry and geography
• Experienced management team and loyal expert staff
2. USP: Technology leadership and vendor neutrality
• Leadership in relevant product categories by industry analysts
• Innovator: First Digital Business Platform
• Neutral vendor to integrate systems from large brands
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• 40+ percent of revenue is recurring maintenance
• High operating margin (2015e: 28-29%)
• Continuous dividend (cash-out ratio 25-33% of net profit/Free Cash Flow)
7 |
Public Sector Telecom Chemicals/Pharma Energy/Utilities
Manufacturing Logistic/Transport Consumer/Retail
Finance
BLUE CHIP CUSTOMER BASE BUILT OVER 40+ YEARS (SAMPLES)
© 2015 Software AG. All rights reserved.
8 |
BALANCED RISK
© 2015 Software AG. All rights reserved.
REVENUE BY GEOGRAPHY AND INDUSTRY
Product Revenue by Region Product Revenue by Industry
47% 45%
(13%)
8%
Americas
EMEA (13% Germany)
Asia Pacific
21%
19%
19%
10%
9%
Government Financial Services
IT Services Services
Manufacturing Telco & Media
Transport & Logistics Other
Based on Group product revenue – 9M 2015
9 |
EXPERIENCED MANAGEMENT TEAM AND LOYAL EXPERT STAFF
Karl-Heinz Streibich Eric Duffaut Dr. Wolfram Jost Arnd Zinnhardt Chief Executive Officer
- since 2003 -
Chief Customer Officer
- since 2014 -
Chief Technology Officer
- since 2010 -
Chief Financial Officer
- since 2002 -
Human Resources, Legal,
Information Services (IT),
Corporate Communications,
Processes, Audits & Quality,
Corporate Office
Sales & Marketing,
Global Consulting Services,
Partner Management
Research & Development Finance, Controlling,
Taxes, Treasury,
Business Operations,
Mergers & Acquisitions,
Investor Relations,
Global Purchasing
© 2015 Software AG. All rights reserved.
10 |
KEY VALUE INVESTMENT INDICATORS
© 2015 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built over 40+ years
• Risk balanced revenue by industry and geography
• Experienced management team and loyal expert staff
2. USP: Technology leadership and vendor neutrality
• Leadership in relevant product categories by industry analysts
• Innovator: First Digital Business Platform
• Neutral vendor to integrate systems from large brands
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• 40+ percent of revenue is recurring maintenance
• High operating margin (2015e: 28-29%)
• Continuous dividend (cash-out ratio 25-33% of net profit/Free Cash Flow)
11 | © 2015 Software AG. All rights reserved
Our solutions work in
harmony with your
existing IT landscape.
We make all leading
databases and application
platforms work in synergy
with one another.
We won’t lock you into
proprietary systems.
NEUTRAL - BECAUSE WE ARE VENDOR INDEPENDENT
12 |
KEY VALUE INVESTMENT INDICATORS
© 2015 Software AG. All rights reserved.
1. Footprint: Established global player in enterprise software
• Blue Chip customer base built over 40+ years
• Risk balanced revenue by industry and geography
• Experienced management team and loyal expert staff
2. USP: Technology leadership and vendor neutrality
• Leadership in relevant product categories by industry analysts
• Innovator: First Digital Business Platform
• Neutral vendor to integrate systems from large brands
3. Financials: Solid profit base and high cash generation
• ⅔ of license revenue from growing market segments
• 40+ percent of revenue is recurring maintenance
• High operating margin (2015e: 28-29%)
• Continuous dividend (cash-out ratio 25-33% of net profit/Free Cash Flow)
13 |
LICENSE REVENUE: ⅔ FROM GROWING IT MARKETS
© 2015 Software AG. All rights reserved.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e
A&N
DBP
DBP offering focused on IT digitization segments,
like IoT, streaming analytics etc.
14 |
RECURRING MAINTENANCE REVENUE
© 2015 Software AG. All rights reserved.
0
100
200
300
400
2010 2011 2012 2013 2014 2015e*
A&N
DBP
353 362 378 369 369
410+*
>45% of Group Revenue
from Maintenance
* According to Analyst Consensus as of Oct. 2, 2015 ** Group revenue split 9M 2015
in €m
49%
Maintenance
>90% recurring
27%
License
23%
Consulting
15 |
200
300
400
500
600
2015 2017 2019 2021 2023 2025
*renewal rate ca. 95%
400
500
600
700
800
2015 2017 2019 2021 2023 2025
© 2015 Software AG. All rights reserved. For internal use only
DBP License: +10% CAGR
DBP License: flat
€m
€m
€m
MAINTENANCE REVENUE SHOWS COMPOUND GROWTH
16 |
SOFTWARE AG VALUE INVESTMENT KPI
40%
Mainte-
nance
31%
License
29%
Consulting
Growing share of product and recurring revenues
0.46€
0.50€
2013 2014
Dividend
& yield
increase
Cash conversion
rate average ca.
120% of Net profit
50%
90%
130%
170%
2011 2012 2013 2014 2015e1.8% 2.5% yield:
Operating margin*
improved
9M 2013
* Non–IFRS EBITA in % of revenue
20%
30%
40%
Q1 Q2 Q3 Q4
2014
2013
2015
9M 2015
© 2015 Software AG. All rights reserved.
