Software AG - Equity Story. 10th HSBC s Equity Conference March 27, 2012

Transcription

1 Software AG - Equity Story 10th HSBC s Equity Conference March 27, 2012

2 March Safe-Harbor-Statement 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.

3 March Software AG - At a Glance Revenue over 1 bn Global Leader for Process & Integration Solutions Enterprise & Public Sector Customers 5,500+ Employees Worldwide 2,900 Consultants 890 R&D Staff Free Float >70% Software AG Foundation

4 March Shareholder Structure Shareholder structure Major institutional investors 34% 29% Software AG Foundation Institutional Investors Alken 4.8% Deka 4.6% DWS 3.3% T. Rowe Price 3.1% 37% Private Investors & undisclosed Fidelity 3.0% Allianz Global Investors 3.0% Disclosed Institutional Investors regional split* Share data 6% 6% 7% 14% 27% 40% Germany UK US France Scandinavia Other Number of total shares: 86,827,845 Freefloat: ~ 71% Indices: TecDAX, DAX 100, TechAllShare Codes: SOW, SOW GR, SOWG.DE ISIN: DE ADR U.S. trading symbol: STWRY * Source: ThomsonOne; own research

5 March Software AG - Sustainable Growth REVENUE -2% +7% +10% +29% +16% +17% +32% -2% 13% CAGR (in m) ,120 1,098 EARNINGS PER SHARE (IN )** +646% +16% +16% 0.09* 0.65* % % % % /-0% % CAGR FREE CASH FLOW +200% 8* 24* +41% +62% +92% % % % % % CAGR * excluding gains from sale of assets ** adjusted for 1:3 share split (May 2011)

6 March Business Model in m Total revenue: 1,098m (FY 2011) License Maintenance BPE ETS IDS Scheer Consulting Consulting & Services License Direct sales force One-time payment for perpetual license Additional payment for capacity upgrades and add-ons Price: Capacity/MIPS or CPU based Maintenance Annual contracts with automatic renewal and 3-5 year contracts Pricing: - BPE: around 18% of license - ETS: around 15% of license Consulting & Services BPE & ETS: implementing own products IDS Scheer: implementing SAP products Cost plus or fixed price projects Own staff + freelance

7 March Revenue Split* Product Revenue by Region Product Revenue by Industry 14% 9% 46% Retail Transport & Logistics Others 22% Financial Sector PIIGS 5% 32% Telecos Manufacturing 21% Public Sector Associations Americas Germany EMEA BRICS 14% Asia Pacific IT *Based on product revenue: 674m (FY 2011)

8 March Enterprise Transaction Systems Generating Strong Cash Flows Revenue Revenue development FY 2011 ( 381m) Service 17% License 32% 51% Maintenance in m Business characteristics High performance data base (Adabas) Rapid business application development (Natural) Products are mission-critical for 70% of our customers High margins and strong recurring cash flow Annual maintenance renewal rate: ~ 95% (average) Cost management: transfer R&D to low-cost countries Market and Positioning Mature market limited to existing customer base Installed systems difficult to replace Migration/outsourcing to UNIX/OS possible Market volume in decline Lifecycle enhancement by modernization and add-on products

9 March Business Process Excellence Driving Growth Revenue split Revenue development FY 2011 ( 528m) in m % 32% Service License 32% Maintenance Business characteristics Market and Positioning * Comprehensive middleware to design, develop, deploy, operate, monitor and analyze end-to-end process applications (products: webmethods, ARIS, Terracotta) BPE products save cost and add business value Digitization makes enterprises more competitive and public administrations more efficient. Technology leader (Gartner, Forrester) Software works across all installed systems Software AG is top 3 vendor(esb/bpm) Market growth perspective (CAGR > 10%) Average deal size (deals > 100k) > 450k *2010: transfer of ARIS related revenues into BPE segment

10 March Growing Relevance of BPE also on Income Level 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Ongoing margin improvement in BPE 52% -20% 55% 53% 54% 2% 19% 22% 58% 57% 29% 29% % in % 115% leads to a balanced income split 98% 78% 72% 63% 58% 42% 37% 28% 2% 22% -15% Business Process Excellence Enterprise Transaction Systems Segment margin (in %) Segment contribution split BPE/ETS (in %)

