IT MEETS OT THE DIGITAL ENABLEMENT HAPPENS NOW

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1 IT MEETS OT THE DIGITAL ENABLEMENT HAPPENS NOW Dr. Wolfram Jost CTO UBS Quo Vadis Industrials Tour Frankfurt, 20 September Software AG. All rights reserved

2 SAFE HARBOR STATEMENT 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 Software AG. All rights reserved

3 THE DIGITAL ENABLEMENT HAPPENS NOW RETAIL PHARMA PRODUCTION INSURANCE MOBILITY Digital: Digital: Digital: Digital: Digital: Consumer centric supply chains Platform as a retailer (Alibaba & Amazon) Personalized medicine Health card as a medical service platform Individualized production Smart products (I 4.0, MES, IoT) Predictive solutions Platform as a broker Personalized insurance contract Connected cars Platform as a broker (Uber) Digital Category: Digital Category: Digital Category: Digital Category: Digital Category: C: Connected Process Innovation Product Innovation Organizational Innovation Service Innovation A: Assisted S: Shared Service E: Electric Software AG. All rights reserved

4 175 billion market 43% CAGR Software AG. All rights reserved

5 IOT-SPECIFIC OVERALL MARKET OF 250B IN 2020 Sources: IDC, Gartner, ABI, CMI; BCG IoT market model Software AG. All rights reserved

6 IOT USE CASES Predictive Maintenance Smart Logistics Smart Insurance Smart City Connected Car Smart Home Smart Grid Connected Health Smart Manufacturing (Industrie 4.0) Smart Lightning Smart Parking Smart Retail Software AG. All rights reserved

7 IOT IS DRIVING DIGITAL TRANSFORMATION Efficiency & Optimization Increase operational efficiency Optimize use of assets Improve product quality Better reliability of equipment New Business Models Assets as a service instead of owned assets Offer higher-value services with new revenue models Better customer experience & new engagements Staying competitive Software AG. All rights reserved

8 GARTNER ABOUT IOT BUSINESS SOLUTIONS You don t buy an IoT Business Solution, you assemble and build it. There is no commercial-off-the-shelfs (COTS) end-to-end IoT Business Solution. And it is unlikely that there ever will be Software AG. All rights reserved

9 A TYPICAL IOT JOURNEY FOR AN ENTERPRISE CUSTOMER FROM SIMPLE USE CASES TO AUTOMATION, PREDICTION AND INNOVATION III New business models, innovation I Collecting & acting on data II Automation & prediction Basic functional & non-functional requirements Device management, basic analytics, simple visualization Triggering events based on data Integration More complex analytical models Data reliability is critical Organisational change From selling hardware to as-a-service Focus on ROI and increasing maturity of IoT platforms drives demand from large enterprise customers Software AG. All rights reserved

10 CUMULOCITY IOT OVERVIEW Asset Performance Management Manufacturing Operations Mgmt Service Management Further Applications TRUE MULTI-TENANCY SOLUTION ACCELERATORS SCALABILITY & HIGH AVAILABILITY PROCESS & APPLICATIONS INTEGRATION & API CLOUD + HYBRID SECURITY DATA & ANALYTICS DEVICES ON PREMISE EDGE all verticals all use cases all networks Software AG. All rights reserved

11 DIGITAL BUSINESS IS A PLATFORM BUSINESS IOT PLATFORMS ARE DISTRIBUTED IoT Endpoints IoT Edge Platform IoT Cloud Platform Enterprise Applications MES ERP CRM Gateway Edge Server SaaS SaaS Local Communication Long-range Communication Backend Integration Software AG. All rights reserved

12 PROCESS VIEW DATA FLOW Connectivity Data & Analytics Enterprise Integration Actions Connected Devices S p e e d L a y e r Streaming Analytics Predictive Model Execution Alerts In-Memory Dashboards Human Gateway Device Connectivity Integration Storage Processes Business Intelligence Time Series Analytics Predictive Model Creation Enterprise Applications & Production Data APIs SaaS DB CRM MES ERP B a t c h L a y e r Software AG. All rights reserved

13 DISTRIBUTED IIOT ARCHITECTURE ANALYTICS AT ANY LEVEL IoT Device (Agents) Thin Edge (On-Premises Gateway) Thick Edge (On-Premises Server) Private Cloud (Dedicated) Public Cloud (Shared) Software AG. All rights reserved

