software ag 4th quarter & full-year 2011 results (ifrs
TRANSCRIPT
Software AG
4th Quarter & Full-Year 2011 Results
(IFRS, unaudited)
January 24, 2012
January 24, 2012 | 2
This presentation contains forward-looking statements based on 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.
Safe-Harbor-Statement
Software AG
Financial Results, 4th Quarter and Full-Year 2011
(IFRS, un-audited)
Karl-Heinz Streibich, CEO
January 24, 2012
January 24, 2012 | 4
2003 2004 2005 2006 2007 2008 2009 2010 2011
420 411 438 483 621 721 847 1,120
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007 2008 2009 2010 2011
59 84 96 111 137 181 218 269
+42% +15% +15% +23%
+32% +21%
+23% EBIT
2003 2004 2005 2006 2007 2008 2009 2010
(in €m)
-2% +7% +10%
+29% +16%
+17%
+32% REVENUE
(in € m)
Sustainable profitable growth
January 24, 2012 | 5
2003 2004 2005 2006 2007 2008 2009 2010 2011
2003 2004 2005 2006 2007 2008 2009 2010 2011
59 84 96 111 137 181 218 269
420 411 438 483 621 721 847 1,120
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007 2008 2009 2010
2011
2011
1,098
269
Record result of 2010 repeated in 2011
+42% +15% +15% +23%
+32% +21%
+23% EBIT
(in €m)
-2% +7% +10%
+29% +16%
+17%
+32% REVENUE
(in € m)
January 24, 2012 | 6
(in €m)
∆ in % at constant currency
189
381
528
2011
IDS Scheer Consulting ETS BPE
2009
847*
1,098
79*
396
372*
* First consolidated in Q3 2009
+28%
0%
+26%
Development of business lines: full year revenue
1,120
200
420
499 +7%
-8%
-0.7%
2010
-5%
Revenue core business
(BPE + ETS) 2010 = 2011 (at constant currency)
January 24, 2012 | 7
0
5
10
15
20
25
30
35
40
45
50
Q4/10 Q4/11 Q4/10 Q4/11
North & South
America
ETS license revenue in Q4:
Comparison of development in EMEA vs. Americas
* At constant currency
(in €m)
Brazil -7%*
-63%*
-87%*
EMEA (incl. DACH)
January 24, 2012 | 8
0
5
10
15
20
25
30
35
40
Q4/10 Q4/11 Q4/10 Q4/11
EMEA (incl. DACH)
North America
BPE license revenue in Q4:
Comparison of development in EMEA vs. North America
(in €m)
* At constant currency
+40%*
-7%*
January 24, 2012 | 9
Revenue split by industry
* Based on product revenue
Q4 2011* FY 2011*
20%
20% Public Sector
Financial
Sector
Partner
IT
Manufacturing
Telecos
Transport & Logistics
Retail
Others
22%
21% Public Sector
Financial
Sector
Partner
IT
Manufacturing
Telecos
Transport & Logistics
Retail
Others
January 24, 2012 | 10
Strengthening our competitive position and image in North America
1. Operational Actions
• The appointment of the US Sales Executive to the Group Executive Board (GEB)
• Realignment of sales (after the merger of the sales teams)
• Increase the sales and marketing budgets by 20%
• Establish regional centers (hubs) for market development
• Establish a global service and support unit for ETS
2. Strategic Actions
• Establish a Federal Unit
• Bidding for public projects (Defense and Security)
• Strengthening our presence in Silicon Valley
• Mergers & Acquisitions, Research & Development, Product Marketing
• Expansion based on Terracotta
January 24, 2012 | 11
(in €m)
0
100
200
300
400
500
600
700
800
900
1000
2006 2007 2008 2009 2010 2011
Business line BPE
Business line ETS
74%
26%
46%
52% 56%
62%
38%
44% 48%
54% 58%
42%
BPE – once again the strongest revenue contributor
January 24, 2012 | 12
2003 2004 2005 2006 2007 2008 2009 2010 2011
2003 2004 2005 2006 2007 2008 2009 2010 2011
59 84 96 111 137 181 218 269
+42% +15% +15% +23%
+32% +21%
+23% EBIT
420 411 438 483 621 721 847 1,120
-2% +7% +10%
+29% +16%
+17%
+32% REVENUE
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007 2008 2009 2010
2012e
2012e
(in €m)
(in €m)
Consolidation in 2012 – basis for further growth
1,098
2011
269
2011
January 24, 2012 | 13
Outlook FY 2012
* Net of currency
(in €m)
Total Revenue Group
- thereof BPE
- thereof ETS
EBIT Margin
2011
381.3
527.9
24.5%
Outlook 2012 (as of January 24, 2012)
+5% to +15%*
23.0% to 24.5%
-12% to -7%*
1,098.3 -3% to +3%*
Outlook Q1 2012
Given the normal seasonality, Q1 2012 is expected to be below the extraordinary
good results of Q1 2011.
