Lawson Software Overview Rob Schriesheim, EVP and CFO

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1 Lawson Software Overview Rob Schriesheim, EVP and CFO Q4 Fiscal 2008 Update July 2008

2 Use of Forward-Looking Statements This presentation contains forward-looking statements that contain risks and uncertainties. These forward-looking statements contain statements of intent, belief or current expectations of Lawson Software and its management. Such forward-looking statements are not guarantees of future results and involve risks and uncertainties that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this presentation. Such risk factors include, among others: uncertainties in Lawson s ability to realize synergies and revenue opportunities anticipated from the Intentia acquisition; changes in conditions in the company s targeted industries; increased competition; whether the company can successfully develop new products and the degree to which these gain market acceptance; global military conflicts, terrorist attacks, pandemics and any future events in response to these developments. Actual results may differ materially from those contained in the forward-looking statements in this presentation. Additional information concerning these and other risk factors is contained in the Risk Factors section of Lawson Software s most recently filed Form 10-K. Lawson Software undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this presentation.

3 Use of Non-GAAP Information In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, this presentation includes non- GAAP financial results. These non-gaap results exclude amortization of all acquisition-related intangibles, Intentia integration costs, restructuring charges, certain stock-based compensation expenses and other expenses. Lawson s management believes the non-gaap measures used in this presentation are useful to investors because they provide supplemental information that analysts frequently use to analyze software companies that have recently made significant acquisitions. Management uses these non-gaap measures to evaluate its financial results, develop budgets and manage expenditures. The method Lawson uses to produce non-gaap results is not computed according to GAAP, may differ from the methods used by other companies, and should not be regarded as a replacement for GAAP measures. GAAP to non-gaap reconciliation is available on our website.

4 Agenda Consistently improving performance Q4 08 and FY 08 Summary Growth drivers 4

5 The Lawson Story The Environment The $6B global ERP software industry continues to face consolidation, disruptions and opportunities The Company Lawson is now 3 rd largest public ERP provider worldwide, with a vertically-focused business model The Opportunity Capitalize on the market dynamics and Lawson s expanded global platform to drive margin and earnings growth The Action Plan Continue executing our focused strategy to deliver top line growth and higher operating margins 5

6 Transforming Lawson to a Global, High Performance Company High Margin Improve margins Grow globally Low N. American Geographic Profile Global 6

7 Diversified Revenue Streams Revenue Breakdown (FY 2008) Diversified 4,000 customers 200 Partners License 15% Services 45% Maintenance 40% 30 countries Balanced revenue 40% recurring 25% of FY09 revenues are in backlog 30-40% of licenses is from new customers 50% outside U.S. Balanced revenue streams adds some resiliency 7

8 Growing Revenues (Non-GAAP) 1. FY 05 company reported result was $335M. $700M is company estimate of Lawson and Intentia run rate performance for FY 05. Intentia acquisition closed in Q4 of FY FY 06 company reported result was $393M. $725M is company estimate of Lawson and Intentia run rate performance for FY 06. Intentia acquisition closed in Q4 of FY FY 09 = company guidance as of July 10, CAGR from FY 05 run rate estimate 7% CAGR 4 +12% Y-o-Y 8

9 Operating Margins Advancing Towards Goals (Non-GAAP) 1. FY 05 company reported result was 6%. 3% is company estimate of Lawson and Intentia run rate performance for FY 05. Intentia acquisition closed in Q4 of FY FY 06 company reported result was 11%. 5% is company estimate of Lawson and Intentia run rate performance for FY 06. Intentia acquisition closed in Q4 of FY Improvement from FY 05 run rate estimate +700 bpts 3 up from FY 08 9

10 Achieving EPS Growth (Non-GAAP) 1. FY 05 company reported result was $0.16 $0.05 is company estimate of Lawson and Intentia run rate performance for FY 05. Intentia acquisition closed in Q4 of FY FY 06 company reported result was $0.29. $0.12 is company estimate of Lawson and Intentia run rate performance for FY 06. Intentia acquisition closed in Q4 of FY FY 09 = company guidance as of July 10, CAGR from FY 05 run rate estimate 71-75% CAGR 4 10

11 Consistently improving performance Q4 08 and FY 08 Summary Growth drivers 11

12 Q4 FY08 Highlights Largest quarter ever for license contracting Over $51 million Deferred license revenue balance now at $54.6 million 30% of Q4 software contracting was with new customers Winning new customers deals at a pace of 30+ per month New customers and new markets add to Lawson s growth Continued to grow profitability in tandem with revenue growth Operating margin: 11.5% Services margin: 18.4% Both figures are best since merger and show continuous improvement Robust balance sheet Cash balance $489 M vs. $561M at YE FY 07 $106M share repurchase +$20M acquisitions +$18M FMV decline in ARS in FY 08 $128 million cash flow from operations in Q4 driven by maintenance renewal period $82 million cash flow from operations for the full year Exited ARS portfolio

13 Q4 FY 2008 Summary Q4 08 (non-gaap) Q4 08 Q4 07 YoY Change Total Revenue $233M $214M +9% License Revenue $42M $41M +3% Maintenance Revenue $89M $78M +13% Service Revenue $102M $95M +8% Operating Margin 11.5% 9.9% +160 bp EPS $0.10 $ % Diluted shares outstanding 177M 188M -6% 13

