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©2014 Software AG. All rights reserved.

1 |

November 2014

Software AG

Investor Presentation


2 |

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 |

Introduction 4

1

3

4

5

6

2

Agenda

7

Business Characteristics 25

Product Offering & Customer References 30

Market Positioning & Competition 36

Key Financials 41

Financials 2014 44

8 Shares & Ownership 60

Key Investment Indicators 8


4 |

Committed to helping our customers succeed for more than 40 years

Customer base including

70% More than

2.5 m+ users

4,600+ employees

worldwide

€973 million

in revenue

15 x Gartner– and

Forrester

leader of the Fortune 1,000

Software AG

A leader in business processes, integration and big data


5 |

Enterprise Transaction Systems ETS

• Database

Management System

• Application

Development

• Modernization

Business Process Excellence

• Business & IT Transformation

• Intelligent Business Operations

• Integration

• Adaptive Applications

• In-Memory Technology

Business Lines

BPE – Digital Business Platform Consulting

• Global Consulting

Services

• Implementing own

product stack

Application,

infrastructure and

middleware

Develop, deploy

and integrate

applications

Manage business

and IT-

transformation

47% 31%

22%

S H A R E O F

R E V E N U E *

* Based on revenue 2013 ( € 897m): pro forma excl. SAP consulting


6 |

Positioning: Middleware is Layer of Differentiation

Custom Software

Adabas

- Natural

Packaged Applications

SAP Oracle

Back Office Standardization happened

Packaged Applications

e.g. Salesforce.com

Front Office Standardization begins

C U S T O M E R S

Space of differentiation & Innovation

S Y S T E M S O F R E C O R D S

Business and IT

Transformation (Processes, Applications)

Agile Development

BPM/Apps

Integration & Connectivity (Internet of Things, Big Data, Cloud)

Streaming

Analytics

Adaptive Applications Marketing

Support

Commerce

Business and IT

Transformation (Processes, Applications)

Agile Development

BPM/Apps

Integration & Connectivity (Internet of Things, Big Data, Cloud)

Streaming

Analytics

Adaptive Applications Marketing

Support

Commerce


7 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




8 |

Key Investment Indicators

1. Footprint: Established global player in enterprise IT

• Risk balanced revenue by industry and geography

• Blue Chip customer base built over 40+ years

• Experienced management team and loyal expert staff

2. USP: Technology leadership and vendor neutrality

• Leadership in 15 product categories by Gartner and Forrester

• Neutral vendor to install systems from large brands

• 70 percent of license revenue from growing IT market segments

3. Financials: Solid profit base and high cash generation

• 40 percent of revenue is recurring maintenance

• High operating margin (target 2014: 26-28%)

• Continuous dividend payments (current yield 2%)


