DB ACCESS GERMAN, SWISS & AUSTRIAN CONFERENCE
Karl-Heinz Streibich
CEO, Software AG
June 9, 2016
© 2016 Sofware AG. All rights reserved.
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SAFE HARBOR
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.
© 2016 Software AG. All rights reserved.
3 | © 2016 Software AG. All rights reserved.
DIGITAL TRANSFORMATION IS ON EVERY BUSINESS AGENDA
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CORE REASON OF DIGITAL DISRUPTION DIGITAL CHALLENGERS SEPERATE THE CUSTOMERS FROM ESTABLISHED COMPANIES
DIGITAL DISRUPTION
Any industry ... Retail Hotels Banks Insurance
© 2016 Software AG. All rights reserved.
5 | © 2016 Software AG. All rights reserved.
DIGITAL TRANSFORMATION TO DO’S
FROM APPLICATION SILOS TO AN
INTEGRATED PLATFORM
ARCHITECTURE
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FLEXIBILITY
!! DATA QUALITY
!! SECURITY Business
Logic
(Data Center) internal
Systems of records Applications
!! INOVATION Flexibility
! DATA QUALITY
SECURITY
Pervasive
Integration
New digital innovations
customer centric, B2B
(IoT) external
Internet of Things (IoT) platform
(Real time, device and event driven,
streaming analytics)
!! FLEXIBILITY
! DATA QUALITY (MDM)
! SECURITY Integration
Logic
Integration layer for
differentiation & innovation
(Middleware) internal
Integration Centric Architecture
(B2B, ESB, API, Hybrid Cloud)
Business process digitization
Departmental agile Apps/Cloud based
“The new data center extension”: Software platform centricity & IoT private cloud
“The old data center”: Application/Database centricity
1. Integration Centered Enterprise Architecture
2. Real-time, event driven new business models
3. Agile & flexible applications (adaptive apps)
4. Business processes digitization
NEW DIGITAL BUSINESS CAPABILITIES ARE WRITTEN IN SOFTWARE
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© 2016 Software AG. All rights reserved.
5 BUILDING BLOCKS OF THE DIGITAL BUSINESS PLATFORM DIGITAL 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
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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
© 2016 Software AG. All rights reserved.
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
dati
on
9 | © 2016 Software AG. All rights reserved.
ENABLING DIGITAL TRANSFORMATION
OPPORTUNITY:
• Leverage the huge revenue potential of the
Internet of Things
• The company appointed Software AG as
the strategic business partner
RESULTS:
• Taking business to the cloud
• High reliability expected—critical for IoT
services for customers
• Improving message delivery across all
production plants worldwide
• Digitizing internal processes
• Significant reduction of downtime
OF A WORLD-LEADING MANUFACTURER
S I N C E P A R T N E R I N G W I T H S O F T W A R E A G :
of annual revenue
Become “one of the world’s leading IoT companies”
80% That’s more than €110 million/day
processed on Software AG’s
DIGITAL BUSINESS PLATFORM
Large global
Supplier of Auto
Components
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TRANSFORMING POSTAL SERVICES
© 2016 Software AG. All rights reserved.
THROUGH INTEGRATION CENTRIC PROCESS AUTOMATION
OPPORTUNITY:
• Customs Affairs Platform to support quick
new market entry
RESULTS:
• Quickly define new market requirements
and local business (process) models
• Faster entry of new markets
• Ensured IT readiness at time of market
entry
S I N C E P A R T N E R I N G W I T H S O F T W A R E A G :
FASTER
ENTRY
OF NEW MARKETS
SECURES
GLOBAL GROWTH
Global Postal
Services Company
11 | © 2016 Software AG. All rights reserved.
TRANSFORMING RETAIL WITH THE DIGITAL BUSINESS PLATFORM
S I N C E P A R T N E R I N G W I T H S O F T W A R E A G :
OPPORTUNITY:
• Unite newly merged group onto one single
unit based on Digital Business Platform
• Build on previous investment in Software AG
integration technology
RESULTS:
• ONE platform offers all required digital
capabilities
• “Independent Federation Layer”
• Freedom of choice in technology since
Software AG’s platform works with any
system or application ( neutrality )
• Faster implementation with Software AG’s
Global Consulting Services
• Expected 20% increased productivity
20%
ONE DIGITAL PLATFORM
FOR ENTIRE GLOBAL GROUP
PRODUCTIVITY BOOST EXPECTED
NEW DIGITAL
APPS:
FOR RETAIL
& PHARMACY
NO VENDOR LOCK-IN
Global Pharmacy
Retailer
12 | © 2016 Software AG. All rights reserved.