January 24, 2012 | 14
~20%
~25%
~20%
~35%
0
5
10
15
20
25
30
35
40
Q1 Q2 Q3 Q4
Normal
Normal
in % of FY license revenue
Seasonal split of license revenues by quarter
Normal
seasonality
January 24, 2012 | 15
~20%
~25%
~20%
~35%
0
5
10
15
20
25
30
35
40
Q1 Q2 Q3 Q4
Normal
Normal
24%
20%
25%
31%
Percentage
in 2011
Normal
seasonality
Seasonal split of license revenues by quarter
in % of FY license revenue
January 24, 2012 | 16
BPE Business Division
• Double digit license revenue growth
• A doubling of revenue by end of 2015
ETS Business Division
• Maintenance revenue largely stable
• Optimize the cost structure to maintain an operating margin > 50%
The Group
• Increase the EBIT margin to 30%
• A doubling of net income by end of 2015
• M&A: large acquisition every 2-4 years
Mid-term Goals – (3 to 5 years)
Software AG
4th Quarter & Full-Year 2011 Results
(IFRS, unaudited)
Arnd Zinnhardt, CFO
January 24, 2012
January 24, 2012 | 18
Currency impact on revenue
41% revenue in Euro
59% revenue in foreign currency
Euro 41%
US Dollar 24%
Others 10%
(in €m)
ILS 4%
JPY 2%
CAD 3%
ZAR 3%
AUD 4%
GBP 3%
BRL 6%
Currency impact
on revenue
Q4
2011
FY
2011
Licenses -1.8 -6.3
Maintenance -0.4 -4.9
Consulting & other -0.4
-2.0
Total
-2.6 -13.2
Δ% (yoy)
-0.9%
-1.2%
January 24, 2012 | 19
Segment report Q4 2011 / FY 2011
Business Process Excellence
(in €m) Q4
2011
Q4
2010 Δ% Δ%
acc
FY
2011
FY
2010 Δ% Δ%
acc
Licenses 56.6 59.8 -5% -3% 168.6 164.4 +3% +5%
Maintenance 44.7 40.4 +11% +11% 169.2 155.0 +9% +11%
Product revenue 101.3 100.2 +1% +2% 337.8 319.4 +6% +8%
Services & other 49.8 48.0 +4% +4% 190.1 179.8 +6% +6%
Total revenue 151.1 148.2 +2% +3% 527.9 499.2 +6% +7%
Cost of sales -52.4 -47.0 +11% -187.1 -169.8 +10%
Gross profit 98.7 101.2 -2% 340.8 329.4 +3%
Sales & marketing -33.7 -39.7 -15% -125.3 -125.1 -
R & D -16.5 -15.7 +5% -61.3 -59.9 +2%
Segment result 48.5 45.8 +6% 154.2 144.4 +7%
January 24, 2012 | 20
Segment report Q4 2011 / FY 2011
Enterprise Transaction Systems
(in €m) Q4
2011
Q4
2010 Δ% Δ%
acc
FY
2011
FY
2010 Δ% Δ%
acc
Licenses 32.9 66.0 -50% -49% 120.1 156.3 -23% -21%
Maintenance 48.6 49.9 -3% -2% 192.8 198.3 -3% -2%
Product revenue 81.5 115.9 -30% -29% 312.9 354.6 -12% -10%
Services & other 18.2 17.3 +5% +6% 68.4 65.4 +5% +5%
Total revenue 99.7 133.2 -25% -24% 381.3 420.0 -9% -8%
Cost of sales -17.2 -17.5 -2% -72.3 -73.6 -2%
Gross profit 82.5 115.7 -29% 309.0 346.4 -11%
Sales & marketing -18.8 -20.8 -10% -66.8 -73.3 -9%
R & D -6.0 -8.3 -28% -26.4 -31.6 -16%
