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©2013 Software AG. All rights reserved.
Deutsche Bank
German, Swiss & Austrian
Conference
Arnd Zinnhardt
CFO
May 14, 2013
©2013 Software AG. All rights reserved.
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
©2013 Software AG. All rights reserved.
3 |
Software AG - At a Glance
High performance database
Process Planning,
monitoring and analysis
Middleware to integrate data applications and
digital workflows
Big-data and In-memory technology
> € 1bn revenue
Operating EBITDA margin 28.6% (FY 2012)
> € 2.3 B market cap,
Net Cash positive
> 5,000 Employees worldwide
~ 66% Free float,
29% Software AG Foundation
Global customer base:
80% of Fortune 10,000
Technology leader in systems integration,
process automation and data management
©2013 Software AG. All rights reserved.
4 |
Large Enterprise Customers in 70 Countries Worldwide
Finance Public Sector Telecom Chemicals/Pharma Energy/Utilities
Manufacturing Logistics/Transport
Healthcare/
Consumer Goods
©2013 Software AG. All rights reserved.
5 |
1,098
Software AG‘s Track Record
411
721
1.046
0
200
400
600
800
1.000
2004 2008 2012
Revenue in €m
87
116
171
0
30
60
90
120
150
180
2004 2008 2012
Net profit in €m
2,438
3,526
5,419
0
1.000
2.000
3.000
4.000
5.000
2004 2008 2012
Employees
108
181
248
0
50
100
150
200
250
2004 2008 2012
EBIT in €m
©2013 Software AG. All rights reserved.
6 |
Financial Sector
Public Sector
IT
Associ-ations
Services
Manu-facturing
Telcos
Logistics Retail
Other
PIIGS
< 4%
BRICS 13%
48%
31%
13%
8%
Product Revenue by Industry
*Based on product revenue FY 2012
Product Revenue by Region*
Product Revenue by Industry*
Revenue Split – Well Balanced
EMEA
(ex Germany)
Asia Pacific Americas
Germany 20%
20%
©2013 Software AG. All rights reserved.
7 |
• Application Development
• Database Management System
• Application Modernization
Transaction PLATFORMS
• Business Process Analysis
• Enterprise Architecture
• Governance, Risk and Compliance Management
Business Process PLATFORMS
• In-Memory Data Management
• In-Memory Intelligent Action
Big Data PLATFORMS
• Integration
• Business Process Management
Integration PLATFORMS
©2013 Software AG. All rights reserved.
8 |
Business Process Excellence (BPE)
Business Process PLATFORMS
Integration PLATFORMS
Big Data PLATFORMS
Transaction PLATFORMS
Software AG Product Suite – Powering The Digital Enterprise
0
100
200
300
400
2004 2005 2006 2007 2008 2009 2010 2011 2012
in €m
BPE - Business characteristics BPE - Product revenue development
Technology leader (Gartner, Forrester)
Worldwide biggest independent specialized
vendor of Business Process Excellence (BPE)
Market growth perspective (CAGR 10% + p.a.)
License revenue growth: +20% to +30% in 2013
Growth driver: market, portfolio, deal size, sales
staff
©2013 Software AG. All rights reserved.
9 |
0
100
200
300
400
2004 2005 2006 2007 2008 2009 2010 2011 2012
in €m
ETS - Business characteristics ETS - Product revenue development
Enterprise Transaction Systems (ETS):
ADABAS (fastest transactional database)
NATURAL (rapid application development)
Mature market (cash-cow)
Revenue decline, stable margins and strong
recurring cash flow
Cost management focus
Annual maintenance renewal rate: ~ 95%
(average)
Business Process PLATFORMS
Integration PLATFORMS
Big Data PLATFORMS
Transaction PLATFORMS
Software AG Product Suite – Powering The Digital Enterprise
Enterprise Transaction
Systems (ETS)
©2013 Software AG. All rights reserved.
10 |
Increasing Product Revenue from the High-Growth BPE Division
39% 43% 47% 52% 55%
61% 57% 53% 48% 45%
0%
20%
40%
60%
80%
100%
2008 2009 2010 2011 2012
ETS
BPE
209 244
319 338 385
0
100
200
300
400
2008 2009 2010 2011 2012
BPEBPE Product Revenue in €m
Relative share
of product
revenue
©2013 Software AG. All rights reserved.