49%
Mainte-
nance
27%
License
23%
Consulting
27%
FY2013
28%
FY2014
28-29%
FY2015e
17 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
18 |
• Implementing own
product stack
• Customized Solutions
BUSINESS LINES
• Database
Management System
• Application
Development
• Modernization
• Business & IT
Transformation
• Streaming Analytics
• AgileApps
• IT Portfolio
Management
• Integration &
Connectivity
Share of
Revenue
Share of
Revenue
Share of
Revenue 48% 29% 23%
Group revenue split 9M 2015
© 2015 Software AG. All rights reserved.
19 |
BUSINESS DEVELOPMENT
© 2015 Software AG. All rights reserved.
STRATEGY EXECUTION IN 3 STAGES
243 355
395
2003 2010 2006 2014 2020
Revenue in €m: Product Revenue
(Own Products, Group)
DBP
A&N
69
677
351
20 |
BUSINESS MODEL
© 2015 Software AG. All rights reserved.
REVENUE STRUCTURE & SEASONALITY
49%
Maintenance
27%
License
23% Consulting
~20% ~25%
~20%
~35%
0
10
20
30
40
Q1 Q2 Q3 Q4
Normal license seasonality
Share of Revenue*
License
• Direct sales force & Partners
• One-time payment for perpetual license
• Additional payment for capacity upgrades, extended usage and add-on products
• Price: Capacity/MIPS or CPU based
Maintenance
• Annual Payment
• Price based on license volume:
• DBP: new 22% (installed 18-20%)
• A&N: 15 - 18%
Consulting Services
• Implementing own products
• Cost plus or fixed price projects
• Own staff + freelance
* 9M 2015 Group Revenue
21 |
ACQUISITIONS
© 2015 Software AG. All rights reserved.
SUPPORT, TECHNOLOGY, LEADERSHIP
BUSINESS & IT
TRANSFORMATION
ANALYTICS & DECISIONS
PROCESS
INTEGRATION
IN-MEMORY DATA
Event Processing
IT Portfolio Management
Visualization
Cloud Application Development
Messaging
Mobile Suite
In-Memory Data Fabric
22 |
GO-TO-MARKET: 2015
© 2015 Software AG. All rights reserved.
KEY SUCCESS FACTORS
Partner Eco System expansion to get ready for scale • Strategic initiative and major KPI
Maximize Maintenance Revenue • New dedicated Line of Business
Improve DBP Sales Productivity & Excellence • New GTM Model
2 From Product to platforms driven Go to Market • Cross-board areas strategic initiative
GCS Value Creation & Knowledge Multiplier • Co-Innovation with Customers
• Partner Enablement
1
3
4
5
23 |
PARTNERS
© 2015 Software AG. All rights reserved.
A FORCE MULTIPLIER FOR SUCCESS
Sample of Strategic Global Alliance Partners
Increase value:
• Effective sales and service delivery due to local coverage
• Reduce time-to-value through broad industry and vertical footprint
• Accelerating innovation & solutions to provide systems of differentiation
• Increase implementation success rate by extended partner service capabilities
• Successfully manage the transformation into a true DIGITAL business
24 |
REVENUE AND MARGIN DRIVERS
© 2015 Software AG. All rights reserved.
2014 2015 2016 2017 2018
Sales efficiency
Platforms / use case packaging
Recurring projects
Cloud based offerings
Partner sales / OEM
Revenue mix
Economies of scale
(R&D, G&A)
Metrics
Channel
sales
Sales
productivity
25 |
MID-TERM OUTLOOK
© 2015 Software AG. All rights reserved.
SCENARIO UNTIL 2020
DBP
Group Maintenance
Operating Margin
(EBITA, non-IFRS)
A&N
• 32% to 35%
• Sustainable single digit annual revenue growth
• High single digit to low double digit annual
license growth
• Continuous focus on sales efficiency
• Loyal customer base
• Growing share of Maintenance to stabilize
business line revenue development
26 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
27 |
DISRUPTION IS EVERYWHERE ALL OF THE TIME
Resurgent Risk Managers Connected Customers Internet of Things
• Regulation causing significant and
continuous change
• Controls are slow to respond to
changing business risks
• Controls rooted in analysis of the
past and slow to respond
• Large number and variety of data
sources needed to derive “context”
• Unable to combine customer
insights, inventory and competitor
data “on the fly”
• Extreme speed and scale needed to
act on customer context
• Integration with countless “things”
disrupting enterprise architectures
• Unable to automate maintenance
scheduling, procurement and other
core business services
• Challenged to combine historical
and streaming big data “on the fly”
© 2015 Software AG. All rights reserved.
28 | © 2015 Software AG. All rights reserved.
Digital business is disrupting business
operations in a way we have never seen
before (Big Change)
1
Today‘s conventional business applications
are not able to meet the demands and
challenges of digital business 2
A new generation of business applications is
needed which is based on agility, flexibility &
speed: “Digital Business Applications”
3
The technology foundation for managing the
digital change (processes, IT) and building
dígital business applications is the “Digital
Business Platform”
5
The paradigm is no longer buying packaged
applications. The new paradigm is buy (platform)
and build (business logic) 4
Software AG delivers the world‘s first Digital
Business Platform 6
Software AG – Promotes the Paradigm Shift
29 |
Front office
Customer engagement systems
DIGITAL BUSINESS PLATFORM
Core operational systems (ERP, SCM, …)
Finance & Controlling
Order Management
Customer Management
Procurement Supply Chain Management
Digital business applications Agility, Speed, Innovation, Differentiation
Sales Service Support
DIGITAL BUSINESS PLATFORM
Marketing
Sales
Back office • Stable
• Reliable
• Efficient
• Standardization
DIGITAL BUSINESS APPLICATIONS
© 2015 Software AG. All rights reserved.