14 Momentum Continued in FY 2008 FY 2008 (non-gaap) FY 2008 FY 2007 YoY Change Total Revenue $854M $762M +12% License Revenue $132M $106M +25% Maintenance Revenue $338M $300M +13% Service Revenue $383M $356M +8% Operating Margin 9.9% 7.4% +250 bp EPS $0.33 $ % Effective tax rate Diluted shares outstanding 39% 47% 180M 186M - 80 bp -3% 14

15 FY 08 Operating Margin Improvement (Non GAAP) 1.6% 1.2% 7.4% Improved service margin Revenue Increased billable Growth hours from Manila Less free services Global rate card (0.3%) Op Ex investments Manila Global ERP system 9.9% FY 2007 FY

16 Prudent Expense Management FY 2008 Expenses (non-gaap) FY 2008 % Inc/(Dec) Reported % Inc/(Dec) at CC Cost of Sales $396M+ 5% -1% Operating Expenses $373M + 13% + 8% Total Costs & Expenses $767M + 9% + 3% 16

17 Lawson Professional Services Services gross margin improvement From 11% in Q4 07 to 18.4% in Q4 08 Goal is 20% Philippines Service & Support Center Started January employees as of May 31, are services professionals Billable Hours FY 07: 20,000 billable hours in FY 07 FY 08: 127,000 billable hours in FY 08 Contributed approximately 9% of all billable hour in FY08

18 Partner Accomplishments FY 08 Revenue Channel partner revenue grew ~87% year-over-year SI influenced revenue grew ~67% year-over-year New customers Approximately 1/4 of new customers were won by partners Geography Launched healthcare channel partner in Middle East Latin America -- recruited new partners in Brazil and Chile

19 Partner Network: Key Partners by Industry

20 FY 08 Innovation & Enhancements Smart Office Smart Notifications Enhancements to LBI Lawson Talent Management Talent Acquisition Compensation Management Performance Management Learning & Development Succession Management First full suite written in Landmark Trace Engine Assortment Planner Lawson Fashion PLM e-sales Contract Management Work Force Management Service Automation QuickStep for each target market Common Platform LSF for M3 Process Flow Integrator

21 Innovation by Target Industry Food & Beverage QuickStep for F&B Trace Engine 3.0 Livestock Fashion QuickStep for Fashion Assortment Replenishment Planner Lawson Fashion PLM Distribution QuickStep for Distribution E-Sales ESM & Rental Watch this space Healthcare QuickStep for Healthcare Contract Management Work Force Management Public Sector QuickStep for Government Contract Management Service Automation

22 Consistently improving performance Q4 08 and FY 08 Summary Growth drivers 22

23 What Will Drive Earnings Growth 1. Market consolidation share gains 2. License revenue growth 3. Margin expansion 23

24 1. Market Consolidation Share Gains Market consolidation has created opportunity for Lawson Fewer competitors Acquired customer sets seek better relationship Microsoft customers want scalability, functional depth, global support Infor customers want a future Oracle customers want to be loved; IBM technology SAP customers want simplicity Lawson on more RFP lists Lawson global pipeline growth Substantially increased our addressable market via Intentia acquisition 175,000 prospective customers in our addressable (vertical) market 24

25 2. Organic License Revenue Growth FY 08 Growth Drivers New products -38 new products in FY 08 Percent Increase in License Revenues Increasing M3/America sales Doubling sales each year since FY06 ($4M FY06, $8M FY07, $15 M in FY08) Largest M3 deal in recent history Q3 08 Improving M3 sales force productivity 65% higher than year 1 Expanding eco-system of partners, resellers Better than market growth for 2 consecutive years 25

26 3. Executing Operating Margin Improvement Plan (Non GAAP) 3%-4% 17%-19% 2% 10% 2%-3% License and Maintenance Revenue Growth Improved service margin Increased billable hours from Manila Improved onshore utilization OpEx efficiencies Manila Global process efficiencies Less free services FY 2008 World Class Performance 26

27 Offshore Optimization Key to Margin Improvement Manila facility has now ~775 employees up from 0 in Jan 2006 Percent of Billable Consulting Hours Offshore At full productivity, we will add 5 percentage points in operating margin Significant, multi-year transformation 27

28 Advancing Towards Our Goal (Non GAAP) As % of Sales FY 2008 World Class Performance License revenue 1 15% 16-19% Maintenance revenue 2 40% 40-42% Service revenue 3 45% 40-42% Total revenue 100% 100% License gross margin 88% 88-90% Maintenance gross margin 82% 83-84% Service gross margin 17% 20-22% Total gross margin 54% 54-59% Sales & marketing 22% 21-22% R&D 10% 9-10% G&A 12% 8-9% Operating margin 10% 17-19% 1 License contracting growth rate estimates at market rates of 5%-10% per AMR s The Enterprise Resource Planning Report , dated October Historical company rates of 6-8% reflecting inflation adjusted price increases and off-shoring 3 Low single digit growth rates to reflect off-shoring and partner strategy 28

29 Summary: Consistent Growth & Improvement Every line of revenue grew in every quarter in FY08 compared to FY07 Margins have grown each year since the merger (and almost every quarter)

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