German Equity Forum Company Presentation/media/Files/S/Software-AG-IR/... · 12/11/2013 ·...

©2013 Software AG. All rights reserved.

German Equity Forum

Company Presentation

Robert Adolph

Investor Relations

12 November 2013


2 |

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.

Safe-Harbor-Statement


3 |

Software AG - At a Glance

High performance database

Process Planning,

monitoring and analysis

Middleware to integrate data applications and

digital workflows

Big-data and In-memory technology

~ € 1bn revenue (FY 2012)

~ € 700m revenue (9m 2013)

~ 25% operating EBIT margin (9m 2013)

~ 15% free cash flow margin (9m 2013)

> 5,000 Employees worldwide

~ 1,000 R&D

> € 2bn market cap

66% free float

29% Software AG Foundation

70 Countries

Global customer base: 80% of Fortune 10,000

Technology leader in system integration,

process automation and data management


4 |

Financial Sector

Public Sector

IT

Associ-ations

Services

Manu-facturing

Telcos

Logistics Retail

Other

*Based on product revenue FY 2012

Revenue Split – Well Balanced

20%

20%

EMEA

44%

Asia Pacific

8% Americas

48%

GER 15%

PIIGS < 4%

Product Revenue by Region* Product Revenue by Industry*


5 |

Large Enterprise / Public Sector Customers in 70 Countries

Finance Public Sector Telecom Chemicals/Pharma Energy/Utilities

Manufacturing Logistics/ Transport

Healthcare/

Consumer Goods


6 |

• Baseline Business KPIs, Cycle Time,

Special Conditions

• Process, Data Mining

• Event Correlation, Filtering

• Intelligent Operational Actions

• End-to-end, Process Visibility

and Tracking

• Rollup, Summary Views, Dashboards

• Proactive Identification, Alert on

any Business Exception

Our Offering – Improve Your Business

Real-time analytics to improve

operational efficiencies

Benefits

Capabilities

Definition


7 | ©2013 Software AG. All rights reserved.

7 |

BOOST customer satisfaction

AGILE infrastructure for rapid growth

REDUCE customer onboarding time to max 15 minutes

O P P O R T U N I T Y

R E S U L T

Transforming Customer Interaction: Collaboration & Mobile

SPEED mobile channel – 2.4 million self-service activities

NEW Business 320,000 new customers

OLD BUSINES 130,000 dormant customers re-activated


8 | ©2013 Software AG. All rights reserved.

8 |

Automate maintenance & repair process for the 1.7M coolers

• Streamline asset management

• Real-time visibility of cooler location and status

O P P O R T U N I T Y

R E S U L T

Reduce time for asset transfer by 98% (from up to 8 hours to below 10 minutes)

Uncover trends and recurring issues

Avoid lost equipment

Transforming Maintenance and Repair

reduction in transfer time

for assets (from up to 8

hours to below 10 minutes)

98% Refreshments


9 |

Innovation - Big Data

Cloud Events

and SaaS

App Events

Mobile &

Location

Events

Hadoop & Data

Warehouse

Financial

and Trading

Events

$ £ € ¥

Social Media

Events

Low Latency

Universal Messaging

In Memory Data &

Analytics

Real-time Analytics

& Intelligent Action

Real-time Visual

Analytics

System Alerts,

Sensors & Machine

Events


10 |

Technology Leadership

Application Integration Suites • • • • • Business Process Analysis Tools • • • Business Process Management Suites • • • Enterprise Architecture Tools • • Governance, Risk and Compliance • • • Integrated IT Portfolio Analysis Apps • Application Services Governance • • Complex Event Processing Platforms • • • Comprehensive Integration Solutions • • • • • EA Management Suites • Elastic Caching Platforms • • • ESB • • • • Integrated SOA Governance • • SOA Service Life-cycle Management •


11 |

IBM 29%

Oracle 8%

Pegasystems 8%

Software AG 7%

Open Text 4%

Tibco 4%

Others 40%

IBM 31%

Oracle 24%

Microsoft 13%

Software AG

11%

Tibco 9%

Others 12%

Business Process Management Suite Enterprise Service Bus Suite

Source: Gartner, Inc., Market Share: All Software Markets, Worldwide, 2012, Colleen Graham et al, March 2013

Market Share in Main Markets


12 |

R&D drives Leverage of acquired Technology

BPE R&D expenses (incl. IPR amortization)

BPE R&D costs

ETS R&D costs

0%

5%

10%

15%

20%

25%

30%

20082009

20102011

20129m 2013

9.0% 9.0%

8.9% 8.4%

8.4% 9.8%

22.2% 21.6%

18.7% 18.1% 19.5% 20.2%

25.8% 25.8% 24.2% 24.3% 25.8% 26.8%


13 |

I n te l l i gent Bus ines s Opera t ions

Acquisitions Support Technology Leadership and Innovation

Visualization

App-Creation IT Portfolio Management

Event Processing

Messaging


14 |

(Revenue split based on 9m 2013)