DRIVE THE DIGITAL BUSINESS
30 |
MARKET GROWTH 2015 / MID-TERM
© 2015 Software AG. All rights reserved.
Global Infrastructure Software Market (Software Products)
2015 Growth
USD
2015 Growth
Constant
Currency
5-year CAGR
(2014 – 2019)
Constant
Currency
Global Infrastructure Software -2.3% 5.0% 6.2%
Data Integration Tools and Data Quality Tools 0.6% 8.8% 9.4%
Database Management Systems -0.6% 7.7% 7.8%
Application Integration and Middleware (AIM) 0.6% 8.3% 7.5%
Application Development -3.3% 3.8% 3.0%
Source: Gartner: Forecast, Enterprise Software Markets Worldwide, 2012-2019, 4Q15 Update, 17 December 2015, Matthew Cheung, et al.
The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) research opinion or viewpoints published, as part of a syndicated
subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and
not as of the date of this Prospectus) and the opinions expressed in the Gartner Report(s) are subject to change without notice.
31 |
TOP 5 VENDORS
© 2015 Software AG. All rights reserved.
IN MAJOR MARKET SEGMENTS OF THE APPLICATION INTEGRATION AND MIDDLEWARE MARKET 2014 WORLDWIDE
Business Process Management Suite (BPMS)
1. IBM
2. Pegasystems
3. Oracle
4. Software AG
5. OpenText
(Top 5 vendors account for approx. 55% of the market)
Enterprise Service Bus Suite (ESB)
1. IBM
2. Oracle
3. Microsoft
4. Tibco
5. Software AG
(Top 5 vendors account for approx. 80% of the market)
Source: Chart created by Software AG based on Gartner Research: Gartner: Market Share, All Software Markets, Worldwide, 2014, Bianca Francesca Granetto et al, 31 March 2015
The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc.
("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Prospectus) and the opinions expressed in the
Gartner Report(s) are subject to change without notice.
32 |
SOFTWARE AG RANKED AS A LEADER
© 2015 Software AG. All rights reserved
ENTERPRISE ARCHITECTURE MANAGEMENT SUITES
Source: The Forrester Wave™: Enterprise Architecture Management Suites, Q3 2015, Forrester Research, Inc.,
September 1, 2015
The Forrester Wave is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of
Forrester Research, Inc. The Forrester Wave is a graphical representation of Forrester's call on a market and is
plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not
endorse any vendor, product, or service depicted in the Forrester Wave. Information is based on best available
resources. Opinions reflect judgment at the time and are subject to change.
“The Software AG Alfabet product is a core
product that offers strategic planning, enterprise
architecture, and IT portfolio planning
management for integrated management of the
different strategy and planning levels by
stakeholders.”
33 |
SOFTWARE AG RANKED AS A LEADER
© 2015 Software AG. All rights reserved.
BIG DATA STREAMING ANALYTICS MARKET
Source: The Forrester Wave™: Big Data Streaming Analytics Platforms, Q3 2014, Forrester Research, Inc., July
17, 2014
The Forrester Wave is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of
Forrester Research, Inc. The Forrester Wave is a graphical representation of Forrester's call on a market and is
plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not
endorse any vendor, product, or service depicted in the Forrester Wave. Information is based on best available
resources. Opinions reflect judgment at the time and are subject to change.
“The beating heart of Software AG’s streaming
platform is Apama, an asset they acquired from
Progress Software in 2013. It is not surprising that
Software AG has the highest ‘current offering’
score.”
34 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
35 |
DIGITAL BUSINESS DEFINITION
Business Transformation through the
Implementation of new Digital Business
Technology to create new Business Designs (by connecting the digital and physical worlds)
Manage business
and IT transformation
Develop, deploy and
integrate digital business
applications
© 2015 Software AG. All rights reserved.
36 |
DIGITAL BUSINESS PLATFORM 5 BUILDING BLOCKS
ANALYTICS & DECISIONS
Enabling faster and better decisions
PROCESS
Combining people, business and things
INTEGRATION
Connecting multiple endpoints
IN-MEMORY DATA
Providing performance and scale
BUSINESS & IT
TRANSFORMATION
Manage and govern
the change
+ HYBRID
CLOUD
ON PREMISE
© 2015 Software AG. All rights reserved.
37 |
BUSINESS & IT
TRANSFORMATION
ARIS
Business Process Analysis
ARIS
Governance, Risk and
Compliance Management
ALFABET
IT Portfolio Management
ALFABET
Enterprise Architecture
Management
ANALYTICS & DECISIONS
PROCESS
INTEGRATION
IN-MEMORY DATA TERRACOTTA In-Memory Data Fabric
APAMA Streaming Analytics
WEBMETHODS Operational Intelligence
WEBMETHODS AgileApps
WEBMETHODS iBPMS
WEBMETHODS API Management
WEBMETHODS Integration
+ HYBRID
CLOUD
ON PREMISE
PRODUCT OFFERING
© 2015 Software AG. All rights reserved.
