software_ag_investor_fact_book _december 2015_tcm16-137105

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.


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%


4 |

BUSINESS DEVELOPMENT


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


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


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)


8 |

BALANCED RISK


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


10 |
















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 |
















13 |

LICENSE REVENUE: ⅔ FROM GROWING IT MARKETS


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


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


49%

Mainte-

nance

27%

License

23%

Consulting

27%

FY2013

28%

FY2014

28-29%

FY2015e

17 |

INDEX







Financials 6. 57


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


19 |

BUSINESS DEVELOPMENT


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


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


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


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


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


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


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







Financials 6. 57


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”


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


Marketing

Sales

Back office • Stable

• Reliable

• Efficient

• Standardization

DIGITAL BUSINESS APPLICATIONS


DRIVE THE DIGITAL BUSINESS

30 |

MARKET GROWTH 2015 / MID-TERM


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


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


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







Financials 6. 57


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


36 |

DIGITAL BUSINESS PLATFORM 5 BUILDING BLOCKS


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


37 |

BUSINESS & IT

TRANSFORMATION

ARIS

Business Process Analysis

ARIS

Governance, Risk and

Compliance Management

ALFABET

IT Portfolio Management

ALFABET

Enterprise Architecture

Management


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



38 |

PROCUCT OFFERING ADABAS & NATURAL

APPLICATION MODERNIZATION

NATURAL Application Development

ADABAS Database Management System

ADABAS & NATURAL

LINUX, UNIX, WINDOWS

MAINFRAME


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


40 |

ALFABET - BUSINESS AND IT TRANSFORMATION


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


41 |

APAMA - ANALYTICS & DECISIONS


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


42 |

WEBMETHODS - PROCESS


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


43 |

WEBMETHODS - INTEGRATION


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


44 |

TERRACOTTA - IN-MEMORY DATA


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


45 |

SOFTWARE AG CLOUD


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


46 |


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


47 |

INDEX







Financials 6. 57


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


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


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


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


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


53 |

INDEX







Financials 6. 57


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


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


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


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


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


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 |



SEGMENT REPORT Q3 2015 / YTD 2015 (9 MONTHS)


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




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




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


Q3 2015 / YTD 2015 (9 MONTHS)


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


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


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


(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**


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


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


Sales & Marketing 7.9 +1.4 9.4

Consulting

Cost of sales 34.3 +0.8 35.1


Group*

Cost of sales 49.0 +0.8 49.8



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


* 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







Financials 6. 57


71 |

32%

46%

19%

.3.5%

SHAREHOLDER STRUCTURE


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:


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


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


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

http://www.softwareag.com/corporate/inv_rel/stockinfo/estimates/default.asp

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

mailto:[email protected]

software_ag_investor_fact_book _december 2015_tcm16-137105

Documents