New Product

Business

42%

BPE

28%

ETS

30%

Consulting

Revenue by Business Line (9m 2013)

Traditional Product

Business

Implementation work

Break even

Product sales enabler

Integration Technology

Process Management

In-Memory / Big Data

Analytics & Visualization

Disruptive Technology

High growth rates

Operating margin 25%

Investment mode

Data Management,

Application

Modernization

Started in 1970

Operating margin >60%

Cash cow business


15 |

… The Analyst View

A year of transition

The segment margin declined due to

the accelerated investments in growth

Q3 in line with estimates;

Strong performance in

BPE due to large deals

(…) ongoing structural declining ETS business.

BPE was fairly OK (…) reported group EBIT met

expectations helped by tight cost control.


16 |

Revenue Drivers in Transition –

BPE outnumbers ETS / Consulting is in Consolidation

0

100

200

300

400

500

600

700

800

2008 2010 2012 2013e*

(€m)

BPE

Consulting

ETS

39% 46%

54% 60%

539

423

712

335

182

697

* Analyst consensus; own poll


17 |

0

20

40

60

80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

New Customers and Bigger Deals grow License Revenue

(€m)

(€m)

In the quarter: volatile

Four quarter rolling: steady growth

40

80

120

160

200

240

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

2008 2009 2010 2013 2011 2012

2008 2009 2010 2013 2011 2012


18 |

Cost Ratios & Profitability – 9m 2013/2012 (€m)

Total

Revenue

Gross

Profit R&D

Sales & Marketing

9m 2013

9m 2012

479.3

-78.5 -219.3

770.6

701.2

481.1

-74.8

-54.2

11%* 31%*

10%* 24%*

*as % of total revenue

68%*

172.9

135.1

62%*

-181.3

+2.1

-52.5 +6.1

Admin Other

7%*

7%*

38 38

EBIT

(IFRS)


19 |

Strengthen Software AG’s Sales Organization - Worldwide

BPE S&M costs

ETS S&M costs

0%

10%

20%

30%

40%

50%

60%

20082009

20102011

20129m 2013

23.0% 21.6%

20.7% 21.3% 20.9% 22.6%

44.9% 42.2%

39.2% 37.1% 39.1%

48.8%

+ 2 0 0 S & M i n

B P E d i v i s i o n


20 |

Revenue and Margin Drivers 2014+

2014 2015 2016 2017 2018

Impact new sales staff

Growing Ø deal size

Platforms / use case packaging

Recurring projects

Cloud based offerings

Partner sales / OEM

Revenue mix

Economies of scale

(R&D, G&A)

Metrics

Channel

sales

Sales

productivity


21 |

Enterprise Transaction Systems

ETS

• Manage structural

decline (high single

digit % p.a.)

• Manage cost to

maintain segment

result margin > 60%

Business Process Excellence

• Product revenue: growth ca. 15-20%

p.a. (incl. a 50-100% growth from Big

Data)

• > 50% contribution to group result

• Expand Big Data offering by

Intelligent Business Operations

platform

BPE

• Transform

technology

leadership into

market leadership

• Strategic

acquisitions

(cash-only; Cloud/

Big Data)

• Develop 3rd

product line

• Increase revenue

with new products

(non ETS) to € 1bn

• Grow EPS in a

range of 10-20%

p.a.

Software AG Group

S H A R E O F P R O D U C T R E V E N U E *

Business Targets 2018 (2018, base: 2012)

* According to mid-term business goals

BPE


22 |

~80%

Enterprise Transaction

Systems (ETS)

New Products (BPE+)

• Organic Growth

• Integration Technology

• Business Process Mgt.

• Big Data (incl. Terracotta)

• Cloud

• Partner / OEM

• M&A/Innovative Technologies

2012 2018

45%

€1 Billion

20%

80%

2006

55%

~20%

Revenue Targets 2018

Product Revenue


23 |

Solid Business Foundation

1. Footprint: Established global software player with blue chip customer base

2. Financials: Strong balance sheet and cash generation

3. Assets: Experienced management team and loyal expert staff

4. USP: Unique technology leadership in IT mega-trends / growth segments

5. Timing: Almost past ramp-up investments for future growth /

margin leverage ahead


Follow us on Twitter:

@SoftwareAG_IR

Investor Relations

Uhlandstrasse 12

64297 Darmstadt

Germany

phone: +49 (0) 6151 / 92 1900

fax: +49 (0) 6151 / 9234 1900

softwareag.com

e-mail: [email protected]

mailto:[email protected]

German Equity Forum Company Presentation/media/Files/S/Software-AG-IR/... · 12/11/2013 ·...

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