DIGITAL BUSINESS PLATFORM
38 |
PROCUCT OFFERING ADABAS & NATURAL
APPLICATION MODERNIZATION
NATURAL Application Development
ADABAS Database Management System
ADABAS & NATURAL
LINUX, UNIX, WINDOWS
MAINFRAME
© 2015 Software AG. All rights reserved.
39 |
ARIS - BUSINESS AND IT TRANSFORMATION
Capabilities Benefits
ARIS Business Process Analysis
• Process standardization
and transformation
• Process improvement
• Business transparency
• Process agility and efficiency
ARIS Governance, Risk and
Compliance Management
• Compliance management
• Risk management
• Policy management
• Audit management
• Improve efficiency
• Adapt fast to new regulations
• Identify and decrease risks
• Simplify audits
• Establish corporate policies
• Manage incidents efficiently
© 2015 Software AG. All rights reserved.
40 |
ALFABET - BUSINESS AND IT TRANSFORMATION
Capabilities Benefits
ALFABET IT Portfolio Management
• Application and technology
portfolio management
• Project portfolio management
• Aligning business and IT
• Optimizing IT costs
• Making the right investments
ALFABET Enterprise Architecture
Management
• Strategy and architecture management
• Target architecture design
• Architecture governance
• Improved business results
• Synchronized stakeholders
• Policy enforcement
© 2015 Software AG. All rights reserved.
41 |
APAMA - ANALYTICS & DECISIONS
Capabilities Benefits
APAMA Streaming Analytics
• Combine and visualize data across silos
• Monitoring and analytics for process and
business data
• Analyze and respond to patterns within
big data in motion in real time
• Market proven solution accelerators
• End-to-end visibility and transparency
• Operational insights for better decisions
• Coordinate the right response at the
right time
• Your business reacts quicker than your
competitors
• Minimize time-to-market and reduce risk
WEBMETHODS Operational Intelligence
• Business activity monitoring
• Process performance management
• Real-time, process, business and
infrastructure event- and KPI-level
monitoring
• End-to-end process model created based
on transactional application log
© 2015 Software AG. All rights reserved.
42 |
WEBMETHODS - PROCESS
Capabilities Benefits
WEBMETHODS AgileApps
• Dynamic processes
• Case management
• Web applications
• Mobility
• Customizable business processes
• Create powerful enterprise-grade case
management applications
• Use business rules engine
• Communicate via Web, Twitter®,
Facebook, portals or email
WEBMETHODS iBPMS
• Create and run business applications
• Manage processes, tasks and teams
• Monitor business activity
• Simplified and automated processes that
are more efficient
• Better decisions & control with real-time
visibility
• Enabling change through an agile
architecture
© 2015 Software AG. All rights reserved.
43 |
WEBMETHODS - INTEGRATION
Capabilities Benefits
WEBMETHODS API Management
• Complete API and service life-cycle
management
• Mediation and security
• Support wide range of API standards
• SLA and usage monitoring
• Manage the planning, designing,
developing and monetizing of APIs
• Provide APIs for mobile, cloud and hybrid
usage
• Securely expose internal IT data and
services to 3rd parties
WEBMETHODS Integration
• Integrate cloud and on-premise apps in a
single platform
• Service orchestration, mapping and
transformation
• Exchange documents and files with
external partners
• Establish single source of trusted data
• Build new capabilities using existing IT
investments
• Share data across systems
• Adapt quickly to market & business needs
• Automate & streamline partner transactions
• Improve enterprise data quality
© 2015 Software AG. All rights reserved.
44 |
TERRACOTTA - IN-MEMORY DATA
Capabilities Benefits
TERRACOTTA In-Memory Data Fabric
• Hundreds of terabytes of data in memory,
1,000x faster than disk
• Scale up on a single machine and
out across machines
• Full fault-tolerance and fast restart:
99.999% availability
• In-memory real-time access
to information
• Predictable horizontal and vertical scale
• Simple to use, no proprietary hardware
© 2015 Software AG. All rights reserved.
45 |
SOFTWARE AG CLOUD
Capabilities Benefits
ARIS Cloud
• Design, publish and analyze processes
and requirements
• Social collaboration
• Easy to access and use
• Collaborative cross-company
alignment of requirements
ALFABET Cloud
• Plan, manage and optimize IT portfolios
and assets
• Visual inventory, planning tools
• Full transparency across IT portfolios
• Holistic analysis and planning
• Optimize IT assets
WEBMETHODS AgileApps Cloud
• Fast, easy creation of process-
driven agile applications
• Native mobile support
• Improves customer, partner
and employee engagement
• Reduced project backlog
WEBMETHODS Integration Cloud
• Cloud-to-cloud integration
• Cloud-to-on-premises hybrid integration
• Business friendly & web-based UI
• Faster time to market
• Collaborative integration
• Leverage existing systems
© 2015 Software AG. All rights reserved.
46 |
Capabilities Benefits
ADABAS Database Management System
• Database for high-performance
transaction processing
• Multi-platform availability
• Faster and more reliable data processing
• Easily share data with other systems
• Run database on platform of choice
NATURAL Application Development
• Platform for developing and operating
enterprise applications
• Eclipse™-based tool environment
• Cross-platform deployment
• Rapid delivery of applications
• Meet business demands faster
• Retain business logic independent from
platform decision
ADABAS & NATURAL Application Modernization
• Improve end-user experience and
interoperability of applications
• Leverage new technologies—the Web,
mobile, SOA or big data
• Retain investments without risk
• Increase end-user productivity
• Innovate faster
ADABAS & NATURAL - TRANSACTION PROCESSING
© 2015 Software AG. All rights reserved.
