INVESTOR RELATIONS FACTBOOK/media/Files/S/... · Key Investment Indicators 8 2. Business Model,...

INVESTOR RELATIONS FACTBOOK

May 2017

© 2017 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.


SAFE-HARBOR-STATEMENT

3 |

A DAY IN THE LIFE OF SOFTWARE AG

06.15


4 |


06.59


5 |


07.45


6 |


10.00


7 |


11.15


8 |


13.00


9 |


17.00


10 |


17.30


11 |


18.00


12 |

SOFTWARE AG AT A GLANCE


Technology leader for more than 40 years in data management

and application development platforms

>€3bn MARKETCAP

~65% Free Float

€870+ MILLION

IN REVENUE

45%+ recurring

50% new products

4,400+ EMPLOYEES**

R&D 25%

S&M 19%

Consulting

&Services

43%

Admin

13%

47%

Americas

45%

EMEA

REVENUE

33%

Euro

32%

USD

35%

others

BY REGION* BY CURRENCY**

* Based on Group product revenue – FY 2016 **P&L as of December 31, 2016

13 |

BUSINESS LINES


*Group revenue split FY 2016

Share of

Revenue* 51%

Growing Revenue

• Process

• Integration

• Analytics & Decisions

• In-Memory Data

• Business & IT Transformation

Share of

Revenue*

Growing Stability

• Application Development

• Data Management System

• Modernization

Share of

Revenue*

Growing Margin

• Product Stack

• Customized Solutions

27% 22%

14 |

Revenue in €m:

EBITDA

DBP Product revenue

A&N Product revenue

PROFITABLE GROWTH


STRATEGY EXECUTION

284 234

441

2006 2016

Adabas & Natural

Extend Lifecycle

69

31.2%

24.7%

Stable core + profitable

(program 2050+)

EBITA, non-IFRS

2012

Operating margin

15 |

INFLECTION POINTS

© 2017 Software AG. Alle Rechte vorbehalten.

0%

20%

40%

60%

80%

100% License Revenue

0%

20%

40%

60%

80%

100% Maintenance Revenue

2012

0%

20%

40%

60%

80%

100%Business Segment Result

2017 / 2018

2010

Adabas & Natural

Digital Business Platform

16 |

INDEX


Key Investment Indicators 1. 8

Business Model, Characteristics & GTM 2. 22

Markets, Positioning & Competition 3. 29

Digital Business Platform - Core Capabilities 4. 40

Customers References & Use Cases 5. 47

Financials 6. 57

Shares & Ownership 7. 73

17 |

1. KEY INVESTMENT INDICATORS


18 |

KEY 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

• 45+ percent of revenue is recurring maintenance

• High operating margin (2016: 31.2%)

• Continuous return to shareholders (Dividend + SBB ≙ ¾ of free cash flow on average)

19 |

Telecom Chemicals/Pharma Energy/Utilities

Public Sector Logistic/Transport Consumer/Retail

BLUE CHIP CUSTOMER BASE


BUILT OVER 40+ YEARS (SAMPLES)

Finance IoT/Manufacturing

20 |

20%

19%

18% 12%

10%

Government Financial Services

IT Services Manufacturing

Services Telco & Media

Transport & Logistics Other

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

*Based on Group product revenue – FY 2016

21 |

EXPERIENCED MANAGEMENT TEAM


AND LOYAL EXPERT STAFF

Arnd Zinnhardt Chief Financial Officer

- since 2002 -

Finance, Controlling,

Taxes, Treasury,

Business Operations,

Mergers & Acquisitions,

Investor Relations,

Global Purchasing

Dr. Stefan Sigg Chief R&D Officer

- since 2017 -

Global R&D Operations,

R&D Quality Assurance,

Research Programs,

Product Innovations

Dr. Wolfram Jost Chief Technology Officer

- since 2010 -

Product Management,

Product Marketing,

Industry Analyst Relations

Product Innovations

Eric Duffaut Chief Customer Officer

- since 2014 -

Sales, Marketing, Partner

Ecosystem, Global

Consulting Services &

Support

Karl-Heinz Streibich Chief Executive Officer

- since 2003 -

Corporate Office

Human Resources, Legal,

Information Services (IT),

Corporate Communications,

Processes, Audits & Quality

22 |
















23 |

TECHNOLOGY LEADERSHIP


SOFTWARE AG SUITE IS A LEADER IN 6 MARKETS

Gartner is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and

internationally, and is used herein with permission. All rights reserved.

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not

advise technology users to select only those vendors with the highest ratings or other designations. Gartner

research publications consist of the opinions of Gartner’s research organization and should not e construed

as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research,

including any warranties of merchantability or fitness for a particular purpose.