14 SOFTWARE AG S SUCCESS STORIES IN IOT IOT ECOSYSTEMS INDUSTRY 4.0, TELCOS, AUTOMOTIVE, JV of leading machinery manufactures: DMG MORI, DUERR, ZEISS, ASM, ENGEL, KARL MAYER Transforming auto insurance through behavioral, contextual and driving analytics Strengthening Mindsphere platform across industries enabling powerful industry applications Enabling customers to use geo-sensing alerts, reduce theft and anticipate maintenance needs Leveraging Bosch IoT Cloud platform with Realtime predictive analytics technology KPN (NL), Telstra (AUS), Telia (SWE), Reliance Communications (India), NTT (Japan), Deutsche Telekom (T-Systems), Nokia or Huawei Software AG. All rights reserved

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16 OUR ROLE IN THE MINDSPHERE ARCHITECTURE EXTENDS WAYS TO SEND DATA INTO MINDSPHERE MindConnect API MindConnect Integration Simplified integration of application data into MindSphere Combine machine data with data out of our applications, on premise or in the cloud MindConnect IoT Extensions Extends range of IoT devices Combines device identity, asset and software management Use other customizable software agents on custom devices More than 40 customers in production Software AG. All rights reserved

17 Partner & Developer API Gateway (external) Identity Management Security / Safety / QoS Management User Experience Management BOSCH IOT FRAMEWORK PLATFORM SERVICES Customer Service Consumer User Front End Components, Interfaces & Platforms (e.g. Tablet, PC, Embedded UI ) Digital Experience Presentation Framework Business Model specific Building Blocks Marketplace Customer, Developer & Partner oriented Building Blocks Mobility Services Smart Home Developer Portal Digital Marketplace Sales (WebShop) Basic Commerce Platform Marketing Service Lifecycle Support & After-Sales Building Automation Fulfillment Assurance Billing Smart Grid Connected Industry Content Mgmt. (incl. Digital Asset Mgmt.) Digital Marketing & Campaign Workbench Product & Service Configuration Pricing Engine IoT Foundational Building Blocks Semantic Management Device Management Business Process & Rule Management Digital Foundational Building Blocks Transactional & Behavioral Analytics Master & Reference Data Management Enterprise Services 360 Data Integration Device Virtualization Enterprise Service Providers (e.g. ERP, CRM ) Device Communication Device Application & Basic Software Platform & Device Security Mgmt. Device Source: Project IoT Ecosystem Software AG. All rights reserved Enterprise Integration Infrastructure Services Enterprise & Network Infrastructure Cloud Infrastructure All building blocks can be realized Bosch internal, external and cloud-based Manufacturing Infrastructure

18 Software AG. All rights reserved. For internal use only

19 SMART COMPRESSORS REPORT PERFORMANCE IN REAL-TIME Software AG. All rights reserved

20 WIND TURBINES FEED ANALYTICS NEEDED FOR PREDICTIVE MAINTENANCE Software AG. All rights reserved

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22 SMART INSURANCE USAGE BASED INSURANCE Analyzing driver behaviour to offer smart insurance policy 4,3 Save money on your car insurance Software AG. All rights reserved.

23 AIR COMPRESSORS CONDITION MONITORING, FAULT DETECTION & REMOTE CONTROL Real-time monitoring Real-time fault detection Online storage and on-demand distribution to the correct service partner Remote configuration Customised dashboards Plug and play machine integration Cumulocity allows us to provide a uniquely branded, secure IoT monitoring solution to our compressor distributors and service partners allowing them to offer a high-quality, real-time monitoring solution to their customers - Sia Abbaszadeh, VP Global Marketing & Technology, Gardner Denver Software AG. All rights reserved.

24 HYBRID INTEGRATION & APPLICATION DEVELOPMENT Software AG. All rights reserved

25 SOFTWARE AG LOW-CODE APP DESIGNER BUILD IOT APPS WITHOUT CODING LOW-CODE APP DESIGNER Template based Apps IoT Data Sources Secure Connectivity Drag & Drop UI & Logic Creation In-Context Actions Software AG. All rights reserved.

26 IOT DEMO USING LOW-CODE PLATFORM TO ENHANCE FIELD SERVICE Software AG. All rights reserved

27 DIGITAL BUSINESS PLATFORM (DBP) & IOT EVOLUTION CREATING NEW DIGITAL BUSINESS IN REAL TIME ECONOMY DBP Connect business data & logic I ot Connect device & production process data Apply real-time analytics Build new digital business models (algorithms) Create new digital enterprise Software AG. All rights reserved.