11 |
BPE - Future Growth is Driven by New Products
(BPE licenses in €m)
35.7
45.6 50.0
63.5
41.9
0
10
20
30
40
50
60
70
80
90
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2e 2013 Q3e 2013 Q4e 2013
+19% y-o-y*
*at constant currency rates
©2013 Software AG. All rights reserved.
12 |
Cost Ratios & Profitability - 2011/2012
(in €m)
Total
Revenue
Gross
Profit R&D
Sales & Marketing
Profitability
FY 2012
FY 2011
668.6
-100.8 -246.9
EBIT (IFRS) Margin 23.7%
1,098.3
1,047.3
EBIT (IFRS)
Margin 24.5% 656.2
-88.0
-75.1
10%* 24%*
8%* 21%*
*as % of total revenue
64%*
269.2
248.3
60%*
-230.2
+6.4
-75.8 +2.7
Admin Other
7%*
7%*
(in €m)
©2013 Software AG. All rights reserved.
Strategy
©2013 Software AG. All rights reserved.
14 |
Growth Strategy
Growth
based on three pillars
Organic Growth…
…leverage technology
leadership in enterprise
infrastructure software
• Fast integration
middleware
• High speed process
automation
• High performance
data management
Innovation…
…addressing
Mega Trends
for enterprise IT
• Cloud
• Big Data
• Mobile
• Collaboration
Selective M&A…
…in three strategic
areas:
• Integration / SOA &
Cloud
• Business Processes
• Big Data
©2013 Software AG. All rights reserved.
15 |
(Product revenue in €m)
BPE – Engine of Future Growth
284
309 331 328
355
313 310
69
146
209
244
319 338
385
0
50
100
150
200
250
300
350
400
450
500
2006 2007 2008 2009 2010 2011 2012 2013e
Business Process Excellence
Enterprise Transaction Systems +16%
to
+22%
-9%
to
-4%
2013e
Outlook
2013*
* At constance currency
©2013 Software AG. All rights reserved.
16 |
Acquisitions Support Technology Leadership
2007
2008
2009
2010
2011 2012
Strategic Acquisitions
Technology – Add Ons
2013
©2013 Software AG. All rights reserved.
17 |
Innovation Strategy
Main Technology Drivers – 4 Forces
NoSQL
Hadoop
Social Computing
Internet of Things
©2013 Software AG. All rights reserved.
Outlook
©2013 Software AG. All rights reserved.
19 |
Group revenue split by product revenue (BPE, ETS)
Mid-term Target - Product Revenue
~80%
ETS Product Revenue
BPE Product Revenue • Organic Growth
• Integration Technology
• Business Process Mgt.
• Cloud
• Terracotta / Big Data
• Partner / OEM
• M&A / Innovative Technologies
2012 2018
45%
€1 Billion
20%
80%
2006
55%
~20%
©2013 Software AG. All rights reserved.
20 |
BPE
Enterprise Transaction Systems
Business Process Excellence Product revenue: growth ca. 15-20% p.a.
> 50% contribution to group result
Terracotta / BigData
Product revenue: growth ca. 50-100% p.a.
Expand BigData offering by Real Time BI platform
Product revenue in gradual decline (single digit % p.a.)
Manage cost to maintain operating margin > 50%
ETS
Share of
product revenue*
* According to
mid-term
business goals
Mid-term Business Goals (2018, base: 2012)
Increase BPE product revenue to € 1 bn
Strategic acquisitions (cash-only; Cloud/BigData)
EPS growth 10-20% p.a. (2013-2018)
Software AG Group
©2013 Software AG. All rights reserved.
21 |
Outlook FY 2013
* Net of currency, delta ** before share -buyback
Product Revenue BPE
Product Revenue ETS 310
€ 1.70 to € 1.80
-9% to -4%*
384 +16% to +22%*
€ 1.90
FY 2012 (in €m)
Outlook FY 2013 (as of Jan. 29, 2013)
EPS**
©2013 Software AG. All rights reserved.
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