• The Forrester Wave™: In-Memory Data

Grids, Q3 2015

• The Forrester Wave™: Hybrid Integration

For Enterprises, Q4 2016

• The Forrester Wave™: Enterprise

Architecture Management Suites, Q3 2015

• The Forrester Wave™: Big Data Streaming

Analytics, Q1 2016

• Enterprise Architecture Tools, May 2016

• Integrated IT Portfolio Analysis Application,

November 2016

Magic Quadrants

Please assess the reports from Forrester and Gartner through the hyperlinks

https://info.softwareag.com/Forrester-Wave-In-Memory-Data-Grids.html





https://info.softwareag.com/hybrid-integration-leader-forrester-wave-2016.html




https://info.softwareag.com/forrester-wave-2015-enterprise-architecture-management-eam-alfabet.html

https://info.softwareag.com/forrester-wave-2015-enterprise-architecture-management-eam-alfabet.html

https://info.softwareag.com/Forrester-Wave-Streaming-Analytics.html

https://info.softwareag.com/Forrester-Wave-Streaming-Analytics.html

https://info.softwareag.com/Gartner-MQ-Enterprise-Architecure.html





https://info.softwareag.com/Gartner_MQ_IT_Portfolio_Analysis.html




24 |

INNOVATOR FOR


COMPETITIVE DIFFERENTIATION

WORLD’S

1st

high-performance

transactional data

management

ADABAS &

NATURAL

B2B server and

SOA integration platform

WEBMETHODS

business process analysis

and design platform

ARIS

Big data & streaming

analytics platform

TERRACOTTA

APAMA

THE FIRST THE FIRST THE FIRST THE FIRST

25 |

NEUTRAL - BECAUSE WE ARE


VENDOR INDEPENDENT

Our solutions work in

harmony with any

existing IT landscape.

We make all leading

databases and application

platforms work in synergy

with one another.

We won’t lock our

customer into

proprietary systems.

26 |
















27 |

LICENSE REVENUE: ⅔ FROM GROWING IT MARKETS


0%

20%

40%

60%

80%

100%

2006 2008 2010 2012 2014 2016

A&N

DBP

DBP offering focused on IT digitization segments, like IoT, streaming analytics etc.

28 |

RECURRING MAINTENANCE REVENUE


0

100

200

300

400

2010 2011 2012 2013 2014 2015 2016

A&N

DBP

353 362 378 369 369

407

>45% of Group Revenue

from Maintenance

in €m

48%

Maintenance

>90% recurring

30%

License

22%

Consulting

412

29 |

200

300

400

500

600

2015 2017 2019 2021 2023 2025

*renewal rate ca. 93-95%

400

500

600

700

800

2015 2017 2019 2021 2023 2025


A) +10% CAGR

B) flat

€m

€m

€m

MAINTENANCE REVENUE SHOWS COMPOUND GROWTH

DBP Maintenance:

Renewal Rate: 93% (2015-2018), 94% (2019-2021), 95% (2022-2025)

Net New Maintenance ≙ 18% of license p.y.

Stable Churn Rate: - 4% CAGR

(regardless of license revenue)

DBP License:

A

A

B

B

Model Assumptions:

A&N Maintenance:

30 |

31.2%

FY2016

29.7%

FY2015 26.8%

FY2013

27.9%

FY2014

SOFTWARE AG


INVESTMENT KPI

44%

Mainte-

nance

32%

License

24%

Consulting

Growing share of product and recurring revenues

€0.50

€0.60*

2014 2016

Dividend increase

Free Cash Flow

conversion rate

around 130% of

Net profit.

50%

90%

130%

170%

2012 2013 2014 2015 2016

yield: 1.7%

Operating margin* expansion

FY 2014 * non–IFRS EBITA in % of revenue FY 2016

48%

Mainte-

nance

30%

License

22%

Consulting

32 – 35%

(2020 target)

cash-out ratio:

25 – 33%

30.5 – 31.5%

FY2017e

* Dividend recommendation, subject to the agreement at the Annual General Meeting in May 2017

31 | © 2017 Software AG. All rights reserved.

2. BUSINESS MODEL, CHARACTERISTICS & GTM

32 |

0%

10%

20%

30%

40%

Q1 Q2 Q3 Q4

License Maintenance Services

BUSINESS MODEL


REVENUE STRUCTURE & LICENSE VOLATILITY

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 (renewal rate >90%)

• Price based on license volume:

• DBP: up to 22% (new); (≤20% installed)

• A&N: 15% (mainframe); 20% (other)

Consulting Services

• Implementing own products

• Cost plus or fixed price projects

• Own staff + freelance and partners

Ø quarterly share of respective

FY revenue 2014 - 2016

33 |

ACQUISITIONS SUPPORT TECHNOLOGY LEADERSHIP

Integration and BPM Business Process Analysis Big Data (In Memory)

Application PaaS

2007 2008 2009 2010 2011 2012 2013 2016


*A&N Portfolio (all other DBP)

