Lawson Software Overview Harry Debes, President and CEO. May 6, 2008

Transcription

1 Lawson Software Overview Harry Debes, President and CEO May 6, 2008

2 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 a 70%+ increase in operating margins 2

3 A Company On the Move FY FY2008E Increase Revenues $391M $ M 115% Revenues Outside U.S. $36M $ M 10X Customers worldwide 2,000 4,000 Product lines Market cap $0.5B $1.4B 100% Major new product line 2.8X 1 Lawson acquires Intentia International, AB in Q4 06 doubling the company s size and scale Note: Fiscal year ends May 31 3

4 New Mindset, Stronger Competitive Position Prior to 2005 Established public company Long-term viability challenges in consolidating market Company transformation Merger completion and integration Execution and growth 2009 Record of setting and meeting goals Today s challenges are about how fast we can grow 4

5 Changing Lawson s Profile: To a Global, High Performance Company High Margin Improve margins Grow globally Low N. American Geographic Profile Global 5

6 Continuing Progress in FY 2008 Q3 FY 2008 Summary (non-gaap) Q3 FY 2008 Q3 FY 2007 YoY Change 1 Total Revenue $213 M $193M +10% License Revenue $32M $26M +21% Maintenance Revenue $85M $75M +14% Service Revenue $96M $92M +5% Operating Margin 9.6% 8.7% +90 bp EPS $0.08 $ % 1 Represents organic growth Lawson FY ends May 31 6

7 Solid Revenue Growth (Non GAAP) +11.5% FY09 & FY10 growth Pre full impact of Intentia acquisition Lawson FY ends May 31 YTD Q3 FY 08 up 14% 7

8 Achieving EPS Growth (Non GAAP) Pre full impact of Intentia acquisition $ % to 79% $ $0.34 FY09 & FY10 growth $0.19 FY 2006 FY 2007 FY 2008 Guidance Lawson FY ends May 31 YTD Q3 FY 08 up 105% 8

9 Margins Advancing Towards Goal (Non GAAP) Pre full impact of Intentia acquisition Short-term focus is margin expansion 13% 14% 15% Mid-teens 5% Q1 Q2 Q3 Q4 FY 2006 Lawson FY ends May 31 9

10 Executing Operating Margin Improvement Plan (Non GAAP) Target is to increase operating margin by 10+ percentage points 5% 17%-19% 2% 7% 1% Deferred roll-in normalized 1% Revenue mix (shift away from services) 1% Improved maintenance margin Service margin: reduce third party Off-shore optimization reduces expenses Q3 FY 08 margin = 9.6% 10

11 Offshore Optimization Key to Margin Improvement Manila facility has now ~685 employees growing to 800, or 20-25% up from 0 in Jan 2006 Percent of Billable Consulting Hours Offshore At full productivity, we will see 5 percentage points in operating margin Significant, multi-year transformation Temporary duplicate costs through mid

12 Advancing Towards Our Goal (Non GAAP) As % of Sales Q3 FY 08 Actual Goal License revenue 1 15% 18-19% Maintenance revenue 2 40% 41-42% Service revenue 3 45% 40-42% Total revenue 100% 100% License gross margin 88% 89-90% Maintenance gross margin 82% 83-84% Service gross margin 18% 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 9.6% 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 12

13 How to deal with larger competitors

14 Laser Focus on Key Verticals FASHION FOOD EQUIPMENT SERVICE & RENTAL HEALTHCARE PUBLIC SECTOR ABB Grains BT Industries Dallas Area Rapid Transit 14

15 New Human Capital Management Solution Lawson s Sixth Strategic Market In the first HCM battle, pitting Lawson, Oracle, and Workday against each other to draw attention to the leading ERP vendor s products in core HR and strategic-hcm areas Lawson won by showing how it will integrate into the rest of the business. 15

16 Mid to Large Size Customers = Our Sweet Spot Mid-Market Large Revenues > $1B Revenues $250M - $1B Our Sweet Spot Faster growing segment 12% annual growth projected LWSN license revenues +39% YTD Q % of Lawson s customers Good fit with our value proposition Small Revenues < $250M Source: Benchmark Equity, 2007 and Forester Research 16

17 Lowest Cost of Ownership: Manufacturing Industry Total Cost Per User Per Percentage Point of Improvement Lawson Top Performing Categories 1, X more effective 516 Reduction in inventory costs Reduction in manufacturing operational costs Reduction of administrative costs Improved complete and on-time shipments Oracle SAP QAD Infor All Others Epicor Source: Aberdeen Group, July 2007 The Total Cost of ERP Ownership in Mid-Sized Companies Similar cost advantages for service industries 17

18 Customer Intimacy it s an Attitude 4,000 customers is not 60,000 customers Big Fish in smaller pond Partnership not Customer-Vendor relationship MYLawson site treat customers as individuals Direct executive access: harry@lawson.com

19 Recent Datapoints Monkhill Confectionery

20 Why you should consider LWSN Differentiated business model for our targeted customers Successfully executing improvement plan Clear focus to sustain turnaround, improve performance Laser focus on key verticals, proven track record Clear, achievable goals, margin expanding, momentum building Leverage global platform, new products 20

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