OPTIMIZING B2B INTEGRATION WITH A DIGITAL BUSINESS PLATFORM
S I N C E P A R T N E R I N G W I T H S O F T W A R E A G :
OPPORTUNITY:
• Create a world-class B2B
integration solution to meet rapidly
expanding needs
RESULTS:
• Can send/receive 300.000 partner
messages/hour
• Scales easily 10 times—leverages
the cloud for elasticity
• Secure, thanks to regular &
complete security audits
• Managed by Software AG’s Global
Consulting Services
SUPPLY CHAIN
SCALES EASILY Up to 300,000 messages/hour
Secure, high-performance, fully capable
B2B/EDI SOLUTION run by Software AG
One of the world‘s
leading Internet
companies
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HOW WE GOT TO OUR LEADING POSITION
© 2016 Software AG. All rights reserved.
STRATEGY EXECUTION IN 3 STAGES
243 355
432
2003 2010 2006 2015 2020
Revenue in €m: Product Revenue
(Own Products, Group)
DBP
A&N
69
677
351
679
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SOFTWARE AG AT A GLANCE
Technology leader for more than 40 years
in data management and application development platforms
€870+ MILLION IN REVENUE
4,300+ EMPLOYEES WORLDWIDE
€2.5bn MARKET CAP
45%+
recurring
50% new
products
P&L as of December 31, 2015
REVENUE BY BUSINESS LINE
34%
Euro
31%
USD
REVENUE BY CURRENCY
R&D 23%
S&M 20%
~65% Free Float
Consulting
& Services
43%
Admin
14%
© 2016 Software AG. All rights reserved.
A&N
28%
DBP
50%
GCS
22%
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20%
19%
19%
12%
10%
Government Financial Services
IT Services Services
Manufacturing Telco & Media
Transport & Logistics Other
DIVERSIFIED TO BALANCED RISK
© 2016 Software AG. All rights reserved.
EQUAL PRESENCE AMERICAS AND EMEA, ALL INDUSTRIES
Product Revenue by Region Product Revenue by Industry
45%
48%
(14%)
7%
Americas
EMEA (14% Germany)
Asia Pacific
Based on Group product revenue – FY 2015
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DIGITAL BUSINESS PLATFORM
© 2016 Software AG. All rights reserved.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
A&N
DBP
DBP offering focused on IT digitization segments,
like IoT, streaming analytics etc.
REPRESENTS TWO THIRD OF PRODUCT BUSINESS
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RECURRING REVENUE FOCUS:
© 2016 Software AG. All rights reserved.
0
100
200
300
400
2010 2011 2012 2013 2014 2015
A&N
DBP
353 362 378 369 369
407
47% of Group Revenue
from Maintenance
(>90% recurring)
in €m
47%
Maintenance
31%
License
22%
Consulting
HIGH MARGIN & PREDICTABILITY
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0.33* 0.37* 0.38*
0.43* 0.46 0.46 0.46
0.50
0.55
2007 2008 2009 2010 2011 2012 2013 2014 2015
DIVIDEND POLICY
© 2016 Software AG. All rights reserved.
FOCUS ON CONTINUITY
Ordered by fiscal year/in €
* According to the 1:3 stock split, rounded
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SOFTWARE AG VALUE INVESTMENT KPI
39%
Mainte-
nance
34%
License
27%
Consulting
Growing share of product and recurring revenues
0.50€
0.55€
2014 2015
Dividend
increase
Free Cash Flow
conversion rate
around 120% of
Net profit.
50%
90%
130%
170%
2011 2012 2013 2014 2015
2.1% yield:
Operating margin* expansion
FY 2013 * Non–IFRS EBITA in % of revenue FY 2015
47%
Mainte-
nance
31%
License
22%
Consulting
© 2016 Software AG. All rights reserved.
Operating expenses
in €m 481.2 446.2 444.6
29.7%
26.8%
27.9%
2014 2015 2013
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BUSINESS DEVELOPMENT AND OUTLOOK
© 2016 Software AG. All rights reserved.
REVENUE OUTLOOK 2016
2007 2013 2010 2015
Outlook 2016
A&N
DBP
A&N Revenue in €m DBP Revenue in €m
432 +5% to +10%
-4% to-8% 247
150
310
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BUSINESS DEVELOPMENT AND OUTLOOK
© 2016 Software AG. All rights reserved.
MARGIN OUTLOOK
30-31%
29.7%
27.9%
32 – 35%
2020 target
26.8%
* EBITA non-IFRS adjusted for non-operating items
Operating Margin*
2016e 2015 2014 2013
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Investor Relations
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Germany
T: +49 (0) 6151 / 92 1900
F: +49 (0) 6151 / 9234 1900
W: softwareag.com
© 2016 Software AG. All rights reserved