Deutsche Bank German, Swiss & Austrian Conference Arnd Zinnhardt CFO May 14, 2013
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. 2
Software AG - At a Glance Technology leader in systems integration, process automation and data management Middleware to integrate data applications and digital workflows > 1bn revenue Operating EBITDA margin 28.6% (FY 2012) > 2.3 B market cap, Net Cash positive > 5,000 Employees worldwide Big-data and In-memory technology Process Planning, monitoring and analysis ~ 66% Free float, 29% Software AG Foundation High performance database Global customer base: 80% of Fortune 10,000 3
Large Enterprise Customers in 70 Countries Worldwide Finance Public Sector Chemicals/Pharma Energy/Utilities Telecom Manufacturing Logistics/Transport Healthcare/ Consumer Goods 4
Software AG s Track Record Revenue in m EBIT in m 1.000 800 721 1,098 1.046 250 200 181 248 600 400 411 150 100 108 200 50 0 2004 2008 2012 0 2004 2008 2012 180 150 120 90 87 Net profit in m 116 171 5.000 4.000 3.000 2,438 Employees 3,526 5,419 60 2.000 30 1.000 0 2004 2008 2012 0 2004 2008 2012 5
Revenue Split Well Balanced Product Revenue by Region* Product Revenue by Industry* Germany PIIGS < 4% Asia Pacific 13% 8% Americas 48% Telcos Manufacturing Retail Other Logistics 20% Financial Sector EMEA (ex Germany) 31% BRICS 13% Associations Services IT 20% Public Sector *Based on product revenue FY 2012 6
Business Process Integration Big Data Transaction Business Process Analysis Enterprise Architecture Governance, Risk and Compliance Management Integration Business Process Management In-Memory Data Management In-Memory Intelligent Action Application Development Database Management System Application Modernization 7
Software AG Product Suite Powering The Digital Enterprise Business Process Excellence (BPE) Business Process Integration Big Data Transaction BPE - Business characteristics Technology leader (Gartner, Forrester) Worldwide biggest independent specialized vendor of Business Process Excellence (BPE) Market growth perspective (CAGR 10% + p.a.) License revenue growth: +20% to +30% in 2013 Growth driver: market, portfolio, deal size, sales staff 400 300 200 100 0 BPE - Product revenue development in m 2004 2005 2006 2007 2008 2009 2010 2011 2012 8
Software AG Product Suite Powering The Digital Enterprise Enterprise Transaction Systems (ETS) Business Process Integration Big Data Transaction ETS - Business characteristics ETS - Product revenue development Enterprise Transaction Systems (ETS): ADABAS (fastest transactional database) NATURAL (rapid application development) Mature market (cash-cow) Revenue decline, stable margins and strong recurring cash flow Cost management focus Annual maintenance renewal rate: ~ 95% (average) 400 300 200 100 0 in m 2004 2005 2006 2007 2008 2009 2010 2011 2012 9
Increasing Product Revenue from the High-Growth BPE Division 400 300 BPE Product Revenue in m BPE 200 100 209 244 319 338 385 0 2008 2009 2010 2011 2012 100% 80% 60% 40% 20% 0% 61% 57% 53% 48% 45% 39% 43% 47% 52% 55% 2008 2009 2010 2011 2012 Relative share of product revenue ETS BPE 10
BPE - Future Growth is Driven by New Products (BPE licenses in m) 90 80 70 63.5 60 50 40 35.7 45.6 50.0 41.9 30 20 +19% y-o-y* 10 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2e 2013 Q3e 2013 Q4e 2013 *at constant currency rates 11
Cost Ratios & Profitability - 2011/2012 FY 2012 (in m) *as % of total revenue 1,047.3 668.6-100.8-246.9-75.8 +2.7 EBIT (IFRS) Margin 23.7% 64%* 10%* 24%* 7%* 248.3 Total Revenue Gross Profit R&D Sales & Marketing Admin Other Profitability FY 2011 (in m) 1,098.3 656.2-88.0-230.2-75.1 +6.4 EBIT (IFRS) Margin 24.5% 60%* 8%* 21%* 7%* 269.2 12
Strategy
Growth Strategy Growth based on three pillars Organic Growth leverage technology leadership in enterprise infrastructure software Fast integration middleware High speed process automation High performance data management Selective M&A in three strategic areas: Integration / SOA & Cloud Business Processes Big Data Innovation addressing Mega Trends for enterprise IT Cloud Big Data Mobile Collaboration 14
BPE Engine of Future Growth (Product revenue in m) 500 450 Outlook 2013* Business Process Excellence Enterprise Transaction Systems +16% to +22% 400 350 300 284 309 331 328 355 319 338 313 310 385-9% to -4% 250 200 209 244 150 146 100 50 0 15 69 2006 2007 2008 2009 2010 2011 2012 2013e * At constance currency
Acquisitions Support Technology Leadership Strategic Acquisitions 2010 2011 2012 2013 2009 2008 2007 Technology Add Ons 16
Innovation Strategy Main Technology Drivers 4 Forces NoSQL Hadoop Social Computing Internet of Things 17
Outlook
Mid-term Target - Product Revenue Group revenue split by product revenue (BPE, ETS) 1 Billion 55% ~80% BPE Product Revenue Organic Growth Integration Technology Business Process Mgt. Cloud Terracotta / Big Data Partner / OEM M&A / Innovative Technologies 20% 80% 45% ~20% ETS Product Revenue 2006 2012 2018 19
Mid-term Business Goals (2018, base: 2012) Share of product revenue* BPE Business Process Excellence Product revenue: growth ca. 15-20% p.a. > 50% contribution to group result Terracotta / BigData Product revenue: growth ca. 50-100% p.a. Expand BigData offering by Real Time BI platform ETS Enterprise Transaction Systems Product revenue in gradual decline (single digit % p.a.) Manage cost to maintain operating margin > 50% Software AG Group Increase BPE product revenue to 1 bn Strategic acquisitions (cash-only; Cloud/BigData) EPS growth 10-20% p.a. (2013-2018) * According to mid-term business goals 20
Outlook FY 2013 FY 2012 (in m) Outlook FY 2013 (as of Jan. 29, 2013) Product Revenue BPE 384 +16% to +22%* Product Revenue ETS 310-9% to -4%* EPS** 1.90 1.70 to 1.80 * Net of currency, delta ** before share -buyback 21
Investor Relations Uhlandstrasse 12 64297 Darmstadt Germany phone: +49 (0) 6151 / 92 1900 fax: +49 (0) 6151 / 9234 1900 softwareag.com e-mail: investor.relations@softwareag.com Follow us on Twitter: @SoftwareAG_IR