IoT

2017

AI

* *

Streaming

Analytics

34 |

PARTNER SOLUTIONS


DIGITAL MARKETPLACE - A CREDIBLE INDUSTRY ECOSYSTEM

MEDIA BACKBONE

CONDUCTOR

SCHEER BPAAS

ARIS MOBILE SERVICES

INTRADAY LIQUIDITY

MONITORING

CONNECTED SERVICE

EXPERIENCE

ACCORD ALFABET

ACCELERATOR

CONTINUOUS

ASSURANCE

WIPRO LOOKING

GLASS

GLOBAL OPERATIONS

SOLUTIONS

SMART WORK

BENCH

AUTOMATED

TEST ENGINE

PREDICTIVE

MAINTENANCE

SERVICE

INTEGRATION SUITE

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj8nYGKt9HJAhXBXBQKHRVMC7gQjRwIBw&url=http://www.brandsoftheworld.com/logo/cognizant-technology-solutions-0&bvm=bv.109395566,d.d24&psig=AFQjCNEsUvfyl2CpxK7Zifg4rjz0ya9tpQ&ust=1449841623594253

35 |

NEW GO TO MARKET


KEY INITIATIVES

Pipeline Volume: +20% (UW)

Deals in Pipeline over €1m: more than doubled

New Service (EAS) drives maintenance growth

KPIs 2015 - 2016

Demand Generation (DBP)

Industry Use Cases (DBP)

Maintenance Revenue (Group)

Sales Productivity (DBP)

OPTIMIZE TO PERFORM

Cloud (DBP)

Business Line Margin Improvement 700bps

Sales Productivity: +20% CAGR

Cloud revenue high double-digit growth

Roughly 100 industry use cases developed

Majority is Partner originated

36 |

90

95

100

105

110

115

DBP Business Line 4 Quarter rolling average

40

42

44

46

48

50

DBP License 4 Quarter rolling average

SOFTWARE AG – DBP REVENUE TREND


€m Trend

Q2 14 -

Q1 15

Q3 14 -

Q2 15

Q4 14 -

Q3 15

Q1 15 -

Q4 15

Q2 15 -

Q1 16

Q3 15 -

Q2 16

Q4 15 -

Q3 16

Q1 16 -

Q4 16

Trend €m

Q2 14 -

Q1 15

Q3 14 -

Q2 15

Q4 14 -

Q3 15

Q1 15 -

Q4 15

Q2 15 -

Q1 16

Q3 15 -

Q2 16

Q4 15 -

Q3 16

Q1 16 -

Q4 16

Q2 16 -

Q1 17

Q2 16 -

Q1 17

37 |

SOFTWARE AG 2015 2020


• Customer Centric Co-Innovation

• Digital Business Platform Best of Suite

• Multi Channel Sales & Marketing

• Cloud Enablement of Portfolio

• M&A Readiness continues

• Deployment Services Framework

SUCCESS FACTORS

INVESTMENT FOCUS:

• Profitable organic growth

• Margin 2020: 32-35% (EBITA non-IFRS)

• DBP > 10% license growth CAGR

• A&N Customer Life Cycle Enhancement

• Continuous Corporate Efficiency Program

• Expand Innovation Leadership

• Dividend Payment / Share Buy Backs

CORE TARGETS


3. MARKETS, POSITIONING & COMPETITION

39 |

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”

40 |

SOFTWARE AG – PROMOTES THE PARADIGM SHIFT


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

digital 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

41 |

DIGITIZATION WEDGE SEPARATES CUSTOMERS FROM ESTABLISHED COMPANY


DIGITAL DISRUPTION

Any industry ... Pharma Retail Manufacturing Insurance

Digital Disruption

Internet of Things

Smart Business

Connected Customers


Retail

Consumer

centric

supply

chains

Platform

as a

retailer

PROCESS

INNOVATION

Pharma

Personalized

medicine

Health card

as a

medical

service

platform

PRODUCT

INNOVATION

Individualized

production

Smart

products (I 4.0, MES, IoT)

Predictive

solutions

ORGANIZATIONAL

INNOVATION

Insurance

Platform as

a broker

Personalized

insurance

contract

SERVICE

INNOVATION

Mobility

Connected

cars

Platform

as a

broker

MOBILITY

INNOVATION

…any Industry!

DIGITAL

INNOVATION!

DIGITAL CHALLENGERS SEPARATE CUSTOMERS FROM ESTABLISHED COMPANIES

Manufacturing

http://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjlsc6Bv8nSAhVJlxQKHcSNBu0QjRwIBw&url=http://infowebsystems.com/insurance/&bvm=bv.149093890,d.d24&psig=AFQjCNFSQzA1Zq5Kpjxj21JM3qmTHh0rEQ&ust=1489151232954630

http://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjaurW1vsnSAhXGWxQKHW5bBesQjRwIBw&url=http://www.amrismartsourcing.com/pharma-news-2/this-week-in-pharma-45/&bvm=bv.149093890,d.d24&psig=AFQjCNHFsVRktIh9dpcByqDRLdNW__SOBg&ust=1489151113717688

https://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi0uZKfv8nSAhWEtRQKHff7DlkQjRwIBw&url=https://convent.de/de/archiv/managed-events/connected-mobility-2016/&bvm=bv.149093890,d.d24&psig=AFQjCNHFfwWWU0q2N7dFUP_d7bhvO9B6Jw&ust=1489151351127705

https://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj8m8jUvsnSAhVEVRQKHYT2DhQQjRwIBw&url=https://www.fcagroup.com/en-US/sustainability/we_care_about_environment/responsible_production/Pages/default.aspx&bvm=bv.149093890,d.d24&psig=AFQjCNEqmG6oYzY7pyIxpVz9RUSE3vjwaQ&ust=1489151181790942