47 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
48 |
SINCE PARTNERING WITH SOFTWARE AG
SAVED SEVERAL MILLION
IN SIX MONTHS
HAS DOUBLED THEIR
EFFICIENCY AND
PROFIT MARGINS
EMERGENCY-PREPARED
40,000+ EMPLOYEES
AND CONTRACTORS
TRACKED
SLA COMPLIANCE
IN REAL TIME
SAW A SUPPLY CHAIN
TRANSFORMATION
IN JUST DAYS
35% REDUCTION
OF VEHICLE INVENTORY
WITHIN 3 YEARS
© 2015 Software AG. All rights reserved.
49 |
SINCE PARTNERING WITH SOFTWARE AG
PRODUCED A FASTER
SOLUTION DELIVERY IN 3
MONTHS INSTEAD OF 18
ACHIEVED REAL-TIME
SYSTEM
RESPONSIVENESS:
99.99984% AVAILABILITY
CERN REDUCED PROCESS COST
BY MORE THAN 20%
CONSOLIDATED 300+
PROCESSES WITH 24 MIL
DATA EXCHANGES A
MONTH
CUSTOMER
ON-BOARDING
BECAME 30% FASTER
SERVED VIP CUSTOMERS
IN 2 MINUTES INSTEAD
OF 20 MINUTES
© 2015 Software AG. All rights reserved.
50 |
INTERNET OF THINGS PREDICTIVE MAINTENANCE Monitor equipment condition and predict failures using sensor data
Combine historical maintenance trends and real-time sensor data
Predict when plant or field assets require maintenance
Obtain real-time visibility of technician tasks and performance
Improved operating margins on technician and maintenance costs
Improved remedial planning & insights into preventative measures
More stringent SLAs resulting in higher revenue
© 2015 Software AG. All rights reserved.
51 |
CONNECTED CUSTOMER LOCATION ANALYTICS
Provide actionable insight about traffic in-stores, hotels & other venues
Automate intelligent action based on real-time insight
Assign staff automatically as bottlenecks and problem areas occur
Create detailed heat-maps and visual analytics for floor plan optimization
Improved understanding of customer journeys through physical locations
Improved customer service with on-the-fly redeployment of staff
Improved analytics on dwell time, repeat customers and visit frequency
© 2015 Software AG. All rights reserved.
52 |
SMART LOGISTICS MANUFACTURERS
Real-time and predictive analytics for improved monitoring of logistics providers
Monitor product condition and synchronize delivery across logistics providers
Alerts and suggested actions, automated corrective actions where possible
Harness streaming location, environmental, traffic, telematics data and more
Accurately project arrival times to take action only when needed
Focus logisticians on optimizing the plan, not finding the issues in arrears
Minimize waste and scheduling inefficiency, streamline logistics networks
© 2015 Software AG. All rights reserved.
53 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
54 |
* EPS basic, 2007 – 2010 pro-forma, adjusted for share split (2011) ** Including €55m Securities
in €m, IFRS 2014 2013 2012 2011 2010 2009 2008 2007
Total Revenue 857.8 972.7 1,047.3 1,098.3 1,119.5 847.4 720.6 621.3
- License 270.1 330.1 318.9 295.2 327.4 269.9 272.0 241.3
- Maintenance 371.3 375.6 393.3 378.7 369.4 310.6 267.1 212.9
- Consulting
& Other 216.4 267.0 335.1 424.4 422.7 266.9 181.5 167.1
BL DBP 394.5 422.9 385.5 339.6 321.5 247.2 210.7 149.9
BL A&N 245.3 274.5 310.5 313.9 355.4 328.5 332.1 310.2
BL Consulting 218.0 275.4 351.3 444.8 441.4 271.3 177.8 161.1
EBIT 176.0 205.5 248.3 269.2 268.6 218.2 180.5 136.8
EPS (€)* 1.39 1.60 1.90 2.05 2.06 1.64 1.35 1.04
Dividend (total cash out) 39.5 36.3 38.2 39.9 37.0 32.6 31.5 28.5
Free cashflow 132.7 159.1 170.7 187.7 217.8 188.4 133.4 82.2
Net debt (-) / Net cash(+) -70.4** -106.9** +49.7 -60.9 -167.2 -271.8 -70.3 -133.0
Shareholders‘ equity 1,013.4 965.6 1,060.1 951.5 769.3 647.2 549.1 462.5
Employees (FTE) 4,421 5,238 5,419 5,535 5,644 6,013 3,526 3,479
FINANCIAL DATA
© 2015 Software AG. All rights reserved.
KEY FIGURES
55 |
1. Return on equity: Operating EBIT / Equity
2. Return on cap. employed: Operating EBIT / (Fixed assets + Working capital)
3. Current assets ./. Cash and Cash Equivalents ./. Current liabilities
4. Current assets ./. Current liabilities / Total revenue
5. (Operating Cash flow ./. Capex) / Revenue.
IFRS unless stated different FY 2014 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007
Operating margin (EBITA, non-IFRS) 27.9% 26.8% 28.5% n.a. n.a. n.a. n.a. n.a.