9 |

Based on product revenue group - FY 2013

Product Revenue by Region Product Revenue by Industry

Public Sector Financial Sector

IT Services

Associations Manufacturing

Other

22%

19%

48%

31%

12%

9%

EMEA

Germany Asia Pacific

Americas

Risk Balanced Revenue by Industry and Geography


10 |

Blue Chip Customer Base Built Over 40+ years

Finance Public Sector Telecom Chemicals/Pharma Energy/Utilities

Manufacturing Logistics/ Transport

Healthcare/

Consumer Goods


11 |

Experienced Management Team and Loyal Expert Staff

Karl-Heinz Streibich Arnd Zinnhardt Dr. Wolfram Jost

Corporate Communications,

Global Legal, Global Audit,

Corporate Office and Top

Management Development,

Global Information Services,

Corporate University

Chief Executive Officer

- since 2003 -

Finance, Controlling,

Taxes, Treasury,

Mergers & Acquisitions,

Business Operations,

Investor Relations, Global

Purchasing, Human

Resources

Chief Financial Officer

- since 2002 -

Research & Development

Chief Technology Officer

- since 2010 -

Eric Duffaut

Chief Customer Officer

- since 2014 -

Global Sales

Global Consulting Services

Marketing

Partner Management


12 |















13 |

Leadership in 15 Product Categories by Gartner and

Forrester

Application Integration Suites • • • • •

Application Services Governance • •

Business Process Analysis Tools • • •

Business Process Management Suites • • •

Enterprise Architecture Tools • •

Governance, Risk and Compliance • •

Integrated IT Portfolio Analysis Apps •

Complex Event Processing Platforms • • •

Comprehensive Integration Solutions • • • • •

EA Management Suites •

Elastic Caching Platforms • • •

ESB • • • •

Integrated SOA Governance • •

SOA Service Life-Cycle Management •


14 |

Acquisitions Support Technology Leadership

Integration and BPM Business Process Analysis Big Data Application PaaS

2007 2008 2009 2010 2011 2012 2013


15 |

Technology Leadership - Digital Business Platform


16 |

AIM Software Spending by Region


17 |

IT-Investments in Categories

79

45

18

41

3

14

0 20 40 60 80 100

2011

2016

Systems of

record

investment

Systems of

engagement

spending

Mobile/tablet

front-end app

budgets

Source: Forrester Research


18 |

License Revenue: 70% from Growing IT Market Segments

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014e

BPE

ETS

BPE offerings focus on growing IT market segments

24%

37% 42%

62% 67%

>70%

76% 63%

58% 56%

49% 42% 38% 33% <30%

44% 58%

51%

* Estimate based on analyst consensus

*


19 |















20 |

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010 2011 2012 2013 2014e

40% of Revenue is Recurring Maintenance

186 213

267 305

353 362 378

> 90% of Maintenance Revenue is recurring

369 €m

369*

BPE

ETS

* Analyst consensus Currency impact 9m 2014: € -9m

> 40% of Group Revenue from Maintenance


21 |

Group Maintenance Revenue - Scenarios

€m

350

400

2013 2018

A: BPE with flat license development

B: BPE with license growth market perform

* Assumptions: BPE maintenance depending on license growth, varying with scenario;

ETS maintenance -7% CAGR

A B


22 |

High Operating Margin (Target 2014: 26-28%)

Group EBITA margin

(Non-IFRS)

Segment result margin:

BPE

Consulting

Required Range to achieve

FY Margin Target of 26 – 28%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014e


23 |

Dividend policy reflects profit, cash flow and financing requirements for growth

Cash out ratio: 20-25% of average FCF/net profit

Continuous Dividend Payments

0.25 0.27 0.30

0.33 0.37 0.38

0.43 0.46 0.46 0.46

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Ordered by fiscal year/in €


24 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




25 |

License

• Direct sales force & Partners

• One-time payment for perpetual license

• Additional payment for capacity upgrades, extended usage and add-on products

• Price: Capacity/MIPS or CPU based

Maintenance

• Renewal rate > 90%

• Pricing: - BPE: around 18% of license - ETS: around 15% of license

Consulting Services

• BPE & ETS: implementing own products

• Cost plus or fixed price projects

• Own staff + freelance

Business Model – Revenue Structure & Seasonality

41%

Maintenance

36%

License

22%

Consulting

~20% ~25%

~20%

~35%

0

10

20

30

40

Q1 Q2 Q3 Q4

Normal license seasonality

Revenue Elements


26 |

BPE - New Customers and Bigger Deals Increase License

Volatility

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 24 25 26 27 28

2008 2009 2010 2013 2011 2012 2014

40

90

140

190

240

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

2008 2009 2010 2013 2011 2012 2014

€m In the quarter – very volatile

4 quarter rolling €m

* Based on market expectation for Q4 2014

*

*


27 |

Revenue and Margin Drivers Mid Term

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


28 |

Turning Technology Leadership into Market Leadership with

Multi Channel Ecosystem

Aris/web-Methods

webMethods

Apama

JackBe

LongJump

Alfabet, ARIS

TerracottaMychannels

Growth Multiple

Sales

Channels

Single

Sales

Channel

SI‘s

OEM‘s/ISV‘s

Suite

Direct Sales

Digital Business

Platform


29 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




30 |

The Impact of Differentiating Digital Business Solutions

Refreshments

Supply chain transformation in days

10s of millions increase in profit

higher response

rate to marketing

campaigns

reduction in

transfer time

for assets 98%

10x

several million

Average annual benefit of

now emergency-prepared

Employees and contractors


31 |

O P P O R T U N I T Y :