28 COMBINING DEVICE DATA & ENTERPRISE DATA TOOLING FOR BUSINESS USERS & NON-CODERS Software AG. All rights reserved.

29 SOFTWARE AG S OPEN IoT ECOSYSTEM OVERVIEW Technology & Analytics Hardware & Devices System Integrator Consortia & Alliances Value-added reseller Infrastructure & Connectivity Software AG. All rights reserved.

30 BACKUP 2018 Software AG. All rights reserved.

31 SOFTWARE AG AT A GLANCE Technology leader for more than 40 years in data management and application development platforms 870+ MILLION IN REVENUE 50%+ recurring 75% product revenue 41% Americas 51% EMEA BY REGION* REVENUE 26% A&N 23% Services 51% DBP BY BUSINESS LINES* 4,500+ EMPLOYEES** Consulting &Services 42% Admin 13% R&D 26% S&M 19% ~ 3bn MARKETCAP ~ 66% Free Float * Based on Group product revenue FY 2017 **P&L as of December 31, Software AG. All rights reserved.

32 BUSINESS LINES IoT and Industry 4.0 Platforms Integration & Automation Analytics & Decisions In-Memory Data Business & IT Transformation Application Development Data Management System Modernization System Support Strategy & Design Product Implementation & Customized Solutions Education & Cloud Services Global Delivery (on-/offshore) Growing Revenue Growing Stability Growing Margin Share of Revenue* 52% Share of Revenue* Share of 25% 23% Revenue* *Group revenue split FY Software AG. All rights reserved.

33 2018 TURNING POINT / DIGITAL BUSINESS DRIVING GROWTH 100% License Revenue 100% Maintenance Revenue 80% % % 60% 40% 40% 20% 20% 0% 0% 100% Segment Result 80% 60% 40% 20% 0% 2018e Digital Business Platform Adabas & Natural Software AG. All rights reserved.

34 OUTLOOK FULL YEAR 2018 FY 2017 (in m) FY 2018 Outlook (as of April 13, 2018) DBP Total Revenue - DBP (excl. Cloud & IoT) - DBP Cloud & IoT N/A % to +7% 1) % to +135% 1) Adabas & Natural Operating Margin Group (EBITA non-ifrs) 2) EPS non-ifrs 3) % % to -2% 1) 30% to 32% +5% to +15% 1) At constant currency rates 2) Adjusted for non-operating items (see non-ifrs earnings results) 3) Weighted average shares outstanding (basic/ias 33.19) FY 2017: 74.6m / H1 2018: 74.0m; based on new US-Federal-Tax and Euro/US-Dollar exchange rate of 1/ Software AG. All rights reserved.

35 FINANCIAL DATA KEY FIGURES in m, IFRS H H Δ FY 2017 FY 2016 Δ Total Revenue %* %* BL DBP (including Cloud & IoT) %* %* Thereof Cloud & IoT %* 14.9 N/A N/A BL A&N %* %* BL Consulting %* %* Annual Recurring Revenue (Cloud & IoT) %* 14.8** N/A N/A EBIT % % EBITA (non-ifrs) % % EPS (in, non-ifrs) % % Dividend per share % Free cash flow % % Operating Margin Group (EBITA non-ifrs) 28.7% 28.4% 30bps 31.8% 31.2% 60bps Shareholders equity ratio 59.4% 58.7% 70bps 58.6% 61.1% -250bps *At constant currency ** at internal FX plan rate Software AG. All rights reserved

36 SHAREHOLDER STRUCTURE OWNERSHIP REGIONAL SPLIT* Software AG Foundation Own Shares (0.03%) Institutional Investors Private Investors 33.7% 61.3% 18.9% 19.1% 38.4% Germany North America Continental Europe (excl. Germany) UK & Ireland 23.1% Rest of World *Institutional Investors based on public files, August 2018 Share Info Number of total shares: 74,000,000 Thereof Free Float: ~ 66% Number of shares outstanding: ~ 74m Registered shares since Oct. 2, 2017 Share Data SOW, SOW:GR, SOWGn.DE ISIN: DE000A2GS401 ADR symbol: STWRY Indices: TecDAX, DAX100, TechAllShare Major Institutional Shareholders according to notification of voting rights above 3% threshold of shares outstanding Deutsche Asset Mgmt. Investment 4.91% Axxion S.A. 3.30% BlackRock, Inc 3.05% Software AG. All rights reserved.

37 Investor Relations Uhlandstrasse Darmstadt Germany phone: +49 (0) 6151 / fax: +49 (0) 6151 / softwareag.com investor.relations@softwareag.com Software AG. All rights reserved.