Segment result 57.7 86.6 -33% 215.8 241.5 -11%
January 24, 2012 | 21
Growing relevance of BPE also on income level
Segment Margin (in %)
Business Process Excellence
Enterprise Transaction Systems
29%
Ongoing margin improvement
in BPE …
52% 55% 53% 54%
58% 57%
-20%
2%
19% 22%
29% 29%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
2006 2007 2008 2009 2010 20112006
… leads to a balanced
income split in %
Segment contribution split
BPE/ETS (in %)
115%
98%
78% 72%
63% 58%
-15%
2% 22% 28%
37% 42%
-40
-20
0
20
40
60
80
100
120
140
2006 2007 2008 2009 2010 20112006
January 24, 2012 | 22
Segment report Q4 2011 / FY 2011
IDS Scheer Consulting
(in €m) Q4
2011
Q4
2010 Δ% Δ%
acc
FY
2011
FY
2010 Δ% Δ%
acc
External product
revenue
6.4 5.9 +8% +9% 23.2 22.8 +2% +3%
Services & other 36.7 39.4 -7% -7% 166.0 177.5 -6% -6%
Total revenue 43.1 45.3 -5% -5% 189.2 200.3 -6% -5%
Cost of sales -35.4 -47.3 -25% -162.3 -177.7 -9%
Gross profit 7.7 -2.0 - 26.9 22.6 +19%
Sales & marketing -5.5 -6.0 -8% -25.7 -28.5 -10%
R & D -0.1 -0.1 - -0.4 -0.6 -33%
Segment result 2.1 -8.1 - 0.8 -6.5 -
January 24, 2012 | 23
Result Q4 2011 / FY 2011
* Depreciation & amortization is included in functional areas according to IFRS
(in €m) Q4
2011
Q4
2010 Δ% FY
2011
FY
2010
Δ%
Total revenue 294.0 326.7 -10% 1,098.3 1,119.5 -2%
Cost of sales -109.7 -117.3 -6% -442.1 -442.0 -
Gross profit 184.3 209.4 -12% 656.2 677.5 -3%
Margin in %
62.7% 64.1% 59.7% 60.5%
R & D -22.6 -24.0 -6% -88.0 -92.0 -4%
Sales & marketing -61.7 -69.2 -11% -230.2 -238.9 -4%
Administration -26.1 -23.7 +10% -75.1 -85.3 -12%
Other income/expense +4.1 +1.6 - +6.3 +7.3 -14%
EBIT 78.0 94.1 -17% 269.2 268.6 -
Margin in % 26.5% 28.8% 24.5% 24.0%
EBITDA (pro-forma*) 89.2 106.1 -16% 315.5 315.0 -
Margin in % 30.3% 32.5% 28.7% 28.1%
January 24, 2012 | 24
Net result Q4 2011 / FY 2011
* Weighted average shares outstanding (basic) Q4 2011: 86.7m / Q4 2010: 85.1m (pro-forma, incl. share split)
(in €m) Q4
2011
Q4
2010 Δ% FY
2011
FY
2010 Δ%
EBIT 78.0 94.1 -17% 269.2 268.6 -
Margin in % 26.5% 28.8% 24.5% 24.0%
Financial income -3.1 -3.1 - -9.9 -14.2 -30%
Profit before tax 74.9 91.0 -18% 259.3 254.4 +2%
Taxes -23.0 -26.3 -13% -82.1 -78.8 +4%
Taxe rate in % 30.7% 28.9% 31.7% 31.0%
Net income 51.9 64.7 -20% 177.2 175.6 +1%
EPS in €* €0.60 €0.76 -21% €2.05 €2.06 -
January 24, 2012 | 25
Cash flow Q4 2011 / FY 2011
* Cash flow from investing activities except acquisitions / **pro-forma, incl. share split
(in €m) Q4
2011
Q4
2010 Δ% FY
2011
FY
2010 Δ%
Operating cash flow 83.2 82.1 1% 198.6 227.4 -13%