R E S U L T S :

Transforming Financial Services

• Free up IT budget to directly support

‐ Aggressive international growth in the

private banking sector

‐ Higher cross-selling across divisions

• Avoided development projects: Credit

Suisse saves $6 million annually

• Eliminated software costs: the

organization is saving $5 million annually

Through IT Portfolio Management and Enterprise Architecture Management

Payback in

6 MONTHS

SEVERAL MILLION DOLLARS SAVED

R E S U LT:


32 |


R E S U L T S :

Transforming Food and Beverage

• Automate maintenance & repair process

for 1.7m coolers

• Streamline asset management

• Real-time visibility of cooler location and

status

• Reduce time for asset transfer by 98%

(from up to 8 hours to below 10 minutes)

• Uncover trends and recurring issues

• Avoid lost equipment

Through the Software AG Suite

R E S U L T:

98%

from up to 8 hours to below 10 minutes

REDUCTION IN TRANSFER TIME FOR ASSETS

Refreshments


33 |


R E S U L T S :

Transforming Financial Services

• Fraud detection

• Reduce fraud loss

• Improve speed and accuracy of fraud

detection system

• Increase rules in fraud detection algorithm

from 50 to over 1,000

• Drive profit up by tens of millions of

Euros

• Meet 650 millisecond end-to-end SLA 99%

of the time

• Achieve better accuracy

Through In-Memory Data Management

R E S U L T:

Fraud detection I N M I L L I S E C O N D S

DRIVES PROFIT UP

of millions €

BY 10s


34 |


R E S U L T S :

Transforming Telecommunications

• Customer retention through real-time

targeted marketing campaigns

• Increase customer loyalty by proactively

offering the right service at the right

time

• 10 times higher response rate to

marketing campaigns

• Marketing campaign cycle time cut from

days to minutes

• Increased customer satisfaction and

retention rates

• Leapfrogging competition through digital

innovation

Through Intelligent Business Operations

10x INCREASE IN OFFER UPTAKE

$15 million

in revenue

in year one

INCREASE

R E S U L T:


35 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




36 |

IBM 29%

Pegasystems 10%

Oracle 8%

Software AG 7%

OpenText 4%

Appian 3%

Tibco 3%

Others 36% IBM

29%

Oracle 23%

Microsoft 13%

Tibco 9%

Others 15%

Business Process Management Suite

(BPMS)

Enterprise Service Bus Suite

(ESB)

Source: Source: Gartner: Market Share, All Software Markets, Worldwide, 2013, Colleen Graham et al, 28 March 2014

Market Share in Main Markets: BPMS (Process Management)

and ESB (Integration)

Software AG

11%


37 |

Positioned in Leaders Quadrant of Gartner’s Magic Quadrant

for On-Premises Application Integration Suites

Source: Gartner, Inc., Magic Quadrant for On-Premises Application Integration

Suites, Jess Thompson, et al., July 29, 2014.

This graphic was published by Gartner, Inc. as part of a larger research document

and should be evaluated in the context of the entire document. The Gartner

document is available upon request from Software AG.

Gartner does not endorse any vendor, product or service depicted in its research

publications, and does not advise technology users to select only those vendors

with the highest ratings. Gartner research publications consist of the opinions of

Gartner's research organization and should not be construed as statements of

fact. Gartner disclaims all warranties, expressed or implied, with respect to this

research, including any warranties of merchantability or fitness for a particular

purpose.