43 |

Customized / modeled Business Logic Standard Apps Business Logic

DIGITAL TRANSFORMATION


FROM APP - SILOS TO A DIGITAL SOFTWARE PLATFORM

Innovation only through vendor

Open, flexible agile • Sprint projects

Real time visibility • Short project cycle

PREVIOUS ARCHITECTURE: SILO NEW ARCHITECTURE: PLATFORM

Monolithic • Complex • Inflexible/slow

Business Logic

Integration

Process

Data

(all in one app)

Business Transformation

IT Portfolio

Management

Hybrid Cloud

Integration

APP Development

Big Data Analytics

Internet of Things

iBPMS

Digital Software Infrastructure Platform

Process/ Integration/ Big Data

44 |

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


Global Infrastructure Software Market Segments related to Digital Business Platform – market

segments related to DBP’s 5 building blocks + IoT

Software Market Segment Market Size 2016 ($b) Growth 2016/20 (Δ %)

Integration 7.1

BPM 2.8

Bsn.&IT Transfor. – Analtc&Dec.

9.6

In-Memory Data 4.2

IoT Platform* 0.4

Total related market 24.1

Chart created by Software AG based on Gartner Research, Source: Market Share: All Software Markets, Worldwide, 2017 Published: 20 March 2017 ID: G00323032

* IoT Platforms Market Report 2015-2020,” published by IoT Analytics

DIGITAL BUSINESS PLATFORM - MARKET SIZE & GROWTH

46 |

TOP 5 VENDORS


IN MAJOR MARKET SEGMENTS OF THE APPLICATION INTEGRATION AND MIDDLEWARE MARKET 2016 WORLDWIDE

Business Process Management Suite (BPMS)

1. IBM

2. Oracle

3. Open Text

4. Software AG

5. Pegasystems

(Top 5 vendors account for approx. 52% of the market)

Enterprise Service Bus Suite (Integration)

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: Market Share: All Software Markets, Worldwide, 2016,” Matthew Cheung, et al., April 14, 2017

47 |

BLOOR RESEARCH, STREAMING ANALYTICS 2016


Software AG’s “comprehensive combination of

performance and scalability, streaming

analytics operators, graphical tools and solution

accelerators for application development” puts

it at the top of the class

48 |

TOP SIX 2017 PREDICTIONS FOR APPLICATION INTEGRATION

Integration With APIs

APIs are part of a bigger market and an extension of

integration

The IT community is recognizing the value of APIs for

application integration

Integration

Microservices Mature

Microservice architecture will be taken into production with real projects

Integration vendors will go to market with microservices using important supporting technologies such as containers (Docker, Kubernetes, etc.)

Rise Of The Chatbots

Artificial Intelligence is everywhere – especially with the rise of chatbots and virtual assistants

There will be an increase in the need for bots to have timely data such as customer, product and service data to improve the virtual experience of customers

IoT Integration Everywhere

As more companies move into real IoT implementations, the role of integration as the broker “Thing” data will become fully realized

Data is only valuable if it gets delivered

Blockchain Integration

Blockchain technology for fast and secure payments increases in different industries

Integration will be the key that ties these initiatives into business by adding new channel for secure and fast business


Specialists Not Required

Integration tools will need to accommodate multiple user types along

with traditional developers

Integration vendors will need to provide tooling for ad hoc and non

technical developers as well as specialists, including graphical, low

code solutions


4. DIGITAL BUSINESS PLATFORM – CORE CAPABILITIES

50 |


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

51 |


Core ERP (SOR) Legacy Custom Things

E-Procure CRM HR

THE NEW LANDSCAPE ARCHITECTURE DIGITAL BUSINESS PLATFORM AT THE CORE

DIGITAL BUSINESS PLATFORM (PaaS)

+ HYBRID

CLOUD

ON PREMISE

Systems of Differentiation (Digital Applications)

Big Data Mobile Apps Partners

Modular, Agile, Flexible, Fast, Differentiating

52 |



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

53 |


DIGITAL BUSINESS PLATFORM CAPABILITIES

Business strategy

& planning

Collaboration

Design &

analysis

Risk & compliance

management

Audit

management

Portfolio

management

Enterprise

architecture

BUSINESS & IT

TRANSFORMATION

PROCESS

IoT

integration

INTEGRATION

Pattern

detection

Mobile

enablement

Application

integration

Mobile

integration

In-Memory data

management

Visual

analytics

Business

dashboards

Process

automation

Task

management

B2B

integration

Services

governance

Universal

messaging

Predictive

analytics

Process

discovery

Application

development

Rules

management

API

gateway

Integration

services

Search &

compute

Event

processing

Process

monitoring

Case

management

Process

orchestration

API

portal

Cloud service

integration

Continuous

query

IN-MEMORY

DATA

ANALYTICS &

DECISIONS

54 |

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


55 |

Capabilities Benefits

ADABAS Data Management System

• Data management for high-performance

transaction processing

• Multi-platform availability

• Faster and more reliable data processing

• Easily share data with other systems

• Data management 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



5. CUSTOMER REFERENCES & USE CASES

57 |

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

58 |

SINCE PARTNERING


WITH SOFTWARE AG

PRODUCED A FASTER

SOLUTION DELIVERY IN 3

MONTHS INSTEAD OF 18

ACHIEVED REAL-TIME

SYSTEM RESPONSIVENESS:

99.99984% AVAILABILITY

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

CERN

59 |

CO-INNOVATION CUSTOMERS


60 |

INTERNET OF THINGS (IOT) PLATFORM OF SOFTWARE AG


Connected Devices

Enterprise

IoT Solutions

& Applications

Predictive

Maintenance

Smart

Production

Connected

Customer

Smart

Logistics

Development

& Delivery Environment

Application

Development

Portals &

API Gateway

Data

Visualizations

IoT Edge Services Lightweight

Messaging Edge Analytics

Device Connectivity &

Embedded Agents

Business

Systems

&

Partner

Networks

&

Ecosystems

IoT Platform

Services

Agile Business

Process Management

Predictive Analytics &

Machine Learning Streaming Analytics

In-memory

Data Management

Enterprise Integration

Visual

Analytics

Device Management Ad Hoc

Historical Analytics

API Management

+

IoT

Fo

un

da

tio

n

61 |

KEY IOT USE CASES FOR SOFTWARE AG


Use Case Description & Value

Predictive

Maintenance

• Continuous analysis of operational metrics to maintain & service equipment or

infrastructure to prevent breakdown

• Save costs by minimizing downtimes

Connected

Customer

• Analyse customer behaviour & location in real time to engage better with them

• Create revenue from context-aware, multi-channel, personalized offerings

• Improve customer loyalty & satisfaction

Smart

Logistics

• Track assets in real-time for situational awareness & improved decision making

• Optimize the supply chain end-to-end

• Increase customer satisfaction

Smart

Manufacturing &

Smart Metering

• Live sensor data analysis for real time insights into production environments

• Save costs by improving product quality (minimize waste)

• Increase revenue by providing higher quality assurance and better service to

customers

62 |

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 and insights into preventative measures

More stringent SLAs resulting in higher revenue

63 |

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


64 |

SMART LOGISTICS FOR LOGISTICS PROVIDERS Real-time and predictive analytics for improved logistics operations

Monitor vehicle telematic, traffic, sensor, environmental and other data

Alerts and suggested action, automated corrective actions where possible

Harness the IoT to minimize waste and scheduling inefficiency

Project accurate arrival times, react immediately to emerging issues

Optimize operations with arrival notifications for automated check-in

Provide customers with accurate ETA, ensure you are the provider

of choice


65 |

SMART MANUFACTURING 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



6. FINANCIALS

67 |

* EPS basic, 2007 – 2010 pro-forma, adjusted for share split (2011)

in €m, IFRS 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Total Revenue 871.8 873.1 857.8 972.7 1,047.3 1,098.3 1,119.5 847.4 720.6 621.3

BL DBP 441.4 431.5 394.5 422.9 385.5 339.6 321.5 247.2 210.7 149.9

BL A&N 234.6 248.0 245.3 274.5 310.5 313.9 355.4 328.5 332.1 310.2

BL Consulting 195.8 193.6 218.0 275.4 351.3 444.8 441.4 271.3 177.8 161.1

Group License 263.0 271.9 270.1 330.1 318.9 295.2 327.4 269.9 272.0 241.3

Group Maintenance 412.2 406.9 371.3 375.6 393.3 378.7 369.4 310.6 267.1 212.9

EBIT 213.9 209.4 176.0 205.5 248.3 269.2 268.6 218.2 180.5 136.8

EBITA (non-IFRS) 272.0 259.1 239.3 260.7 298.9 n/a n/a n/a n/a n/a

EPS (in €, non-IFRS)* 2.37 2.22 1.96 2.07 2.31 n/a n/a n/a n/a n/a

Dividend (total cash out) 41.9 39.5 39.5 36.3 38.2 39.9 37.0 32.6 31.5 28.5

Free cash flow 187.0 170.0 132.7 159.1 170.7 187.7 217.8 188.4 133.4 82.2

Net cash / Net debt 73.1 -25.7 -15.1 -50.4 49.7 -60.9 -167.2 -271.8 -70.3 -133.0

Shareholders‘ equity 1,195.6 1,089.8 1,013.4 965.6 1,060.1 951.5 769.3 647.2 549.1 462.5

Employees (FTE) 4,471 4,337 4,421 5,238 5,419 5,535 5,644 6,013 3,526 3,479

FINANCIAL DATA


KEY FIGURES

68 |

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 2016 FY 2015 FY 2014 FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007

Operating margin (EBITA, non-IFRS)

31.2 29.7 27.9 26.8 28.5 n.a. n.a. n.a. n.a. n.a.