EBITDA margin 26.4% 26.6% 28.6% 28.7% 28.1% 30.3% 28.6% 25.7%
EBIT margin 20.5% 21.1% 23.7% 24.5% 24.0% 25.8% 25.1% 23.3%
ROE1 17.4% 21.3% 23.4% 28.3% 34.9% 33.7% 32.9% 31.8%
ROCE2 12.6% 14.6% 18.2% 20.5% 27.4% 20.9% 26.2% 22.5%
Net Working Capital (€m)3 -€98.1 -€213.5m -€41.6 -€23.8 -€194.4 -€211.3 -€74.1 -€55.0
Working Capital ratio4 25.7% 24.3% 26.2% 17.5% -8.2% 0.8% 3.2% 4.2%
Free Cash Flow margin5 15.5% 16.4% 16.3% 17.1% 19.5% 22.2% 18.5% 13.2%
Corporate tax rate 33.7% 32.0% 31.2% 31.7% 31.0% 32.7% 34.0% 35.4%
WACC6 4.35% 5.12% 5.1% 5.7% 6.8% 5.5% 6.8% 8.4%
Equity ratio 54.8% 48.4% 59.8% 56.6% 48.1% 39.1% 51.8% 47.2%
DSO (Days Sales Outstanding) 115 107 105 93 100 109 120 119
Capex (€m) €10.5 €12.7 €13.3 €10.9 €9.7 €12.1 €6.6 €11.8
Capital Employed7 (€m) €1,326.0 €1,346.3 €1,313.0 €1,262.0 €929.6 €1,002.2 €669.9 €655.2
KEY FINANCIAL RATIOS
© 2015 Software AG. All rights reserved.
IN % OF REVENUE
6. Pro forma, not applied for corporate management
7. Fixed assets + Working capital
56 |
Product Revenue
Digital Business Platform
Product Revenue
Adabas & Natural
Operating Margin
(Non-IFRS)2)
FY 2014 (in €m)
244.7
394.5
27.9%
OUTLOOK
© 2015 Software AG. All rights reserved.
FULL YEAR 2015
1) At constant currency rates
2) EBITA adjusted for non-operating items (see non-IFRS earnings)
28.0% to 29.0%
-4% to -6%1)
0% to +3%1)
Outlook FY 2015 adjusted
(as of October 13, 2015)
57 |
CURRENCY IMPACT ON REVENUE
© 2015 Software AG. All rights reserved.
Q3 2015 / YTD 2015 (9 MONTHS)
Euro 34%
US Dollar 31%
Other 12%
ZAR 5%
ILS 4%
BRL 4%
GBP 7%
(in €m; yoy)
Q3
2015
Q3
in %
YTD
2015
YTD
in %
Licenses 1.8 3% 12.2 8%
Maintenance 5.2 5% 22.4 8%
Consulting & Other 1.4 3% 6.2 5%
Total 8.4 4% 40.8 7%
Currency impact on revenue
34% revenue in Euro
66% revenue in foreign currency
Currency split YTD 2015
AUD 3%
58 |
REVENUE
© 2015 Software AG. All rights reserved.
Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 ∆% ∆% acc YTD 2015 YTD 2014 ∆% ∆% acc
Product revenue 169.9 157.8 8% 3% 473.3 446.5 6% -2%
Licenses 68.9 64.1 7% 5% 169.0 171.5 -2% -9%
Maintenance 101.0 93.7 8% 2% 304.3 275.0 11% 3%
Consulting & Services 45.7 47.7 -4% -7% 141.7 163.5 -13% -17%
Other 0.3 0.1 200% 66% 0.6 0.5 20% 19%
Total 215.9 205.6 5% 1% 615.6 610.5 1% -6%
59 |
DIGITAL BUSINESS PLATFORM
© 2015 Software AG. All rights reserved.
SEGMENT REPORT Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 ∆% ∆% acc YTD 2015 YTD 2014 ∆% ∆% acc
Licenses 41.1 42.2 -2% -6% 109.5 118.7 -8% -15%
Maintenance 61.8 54.4 14% 7% 184.4 157.7 17% 8%
Total revenue 103.2 96.6 7% 1% 293.9 276.4 6% -2%
Cost of sales -7.5 -5.4 39% 34% -21.0 -16.5 27% 21%
Gross profit 95.7 91.2 5% -1% 272.9 259.9 5% -4%
Sales & Marketing -46.2 -40.8 13% 6% -144.6 -135.3 7% -1%
Research & Development -20.5 -21.3 -4% -11% -64.0 -62.7 2% -7%
Segment result 29.0 29.1 0% -3% 64.3 61.9 4% -6%
Margin in % 28.1% 30.1% 21.9% 22.4%
60 |
ADABAS & NATURAL
© 2015 Software AG. All rights reserved.
SEGMENT REPORT Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 ∆% ∆% acc YTD 2015 YTD 2014 ∆% ∆% acc
Licenses 27.5 21.9 26% 26% 59.5 52.6 13% 7%
Maintenance 39.2 39.3 0% -4% 119.8 115.3 4% -3%
Product revenue 66.7 61.2 9% 7% 179.3 167.9 7% 0%
Other 0.2 0.1 0.5 0.4
Total revenue 66.9 61.3 9% 7% 179.8 168.3 7% 0%
Cost of sales -3.4 -3.1 10% 6% -10.0 -9.3 8% 4%
Gross profit 63.5 58.2 9% 7% 169.8 159.0 7% 0%
Sales & Marketing -7.9 -7.8 1% -3% -25.0 -25.8 -3% -11%
Research & Development -4.6 -5.9 -22% -26% -15.4 -18.3 -16% -21%
Segment result 51.0 44.5 15% 13% 129.4 114.9 13% 6%
Margin in % 76.2% 72.6% 72.0% 68.3%
61 |
CONSULTING
© 2015 Software AG. All rights reserved.