38 |

Positioned in Leaders Quadrant of Gartner’s Magic

Quadrant for Enterprise Architecture Tools

Source: Gartner, Inc., Magic Quadrant for Enterprise Architecture Tools, Saul Brand,

September 30, 2014

This graphic was published by Gartner, Inc. as part of a larger research document and

should be evaluated in the context of the entire document. The Gartner document is

available upon request from Software AG.

Gartner does not endorse any vendor, product or service depicted in its research

publications, and does not advise technology users to select only those vendors with the

highest ratings. Gartner research publications consist of the opinions of Gartner's

research organization and should not be construed as statements of fact. Gartner

disclaims all warranties, expressed or implied, with respect to this research, including

any warranties of merchantability or fitness for a particular purpose.


39 |

Software AG Ranked as a Leader in the

Big Data Streaming Analytics Market

Source: The Forrester Wave™: Big Data Streaming Analytics Platforms, Q3 2014,

Forrester Research, Inc., July 17, 2014

The Forrester Wave is copyrighted by Forrester Research, Inc. Forrester and Forrester

Wave are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical

representation of Forrester's call on a market and is plotted using a detailed

spreadsheet with exposed scores, weightings, and comments. Forrester does not

endorse any vendor, product, or service depicted in the Forrester Wave. Information

is based on best available resources. Opinions reflect judgment at the time and are

subject to change.


40 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




41 |

Financial Data - Key Figures

in €m, IFRS 2013 2012 2011 2010 2009 2008 2007

Total Revenue 972.7 1,047.3 1,098.3 1,119.5 847.4 720.6 621.3

- License 330.1 318.9 295.2 327.4 269.9 272.0 241.3

- Maintenance 375.6 393.3 378.7 369.4 310.6 267.1 212.9

- Consulting

& Other 267.0 335.1 424.4 422.7 266.9 181.5 167.1

BL BPE 422.9 385.5 339.6 321.5 247.2 210.7 149.9

BL ETS 274.5 310.5 313.9 355.4 328.5 332.1 310.2

BL Consulting 275.4 351.3 444.8 441.4 271.3 177.8 161.1

- BPE/ETS 199.7 n.a. n.a. n.a. n.a. 177.8 161.1

- IDS/SAP 75.7 n.a. n.a. n.a. n.a. n.a. n.a.

EBIT 205.5 248.3 269.2 268.6 218.2 180.5 136.8

EPS (€)* 1.60 1.90 2.05 2.06 1.64 1.35 1.04

Dividend (€m, total) 36.3* 38.2 39.9 37.0 32.6 31.5 28.5

Free cashflow 159.1 170.7 187.7 217.8 188.4 133.4 82.2

Net debt (-)

(/cash(+) -106.9** +49.7 -60.9 -167.2 -271.8 -70.3 -133.0

Shareholders‘

equity 965.6 1,060.1 951.5 769.3 647.2 549.1 462.5

Employees (FTE) 5,238 5,419 5,535 5,644 6,013 3,526 3,479

* Dividend payment based on 78,859,844 dividend entitled shares (0,46€/share)

** Including € 56.5 Mio. Securities

***EPS basic, 2007 – 2010 pro-forma, adjusted for share split


42 |

1. Net operating profit after tax = op. PbT ./. tax rate x (op. PbT + goodwill)

2. Return on equity: Operating EBIT / Equity

3. Return on cap. employed: Operating EBIT / (Fixed assets + Working capital)

4. Current assets ./. Cash and Cash Equivalents ./. Current liabilities

FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007

EBITDA margin 26.6% 28.6% 28.7% 28.1% 30.3% 28.6% 25.7%

Operating Margin (Non-IFRS) 26.8% 28.5% n.a. n.a. n.a. n.a. n.a.