EBITDA margin 29.1 29.7 26.4 26.6 28.6 28.7 28.1 30.3 28.6 25.7

EBIT margin 24.5 24.0 20.5 21.1 23.7 24.5 24.0 25.8 25.1 23.3

ROE1 17.9 19.2 17.4 21.3 23.4 28.3 34.9 33.7 32.9 31.8

ROCE2 15.2 16.1 12.6 14.6 18.2 20.5 27.4 20.9 26.2 22.5

Net Working Capital (€m)3 -€200.2 -€155.9 -€98.1 -€213.5 -€41.6 -€23.8 -€194.4 -€211.3 -€74.1 -€55.0

Working Capital ratio4 20.0 16.6 25.7 24.3% 26.2 17.5 -8.2 0.8 3.2 4.2

Free Cash Flow margin5 21.4 19.5 15.5 16.4 16.3 17.1 19.5 22.2 18.5 13.2

Corporate tax rate 33.0 32.4 33.7 32.0 31.2 31.7 31.0 32.7 34.0 35.4

WACC6 4.05 4.13 4.35 5.12 5.1 5.7 6.8 5.5 6.8 8.4

Equity ratio 61.2 60.1 54.8 48.4 59.8 56.6 48.1 39.1 51.8 47.2

DSO (Days Sales Outstanding) 113 111 115 107 105 93 100 109 120 119

Capex (€m) €16.7 €15.5 €10.5 €12.7 €13.3 €10.9 €9.7 €12.1 €6.6 €11.8

Capital Employed7 (€m) €1,381.9 €1,282.8 €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

69 |

Product Revenue

Digital Business Platform

Product Revenue

Adabas & Natural

Operating Margin Group

(EBITA non-IFRS)2)

OUTLOOK – CONFIRMED


FULL YEAR 2017

1) At constant currency rates

2) Adjusted for non-operating items (see non-IFRS earnings results)

30.5% to 31.5%

-2% to -6%1)

+5% to +10%1)

Outlook FY 2017 (as of January 26, 2017)

FY 2016 (in €m)

233.9

441.4

31.2%

70 |

Euro 33%

US Dollar 30%

Other 10%

(in €m; yoy)