11 Business Process Excellence The Way Forward Disruptive Technology for Innovative Business Models (Digital Enterprise)

12 Applications Silos versus Business Models March

13 March Business Problems with Packaged Applications How significant are the following business problems in your existing enterprise app implementations? Important & very important High cost of ownership 87% Poor cross-functional processes 85% Lack of visibility into process results 85% Mismatch between apps and business requirements 85% Difficult to upgrade 83% Inflexibility limits process change 79% Apps form a barrier to innovation 65% Poor internal/external collaboration tools 65% Poor support for unstructured content 59% Poor industry-specific funtionality 57% Can t extend processes to external partners 55% Difficult to connect to mobile and cloud solutions 43% Source: September 2011 Business Process Online Survey Base: 119 business process professionals

14 March Digital Enterprise Enables Flexibility and Agility e.g. Orderto-cash Process Intelligence Process logic (BPM) ESB (Integration logic) IN-MEMORY DATA STORE Analytics Processes Integration Data Mgmt. New services (Business logic) Application Platform

15 Collaborative Process Platform March

16 March BPE Lifecycle Cloud Real time Collaboration EnterpriseBusiness EnterpriseProcess Business Process Management Mobile Model2 Execute Management Lifecycle Governance Social Ease of use

17 March Model to Execute Allows Roundtripping (USP) Business Model B-BPMN Model ARIS T-BPMN Model Execution webmethods

18 March Big Data Provide new Data Management Challenges Applications Analytics Database bottlenecks Costly to scale Restricted data models SPEED SCALE FLEXIBILITY Batch processing delays Capacity constrained New data Transactional Data Analytical Data

19 March Current Offering: Solution for Transactional Challanges Applications Analytics Database bottlenecks Costly to scale Restricted data models SPEED SCALE FLEXIBILITY Batch processing delays Capacity constrained New data Transactional Data Analytical Data

20 March The Way Forward Solution for Transactions & Analytics (USP) Applications Analytics Real-time access and analytics to terabytes of in-memory data NEXT-GENERATION DATA MANAGEMENT Low latency integration for existing and new data Transactional Data Analytical Data

21 March Cloud Enablement End-to-End Processes Inquiry process Offer process Example: Order-to-cash Process logic (BPM) Order process Shippment process Billing process Integration logic On Premise ESB ipaas SaaS SaaS On premise SaaS new business logic Business logic

22 March Software AG Cloud Strategy: Platform-as-a-Service Collaborative Process Platform Enterprise BPM Platform BPMPaas Integration/SOA Platform ipaas Application Platform apaas Data Management Platform dbpaas Platform-as-a-Service (PaaS)

23 IT Megatrend Digitization and Disruptive Technologies March

24 March BPE New Business Outgrowing the Cash-Cow ETS (in m) % 42% % 52% % 62% Business line ETS 54% 58% % 38% 48% 44% Business line BPE

25 March Outlook FY 2012 (in m) Total Revenue 2011 Outlook 2012 (as of January 24, 2012) Business line BPE Business line ETS Group (incl. IDSC) % to +15%* % to -7%* 1, % to +3%* EBIT Margin** 24.5% 23.0% to 24.5% Outlook Q Given the normal seasonality, Q is expected to be below the extraordinary good results of Q * Net of currency ** Stated IFRS

26 March Mid-term Goals (3 to 5 years) BPE Business Division Double digit license revenue growth A doubling of revenue by end of 2015* ETS Business Division Maintenance revenue largely stable Optimize the cost structure to maintain an operating margin > 50% The Group Increase the EBIT margin to 30% A doubling of net income by end of 2015* M&A: large acquisition every 2-4 years * Base 2010

27 Thank you Please contact: Investor Relations Uhlandstrasse Darmstadt Germany phone: +49 (0) 6151 / fax: +49 (0) 6151 / web: softwareag.com investor.relations@softwareag.com