Amortization/ Depreciation

5.5% 4.9% 4.2% 4.1% 4.6% 3.5% 2.4%

Operating EBIT margin 21.1% 23.7% 24.5% 24.0% 25.8% 25.1% 23.3%

NOPAT1 margin 13.8% 15.7% 16.1% 15.7% 16.6% 16.1% 15.1%

ROE2 21.3% 23.4% 28.3% 34.9% 33.7% 32.9% 31.8%

ROCE3 14.6% 18.2% 20.5% 27.4% 20.9% 26.2% 22.5%

Net Working Capital in €m4 -€213.5m -€41.6 -€23.8 -€194.4 -€211.3 -€74.1 -€55.0

Working Capital5 24.3% 26.2% 17.5% -8.2% 0.8% 3.2% 4.2%

Free Cash Flow margin6 16.4% 16.3% 17.1% 19.5% 22.2% 18.5% 13.2%

Corporate tax rate 32.0% 31.2% 31.7% 31.0% 32.7% 34.0% 35.4%

WACC7 5.12% 5.1% 5.7% 6.8% 5.5% 6.8% 8.4%

Equity ratio 48.4% 59.8% 56.6% 48.1% 39.1% 51.8% 47.2%

DSO (Days Sales Outstanding) 107 105 93 100 109 120 119

Capex €m €12.7 €13.3 €10.9 €9.7 €12.1 €6.6 €11.8

Capital Employed8 €m €1,346.3 €1,313.0 €1,262.0 €929.6 €1,002.2 €669.9 €655.2

5. Current assets ./. Current liabilities / Total revenue

6. (Operating Cash flow ./. Capex) / Revenue

7. Pro forma, not applied for corporate management

8. Fixed assets + Working capital

Key Financial Ratios (IFRS; in % of revenue)


43 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




44 |

Euro 38%

US Dollar 25%

Other 12%

BRL 5%

ILS 5%

AUD 4%

CAD 4%

GBP 7%

(in €m; yoy)

Q3

2014

Q3

in %

YTD

2014

YTD

in %

Licenses 0.8 1% -3.4 -2%

Maintenance -0.2 - -9.0 -3%

Consulting &

Other 0.3 1% -1.8 -1%

Total 0.9 - -14.2 -2%

Currency impact on revenue

Currency Impact on Revenue

Q3 2014 / YTD 2014 (9 months)

38% revenue in Euro

62% revenue in foreign currency

Currency split 9 months 2014


45 |

(in €m) Q3

2014

Q3

2013

Δ%

Δ%

acc YTD

2014

YTD

2013

Δ%

Δ%

acc

Licenses 42.2 61.8 -32% -33% 118.7 146.5 -19% -17%

Maintenance 54.4 52.5 4% 3% 157.7 149.6 5% 8%

Total revenue 96.6 114.3 -15% -16% 276.4 296.1 -7% -4%

Cost of sales -5.4 -5.5 -2% -2% -16.5 -16.3 1% 4%

Gross profit 91.2 108.8 -16% -17% 259.9 279.8 -7% -5%

Sales & marketing -40.8 -50.4 -19% -19% -135.3 -144.5 -6% -4%

R & D -21.3 -20.2 5% 5% -62.7 -59.7 5% 6%

Segment result 29.1 38.2 -24% -26% 61.9 75.6 -18% -16%

Segment Report Q3 2014 / YTD 2014 (9 Months)

Business Process Excellence (BPE)


46 |

(in €m) Q3

2014

Q3

2013

Δ%

Δ%

acc

YTD

2014

YTD

2013

Δ%

Δ%

acc

Licenses 21.9 17.8 23% 22% 52.6 71.4 -26% -25%

Maintenance 39.3 41.1 -4% -4% 115.3 127.4 -9% -6%

Product revenue 61.2 58.9 4% 4% 167.9 198.8 -16% -13%

Other 0.1 0.1 - - 0.4 0.5 - -

Total revenue 61.3 59.0 4% 4% 168.3 199.3 -16% -13%

Cost of sales -3.1 -3.5 -11% -12% -9.3 -10.4 -11% -8%

Gross profit 58.2 55.5 5% 5% 159.0 188.9 -16% -13%

Sales & marketing -7.8 -9.9 -21% -23% -25.8 -37.2 -31% -29%

R&D -5.9 -6.0 -2% -1% -18.3 -18.9 -3% -3%

Segment result 44.5 39.6 12% 13% 114.9 132.8 -13% -10%

Segment report Q3 2014 / YTD 2014 (9 months)