SEGMENT REPORT Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 ∆% ∆% acc YTD 2015 YTD 2014 ∆% ∆% acc
DBP / A&N services 45.8 47.7 -4% -7% 141.8 143.5 -1% -18%
SAP product revenue* - - - - - 2.2 - -
SAP services* - - - - - 20.0 - -
Total revenue 45.8 47.7 -4% -7% 141.8 165.7 -14% -18%
Cost of sales -34.3 -37.6 -9% -11% -112.9 -137.6 -18% -21%
Gross profit 11.5 10.1 14% 9% 28.9 28.1 3% -4%
Sales & Marketing -4.4 -4.8 -8% -11% -14.2 -18.0 -21% -25%
Segment result 7.1 5.3 34% 26% 14.7 10.1 46% 34%
Margin in % 15.5% 11.1% 10.4% 6.1%
* Deconsolidation of SAP related business
62 |
RESULTS
© 2015 Software AG. All rights reserved.
Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 ∆% ∆% acc YTD 2015 YTD 2014 ∆% ∆% acc
Total revenue 215.9 205.6 5% 1% 615.6 610.5 1% -6%
Cost of sales -49.1 -51.4 -4% -7% -157.9 -182.3 -13% -16%
Gross profit 166.8 154.2 8% 3% 457.7 428.2 7% -1%
Margin in % 77.3% 75.0% 74.4% 70.1%
Research & Development -25.1 -27.2 -8% -13% -79.4 -81.0 -2% -8%
Sales & Marketing -63.1 -57.5 10% 4% -197.5 -191.1 3% -4%
Administration -11.1 -19.4 -43% -44% -50.1 -54.4 -8% -11%
Other income / expense -0.7 -1.0 -1.4 2.9
EBIT 66.8 49.1 36% 34% 129.3 104.6 24% 13%
Margin in % 30.9% 23.9% 21.0% 17.1%
63 |
NON-IFRS EARNINGS
© 2015 Software AG. All rights reserved.
Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 YTD 2015 YTD 2014
EBIT (before all taxes) 66.8 49.1 129.3 104.6
Amortization on acquisition related intangible assets 8.4 9.4 27.6 30.9
Reduction acquisition related product revenue by purchase price allocation - - - 0.5
Other impacts from M&A activities - 0.1 2.5 -1.0
Share based payments -13.3 3.5 -5.9 6.2
Restructuring / severances 8.3 0.7 13.4 7.0
Result from sold operations - - - 2.7
EBITA (Non-IFRS) 70.2 62.8 166.9 150.9
in % of revenue (Non-IFRS) 32.5% 30.5% 27.1% 24.7%
Net income (Non-IFRS) 47.2 39.7 109.1 95.8
EPS (Non-IFRS)* €0.60 €0.50 €1.39 €1.21
* Weighted average shares outstanding (basic) Q3 2015: 78.6m / Q3 2014: 78.9m / 9m 2015: 78.8m / 9m 2014: 79.3m
64 |
CASH FLOW
© 2015 Software AG. All rights reserved.
Q3 2015 / YTD 2015 (9 MONTHS)
(in €m) Q3 2015 Q3 2014 ∆% YTD 2015 YTD 2014 ∆% FY 2014
Operating cash flow 28.2 22.0 28% 139.9 94.5 48% 143.2
./. CapEx* -5.6 -2.6 -11.1 -8.7 -10.5
Free cash flow 22.6 19.4 16% 128.8 85.8 50% 132.7
in % of revenue 10.5% 9.4% 20.9% 14.0% 15.5%
Free cash flow per share** €0.29 €0.25 16% €1.63 €1.08 51% €1.68
* Cash flow from investing activities except acquisitions and except investments in debt instruments
** Based on average shares outstanding (basic) Q3 2015: 78.6m / Q3 2014: 78.9m / 9m 2015: 78.8m / 9m 2014: 79.3m
65 |
Sept. 30,
2015
Sept. 30,
2015
1,791.3
343.1
255.1
74.3
1,118.8
344.7
244.0
137.9
1,064.7
Assets Liabilities
BALANCE SHEET
© 2015 Software AG. All rights reserved.
(in €m)
Dec. 31,
2014
Dec. 31,
2014
444.1
279.3
112.1
1,013.4
373.7
298.6
70.9
1,105.7
1,848.9 1,848.9 1,791.3
Cash and cash
equivalents/Securities
Trade receivables
Inventory and other assets
Fixed assets
(Goodwill 888.1/857.3)
Total
Financial liabilities
Other liabilities
Deferred income
Shareholders’ equity
(ratio 59.4% / 54.8%)
Total
66 |
FINANCIAL STATUS & ALLOCATION OF FUNDS
0
100
200
300
400
500
600
700
December 31, 2013 December 31, 2014 September 30, 2015
Financial liabilities
Cash / cash equivalents/ Securities
2*
Return to
shareholders
* Net debt ** Share buy back & Dividend payments
107*
107** 70*
374
(in €m)
56**
© 2015 Software AG. All rights reserved.