Q1 2017 Q1 in %

Licenses 1.6 3%

Maintenance 3.9 4%

Consulting & Other 0.7 1%

Total 6.2 3%

CURRENCY IMPACT ON REVENUE


Q1 2017

Currency impact on revenue

33% revenue in Euro

67% revenue in foreign currency

Currency split Q1 2017

BRL 5%

ZAR 4%

AUD 3%

GBP 7%

ILS 5%

CAD 3%

71 |

(in €m) Q1

2017

Q1

2016

∆% ∆% acc FY

2016

FY

2015

∆% ∆%

acc

Product revenue 153.5 158.0 -3% -6% 675.2 678.8 -1% 1%

Licenses 46.3 59.1 -22% -24% 263.0 271.9 -3% -3%

Maintenance 107.2 98.9 8% 5% 412.2 406.9 1% 3%

Consulting 52.0 47.8 9% 7% 195.2 193.4 1% 3%

Other 0.4 0.4 - - 1.4 0.9 - -

Total 205.9 206.2 0% -3% 871.8 873.1 0% 1%

REVENUE


Q1 2017 / FY 2016

72 |

DIGITAL BUSINESS PLATFORM SEGMENT REPORT Q1 2017 / FY 2016

(in €m) Q1

2017

Q1

2016

∆% ∆% acc FY

2016

FY

2015

∆% ∆%

acc

Licenses 38.4 32.7 18% 15% 186.3 183.5 2% 1%

Maintenance 67.2 61.9 9% 6% 255.1 248.0 3% 5%

Total revenue 105.6 94.6 12% 9% 441.4 431.5 2% 3%

Cost of sales -7.1 -8.3 -14% -15% -31.3 -27.9 12% 13%

Gross profit 98.5 86.3 14% 11% 410.1 403.6 2% 3%

Sales & Marketing -44.8 -40.4 11% 8% -172.4 -192.7 -11% -10%

Research & Development -23.7 -22.1 7% 4% -89.9 -85.7 5% 4%

Segment result 30.0 23.8 26% 23% 147.8 125.2 18% 20%

Margin in % 28.4% 25.2% 33.5% 29.0%


73 |

ADABAS & NATURAL SEGMENT REPORT Q1 2017 / FY 2016


(in €m) Q1

2017

Q1

2016

∆% ∆%

acc

FY

2016

FY

2015

∆% ∆%

acc

Licenses 7.8 26.4 -70% -72% 76.8 88.4 -13% -12%

Maintenance 40.1 37.0 8% 2% 157.1 158.9 -1% 1%

Product revenue 47.9 63.4 -24% -29% 233.9 247.3 -5% -4%

Other 0.1 0.2 - - 0.7 0.7 0% 0%

Total revenue 48.0 63.6 -25% -29% 234.6 248.0 -5% -4%

Cost of sales -2.8 -3.2 -13% -12% -11.7 -14.2 -18% -17%

Gross profit 45.2 60.4 -25% -30% 222.9 233.8 -5% -3%

Sales & Marketing -8.1 -10.3 -21% -25% -38.0 -39.5 -4% -2%


Segment result 31.0 44.8 -31% -36% 162.4 173.6 -6% -5%

Margin in % 64.6% 70.4% 69.2% 70.0%

74 |

CONSULTING SEGMENT REPORT Q1 2017 / FY 2016


(in €m) Q1

2017

Q1

2016

∆% ∆% acc FY

2016

FY

2015

∆% ∆%

acc

Total revenue 52.3 48.0 9% 7% 195.9 193.6 1% 3%

Cost of sales -41.9 -41.7 0% -1% -157.5

-153.3 3% 4%

Gross profit 10.4 6.3 65% 66% 38.4 40.3 -5% -2%

Sales & Marketing -4.9 -4.4 11% 12% -17.6 -18.5 -5% -2%

Segment result 5.5 1.9 189% 193% 20.8 21.8 -5% -1%

Margin in % 10.5% 4.0% 10.6% 11.3%

75 |

RESULTS Q1 2017 / FY 2016


(in €m) Q1

2017

Q1

2016

∆% ∆%

acc

FY

2016

FY

2015

∆% ∆%

acc

Total revenue 205.9 206.2 0% -3% 871.8 873.1 0% 1%

Cost of sales -55.0 -56.0 -2% -3% -211.8 -212.2 0% 1%

Gross profit 150.9 150.2 0% -3% 660.0 660.9 0% 1%

Margin in % 73.3% 72.8% 75.7% 75.7%


Sales & Marketing -62.4 -59.6 5% 2% -245.7 -268.8 -9% -7%

Administration -18.5 -19.2 -4% -5% -79.3 -69.4 14% 15%

Other income / expense 1.3 1.4 - - -8.6 -6.9 25%

EBIT 41.5 45.3 -8% - 213.9 209.4 2%

Margin in % 20.2% 22.0% 24.5% 24.0%

76 |

EARNINGS


Q1 2017 / FY 2016

* Weighted average shares outstanding (basic) Q1 2017: 75.9m / Q1 2016: 76.2m

(in €m) Q1

2017

Q1

2016

∆% FY

2016

FY

2015

∆%

EBIT (before all taxes) 41.5 45.3 -8% 213.9 209.4 2%

Financial result -0.2 -0.4 -50% -4.4 -2.9 -

Profit before taxes 41.3 44.9 -8% 209.5 206.5 1%

Other taxes -2.0 -1.3 54% -5.5 -6.0 -8%

Income taxes -12.0 -14.1 -15% -63.6 -60.9 4%

Tax rate in % 33.9% 34.3% 33.0% 32.4%

Net income 27.3 29.5 -7% 140.4 139.6 1%

EPS in €* €0.36 €0.39 -8% €1.84 €1.78 3%

77 |

NON-IFRS EARNINGS


Q1 2017 / FY 2016

* Weighted average shares outstanding (basic) Q1 2017: 75.9m / Q1 2016: 76.2m

(in €m) Q1

2017

Q1

2016

FY

2016

FY

2015

EBIT (before all taxes) 41.5 45.3 213.9 209.4

Amortization on acquisition related intangible assets 7.8 7.3 29.1 35.0

Share based payments 0.4 2.4 14.2 -3.1

Restructuring / severances / legal case 5.0 4.0 11.8 15.3

Other impacts / impacts from M&A activities 1.6 0.1 3.0 2.5

EBITA (non-IFRS) 56.3 59.1 272.0 259.1

in % of revenue (Non-IFRS) 27.3% 28.7% 31.2% 29.7%

Net income (non-IFRS) 37.3 38.7 180.4 173.9

EPS (non-IFRS)* €0.49 €0.51 €2.37 €2.22

78 |

Q1

2017

FY

2017*

Amortization

(in €m)

Depreciation

* Estimated

FY

2018*

AMORTIZATION / DEPRECIATION IMPACT

© 2017 Software AG. All rights reserved

(PRELIMINARY)

30.2

10.8

7.8

2.9

20.5

11.0

FY

2019*

18.2

11.0

79 |

CASH FLOW


Q1 2017 / FY 2016

*Cash flow from investing activities except acquisitions and except investments in debt instruments

** yoy change because of one time property investment at Darmstadt

***Based on weighted average shares outstanding (basic) Q1 2017: 75.9m / Q1 2016: 76.2m

(in €m) Q1

2017

Q1

2016

∆% FY

2016

FY

2015

∆%

Operating cash flow 61.7 61.9 0% 203.7 185.4 10%

./. CapEx* 18.4** 60.5 -16.7 -15.4

Free cash flow 43.3 60.5 -28% 187.0 170.0 10%

in % of revenue 21.0% 29.3% 21.4% 19.5%

Free cash flow per share*** €0.57 €0.79 -28% €2.45 €2.17 13%

80 |

Mar. 31,

2017

Mar. 31,

2017

Assets Liabilities

BALANCE SHEET

(in €m)