Enterprise Transaction Systems (ETS)


47 |

Segment report Q3 2014 / YTD 2014 (9 months)

Consulting

(in €m) Q3

2014

Q3

2013 Δ% Δ%

acc

YTD

2014

YTD

2013 Δ% Δ%

acc

BPE/ETS services 47.7 47.5 - - 143.5 146.9 -2% -1%

SAP product revenue* - 1.9 - - 2.2 6.4 -66% -66%

SAP services* - 15.8 - - 20.0 52.4 -62% -62%

Total revenue 47.7 65.2 -27% -27% 165.7 205.7 -19% -19%

Cost of sales -37.6 -56.1 -33% -33% -137.6 -175.4 -22% -21%

Gross profit 10.1 9.1 11% 9% 28.1 30.3 -7% -7%

Sales & marketing -4.8 -8.1 -41% -42% -18.0 -26.3 -32% -31%

Segment result 5.3 1.0 430% 430% 10.1 4.0 153% 153%

* Deconsolidation of SAP related business


48 |

44

Results Q3 2014 / YTD 2014 (9 months)

(in €m) Q3

2014

Q3

2013

Δ%

Δ%

acc YTD

2014

YTD

2013

Δ%

Δ%

acc

Total revenue 205.6 238.5 -14% -14% 610.5 701.2 -13% -11%

Cost of sales -51.4 -72.6 -29% -29% -182.3 -221.9 -18% -17%

Gross profit 154.2 165.9 -7% -8% 428.2 479.3 -11% -8%

Margin in % 75.0% 69.6% 70.1% 68.4%

R & D -27.2 -26.1 4% 4% -81.0 -78.5 3% 4%

Sales & marketing -57.5 -72.5 -21% -21% -191.1 -219.3 -13% -11%

Administration -19.4 -17.3 12% 13% -54.4 -52.5 4% 5%

Other

income/expense -1.0 -0.9 - - 2.9 6.1 - -

EBIT 49.1 49.1 - -1% 104.6 135.1 -23% -18%

Margin in % 23.9% 20.6% 17.1% 19.3%


49 |

Non-IFRS Earnings Q3 2014 / YTD 2014 (9 months)

(in €m) Q3

2014

Q3

2013

YTD

2014

YTD

2013

EBIT (before all taxes) 49.1 49.1 104.6 135.1

Amortization on acquisition related

intangible assets 9.4 11.5 30.9 31.0

Reduction acquisition related product

revenue by purchase price allocation - 0.9 0.5 0.9

Other impacts from M&A activities 0.1 0.3 -1.0 -1.5

Share based payment 3.5 0.5 6,2 -0.8

Restructuring/severances 0.7 4.0 7.0 9.2

Result from sold operations - - 2.7 -

EBITA (Non-IFRS) 62.8 66.3 150.9 173.9

in % of revenue (Non-IFRS) 30.5% 27.7% 24.7% 24.8%

Net income (Non-IFRS) 39.7 42.8 95.8 114.2

EPS (Non-IFRS)* 0.50 0.52 1.21 1.36

Net income (IFRS) 30.4 31.1 63.1 87.1

* Weighted average shares outstanding (basic) Q3 2014: 78.9m / Q3 2013: 83.0m // 9m 2014: 79.3m / 9m 2013: 84.2m


50 |

Cash flow Q3 2014 / YTD 2014 (9 months)