67 |
Q3
2015
FY
2014
FY
2015*
Amortization
(in €m)
Depreciation
8.4
3.1
39.2
11.6
34.5
13.4
* Estimated
FY
2016ff*
27.5
12.4
AMORTIZATION / DEPRECIATION IMPACT
© 2015 Software AG. All rights reserved
2015 ff. (PRELIMINARY)
68 |
OPERATING COST ADJUSTED FOR ONE-TIME EFFECTS
© 2015 Software AG. All rights reserved.
Q3 2015 (in €m) Q3
2015 rep.
Netted one-time
effects
Q3
2015 adj.
DBP
Research & Development 20.5 +1.2 21.7
Sales & Marketing 46.2 -3.8 42.4
A&N
Research & Development 4.6 +0.7 5.3
Sales & Marketing 7.9 +1.4 9.4
Consulting
Cost of sales 34.3 +0.8 35.1
Sales & Marketing 4.4 -0.2 4.2
Group*
Cost of sales 49.0 +0.8 49.8
Research & Development 25.1 +1.8 26.9
Sales & Marketing 63.1 -2.9 60.2
Administration 11.1 +7.5 18.6 * Group incl. amortization
One-time effects Q3 2015:
• MIP IV release € +15.5m
• Restructuring € -8.3m
EBIT impact net € +7.2m
69 |
HEADCOUNT BY FUNCTIONAL AREAS* AND GEOGRAPHY
© 2015 Software AG. All rights reserved.
* According to P+L structure as of September 2015
22%
22%
14% 42%
Research &Development
Sales &Marketing
Administration
Consulting &Services
27%
29% 14%
30% Germany
Rest of Europe
USA
Rest of World
Total: 4,384 (FTE)
70 |
INDEX
© 2015 Software AG. All rights reserved.
Key Value Investment Indicators 1. 6
Business Model & Characteristics 2. 19
Markets, Positioning & Competition 3. 28
Digital Business Platform - Core Capabilities 4. 38
Customers References & Use Cases 5. 51
Financials 6. 57
Shares & Ownership 7. 74
71 |
32%
46%
19%
.3.5%
SHAREHOLDER STRUCTURE
© 2015 Software AG. All rights reserved.
35%
25%
11%
16%
9% 3%
Number of total shares: 79,000,000
Freefloat: ~ 65%
Indices: TecDAX, DAX 100, TechAllShare
Codes: SOW, SOW GR, SOWG.DE
ISIN: DE0003304002, ADR symbol: STWRY
Germany
United States
Switzerland
Scandinavia
United Kingdom
Rest of World
Shareholder Structure
Share Data
Shareholder by Region (disclosed)*
Software AG Foundation 31.59 % 30.04.15
Remo Stoffel 3.66 % 30.04.15
Fidelity FMR LLC 3.34% 10.05.13
Software AG own shares 3.50 % 04.12.15**
Major Investors*
France & Benelux
* according to voting rights notifications
** notification pursuant to Article 4 (4) Commission Regulation (EC) No 2273/2003
* Source: Thomson One, December 2015 ** as of December 2015
Software AG
Foundation
Disclosed
Investors*
Undisclosed Investors
Own Shares**
72 |
CASH USE:
© 2015 Software AG. All rights reserved.
SHARE BUY-BACK 2013-15
Share Buy-back
program 2013 I
Feb/12/2013 -
Apr/29/2013
Share Buy-back
program 2013 II
Nov/12/2013 -
Feb/26/2014
Cancellation of
treasury shares
Apr/30/2015
Share Buy-back
program 2015
Sept/08/2015 -
Dec/04/2015
Share capital: 86,943,945 shares Share capital: 79,000,000 shares
Freefloat: ~ 65%
€115 million
4.5%
€110 million
4.7% €70 million
3.4%
9.1%
Own Shares*
3.5%
* as of Dec. 04, 2015
73 |
SOFTWARE AG FOUNDATION
© 2015 Software AG. All rights reserved.
ANCHOR SHAREHOLDER
The Software AG Foundation is one of Germany’s ten largest foundations
(capital stock € 1bn+ , Software AG shares and other assets)
Founded by Dr. hc. Peter M. Schnell in 1992
Disburses financial support amounting to approx. € 30 million annually
Principle of a “self-help grant” (supports nonprofit organizations)
The Foundation focuses on many different projects in areas including:
• science and research, environment
• support for the elderly and disabled, support for children and young people
• education and training
74 |
ANALYST COVERAGE
© 2015 Software AG. All rights reserved.
Baader Bank
Barclays Capital
Berenberg Bank
Bryan Garnier
Commerzbank
Credit Suisse
Deutsche Bank
DZ Bank
Equinet
Goldman Sachs
Hauck & Aufhäuser
HSBC
Independent Research
JPM/Cazenove
Kepler Cheuvreux
LBBW
MainFirst
Metzler
Mirabaud
Morgan Stanley
Oddo Seydler
Société Générale
UBS
Warburg Research
For latest consensus of analysts‘ financial estimates visit our
IR website on: www.softwareag.com
Banks / Broker who cover Software AG on a regular base
75 | © 2015 Software AG. All rights reserved.
Investor Relations
Uhlandstrasse 12
64297 Darmstadt
Germany
phone: +49 (0) 6151 / 92 1900
fax: +49 (0) 6151 / 9234 1900
softwareag.com
e-mail: [email protected]
@SoftwareAG_IR