./. CapEx* -3.7 -3.0 -10.9 -9.6
Free cash flow 79.5 79.1 1% 187.7 217.8 -14%
as % of revenue 27.0% 24.2% 17.1% 19.5%
Free cash flow per share** €0.92 €0.93 -1% €2.18 €2.56 -15%
Weighted average number of
shares (in m)**
86.7 85.1 86.2 85.1
January 24, 2012 | 26
Balance sheet
Assets Liabilities
Cash and cash
equivalents
Trade receivables
Inventory,
other assets
Fixed assets
(goodwill 752.2/
717.3)
Financial
liabilities
Other liabilities
Deferred
income
Shareholders
equity (ratio
56.6%/48.1%)
Total Total
(in €m)
1,599.6 1,680.7 1,680.7 1,599.6
December
31, 2011
December
31, 2010
December
31, 2011
December
31, 2010
216.5
317.9
77.1
1,069.2
102.5
350.8
124.8
1,021.5
277.4
345.9
105.9
951.5
269.7
430.7
129.9
769.3
January 24, 2012 | 27
Thank you!
January 24, 2012 | 28
Amortization / depreciation impact 2011ff (preliminary)
* Estimated
Amortization IDS
(in €m)
Amortization other
Depreciation
Q4
2011
2.7
5.5
2.8
FY
2011
11.0
24.5
11.2
FY
2012ff*
11.0
21.9
13.3
January 24, 2012 | 29
Headcount by functional areas* and geography
* According to P+L structure
(in FTE) Dec 31,
2011
Sept 30,
2011 Δ%
qoq
Dec 31,
2010 Δ%
yoy
Total 5,535 5,498 +1% 5,644 -2%
Consulting & Services 2,894 2,874 +1% 3,039 -5%
R & D 887 855 +4% 850 +4%
Sales & marketing 1,023 1,031 -1% 1,022 -
Administration 731 738 -1% 733 -
USA 714 721 -1% 685 +4%
Germany 1,881 1,920 -2% 2,051 -8%
Rest of world 2,940 2,857 +3% 2,905 +1%
January 24, 2012 | 30
Revenue Q4 2011 / FY 2011
(in €m) Q4
2011
Q4
2010 Δ%
Δ%
acc
FY
2011
FY
2010 Δ% Δ%
acc
Product 189.2 222.0 -15% -14% 673.9 696.8 -3% -2%
Licenses 91.6 127.7 -28% -27% 295.2 327.4 -10% -8%
Maintenance 97.6 94.3 +4% +4% 378.7 369.4 +3% +4%
Consulting &
Services
103.4 103.7 - - 419.8 418.7 - +1%
Other 1.4 1.0 +40% +38% 4.6 4.1 +12% +13%
Total 294.0 326.7 -10% -9% 1,098.3 1,119.5 -2% -1%
January 24, 2012 | 31
Segment report quarterly development in 2011
IDS Scheer Consulting
(in €m) Q4
2011
Q3
2011
Q2
2011
Q1
2011
Q4
2010
External product revenue
6.4
5.6
5.4
5.9
5.9
Services & other 36.7 42.8 40.4 46.0 39.4
Total revenue 43.1 48.4 45.8 51.9 45.3
Cost of sales -35.4 -37.4 -44.1 -45.4 -47.3
Gross profit 7.7 11.0 1.7 6.5 -2.0
Sales & marketing -5.5 -7.0 -6.7 -6.5 -6.0
R & D -0.1 -0.1 -0.1 -0.1 -0.1
Segment result 2.1 3.9 -5.1 -0.1 -8.1
in % of revenvue 4.8% 8.1% - - -
Please contact:
Investor Relations
Uhlandstrasse 12
64297 Darmstadt
Germany
phone: +49 (0) 6151 / 92- 3046
fax: +49 (0) 6151 / 92- 1933
web: softwareag.com
e-mail: [email protected]