(in €m) Q3

2014

Q3

2013

Δ% YTD

2014

YTD

2013

Δ%

Operating cash flow 22.0 36.6 -40% 94.5 115.4 -18%

./. CapEx* -2.6 -3.3 -8.7 -9.8

Free cash flow 19.4 33.3 -42% 85.8 105.6 -19%

as % of revenue 9.4% 14.0% 14.0% 15.1%

Free cash flow per share** 0.25 0.40 -38% 1.08 1.25 -14%

* Cash flow from investing activities except acquisitions and except investments in debt instruments

** Based on average outstanding shares: Q3 2014: 78.9m / Q3 2013: 83.0m // 9m 2014: 79.3m / 9m 2013: 84.2m


51 |

Sept. 30,

2014

Sept. 30,

2014

1,791.8 1,791.8

335.1

260.2

92.8

1,103.7

437.0

248.2

134.3

972.3

Cash and cash

equivalents/

Securities

Trade receivables

Inventory, other assets

Fixed assets

(goodwill 848.1/829.2)

Total

Financial liabilities

Other liabilities

Deferred income

Shareholders’ equity

(ratio 54.3%/48.4%)

Total

Assets Liabilities

Balance sheet (in €m)

Dec. 31,

2013

Dec. 31,

2013

1,996.9

613.4

309.9

108.0

965.6

1,996.9

506.5

323.2

57.3

1,109.9


52 |

Loan-Liquidity Structure (30 September 2014, €m)

Financing

0 100 200 300 400 500

Liquidity

Loans

335

437

Promissory note (2013)

Bank loan & other

European Investment Bank

due 2015-17 2018/20

Net debt: 102

125

in €m

298

Liquidity:

Cash (€ 275m) and

Securities (€ 60m)


53 |

Outlook FY 2014

Product Revenue BPE

Product Revenue ETS

26% to 28%

-9% to -16%*

Previous year’s level

FY 2013 (in €m)

Outlook FY 2014 (as of June 15, 2014)

Operating Margin

(Non-IFRS)**

9m 2014

-13%*

-4%*

24.7%

273.8

422.9

26.8%

* Revenue growth or decline at constant currency

** Before adjustments for non-operating items (see non-IFRS earnings results)


54 |

Earnings Q3 2014 / YTD 2014 (9 months)

(in €m) Q3

2014

Q3

2013

Δ%

YTD

2014

YTD

2013

Δ%

Net Income 30.4 31.1 -2% 63.1 87.1 -28%

Income taxes 14.5 14.6 -1% 27.8 38.6 -28%

Other taxes 2.1 1.6 31% 6.2 4.8 29%

Financial result 2.1 1.8 17% 7.6 4.6 65%

EBIT (before all taxes) 49.1 49.1 - 104.7 135.1 -23%

Amortization 9.4 11.5 -18% 30.9 30.9 -

Depreciation 2.8 3.2 -13% 8.8 10.0 -12%

EBITDA 61.3 63.8 -4% 144.4 176.0 -18%

Margin in % 29.8% 26.8% 23.6% 25.1%


55 |

Amortization / depreciation impact 2014ff

(preliminary)

Q3

2014

GJ

2014

GJ

2015ff*

* Estimated

Amortization IDS

(in €m)

Amortization other

Depreciation

2.6

6.7

2.9

10.5

30.1

11.6

7.7

24.0

11.6


56 |

Headcount by functional areas* and geography

(in FTE) Sept. 30,

2014

June 30,

2014

Δ%

qoq

Sept. 30,

2013

Δ%

yoy

Total 4,553 4,606 -1% 5,356 -15%

Consulting & services 1,884 1,906 -1% 2,375 -21%

R & D 989 977 1% 1,005 -2%

Sales & marketing 1,026 1,059 -3% 1,261 -19%

Administration 654 664 -2% 715 -9%

USA 695 718 -3% 804 -14%

Germany 1,237 1,251 -1% 1,735 -29%

Rest of world 2,621 2,637 -1% 2,817 -7%

* According to P+L structure


57 |

Revenue Q3 2014 / YTD 2014 (9 months)