Dec. 31,

2016

Dec. 31,

2016

Cash and cash equivalents

Financial assets

Trade and other receivables

Fixed assets

(Goodwill 966.2 / 936.6)

Total

Non-financial assets

Financial liabilities

Other liabilities

Deferred income

Shareholders’ equity

(ratio 61.3% / 61.1%)

Total

374.6

305.9

55.7

1,161.6

1,957.2

59.4

301.5

325.8

133.1

1,196.8

1,957.2

362.3

273.5

62.7

1,207.1

1,961.9

56.3

1,961.9

287.3

178.6

292.7

1,203.3


81 |

HEADCOUNT BY FUNCTIONAL AREAS* AND GEOGRAPHY


25% 1,122 (+1%)

19% 863 (+2%)

14% 610 (+1%)

42% 1,891 (-1%)

Research &Development

Sales &Marketing

Administration

Consulting &Services

25% 1,141 (-1%)

17% 764 (+0%)

13% 599 (-1%)

44% 1,982 (+1%)

Germany

India

USA

Rest of World

* According to P+L structure as of March 31, 2017

Total: 4,486 (FTE)


7. SHARES & OWNERSHIP

83 |

33%

36%

31%

0.4%

SHAREHOLDER STRUCTURE


31%

30%

18%

12%

Number of total shares: 76,400,000

Free float: ~ 65%

Indices: TecDAX, DAX 100, TechAllShare

Codes: SOW, SOW GR, SOWG.DE

ISIN: DE0003304002, ADR symbol: STWRY

Germany

United States

France & Benelux 3%

Scandinavia

United Kingdom

Rest of World 4%

Shareholder Structure

Share Data

Shareholder (disclosed)* by Region

Voting Rights Notifications

Switzerland 2%

1) notification pursuant to Article 4 (4) Commission Regulation (EC) No 2273/2003

* Source: IPREO, May 2017

Software AG

Foundation

Disclosed

Shareholders*

Undisclosed

Shareholders

Own Shares

Software AG Foundation 32.67% 15.03.17

Deutsche Asset Mgt. Investment 5.01% 05.07.16

Software AG (own shares) 3.068% 09.05.171)

84 |

0.30* 0.33* 0.37* 0.38*

0.43* 0.46 0.46 0.46

0.50 0.55

0.60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

DIVIDEND POLICY


FOCUS ON CONTINUITY

Dividend by fiscal year

(in € per share)

* According to the 1:3 stock split, rounded

85 |

DIVIDEND YIELD EXCEEDING GOVERNMENT BONDS


-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

2010 2011 2012 2013 2014 2015 2016

Dividend yield Software AG German Government Bonds (5 years) Yield spread

86 |

CASH USE:


SHARE BUY-BACK 2013-17

Buy-back own shares

2013 - 2014

Cancellation of

treasury shares

April 30, 2015

Buy-back own

shares 2015

Sept. 8, 2015 -

Dec. 4, 2015

Until cancellation / capital reduction:

Share capital: 86,943,945.00 €

Number of shares: 86,943,945

€m 225

9.2%

€m 70

3.4%

- 9.1%

-3.29%

Until cancellation / capital reduction:



Cancellation of

treasury shares

March 14, 2017

Buy-back own

shares 2017

March 13, 2017 -

May 11, 2017

3.266%

Own shares

Position after

cancellation

March 15, 2017

Since cancellation / capital reduction:



0.38%

87 |

0

50

100

150

200

250

2012 2013 2013 2014 2014 2015 2015 2016 2016 2017*

Free Cash Flow

Share Buy-Back +Dividends

CASH RETURN TO SHAREHOLDERS


Ø ¾ FREE CASH FLOW TURNS INTO DIVIDENDS AND SBB

€m

88 |

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

89 |

ANALYST COVERAGE


Baader Helvea E.R.

Barclays Capital

Bryan, Garnier & Co

Commerzbank

Crédit Suisse

Deutsche Bank

DZ Bank

Equinet

Goldman Sachs

Hauck & Aufhäuser

HSBC

Independent Research

J.P. Morgan Cazenove

Kepler Cheuvreux

LBBW

MainFirst Bank AG

Metzler

Morgan Stanley

Oddo Seydler

Société Générale

UBS I.R.

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

90 |

INVESTER RELATIONS


Uhlandstrasse 12

64297 Darmstadt

Germany

phone: +49 (0) 6151 / 92 1900

fax: +49 (0) 6151 / 9234 1900

softwareag.com

e-mail: [email protected]

mailto:[email protected]

INVESTOR RELATIONS FACTBOOK/media/Files/S/... · Key Investment Indicators 8 2. Business Model,...

Documents

Transcript of INVESTOR RELATIONS FACTBOOK/media/Files/S/... · Key Investment Indicators 8 2. Business Model,...