(in €m) Q3

2014

Q3

2013

Δ%

Δ%

acc YTD

2014

YTD

2013

Δ%

Δ%

acc

Product Revenue 157.8 175.1 -10% -10% 446.5 501.3 -11% -8%

License 64.1 79.5 -19% -20% 171.3 217.9 -21% -20%

Maintenance 93.7 93.7 - - 273.0 277.0 -1% 2%

Product IDS (SAP) - 1.9 - - 2.2 6.4 -65% -65%

Consulting BPE/ETS 47.7 47.4 1% - 143.5 146.6 -2% -1%

Consulting IDS (SAP) - 15.8 - - 20.0 52.4 -62% -62%

Other 0.1 0.2 - - 0.5 0.9 - -

Total 205.6 238.5 -14% -14% 610.5 701.2 -13% -11%


58 |

Revenue 2013 excl. IDS Consulting* (pro forma)

(in Mio. €) Q1 Q2

Q3 Q4 FY

Product 154.6 167.1 173.2 201.7 696.6

Licenses 63.0 75.4 79.5 109.6 327.5

Maintenance 91.6 91.7 93.7 92.1 369.1

Consulting & services 49.0 50.3 47.4 53.0 199.7

Other 0.3 0.3 0.2 0.2 1.0

Total 203.9 217.7 220.8 254.9 897.3

* IDS Consulting (SAP-products and services); business unit was sold in May 2014


59 |

Introduction 4

1

3

4

5

6

2

Agenda

7




Key Financials 41

Financials 2014 44




60 |

*Source: Ipreo, Factset, November 2014

Number of total shares: 86,943,945

Freefloat: ~ 62%

Indices: TecDAX, DAX 100, TechAllShare

Codes: SOW, SOW GR, SOWG.DE

ISIN: DE0003304002

ADR U.S. trading symbol: STWRY

Share Data

Major Institutional Investors*

Solid Shareholder Structure

Shareholder Structure

Institutional Investors by Region*

Software AG Foundation

Institutional Investors

Private & undisclosed 30%

29%

32% Own Shares**

**as of August 2014

Fidelity (FMR LLC) 4.1%

Templeton 3.0%

Deutsche Asset & Wealth 3.0%

Norges Bank 2.9%

SEB Asset Management AG 1.9%

Shareholder Value 1.3%

35%

11%

8%

5% Germany

United States

United Kingdom

Scandinavia

France

Rest of World

6%

BeNeLux

3%

9%

29%

Switzerland

3%


61 |

The Software AG Foundation is one of Germany’s ten largest foundations

(capital stock € 1.1 bn (Dec. 31, 2012), Software AG shares and other assets)

Founded by Dr. hc. Peter M. Schnell in 1992

Disburses financial support amounting to approx. € 30 million annually

Under the principle of a “self-help grant”, the Foundation supports nonprofit

organizations not only with financial support but also with consulting services in

promoting project sustainability and further developments

The Foundation finances many different projects in areas including:

• science and research

• support for the elderly and disabled

• care and support for children and young people

• education and training

• the environment

Software AG Foundation – Anchor Shareholder


62 |

Baader Bank

Barclays Capital

Berenberg Bank

Bryan Garnier

Commerzbank

Credit Suisse

Deutsche Bank

DZ Bank

Independent Res.

JPM/Cazenove

Kepler

LBBW

Goldman Sachs

Hauck & Aufhäuser

HSBC

MainFirst

Metzler

Mirabaud

Morgan Stanley

Natixis

Société Générale

UBS

Warburg Research

Analyst Coverage

Banks / Broker who cover Software AG on a regular base

For latest consensus of analysts‘ financial estimates visit our

IR website on: www.softwareag.com


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]

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